497 1 perspective_497c.txt PERSPECTIVE FIXED AND VARIABLE ANNUITY(R) ISSUED BY JACKSON NATIONAL LIFE INSURANCE COMPANY(R) AND JACKSON NATIONAL SEPARATE ACCOUNT - I MARCH 31, 2008 Please read this prospectus before you purchase this variable annuity. It contains important information about the Contract that you should know before investing. THIS PROSPECTUS PROVIDES A DESCRIPTION OF THE MATERIAL RIGHTS AND OBLIGATIONS UNDER THE CONTRACT. YOUR CONTRACT AND ANY ENDORSEMENTS ARE THE FORMAL CONTRACTUAL AGREEMENT BETWEEN YOU AND THE COMPANY. IT IS IMPORTANT THAT YOU READ THE CONTRACT AND ENDORSEMENTS, WHICH REFLECT STATE OR OTHER VARIATIONS. You should keep this prospectus on file for future reference. To learn more about this variable annuity, you can obtain a free copy of the Statement of Additional Information ("SAI") dated March 31, 2008 by calling Jackson National Life Insurance Company ("JacksonSM" or "we") at 1 (800) 766-4683 or by writing Jackson at: Annuity Service Center, P.O. Box 17240, Denver, Colorado 80217-9959. The SAI has been filed with the Securities and Exchange Commission ("SEC") and is legally a part of this prospectus. The Table of Contents of the SAI appears at the end of this prospectus. The SEC maintains a website (http://www.sec.gov) that contains the SAI, material incorporated by reference and other information regarding registrants that file electronically with the SEC. This prospectus also describes a variety of optional features, not all of which may be available at the time you are interested in purchasing one, as we reserve the right to prospectively restrict availability of the optional features. Broker-dealers selling the Contracts may limit the availability of an optional feature. Ask your representative about what optional features are or are not offered. If a particular optional feature that interests you is not offered, you may want to contact another broker-dealer to explore its availability. In addition, not all optional features may be available in combination with other optional features, as we also reserve the right to prospectively restrict the availability to elect certain features if certain other optional features have been elected. We reserve the right to limit the number of Contracts that you may purchase. Please confirm with us or your representative that you have the most current prospectus and supplements to the prospectus that describe the availability and any restrictions on the optional features. In addition, three new optional Guaranteed Minimum Withdrawal Benefits, SafeGuard Max, LifeGuard Freedom and LifeGuard Freedom with Joint Option, may not yet have been approved for sale in your state. In the event these optional benefits are not yet approved in your state, the following Guaranteed Minimum Withdrawal Benefits available prior to March 31, 2008, will continue to be available to you: SafeGuard 7 Plus, LifeGuard Advantage, LifeGuard Ascent and LifeGuard Ascent with Joint Option. In all other states, SafeGuard Max, LifeGuard Freedom and LifeGuard Freedom with Joint Option will replace these previously available Guaranteed Minimum Withdrawal Benefits. The representative assisting you will advise you whether an optional benefit is available and which one remains available to you. You or your representative may contact our Annuity Service Center to see whether and which new optional benefits have been approved for sale in your state. o Individual and group, flexible premium deferred annuity. o 6 fixed accounts, including 4 guaranteed fixed accounts and 2 DCA+ fixed accounts that each offer a minimum interest rate that is guaranteed by Jackson (the "Fixed Accounts"). o 8 Guaranteed Minimum Withdrawal Benefit (GMWB) options. o A GUARANTEED MINIMUM WITHDRAWAL BENEFIT (GMWB) FIXED ACCOUNT (only if the optional LifeGuard Select GMWB or LifeGuard Select with Joint Option GMWB are elected) that offers a minimum interest rate that is guaranteed by Jackson and is an account to and from which automatic transfers of your Contract Value may be required according to non-discretionary formulas. o Investment divisions that purchase shares of the following Funds - all Class A shares (the "Funds"): JNL SERIES TRUST JNL/AIM INTERNATIONAL GROWTH FUND (FORMERLY, JNL/JP MORGAN INTERNATIONAL EQUITY FUND) JNL/AIM Large Cap Growth Fund JNL/AIM Real Estate Fund JNL/AIM Small Cap Growth Fund JNL/CAPITAL GUARDIAN GLOBAL BALANCED FUND (FORMERLY, JNL/FI BALANCED FUND) JNL/CAPITAL GUARDIAN GLOBAL DIVERSIFIED RESEARCH FUND (FORMERLY, JNL/SELECT GLOBAL GROWTH FUND) JNL/CAPITAL GUARDIAN INTERNATIONAL SMALL CAP FUND JNL/CAPITAL GUARDIAN U.S. GROWTH EQUITY FUND (FORMERLY, JNL/SELECT LARGE CAP GROWTH FUND) JNL/Credit Suisse Global Natural Resources Fund JNL/Credit Suisse Long/Short Fund JNL/Eagle Core Equity Fund JNL/Eagle SmallCap Equity Fund JNL/Franklin Templeton Founding Strategy Fund JNL/Franklin Templeton Global Growth Fund JNL/Franklin Templeton Income Fund JNL/Franklin Templeton Mutual Shares Fund JNL/Franklin Templeton Small Cap Value Fund JNL/Goldman Sachs Core Plus Bond Fund JNL/Goldman Sachs Mid Cap Value Fund JNL/Goldman Sachs Short Duration Bond Fund JNL/JPMorgan International Value Fund JNL/JPMORGAN MIDCAP GROWTH FUND (FORMERLY, JNL/FI MID-CAP EQUITY FUND) JNL/JPMorgan U.S. Government & Quality Bond Fund JNL/Lazard Emerging Markets Fund JNL/LAZARD MID CAP EQUITY FUND (FORMERLY, JNL/LAZARD MID CAP VALUE FUND) JNL/LAZARD SMALL CAP EQUITY FUND (FORMERLY, JNL/LAZARD SMALL CAP VALUE FUND) JNL/Mellon Capital Management S&P 500 Index Fund JNL/Mellon Capital Management S&P 400 MidCap Index Fund JNL/Mellon Capital Management Small Cap Index Fund JNL/Mellon Capital Management International Index Fund JNL/Mellon Capital Management Bond Index Fund JNL/Mellon Capital Management Enhanced S&P 500 Stock Index Fund JNL/Mellon Capital Management Index 5 Fund JNL/Mellon Capital Management 10 x 10 Fund JNL/Oppenheimer Global Growth Fund JNL/PAM ASIA EX-JAPAN FUND JNL/PAM CHINA-INDIA FUND JNL/PIMCO Real Return Fund JNL/PIMCO Total Return Bond Fund JNL/PPM AMERICA CORE EQUITY FUND (FORMERLY, JNL/PUTNAM EQUITY FUND) JNL/PPM America High Yield Bond Fund JNL/PPM AMERICA MID CAP VALUE FUND JNL/PPM AMERICA SMALL CAP VALUE FUND JNL/PPM America Value Equity Fund JNL/Select Balanced Fund JNL/Select Money Market Fund JNL/Select Value Fund JNL/T. Rowe Price Established Growth Fund JNL/T. Rowe Price Mid-Cap Growth Fund JNL/T. Rowe Price Value Fund JNL/S&P Managed Conservative Fund JNL/S&P Managed Moderate Fund JNL/S&P Managed Moderate Growth Fund JNL/S&P Managed Growth Fund JNL/S&P Managed Aggressive Growth Fund JNL/S&P Retirement Income Fund JNL/S&P Retirement 2015 Fund JNL/S&P Retirement 2020 Fund JNL/S&P Retirement 2025 Fund JNL/S&P Disciplined Moderate Fund JNL/S&P Disciplined Moderate Growth Fund JNL/S&P Disciplined Growth Fund JNL/S&P COMPETITIVE ADVANTAGE FUND JNL/S&P DIVIDEND INCOME & GROWTH FUND JNL/S&P INTRINSIC VALUE FUND JNL/S&P TOTAL YIELD FUND JNL/S&P 4 FUND JNL Variable Fund LLC JNL/Mellon Capital Management DowSM 10 Fund JNL/Mellon Capital Management S&P(R) 10 Fund JNL/Mellon Capital Management Global 15 Fund JNL/MELLON CAPITAL MANAGEMENT NASDAQ(R) 25 FUND (FORMERLY, JNL/MELLON CAPITAL MANAGEMENT NASDAQ(R) 15 FUND) JNL/MELLON CAPITAL MANAGEMENT VALUE LINE(R) 30 FUND (FORMERLY, JNL/MELLON CAPITAL MANAGEMENT VALUE LINE(R) 25 FUND) JNL/Mellon Capital Management DowSM Dividend Fund JNL/Mellon Capital Management S&P(R) 24 Fund JNL/Mellon Capital Management 25 Fund JNL/Mellon Capital Management Select Small-Cap Fund JNL/Mellon Capital Management JNL 5 Fund JNL/Mellon Capital Management VIP Fund JNL/Mellon Capital Management JNL Optimized 5 Fund JNL/Mellon Capital Management S&P(R) SMid 60 Fund JNL/Mellon Capital Management NYSE(R) International 25 Fund JNL/Mellon Capital Management Communications Sector Fund JNL/Mellon Capital Management Consumer Brands Sector Fund JNL/Mellon Capital Management Financial Sector Fund JNL/Mellon Capital Management Healthcare Sector Fund JNL/Mellon Capital Management Oil & Gas Sector Fund JNL/Mellon Capital Management Technology Sector Fund UNDERSCORED ARE THE FUNDS THAT ARE NEWLY AVAILABLE, OR RECENTLY UNDERWENT NAME CHANGES. THE FUNDS ARE NOT THE SAME MUTUAL FUNDS THAT YOU WOULD BUY THROUGH YOUR STOCKBROKER OR A RETAIL MUTUAL FUND. THE PROSPECTUSES FOR THE FUNDS ARE ATTACHED TO THIS PROSPECTUS. WE OFFER OTHER VARIABLE ANNUITY PRODUCTS WITH DIFFERENT PRODUCT FEATURES, BENEFITS AND CHARGES. THE SEC HAS NOT APPROVED OR DISAPPROVED THIS VARIABLE ANNUITY OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. IT IS A CRIMINAL OFFENSE TO REPRESENT OTHERWISE. -------------------------------------------------------------------------------- o Not FDIC/NCUA insured o Not Bank/CU guaranteed o May lose value o Not a deposit o Not insured by any federal agency -------------------------------------------------------------------------------- TABLE OF CONTENTS
KEY FACTS.................................................................................................2 FEES AND EXPENSES TABLES..................................................................................4 EXAMPLE...................................................................................................15 THE ANNUITY CONTRACT......................................................................................15 JACKSON...................................................................................................16 THE GUARANTEED FIXED ACCOUNTS AND GMWB FIXED ACCOUNT....................................................................................17 THE SEPARATE ACCOUNT......................................................................................17 INVESTMENT DIVISIONS......................................................................................17 CONTRACT CHARGES..........................................................................................30 DISTRIBUTION OF CONTRACTS.................................................................................42 PURCHASES.................................................................................................44 TRANSFERS AND FREQUENT TRANSFER RESTRICTIONS..............................................................46 TELEPHONE AND INTERNET TRANSACTIONS.......................................................................47 ACCESS TO YOUR MONEY......................................................................................48 INCOME PAYMENTS (THE INCOME PHASE)........................................................................140 DEATH BENEFIT.............................................................................................142 TAXES.....................................................................................................146 OTHER INFORMATION.........................................................................................149 PRIVACY POLICY............................................................................................151 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION..............................................157 APPENDIX A (about Dow Jones)..............................................................................A-1 APPENDIX B (Broker-Dealer Support) .......................................................................B-1 APPENDIX C (GMWB Prospectus Examples).....................................................................C-1 APPENDIX D (LifeGuard Select GMWB and LifeGuard Select with Joint Option GMWB Transfer of Assets Methodology)...........................................................D-1 APPENDIX E (Accumulation Unit Values).....................................................................E-1
KEY FACTS ------------------------------------------------------------------------------------------------------------------------------- ANNUITY SERVICE CENTER: 1 (800) 766-4683 (8 a.m. - 8 p.m. ET) MAIL ADDRESS: P.O. Box 17240, Denver, Colorado 80217-9959 DELIVERY ADDRESS: 7601 Technology Way, Denver, Colorado 80237 ------------------------------------------------------------------------------------------------------------------------------- INSTITUTIONAL MARKETING GROUP SERVICE CENTER: 1 (800) 777-7779 (8 a.m. - 8 p.m. ET) MAIL ADDRESS: P.O. Box 30392, Lansing, Michigan 48909-7892 DELIVERY ADDRESS: 1 Corporate Way, Lansing, Michigan 48951 Attn: IMG ------------------------------------------------------------------------------------------------------------------------------- HOME OFFICE: 1 Corporate Way, Lansing, Michigan 48951 -------------------------------------------------------------------------------------------------------------------------------
THE ANNUITY CONTRACT The fixed and variable annuity Contract offered by Jackson provides a means for allocating on a tax-deferred basis for non-qualified Contracts to the Fixed Accounts and investment divisions (the "Investment Divisions"). In addition to the Fixed Accounts, if you elect the LifeGuard Select GMWB or the LifeGuard Select with Joint Option GMWB, automatic transfers of your Contract Value may be allocated to a GMWB Fixed Account. (We refer to the Fixed Accounts, GMWB Fixed Account and the Investment Divisions together as the "Allocation Options"). The Contract is intended for retirement savings or other long-term investment purposes and provides for a death benefit and income options. -------------------------------------------------------------------------------- ALLOCATION OPTIONS Although more than 18 Investment Divisions, Fixed Accounts and the GMWB Fixed Account are available under your Contract, you may not allocate your Contract Value to more than 18 Allocation Options at any one time. Additionally, you may not CHOOSE to allocate your premiums to the GMWB Fixed Account; however, Contract Value may be automatically allocated to the GMWB Fixed Account according to non-discretionary formulas if you have purchased the optional LifeGuard Select GMWB or the LifeGuard Select with Joint Option GMWB. -------------------------------------------------------------------------------- EXPENSES The Contract has insurance features and investment features, and there are costs related to each. Jackson makes a deduction for its insurance and administration charges that is equal to 1.40% of the daily value of the Contracts invested in the Investment Divisions. If you select our Maximum Anniversary Value Death Benefit Option, Jackson makes a deduction for its insurance and administration charges that is equal to 1.50% of the daily value of the Contracts invested in the Investment Divisions. If you select our Earnings Protection Benefit Endorsement, Jackson deducts an additional charge equal to 0.20% of the daily net asset value of Contracts invested in the Investment Divisions. These charges do not apply to the Fixed Accounts or the GMWB Fixed Account. During the accumulation phase, Jackson deducts a $35 annual contract maintenance charge from your Contract. If you select any one of our GMWBs, Jackson deducts an additional charge, the maximum of which ranges from 0.51% to 1.86% of the Guaranteed Withdrawal Balance (GWB). While the charge is deducted from your Contract Value, it is based on the GWB. For more information, including how the GWB is calculated, please see "Contract Charges." If you take your money out of the Contract, Jackson may assess a withdrawal charge. The withdrawal charge starts at 7% in the first year after receipt of a premium payment and declines 1% a year to 0% after 7 years. Jackson may assess a state premium tax charge which ranges from 0% - 3.5% (the amount of state premium tax, if any, will vary from state to state) when you begin receiving regular income payments from your Contract, when you make a withdrawal or, in states where required, at the time premium payments are made. There are also investment charges, which are expected to range from 0.58% to 2.27%, on an annual basis, of the average daily value of the Funds, depending on the Fund. -------------------------------------------------------------------------------- PURCHASES Under most circumstances, you can buy a Contract for $5,000 or more ($2,000 or more for a qualified plan Contract). You can add $500 ($50 under the automatic payment plan) or more at any time during the accumulation phase. We reserve the right to refuse any premium payment. We expect to profit from certain charges assessed under the Contract (i.e., the Withdrawal Charge and the Mortality and Expense Risk Charge). -------------------------------------------------------------------------------- ACCESS TO YOUR MONEY During the accumulation phase, there are a number of ways to take money out of your Contract, generally subject to a charge or adjustment. You may also have to pay income tax and a tax penalty on any money you take out. -------------------------------------------------------------------------------- INCOME PAYMENTS You may choose to receive regular income from your annuity. During the income phase, you have the same variable allocation options. -------------------------------------------------------------------------------- DEATH BENEFIT If you die before moving to the income phase, the person you have chosen as your beneficiary will receive a death benefit. If you select the Earnings Protection Benefit Endorsement, the death benefit your beneficiary receives may be increased by 40% of earnings up to a maximum of 100% of the premiums you have paid (25% of earnings for Owners ages 70-75). -------------------------------------------------------------------------------- FREE LOOK If you cancel your Contract within 20 days after receiving it (or whatever period is required in your state), Jackson will return the amount your Contract is worth on the day we receive your request or the Contract is returned to your selling agent. This may be more or less than your original payment. If required by law, Jackson will return your premium. In some states, we are required to hold the premiums of a senior citizen in a guaranteed fixed account during the free look period, unless we are specifically directed to allocate the premiums to the Investment Divisions. State laws vary; your free look rights will depend on the laws of the state in which you purchased the Contract. -------------------------------------------------------------------------------- TAXES Under the Internal Revenue Code you generally will not be taxed on the earnings on the money held in your Contract until you take money out (this is referred to as tax-deferral). There are different rules as to how you will be taxed depending on how you take the money out and whether your Contract is non-qualified or purchased as part of a qualified plan. FEES AND EXPENSES TABLES THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE (AND FOOTNOTES) DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY AT THE TIME THAT YOU BUY AND SURRENDER THE CONTRACT, RECEIVE INCOME PAYMENTS OR TRANSFER CONTRACT VALUE BETWEEN ALLOCATION OPTIONS. STATE PREMIUM TAXES MAY ALSO BE DEDUCTED.
------------------------------------------------------------------------------------------------------------- OWNER TRANSACTION EXPENSES (1) Maximum Withdrawal Charge (2) - PERCENTAGE OF PREMIUM WITHDRAWN, IF APPLICABLE 7% ---------------------------------------------------------------------------------------------------- -------- Commutation Fee: Upon a total withdrawal after income payments have commenced under income option 4, or if after death during the period for which payments are guaranteed under income option 3 and beneficiary elects a lump sum payment, the amount received will be reduced by (a) minus (b) where: o (a) = the present value of the remaining income payments (as of the date of calculation) for the period for which payments are guaranteed to be made, discounted at the rate assumed in calculating the initial payment; and o (b) = the present value of the remaining income payments (as of the date of calculation) for the period for which payments are guaranteed to be made, discounted at a rate no more than 1% higher than the rate used in (a). ---------------------------------------------------------------------------------------------------- -------- Transfer Charge (3) - PER TRANSFER AFTER 15 IN A CONTRACT YEAR $25 ---------------------------------------------------------------------------------------------------- -------- Expedited Delivery Charge (4) $22.50 ---------------------------------------------------------------------------------------------------- -------- (1) See "Contract Charges." (2) Years Since Premium Payment 0 1 2 3 4 5 6 7+ Charge 7% 6% 5% 4% 3% 2% 1% 0% (3) We do not count transfers in conjunction with dollar cost averaging, earnings sweep, automatic rebalancing, and periodic automatic transfers. (4) When, at your request, we incur the expense of providing expedited delivery of your partial withdrawal or complete surrender, we will assess the following charges: $20 for wire service and $10 for overnight delivery ($22.50 for Saturday delivery). Withdrawal charges and interest rate adjustments will not be charged on wire/overnight fees.
THE NEXT TABLE (AND FOOTNOTES) DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING THE FUNDS' FEES AND EXPENSES.
-------------------------------------------------------------------------------------------------------------- PERIODIC EXPENSES BASE CONTRACT Annual Contract Maintenance Charge $35 Separate Account Annual Expenses ANNUAL PERCENTAGE OF AVERAGE DAILY ACCOUNT VALUE OF INVESTMENT DIVISIONS 1.40% Mortality And Expense Risk Charge 1.25% (5) Administration Charge 0.15% ---------------------------------------------------------------------------------------------------- -------- Total Separate Account Annual Expenses for Base Contract 1.40% ---------------------------------------------------------------------------------------------------- -------- OPTIONAL ENDORSEMENTS - The following optional endorsement charges are based on average account value: EarningsMax(R), and the Maximum Anniversary Value Death Benefit. Please see footnotes 6 - 17 for those charges that are not based on average account value. A VARIETY OF OPTIONAL ENDORSEMENTS TO THE CONTRACT ARE AVAILABLE. YOU MAY SELECT ONE OF EACH GROUPING BELOW. ------------------------------------------------------------------------------------------------------------- Earnings Protection Benefit Maximum Annual Charge ("EarningsMax") 0.20% --------------------------------------------------------------------------------------------------- --------- ------------------------------------------------------------------------------------------------------------- 7% Guaranteed Minimum Withdrawal Benefit Maximum Annual Charge (no longer offered as of March 31, 0.75% 2008)("SafeGuard 7 PlusSM") (6) Guaranteed Minimum Withdrawal Benefit With 5-Year Step-Up Maximum Annual Charge ("SafeGuard MaxSM") (7) 0.81% 5% GMWB With Annual Step-Up Maximum Annual Charge ("AutoGuard 5SM") (8) 1.47% 6% GMWB With Annual Step-Up Maximum Annual Charge ("AutoGuard 6SM") (9) 1.62% 5% GMWB Without Step-Up Maximum Annual Charge ("MarketGuard 5SM") (10) 0.51% 5% for Life GMWB With Bonus and Annual Step-Up Maximum Annual Charge (no longer offered as of March 31, 2008)("LifeGuard AdvantageSM") (11) 1.50% For Life GMWB With Annual Step-Up Maximum Annual Charge (no longer offered as of March 31, 2008)("LifeGuard AscentSM") (12) 1.50% Joint For Life GMWB With Annual Step-Up Maximum Annual Charge (no longer offered as of March 31, 2008)("LifeGuard Ascent With Joint Option") (13) 1.71% For Life GMWB With Bonus and Annual Step-Up Maximum Annual Charge ("LifeGuard FreedomSM") (14) 1.50% Joint For Life GMWB With Bonus and Annual Step-Up Maximum Annual Charge ("LifeGuard Freedom With Joint Option") (15) 1.86% For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up Maximum Annual Charge ("LifeGuard SelectSM") (16) 1.20% Joint For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up Maximum Annual Charge ("LifeGuard Select With Joint Option") (17) 1.50% ------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------- --------- Maximum Anniversary Value Death Benefit Maximum Annual Charge (1)(8) 0.22% --------------------------------------------------------------------------------------------------- ---------
(5) If you choose the optional Maximum Anniversary Value Death Benefit, this charge will be reduced to 1.13%. The reduction of 0.12% reflects the replacement of the standard death benefit with the optional Maximum Anniversary Value Death Benefit, which is covered by a separate additional charge. (6) The charge is quarterly, currently 0.10% (0.40% annually) of the GWB, subject to a maximum annual charge of 0.75% as used in the Table. But for Contracts purchased IN WASHINGTON STATE, the charge is monthly, currently 0.035% (0.42% annually) of the GWB, subject to a maximum annual charge of 0.75%. The charge is deducted at the end of each calendar quarter/Contract Month, or upon termination of the endorsement, from your Contract Value on a pro rata basis. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. We deduct the charge from the Investment Divisions by canceling Accumulation Units; the charge is not part of the Accumulation Unit calculation. While the charge is deducted from your Contract Value, it is based on the applicable percentage of the GWB. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. For more information, including how the GWB is calculated, please see "7% Guaranteed Minimum Withdrawal Benefit" beginning on page 50. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. (7) The charge is quarterly, currently 0.1125% (0.45% annually) of the GWB, subject to a maximum annual charge of 0.80%. But for Contracts purchased IN WASHINGTON STATE, the charge is monthly, currently 0.0375% (0.45 annually) of the GWB, subject to a maximum annual charge of 0.81% as used in the Table. The charge is deducted at the end of each Contract Quarter/Contract Month, or upon termination of the endorsement, from your Contract Value on a pro rata basis. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. We deduct the charge from the Investment Divisions by canceling Accumulation Units; the charge is not part of the Accumulation Unit calculation. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. For more information, including how the GWB is calculated, please see "Guaranteed Minimum Withdrawal Benefit With 5-Year Step-Up" beginning on page 3460. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. (8) The charge is quarterly, currently 0.1625% (0.65% annually) of the GWB, subject to a maximum annual charge of 1.45%. But for Contracts purchased IN WASHINGTON STATE, the charge is monthly, currently 0.055% (0.66% annually) of the GWB, subject to a maximum annual charge of 1.47% as used in the Table. The charge is deducted at the end of each Contract Quarter/Contract Month, or upon termination of the endorsement, from your Contract Value on a pro rata basis. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. We deduct the charge from the Investment Divisions by canceling Accumulation Units; the charge is not part of the Accumulation Unit calculation. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. For more information, including how the GWB is calculated, please see "5% Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 60. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. For Contracts to which this endorsement was added BEFORE MARCH 31, 2008, you pay the applicable percentage of the GWB each CALENDAR QUARTER. For Contracts to which this endorsement was added ON OR AFTER MARCH 31, 2008, you pay the applicable percentage of the GWB each CONTRACT QUARTER. For Contracts purchased IN WASHINGTON STATE, you pay the applicable percentage of the GWB each CONTRACT MONTH. (9) The charge is quarterly, currently 0.2125% (0.85% annually) of the GWB, subject to a maximum annual charge of 1.60%. But for Contracts purchased IN WASHINGTON STATE, the charge is monthly, currently 0.0725% (0.87% annually) of the GWB, subject to a maximum annual charge of 1.62% as used in the Table. The charge is deducted at the end of each Contract Quarter/Contract Month, or upon termination of the endorsement, from your Contract Value on a pro rata basis. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. We deduct the charge from the Investment Divisions by canceling Accumulation Units; the charge is not part of the Accumulation Unit calculation. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. For more information, including how the GWB is calculated, please see "6% Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 65. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. For Contracts to which this endorsement was added BEFORE MARCH 31, 2008, you pay the applicable percentage of the GWB each CALENDAR QUARTER. For Contracts to which this endorsement was added ON OR AFTER MARCH 31, 2008, you pay the applicable percentage of the GWB each CONTRACT QUARTER. For Contracts purchased IN WASHINGTON STATE, you pay the applicable percentage of the GWB each CONTRACT MONTH. (10) The charge is quarterly, currently 0.05% (0.20% annually) of the GWB, subject to a maximum annual charge of 0.50%. But for Contracts purchased IN WASHINGTON STATE, the charge is monthly, currently 0.0175% (0.21% annually) of the GWB, subject to a maximum annual charge of 0.51% as used in the Table. The charge is deducted at the end of each Contract Quarter/Contract Month, or upon termination of the endorsement, from your Contract Value on a pro rata basis. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. We deduct the charge from the Investment Divisions by canceling Accumulation Units; the charge is not part of the Accumulation Unit calculation While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. For more information, including how the GWB is calculated, please see "5% Guaranteed Minimum Withdrawal Benefit Without Step-Up" beginning on page 69. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. (11) 1.50% is the maximum annual charge of the 5% for Life GMWB With Bonus and Annual Step-Up for the following age groups: 55-59, 60-64, and 65-69, which charge is payable quarterly. The charge for the 5% for Life GMWB With Annual Step-Up varies by age group. THE BELOW TABLES HAVE THE MAXIMUM AND CURRENT CHARGES FOR ALL AGE GROUPS. You pay the applicable percentage of the GWB each calendar quarter. But for Contracts purchased IN WASHINGTON STATE, the charge is monthly. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine Accumulation Unit value. 5% FOR LIFE GMWB WITH BONUS AND ANNUAL STEP-UP ------------------- --------------------- ------------------------ Annual Charge Maximum Current ------------------- --------------------- ------------------------ ------------------- --------- ----------- ----------- ------------ Ages 45 - 49 1.00%/4 1.02%/12 0.55%/4 0.57%/12 50 - 54 1.15%/4 1.17%/12 0.70%/4 0.72%/12 55 - 59 1.50%/4 1.50%/12 0.95%/4 0.96%/12 60 - 64 1.50%/4 1.50%/12 0.95%/4 0.96%/12 65 - 69 1.50%/4 1.50%/12 0.95%/4 0.96%/12 70 - 74 0.90%/4 0.90%/12 0.55%/4 0.57%/12 75 - 80 0.65%/4 0.66%/12 0.40%/4 0.42%/12 ------------------- --------- ----------- ----------- ------------ ------------------- ---------------------------------------------- Charge Basis GWB ------------------- ---------------------------------------------- ------------------- --------- ----------- ----------- ------------ Charge Frequency Quarterly Monthly Quarterly Monthly For more information about the charge for this endorsement, please see "5% For Life GMWB With Bonus and Annual Step-Up Charge" beginning on page 36. For more information about how the endorsement works, please see "5% For Life GMWB With Bonus and Annual Step-Up" beginning on page 73. (12) 1.50% is the maximum annual charge of the For Life GMWB With Annual Step-Up, which charge is payable quarterly. THE BELOW TABLES HAVE THE MAXIMUM AND CURRENT CHARGES. You pay the applicable percentage of the GWB each calendar quarter. But for Contracts purchased IN WASHINGTON STATE, the charge is monthly. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine Accumulation Unit value. FOR LIFE GMWB WITH ANNUAL STEP-UP ------------------ ---------------------- ----------------------- Annual Charge Maximum Current ------------------ ---------------------- ----------------------- ------------------ ---------- ----------- ----------- ----------- Ages 45 - 85 1.50%/4 1.50%/12 0.95%/4 0.96%/12 ------------------ ---------------------------------------------- Charge Basis GWB ------------------ ---------------------------------------------- ------------------ ---------- ----------- ----------- ----------- Charge Frequency Quarterly Monthly Quarterly Monthly For more information about the charge for this endorsement, please see "For Life GMWB With Annual Step-Up Charge" beginning on page 37. For more information about how the endorsement works, please see "For Life GMWB With Annual Step-Up" beginning on page 80. (13) 1.71% is the maximum annual charge of the Joint For Life GMWB With Annual Step-Up, which charge is payable monthly. THE BELOW TABLES HAVE THE MAXIMUM AND CURRENT CHARGES. You pay the applicable percentage of the GWB each calendar quarter. But for Contracts purchased IN WASHINGTON STATE, the charge is monthly. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine Accumulation Unit value. JOINT FOR LIFE GMWB WITH ANNUAL STEP-UP ------------------ --------------------- ---------------------------- Annual Charge Maximum Current ------------------ --------------------- ---------------------------- ------------------ --------- ----------- ------------ --------------- Ages 45 - 85 1.70%/4 1.71%/12 1.15%/4 1.17%/12 ------------------ -------------------------------------------------- Charge Basis GWB ------------------ -------------------------------------------------- ------------------ --------- ----------- ------------ --------------- Charge Frequency Quarterly Monthly Quarterly Monthly For more information about the charge for this endorsement, please see "Joint For Life GMWB With Annual Step-Up Charge" beginning on page 37. For more information about how the endorsement works, please see "Joint For Life GMWB With Annual Step-Up" beginning on page 88. (14) 1.50% is the maximum annual charge of the For Life GMWB With Bonus and Annual Step-Up, which charge is payable quarterly. THE BELOW TABLES HAVE THE MAXIMUM AND CURRENT CHARGES. You pay the applicable percentage of the GWB each Contract Quarter. But for Contracts purchased IN WASHINGTON STATE, you pay the charge each Contract Month. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. FOR LIFE GMWB WITH BONUS AND ANNUAL STEP-UP ------------------ --------------------- --------------------------- Annual Charge Maximum Current ------------------ --------------------- --------------------------- ------------------ --------- ----------- ------------ -------------- Ages 45 - 80 1.50%/4 1.50%/12 0.95%/4 0.96%/12 ------------------ ------------------------------------------------- Charge Basis GWB ------------------ ------------------------------------------------- ------------------ --------- ----------- ------------ -------------- Charge Frequency Quarterly Monthly Quarterly Monthly For more information about the charge for this endorsement, please see "For Life GMWB With Bonus and Annual Step-Up Charge" beginning on page 39. For more information about how the endorsement works, please see "For Life GMWB With Bonus and Annual Step-Up " beginning on page 95. (15) 1.86% is the maximum annual charge of the Joint For Life GMWB With Bonus and Annual Step-Up, which charge is payable monthly. THE BELOW TABLES HAVE THE MAXIMUM AND CURRENT CHARGES. You pay the applicable percentage of the GWB each Contract Quarter. But for Contracts purchased IN WASHINGTON STATE, you pay the charge each Contract Month. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. JOINT FOR LIFE GMWB WITH BONUS AND ANNUAL STEP-UP ------------------ --------------------- --------------------------- Annual Charge Maximum Current ------------------ --------------------- --------------------------- ------------------ --------- ----------- ------------ -------------- Ages 45 - 80 1.85%/4 1.86%/12 1.25%/4 1.26%/12 ------------------ ------------------------------------------------- Charge Basis GWB ------------------ ------------------------------------------------- ------------------ --------- ----------- ------------ -------------- Charge Frequency Quarterly Monthly Quarterly Monthly For more information about the charge for see "Joint For Life GMWB With Bonus and A this endorsement, please beginning on page 40. For more informatinnual Step-Up Charge" endorsement works, please see "Joint For on about how the Annual Step-Up " beginning on page 103. Life GMWB With Bonus and (16) 1.20% is the maximum annual charge of the For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up, which charge is payable quarterly. The below tables have the maximum and current charges. You pay the applicable percentage of the GWB each Contract Quarter. But for Contracts purchased in Washington State, you pay the charge each Contract Month. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division, the guaranteed fixed account and the GMWB Fixed Account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up ------------------ --------------------- --------------------------- Annual Charge Maximum Current ------------------ --------------------- --------------------------- ------------------ --------- ----------- ------------ -------------- Ages 55 - 80 1.20%/4 1.20%/12 0.65%/4 0.66%/12 ------------------ ------------------------------------------------- Charge Basis GWB ------------------ ------------------------------------------------- ------------------ --------- ----------- ------------ -------------- Charge Frequency Quarterly Monthly Quarterly Monthly For more information about the charge for this endorsement, please see "For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up Charge" beginning on page 40. For more information about how the endorsement works, please see "For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up " beginning on page 114. Please check with your representative to learn about the current interest rate for the GMWB Fixed Account. You may also contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. (17) 1.50% is the maximum annual charge of the Joint For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up, which charge is payable quarterly. The below tables have the maximum and current charges. You pay the applicable percentage of the GWB each Contract Quarter. But for Contracts purchased in Washington State, you pay the charge each Contract Month. The GWB is the guaranteed amount available for future periodic withdrawals. If you select a GMWB when you purchase your Contract, the GWB is generally your initial premium payment, net of taxes and adjusted for any subsequent premium payments and withdrawals. If the GMWB is elected after the issue date, the GWB is generally your Contract Value on the date the endorsement is added, adjusted for any subsequent premium payments and withdrawals. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division, the guaranteed fixed account and the GMWB Fixed Account. Monthly charges are pro rata deducted based on the applicable Investment Divisions only. JOINT FOR LIFE GMWB WITH BONUS, GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT AND ANNUAL STEP-UP ------------------ --------------------- --------------------------- Annual Charge Maximum Current ------------------ --------------------- --------------------------- ------------------ --------- ----------- ------------ -------------- Ages 55 - 80 1.50%/4 1.50%/12 0.80%/4 0.81%/12 ------------------ ------------------------------------------------- Charge Basis GWB ------------------ ------------------------------------------------- ------------------ --------- ----------- ------------ -------------- Charge Frequency Quarterly Monthly Quarterly Monthly For more information about the charge for this endorsement, please see "Joint For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up Charge" beginning on page 42. For more information about how the endorsement works, please see "Joint For Life GMWB With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up " beginning on page 124. (18) If you select this Maximum Anniversary Value Death Benefit option, the mortality and expense risk charge under your contract will be reduced to 1.13%. THE NEXT ITEM SHOWS THE MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES CHARGED BY THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. -------------------------------------------------------------------------------- TOTAL ANNUAL FUND OPERATING EXPENSES -------------------------------------------------------------------------------- (Expenses that are deducted from Fund assets, including management and administration fees, 12b-1 service fees and other expenses.) Minimum: 0.58% Maximum: 2.27% -------------------------------------------------------------------------------- MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS BELOW. BUT PLEASE REFER TO THE FUNDS' PROSPECTUSES FOR EVEN MORE INFORMATION, INCLUDING INVESTMENT OBJECTIVES, PERFORMANCE, AND INFORMATION ABOUT JACKSON NATIONAL ASSET MANAGEMENT, LLC(R), THE FUNDS' ADVISER AND ADMINISTRATOR, AS WELL AS THE SUB-ADVISERS.
FUND OPERATING EXPENSES (AS AN ANNUAL PERCENTAGE OF THE FUND'S AVERAGE DAILY NET ASSETS) ACQUIRED MANAGEMENT FUND FEES ANNUAL AND ADMIN FEE SERVICE OTHER AND EXPENSES OPERATING FUND NAME A (12B-1) FEE EXPENSES B C EXPENSES ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/AIM International Growth 0.82% 0.20% 0.01% 0.01% 1.04% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/AIM Large Cap Growth F 0.77% 0.20% 0.01% 0.00% 0.98% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/AIM Real Estate 0.81% 0.20% 0.01% 0.01% 1.03% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/AIM Small Cap Growth 0.95% 0.20% 0.00% 0.01% 1.16% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Capital Guardian Global Balanced F 0.80% 0.20% 0.01% 0.00% 1.01% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Capital Guardian Global Diversified Research 0.90% 0.20% 0.00% 0.01% 1.11% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Capital Guardian International Small Cap 1.10% 0.20% 0.00% 0.04% 1.34% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Capital Guardian U.S. Growth Equity 0.80% 0.20% 0.00% 0.00% 1.00% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Credit Suisse Global Natural Resources 0.85% 0.20% 0.00% 0.01% 1.06% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Credit Suisse Long/Short 1.00% 0.20% 1.06% D 0.01% 2.27% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Eagle Core Equity 0.73% 0.20% 0.01% 0.01% 0.95% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Eagle SmallCap Equity 0.83% 0.20% 0.00% 0.01% 1.04% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Franklin Templeton Founding Strategy 0.05% 0.00% 0.00% 1.06% E 1.11% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Franklin Templeton Global Growth 0.90% 0.20% 0.00% 0.00% 1.10% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Franklin Templeton Income 0.82% 0.20% 0.00% 0.00% 1.02% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Franklin Templeton Mutual Shares 0.85% 0.20% 0.02% D 0.00% 1.07% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Franklin Templeton Small Cap Value 0.95% 0.20% 0.01% 0.01% 1.17% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Goldman Sachs Core Plus Bond 0.70% 0.20% 0.01% 0.01% 0.92% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Goldman Sachs Mid Cap Value 0.82% 0.20% 0.01% 0.01% 1.04% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Goldman Sachs Short Duration Bond 0.54% 0.20% 0.01% 0.00% 0.75% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/JPMorgan International Value 0.80% 0.20% 0.01% 0.00% 1.01% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/JPMorgan MidCap Growth 0.80% 0.20% 0.01% 0.01% 1.02% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/JPMorgan U.S. Government & Quality Bond 0.58% 0.20% 0.00% 0.01% 0.79% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Lazard Emerging Markets 1.09% 0.20% 0.00% 0.02% 1.31% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Lazard Mid Cap Equity F 0.81% 0.20% 0.01% 0.01% 1.03% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Lazard Small Cap Equity 0.85% 0.20% 0.01% 0.01% 1.07% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management S&P 500 Index 0.38% 0.20% 0.01% 0.01% 0.60% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management S&P 400 MidCap Index 0.39% 0.20% 0.01% 0.00% 0.60% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Small Cap Index 0.39% 0.20% 0.01% 0.00% 0.60% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management International Index 0.44% 0.20% 0.01% 0.00% 0.65% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Bond Index 0.40% 0.20% 0.00% 0.00% 0.60% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Enhanced S&P 500 Stock Index 0.58% 0.20% 0.01% 0.01% 0.80% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Index 5 0.05% 0.00% 0.01% 0.61% E 0.67% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management 10 x 10 0.05% 0.00% 0.01% 0.63% E 0.69% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Oppenheimer Global Growth 0.84% 0.20% 0.01% 0.00% 1.05% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PAM Asia ex-Japan 1.10% 0.20% 0.00% 0.08% 1.38% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PAM China-India 1.20% 0.20% 0.00% 0.08% 1.48% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PIMCO Real Return 0.60% 0.20% 0.00% 0.00% 0.80% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PIMCO Total Return Bond 0.60% 0.20% 0.00% 0.01% 0.81% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PPM America Core Equity F 0.75% 0.20% 0.01% 0.00% 0.96% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PPM America High Yield Bond F 0.57% 0.20% 0.00% 0.01% 0.78% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PPM America Mid Cap Value 0.85% 0.20% 0.01% 0.00% 1.06% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PPM America Small Cap Value 0.85% 0.20% 0.01% 0.00% 1.06% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/PPM America Value Equity 0.65% 0.20% 0.01% 0.00% 0.86% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Select Balanced 0.58% 0.20% 0.00% 0.01% 0.79% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Select Money Market 0.38% 0.20% 0.00% 0.00% 0.58% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Select Value 0.63% 0.20% 0.00% 0.00% 0.83% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/T. Rowe Price Established Growth 0.68% 0.20% 0.00% 0.01% 0.89% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/T. Rowe Price Mid-Cap Growth 0.81% 0.20% 0.01% 0.02% 1.04% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/T. Rowe Price Value 0.75% 0.20% 0.00% 0.01% 0.96% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Managed Conservative 0.18% 0.00% 0.00% 0.88% E 1.06% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Managed Moderate 0.18% 0.00% 0.01% 0.91% E 1.10% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Managed Moderate Growth 0.15% 0.00% 0.01% 0.96% E 1.12% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Managed Growth 0.15% 0.00% 0.00% 0.98% E 1.13% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Managed Aggressive Growth 0.17% 0.00% 0.00% 1.02% E 1.19% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Retirement Income 0.18% 0.00% 0.00% 0.90% E 1.08% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Retirement 2015 0.18% 0.00% 0.00% 1.01% E 1.19% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Retirement 2020 0.18% 0.00% 0.00% 1.02% E 1.20% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Retirement 2025 0.18% 0.00% 0.00% 1.04% E 1.22% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Disciplined Moderate 0.18% 0.00% 0.00% 0.69% E 0.87% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Disciplined Moderate Growth 0.18% 0.00% 0.00% 0.71% E 0.89% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Disciplined Growth 0.18% 0.00% 0.01% 0.67% E 0.86% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Competitive Advantage 0.50% 0.20% 0.00% 0.04% 0.74% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Dividend Income & Growth 0.50% 0.20% 0.00% 0.05% 0.75% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Intrinsic Value 0.50% 0.20% 0.00% 0.04% 0.74% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P Total Yield 0.50% 0.20% 0.00% 0.04% 0.74% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/S&P 4 0.05% 0.00% 0.00% 0.74% E 0.79% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management DowSM 10 0.44% 0.20% 0.02% 0.00% 0.66% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management S&P(R) 10 0.44% 0.20% 0.01% 0.00% 0.65% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Global 15 0.48% 0.20% 0.01% 0.00% 0.69% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Nasdaq(R) 25 0.50% 0.20% 0.04% 0.00% 0.74% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Value Line(R) 30 0.43% 0.20% 0.16% 0.00% 0.79% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management DowSM Dividend 0.45% 0.20% 0.02% 0.00% 0.67% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management S&P(R) 24 0.52% 0.20% 0.01% 0.00% 0.73% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management 25 0.44% 0.20% 0.00% 0.00% 0.64% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Select Small-Cap 0.44% 0.20% 0.01% 0.00% 0.65% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management JNL 5 0.42% 0.20% 0.02% 0.00% 0.64% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management VIP 0.44% 0.20% 0.05% 0.00% 0.69% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management JNL Optimized 5 0.46% 0.20% 0.05% 0.00% 0.71% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management S&P(R) SMid 60 0.52% 0.20% 0.01% 0.01% 0.74% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management NYSE(R) International 25 0.57% 0.20% 0.04% 0.01% 0.82% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Communications Sector 0.49% 0.20% 0.03% 0.00% 0.72% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Consumer Brands Sector 0.52% 0.20% 0.03% 0.00% 0.75% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Financial Sector 0.51% 0.20% 0.03% 0.00% 0.74% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Healthcare Sector 0.49% 0.20% 0.03% 0.00% 0.72% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Oil & Gas Sector 0.44% 0.20% 0.03% 0.00% 0.67% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------ JNL/Mellon Capital Management Technology Sector 0.50% 0.20% 0.03% 0.00% 0.73% ----------------------------------------------------------- --------------- ------------- -------------- -------------- ------------
A Certain Funds pay Jackson National Asset Management, LLC, the Administrator, an administrative fee for certain services provided to the Fund by the Administrator. The JNL/AIM International Growth Fund, the JNL/Capital Guardian International Small Cap Fund, the JNL/Capital Guardian Global Diversified Research Fund, the JNL/Capital Guardian Global Balanced Fund, the JNL/Credit Suisse Global Natural Resources Fund, the JNL/Credit Suisse Long/Short Fund, the JNL/Franklin Templeton Global Growth Fund, the JNL/JPMorgan International Value Fund, the JNL/Lazard Emerging Markets Fund, the JNL/Oppenheimer Global Growth Fund, and all of the JNL/Mellon Capital Management Funds EXCEPT the JNL/Mellon Capital Management S&P 500 Index Fund, the JNL/Mellon Capital Management S&P 400 MidCap Index Fund, the JNL/Mellon Capital Management Small Cap Index Fund, the JNL/Mellon Capital Management Bond Index Fund, the JNL/Mellon Capital Management Enhanced S&P 500 Stock Index Fund, the JNL/Mellon Capital Management Index 5 Fund, the JNL/Mellon Capital Management 10 x 10 Fund, the JNL/Mellon Capital Management Global 15 Fund, and the JNL/Mellon Capital Management NYSE(R) International 25 Fund pay an administrative fee of 0.15%. The JNL/Mellon Capital Management Global 15 Fund, the JNL/Mellon Capital Management NYSE(R) International 25 Fund, and the JNL/PAM Asia ex-Japan Fund pay an administrative fee of 0.20%. The JNL/PAM China-India Fund pays an administrative fee of 0.30%. The JNL/Franklin Templeton Founding Strategy Fund, the JNL/Mellon Capital Management Index 5 Fund, the JNL/Mellon Capital Management 10 x 10 Fund, and all of the JNL/S&P Funds EXCEPT the JNL/S&P Competitive Advantage Fund, the JNL/S&P Dividend Income & Growth Fund, the JNL/S&P Intrinsic Value Fund, and the JNL/S&P Total Yield Fund pay an administrative fee of 0.05%. All other Funds pay an administrative fee of 0.10%. The Management and Administrative Fee and the Annual Operating Expenses columns in this table reflect the inclusion of the applicable administrative fee. B Other expenses include registration fees, licensing costs, a portion of the Chief Compliance Officer costs, directors and officers insurance, the fees and expenses of the disinterested Trustees/Managers and of independent legal counsel to the disinterested Trustees/Managers. C ACQUIRED FUND FEES AND EXPENSES. The expenses shown represent the Funds' pro rata share of fees and expenses of investing in mutual funds, including money market funds used for purposes of investing available cash balances. D Amount includes the costs associated with the Fund's short sales on equity securities. When a cash dividend is declared on a security for which the Fund holds a short position, the Fund incurs the obligation to pay an amount equal to that dividend to the lender of the shorted security. In addition, the Fund incurs fees in connection with the borrowing of securities related to short sale transactions. For December 31, 2007, total cost of short sales transactions to the JNL/Credit Suisse Long/Short Fund, and JNL/Franklin Templeton Mutual Shares Fund was 1.06% and 0.01%, respectively. E Amounts are based on the allocations to underlying funds during the period ended December 31, 2007. Current allocations may be different, and therefore, actual amounts for subsequent periods may be higher or lower than those shown above. F The management/administrative fee has been restated to reflect a contract amendment; the fee was adjusted to the level shown in the table above. EXAMPLE The example below is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity Contracts. These costs include Contract Owner transaction expenses, Contract fees, Separate Account annual expenses and Fund fees and expenses. (The Annual Contract Maintenance Charge is determined by dividing the total amount of such charges collected during the calendar year by the total market value of the Investment Divisions, Fixed Accounts and the GMWB Fixed Account, if applicable.) The example assumes that you invest $10,000 in the Contract for the time periods indicated. Neither transfer fees nor premium tax charges are reflected in the example. The example also assumes that your investment has a 5% return on assets each year. The following example includes maximum Fund fees and expenses and the cost if you select the Earnings Protection Benefit Endorsement, the Maximum Anniversary Value Death Benefit Option and the Guaranteed Minimum Withdrawal Benefit (using the maximum possible charge). Although your actual costs may be higher or lower, based on these assumptions, your costs would be: If you surrender your Contract at the end of the applicable time period: 1 YEAR 3 YEARS 5 YEARS 10 YEARS $664 $1,815 $2,943 $5,688 If you annuitize at the end of the applicable time period: 1 YEAR * 3 YEARS 5 YEARS 10 YEARS $664 $1,815 $2,943 $5,688 * Withdrawal charges apply to income payments occurring within one year of the Contract's Issue Date. If you do NOT surrender your Contract: 1 YEAR 3 YEARS 5 YEARS 10 YEARS $594 $1,765 $2,913 $5,688 THE EXAMPLE DOES NOT REPRESENT PAST OR FUTURE EXPENSES. YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER. CONDENSED FINANCIAL INFORMATION. The information about the values of all accumulation units constitutes the condensed financial information, which can be found in the Statement of Additional Information. The value of an accumulation unit is determined on the basis of changes in the per share value of an underlying fund and Separate Account charges for the base Contract and the various combinations of optional endorsements. The financial statements of the Separate Account and Jackson can be found in the Statement of Additional Information. The financial statements of the Separate Account include information about all the contracts offered through the Separate Account. The financial statements of Jackson that are included should be considered only as bearing upon the company's ability to meet its contractual obligations under the Contracts. Jackson's financial statements do not bear on the future investment experience of the assets held in the Separate Account. For your copy of the Statement of Additional Information, please contact us at the Annuity Service Center. Our contact information is on the cover page of this prospectus. THE ANNUITY CONTRACT The fixed and variable annuity Contract offered by Jackson is a Contract between you, the Owner, and Jackson, an insurance company. The Contract provides a means for allocating on a tax-deferred basis to the Investment Divisions, the guaranteed fixed accounts and the GMWB Fixed Account (only if the optional LifeGuard Select GMWB or LifeGuard Select with Joint Option GMWB are elected). The Contract is intended for retirement savings or other long-term investment purposes and provides for a death benefit and guaranteed income options. The Contract, like all deferred annuity contracts, has two phases: (1) the accumulation phase and (2) the income phase. Withdrawals under a non-qualified contract will be taxable on an "income first" basis. This means that any withdrawal from a non-qualified contract that does not exceed the accumulated income under the Contract will be taxable in full. Any withdrawals under a tax-qualified contract will be taxable except to the extent that they are allocable to an investment in the Contract (any after-tax contributions). In most cases, there will be little or no investment in the Contract for a tax-qualified contract because contributions will have been made on a pre-tax or tax-deductible basis. Income payments under either a non-qualified contract or a tax-qualified contract will be taxable except to the extent that they represent a partial repayment of the investment in the Contract. The Contract offers guaranteed fixed accounts. The guaranteed fixed accounts each offer a minimum interest rate that is guaranteed by Jackson for the duration of the guaranteed fixed account period. While your money is in a guaranteed fixed account, the interest your money earns and your principal are guaranteed by Jackson. The value of a guaranteed fixed account may be reduced if you make a withdrawal prior to the end of the guaranteed fixed account period, but will never be less than the premium payments accumulated at 3% per year. If you choose to have your annuity payments come from the guaranteed fixed accounts, your payments will remain level throughout the entire income phase. In addition to the guaranteed fixed accounts, there is a GMWB Fixed Account. The GMWB Fixed Account is available ONLY in conjunction with the purchase of the LifeGuard Select GMWB or the LifeGuard Select with Joint Option GMWB. If you elect to purchase one of these two GMWBs, automatic transfers of your Contract Value may be required to and from the GMWB Fixed Account according to non-discretionary formulas. You may not allocate additional monies to the GMWB Fixed Account. For more information regarding the GMWB Fixed Account, please see below. The Contract also offers Investment Divisions. The Investment Divisions are designed to offer the potential for a higher return than the guaranteed fixed accounts. HOWEVER, THIS IS NOT GUARANTEED. IT IS POSSIBLE FOR YOU TO LOSE YOUR CONTRACT VALUE ALLOCATED TO ANY OF THE INVESTMENT DIVISIONS. If you put money in the Investment Divisions, the amount of money you are able to accumulate in your Contract during the accumulation phase depends upon the performance of the Investment Divisions you select. The amount of the income payments you receive during the income phase also will depend, in part, on the performance of the Investment Divisions you choose for the income phase. As the Owner, you can exercise all the rights under the Contract. You can assign the Contract at any time during your lifetime but Jackson will not be bound until it receives written notice of the assignment (there is an assignment form). An assignment may be a taxable event. Your ability to change ownership is limited on Contracts with one of the For Life GMWBs. Please contact our Annuity Service Center for help and more information. The Contract is a flexible premium fixed and variable deferred annuity and may be issued as either an individual or a group contract. Contracts issued in your state may provide different features and benefits than those described in this prospectus. This prospectus provides a description of the material rights and obligations under the Contract. Your Contract and any endorsements are the formal contractual agreement between you and the Company. In those states where Contracts are issued as group contracts, references throughout the prospectus to "Contract(s)" shall also mean "certificate(s)." JACKSON Jackson is a stock life insurance company organized under the laws of the state of Michigan in June 1961. Its legal domicile and principal business address is 1 Corporate Way, Lansing, Michigan 48951. Jackson is admitted to conduct life insurance and annuity business in the District of Columbia and all states except New York. Jackson is ultimately a wholly owned subsidiary of Prudential plc (London, England). Jackson has responsibility for administration of the Contracts and the Separate Account. We maintain records of the name, address, taxpayer identification number and other pertinent information for each Contract Owner and the number and type of Contracts issued to each Contract Owner, and records with respect to the value of each Contract. Jackson is working to provide documentation electronically. When this program is available, Jackson will, as permitted, forward documentation electronically. Please contact Jackson's Service Center for more information. THE GUARANTEED FIXED ACCOUNTS AND GMWB FIXED ACCOUNT CONTRACT VALUE ALLOCATED TO A GUARANTEED FIXED ACCOUNT AND/OR THE GMWB FIXED ACCOUNT WILL BE PLACED WITH OTHER ASSETS IN JACKSON'S GENERAL ACCOUNT. THE GUARANTEED FIXED ACCOUNTS AND THE GMWB FIXED ACCOUNT ARE NOT REGISTERED WITH THE SEC AND THE SEC DOES NOT REVIEW THE INFORMATION WE PROVIDE TO YOU ABOUT THEM. DISCLOSURES REGARDING THE GUARANTEED FIXED ACCOUNTS AND THE GMWB FIXED ACCOUNT, HOWEVER, MAY BE SUBJECT TO THE GENERAL PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES. YOUR CONTRACT CONTAINS A MORE COMPLETE DESCRIPTION OF THE GUARANTEED FIXED ACCOUNTS AND THE GMWB FIXED ACCOUNT. THE GMWB FIXED ACCOUNT THE GUARANTEED MINIMUM WITHDRAWAL BENEFIT (GMWB) FIXED ACCOUNT. The GMWB Fixed Account is available only in conjunction with the purchase of the LifeGuard Select GMWB or the LifeGuard Select with Joint Option GMWB. If you elect to purchase one of these two GMWBs, automatic transfers of your Contract Value may be required to and from the GMWB Fixed Account according to non-discretionary formulas. You may not allocate additional monies to the GMWB Fixed Account. The Contract Value in the GMWB Fixed Account is credited with a specific interest rate. The interest rate initially declared for each transfer to the GMWB Fixed Account will remain in effect for a period of not less than one year. GMWB Fixed Account interest rates for subsequent periods may be higher or lower than the rates previously declared. The interest rate is credited daily to the Contract Value in the GMWB Fixed Account and the rate may vary by state but will never be less than 3%. Please contact us at the Annuity Service Center or contact your representative to obtain the currently declared GMWB Fixed Account interest rate for your state. Our contact information is on the cover page of this prospectus. Contract charges deducted from the guaranteed fixed accounts and Investment Divisions are also deducted from the GMWB Fixed Account in accordance with your Contract's provisions. DCA, DCA+, Earnings Sweep and Automatic Rebalancing are not available to or from the GMWB Fixed Account. There is no interest rate adjustment on transfers, withdrawals or deductions from the GMWB Fixed Account. Transfers to and from the GMWB Fixed Account are AUTOMATIC according to non-discretionary formulas; you may NOT CHOOSE to transfer amounts to and from the GMWB Fixed Account. These automatic transfers will not count against the 15 free transfers in a Contract Year. You will receive a confirmation statement reflecting the automatic transfer of any Contract Value to and from the GMWB Fixed Account. For more detailed information regarding LifeGuard Select, including the GMWB Fixed Account, please see "For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up Endorsement" beginning on page 112. For more detailed information regarding LifeGuard Select with Joint Option, please see "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up Endorsement" beginning on page 124. THE SEPARATE ACCOUNT The Jackson National Separate Account - I was established by Jackson on June 14, 1993, pursuant to the provisions of Michigan law. The Separate Account is a separate account under state insurance law and a unit investment trust under federal securities law and is registered as an investment company with the SEC. The assets of the Separate Account legally belong to Jackson and the obligations under the Contracts are obligations of Jackson. However, the Contract assets in the Separate Account are not chargeable with liabilities arising out of any other business Jackson may conduct. All of the income, gains and losses resulting from these assets are credited to or charged against the Contracts and not against any other Contracts Jackson may issue. The Separate Account is divided into Investment Divisions. Jackson does not guarantee the investment performance of the Separate Account or the Investment Divisions. INVESTMENT DIVISIONS Your Contract Value may be allocated to no more than 18 Investment Divisions, the GMWB Fixed Account and the Fixed Accounts at any one time. Each Investment Division purchases the shares of one underlying Fund (mutual fund portfolio) that has its own investment objective. The following Investment Divisions are each known as a Fund of Funds. Funds offered in a Fund of Funds structure may have higher expenses than direct investments in the underlying Funds. You should read the prospectus for the JNL Series Trust for more information. JNL/Franklin Templeton Founding Strategy JNL/Mellon Capital Management Index 5 JNL/Mellon Capital Management 10 x 10 JNL/S&P Managed Conservative JNL/S&P Managed Moderate JNL/S&P Managed Moderate Growth JNL/S&P Managed Growth JNL/S&P Managed Aggressive Growth JNL/S&P Retirement Income JNL/S&P Retirement 2015 JNL/S&P Retirement 2020 JNL/S&P Retirement 2025 JNL/S&P Disciplined Moderate JNL/S&P Disciplined Moderate Growth JNL/S&P Disciplined Growth JNL/S&P 4 THE NAMES OF THE FUNDS THAT ARE AVAILABLE, ALONG WITH THE NAMES OF THE ADVISERS AND SUB-ADVISERS AND A BRIEF STATEMENT OF EACH INVESTMENT OBJECTIVE, ARE BELOW: -------------------------------------------------------------------------------- JNL SERIES TRUST -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- JNL/AIM INTERNATIONAL GROWTH FUND Jackson National Asset Management, LLC (and AIM Capital Management, Inc.) Seeks long-term growth of capital by investing in a diversified portfolio of reasonably priced, quality international equity securities whose issuers are considered by the Fund's portfolio managers to have strong fundamentals and/or accelerating earnings growth. -------------------------------------------------------------------------------- JNL/AIM LARGE CAP GROWTH FUND Jackson National Asset Management, LLC (and AIM Capital Management, Inc.) Seeks long-term growth of capital by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in securities of large-capitalization companies. -------------------------------------------------------------------------------- JNL/AIM REAL ESTATE FUND Jackson National Asset Management, LLC (and AIM Capital Management, Inc. and INVESCO Institutional (N.A.), Inc. (sub-sub-adviser)) Seeks high total return by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in real estate and real estate-related companies, including real estate investment trusts. -------------------------------------------------------------------------------- JNL/AIM SMALL CAP GROWTH FUND Jackson National Asset Management, LLC (and AIM Capital Management, Inc.) Seeks long-term growth of capital by normally investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in securities of small-cap companies. -------------------------------------------------------------------------------- JNL/CAPITAL GUARDIAN GLOBAL BALANCED FUND Jackson National Asset Management, LLC (and Capital Guardian Trust Company) Seeks income and capital growth, consistent with reasonable risk via balanced accomplishment of long-term growth of capital, current income, and conservation of principal through investments in stocks and fixed-income securities of U.S. and non-U.S. issuers. The Fund's neutral position is a 65%/35% blend of equities and fixed-income, but may allocate 55% to 75% to equities and 25% to 45% to fixed-income. -------------------------------------------------------------------------------- JNL/CAPITAL GUARDIAN GLOBAL DIVERSIFIED RESEARCH FUND Jackson National Asset Management, LLC (and Capital Guardian Trust Company) Seeks long-term growth of capital and income by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a portfolio consisting of equity securities of U.S. and non-U.S. issuers. The Fund normally will invest in common stocks, preferred shares and convertible securities of companies with market capitalization greater than $1 billion at the time of purchase. -------------------------------------------------------------------------------- JNL/CAPITAL GUARDIAN INTERNATIONAL SMALL CAP FUND Jackson National Asset Management, LLC (and Capital Guardian Trust Company) Seeks long-term growth of capital and income by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a portfolio consisting primarily of equity securities of non-U.S. issuers (including ADRs and other U.S. registered securities) and securities whose principal markets are outside the U.S. with market capitalization of between $50 million and $2 billion at the time of purchase. -------------------------------------------------------------------------------- JNL/CAPITAL GUARDIAN U.S. GROWTH EQUITY FUND Jackson National Asset Management, LLC (and Capital Guardian Trust Company) Seeks long-term growth of capital and income by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a portfolio consisting primarily of equity securities of U.S. issuers and securities whose principal markets are in the U.S. (including ADRs and other U.S. registered foreign securities that are tied economically to the U.S.). The Fund normally will invest in common stocks and convertible securities of companies with market capitalization greater than $1.5 billion at the time of purchase. -------------------------------------------------------------------------------- JNL/CREDIT SUISSE GLOBAL NATURAL RESOURCES FUND Jackson National Asset Management, LLC (and Credit Suisse Asset Management, LLC and Credit Suisse Asset Management Limited (sub-sub-adviser)) Seeks long-term growth of capital by investing a minimum of 95% (of the majority of its assets) of its assets in worldwide companies. -------------------------------------------------------------------------------- JNL/CREDIT SUISSE LONG/SHORT FUND Jackson National Asset Management, LLC (and Credit Suisse Asset Management, LLC) Seeks total return by investing through a quantitative active equity management strategy that allows the portfolio to underweight unattractive stocks beyond benchmark weights, resulting in short positions on certain stocks. -------------------------------------------------------------------------------- JNL/EAGLE CORE EQUITY FUND Jackson National Asset Management, LLC (and Eagle Asset Management, Inc.) Seeks long-term growth through capital appreciation and, secondarily, current income by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) equity securities consisting primarily of common stocks of large U.S. companies. -------------------------------------------------------------------------------- JNL/EAGLE SMALLCAP EQUITY FUND Jackson National Asset Management, LLC (and Eagle Asset Management, Inc.) Seeks long-term capital appreciation by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a diversified portfolio of equity securities of U.S. companies with market capitalizations in the range of $100 million to $3 billion. -------------------------------------------------------------------------------- JNL/FRANKLIN TEMPLETON FOUNDING STRATEGY FUND Jackson National Asset Management, LLC Seeks capital appreciation by investing in a combination of mutual funds (Underlying Funds) on a fixed percentage basis. These Underlying Funds, in turn invest primarily in U.S. and foreign equity securities, and, to a lesser extent, fixed-income and money market securities. -------------------------------------------------------------------------------- JNL/FRANKLIN TEMPLETON GLOBAL GROWTH FUND Jackson National Asset Management, LLC (and Templeton Global Advisors Limited) Seeks long-term capital growth by investing primarily in the equity securities of companies located anywhere in the world, including emerging markets (under normal market conditions). -------------------------------------------------------------------------------- JNL/FRANKLIN TEMPLETON INCOME FUND Jackson National Asset Management, LLC (and Franklin Advisers, Inc.) Seeks to maximize income while maintaining prospects for capital appreciation by investing in a diversified portfolio of debt and equity securities. -------------------------------------------------------------------------------- JNL/FRANKLIN TEMPLETON MUTUAL SHARES FUND Jackson National Asset Management, LLC (and Franklin Mutual Advisers, LLC) Seeks capital appreciation, which may occasionally be short-term, and secondarily, income by investing in equity securities of companies in any nation, pursuant to manager discretion. The Fund invests primarily (up to 80%) in mid- and large-cap companies with market capitalization greater than $1.5 billion at the time of investment, but it may invest a significant portion of its assets in small-cap companies as well. -------------------------------------------------------------------------------- JNL/FRANKLIN TEMPLETON SMALL CAP VALUE FUND Jackson National Asset Management, LLC (and Franklin Advisory Services, LLC Seeks long-term total return by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in securities of small-capitalization companies. -------------------------------------------------------------------------------- JNL/GOLDMAN SACHS CORE PLUS BOND FUND Jackson National Asset Management, LLC (and Goldman Sachs Asset Management, L.P.) Seeks a high level of current income, with capital appreciation as a secondary objective, by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a globally diverse portfolio of bonds and other fixed-income securities and related investments. -------------------------------------------------------------------------------- JNL/GOLDMAN SACHS MID CAP VALUE FUND Jackson National Asset Management, LLC (and Goldman Sachs Asset Management, L.P.) Seeks long-term capital appreciation by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a diversified portfolio of securities in mid-cap issuers with public stock market capitalizations within the range of market capitalization of companies constituting the Russell Midcap(R) Value Index at the time of investing. -------------------------------------------------------------------------------- JNL/GOLDMAN SACHS SHORT DURATION BOND FUND Jackson National Asset Management, LLC (and Goldman Sachs Asset Management, L.P.) Seeks a high level of current income, and secondarily, the potential for capital appreciation by investing 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in fixed income securities. -------------------------------------------------------------------------------- JNL/JPMORGAN INTERNATIONAL VALUE FUND Jackson National Asset Management, LLC (and J.P. Morgan Investment Management, Inc.) Seeks high total return from a portfolio of equity securities of foreign companies in developed and, to a lesser extent, developing markets. -------------------------------------------------------------------------------- JNL/JPMORGAN MIDCAP GROWTH FUND Jackson National Asset Management, LLC (and J.P. Morgan Investment Management, Inc.) Seeks capital growth over the long-term by investing primarily in common stocks of mid-cap companies which its sub-adviser, J.P. Morgan Investment Management Inc. ("JPMorgan"), believes are capable of achieving sustained growth. Under normal circumstances, the Fund invests at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a broad portfolio of common stocks of companies with market capitalizations equal to those within the universe of Russell Midcap Growth Index stocks at the time of purchase. -------------------------------------------------------------------------------- JNL/JPMORGAN U.S. GOVERNMENT & QUALITY BOND FUND Jackson National Asset Management, LLC (and J.P. Morgan Investment Management, Inc.) Seeks a high level of current income by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in: (i) U.S. treasury obligations; (ii) obligations issued or guaranteed by agencies or instrumentalities of the U.S. government which are backed by their own credit and may not be backed by the full faith and credit of the U.S. government; and (iii) mortgage-backed securities guaranteed by the Government National Mortgage Association that are supported by the full faith and credit of the U.S. government. -------------------------------------------------------------------------------- JNL/LAZARD EMERGING MARKETS FUND Jackson National Asset Management, LLC (and Lazard Asset Management LLC) Seeks long-term capital appreciation by investing 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in equity securities of companies whose principal business activities are located in emerging market countries and that the sub-adviser believes are undervalued based on their earnings, cash flow or asset values. -------------------------------------------------------------------------------- JNL/LAZARD MID CAP EQUITY FUND Jackson National Asset Management, LLC (and Lazard Asset Management) Seeks long-term capital appreciation by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a non-diversified portfolio of equity securities of U.S. companies with market capitalizations in the range of companies represented in the Russell Mid Cap Index and that the sub-adviser believes are undervalued. -------------------------------------------------------------------------------- JNL/LAZARD SMALL CAP EQUITY FUND Jackson National Asset Management, LLC (and Lazard Asset Management) Seeks long-term capital appreciation by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a non-diversified portfolio of equity securities of U.S. companies with market capitalizations in the range of companies represented by the Russell 2000(R) Index that the sub-adviser believes are undervalued. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT S&P 500 INDEX FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks to match the performance of the S&P 500(R) Index to provide long-term capital growth by investing in large-capitalization company securities. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT S&P 400 MIDCAP INDEX FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks to match the performance of the S&P 400(R) Index to provide long-term capital growth by investing in equity securities of medium capitalization-weighted domestic corporations. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT SMALL CAP INDEX FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks to match the performance of the Russell 2000(R) Index to provide long-term growth of capital by investing in equity securities of small- to mid-size domestic companies. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT INTERNATIONAL INDEX FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks to match the performance of the Morgan Stanley Capital International Europe Australasia Far East Free Index to provide long-term capital growth by investing in international equity securities attempting to match the characteristics of each country within the index. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT BOND INDEX FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks to match the performance of the Lehman Brothers Aggregate Bond Index to provide a moderate rate of income by investing in domestic fixed-income investments. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT ENHANCED S&P 500 STOCK INDEX FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks to exceed the performance of the S&P 500 Index by tilting towards stocks having higher expected return while maintaining overall index characteristics. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT INDEX 5 FUND Jackson National Asset Management, LLC Seeks capital appreciation by initially allocating in the following Funds: >> 20% in the JNL/Mellon Capital Management S&P 500 Index Fund; >> 20% in the JNL/Mellon Capital Management S&P 400 MidCap Index Fund; >> 20% in the JNL/Mellon Capital Management Small Cap Index Fund; >> 20% in the JNL/Mellon Capital Management International Index Fund; and >> 20% in the JNL/Mellon Capital Management Bond Index Fund. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT 10 X 10 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks capital appreciation and income by initially allocating in the following Funds: >> 50% in the Class A shares of the JNL/Mellon Capital Management JNL 5 Fund; >> 10% in the Class A shares of the JNL/Mellon Capital Management S&P 500 Index Fund; >> 10% in the Class A shares of the JNL/Mellon Capital Management S&P 400 MidCap Index Fund; >> 10% in the Class A shares of the JNL/Mellon Capital Management Small Cap Index Fund; >> 10% in the Class A shares of the JNL/Mellon Capital Management International Index Fund; and >> 10% in the Class A shares of the JNL/Mellon Capital Management Bond Index Fund. -------------------------------------------------------------------------------- JNL/OPPENHEIMER GLOBAL GROWTH FUND Jackson National Asset Management, LLC (and OppenheimerFunds, Inc.) Seeks capital appreciation by investing primarily in common stocks of companies in the U.S. and foreign countries. The Fund can invest without limit in foreign securities and can invest in any country, including countries with developed or emerging markets. -------------------------------------------------------------------------------- JNL/PAM ASIA EX-JAPAN FUND Jackson National Asset Management, LLC (and Prudential Asset Management (Singapore) Limited) Seeks long-term total return by investing under normal circumstances at least 80% of its assets (net assets plus the amount of any borrowings for investment purpose) in equity and equity-related securities (such as depositary receipts, convertible bonds and warrants) of companies, which are listed, incorporated, or have their area of primary activity in the Asia ex-Japan region. -------------------------------------------------------------------------------- JNL/PAM CHINA-INDIA FUND Jackson National Asset Management, LLC (and Prudential Asset Management (Singapore) Limited) Seeks long-term total return by investing normally, 80% of its assets (net assets plus the amount of any borrowings for investment purpose) in equity and equity-related securities (such as depositary receipts, convertible bonds and warrants) of corporations, which are incorporated in, or listed in, or have their area of primary activity in the People's Republic of China and India. -------------------------------------------------------------------------------- JNL/PIMCO REAL RETURN FUND Jackson National Asset Management, LLC (and Pacific Investment Management Company LLC) Seeks maximum real return, consistent with preservation of real capital and prudent investment management by investing under normal circumstances in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or government-sponsored enterprises and corporations. -------------------------------------------------------------------------------- JNL/PIMCO TOTAL RETURN BOND FUND Jackson National Asset Management, LLC (and Pacific Investment Management Company LLC) Seeks maximum total return, consistent with the preservation of capital and prudent investment management, by investing under normal circumstances at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a diversified portfolio of investment-grade, fixed-income securities of U.S. and foreign issuers such as government, corporate, mortgage- and other asset-backed securities and cash equivalents. -------------------------------------------------------------------------------- JNL/PPM AMERICA CORE EQUITY FUND Jackson National Asset Management, LLC (and PPM America, Inc.) Seeks long-term capital growth by investing primarily, at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a diversified portfolio of equity securities of U.S. companies with market capitalizations within the range of companies constituting the S&P 500 Index at the time of the initial purchase. If the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. -------------------------------------------------------------------------------- JNL/PPM AMERICA HIGH YIELD BOND FUND Jackson National Asset Management, LLC (and PPM America, Inc.) Seeks to maximize current income, with capital appreciation as a secondary objective, by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in high-yield, high-risk debt securities ("junk bonds") and related investments and may invest in derivative instruments that have economic characteristics similar to the fixed income instruments, and in derivative instruments such as options, futures contracts or swap agreements, including credit default swaps, and may also invest in securities of foreign insurers. -------------------------------------------------------------------------------- JNL/PPM AMERICA MID CAP VALUE FUND Jackson National Asset Management, LLC (and PPM America, Inc.) Seeks long-term growth of capital by investing, primarily, at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a diversified portfolio of equity securities of U.S. companies with market capitalizations within the range of companies, constituting the Russell Midcap Index at the time of the initial purchase. If the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. -------------------------------------------------------------------------------- JNL/PPM AMERICA SMALL CAP VALUE FUND Jackson National Asset Management, LLC (and PPM America, Inc.) Seeks long-term growth of capital by investing, primarily, at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a diversified portfolio of equity securities of U.S. companies with market capitalizations within the range of companies constituting the S&P Small Cap 600 Index at the time of the initial purchase. If the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. -------------------------------------------------------------------------------- JNL/PPM AMERICA VALUE EQUITY FUND Jackson National Asset Management, LLC (and PPM America, Inc.) Seeks long-term capital growth by investing primarily in a diversified portfolio of equity securities of domestic companies with market capitalizations within the range of companies constituting the S&P 500 Index. The capitalization range of the S&P 500 Index is currently between $1.336 billion and $510.201 billion. At least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) will be invested, under normal circumstances, in equity securities. -------------------------------------------------------------------------------- JNL/SELECT BALANCED FUND Jackson National Asset Management, LLC (and Wellington Management Company, LLP) Seeks reasonable income and long-term capital growth by investing primarily in a diversified portfolio of common stock and investment grade fixed-income securities, but may also invest up to 15% of its assets in foreign equity and fixed income securities. -------------------------------------------------------------------------------- JNL/SELECT MONEY MARKET FUND Jackson National Asset Management, LLC (and Wellington Management Company, LLP) Seeks a high level of current income as is consistent with the preservation of capital and maintenance of liquidity by investing in high quality, short-term money market instruments. -------------------------------------------------------------------------------- JNL/SELECT VALUE FUND Jackson National Asset Management, LLC (and Wellington Management Company, LLP) Seeks long-term growth of capital by investing at least 65% of its total assets in common stocks of domestic companies, focusing on companies with large market capitalizations. Using a value approach, the Fund seeks to invest in stocks that are undervalued relative to other stocks. -------------------------------------------------------------------------------- JNL/T. ROWE PRICE ESTABLISHED GROWTH FUND Jackson National Asset Management, LLC (and T. Rowe Price Associates, Inc.) Seeks long-term growth of capital and increasing dividend income by investing primarily in common stocks, concentrating its investments in well-established growth companies. -------------------------------------------------------------------------------- JNL/T. ROWE PRICE MID-CAP GROWTH FUND Jackson National Asset Management, LLC (and T. Rowe Price Associates, Inc.) Seeks long-term growth of capital by normally investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a broadly diversified portfolio of common stocks of medium-sized (mid-capitalization) companies which the sub-adviser expects to grow at a faster rate than the average company. -------------------------------------------------------------------------------- JNL/T. ROWE PRICE VALUE FUND Jackson National Asset Management, LLC (and T. Rowe Price Associates, Inc.) Seeks long-term capital appreciation by investing in common stocks believed to be undervalued. Income is a secondary objective. In taking a value approach to investment selection, at least 65% of its total assets will be invested in common stocks the portfolio manager regards as undervalued. -------------------------------------------------------------------------------- JNL/S&P MANAGED CONSERVATIVE FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, Inc.) Seeks capital growth and current income by investing in Class A Shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and JNL Variable Fund LLC that invest in equity and fixed income securities. Under normal circumstances, the Fund allocates approximately 10% to 30% of its assets to Underlying Funds that invest primarily in equity securities, 50% to 80% to Underlying Funds that invest primarily in fixed-income securities and 0% to 30% to Underlying Funds that invest primarily in money market securities. Within these three asset classes, the Fund remains flexible with respect to the percentage it will allocate among Underlying Funds. -------------------------------------------------------------------------------- JNL/S&P MANAGED MODERATE FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, Inc.) Seeks capital growth, with current income as a secondary objective, by investing in Class A Shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and JNL Variable Fund LLC that invest in equity and fixed income securities. Under normal circumstances, the Fund allocates approximately 30% to 50% of its assets to Underlying Funds that invest primarily in equity securities, 35% to 65% to Underlying Funds that invest primarily in fixed-income securities and 0-25% to Underlying Funds that invest primarily in money market securities. Within these asset classes, the Fund remains flexible with respect to the percentage it will allocate among particular Underlying Funds. -------------------------------------------------------------------------------- JNL/S&P MANAGED MODERATE GROWTH FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, Inc.) Seeks capital growth and current income by investing in Class A Shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and JNL Variable Fund LLC that invest in equity and fixed income securities. Under normal circumstances, the Fund allocates approximately 50% to 70% of its assets to Underlying Funds that invest primarily in equity securities, 20% to 50% to Underlying Funds that invest primarily in fixed-income securities and 0% to 20% to Underlying Funds that invest primarily in money market securities. Within these three asset classes, the Fund remains flexible with respect to the percentage it will allocate among Underlying Funds. -------------------------------------------------------------------------------- JNL/S&P MANAGED GROWTH FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, Inc.) Seeks capital growth, with current income as a secondary objective, by investing in Class A Shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and JNL Variable Fund LLC that invest in equity and fixed income securities. Under normal circumstances, the Fund allocates approximately 70% to 90% of its assets to Underlying Funds that invest primarily in equity securities, 5% to 30% to Underlying Funds that invest primarily in fixed-income securities and 0-15% to Underlying Funds that invest primarily in money market securities. Within these asset classes, the Fund remains flexible with respect to the percentage it will allocate among particular Underlying Funds. -------------------------------------------------------------------------------- JNL/S&P MANAGED AGGRESSIVE GROWTH FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, Inc.) Seeks capital growth by investing in Class A Shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and JNL Variable Fund LLC that invest in equity securities. Under normal circumstances, the Fund allocates up to 80% to 100% of its assets to Underlying Funds that invest primarily in equity securities, 0% to 20% to Underlying Funds that invest primarily in fixed-income securities and 0% to 20% to Underlying Funds that invest primarily in money market securities. The Fund remains flexible with respect to the percentage it will allocate among those particular Underlying Funds that invest primarily in equity securities. -------------------------------------------------------------------------------- JNL/S&P RETIREMENT INCOME FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, LLC) Seeks high current income and as a secondary objective, capital appreciation by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC using an asset allocation strategy designed for investors already in or near retirement. Under normal circumstances, the Fund allocates approximately 20% to 45% of its assets to Underlying Funds that invest primarily in equity securities, 20% to 80% to Underlying Funds that invest primarily in fixed-income securities and 0% to 30% to Underlying Funds that invest primarily in short-term securities. Within these three asset classes, the Fund remains flexible with respect to the percentage it will allocate among Underlying Funds. -------------------------------------------------------------------------------- JNL/S&P RETIREMENT 2015 FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, LLC) Seeks high total return until its target retirement date. After the Fund's target retirement date, the Fund's objective will be to seek high current income and as a secondary objective, capital appreciation. Once the Fund reaches an allocation that is similar to the JNL/S&P Retirement Income Fund, it is expected that the Fund will be merged into the JNL/S&P Retirement Income Fund. The Fund seeks to achieve its objective by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC using an asset allocation strategy designed for investors expecting to retire around the year 2015, assuming a retirement age of 65. Under normal circumstances, the Fund allocates approximately 30% to 80% of its assets to Underlying Funds that invest primarily in equity securities, 20% to 70% to Underlying Funds that invest primarily in fixed-income securities and 0% to 30% to Underlying Funds that invest primarily in short-term securities. Within these three asset classes, the Fund remains flexible with respect to the percentage it will allocate among Underlying Funds. -------------------------------------------------------------------------------- JNL/S&P RETIREMENT 2020 FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, LLC) Seeks high total return until its target retirement date. After the Fund's target retirement date, the Fund's objective will be to seek high current income and as a secondary objective, capital appreciation. Once the Fund reaches an allocation that is similar to the JNL/S&P Retirement Income Fund, it is expected that the Fund will be merged into the JNL/S&P Retirement Income Fund. The Fund seeks to achieve its objective by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC using an asset allocation strategy designed for investors expecting to retire around the year 2020, assuming a retirement age of 65. Under normal circumstances, the JNL/S&P Retirement 2020 Fund allocates approximately 30-% to 90% of its assets to Underlying Funds that invest primarily in equity securities, 0% to 70% to Underlying Funds that invest primarily in fixed-income securities and 0% to 30% to Underlying Funds that invest primarily in short-term securities. Within these three asset classes, the JNL/S&P Retirement 2020 Fund remains flexible with respect to the percentage it will allocate among Underlying Funds. -------------------------------------------------------------------------------- JNL/S&P RETIREMENT 2025 FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services, LLC) Seeks high total return until its target retirement date. After the Fund's target retirement date, the Fund's objective will be to seek high current income and as a secondary objective, capital appreciation. Once the Fund reaches an allocation that is similar to the JNL/S&P Retirement Income Fund, it is expected that the Fund will be merged into the JNL/S&P Retirement Income Fund. The Fund seeks to achieve its objective by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC using an asset allocation strategy designed for investors expecting to retire around the year 2025, assuming a retirement age of 65. Under normal circumstances, the JNL/S&P Retirement 2025 Fund allocates approximately 30% to 95% of its assets to Underlying Funds that invest primarily in equity securities, 0% to 70% to Underlying Funds that invest primarily in fixed-income securities and 0% to 30% to Underlying Funds that invest primarily in short-term securities. Within these three asset classes, the JNL/S&P Retirement 2025 Fund remains flexible with respect to the percentage it will allocate among Underlying Funds. -------------------------------------------------------------------------------- JNL/S&P DISCIPLINED MODERATE FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC) Seeks capital growth, and secondarily, current income by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC. The Fund seeks to achieve capital growth through its investments in Underlying Funds that invest primarily in equity securities. The Fund seeks to achieve current income through its investments in Underlying Funds that invest primarily in fixed-income securities. Under normal circumstances, the Fund allocates approximately 50% to 70% of its assets to Underlying Funds that invest primarily in equity securities, 5% to 30% to Underlying Funds that invest primarily in fixed-income securities and 0% to 15% of its assets to Underlying Funds that invest primarily in money market securities. -------------------------------------------------------------------------------- JNL/S&P DISCIPLINED MODERATE GROWTH FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC) Seeks capital growth and current income by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC. The Fund seeks to achieve capital growth through its investments in Underlying Funds that invest primarily in equity securities. The Fund seeks to achieve current income through its investments in Underlying Funds that invest primarily in fixed-income securities. Under normal circumstances, the Fund allocates approximately 70% to 90% of its assets to Underlying Funds that invest primarily in equity securities, 5% to 30% to Underlying Funds that invest primarily in fixed-income securities and 0% to 15% of its assets to Underlying Funds that invest primarily in money market securities. -------------------------------------------------------------------------------- JNL/S&P DISCIPLINED GROWTH FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC) Seeks capital growth by investing in Class A shares of a diversified group of other Funds (Underlying Funds), which are part of the JNL Series Trust and the JNL Variable Fund LLC. The Fund seeks to achieve capital growth through its investments in Underlying Funds that invest primarily in equity securities. Under normal circumstances, the Fund allocates approximately 80% to 100% of its assets to Underlying Funds that invest primarily in equity securities, 0% to 20% to Underlying Funds that invest primarily in fixed-income securities and 0% to 20% of its assets to Underlying Funds that invest primarily in money market securities. -------------------------------------------------------------------------------- JNL/S&P COMPETITIVE ADVANTAGE FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC and Mellon Capital Management Corporation) Seeks capital appreciation by investing approximately equal amounts in the common stock of 30 companies included in the S&P 500 that are, in the opinion of Standard & Poor's Investment Advisory Services LLC ("SPIAS"), profitable and predominantly higher-quality. In selecting the companies, SPIAS looks to 30 companies ranked by return on invested capital and lowest market-to-book multiples. -------------------------------------------------------------------------------- JNL/S&P DIVIDEND INCOME & GROWTH FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC and Mellon Capital Management Corporation) Seeks primarily capital appreciation with a secondary focus on current income by investing approximately equal amounts in the common stock of the 30 companies, that have the highest indicated annual dividend yields ("Dividend Yield") within their sector. The three stocks with the highest Dividend Yield, are selected from each of 10 economic sectors in the S&P 500. -------------------------------------------------------------------------------- JNL/S&P INTRINSIC VALUE FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC and Mellon Capital Management Corporation) Seeks capital appreciation by investing approximately equal amounts in the common stock of 30 companies included in the S&P 500, excluding financial companies, that are, in the opinion of Standard & Poor's Investment Advisory Services LLC ("SPIAS"), companies with positive free cash flows and low external financing needs. -------------------------------------------------------------------------------- JNL/S&P TOTAL YIELD FUND Jackson National Asset Management, LLC (and Standard & Poor's Investment Advisory Services LLC and Mellon Capital Management Corporation) Seeks capital appreciation by investing approximately equal amounts in the common stock of the 30 companies that have the highest S&P Total Yield (a broad measure of cash returned to shareholders and bondholders). Standard & Poor's Investment Advisory Services LLC ("SPIAS") seeks companies that are significantly reducing their debt burden and/or increasing their equity distributions. -------------------------------------------------------------------------------- JNL/S&P 4 FUND Jackson National Asset Management, LLC Seeks capital appreciation by investing in a combination of mutual funds ("Underlying Funds") on a fixed percentage basis. The Fund will invest at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in companies included in the S&P 500. The Fund seeks to achieve its objective by making initial allocations of its assets and cash flows to the following four Underlying Funds (Class A) on each Stock Selection Date: >> 25% in JNL/S&P Competitive Advantage Fund; and >> 25% in JNL/S&P Dividend Income & Growth Fund; and >> 25% in JNL/S&P Intrinsic Value Fund; and >> 25% in JNL/S&P Total Yield Fund. -------------------------------------------------------------------------------- ABOUT THE JNL/S&P RETIREMENT FUNDS. The JNL/S&P Retirement Funds have retirement target dates. The investment strategies of these funds are designed to limit your risk of investment losses as of the date you expect to make withdrawals from your Contract. There is at least some degree of overlap between this fundamental goal and the protections provided under the Contract's basic death benefit and under certain optional features, specifically: (i) the Earnings Protection Benefit and (ii) any GMWB. Each of these three benefits provides a specific guarantee of minimum value regardless of investment performance on certain relevant dates: (i) the Owner's date of death in the case of death benefits and the Earnings Protection Benefit and (ii) an Owner's specific age under a GMWB. To the extent the JNL/S&P Retirement Funds achieve their specific goals, the need for and the additional value of the protections received under these three benefits may be somewhat diminished. The potential for overlap is greatest for a GMWB because that benefit will come into effect at approximately the same date as the JNL/S&P Retirement Funds' applicable target retirement date. The potential for overlap generally is less for death benefits and the Earnings Protection Benefit because those benefits do not come into effect on a fixed or predetermined date and the likelihood the Owner's date of death will be the same as the date that is the target date for the JNL/S&P Retirement Funds is relatively small. Investment in a fund such as the JNL/S&P Retirement Income Fund, however, may not be consistent with the Earnings Protection Benefit to the extent that conservative investing may not accomplish the Earnings Protection Benefit goal of providing an additional payout to help offset potential tax liabilities if there are earnings in the Contract at the Owner's death. You, therefore, are encouraged to consider whether you want to participate in an optional benefit when you plan to invest in a JNL/S&P Retirement Fund. Among the considerations are the charges for the optional benefits and the value to you of having overlapping goals and protections. In addition, there may be personal considerations affecting your decision that a knowledgeable adviser can assist you in weighing. -------------------------------------------------------------------------------- JNL VARIABLE FUND LLC -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT DOWSM 10 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT S&P(R) 10 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT GLOBAL 15 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT NASDAQ(R) 25 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return by investing in the common stocks of companies that are expected to have a potential for capital appreciation. The common stocks of 25 companies are selected from stocks included in the Nasdaq-100 Index(R). -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT VALUE LINE(R) 30 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks capital appreciation by investing in 30 of the 100 common stocks that Value Line(R) gives a #1 ranking for TimelinessTM. The 30 stocks are selected each year based on certain positive financial attributes. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT DOWSM DIVIDEND FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks to provide the potential for an above-average total return by investing approximately equal amounts in the common stock of the 25 companies included in the Dow Jones Select Dividend IndexSM which have the best overall ranking on both the change in return on assets of the last year compared to the prior year and price-to-book on each "Stock Selection Date." -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT S&P(R) 24 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through capital appreciation by investing in the common stocks of companies that have the potential for capital appreciation by investing in common stocks of 24 companies selected from a subset of stocks included in the Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index(R)"). -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT 25 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income by investing the common stocks of 25 companies selected from a pre-screened subset of the stocks listed on the New York Stock Exchange ("NYSE"). -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT SELECT SMALL-CAP FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through capital appreciation by investing at least 80% of its assets (net assets plus the amount of any borrowings for investment purposes) in a portfolio of common stocks of 100 small capitalization ("small cap") companies selected from a pre-screened subset of the common stocks listed on the New York Stock Exchange ("NYSE"), the American Stock Exchange ("AMEX") or The Nasdaq Stock Market ("Nasdaq"), on each Stock Selection Date. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT JNL 5 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through capital appreciation and dividend income by investing in the common stocks of companies that are identified by a model based on 5 different specialized strategies: >> 20% in the DowSM 10 Strategy, a dividend yielding strategy; >> 20% in the S&P(R) 10 Strategy, a blended valuation-momentum strategy; >> 20% in the Global 15 Strategy, a dividend yielding strategy; >> 20% in the 25 Strategy, a dividend yielding strategy and >> 20% in the Select Small-Cap Strategy, a small capitalization strategy. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT VIP FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return by investing in the common stocks of companies that are identified by a model based on six separate specialized strategies: >> The DowSM Core 5 Strategy; >> The European 20 Strategy; >> The Nasdaq(R) 25 Strategy; >> The S&P 24 Strategy; >> The Select Small-Cap Strategy; and >> The Value Line(R) 30 Strategy. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT JNL OPTIMIZED 5 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return by investing in the common stocks of companies that are identified by a model based on five separate specialized strategies: >> 25% in the Nasdaq(R) 25 Strategy; >> 25% in the Value Line(R) 30 Strategy; >> 24% in the European 20 Strategy; >> 14% in the Global 15 Strategy; and >> 12% in the 25 Strategy. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT S&P(R) SMID 60 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks capital appreciation by investing in the common stock of 30 companies included in the Standard & Poor's MidCap 400 Index and 30 companies in the Standard & Poor's SmallCap 600 Index. The 60 companies are selected on each Stock Selection Date. The Fund seeks to achieve its objective by identifying small and mid-capitalization companies with improving fundamental performance and sentiment. The Fund focuses on small and mid-capitalization companies because the Adviser believes they are more likely to be in an earlier stage of their economic life cycle than mature large-cap companies. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT NYSE(R) INTERNATIONAL 25 FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks capital appreciation by investing in foreign companies. The 25 companies are selected on each Stock Selection Date. The Sub-Adviser generally uses a buy and hold strategy, trading only around each Stock Selection Date, when cash flow activity occurs in the Fund and for a dividend investment. The Sub-Adviser may also trade for mergers or acquisitions if the original stock is not the surviving company. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT COMMUNICATIONS SECTOR FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income by utilizing a replication investment approach, called indexing, which attempts to replicate the investment performance of the Dow Jones U.S. Telecommunications Index. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT CONSUMER BRANDS SECTOR FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income by utilizing a replication investment approach, called indexing, which attempts to replicate the investment performance of the Dow Jones U.S. Consumer Services Index. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT FINANCIAL SECTOR FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income by utilizing a replication investment approach, called indexing, which attempts to replicate the investment performance of the Dow Jones U.S. Financial Index. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT HEALTHCARE SECTOR FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income by utilizing a replication investment approach, called indexing, which attempts to replicate the investment performance of the Dow Jones U.S. Healthcare Index. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT OIL & GAS SECTOR FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income by utilizing a replication investment approach, called indexing, which attempts to replicate the investment performance of the Dow Jones U.S. Oil & Gas Index. -------------------------------------------------------------------------------- JNL/MELLON CAPITAL MANAGEMENT TECHNOLOGY SECTOR FUND Jackson National Asset Management, LLC (and Mellon Capital Management Corporation) Seeks total return through a combination of capital appreciation and dividend income by utilizing a replication investment approach, called indexing, which attempts to replicate the investment performance of the Dow Jones U.S. Technology Index. -------------------------------------------------------------------------------- The investment objectives and policies of certain of the Funds are similar to the investment objectives and policies of other mutual Funds that certain of the investment sub-advisers manage. Although the objectives and policies may be similar, the investment results of the Funds may be higher or lower than the result of such mutual Funds. We cannot guarantee, and make no representation, that the investment results of similar funds will be comparable even though the funds have the same investment sub-advisers. The Funds described are available only through variable annuity Contracts issued by Jackson. They are NOT offered or made available to the general public directly. A Fund's performance may be affected by risks specific to certain types of investments, such as foreign securities, derivative investments, non-investment grade debt securities, initial public offerings (IPOs) or companies with relatively small market capitalizations. IPOs and other investment techniques may have a magnified performance impact on a Fund with a small asset base. A Fund may not experience similar performance as its assets grow. You should read the prospectuses for the JNL Series Trust and the JNL Variable Fund LLC carefully before investing. Additional Funds and Investment Divisions may be available in the future. The prospectuses for the JNL Series Trust and the JNL Variable Fund LLC are attached to this prospectus. However, these prospectuses may also be obtained at no charge by calling 1-800-766-4683 (Annuity and Life Service Center) or 1-800-777-7779 (for contracts purchased through a bank or financial institution), by writing P.O. Box 17240, Denver, Colorado 80217-9959, or by visiting WWW.JNL.COM. VOTING RIGHTS. To the extent required by law, Jackson will obtain from you and other Owners of the Contracts instructions as to how to vote when the Funds solicit proxies in conjunction with a vote of shareholders. When Jackson receives instructions, we will vote all the shares Jackson owns in proportion to those instructions. An effect of this proportional voting is that a relatively small number of Owners may determine the outcome of a vote. SUBSTITUTION. Jackson may be required, or determine in its sole discretion, to substitute a different mutual Fund for the one in which the Investment Division is currently invested. This will be done with any required approval of the SEC. Jackson will give you notice of such transactions. CONTRACT CHARGES There are charges associated with your Contract, the deduction of which will reduce the investment return of your Contract. Charges are deducted proportionally from your Contract Value. Some of these charges are for optional endorsements, as noted, so they are deducted from your Contract Value only if you selected to add that optional endorsement to your Contract. These charges may be a lesser amount where required by state law or as described below, but will not be increased. We expect to profit from certain charges assessed under the Contract. These charges (and certain other expenses) are as follows: MORTALITY AND EXPENSE RISK CHARGE. Each day, as part of our calculation of the value of the accumulation units and annuity units, we make a deduction for the Mortality and Expense Risk Charge. On an annual basis, this charge equals 1.25% of the average daily net asset value of your allocations to the Investment Divisions. This charge is 0.12% lower (1.13% of the average daily net asset value of your allocations to the Investment Divisions) if you select the Maximum Anniversary Value Death Benefit to reflect the replacement of the standard death benefit. The Maximum Anniversary Value Death Benefit is covered by a separate additional charge (see below). The Mortality and Expense Risk Charge does not apply to the guaranteed fixed accounts or the GMWB Fixed Account. The Mortality and Expense Risk Charge compensates us for the risks we assume in connection with all the Contracts, not just your Contract. The mortality risks that Jackson assumes arise from our obligations under the Contracts: o to make income payments for the life of the annuitant during the income phase; o to waive the withdrawal charge in the event of your death; and o to provide both a standard and enhanced death benefit prior to the income date. The expense risk that Jackson assumes is the risk that our actual cost of administering the Contracts and the Investment Divisions will exceed the amount that we receive from the administration charge and the annual contract maintenance charge. ADMINISTRATION CHARGE. Each day, as part of our calculation of the value of the accumulation units and annuity units, we make a deduction for administration charges. On an annual basis, these charges equal 0.15% of the average daily net asset value of your allocations to the Investment Divisions. This charge does not apply to the guaranteed fixed accounts or the GMWB Fixed Account. This charge compensates us for our expenses incurred in administering the Contracts and the Separate Account. EARNINGS PROTECTION BENEFIT ("EARNINGSMAX") CHARGE. If you select the Earnings Protection Benefit Endorsement, each day during the accumulation phase of your Contract Jackson makes a deduction for the charge for this benefit. We do this as part of our calculation of the value of the accumulation units. On an annual basis, this charge equals 0.20% of the daily net asset value of the Contracts having this Endorsement that are invested in an Investment Division, after expenses have been deducted. This charge does not apply to the guaranteed fixed accounts or the GMWB Fixed Account. We stop deducting this charge if you annuitize your Contract. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT CHARGE. If you select the Maximum Anniversary Value Death Benefit Endorsement, each day during the accumulation phase of your Contract Jackson makes a deduction for the charge for this benefit. We do this as part of our calculation of the value of the accumulation units. On an annual basis, this charge equals 0.22% of the daily net asset value of the Contracts having this Endorsement that are invested in an Investment Division, after expenses have been deducted. This charge does not apply to the guaranteed fixed accounts or the GMWB Fixed Account. We stop deducting this charge if you annuitize your Contract. ANNUAL CONTRACT MAINTENANCE CHARGE. During the accumulation phase, Jackson deducts a $35 ($30 in Washington) annual contract maintenance charge on each anniversary of the date on which your Contract was issued. If you make a complete withdrawal from your Contract, the annual contract maintenance charge will also be deducted. This charge is for administrative expenses. The annual contract maintenance charge will be assessed on the Contract Anniversary or upon full withdrawal and generally is taken from the Investment Divisions, the guaranteed fixed accounts and the GMWB Fixed Account based on the proportion their respective value bears to the Contract Value. Jackson will not deduct this charge if, when the deduction is to be made, the value of your Contract is $50,000 or more. Jackson may discontinue this practice at any time. TRANSFER FEE. A transfer fee of $25 will apply to transfers in excess of 15 in a Contract year. Jackson may waive the transfer fee in connection with Earnings Sweep or pre-authorized automatic transfer programs, or may charge a lesser fee where required by state law. COMMUTATION FEE. If you make a total withdrawal from your Contract after income payments have commenced under income option 4, or if after your death during the periods for which payments are guaranteed to be made under income option 3, your beneficiary elects to receive a lump sum payment, the amount received will be reduced by (a) minus (b) where: o (a) = the present value of the remaining income payments (as of the date of calculation) for the period for which payments are guaranteed to be made, discounted at the rate assumed in calculating the initial payment; and o (b) = the present value of the remaining income payments (as of the date of calculation) for the period for which payments are guaranteed to be made, discounted at a rate no more than 1% higher than the rate used in (a). WITHDRAWAL CHARGE. During the accumulation phase (if and to the extent the Contract Value is sufficient to pay any remaining withdrawal charges that remain after a withdrawal), you can make withdrawals from your Contract without a Withdrawal Charge. o At any time during the accumulation phase, you may withdraw premiums that are not subject to a Withdrawal Charge (premiums in your annuity for seven years or longer and not previously withdrawn). o Once every year, you may withdraw the greater of earnings or 10% of premiums paid (not yet withdrawn)("Free Withdrawal"). Withdrawals in excess of that will be charged a Withdrawal Charge starting at 7% in the first year and declining 1% a year to 0% after 7 years. The Withdrawal Charge compensates us for costs associated with selling the Contracts. Required minimum distributions will reduce the 10% Free Withdrawal amount. For purposes of the withdrawal charge, Jackson treats withdrawals as coming first from earnings and then from the oldest remaining premium. If you make a full withdrawal, the Withdrawal Charge is based on premiums remaining in the Contract. If you make a full withdrawal, you will not receive the benefit of the Free Withdrawal and the entire amount withdrawn will be subject to a Withdrawal Charge. If you withdraw only part of the value of your Contract, we deduct the Withdrawal Charge from the remaining value in your Contract. NOTE: Withdrawals under a non-qualified Contract will be taxable on an "income first" basis. This means that any withdrawal from a non-qualified Contract that does not exceed the accumulated income under the Contract will be taxable in full. Any withdrawals under a tax-qualified Contract will be taxable except to the extent that they are allocable to investment in the Contract (any after-tax contributions). In most cases, there will be little or no investment in the Contract for a tax-qualified Contract because contributions will have been made on a pre-tax or tax-deductible basis. Jackson does not assess the Withdrawal Charge on any payments paid out as (1) income payments after the first year, (2) death benefits, or (3) withdrawals necessary to satisfy the required minimum distribution of the Internal Revenue Code (but if the withdrawal requested exceeds the required minimum distribution; if the Contract was purchased with contributions from a nontaxable transfer, after the Owner's death, of an Individual Retirement Annuity (IRA); or is a Roth IRA annuity, then the entire withdrawal will be subject to the withdrawal charge). Withdrawals for terminal illness or other specified conditions as defined by Jackson may not be subject to a Withdrawal Charge. These provisions are not available in all states. Jackson may reduce or eliminate the amount of the Withdrawal Charge when the Contract is sold under circumstances which reduce its sales expense. Some examples are: the purchase of a Contract by a large group of individuals or an existing relationship between Jackson and a prospective purchaser. Jackson may not deduct a Withdrawal Charge under a Contract issued to an officer, director, agent or employee of Jackson or any of its affiliates. 7% GUARANTEED MINIMUM WITHDRAWAL BENEFIT ("SAFEGUARD 7 PLUS") CHARGE. If you select the 7% GMWB, in most states you will pay 0.10% of the GWB each calendar quarter (0.40% annually). IN WASHINGTON STATE, the charge is monthly, currently 0.035% of the GWB (0.42% annually), which we will waive at the end of a Contract Month to the extent that the charge exceeds the amount of your Contract Value allocated to the Investment Divisions. For more information about the GWB, please see "7% Guaranteed Minimum Withdrawal Benefit" beginning on page 50. PLEASE NOTE: EFFECTIVE MARCH 31, 2008, THIS ENDORSEMENT IS NO LONGER AVAILABLE TO ADD TO A CONTRACT. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine accumulation unit value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The charge is prorated, from the endorsement's effective date, to the end of the first quarter or first month after selection. Similarly, the charge is prorated upon termination of the endorsement. We reserve the right to prospectively change the charge: on new Contracts; if you select this benefit after your Contract is issued; or with a Step-Up - subject to a maximum charge of 0.75% annually in all states offering this benefit. The actual deduction of the charge will be reflected in your quarterly statement. We stop deducting the charge on the earlier date that you annuitize the Contract, or your Contract Value is zero. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a STEP-UP. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "7% Guaranteed Minimum Withdrawal Benefit" beginning on page 50. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH 5-YEAR STEP-UP CHARGE ("SAFEGUARD MAX"). If you select the Guaranteed Minimum Withdrawal Benefit With 5-Year Step-Up, in most states you will pay 0.1125% of the GWB each Contract Quarter (0.45% annually). IN WASHINGTON STATE, you pay the charge, currently 0.0375% of the GWB (0.45% annually), each Contract Month. IN WASHINGTON STATE, we will waive the charge at the end of a Contract Month to the extent that the charge exceeds the amount of your Contract Value allocated to the Investment Divisions. For more information about the GWB, please see "Guaranteed Minimum Withdrawal Benefit With 5-Year Step-Up" beginning on page 55. We deduct the charge from your Contract Value on a pro rata basis over each applicable Investment Division and the Fixed Account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling Accumulation Units rather than as part of the calculation to determine Accumulation Unit Value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. Upon termination of the endorsement, the charge is prorated for the period since the last quarterly or monthly charge. We reserve the right to prospectively change the charge: on new Contracts; if you select this benefit after your Contract is issued; or upon election of a Step-Up - subject to a maximum charge of 0.80% annually in states where the charge is quarterly, 0.81% annually in states where the charge is monthly. The actual deduction of the charge will be reflected in your quarterly statement. We stop deducting this charge on the earlier date that you annuitize the Contract, or your Contract Value is zero. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "Guaranteed Minimum Withdrawal Benefit With 5-Year Step-Up" beginning on page 55. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. 5% GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH ANNUAL STEP-UP ("AUTOGUARD 5") CHARGE. If you select the 5% GMWB With Annual Step-Up, in most states you will pay 0.1625% of the GWB each quarter (0.65% annually). IN WASHINGTON STATE, the charge is monthly, currently 0.055% of the GWB (0.66% annually), which we will waive at the end of a Contract Month to the extent that the charge exceeds the amount of your Contract Value allocated to the Investment Divisions. For Contracts to which this endorsement was added BEFORE MARCH 31, 2008, you pay the applicable percentage of the GWB each CALENDAR QUARTER. For Contracts to which this endorsement was added ON OR AFTER MARCH 31, 2008, you pay the applicable percentage of the GWB each CONTRACT QUARTER. For Contracts purchased IN WASHINGTON STATE, you pay the applicable percentage of the GWB each CONTRACT MONTH. The actual deduction of the charge will be reflected in your quarterly statement. For more information about the GWB, please see "5% Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 60. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine accumulation unit value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. Upon termination of the endorsement, the charge is prorated for the period since the last quarterly or monthly charge. The charge may be reduced if you do not take any withdrawals before the fifth Contract Anniversary, or before the tenth Contract Anniversary, after the endorsement's effective date. If the charge in your state is quarterly, and if you have not taken any withdrawals before the fifth Contract Anniversary, then you will pay 0.1125% of the GWB each quarter (0.45% annually). After the tenth Contract Anniversary if no withdrawals have been taken, you will pay 0.05% of the GWB each quarter (0.20% annually). If the charge in your state is monthly, and if you have not taken any withdrawals before the fifth Contract Anniversary, then you will pay 0.0375% of the GWB each Contract Month (0.45% annually). After the tenth Contract Anniversary if no withdrawals have been taken, you will pay 0.0175% of the GWB each Contract Month (0.21% annually). We reserve the right to prospectively change the charge on new Contracts; if you select this benefit after your Contract is issued; or with a step-up that you request (not on step-ups that are automatic) - subject to a maximum charge of 1.45% annually in states where the charge is quarterly, 1.47% annually in states where the charge is monthly. We stop deducting this charge on the earlier date that you annuitize the Contract, or your Contract Value is zero. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "5% Guaranteed Minimum Withdrawal Benefit with Annual Step-Up" beginning on page 60. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. 6% GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH ANNUAL STEP-UP ("AUTOGUARD 6") CHARGE. If you select the 6% GMWB With Annual Step-Up, in most states you will pay 0.2125% of the GWB each quarter (0.85% annually). IN WASHINGTON STATE, the charge is monthly, currently 0.0725% of the GWB (0.87% annually), which we will waive at the end of a Contract Month to the extent that the charge exceeds the amount of your Contract Value allocated to the Investment Divisions. For Contracts to which this endorsement was added BEFORE MARCH 31, 2008, you pay the applicable percentage of the GWB each CALENDAR QUARTER. For contracts to which this endorsement was added ON OR AFTER MARCH 31, 2008, you pay the applicable percentage of the GWB each CONTRACT QUARTER. For contracts purchased IN WASHINGTON STATE, you pay the applicable percentage of the GWB each CONTRACT MONTH. The actual deduction of the charge will be reflected in your quarterly statement. For more information about the GWB, please see "6% Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 65. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine accumulation unit value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. Upon termination of the endorsement, the charge is prorated for the period since the last quarterly or monthly charge. The charge may be reduced if you do not take any withdrawals before the fifth Contract Anniversary, or before the tenth Contract Anniversary, after the endorsement's effective date. If the charge in your state is quarterly, and if you have not taken any withdrawals before the fifth Contract Anniversary, then you will pay 0.15% of the GWB each quarter (0.60% annually). After the tenth Contract Anniversary if no withdrawals have been taken, you will pay 0.075% of the GWB each quarter (0.30% annually). If the charge in your state is monthly, and if you have not taken any withdrawals before the fifth Contract Anniversary, then you will pay 0.05% of the GWB each Contract Month (0.60% annually). After the tenth Contract Anniversary if no withdrawals have been taken, you will pay 0.025% of the GWB each Contract Month (0.30% annually). We reserve the right to prospectively change the charge on new Contracts; if you select this benefit after your Contract is issued; or with a step-up that you request (not on step-ups that are automatic) - subject to a maximum charge of 1.60% annually in states where the charge is quarterly, 1.62% annually in states where the charge is monthly. We stop deducting this charge on the earlier date that you annuitize the Contract, or your Contract Value is zero. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "6% Guaranteed Minimum Withdrawal Benefit with Annual Step-Up" beginning on page 65. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. 5% GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITHOUT STEP-UP ("MARKETGUARD 5") CHARGE. If you select the 5% GMWB without Step-Up, in most states you will pay 0.05% of the GWB each calendar quarter (0.20% annually). IN WASHINGTON STATE, the charge is monthly, currently 0.0175% of the GWB (0.21% annually), which we will waive at the end of a Contract Month to the extent that the charge exceeds the amount of your Contract Value allocated to the Investment Divisions. The actual deduction of the charge will be reflected in your quarterly statement. For more information about the GWB, please see "5% Guaranteed Minimum Withdrawal Benefit Without Step-Up" beginning on page 69. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine accumulation unit value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The charge is prorated, from the endorsement's effective date, to the end of the first quarter or first month after selection. Similarly, the charge is prorated upon termination of the endorsement. The charge may be reduced if you do not take any withdrawals before the fifth Contract Anniversary, or before the tenth Contract Anniversary, after the endorsement's effective date. If the charge in your state is quarterly, and if you have not taken any withdrawals before the fifth Contract Anniversary, then you will pay 0.0375% of the GWB each calendar quarter (0.15% annually). After the tenth Contract Anniversary if no withdrawals have been taken, you will pay 0.025% of the GWB each calendar quarter (0.10% annually). If the charge in your state is monthly, and if you have not taken any withdrawals before the fifth Contract Anniversary, then you will pay 0.0125% of the GWB each Contract Month (0.15% annually). After the tenth Contract Anniversary if no withdrawals have been taken, you will pay 0.01% of the GWB each Contract Month (0.12% annually). We reserve the right to prospectively change the charge on new Contracts, or before you select this benefit if after your Contract is issued, subject to a maximum charge of 0.50% annually in states where the charge is quarterly, 0.51% annually in states where the charge is monthly. We stop deducting this charge on the earlier date that you annuitize the Contract, or your Contract Value is zero. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. Upon election of the GMWB, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "5% Guaranteed Minimum Withdrawal Benefit Without Step-Up" beginning on page 69. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. 5% FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS AND ANNUAL STEP-UP ("LIFEGUARD ADVANTAGE") CHARGE. The charge for this GMWB is expressed as an annual percentage of the GWB and depends on the Owner's age when the endorsement is added to the Contract. The charge varies by age group (see table below). For more information about the GWB, please see "5% For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 73. With joint Owners, the charge is based on the older Owner's age. For the Owner that is a legal entity, the charge is based on the Annuitant's age. (With joint Annuitants, the charge is based on the older Annuitant's age.) PLEASE NOTE: EFFECTIVE MARCH 31, 2008, THIS ENDORSEMENT IS NO LONGER AVAILABLE TO ADD TO A CONTRACT. Annual Charge Maximum Current ---------------------- -------------------------- --------------------------- ---------------------- ------------ ------------- ------------- ------------- Ages 45 - 49 1.00% / 4 1.02% / 12 0.55% / 4 0.57% / 12 50 - 54 1.15% / 4 1.17% / 12 0.70% / 4 0.72% / 12 55 - 59 1.50% / 4 1.50% / 12 0.95% / 4 0.96% / 12 60 - 64 1.50% / 4 1.50% / 12 0.95% / 4 0.96% / 12 65 - 69 1.50% / 4 1.50% / 12 0.95% / 4 0.96% / 12 70 - 74 0.90% / 4 0.90% / 12 0.55% / 4 0.57% / 12 75 - 80 0.65% / 4 0.66% / 12 0.40% / 4 0.42% / 12 ---------------------- ------------ ------------- ------------- ------------- ---------------------- ------------------------------------------------------ Charge Basis GWB ---------------------- ------------------------------------------------------ ---------------------- ------------ ------------- ------------- ------------- Charge Frequency Quarterly Monthly Quarterly Monthly You pay the applicable annual percentage of the GWB each calendar quarter. IN WASHINGTON STATE, the charge is monthly, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine accumulation unit value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The charge is prorated, from the endorsement's effective date, to the end of the first quarter or first month after selection. Similarly, the charge is prorated upon termination of the endorsement. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when you elect a step-up (not on step-ups that are automatic), again subject to the applicable maximum annual charge. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "5% For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 78. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "5% For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 73. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH ANNUAL STEP-UP ("LIFEGUARD ASCENT") CHARGE. The charge for this GMWB begins when the endorsement is added to the Contract and is expressed as an annual percentage of the GWB (see table below). For more information about the GWB, please see "For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 80. PLEASE NOTE: EFFECTIVE MARCH 31, 2008, THIS ENDORSEMENT IS NO LONGER AVAILABLE TO ADD TO A CONTRACT. Annual Charge Maximum Current --------------------- --------------------------- -------------------------- --------------------- ------------- ------------- ------------ ------------- Ages 45 - 85 1.50% / 4 1.50% / 12 0.95% / 4 0.96% / 12 --------------------- ------------- ------------- ------------ ------------- --------------------- ------------------------------------------------------ Charge Basis GWB --------------------- ------------- ------------- ------------ ------------- Charge Frequency Quarterly Monthly Quarterly Monthly You pay the applicable annual percentage of the GWB each calendar quarter. IN WASHINGTON STATE, the charge is monthly, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine accumulation unit value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The charge is prorated, from the endorsement's effective date, to the end of the first quarter or first month after selection. Similarly, the charge is prorated upon termination of the endorsement. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when you elect a step-up (not on step-ups that are automatic), again subject to the applicable maximum annual charge. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 87. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 80. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. JOINT FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH ANNUAL STEP-UP ("LIFEGUARD ASCENT WITH JOINT OPTION") CHARGE. The charge for this GMWB begins when the endorsement is added to the Contract and is expressed as an annual percentage of the GWB (see table below). For more information about the GWB, please see "Joint For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 88. PLEASE NOTE: EFFECTIVE MARCH 31, 2008, THIS ENDORSEMENT IS NO LONGER AVAILABLE TO ADD TO A CONTRACT. Annual Charge Maximum Current --------------------- --------------------------- -------------------------- --------------------- ------------- ------------- ------------ ------------- Ages 45 - 85 1.70% / 4 1.71% / 12 1.15% / 4 1.17% / 12 --------------------- ------------- ------------- ------------ ------------- --------------------- ------------------------------------------------------ Charge Basis GWB --------------------- ------------------------------------------------------ --------------------- ------------- ------------- ------------ ------------- Charge Frequency Quarterly Monthly Quarterly Monthly You pay the applicable annual percentage of the GWB each calendar quarter. IN WASHINGTON STATE, the charge is monthly, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the guaranteed fixed account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling accumulation units rather than as part of the calculation to determine accumulation unit value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. The charge is prorated, from the endorsement's effective date, to the end of the first quarter or first month after selection. Similarly, the charge is prorated upon termination of the endorsement. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when you elect a step-up (not on step-ups that are automatic), again subject to the applicable maximum annual charge. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "Joint For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 95. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "Joint For Life Guaranteed Minimum Withdrawal Benefit With Annual Step-Up" beginning on page 88. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS AND ANNUAL STEP-UP ("LIFEGUARD FREEDOM") CHARGE. The charge for this GMWB begins when the endorsement is added to the Contract and is expressed as an annual percentage of the GWB (see table below). For more information about the GWB, please see "For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 95. Annual Charge Maximum Current --------------------- --------------------------- -------------------------- --------------------- ------------- ------------- ------------ ------------- Ages 45 - 80 1.50% / 4 1.50% / 12 0.95% / 4 0.96% / 12 --------------------- ------------- ------------- ------------ ------------- --------------------- ------------------------------------------------------ Charge Basis GWB --------------------- ------------------------------------------------------ --------------------- ------------- ------------- ------------ ------------- Charge Frequency Quarterly Monthly Quarterly Monthly You pay the applicable annual percentage of the GWB each Contract Quarter. For Contracts purchased IN WASHINGTON STATE, you pay the charge each Contract Month, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the Fixed Account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling Accumulation Units rather than as part of the calculation to determine Accumulation Unit Value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. Upon termination of the endorsement, the charge is prorated for the period since the last quarterly or monthly charge. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when there is a step-up on or after the eleventh Contract Anniversary, again subject to the applicable maximum annual charge. If the GMWB charge is to increase, a notice will be sent to you 45 days prior to the Contract Anniversary. You may then elect to discontinue the automatic step-up provision and the GMWB charge will not increase but remain at its then current level. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 101. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 95. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. JOINT FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS AND ANNUAL STEP-UP ("LIFEGUARD FREEDOM WITH JOINT OPTION") CHARGE. The charge for this GMWB begins when the endorsement is added to the Contract and is expressed as an annual percentage of the GWB (see table below). For more information about the GWB, please see "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 103. Annual Charge Maximum Current --------------------- --------------------------- -------------------------- --------------------- ------------- ------------- ------------ ------------- Ages 45 - 80 1.85% / 4 1.86% / 12 1.25% / 4 1.26% / 12 --------------------- ------------- ------------- ------------ ------------- --------------------- ------------------------------------------------------ Charge Basis GWB --------------------- ------------------------------------------------------ --------------------- ------------- ------------- ------------ ------------- Charge Frequency Quarterly Monthly Quarterly Monthly You pay the applicable annual percentage of the GWB each Contract Quarter. For Contracts purchased IN WASHINGTON STATE, you pay the charge each Contract Month, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. Quarterly charges are pro rata deducted over each applicable Investment Division and the Fixed Account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling Accumulation Units rather than as part of the calculation to determine Accumulation Unit Value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. Upon termination of the endorsement, the charge is prorated for the period since the last quarterly or monthly charge. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when there is a step-up on or after the eleventh Contract Anniversary, again subject to the applicable maximum annual charge. If the GMWB charge is to increase, a notice will be sent to you 45 days prior to the Contract Anniversary. You may then elect to discontinue the automatic step-up provision and the GMWB charge will not increase but remain at its then current level. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 110. Please check with your representative to learn about the current level of the charge, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and a Step-Up, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus And Annual Step-Up" beginning on page 103. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS, GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT AND ANNUAL STEP-UP ("LIFEGUARD SELECT") CHARGE. The charge for this GMWB begins when the endorsement is added to the Contract and is expressed as an annual percentage of the GWB (see table below). For more information about the GWB, please see "For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" beginning on page 114. Annual Charge Maximum Current --------------------- --------------------------- -------------------------- --------------------- ------------- ------------- ------------ ------------- Ages 55 - 80 1.20% / 4 1.20% / 12 0.65% / 4 0.66% / 12 --------------------- ------------- ------------- ------------ ------------- --------------------- ------------------------------------------------------ Charge Basis GWB --------------------- ------------------------------------------------------ --------------------- ------------- ------------- ------------ ------------- Charge Frequency Quarterly Monthly Quarterly Monthly You pay the applicable annual percentage of the GWB each Contract Quarter. For Contracts purchased IN WASHINGTON STATE, you pay the charge each Contract Month, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. The deduction of the charge could cause an automatic transfer under this GMWB's Transfer of Assets provision. For more information, please see "Transfer of Assets" under "For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" beginning on page 119. Quarterly charges are pro rata deducted over each applicable Investment Division, the Fixed Account and the GMWB Fixed Account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling Accumulation Units rather than as part of the calculation to determine Accumulation Unit Value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. Upon termination of the endorsement, the charge is prorated for the period since the last quarterly or monthly charge. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when there is a step-up on or after the eleventh Contract Anniversary, again subject to the applicable maximum annual charge. If the GMWB charge is to increase, a notice will be sent to you 45 days prior to the Contract Anniversary. You may then elect to discontinue the automatic step-up provision and the GMWB charge will not increase but remain at its then current level. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" beginning on page 114. Please check with your representative to learn about the current level of the charge and the current interest rate for the GMWB Fixed Account, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and upon automatic Step-Up on or after the eleventh Contract Anniversary, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" beginning on page 114. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. JOINT FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS, GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT AND ANNUAL STEP-UP ("LIFEGUARD SELECT WITH JOINT OPTION") CHARGE. The charge for this GMWB begins when the endorsement is added to the Contract and is expressed as an annual percentage of the GWB (see table below). For more information about the GWB, please see "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" beginning on page 124. Annual Charge Maximum Current --------------------- --------------------------- -------------------------- --------------------- ------------- ------------- ------------ ------------- Ages 55 - 80 1.50% / 4 1.50% / 12 0.80% / 4 0.81% / 12 --------------------- ------------- ------------- ------------ ------------- --------------------- ------------------------------------------------------ Charge Basis GWB --------------------- ------------------------------------------------------ --------------------- ------------- ------------- ------------ ------------- Charge Frequency Quarterly Monthly Quarterly Monthly You pay the applicable annual percentage of the GWB each Contract Quarter. For Contracts purchased IN WASHINGTON STATE, you pay the charge each Contract Month, which charge is waived at the end of a Contract Month to the extent it exceeds the amount of your Contract Value allocated to the Investment Divisions. We deduct the charge from your Contract Value. The deduction of the charge could cause an automatic transfer under this GMWB's Transfer of Assets provision. For more information, please see "Transfer of Assets" under "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" beginning on page 131. Quarterly charges are pro rata deducted over each applicable Investment Division, the Fixed Account and the GMWB Fixed Account. IN WASHINGTON STATE, monthly charges are also pro rata, but deducted over the applicable Investment Divisions only. With the Investment Divisions, we deduct the charge by canceling Accumulation Units rather than as part of the calculation to determine Accumulation Unit Value. While the charge is deducted from Contract Value, it is based on the applicable percentage of the GWB. Upon termination of the endorsement, the charge is prorated for the period since the last quarterly or monthly charge. We reserve the right to prospectively change the charge on new Contracts, or if you select this benefit after your Contract is issued, subject to the applicable maximum annual charge. We may also change the charge when there is a step-up on or after the eleventh Contract Anniversary, again subject to the applicable maximum annual charge. If the GMWB charge is to increase, a notice will be sent to you 45 days prior to the Contract Anniversary. You may then elect to discontinue the automatic step-up provision and the GMWB charge will not increase but remain at its then current level. The actual deduction of the charge will be reflected in your quarterly statement. You will continue to pay the charge for the endorsement through the earlier date that you annuitize the Contract or your Contract Value is zero. Also, we will stop deducting the charge under the other circumstances that would cause the endorsement to terminate. For more information, please see "Termination" under "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" beginning on page 135. Please check with your representative to learn about the current level of the charge and the current interest rate for the GMWB Fixed Account, or contact us at the Annuity Service Center for more information. Our contact information is on the first page of the prospectus. In addition, please consult the representative to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of the GMWB and upon automatic Step-Up on or after the eleventh Contract Anniversary, the applicable GMWB charge will be reflected in your confirmation. For more information about how the endorsement works, please see "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" beginning on page 124. Also see "Guaranteed Minimum Withdrawal Benefit Important Special Considerations" beginning on page 50 for additional important information to consider when purchasing a Guaranteed Minimum Withdrawal Benefit. OTHER EXPENSES. Jackson pays the operating expenses of the Separate Account, including those not covered by the mortality and expense and administrative charges. There are deductions from and expenses paid out of the assets of the Funds. These expenses are described in the attached prospectuses for the JNL Series Trust and the JNL Variable Fund LLC. PREMIUM TAXES. Some states and other governmental entities charge premium taxes or other similar taxes. Jackson is responsible for the payment of these taxes and may make a deduction from the value of the Contract for them. Premium taxes generally range from 0% to 3.5% (the amount of state premium tax, if any, will vary from state to state). INCOME TAXES. Jackson reserves the right, when calculating unit values, to deduct a credit or charge with respect to any taxes paid by or reserved for Jackson during the valuation period which are determined by Jackson to be attributable to the operation of the Separate Account, or to a particular Investment Division. No federal income taxes are applicable under present law, and we are not making any such deduction. DISTRIBUTION OF CONTRACTS Jackson National Life Distributors LLC ("JNLD") located at 7601 Technology Way, Denver, Colorado 80237, serves as the distributor of the Contracts. JNLD is a wholly owned subsidiary of Jackson. Commissions are paid to broker-dealers who sell the Contracts. While commissions may vary, they are not expected to exceed 8% of any premium payment. Where lower commissions are paid up front, we may also pay trail commissions. We may also pay commissions on the Income Date if the annuity option selected involves a life contingency or a payout over a period of ten or more years. Under certain circumstances, JNLD out of its own resources may pay bonuses, overrides, and marketing allowances, in addition to the standard commissions. These payments and/or reimbursements to broker-dealers are in recognition of their marketing and distribution and/or administrative services support. They may not be offered to all broker-dealers, and the terms of any particular agreement may vary among broker-dealers depending on, among other things, the level and type of marketing and distribution support provided assets under management, and the volume and size of the sales of our insurance products. They may provide us greater access to the registered representatives of the broker-dealers receiving such compensation or may otherwise influence the broker-dealer and/or registered representative to present the Contracts more favorably than other investment alternatives. Such compensation is subject to applicable state insurance law and regulation and the NASD rules of conduct. While such compensation may be significant, it will not cause any additional direct charge by us to you. The two primary forms of such compensation paid by the Company are overrides and marketing support payments. Overrides are payments that are designed as consideration for product placement and sales volume. Overrides are generally based on a fixed percentage of product sales and currently range from 10 to 50 basis points (0.10% to 0.50%). Marketing support payments may be in the form of cash and/or non-cash compensation and allow us to, among other things, participate in sales conferences and educational seminars. Examples of such payments include, but are not limited to, reimbursements for representative training or "due diligence" meetings (including travel and lodging expenses), client prospecting seminars, and business development and educational enhancement items. Payments or reimbursements for meetings and seminars are generally based on the anticipated level of participation and/or accessibility and the size of the audience. Subject to NASD rules of conduct, we may also provide cash and/or non-cash compensation to registered representatives in the form of gifts, promotional items and occasional meals and entertainment. Below is an alphabetical listing of the 20 broker-dealers that received the largest amounts of marketing and distribution and/or administrative support in 2007 from the Distributor in relation to the sale of our variable insurance products: A G Edwards & Sons Centaurus Financial Inc. Commonwealth Financial Network IFMG Securities Inter Securities Inc. Invest Financial Corporation Investment Centers of America, Inc. Lincoln Financial Advisors Linsco/Private Ledger Corporation Mutual Service Corporation National Planning Corporation Next Financial Group Inc. Raymond James Financial Securities America SII Investments, Inc. Thrivent Investment Management UBS Financial Services Inc. Wachovia Securities Inc. WM Financial Services Inc. Woodbury Financial Services Inc. Please see Appendix B for a complete list of broker-dealers that received amounts of marketing and distribution and/or administrative support in 2007 from the Distributor in relation to the sale of our variable insurance products. While we endeavor to update this list on an annual basis, please note that interim changes or new arrangements may not be listed. We may, under certain circumstances where permitted by applicable law, pay a bonus to a Contract purchaser to the extent the broker-dealer waives its commission. You can learn about the amount of any available bonus by calling the toll-free number on the cover page of this prospectus. Contract purchasers should inquire of the representative if such bonus is available to them and its compliance with applicable law. We may use any of our corporate assets to cover the cost of distribution, including any profit from the Contract's mortality and expense risk charge and other charges. Besides Jackson National Life Distributors LLC, we are affiliated with the following broker-dealers: o National Planning Corporation, o SII Investments, Inc., o IFC Holdings, Inc. d/b/a Invest Financial Corporation, o Investment Centers of America, Inc., and o Curian Clearing LLC The Distributor also has the following relationships with the sub-advisers and their affiliates. The Distributor receives payments from certain sub-advisers to assist in defraying the costs of certain promotional and marketing meetings in which they participate. The amounts paid depend on the nature of the meetings, the number of meetings attended, the costs expected to be incurred and the level of the sub-adviser's participation. National Planning Corporation participates in the sales of shares of retail mutual funds advised by certain sub-advisers and other unaffiliated entities and receives selling and other compensation from them in connection with those activities, as described in the prospectus or statement of additional information for those funds. The fees range between 0.30% and 0.45% depending on these factors. In addition, the Distributor acts as distributor of variable annuity contracts and variable life insurance policies (the "Other Contracts") issued by Jackson National Life Insurance Company and its subsidiary, Jackson National Life Insurance Company of New York. Raymond James Financial Services, a brokerage affiliate of the sub-adviser to the JNL/Eagle Funds, participates in the sale of Contracts and is compensated by JNLD for its activities at the standard rates of compensation. Unaffiliated broker-dealers are also compensated at the standard rates of compensation. The compensation consists of commissions, trail commissions and other compensation or promotional incentives as described above and in the prospectus or statement of additional information for the Other Contracts. All of the compensation described here, and other compensation or benefits provided by Jackson or our affiliates, may be greater or less than the total compensation on similar or other products. The amount and/or structure of the compensation can possibly create a potential conflict of interest as it may influence your registered representative, broker-dealer or selling institution to present this Contract over other investment alternatives. The variations in compensation, however, may also reflect differences in sales effort or ongoing customer services expected of the registered representative or the broker-dealer. You may ask your registered representative about any variations and how he or she and his or her broker-dealer are compensated for selling the Contract. PURCHASES MINIMUM INITIAL PREMIUM: o $5,000 under most circumstances o $2,000 for a qualified plan Contract o The maximum we accept without our prior approval is $1 million MINIMUM ADDITIONAL PREMIUMS: o $500 o $50 under the automatic payment plan o You can pay additional premiums at any time during the accumulation phase There is a $100 minimum balance requirement for each Investment Division and guaranteed fixed account. A withdrawal request that would reduce the remaining Contract Value to less than $100 will be treated as a request for a complete withdrawal. ALLOCATIONS OF PREMIUM. When you purchase a Contract, Jackson will allocate your premium to one or more of the Allocation Options you have selected. Your allocations must be in whole percentages ranging from 0% to 100%. The minimum that you may allocate to a guaranteed fixed account or Investment Division is $100. Jackson will allocate additional premiums in the same way unless you tell us otherwise. There may be more than 18 Investment Divisions available under the Contract; however, you may not allocate your money to more than 18 Investment Divisions plus the guaranteed fixed accounts and the GMWB Fixed Account during the life of your Contract. Additionally, you may not CHOOSE to allocate your premiums to the GMWB Fixed Account; however, Contract Value may be automatically allocated to the GMWB Fixed Account according to non-discretionary formulas if you have purchased the optional LifeGuard Select GMWB or the LifeGuard Select with Joint Option GMWB. For more detailed information regarding LifeGuard Select, please see "For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up Endorsement" beginning on page 114.) For more detailed information regarding LifeGuard Select with Joint Option, please see "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up Endorsement" beginning on page 124. Jackson will issue your Contract and allocate your first premium within two business days after we receive your first premium and all information that we require for the purchase of a Contract. If we do not receive all of the information that we require, we will contact you to get the necessary information. If for some reason Jackson is unable to complete this process within five business days, we will return your money. The Jackson business day closes when the New York Stock Exchange closes (usually 4:00 p.m. Eastern time). CAPITAL PROTECTION PROGRAM. Jackson offers a Capital Protection program that a Contract Owner may request at issue. Under this program, Jackson will allocate enough of your premium to the guaranteed fixed account you select to assure that the amount so allocated, based on that guaranteed fixed account's interest rate in effect on the date of allocation, will equal at the end of a selected period of 1, 3, 5, or 7 years, the total premium paid. The rest of the premium will be allocated to the Investment Divisions based on your allocation. If any part of the guaranteed fixed account value is surrendered or transferred before the end of the selected guarantee period, the value at the end of that period will not equal the original premium. For an example of Capital Protection, assume you made a premium payment of $10,000 when the interest rate for the three-year guaranteed period was 3% per year. We would allocate $9,152 to that guarantee period because $9,152 would increase at that interest rate to $10,000 after three years, assuming no withdrawals are taken. The remaining $848 of the payment would be allocated to the Investment Division(s) you selected. Alternatively, assume Jackson receives a premium payment of $10,000 when the interest rate for the seven-year period is 6.75% per year. Jackson will allocate $6,331 to that guarantee period because $6,331 will increase at that interest rate to $10,000 after seven years. The remaining $3,669 of the payment will be allocated to the Investment Divisions you select. Thus, as these examples demonstrate, the shorter guarantee periods require allocation of substantially all premium to achieve the intended result. In each case, the results will depend on the interest rate declared for the guarantee period. The Capital Protection Program will not be available if you purchase the LifeGuard Select Guaranteed Minimum Withdrawal Benefit or the LifeGuard Select with Joint Option Guaranteed Minimum Withdrawal Benefit. ACCUMULATION UNITS. The Contract Value allocated to the Investment Divisions will go up or down depending on the performance of the divisions. In order to keep track of the value of your Contract, Jackson uses a unit of measure called an "accumulation unit." During the income phase it is called an "Annuity Unit." Every business day Jackson determines the value of an accumulation unit for each of the Investment Divisions. This is done by: 1. determining the total amount of assets held in the particular Investment Division; 2. subtracting any asset-based insurance charges; 3. dividing this amount by the number of outstanding accumulation units. Charges deducted through the cancellation of units are not reflected in this computation. The value of an accumulation unit may go up or down from day to day. The base Contract has a different accumulation unit value than each combination of optional endorsements an Owner may elect, based on the differing amount of charges applied in calculating that accumulation unit value. When you make a premium payment, Jackson credits your Contract with accumulation units. The number of accumulation units credited is determined at the close of Jackson's business day by dividing the amount of the premium allocated to any Investment Division by the value of the accumulation unit for that Investment Division that reflects the combination of optional endorsements you have elected and their respective charges. TRANSFERS AND FREQUENT TRANSFER RESTRICTIONS You may transfer your Contract Value between and among the Investment Divisions at any time, unless transfers are subject to other limitations, but transfers between a Fixed Account and an Investment Division must occur prior to the Income Date. Transfers from a Fixed Account may be subject to any applicable interest rate adjustment. There may be periods when we do not offer the Fixed Accounts, or when we impose special transfer requirements on the Fixed Accounts. If a renewal occurs within one year of the Income Date, we will continue to credit interest up to the Income Date at the then current interest rate for the Fixed Accounts. You can make 15 transfers every Contract Year during the accumulation phase without charge. A transfer will be effective as of the end of the business day when we receive your transfer request in Good Order, and we will disclaim all liability for transfers made based on your transfer instructions, or the instructions of a third party authorized to submit transfer requests on your behalf. RESTRICTIONS ON TRANSFERS: MARKET TIMING. The Contract is not designed for frequent transfers by anyone. Frequent transfers between and among Investment Divisions may disrupt the underlying Funds and could negatively impact performance, by interfering with efficient management and reducing long-term returns, and increasing administrative costs. Neither the Contracts nor the underlying Funds are meant to promote any active trading strategy, like market timing. To protect Owners and the underlying Funds, we have policies and procedures to deter frequent transfers between and among the Investment Divisions. Under these policies and procedures, there is a $25 charge per transfer after 15 in a Contract Year, and no round trip transfers are allowed within 15 calendar days. Also, we could restrict your ability to make transfers to or from one or more of the Investment Divisions, which possible restrictions may include, but are not limited to: o limiting the number of transfers over a period of time; o requiring a minimum time period between each transfer; o limiting transfer requests from an agent acting on behalf of one or more Owners or under a power of attorney on behalf of one or more Owners; or o limiting the dollar amount that you may transfer at any one time. To the extent permitted by applicable law, we reserve the right to restrict the number of transfers per year that you can request and to restrict you from making transfers on consecutive business days. In addition, your right to make transfers between and among Investment Divisions may be modified if we determine that the exercise by one or more Owners is, or would be, to the disadvantage of other Owners. We continuously monitor transfers under the Contract for disruptive activity based on frequency, pattern and size. We will more closely monitor Contracts with disruptive activity, placing them on a watch list, and if the disruptive activity continues, we will restrict the availability of electronic or telephonic means to make a transfer, instead requiring that transfer instructions be mailed through regular U.S. postal service, and/or terminate the ability to make transfers completely, as necessary. If we terminate your ability to make transfers, you may need to make a partial withdrawal to access the Contract Value in the Investment Division(s) from which you sought a transfer. We will notify you and your representative in writing within five days of placing the Contract on a watch list. Regarding round trip transfers, we will allow redemptions from an Investment Division; however, once a complete or partial redemption has been made from an Investment Division through an Investment Division transfer, you will not be permitted to transfer any value back into that Investment Division within 15 calendar days of the redemption. We will treat as short-term trading activity any transfer that is requested into an Investment Division that was previously redeemed within the previous 15 calendar days, whether the transfer was requested by you or a third party. Our policies and procedures do not apply to the money market Investment Division, the Fixed Accounts, the GMWB Fixed Account, Dollar Cost Averaging, Earnings Sweep or the Automatic Rebalancing program. We may also make exceptions that involve an administrative error, or a personal unanticipated financial emergency of an Owner resulting from an identified health, employment, or other financial or personal event that makes the existing allocation imprudent or a hardship. Please contact our Annuity Service Center if you believe your transfer request entails a financial emergency. Otherwise, we do not exempt any person or class of persons from our policies and procedures. We have agreements allowing for asset allocation and investment advisory services that are not only subject to our policies and procedures, but also to additional conditions and limitations, intended to limit the potential adverse impact of these activities on other Owners of the Contract. We expect to apply our policies and procedures uniformly, but because detection and deterrence involves judgments that are inherently subjective, we cannot guarantee that we will detect and deter every Contract engaging in frequent transfers every time. If these policies and procedures are ineffective, the adverse consequences described above could occur. We also expect to apply our policies and procedures in a manner reasonably designed to prevent transfers that we consider to be to the disadvantage of other Owners, and we may take whatever action we deem appropriate, without prior notice, to comply with or take advantage of any state or federal regulatory requirement. TELEPHONE AND INTERNET TRANSACTIONS THE BASICS. You can request certain transactions by telephone or at www.jnl.com, our Internet website, subject to Jackson's right to terminate electronic or telephone transfer privileges, as described above. Our Customer Service representatives are available during business hours to provide you with information about your account. We require that you provide proper identification before performing transactions over the telephone or through our Internet website. For Internet transactions, this will include a Personal Identification Number (PIN). You may establish or change your PIN at www.jnl.com. WHAT YOU CAN DO AND HOW. You may make transfers by telephone or through the Internet unless you elect not to have this privilege. Any authorization given via an application, the Jackson website, or through other means to Jackson shall be deemed authorization by you for Jackson to accept transaction instructions, including Investment Division transfers/allocations, by you or your financial representative unless we are notified by you to the contrary. To notify Jackson, please call us at the Service Center. Our contact information is on the cover page of this prospectus and the number is referenced in your Contract or on your quarterly statement. WHAT YOU CAN DO AND WHEN. When authorizing a transfer, you must complete your telephone call by the close of the New York Stock Exchange (usually 4:00 p.m. Eastern time) in order to receive that day's accumulation unit value for an Investment Division. Transfer instructions you send electronically are considered to be received by Jackson at the time and date stated on the electronic acknowledgement Jackson returns to you. If the time and date indicated on the acknowledgement is before the close of the New York Stock Exchange, the instructions will be carried out that day. Otherwise the instructions will be carried out the next business day. Jackson will retain permanent records of all web-based transactions by confirmation number. If you do not receive an electronic acknowledgement, you should telephone the Service Center immediately. HOW TO CANCEL A TRANSACTION. You may only cancel an earlier telephonic or electronic transfer request made on the same day by calling the Service Center before the New York Stock Exchange closes. Otherwise, your cancellation instruction will not be allowed because of the round trip transfer restriction. OUR PROCEDURES. Jackson has procedures that are designed to provide reasonable assurance that telephone or any other electronic authorizations are genuine. Our procedures include requesting identifying information and tape-recording telephone communications, and other specific details. Jackson and its affiliates disclaim all liability for any claim, loss or expense resulting from any alleged error or mistake in connection with a transaction requested by telephone or other electronic means which was not authorized by you. However, if Jackson fails to employ reasonable procedures to ensure that all requested transactions are properly authorized, we may be held liable for such losses. Jackson does not guarantee access to telephonic and electronic information or that we will be able to accept transaction instructions via the telephone or electronic means at all times. Jackson also reserves the right to modify, limit, restrict, or discontinue at any time and without notice the acceptance of instruction from someone other than you and/or this telephonic and electronic transaction privilege. Elections of any optional benefit or program must be in writing and will be effective upon receipt of the request in Good Order. Upon notification of the Owner's death, any telephone transfer authorization, other than by the surviving joint Owners, designated by the Owner ceases and Jackson will not allow such transactions unless the executor/representative provides written authorization for a person or persons to act on the executor's/representative's behalf. ACCESS TO YOUR MONEY You can have access to the money in your Contract: o by making either a partial or complete withdrawal, o by electing the systematic withdrawal program, o by electing a Guaranteed Minimum Withdrawal Benefit, or o by electing to receive income payments. Your beneficiary can have access to the money in your Contract when a death benefit is paid. Withdrawals under the Contract may be subject to a withdrawal charge. For purposes of the withdrawal charge, we treat withdrawals as coming first from earnings and then from the oldest remaining premium. When you make a complete withdrawal you will receive the value of the Contract as of the end of the business day your withdrawal request is received by us in Good Order, MINUS any applicable taxes, the annual contract maintenance charge, charges under any optional endorsement; and all applicable withdrawal charges, adjusted for any applicable interest rate adjustment. For more information about withdrawal charges, please see "Withdrawal Charge" beginning on page 32. Your withdrawal request must be in writing. Jackson will accept withdrawal requests submitted via facsimile. There are risks associated with not requiring original signatures in order to disburse the money. To minimize the risks, the proceeds will be sent to your last recorded address in our records, to be sure to notify us, in writing, with an original signature, of any address change. We do not assume responsibility for improper disbursements if you have failed to provide us with the current address to which the proceeds should be sent. Except in connection with the systematic withdrawal program, you must withdraw at least $500 or, if less, the entire amount in the guaranteed fixed account or Investment Division from which you are making the withdrawal. After your withdrawal, at least $100 must remain in each guaranteed fixed account or Investment Division from which the withdrawal was taken. A withdrawal request that would reduce the remaining Contract Value to less than $100 will be treated as a request for a complete withdrawal. If you have an investment adviser who, for a fee, manages your Contract Value, you may authorize payment of the fee from the Contract by requesting a partial withdrawal. There are conditions and limitations, so please contact our Annuity Service Center for more information. Our contact information is on the cover page of this prospectus. We neither endorse any investment advisers, nor make any representations as to their qualifications. The fee for this service would be covered in a separate agreement between the two of you, and would be in addition to the fees and expenses described in this prospectus. INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL YOU MAKE. THERE ARE LIMITATIONS ON WITHDRAWALS FROM QUALIFIED PLANS. FOR MORE INFORMATION, PLEASE SEE "TAXES" BEGINNING ON PAGE 146. GUARANTEED MINIMUM WITHDRAWAL BENEFIT CONSIDERATIONS. Most people who are managing their investments to provide retirement income want to provide themselves with sufficient lifetime income and also to provide for an inheritance for their beneficiaries. The main obstacles they face in meeting these goals are the uncertainties as to (i) how much income their investments will produce, and (ii) how long they will live and will need to draw income from their investments. A Guaranteed Minimum Withdrawal Benefit (GMWB) is designed to help reduce these uncertainties. A GMWB is intended to address those concerns but does not provide any guarantee the income will be sufficient to cover any individual's particular needs. Moreover, the GMWB does not assure that you will receive any return on your investments. The GMWB also does not protect against loss of purchasing power of assets covered by a GMWB due to inflation. Even relatively low levels of inflation may have a significant effect on purchasing power if not offset by stronger positive investment returns. The step-up feature on certain of the GMWBs may provide protection against inflation when there are strong investment returns that coincide with the availability of effecting a step-up. However, strong investment performance will only help the GMWB guard against inflation if the endorsement includes a step-up feature. Payments under the GMWB will first be made from your Contract Value. Our obligations to pay you more than your Contract Value will only arise under limited circumstances. Thus, in considering the election of any GMWB you need to consider whether the value to you of the level of protection that is provided by a GMWB and its costs, which reduce Contract Value and offset our risks, are consistent with your level of concern and the minimum level of assets that you want to be sure are guaranteed. The Joint For Life GMWB with Bonus and Annual Step-Up and the Joint For Life GMWB with Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up are available only to spouses and differ from the For Life GMWB with Bonus and Annual Step-Up without the Joint Option or and the For Life GMWB with Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up without the Joint Option (which are available to spouses and unrelated parties) and enjoy the following advantages: o If the Contract Value falls to zero, benefit payments under the endorsement will continue until the death of the last surviving Covered Life if the For Life Guarantee is effective. (For more information about the For Life Guarantee and for information on who is a Covered Life under this form of GMWB, please see the "Joint For Life Guaranteed Minimum Withdrawal Benefit With Bonus and Annual Step-Up" subsection beginning on page 88 and the "Joint For Life GMWB with Bonus, Guaranteed Withdrawal Balance Adjustment and Annual Step-Up" subsection beginning on page 124.) o If an Owner dies before the automatic payment of benefits begins, the surviving Covered Life may continue the Contract and the For Life Guarantee is not automatically terminated (as it is on the For Life GMWBs without the Joint Option). The Joint For Life GMWBs have a higher charge than the respective For Life GMWBs without the Joint Option. GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS. Each of the GMWBs provides that the GMWB and all benefits thereunder will terminate on the Income Date, which is the date when annuity payments begin. The Income Date is either a date that you choose or the Latest Income Date. The Latest Income Date is the date on which the Owner attains age 90 under a non-qualified Contract, unless otherwise approved by the Company, or such earlier date as required by the applicable qualified plan, law or regulation. Before (1) electing a GMWB, (2) electing to annuitize your Contract after having purchased a GMWB, or (3) when the Latest Income Date is approaching and you are thinking about electing or have elected a GMWB, you should consider whether the termination of all benefits under the GMWB and annuitizing produces the better financial results for you. Naturally, you should discuss with your Jackson representative whether a GMWB is even suitable for you. Consultation with your financial and tax advisor is also recommended. These considerations are of greater significance if you are thinking about electing or have elected a GMWB For Life, as the For Life payments will cease when you annuitize voluntarily or on the Latest Income Date. Although each of the For Life GMWBs contain an annuitization option that may allow the equivalent of For Life payments when you annuitize on the Latest Income Date, all benefits under a GMWB For Life (and under the other GMWBs) will terminate when you annuitize. To the extent that we can extend the Latest Income Date without adverse tax consequences to you, we will do so, as permitted by the applicable qualified plan, law, or regulation. After you have consulted your financial and tax advisors you will need to contact us to request an extension of the Latest Income Date. Please also see "Extension of Latest Income Date" beginning on page 148 for further information regarding possible adverse tax consequences of extending the Latest Income Date. In addition, with regard to required minimum distributions (RMDs) under an IRA only, it is important to consult your financial and tax advisor to determine whether the benefits of a particular GMWB will satisfy your RMD requirements. With regard to other qualified plans, you must determine what your qualified plan permits. Distributions under qualified plans and Tax-Sheltered Annuities must begin by the later of the calendar year in which you attain age 70 1/2 or the calendar year in which you retire. You do not necessarily have to annuitize your Contract to meet the minimum distribution. 7% GUARANTEED MINIMUM WITHDRAWAL BENEFIT ("SAFEGUARD 7 PLUS"). THE FOLLOWING DESCRIPTION IS SUPPLEMENTED BY SOME EXAMPLES IN APPENDIX C THAT MAY ASSIST YOU IN UNDERSTANDING HOW THE CALCULATIONS ARE MADE IN CERTAIN CIRCUMSTANCES. PLEASE NOTE: EFFECTIVE MARCH 31, 2008, THIS ENDORSEMENT IS NO LONGER AVAILABLE TO ADD TO A CONTRACT. For Owners 80 years old and younger on the Contract's Issue Date, or on the date on which this endorsement is selected if after the Contract's Issue Date, a 7% GMWB may be available, which permits an Owner to make partial withdrawals, prior to the Income Date that, in total, are guaranteed to equal the Guaranteed Withdrawal Balance (GWB)(as defined below), regardless of your Contract Value. THE 7% GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONE GMWB ONLY PER CONTRACT). We may further limit the availability of this optional endorsement. Once selected, the 7% GMWB cannot be canceled. If you select the 7% GMWB when you purchase your Contract, your net premium payment will be used as the basis for determining the GWB. The 7% GMWB may also be selected after the Issue Date within 30 days before any Contract Anniversary. If you select the 7% GMWB after the Issue Date, to determine the GWB, we will use your Contract Value on the date the endorsement is added (see Example 1 in Appendix C). THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon "step-up"), and the GWB is reduced with each withdrawal you take. Once the GWB has been determined, we calculate the Guaranteed Annual Withdrawal Amount (GAWA), which is the maximum annual partial withdrawal amount, except for certain tax-qualified Contracts (as explained below). Upon selection, the GAWA is equal to 7% of the GWB. The GAWA will not be reduced if partial withdrawals taken within any one Contract Year do not exceed 7%. However, withdrawals are not cumulative. If you do not take 7% in one Contract Year, you may not take more than 7% the next Contract Year. If you withdraw more than 7%, the guaranteed amount available may be less than the total premium payments and the GAWA may be reduced. The GAWA can be divided up and taken on a payment schedule that you request. You can continue to take the GAWA each Contract Year until the GWB has been depleted. Withdrawal charges and interest rate adjustments, as applicable, are taken into consideration in calculating the amount of your partial withdrawals pursuant to the 7% GMWB, but these charges or adjustments are offset by your ability to make free withdrawals under the Contract. Any time a subsequent premium payment is made, we recalculate the GWB and the GAWA. Each time you make a premium payment, the GWB is increased by the amount of the net premium payment. Also, the GAWA will increase by 7% of the net premium payment or 7% of the increase in the GWB, if the maximum GWB is reached. We require prior approval for a subsequent premium payment, however, that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is reached. If the total of your partial withdrawals made in the current Contract Year is greater than the GAWA, we will recalculate your GWB and your GAWA may be lower in the future. In other words, WITHDRAWING MORE THAN THE GAWA IN ANY CONTRACT YEAR COULD CAUSE THE GWB TO BE REDUCED BY MORE THAN THE AMOUNT OF THE WITHDRAWAL(S) AND EVEN RESET TO THE THEN CURRENT CONTRACT VALUE, LIKELY REDUCING THE GAWA, TOO. Recalculation of the GWB and GAWA may result in reducing or extending the payout period. Examples 4, 5, and 7 in Appendix C illustrate the impact of such withdrawals. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is LESS THAN or equal to the GAWA, the GWB is equal to the greater of: o the GWB prior to the partial withdrawal less the partial withdrawal; or o zero. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA, the GWB is equal to the lesser of: o the Contract Value after the partial withdrawal; or o the greater of the GWB prior to the partial withdrawal less the partial withdrawal or zero. If all your partial withdrawals made in the current Contract Year are LESS THAN or equal to the GAWA, the GAWA is the lesser of: o the GAWA prior to the partial withdrawal; or o the GWB after the partial withdrawal. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA, the GAWA is equal to the lesser of: o the GAWA prior to the partial withdrawal; o the GWB after the partial withdrawal; or o 7% of the Contract Value after the partial withdrawal. For purposes of these calculations, all partial withdrawals are assumed to be the total amount withdrawn, including any withdrawal charges and interest rate adjustments. Withdrawals made under the guarantee of this endorsement are considered to be the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements. They are subject to the same restrictions and processing rules as described in the Contract. For certain tax-qualified Contracts, the 7% GMWB allows for withdrawals greater than the GAWA to meet the required minimum distribution (RMD) under the Internal Revenue Code (Code) without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. REQUIRED MINIMUM DISTRIBUTION CALCULATIONS. Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Code, RMDs are calculated and taken on a calendar year basis. But with the 7% GMWB, GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the endorsement's guarantees may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of either of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMD requirements for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD requirement for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THE GMWB IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO HELPED YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THE 7% GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. STEP-UP. In the event Contract Value is greater than the GWB, the 7% GMWB allows the GWB to be reset to Contract Value (a "Step-Up"). UPON ELECTION OF A STEP-UP, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM CHARGES LISTED ABOVE. ---------------------------------------------------------- The GWB equals Contract Value. WITH A STEP-UP - The GAWA is recalculated, equaling the greater of: o 7% of the new GWB; OR o The GAWA before the Step-Up. ---------------------------------------------------------- The first opportunity for a Step-Up is the fifth Contract Anniversary after the 7% GMWB is added to the Contract. A Step-Up is allowed at any time, but there must always be at least five years between Step-Ups. THE GWB CAN NEVER BE MORE THAN $5 MILLION WITH A STEP-UP. A request for Step-Up is processed and effective on the date received in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. SPOUSAL CONTINUATION. If the Contract is continued by the spouse, the spouse retains all rights previously held by the Owner and therefore may elect to add the 7% GMWB to the Contract within the 30 days prior to any Contract Anniversary following the continuation date of the original Contract's Issue Date. The 7% GMWB would become effective on the Contract Anniversary following receipt of the request in Good Order. If the spouse continues the Contract and the 7% GMWB endorsement already applies to the Contract, the 7% GMWB will continue and no adjustment will be made to the GWB or the GAWA at the time of continuation. Your spouse may elect to "step-up" on the continuation date. If the Contract is continued under the Special Spousal Continuation Option, the value applicable upon "step-up" is the Contract Value, including any adjustments applied on the continuation date. Any subsequent "step-up" must follow the "step-up" restrictions listed above (Contract Anniversaries will continue to be based on the anniversary of the original Contract's Issue Date). TERMINATION. The 7% GMWB endorsement terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge on the date you annuitize or surrender the Contract. In surrendering the Contract, you will receive the Contract Value less any applicable charges and adjustments and not the GWB or the GAWA you would have received under the 7% GMWB. The 7% GMWB also terminates: with the Contract upon your death (unless the beneficiary who is your spouse continues the Contract) or upon the first date both the GWB and Contract Value equal zero - whichever occurs first. CONTRACT VALUE IS ZERO. If your Contract Value is reduced to zero as the result of a partial withdrawal, Contract charges or poor fund performance and the GWB is greater than zero, the GWB will be paid to you on a periodic basis elected by you, which will be no less frequently than annually, so long as the Contract is still in the accumulation phase. The total annual payment will equal the GAWA, but will not exceed the current GWB. The payments continue until the GWB is reduced to zero. All other rights under your Contract cease and we will no longer accept subsequent premium payments and all optional endorsements are terminated without value. Upon your death as the Owner, your beneficiary will receive the scheduled payments. No other death benefit or Earnings Protection Benefit will be paid. ANNUITIZATION. If you decide to annuitize your Contract, you may choose the following income option instead of one of the other income options listed in your Contract: FIXED PAYMENT INCOME OPTION. This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that you select. If you should die (assuming you are the Owner) before the payments have been completed, the remaining payments will be made to the beneficiary, as scheduled. This income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the Annuitant at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. The purchase of the 7% GMWB may not be appropriate for the Owners of Contracts who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors on this and other matters prior to electing the 7% GMWB. GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH 5-YEAR STEP-UP ("SAFEGUARD MAX"). THE FOLLOWING DESCRIPTION OF THIS GMWB IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C, PARTICULARLY EXAMPLE 2 FOR THE VARYING BENEFIT PERCENTAGE AND EXAMPLES 6 AND 7 FOR THE STEP-UPS. This GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) until the EARLIER of: o The Owner's (or any joint Owner's) death; OR o Until all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB is the guaranteed amount available for future periodic withdrawals. PLEASE NOTE: THE GUARANTEES OF THIS GMWB ARE SUBJECT TO THE ENDORSEMENT'S TERMS, CONDITIONS, AND LIMITATIONS THAT ARE EXPLAINED BELOW. Please consult the representative who is helping, or who helped, you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Owners up to 85 years old (proof of age is required); may be added to a Contract on the Issue Date or any Contract Anniversary; and once added cannot be canceled. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. THIS GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONLY ONE GMWB PER CONTRACT). We allow ownership changes of a Contract with this GMWB when the Owner is a legal entity - to another legal entity or the Annuitant. Otherwise, ownership changes are not allowed. When the Owner is a legal entity, changing Annuitants is not allowed. Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit cause the GWB and GAWA to be recalculated. ELECTION. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. -------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals initial premium net of any TO THE CONTRACT ON THE applicable premium taxes. ISSUE DATE - The GAWA is determined based on the Owner's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. -------------------------------------------------- -------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals Contract Value. TO THE CONTRACT ON ANY CONTRACT ANNIVERSARY - The GAWA is determined based on the Owner's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. -------------------------------------------------- Premium (net of any applicable premium taxes) is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on that date. THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon Step-Up), and the GWB is reduced by each withdrawal. PLEASE NOTE: Upon the Owner's death, this GMWB might be continued by a spousal Beneficiary. Please see the "Spousal Continuation" subsection below for more information. WITHDRAWALS. The GAWA percentage and the GAWA are determined at the time of the first withdrawal. The GAWA is equal to the GAWA percentage multiplied by the GWB prior to the partial withdrawal. The GAWA percentage varies according to age group and is determined based on the Owner's attained age at the time of the first withdrawal. If there are joint Owners, the GAWA percentage is based on the attained age of the oldest joint Owner. (In the examples in Appendix C and elsewhere in this prospectus we refer to this varying GAWA percentage structure as the "varying benefit percentage".) THE GAWA PERCENTAGE FOR EACH AGE GROUP IS: Ages GAWA Percentage ------------------- ------------------------ ------------------- ------------------------ 0 - 74 7% 75 - 79 8% 80 - 84 9% 85+ 10% Withdrawals cause the GWB to be recalculated. Withdrawals may also cause the GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. ------------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater of: PRIOR WITHDRAWALS IN THE CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB before the withdrawal less the withdrawal; OR o Zero. The GAWA is recalculated, equaling the lesser of: o The GAWA before the withdrawal; OR o The GWB after the withdrawal. ------------------------------------------------- You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 5 in Appendix C). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount. The GAWA is also likely to be reduced. ------------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the lesser of: PRIOR WITHDRAWALS IN THE CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o Contract Value after the withdrawal; OR o The greater of the GWB before the withdrawal less the withdrawal, or zero. The GAWA is recalculated, equaling the lesser of: o The GAWA before the withdrawal; OR o The GWB after the withdrawal; OR o The GAWA percentage multiplied by the Contract Value after the withdrawal. ------------------------------------------------- Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a guaranteed fixed account may be subject to an interest rate adjustment. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 143. If the age of any Owner is incorrectly stated at the time of election of the GMWB, on the date the misstatement is discovered, the GWB and the GAWA will be recalculated based on the GAWA percentage applicable at the correct age. Any future GAWA percentage recalculation will be based on the correct age. If the age at election of the Owner (or oldest joint Owner) falls outside the allowable age range, the GMWB will be null and void and all GMWB charges will be refunded. --------------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the endorsement's guarantees may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMDs for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT OR SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THIS GMWB, IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO IS HELPING, OR WHO HELPED, YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THIS GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. --------------------------------------------------------------------------- PREMIUMS. ------------------------------------------------------- WITH EACH SUBSEQUENT The GWB is recalculated, increasing by the amount of PREMIUM PAYMENT ON THE the premium net of any applicable premium taxes. CONTRACT - If the premium payment is received after the first withdrawal, the GAWA is also recalculated, increasing by: o The GAWA percentage multiplied by the subsequent premium payment net of any applicable premium taxes; OR o The GAWA percentage multiplied by the increase in the GWB - IF THE MAXIMUM GWB IS HIT. ------------------------------------------------------ We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. THE GWB CAN NEVER BE MORE THAN $5 MILLION. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is hit. STEP-UP. In the event Contract Value is greater than the GWB, this GMWB allows the GWB to be reset to the Contract Value (a "Step-Up"). UPON ELECTION OF A STEP-UP, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM CHARGES LISTED ABOVE. ------------------------------------------------------ WITH A STEP-UP - The GWB equals Contract Value (subject to a $5 million maximum). If the Step-Up occurs after the first withdrawal, the GAWA is recalculated, equaling the greater of: o The GAWA percentage multiplied by the new GWB, OR o The GAWA prior to Step-Up. ------------------------------------------------------ The first opportunity for a Step-Up is the fifth Contract Anniversary after this GMWB is added to the Contract. Thereafter, a Step-Up is allowed at any time, but there must always be at least five years between Step-Ups. THE GWB CAN NEVER BE MORE THAN $5 MILLION WITH A STEP-UP. A request for Step-Up is processed and effective on the date received in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. OWNER'S DEATH. The Contract's death benefit is not affected by this GMWB SO LONG AS CONTRACT VALUE IS GREATER THAN ZERO and the Contract is still in the accumulation phase. Upon your death (or the first Owner's death with joint Owners) while the Contract is still in force, this GMWB terminates without value. CONTRACT VALUE IS ZERO. If your Contract Value is reduced to zero as the result of a partial withdrawal, contract charges or poor fund performance and the GWB is greater than zero, the GWB will be paid to you on a periodic basis elected by you, which will be no less frequently than annually, so long as the Contract is still in the accumulation phase. The total annual payment will equal the GAWA, but will not exceed the current GWB. If the GAWA percentage has not yet been determined, it will be set at the GAWA percentage corresponding to the Owner's (or oldest joint Owner's) attained age at the time the Contract Value is reduced to zero and the GAWA will be equal to the GAWA percentage multiplied by the GWB. ---------------------------------------------------- AFTER EACH PAYMENT WHEN The GWB is recalculated, equaling the greater of: THE CONTRACT VALUE IS ZERO - o The GWB before the payment less the payment; OR o Zero. The GAWA is recalculated, equaling the lesser of: o THE GAWA BEFORE THE PAYMENT; OR o The GWB after the payment. ---------------------------------------------------- All other rights under your Contract cease and we will no longer accept subsequent premium payments and all optional endorsements are terminated without value. Upon your death as the Owner, no death benefit is payable, including the Earnings Protection Benefit. SPOUSAL CONTINUATION. If the Contract is continued by the spouse, the spouse retains all rights previously held by the Owner and therefore may elect to add this GMWB to the Contract within the 30 days prior to any Contract Anniversary following the continuation date of the original Contract's Issue Date. This GMWB would become effective on the Contract Anniversary following receipt of the request in Good Order. If the spouse continues the Contract and this endorsement already applies to the Contract, the GMWB will continue and no adjustment will be made to the GWB or the GAWA at the time of continuation. If the GAWA percentage has not yet been determined, it will be set at the GAWA percentage corresponding to the Owner's (or oldest joint Owner's) attained age on the continuation date and the GAWA will be equal to the GAWA percentage multiplied by the GWB. Your spouse may elect to Step-Up on the continuation date. If the Contract is continued under the Special Spousal Continuation Option, the value applicable upon Step-Up is the Contract Value, including any adjustments applied on the continuation date. Any subsequent Step-Up must follow the Step-Up restrictions listed above (Contract Anniversaries will continue to be based on the anniversary of the original Contract's Issue Date). For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 142. TERMINATION. This GMWB terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); In surrendering your Contract, you will receive the Contract Value less any applicable charges and adjustments and not the GWB or the GAWA you would have received under this GMWB. o The date of the Owner's death (or the first Owner's death with joint Owners), UNLESS the Beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB; o The first date both the GWB and the Contract Value equals zero; or o The date all obligations under this GMWB are satisfied after the Contract has been terminated. ANNUITIZATION. On the Latest Income Date, the Owner may choose the following income option instead of one of the other income options listed in the Contract: FIXED PAYMENT INCOME OPTION. This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that you select. If you should die (assuming you are the Owner) before the payments have been completed, the remaining payments will be made to the Beneficiary, as scheduled. If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the Owner's (or oldest joint Owner's) attained age at the time of election of this option and the GAWA will be equal to the GAWA percentage multiplied by the GWB. The GAWA percentage will not change after election of this option. This income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the Annuitant at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. 5% GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH ANNUAL STEP-UP ("AUTOGUARD 5"). THE FOLLOWING DESCRIPTION IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C THAT MAY ASSIST YOU IN UNDERSTANDING HOW CALCULATIONS ARE MADE IN CERTAIN CIRCUMSTANCES. For Owners 80 years old and younger on the Contract's Issue Date, or on the date on which this endorsement is selected if after the Contract's Issue Date, a 5% GMWB With Annual Step-Up may be available, which permits an Owner to make partial withdrawals, prior to the Income Date that, in total, are guaranteed to equal the Guaranteed Withdrawal Balance (GWB)(as defined below), regardless of your Contract Value. THE 5% GMWB WITH ANNUAL STEP-UP IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONE GMWB ONLY PER CONTRACT). We may further limit the availability of this optional endorsement. Once selected, the 5% GMWB With Annual Step-Up cannot be canceled. If you select the 5% GMWB With Annual Step-Up when you purchase your Contract, your premium payment net of any applicable taxes will be used as the basis for determining the GWB. The 5% GMWB With Annual Step-Up may also be selected after the Issue Date within 30 days before any Contract Anniversary, and the endorsement will take effect on the Contract Anniversary if your request is in Good Order. If you select the 5% GMWB With Annual Step-Up after the Issue Date, to determine the GWB, we will use your Contract Value on the date the endorsement is added (see Example 1 in Appendix C). THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon "step-up"), and the GWB is reduced with each withdrawal you take. Once the GWB has been determined, we calculate the Guaranteed Annual Withdrawal Amount (GAWA), which is the maximum annual partial withdrawal amount, except for certain tax-qualified Contracts (as explained below). Upon selection, the GAWA is equal to 5% of the GWB. The GAWA will not be reduced if partial withdrawals taken within any one Contract Year do not exceed 5%. However, withdrawals are not cumulative. If you do not take 5% in one Contract Year, you may not take more than 5% the next Contract Year. If you withdraw more than 5%, the guaranteed amount available may be less than the total premium payments and the GAWA will likely be reduced. The GAWA can be divided up and taken on a payment schedule that you request. You can continue to take the GAWA each Contract Year until the GWB has been depleted. Withdrawal charges and interest rate adjustments, as applicable, are taken into consideration in calculating the amount of your partial withdrawals pursuant to the 5% GMWB With Annual Step-Up, but these charges or adjustments are offset by your ability to make free withdrawals under the Contract. Any time a subsequent premium payment is made, we recalculate the GWB and the GAWA. Each time you make a premium payment, the GWB is increased by the amount of the net premium payment. Also, the GAWA will increase by 5% of the net premium payment or 5% of the increase in the GWB, if the maximum GWB is reached. We require prior approval for a subsequent premium payment, however, that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is reached. If the total of your partial withdrawals made in the current Contract Year is greater than the GAWA, we will recalculate your GWB and your GAWA will likely be lower in the future. In other words, WITHDRAWING MORE THAN THE GAWA IN ANY CONTRACT YEAR COULD CAUSE THE GWB TO BE REDUCED BY MORE THAN THE AMOUNT OF THE WITHDRAWAL(S), LIKELY REDUCING THE GAWA, TOO. Recalculation of the GWB and GAWA may result in reducing or extending the payout period. Examples 4, 5, and 7 in Appendix C illustrate the impact of such withdrawals. For certain tax-qualified Contracts, this GMWB allows for withdrawals greater than GAWA to meet the Contract's required minimum distributions (RMDs) under the Internal Revenue Code (Code) without compromising the endorsement's guarantees. Examples 4, 5, and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "Required Minimum Distribution Calculations" below for more information. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is LESS THAN or equal to the GAWA or RMD, as applicable, the GWB is equal to the greater of: o the GWB prior to the partial withdrawal less the partial withdrawal; or o zero. If all your partial withdrawals made in the current Contract Year are LESS THAN or equal to the GAWA or RMD, as applicable, the GAWA is the lesser of: o the GAWA prior to the partial withdrawal; or o the GWB after the partial withdrawal. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA or RMD, as applicable, and this endorsement was added to your Contract ON OR AFTER MARCH 31, 2008, the GWB is equal to the greater of: o the GWB prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see below), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; or o zero. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA or RMD, as applicable, and this endorsement was added to your Contract ON OR AFTER MARCH 31, 2008, the GAWA is equal to the lesser of: o the GAWA prior to the partial withdrawal reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal, or o the GWB after the partial withdrawal. The Excess Withdrawal is defined to be the lesser of: o the total amount of the current partial withdrawal, or o the amount by which the cumulative partial withdrawals for the current Contract Year exceeds the greater of the GAWA or the RMD, as applicable. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA or RMD, as applicable, and this endorsement was added to your Contract BEFORE MARCH 31, 2008, the GWB is equal to the lesser of: o the Contract Value after the partial withdrawal; or o the greater of the GWB prior to the partial withdrawal less the partial withdrawal or zero. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA or RMD, as applicable, and this endorsement was added to your Contract BEFORE MARCH 31, 2008, the GAWA is equal to the lesser of: o the GAWA prior to the partial withdrawal, or o the GWB after the partial withdrawal, or o 5% of the Contract Value after the partial withdrawal. For purposes of all of these calculations, all partial withdrawals are assumed to be the total amount withdrawn, including any withdrawal charges and interest rate adjustments. Withdrawals made under the guarantee of this endorsement are considered to be the same as any other partial withdrawals, including systematic withdrawals, for the purposes of calculating any other values under the Contract and any other endorsements. They are subject to the same restrictions and processing rules as described in the Contract. Withdrawals under the guarantee of this endorsement are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 146. REQUIRED MINIMUM DISTRIBUTION CALCULATIONS. Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Code, RMDs are calculated and taken on a calendar year basis. But with the 5% GMWB With Annual Step-Up, GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the endorsement's guarantees may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of either of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMD requirements for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD requirement for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THE GMWB IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO HELPED YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THE 5% GMWB WITH ANNUAL STEP-UP ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. STEP-UP. Step-Ups with the 5% GMWB With Annual Step-Up reset your GWB to the greater of Contract Value or the GWB before step-up, and GAWA becomes the greater of 5% of the new GWB or GAWA before step-up. Step-Ups occur automatically upon each of the first 12 Contract Anniversaries from the endorsement's effective date, then on or after the 13th Contract Anniversary, at any time upon your request, so long as there is at least one year between step-ups. UPON ELECTION OF A STEP-UP, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM CHARGES LISTED ABOVE. IN ADDITION, THE GWB CAN NEVER BE MORE THAN $5 MILLION WITH A STEP-UP. The request will be processed and effective on the day we receive the request in Good Order. Before deciding to "step-up," please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. SPOUSAL CONTINUATION. If you die before annuitizing a Contract with the 5% GMWB With Annual Step-Up, the Contract's death benefit is still payable when Contract Value is greater than zero. Alternatively, the Contract allows the beneficiary who is your spouse to continue it, retaining all rights previously held by the Owner. If the spouse continues the Contract and the 5% GMWB With Annual Step-Up endorsement already applies to the Contract, the 5% GMWB With Annual Step-Up will continue and no adjustment will be made to the GWB or the GAWA at the time of continuation. Step-Ups will continue automatically or as permitted (as described above), and Contract Anniversaries will continue to be based on the anniversary of the original Contract's Issue Date. Upon spousal continuation of a Contract without the 5% GMWB With Annual Step-Up, if the 5% GMWB With Annual Step-Up is available at the time, the beneficiary may request to add this endorsement within 30 days before any Contract Anniversary, and the endorsement will take effect on the Contract Anniversary if the request is made in Good Order. TERMINATION. The 5% GMWB With Annual Step-Up endorsement terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge on the date you annuitize or surrender the Contract. In surrendering the Contract, you will receive the Contract Value less any applicable charges and adjustments and not the GWB or the GAWA you would have received under the 5% GMWB With Annual Step-Up. The 5% GMWB With Annual Step-Up also terminates: with the Contract upon your death (unless the beneficiary who is your spouse continues the Contract) or upon the first date both the GWB and Contract Value equal zero - whichever occurs first. CONTRACT VALUE IS ZERO. If your Contract Value is reduced to zero as the result of a partial withdrawal, contract charges or poor fund performance and the GWB is greater than zero, the GWB will be paid to you on a periodic basis elected by you, which will be no less frequently than annually, so long as the Contract is still in the accumulation phase. The total annual payment will equal the GAWA, but will not exceed the current GWB. The payments continue until the GWB is reduced to zero. All other rights under your Contract cease and we will no longer accept subsequent premium payments and all optional endorsements are terminated without value. Upon your death as the Owner, your beneficiary will receive the scheduled payments. No other death benefit or Earnings Protection Benefit will be paid. ANNUITIZATION. If you decide to annuitize your Contract, you may choose the following income option instead of one of the other income options listed in your Contract: FIXED PAYMENT INCOME OPTION. This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that you select. If you should die (assuming you are the Owner) before the payments have been completed, the remaining payments will be made to the beneficiary, as scheduled. This income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the Annuitant at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. The purchase of the 5% GMWB With Annual Step-Up may not be appropriate for the Owners of Contracts who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors on this and other matters prior to electing the 5% GMWB With Annual Step-Up. 6% GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH ANNUAL STEP-UP ("AUTOGUARD 6"). THE FOLLOWING DESCRIPTION IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C THAT MAY ASSIST YOU IN UNDERSTANDING HOW CALCULATIONS ARE MADE IN CERTAIN CIRCUMSTANCES. For Owners 80 years old and younger on the Contract's Issue Date, or on the date on which this endorsement is selected if after the Contract's Issue Date, a 6% GMWB With Annual Step-Up may be available, which permits an Owner to make partial withdrawals, prior to the Income Date that, in total, are guaranteed to equal the Guaranteed Withdrawal Balance (GWB)(as defined below), regardless of your Contract Value. THE 6% GMWB WITH ANNUAL STEP-UP IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONE GMWB ONLY PER CONTRACT). We may further limit the availability of this optional endorsement. Once selected, the 6% GMWB With Annual Step-Up cannot be canceled. If you select the 6% GMWB With Annual Step-Up when you purchase your Contract, your premium payment net of any applicable taxes will be used as the basis for determining the GWB. The 6% GMWB With Annual Step-Up may also be selected after the Issue Date within 30 days before any Contract Anniversary, and the endorsement will take effect on the Contract Anniversary if your request is in Good Order. If you select the 6% GMWB With Annual Step-Up after the Issue Date, to determine the GWB, we will use your Contract Value on the date the endorsement is added (see Example 1 in Appendix C). THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon "step-up"), and the GWB is reduced with each withdrawal you take. Once the GWB has been determined, we calculate the Guaranteed Annual Withdrawal Amount (GAWA), which is the maximum annual partial withdrawal amount, except for certain tax-qualified Contracts (as explained below). Upon selection, the GAWA is equal to 6% of the GWB. The GAWA will not be reduced if partial withdrawals taken within any one Contract Year do not exceed 6%. However, withdrawals are not cumulative. If you do not take 6% in one Contract Year, you may not take more than 6% the next Contract Year. If you withdraw more than 6%, the guaranteed amount available may be less than the total premium payments and the GAWA will likely be reduced. The GAWA can be divided up and taken on a payment schedule that you request. You can continue to take the GAWA each Contract Year until the GWB has been depleted. Withdrawal charges and interest rate adjustments, as applicable, are taken into consideration in calculating the amount of your partial withdrawals pursuant to the 6% GMWB With Annual Step-Up, but these charges or adjustments are offset by your ability to make free withdrawals under the Contract. Any time a subsequent premium payment is made, we recalculate the GWB and the GAWA. Each time you make a premium payment, the GWB is increased by the amount of the net premium payment. Also, the GAWA will increase by 6% of the net premium payment or 6% of the increase in the GWB, if the maximum GWB is reached. We require prior approval for a subsequent premium payment, however, that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is reached. If the total of your partial withdrawals made in the current Contract Year is greater than the GAWA, we will recalculate your GWB and your GAWA will likely be lower in the future. In other words, WITHDRAWING MORE THAN THE GAWA IN ANY CONTRACT YEAR COULD CAUSE THE GWB TO BE REDUCED BY MORE THAN THE AMOUNT OF THE WITHDRAWAL(S), LIKELY REDUCING THE GAWA, TOO. Recalculation of the GWB and GAWA may result in reducing or extending the payout period. Examples 4, 5, and 7 in Appendix C illustrate the impact of such withdrawals. For certain tax-qualified Contracts, this GMWB allows for withdrawals greater than GAWA to meet the Contract's required minimum distributions (RMDs) under the Internal Revenue Code (Code) without compromising the endorsement's guarantees. Examples 4, 5, and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "Required Minimum Distribution Calculations" below for more information. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is LESS THAN or equal to the GAWA or RMD, as applicable, the GWB is equal to the greater of: o the GWB prior to the partial withdrawal less the partial withdrawal; or o zero. If all your partial withdrawals made in the current Contract Year are LESS THAN or equal to the GAWA or RMD, as applicable, the GAWA is the lesser of: o the GAWA prior to the partial withdrawal; or o the GWB after the partial withdrawal. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA or RMD, as applicable, and this endorsement was added to your Contract ON OR AFTER MARCH 31, 2008, the GWB is equal to the greater of: o the GWB prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see below), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; or o zero. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA or RMD, as applicable, and this endorsement was added to your Contract ON OR AFTER MARCH 31, 2008, the GAWA is equal to the lesser of: o the GAWA prior to the partial withdrawal reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal, or o the GWB after the partial withdrawal. The Excess Withdrawal is defined to be the lesser of: o the total amount of the current partial withdrawal, or o the amount by which the cumulative partial withdrawals for the current Contract Year exceeds the greater of the GAWA or the RMD, as applicable. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA or RMD, as applicable, and this endorsement was added to your Contract BEFORE MARCH 31, 2008, the GWB is equal to the lesser of: o the Contract Value after the partial withdrawal; or o the greater of the GWB prior to the partial withdrawal less the partial withdrawal or zero. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA or RMD, as applicable, and this endorsement was added to your Contract BEFORE MARCH 31, 2008, the GAWA is equal to the lesser of: o the GAWA prior to the partial withdrawal, or o the GWB after the partial withdrawal, or o 6% of the Contract Value after the partial withdrawal. For purposes of all of these calculations, all partial withdrawals are assumed to be the total amount withdrawn, including any withdrawal charges and interest rate adjustments. Withdrawals made under the guarantee of this endorsement are considered to be the same as any other partial withdrawals, including systematic withdrawals, for the purposes of calculating any other values under the Contract and any other endorsements. They are subject to the same restrictions and processing rules as described in the Contract. Withdrawals under the guarantee of this endorsement are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 146. REQUIRED MINIMUM DISTRIBUTION CALCULATIONS. Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Code, RMDs are calculated and taken on a calendar year basis. But with the 6% GMWB With Annual Step-Up, GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the endorsement's guarantees may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of either of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMD requirements for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD requirement for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THE GMWB IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO IS HELPING, OR WHO HELPED, YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THE 6% GMWB WITH ANNUAL STEP-UP ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. STEP-UP. Step-Ups with the 6% GMWB With Annual Step-Up reset your GWB to the greater of Contract Value or the GWB before step-up, and GAWA becomes the greater of 6% of the new GWB or GAWA before step-up. Step-Ups occur automatically upon each of the first 12 Contract Anniversaries from the endorsement's effective date, then on or after the 13th Contract Anniversary, at any time upon your request, so long as there is at least one year between step-ups. UPON ELECTION OF A STEP-UP, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM CHARGES LISTED ABOVE. IN ADDITION, THE GWB CAN NEVER BE MORE THAN $5 MILLION WITH A STEP-UP. The request will be processed and effective on the day we receive the request in Good Order. Before deciding to "step-up," please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. SPOUSAL CONTINUATION. If you die before annuitizing a Contract with the 6% GMWB With Annual Step-Up, the Contract's death benefit is still payable when Contract Value is greater than zero. Alternatively, the Contract allows the beneficiary who is your spouse to continue it, retaining all rights previously held by the Owner. If the spouse continues the Contract and the 6% GMWB With Annual Step-Up endorsement already applies to the Contract, the 6% GMWB With Annual Step-Up will continue and no adjustment will be made to the GWB or the GAWA at the time of continuation. Step-Ups will continue automatically or as permitted (as described above), and Contract Anniversaries will continue to be based on the anniversary of the original Contract's Issue Date. Upon spousal continuation of a Contract without the 6% GMWB With Annual Step-Up, if the 6% GMWB With Annual Step-Up is available at the time, the beneficiary may request to add this endorsement within 30 days before any Contract Anniversary, and the endorsement will take effect on the Contract Anniversary if the request is made in Good Order. TERMINATION. The 6% GMWB With Annual Step-Up endorsement terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge on the date you annuitize or surrender the Contract. In surrendering the Contract, you will receive the Contract Value less any applicable charges and adjustments and not the GWB or the GAWA you would have received under the 6% GMWB With Annual Step-Up. The 6% GMWB With Annual Step-Up also terminates: with the Contract upon your death (unless the beneficiary who is your spouse continues the Contract) or upon the first date both the GWB and Contract Value equal zero - whichever occurs first. CONTRACT VALUE IS ZERO. If your Contract Value is reduced to zero as the result of a partial withdrawal, contract charges or poor fund performance and the GWB is greater than zero, the GWB will be paid automatically to you on a periodic basis elected by you, which will be no less frequently than annually, so long as the Contract is still in the accumulation phase. The total annual payment will equal the GAWA, but will not exceed the current GWB. The payments continue until the GWB is reduced to zero. All other rights under your Contract cease and we will no longer accept subsequent premium payments and all optional endorsements are terminated without value. Upon your death as the Owner, your beneficiary will receive the scheduled payments. No other death benefit or Earnings Protection Benefit will be paid. ANNUITIZATION. If you decide to annuitize your Contract, you may choose the following income option instead of one of the other income options listed in your Contract: FIXED PAYMENT INCOME OPTION. This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that you select. If you should die (assuming you are the Owner) before the payments have been completed, the remaining payments will be made to the beneficiary, as scheduled. This income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the Annuitant at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. The purchase of the 6% GMWB With Annual Step-Up may not be appropriate for the Owners of Contracts who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors on this and other matters prior to electing the 6% GMWB With Annual Step-Up. 5% GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITHOUT STEP-UP ("MARKETGUARD 5"). THE FOLLOWING DESCRIPTION IS SUPPLEMENTED BY SOME EXAMPLES IN APPENDIX C THAT MAY ASSIST YOU IN UNDERSTANDING HOW CALCULATIONS ARE MADE IN CERTAIN CIRCUMSTANCES. For Owners 80 years old and younger on the Contract's Issue Date, or on the date on which this endorsement is selected if after the Contract's Issue Date, a 5% GMWB without Step-Up may be available, which permits an Owner to make partial withdrawals, prior to the Income Date that, in total, are guaranteed to equal the Guaranteed Withdrawal Balance (GWB)(as defined below), regardless of your Contract Value. THE 5% GMWB WITHOUT STEP-UP IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONE GMWB ONLY PER CONTRACT). We may further limit the availability of this optional endorsement. Once selected, the 5% GMWB without Step-Up cannot be canceled. If you select the 5% GMWB without Step-Up when you purchase your Contract, your premium payment net of any applicable taxes will be used as the basis for determining the GWB. The 5% GMWB without Step-Up may also be selected after the Issue Date within 30 days before any Contract Anniversary, and the endorsement will take effect on the Contract Anniversary if your request is in Good Order. If you select the 5% GMWB without Step-Up after the Issue Date, to determine the GWB, we will use your Contract Value on the date the endorsement is added (see Example 1 in Appendix C). THE GWB CAN NEVER BE MORE THAN $5 MILLION, and the GWB is reduced with each withdrawal you take. Once the GWB has been determined, we calculate the Guaranteed Annual Withdrawal Amount (GAWA), which is the maximum annual partial withdrawal amount, except for certain tax-qualified Contracts (see below). Upon selection, the GAWA is equal to 5% of the GWB. The GAWA will not be reduced if partial withdrawals taken within any one Contract Year do not exceed 5%. However, withdrawals are not cumulative. If you do not take 5% in one Contract Year, you may not take more than 5% the next Contract Year. If you withdraw more than 5%, the guaranteed amount available may be less than the total premium payments and the GAWA may be reduced. The GAWA can be divided up and taken on a payment schedule that you request. You can continue to take the GAWA each Contract Year until the GWB has been depleted. Withdrawal charges and interest rate adjustments, as applicable, are taken into consideration in calculating the amount of your partial withdrawals pursuant to the 5% GMWB without Step-Up, but these charges or adjustments are offset by your ability to make free withdrawals under the Contract. Any time a subsequent premium payment is made, we recalculate the GWB and the GAWA. Each time you make a premium payment, the GWB is increased by the amount of the net premium payment. Also, the GAWA will increase by 5% of the net premium payment or 5% of the increase in the GWB, if the maximum GWB is reached. We require prior approval for a subsequent premium payment, however, that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is reached. If the total of your partial withdrawals made in the current Contract Year is greater than the GAWA, we will recalculate your GWB and your GAWA may be lower in the future. In other words, WITHDRAWING MORE THAN THE GAWA IN ANY CONTRACT YEAR COULD CAUSE THE GWB TO BE REDUCED BY MORE THAN THE AMOUNT OF THE WITHDRAWAL(S) AND EVEN RESET TO THE THEN CURRENT CONTRACT VALUE, LIKELY REDUCING THE GAWA, TOO. Recalculation of the GWB and GAWA may result in reducing or extending the payout period. Examples 4, 5, and 7 in Appendix C illustrate the impact of such withdrawals. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is LESS THAN or equal to the GAWA, the GWB is equal to the greater of: o the GWB prior to the partial withdrawal less the partial withdrawal; or o zero. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA, the GWB is equal to the lesser of: o the Contract Value after the partial withdrawal; or o the greater of the GWB prior to the partial withdrawal less the partial withdrawal or zero. If all your partial withdrawals made in the current Contract Year are LESS THAN or equal to the GAWA, the GAWA is the lesser of: o the GAWA prior to the partial withdrawal; or o the GWB after the partial withdrawal. If the partial withdrawal plus all prior partial withdrawals made in the current Contract Year is GREATER THAN the GAWA, the GAWA is equal to the lesser of: o the GAWA prior to the partial withdrawal; or o the GWB after the partial withdrawal; or o 5% of the Contract Value after the partial withdrawal. For purposes of these calculations, all partial withdrawals are assumed to be the total amount withdrawn, including any withdrawal charges and interest rate adjustments. Withdrawals made under the guarantee of this endorsement are considered to be the same as any other partial withdrawals, including systematic withdrawals, for the purposes of calculating any other values under the Contract and any other endorsements. They are subject to the same restrictions and processing rules as described in the Contract. Withdrawals under the guarantee of this endorsement are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 146. For certain tax-qualified Contracts, the 5% GMWB without Step-Up allows for withdrawals greater than GAWA to meet the required minimum distribution (RMD) under the Internal Revenue Code (Code) without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. REQUIRED MINIMUM DISTRIBUTION CALCULATIONS. Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Code, RMDs are calculated and taken on a calendar year basis. But with the 5% GMWB Without Step-Up, GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the endorsement's guarantees may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of either of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMD requirements for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD requirement for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THE GMWB IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO HELPED YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THE 5% GMWB WITHOUT STEP-UP ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. SPOUSAL CONTINUATION. If you die before annuitizing a Contract with the 5% GMWB without Step-Up, the Contract's death benefit is still payable when Contract Value is greater than zero. Alternatively, the Contract allows the beneficiary who is your spouse to continue it, retaining all rights previously held by the Owner. If the spouse continues the Contract and the 5% GMWB without Step-Up endorsement already applies to the Contract, the 5% GMWB without Step-Up will continue and no adjustment will be made to the GWB or the GAWA at the time of continuation. Contract Anniversaries will continue to be based on the anniversary of the original Contract's Issue Date. Upon spousal continuation of a Contract without the 5% GMWB without Step-Up, if the 5% GMWB without Step-Up is available at the time, the beneficiary may request to add this endorsement within 30 days before any Contract Anniversary, and the endorsement will take effect on the Contract Anniversary if the request is made in Good Order. TERMINATION. The 5% GMWB without Step-Up endorsement terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge on the date you annuitize or surrender the Contract. In surrendering the Contract, you will receive the Contract Value less any applicable charges and adjustments and not the GWB or the GAWA you would have received under the 5% GMWB without Step-Up. The 5% GMWB without Step-Up also terminates: with the Contract upon your death (unless the beneficiary who is your spouse continues the Contract) or upon the first date both the GWB and Contract Value equal zero- whichever occurs first. CONTRACT VALUE IS ZERO. If your Contract Value is reduced to zero as the result of a partial withdrawal, contract charges or poor fund performance and the GWB is greater than zero, the GWB will be paid to you on a periodic basis elected by you, which will be no less frequently than annually, so long as the contract is still in the accumulation phase. The total annual payment will equal the GAWA, but will not exceed the current GWB. The payments continue until the GWB is reduced to zero. All other rights under your Contract cease and we will no longer accept subsequent premium payments and all optional endorsements are terminated without value. Upon your death as the Owner, your beneficiary will receive the scheduled payments. No other death benefit or Earnings Protection Benefit will be paid. ANNUITIZATION. If you decide to annuitize your Contract, you may choose the following income option instead of one of the other income options listed in your Contract: FIXED PAYMENT INCOME OPTION. This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that you select. If you should die (assuming you are the Owner) before the payments have been completed, the remaining payments will be made to the beneficiary, as scheduled. This income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the Annuitant at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. The purchase of the 5% GMWB without Step-Up may not be appropriate for the Owners of Contracts who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors on this and other matters prior to electing the 5% GMWB without Step-Up. 5% FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS AND ANNUAL STEP-UP ("LIFEGUARD ADVANTAGE"). THE FOLLOWING DESCRIPTION OF THIS GMWB IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C, PARTICULARLY EXAMPLES 6 AND 7 FOR THE STEP-UPS, EXAMPLE 8 FOR THE BONUS AND EXAMPLE 9 FOR THE FOR LIFE GUARANTEES. PLEASE NOTE: EFFECTIVE MARCH 31, 2008, THIS ENDORSEMENT IS NO LONGER AVAILABLE TO ADD TO A CONTRACT. This GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the LONGER of: o The Owner's life (the "For Life Guarantee") if the For Life Guarantee is in effect; The For Life Guarantee is based on the life of the first Owner to die with joint Owners. For the Owner that is a legal entity, the For Life Guarantee is based on the Annuitant's life (or the life of the first Annuitant to die if there is more than one Annuitant). The For Life Guarantee becomes effective on the Contract Anniversary on or immediately following the Owner's 65th birthday (or with joint Owners, the oldest Owner's 65th birthday). If the Owner (or oldest Owner) is 65 years old or older on the endorsement's effective date, then the For Life Guarantee is effective when this GMWB is added to the Contract. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event Contract Value is reduced to zero. OR o Until all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB is the guaranteed amount available for future periodic withdrawals. o With this GMWB, we offer a bonus on the GWB; you may be able to receive a credit to the GWB for a limited time (see box below, and the paragraph preceding it at the end of this section, for more information). BECAUSE OF THE FOR LIFE GUARANTEE, YOUR WITHDRAWALS COULD AMOUNT TO MORE THAN THE GWB. BUT PLEASE NOTE: THE GUARANTEES OF THIS GMWB, INCLUDING ANY BONUS OPPORTUNITY, ARE SUBJECT TO THE ENDORSEMENT'S TERMS, CONDITIONS, AND LIMITATIONS THAT ARE EXPLAINED BELOW. Please consult the representative who helped you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Owners 45 to 80 years old (proof of age is required); may be added to a Contract on the Issue Date or any Contract Anniversary; and once added cannot be canceled except by a beneficiary who is the Owner's spouse, who, upon the Owner's death, may elect to continue the Contract without the GMWB. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. THIS GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONLY ONE GMWB PER CONTRACT). We allow ownership changes of a Contract with this GMWB when the Owner is a legal entity - to another legal entity or the Annuitant. Otherwise, ownership changes are not allowed. Also, when the Owner is a legal entity, charges will be determined based on the age of the Annuitant and changing Annuitants is not allowed. Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. ELECTION. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. --------------------------------------------- WHEN THIS GMWB IS ADDED TO THE The GWB equals initial premium net of any CONTRACT ON THE ISSUE DATE - applicable premium taxes. The GAWA equals 5% of the GWB. --------------------------------------------- --------------------------------------------- WHEN THIS GMWB IS ADDED TO THE The GWB equals Contract Value. CONTRACT ON ANY CONTRACT ANNIVERSARY - The GAWA equals 5% of the GWB. --------------------------------------------- PLEASE NOTE: AT THE TIME THE FOR LIFE GUARANTEE BECOMES EFFECTIVE, THE GAWA IS RESET TO EQUAL 5% OF THE THEN CURRENT GWB. Premium net of any applicable premium taxes is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on that date. THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon Step-Up), and the GWB is reduced by each withdrawal. WITHDRAWALS. Withdrawals may cause both the GWB and GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The two tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMDs without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. ---------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB before the withdrawal less the withdrawal; OR o Zero. The GAWA: o Is unchanged WHILE THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. ---------------------------------------------- The GAWA is NOT reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 5 in Appendix C). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount - even set equal to the Contract Value. The GAWA is also potentially impacted. ------------------------------------------------ WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the lesser of: PRIOR WITHDRAWALS IN THE CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o Contract Value after the withdrawal; OR o The greater of the GWB before the withdrawal less the withdrawal, or zero. The GAWA is recalculated, equaling the lesser of: o 5% of the Contract Value after the withdrawal; OR o The greater of 5% of the GWB after the withdrawal, or zero. ------------------------------------------------ Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a guaranteed fixed account may be subject to an interest rate adjustment. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 146. ---------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMDs for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THIS GMWB, IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO HELPED YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THIS GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. ---------------------------------------------------------------------- PREMIUMS. ------------------------------------------------- WITH EACH SUBSEQUENT The GWB is recalculated, increasing by the amount PREMIUM PAYMENT ON THE of the premium net of any applicable premium CONTRACT - taxes. The GAWA is also recalculated, increasing by: o 5% of the premium net of any applicable premium taxes; OR o 5% of the increase in the GWB - IF THE MAXIMUM GWB IS HIT. ------------------------------------------------- We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. THE GWB CAN NEVER BE MORE THAN $5 MILLION. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is hit. STEP-UP. In the event Contract Value is greater than the GWB, this GMWB allows the GWB to be reset to the Contract Value (a "Step-Up"). UPON ELECTION OF A STEP-UP, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM CHARGES LISTED ABOVE. ------------------------------------------------- WITH A STEP-UP - The GWB equals Contract Value. The GAWA is recalculated, equaling the greater of: o 5% of the new GWB; OR o The GAWA before the Step-Up. ------------------------------------------------- Step-Ups occur automatically upon each of the first ten Contract Anniversaries from the endorsement's effective date. Thereafter, a Step-Up is allowed at any time upon your request, so long as there is at least one year between Step-Ups. THE GWB CAN NEVER BE MORE THAN $5 MILLION WITH A STEP-UP. A request for Step-Up is processed and effective on the date received in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. OWNER'S DEATH. The Contract's death benefit is not affected by this GMWB SO LONG AS CONTRACT VALUE IS GREATER THAN ZERO and the Contract is still in the accumulation phase. Upon your death (or the first Owner's death with joint Owners), this GMWB terminates without value. CONTRACT VALUE IS ZERO. With this GMWB, in the event Contract Value is zero, the GAWA is unchanged and payable SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT AND THE CONTRACT IS STILL IN THE ACCUMULATION PHASE. Otherwise, payments will be made while there is value to the GWB (until depleted), so long as the Contract is still in the accumulation phase. Payments are made on the periodic basis you elect, but no less frequently than annually. ---------------------------------------------- AFTER EACH PAYMENT WHEN THE The GWB is recalculated, equaling the greater CONTRACT VALUE IS ZERO - of: o The GWB before the payment less the payment; OR o Zero. The GAWA: o Is unchanged SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. ---------------------------------------------- If you die before all scheduled payments are made, then your beneficiary will receive the remainder. All other rights under your Contract cease, except for the right to change beneficiaries. No subsequent premium payments will be accepted. All optional endorsements terminate without value. And no other death benefit is payable, including the Earnings Protection Benefit. SPOUSAL CONTINUATION. In the event of the Owner's death (or the first Owner's death with joint Owners), the beneficiary who is the Owner's spouse may elect to: o Continue the Contract WITH this GMWB - so long as Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o Upon the Owner's death, the For Life Guarantee is void. o Only the GWB is payable while there is value to it (until depleted). o Step-Ups will continue automatically or as permitted; otherwise, the above rules for Step-Ups apply. o Contract Anniversaries will continue to be based on the Contract's Issue Date. o Continue the Contract WITHOUT this GMWB (GMWB is terminated). o Add this GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the beneficiary's eligibility - WHETHER OR NOT THE SPOUSAL BENEFICIARY TERMINATED THE GMWB IN CONTINUING THE CONTRACT. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 145. TERMINATION. This GMWB terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); o The date of the Owner's death (or the first Owner's death with joint Owners), UNLESS the beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB; o The Continuation Date if the spousal beneficiary elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract Value is zero. ANNUITIZATION. LIFE INCOME OF GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of the Owner (or, with joint Owners, the lifetime of joint Owner who dies first). The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the Owner (or the first Owner's death with joint Owners), and there is no provision for a death benefit payable to the beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if the Owner dies before the due date of the second payment. SPECIFIED PERIOD INCOME OF THE GAWA. On the Latest Income Date if the For Life Guarantee is NOT in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (THIS INCOME OPTION ONLY APPLIES IF THE GMWB HAS BEEN CONTINUED BY THE SPOUSAL BENEFICIARY UPON THE DEATH OF THE ORIGINAL OWNER, IN WHICH CASE THE SPOUSE BECOMES THE OWNER OF THE CONTRACT AND THE LATEST INCOME DATE IS BASED ON THE AGE OF THE SPOUSE.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. BONUS. The description of the bonus feature is supplemented by the examples in Appendix C, particularly example 8. The bonus is an incentive for you NOT to utilize this GMWB (take withdrawals) during a limited period of time, subject to conditions and limitations, allowing the GWB and GAWA to increase (even in a down market relative to your Contract Value allocated to any Investment Divisions). The increase, however, may not equal the amount that your Contract Value has declined. The bonus is a percentage of a sum called the Bonus Base (defined below). The box below has more information about the bonus, including: o How the bonus is calculated; o What happens to the Bonus Base (and bonus) with a withdrawal, premium payment, and any Step-Up; o For how long the bonus is available; and o When and what happens when the bonus is applied to the GWB. -------------------------------------------------------------------------------- The bonus equals 6% (5% if this GMWB is added to the Contract PRIOR TO APRIL 30, 2007) and is based on a sum that may vary after this GMWB is added to the Contract (the Bonus Base"), as described immediately below. o WHEN THIS GMWB IS ADDED TO THE CONTRACT, the Bonus Base equals the GWB. o WITH A WITHDRAWAL, if that withdrawal, and all prior withdrawals in the current Contract Year, exceeds the greater of the GAWA and the RMD, as applicable, then the Bonus Base is set to the lesser of the GWB after, and the Bonus Base before, the withdrawal. Otherwise, there is no adjustment to the Bonus Base with withdrawals. o All withdrawals count, including: systematic withdrawals; RMDs for certain tax-qualified Contracts; withdrawals of asset allocation and advisory fees; and free withdrawals under the Contract. o A withdrawal in a Contract Year during the Bonus Period (defined below) precludes a bonus for that Contract Year. o WITH A PREMIUM PAYMENT, the Bonus Base increases by the amount of the premium net of any applicable premium taxes. o WITH ANY STEP-UP (IF THE GWB INCREASES UPON STEP-UP), the Bonus Base is set to the greater of the GWB after, and the Bonus Base before, the Step-Up. THE BONUS BASE CAN NEVER BE MORE THAN $5 MILLION. The Bonus is available for a limited time (the "Bonus Period"). The Bonus Period runs from the date this GMWB is added to the Contract through the earliest of: o The tenth Contract Anniversary after the effective date of the endorsement; o The Contract Anniversary on or immediately following the Owner's (if joint Owners, the oldest Owner's) 81st birthday; or o The date Contract Value is zero. Spousal continuation of a Contract with this GMWB does not affect the Bonus Period; Contract Anniversaries are based on the Contract's Issue Date. The bonus is applied at the end of each Contract Year during the Bonus Period, if there have been no withdrawals during that Contract Year. Conversely, any withdrawal, including but not limited to systematic withdrawals and required minimum distributions, taken in a Contract Year during the Bonus Period causes the bonus not to be applied. When the bonus is applied: o The GWB is recalculated, increasing by 6 % (5% if this GMWB is added to the Contract PRIOR TO APRIL 30, 2007) of the Bonus Base. o The GAWA is then recalculated, equaling the greater of 5% of the new GWB and the GAWA before the bonus. Applying the bonus to the GWB does not affect the Bonus Base. -------------------------------------------------------------------------------- FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH ANNUAL STEP-UP ("LIFEGUARD ASCENT"). THE FOLLOWING DESCRIPTION OF THIS GMWB IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C, PARTICULARLY EXAMPLE 2 FOR THE VARYING BENEFIT PERCENTAGE AND EXAMPLES 6 AND 7 FOR THE STEP-UPS. This GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the LONGER of: PLEASE NOTE: EFFECTIVE MARCH 31, 2008, THIS ENDORSEMENT IS NO LONGER AVAILABLE TO ADD TO A CONTRACT. o The Owner's life (the "For Life Guarantee") if the For Life Guarantee is in effect; The For Life Guarantee is based on the life of the first Owner to die with joint Owners. There are also other GMWB options for joint Owners that are spouses, as described below. For the Owner that is a legal entity, the For Life Guarantee is based on the Annuitant's life (or the life of the first Annuitant to die if there is more than one Annuitant). The For Life Guarantee becomes effective when this GMWB is added to the Contract. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event Contract Value is reduced to zero. OR o Until all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB is the guaranteed amount available for future periodic withdrawals. BECAUSE OF THE FOR LIFE GUARANTEE, YOUR WITHDRAWALS COULD AMOUNT TO MORE THAN THE GWB. BUT PLEASE NOTE: THE GUARANTEES OF THIS GMWB ARE SUBJECT TO THE ENDORSEMENT'S TERMS, CONDITIONS, AND LIMITATIONS THAT ARE EXPLAINED BELOW. Please consult the representative who helped you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Owners 45 to 85 years old (proof of age is required); may be added to a Contract on the Issue Date or any Contract Anniversary; and once added cannot be canceled except by a beneficiary who is the Owner's spouse, who, upon the Owner's death, may elect to continue the Contract without the GMWB. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. THIS GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONLY ONE GMWB PER CONTRACT). We allow ownership changes of a Contract with this GMWB when the Owner is a legal entity - to another legal entity or the Annuitant. Otherwise, ownership changes are not allowed. When the Owner is a legal entity, changing Annuitants is not allowed. Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. ELECTION. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. --------------------------------------------- WHEN THIS GMWB IS ADDED TO The GWB equals initial premium net of any THE CONTRACT ON THE ISSUE applicable premium taxes. DATE - The GAWA is determined based on the Owner's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. The For Life Guarantee becomes effective on the Contract Issue Date. --------------------------------------------- --------------------------------------------- WHEN THIS GMWB IS ADDED TO THE The GWB equals Contract Value. CONTRACT ON ANY CONTRACT ANNIVERSARY - The GAWA is determined based on the Owner's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. The For Life Guarantee becomes effective on the Contract Anniversary on which the endorsement is added. --------------------------------------------- Premium net of any applicable premium taxes is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on that date. (See Example 1 in Appendix C.) THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon Step-Up), and the GWB is reduced by each withdrawal. PLEASE NOTE: Upon the Owner's death, the For Life Guarantee is void. However, this GMWB might be continued by a spousal beneficiary without the For Life Guarantee. Please see the "Spousal Continuation" subsection below for more information. WITHDRAWALS. The GAWA percentage and the GAWA are determined at the time of the first withdrawal. The GAWA is equal to the GAWA percentage multiplied by the GWB prior to the partial withdrawal. The GAWA percentage varies according to age group and is determined based on the Owner's attained age at the time of the first withdrawal. If there are joint Owners, the GAWA percentage is based on the attained age of the oldest joint Owner. (In the examples in Appendix C and elsewhere in this prospectus we refer to this varying GAWA percentage structure as the "varying benefit percentage".) THE GAWA PERCENTAGE FOR EACH AGE GROUP IS: Ages GAWA Percentage ------------------ ------------------------ ------------------ ------------------------ 45 - 59 4% 60 - 74 5% 75 - 84 6% 85+ 7% Withdrawals cause the GWB to be recalculated. Withdrawals may also cause the GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. ---------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB before the withdrawal less the withdrawal; OR o Zero. The GAWA: o Is unchanged WHILE THE FOR LIFE GUARANTEE IS IN effect; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. ---------------------------------------------- The GAWA is NOT reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 5 in Appendix C). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount - even set equal to the Contract Value. The GAWA is also potentially impacted. ---------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the lesser PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o Contract Value after the withdrawal; OR o The greater of the GWB before the withdrawal less the withdrawal, or zero. The GAWA is recalculated, equaling the lesser of: o The GAWA percentage multiplied by the Contract Value after the withdrawal; OR o The GAWA percentage multiplied by the GWB after the withdrawal. ---------------------------------------------- Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a guaranteed fixed account may be subject to an interest rate adjustment. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 146. If the age of any Owner is incorrectly stated at the time of election of the GMWB, on the date the misstatement is discovered, the GWB and the GAWA will be recalculated based on the GAWA percentage applicable at the correct age. Any future GAWA percentage recalculation will be based on the correct age. If the age at election of the Owner (or oldest joint Owner) falls outside the allowable age range, the GMWB will be null and void and all GMWB charges will be refunded. ---------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMDs for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THIS GMWB, IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO HELPED YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THIS GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. ---------------------------------------------------------------------- PREMIUMS. ----------------------------------------------- WITH EACH SUBSEQUENT PREMIUM The GWB is recalculated, increasing by the PAYMENT ON THE CONTRACT - amount of the premium net of any applicable premium taxes. If the premium payment is received after the first withdrawal, the GAWA is also recalculated, increasing by: o The GAWA percentage multiplied by the subsequent premium payment net of any applicable premium taxes; OR o The GAWA percentage multiplied by the increase in the GWB - IF THE MAXIMUM GWB IS HIT. ----------------------------------------------- We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. THE GWB CAN NEVER BE MORE THAN $5 MILLION. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is hit. STEP-UP. In the event Contract Value is greater than the GWB, this GMWB allows the GWB to be reset to the Contract Value (a "Step-Up"). UPON ELECTION OF A STEP-UP, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM CHARGES LISTED ABOVE. In addition to an increase in the GWB, a Step-Up allows for a potential increase in the GAWA percentage in the event that the Step-Up occurs after the first withdrawal. The value used to determine whether the GAWA percentage will increase upon Step-Up is called the Benefit Determination Base (BDB). The BDB equals initial premium net of any applicable premium taxes, if this GMWB is elected at issue, or the Contract Value on the Contract Anniversary on which the endorsement is added, if elected after issue. Withdrawals do not affect the BDB. Subsequent premium payments increase the BDB by the amount of the premium net of any applicable premium taxes. In addition, unlike the GWB, the BDB is not subject to any maximum amount. Therefore, it is possible for the BDB to be more than $5 million. ------------------------------------------------------ WITH A STEP-UP - The GWB equals Contract Value (subject to a $5 million maximum). If the Contract Value is greater than the BDB prior to the Step-Up then the BDB is set to equal the Contract Value (not subject to any maximum amount); and, if the Step-Up occurs after the first withdrawal, the GAWA PERCENTAGE is recalculated based on the attained age of the Owner. o If there are joint Owners, the GAWA percentage is recalculated based on the oldest joint Owner. o The GAWA percentage will not be recalculated upon step-ups following Spousal Continuation. If the Step-Up occurs after the first withdrawal, the GAWA is recalculated, equaling the greater of: o The GAWA percentage multiplied by the new GWB, OR o The GAWA prior to Step-Up. ------------------------------------------------------ PLEASE NOTE: WITHDRAWALS FROM THE CONTRACT REDUCE THE GWB AND CONTRACT VALUE BUT DO NOT AFFECT THE BDB. IN THE EVENT OF WITHDRAWALS, THE BDB REMAINS UNCHANGED. THEREFORE, BECAUSE THE CONTRACT VALUE MUST BE GREATER THAN THE BDB PRIOR TO STEP-UP IN ORDER FOR THE GAWA PERCENTAGE TO INCREASE, A GAWA PERCENTAGE INCREASE MAY BECOME LESS LIKELY WHEN CONTINUING WITHDRAWALS ARE MADE FROM THE CONTRACT. Step-Ups occur automatically upon each of the first ten Contract Anniversaries from the endorsement's effective date. Thereafter, a Step-Up is allowed at any time upon your request, so long as there is at least one year between Step-Ups. THE GWB CAN NEVER BE MORE THAN $5 MILLION WITH A STEP-UP. HOWEVER, AUTOMATIC STEP-UPS STILL OCCUR AND ELECTED STEP-UPS ARE STILL PERMITTED EVEN WHEN THE GWB IS AT THE MAXIMUM OF $5 MILLION IF THE CONTRACT VALUE IS GREATER THAN THE BDB AND THE GAWA PERCENTAGE WOULD INCREASE. A request for Step-Up is processed and effective on the date received in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. OWNER'S DEATH. The Contract's death benefit is not affected by this GMWB SO LONG AS CONTRACT VALUE IS GREATER THAN ZERO and the Contract is still in the accumulation phase. Upon your death (or the first Owner's death with joint Owners) while the Contract is still in force, this GMWB terminates without value. CONTRACT VALUE IS ZERO. With this GMWB, in the event Contract Value is zero, the GAWA is unchanged and payable SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT AND THE CONTRACT IS STILL IN THE ACCUMULATION PHASE. Otherwise, payments will be made while there is value to the GWB (until depleted), so long as the Contract is still in the accumulation phase. If the GAWA percentage has not yet been determined, it will be set at the GAWA percentage corresponding to the Owner's (or oldest joint Owner's) attained age at the time the Contract Value falls to zero. ----------------------------------------------- AFTER EACH PAYMENT WHEN THE The GWB is recalculated, equaling the greater CONTRACT VALUE IS ZERO - of: o The GWB before the payment less the payment; OR o Zero. The GAWA: o Is unchanged SO LONG AS THE FOR LIFE GUARANTEE IS IN effect; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. ----------------------------------------------- Payments are made on the periodic basis you elect, but no less frequently than annually. If you die before all scheduled payments are made, then your beneficiary will receive the remainder. All other rights under your Contract cease, except for the right to change beneficiaries. No subsequent premium payments will be accepted. All optional endorsements terminate without value. And no other death benefit is payable, including the Earnings Protection Benefit. SPOUSAL CONTINUATION. In the event of the Owner's death (or the first Owner's death with joint Owners), the beneficiary who is the Owner's spouse may elect to: o Continue the Contract WITH this GMWB - so long as Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o Upon the Owner's death, the For Life Guarantee is void. o Only the GWB is payable while there is value to it (until depleted). o Step-Ups will continue automatically or as permitted; otherwise, the above rules for Step-Ups apply. o Contract Anniversaries will continue to be based on the Contract's Issue Date. o If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the Owner's (or oldest joint Owner's) attained age at the time of death. The GAWA percentage will not change on future Step-Ups, even if the Contract Value exceeds the BDB. o The Latest Income Date is based on the age of the surviving spouse. Please refer to "Annuitization" subsection below for information regarding the availability of the "Specified Period Income of the GAW" option if the GWB has been continued by a spousal beneficiary upon the death of the original Owner. o Continue the Contract WITHOUT this GMWB (GMWB is terminated). o Add this GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the beneficiary's eligibility - WHETHER OR NOT THE SPOUSAL BENEFICIARY TERMINATED THE GMWB IN CONTINUING THE CONTRACT. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 145. TERMINATION. This GMWB terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); o The date of the Owner's death (or the first Owner's death with joint Owners), unless the beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB; o The Continuation Date if the spousal beneficiary elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract has been terminated. ANNUITIZATION. LIFE INCOME OF GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of the Owner (or, with joint Owners, the lifetime of joint Owner who dies first). The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the Owner (or the first Owner's death with joint Owners), and there is no provision for a death benefit payable to the beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if the Owner dies before the due date of the second payment. If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the Owner's (or oldest joint Owner's) attained age at the time of election of this option. The GAWA percentage will not change after election of this option. SPECIFIED PERIOD INCOME OF THE GAWA. On the Latest Income Date if the For Life Guarantee is NOT in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (THIS INCOME OPTION ONLY APPLIES IF THE GMWB HAS BEEN CONTINUED BY THE SPOUSAL BENEFICIARY UPON THE DEATH OF THE ORIGINAL OWNER, IN WHICH CASE THE SPOUSE BECOMES THE OWNER OF THE CONTRACT AND THE LATEST INCOME DATE IS BASED ON THE AGE OF THE SPOUSE.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. JOINT FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH ANNUAL STEP-UP ("LIFEGUARD ASCENT WITH JOINT OPTION"). THE DESCRIPTION OF THIS GMWB IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C, PARTICULARLY EXAMPLE 2 FOR THE VARYING BENEFIT PERCENTAGE, EXAMPLES 6 AND 7 FOR THE STEP-UPS AND EXAMPLE 10 FOR THE FOR LIFE GUARANTEES. PLEASE NOTE: EFFECTIVE MARCH 31, 2008, THIS ENDORSEMENT IS NO LONGER AVAILABLE TO ADD TO A CONTRACT. The election of this GMWB under a non-qualified Contract requires the joint Owners to be spouses (as defined under the Internal Revenue Code) and each joint Owner is considered to be a "Covered Life." The Owners cannot be subsequently changed and new Owners cannot be added. Upon death of either joint Owner, the surviving joint Owner will be treated as the primary beneficiary and all other beneficiaries will be treated as contingent beneficiaries. The For Life Guarantee will not apply to these contingent beneficiaries, as they are not Covered Lives. This GMWB is available on a limited basis under non-qualified Contracts for certain kinds of legal entities, such as (i) custodial accounts where the spouses are the joint Annuitants and (ii) trusts where the spouses are the sole beneficial Owners, and the For Life Guarantee is based on the Annuitant's life who dies last. Tax-qualified Contracts cannot be issued to joint Owners and require the Owner and Annuitant to be the same person. Under a tax-qualified Contract, the election of this GMWB requires the Owner and primary beneficiary to be spouses (as defined in the Internal Revenue Code). The Owner and only the primary spousal beneficiary named at the election of this GMWB under a tax-qualified Contract will also each be considered a Covered Life, and these Covered Lives cannot be subsequently changed. For tax-qualified Contracts, the Owner and primary spousal beneficiary cannot be changed while both are living. If the Owner dies first, the primary spousal beneficiary will become the Owner upon Spousal Continuation and he or she may name a beneficiary; however, that beneficiary is not considered a Covered Life. Likewise, if the primary spousal beneficiary dies first, the Owner may name a new beneficiary; however, that beneficiary is also not considered a Covered Life and consequently the For Life Guarantee will not apply to the new beneficiary. For both non-qualified and tax-qualified Contracts, this GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the longer of: o The lifetime of the last surviving Covered Life if the For Life Guarantee is in effect; The For Life Guarantee becomes effective when this GMWB is added to the Contract. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event Contract Value is reduced to zero. OR o Until all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB is the guaranteed amount available for future periodic withdrawals. BECAUSE OF THE FOR LIFE GUARANTEE, YOUR WITHDRAWALS COULD AMOUNT TO MORE THAN THE GWB. BUT PLEASE NOTE: THE GUARANTEES OF THIS GMWB ARE SUBJECT TO THE ENDORSEMENT'S TERMS, CONDITIONS, AND LIMITATIONS THAT ARE EXPLAINED BELOW. Please consult the representative who helped you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Covered Lives 45 to 85 years old (proof of age is required and both Covered Lives must be within the eligible age range). This GMWB may be added to a Contract on the Issue Date or on any Contract Anniversary and cannot be canceled except by a spousal beneficiary who is not a Covered Life, who, upon the Owner's death, may elect to continue the Contract without the GMWB. To continue joint GMWB coverage upon the death of the Owner (or the death of either joint Owner of a non-qualified Contract), provided that the other Covered Life is still living, the Contract must be continued by election of Spousal Continuation. Upon continuation, the spouse becomes the Owner and obtains all rights as the Owner. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. THIS GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONLY ONE GMWB PER CONTRACT). Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. ELECTION. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. --------------------------------------------- WHEN THIS GMWB IS ADDED TO THE The GWB equals initial premium net of any CONTRACT ON THE ISSUE DATE - applicable premium taxes. The GAWA is determined based on the youngest Covered Life's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. The For Life Guarantee becomes effective on the Contract Issue Date. --------------------------------------------- --------------------------------------------- WHEN THIS GMWB IS ADDED TO THE The GWB equals Contract Value. CONTRACT ON ANY CONTRACT ANNIVERSARY - The GAWA is determined based on the youngest Covered Life's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. The For Life Guarantee becomes effective on the Contract Anniversary on which the endorsement is added. --------------------------------------------- Premium (net of any applicable premium taxes) is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on that date. THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon Step-Up), and the GWB is reduced by each withdrawal. PLEASE NOTE: Upon the Owner's death, the For Life Guarantee is void unless this GMWB is continued by a spousal beneficiary who is a Covered Life. However, it is possible for this GMWB to be continued without the For Life Guarantee by a spousal beneficiary who is not a Covered Life. Please see the "Spousal Continuation" subsection below for more information. WITHDRAWALS. The GAWA percentage and the GAWA are determined at the time of the first withdrawal. The GAWA is equal to the GAWA percentage multiplied by the GWB prior to the partial withdrawal. The GAWA percentage varies according to age group and is determined based on the youngest Covered Life's attained age at the time of the first withdrawal. (In the examples in Appendix C and elsewhere in this prospectus we refer to this varying GAWA percentage structure as the "varying benefit percentage".) THE GAWA PERCENTAGE FOR EACH AGE GROUP IS: Ages GAWA Percentage ------------------ ------------------------- ------------------ ------------------------- 45 - 59 4% 60 - 74 5% 75 - 84 6% 85+ 7% Withdrawals cause the GWB to be recalculated. Withdrawals may also cause the GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The two tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. ---------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB before the withdrawal less the withdrawal; OR o Zero. The GAWA: o Is unchanged WHILE THE FOR LIFE GUARANTEE IS IN effect; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. ---------------------------------------------- The GAWA is NOT reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 5 in Appendix C). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount - even set equal to the Contract Value. The GAWA is also potentially impacted. ---------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the lesser PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o Contract Value after the withdrawal; OR o The greater of the GWB before the withdrawal less the withdrawal, or zero. The GAWA is recalculated, equaling the lesser of: o The GAWA percentage multiplied by the Contract Value after the withdrawal; OR o The GAWA percentage multiplied by the GWB after the withdrawal. ---------------------------------------------- Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a guaranteed fixed account may be subject to an interest rate adjustment. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 146. If the age of any Covered Life is incorrectly stated at the time of election of the GMWB, on the date the misstatement is discovered, the GWB and the GAWA be recalculated based on the GAWA percentage applicable at the correct age. Any future GAWA percentage recalculation will be based on the correct age. If the age at election of either Covered Life falls outside the allowable age range, the GMWB will be null and void and all GMWB charges will be refunded. ---------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMDs for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THIS GMWB, IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO HELPED YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THIS GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. ---------------------------------------------------------------------- PREMIUMS. --------------------------------------------- WITH EACH SUBSEQUENT PREMIUM The GWB is recalculated, increasing by the PAYMENT ON THE CONTRACT - amount of the premium net of any applicable premium taxes. If the premium payment is received after the first withdrawal, the GAWA is also recalculated, increasing by: o The GAWA percentage multiplied by the subsequent premium payment net of any applicable premium taxes; OR o The GAWA percentage multiplied by the increase in the GWB - IF THE MAXIMUM GWB IS HIT. --------------------------------------------- We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. THE GWB CAN NEVER BE MORE THAN $5 MILLION. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is hit. STEP-UP. In the event Contract Value is greater than the GWB, this GMWB allows the GWB to be reset to the Contract Value (a "Step-Up"). UPON ELECTION OF A STEP-UP, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM CHARGES LISTED ABOVE. In addition to an increase in the GWB, a Step-Up allows for a potential increase in the GAWA percentage in the event that the Step-Up occurs after the first withdrawal. The value used to determine whether the GAWA percentage will increase upon Step-Up is called the Benefit Determination Base (BDB). The BDB equals initial premium net of any applicable premium taxes, if this GMWB is elected at issue, or the Contract Value on the Contract Anniversary on which the endorsement is added, if elected after issue. Withdrawals do not affect the BDB. Subsequent premium payments increase the BDB by the amount of the premium net of any applicable premium taxes. In addition, unlike the GWB, the BDB is not subject to any maximum amount. Therefore, it is possible for the BDB to be more than $5 million. ------------------------------------------------------------ WITH A STEP-UP - The GWB equals Contract Value (subject to a $5 million maximum). If the Contract Value is greater than the BDB prior to the Step-Up then the BDB is set to equal the Contract Value (not subject to any maximum amount); and, if the Step-Up occurs after the first withdrawal, the GAWA PERCENTAGE is recalculated based on the attained age of the youngest Covered Life. o The GAWA percentage will not be recalculated upon step-ups following Spousal Continuation if the spouse electing Spousal Continuation is not a Covered Life. If the Step-Up occurs after the first withdrawal, the GAWA is recalculated, equaling the greater of: o The GAWA percentage multiplied by the new GWB, OR o The GAWA prior to Step-Up. ------------------------------------------------------------ PLEASE NOTE: WITHDRAWALS FROM THE CONTRACT REDUCE THE GWB AND CONTRACT VALUE BUT DO NOT AFFECT THE BDB. IN THE EVENT OF WITHDRAWALS, THE BDB REMAINS UNCHANGED. THEREFORE, BECAUSE THE CONTRACT VALUE MUST BE GREATER THAN THE BDB PRIOR TO STEP-UP IN ORDER FOR THE GAWA PERCENTAGE TO INCREASE, A GAWA PERCENTAGE INCREASE MAY BECOME LESS LIKELY WHEN CONTINUING WITHDRAWALS ARE MADE FROM THE CONTRACT. Step-Ups occur automatically upon each of the first ten Contract Anniversaries from the endorsement's effective date. Thereafter, a Step-Up is allowed at any time upon your request, so long as there is at least one year between Step-Ups. THE GWB CAN NEVER BE MORE THAN $5 MILLION WITH A STEP-UP. HOWEVER, AUTOMATIC STEP-UPS STILL OCCUR AND ELECTED STEP-UPS ARE STILL PERMITTED EVEN WHEN THE GWB IS AT THE MAXIMUM OF $5 MILLION IF THE CONTRACT VALUE IS GREATER THAN THE BDB AND THE GAWA PERCENTAGE WOULD INCREASE. A request for Step-Up is processed and effective on the date received in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon election of a Step-Up, the applicable GMWB charge will be reflected in your confirmation. OWNER'S DEATH. The Contract's death benefit is not affected by this GMWB SO LONG AS CONTRACT VALUE IS GREATER THAN ZERO and the Contract is still in the accumulation phase. Upon the death of the sole Owner of a qualified Contract or the death of either joint Owner of a non-qualified Contract while the Contract is still in force, this GMWB terminates without value. Please see the information beginning on page 88 regarding the required ownership and beneficiary structure under both qualified and non-qualified Contracts when selecting the Joint For Life GMWB With Annual Step-Up benefit. CONTRACT VALUE IS ZERO. With this GMWB, in the event Contract Value is zero, the GAWA is unchanged and payable SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT, AT LEAST ONE COVERED LIFE REMAINS ALIVE AND THE CONTRACT IS STILL IN THE ACCUMULATION PHASE. Otherwise, payments will be made while there is value to the GWB (until depleted), so long as the Contract is still in the accumulation phase. If the GAWA percentage has not yet been determined, it will be set at the GAWA percentage corresponding to the youngest Covered Life's attained age at the time the Contract Value falls to zero. ---------------------------------------------- AFTER EACH PAYMENT WHEN THE The GWB is recalculated, equaling the greater CONTRACT VALUE IS ZERO - of: o The GWB before the payment less the payment; OR o Zero. The GAWA: o Is unchanged SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. ---------------------------------------------- Payments are made on the periodic basis you elect, but not less frequently than annually. If you die before all scheduled payments are made, then your beneficiary will receive the remainder of the GWB in the form of continuing scheduled payments. All other rights under your Contract cease, except for the right to change beneficiaries. No subsequent premium payments will be accepted. All optional endorsements terminate without value. And no other death benefit is payable, including the Earnings Protection Benefit. SPOUSAL CONTINUATION. In the event of the Owner's (or either joint Owner's) death, the surviving spousal beneficiary may elect to: o Continue the Contract WITH this GMWB - so long as Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o If the surviving spouse is a Covered Life, then the For Life Guarantee remains effective on and after the Continuation Date. If the surviving spouse is not a Covered Life, the For Life Guarantee is null and void. However, the surviving spouse will be entitled to make withdrawals until the GWB is exhausted. o For a surviving spouse who is a Covered Life, continuing the Contract with this GMWB is necessary to be able to fully realize the benefit of the For Life Guarantee. The For Life Guarantee is not a separate guarantee and only applies if the related GMWB has not terminated. o Step-Ups will continue automatically or as permitted in accordance with the above rules for Step-Ups. o Contract Anniversaries will continue to be based on the original Contract's Issue Date. o If the surviving spouse is a Covered Life, the GAWA percentage will continue to be calculated and/or recalculated based on the youngest Covered Life's attained age. o If the surviving spouse is not a Covered Life and if the GAWA percentage has not yet been determined, the GAWA percentage will be based on the youngest Covered Life's attained age at the time of death. The GAWA percentage will not change on future Step-Ups. o The Latest Income Date is based on the age of the surviving spouse. Please refer to "Annuitization" subsection below for information regarding the additional Income Options available on the Latest Income Date. o A new joint Owner may not be added in a non-qualified Contract if a surviving spouse continues the Contract. o Continue the Contract WITHOUT this GMWB (GMWB is terminated) if the surviving spouse is not a Covered Life. Thereafter, no GMWB charge will be assessed. If the surviving spouse is a Covered Life, the Contract cannot be continued without this GMWB. o Add another GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the spousal beneficiary's eligibility, and provided that this GMWB was terminated on the Continuation Date. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 145. TERMINATION. This GMWB terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); o The date of death of the Owner (or either joint Owner), UNLESS the beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB (continuing the Contract with this GMWB is necessary to be able to fully realize the benefit of the For Life Guarantee if the surviving spouse is a Covered Life); o The Continuation Date on a Contract if the spousal beneficiary, who is not a Covered Life, elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract has been terminated. ANNUITIZATION. JOINT LIFE INCOME OF GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of last surviving Covered Life. The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the last surviving Covered Life, and there is no provision for a death benefit payable to the beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if both Covered Lives die before the due date of the second payment. If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the youngest Covered Life's attained age at the time of election of this option. The GAWA percentage will not change after election of this option. SPECIFIED PERIOD INCOME OF THE GAWA. On the Latest Income Date if the For Life Guarantee is NOT in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (THIS INCOME OPTION ONLY APPLIES IF THE GMWB HAS BEEN CONTINUED BY THE SPOUSAL BENEFICIARY AND THE SPOUSAL BENEFICIARY IS NOT A COVERED LIFE IN WHICH CASE THE SPOUSE BECOMES THE OWNER OF THE CONTRACT AND THE LATEST INCOME DATE IS BASED ON THE AGE OF THE SPOUSE.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS AND ANNUAL STEP-UP ("LIFEGUARD FREEDOM"). THE FOLLOWING DESCRIPTION OF THIS GMWB IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C, PARTICULARLY EXAMPLE 2 FOR THE VARYING BENEFIT PERCENTAGE AND EXAMPLES 6 AND 7 FOR THE STEP-UPS. This GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the LONGER of: o The Owner's life (the "For Life Guarantee") if the For Life Guarantee is in effect; The For Life Guarantee is based on the life of the first Owner to die with joint Owners. There are also other GMWB options for joint Owners that are spouses, as described below. For the Owner that is a legal entity, the For Life Guarantee is based on the Annuitant's life (or the life of the first Annuitant to die if there is more than one Annuitant). The For Life Guarantee becomes effective on the Contract Anniversary on or immediately following the Owner (or with joint Owners, the oldest Owner) attaining the age of 59 1/2. If the Owner (or oldest Owner) is 59 1/2 years old or older on the endorsement's effective date, then the For Life Guarantee is effective when this GMWB is added to the Contract. The For Life Guarantee remains effective until the date this endorsement is terminated, as described below, or until the Continuation Date on which this GMWB endorsement is continued under spousal continuation. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event Contract Value is reduced to zero. OR o Until all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB is the guaranteed amount available for future periodic withdrawals. BECAUSE OF THE FOR LIFE GUARANTEE, YOUR WITHDRAWALS COULD AMOUNT TO MORE THAN THE GWB. BUT PLEASE NOTE: THE GUARANTEES OF THIS GMWB ARE SUBJECT TO THE ENDORSEMENT'S TERMS, CONDITIONS, AND LIMITATIONS THAT ARE EXPLAINED BELOW. Please consult the representative who is helping, or who helped, you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Owners 45 to 80 years old (proof of age is required); may be added to a Contract on the Issue Date or any Contract Anniversary; and once added cannot be canceled except by a Beneficiary who is the Owner's spouse, who, upon the Owner's death, may elect to continue the Contract without the GMWB. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. THIS GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONLY ONE GMWB PER CONTRACT). We allow ownership changes of a Contract with this GMWB when the Owner is a legal entity - to another legal entity or the Annuitant. Otherwise, ownership changes are not allowed. When the Owner is a legal entity, changing Annuitants is not allowed. Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. ELECTION. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. -------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals initial premium net of any TO THE CONTRACT ON THE applicable premium taxes. ISSUE DATE - The GAWA is determined based on the Owner's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. -------------------------------------------------- -------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals Contract Value. TO THE CONTRACT ON ANY CONTRACT ANNIVERSARY - The GAWA is determined based on the Owner's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. -------------------------------------------------- Premium (net of any applicable premium taxes) is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on that date. THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon Step-Up), and the GWB is reduced by each withdrawal. PLEASE NOTE: Upon the Owner's death, the For Life Guarantee is void. However, this GMWB might be continued by a spousal Beneficiary without the For Life Guarantee. Please see the "Spousal Continuation" subsection below for more information. WITHDRAWALS. The GAWA percentage and the GAWA are determined at the time of the first withdrawal. The GAWA is equal to the GAWA percentage multiplied by the GWB prior to the partial withdrawal. The GAWA percentage varies according to age group and is determined based on the Owner's attained age at the time of the first withdrawal. If there are joint Owners, the GAWA percentage is based on the attained age of the oldest joint Owner. (In the examples in Appendix C and elsewhere in this prospectus we refer to this varying GAWA percentage structure as the "varying benefit percentage".) THE GAWA PERCENTAGE FOR EACH AGE GROUP IS: Ages GAWA Percentage ------------------- ------------------------ ------------------- ------------------------ 45 - 74 5% 75 - 80 6% 81+ 7% Withdrawals cause the GWB to be recalculated. Withdrawals may also cause the GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. ----------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB before the withdrawal less the withdrawal; OR o Zero. The GAWA: o Is unchanged WHILE THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. ----------------------------------------------- The GAWA is generally NOT reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable, unless the For Life Guarantee is not in effect and the GWB is nearly depleted, resulting in a GWB that is less than the GAWA. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 5 in Appendix C). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount. The GAWA is also likely to be reduced. ----------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see below), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. The GAWA is recalculated as follows: o If the For Life Guarantee is in force, the GAWA prior to the partial withdrawal is reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal. o If the For Life Guarantee is not in force, the GAWA is equal to the lesser of: o The GAWA prior to the partial withdrawal reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal, OR o The GWB after the withdrawal. ----------------------------------------------- The Excess Withdrawal is defined to be the lesser of: o The total amount of the current partial withdrawal, or o The amount by which the cumulative partial withdrawals for the current Contract Year exceeds the greater of the GAWA or the RMD, as applicable. Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a guaranteed fixed account may be subject to an interest rate adjustment. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 143. If the age of any Owner is incorrectly stated at the time of election of the GMWB, on the date the misstatement is discovered, the GWB and the GAWA will be recalculated based on the GAWA percentage applicable at the correct age. Any future GAWA percentage recalculation will be based on the correct age. If the age at election of the Owner (or oldest joint Owner) falls outside the allowable age range, the GMWB will be null and void and all GMWB charges will be refunded. ---------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMDs for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT OR SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THIS GMWB, IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO IS HELPING, OR WHO HELPED, YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THIS GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. ---------------------------------------------------------------------- PREMIUMS. ------------------------------------------------------ WITH EACH SUBSEQUENT The GWB is recalculated, increasing by the amount of PREMIUM PAYMENT ON THE the premium net of any applicable premium taxes. CONTRACT - If the premium payment is received after the first withdrawal, the GAWA is also recalculated, increasing by: o The GAWA percentage multiplied by the subsequent premium payment net of any applicable premium taxes; OR o The GAWA percentage multiplied by the increase in the GWB - IF THE MAXIMUM GWB IS HIT. ------------------------------------------------------ We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. THE GWB CAN NEVER BE MORE THAN $5 MILLION. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is hit. STEP-UP. On each Contract Anniversary following the effective date of this GMWB, if the highest quarterly Contract Value is greater than the GWB, the GWB will be automatically re-set to the highest quarterly Contract Value (a "Step-Up"). ------------------------------------------------------ WITH A STEP-UP - The GWB equals the highest quarterly Contract Value (SUBJECT TO A $5 MILLION MAXIMUM). If the Step-Up occurs after the first withdrawal, the GAWA is recalculated, equaling the greater of: o The GAWA percentage multiplied by the new GWB, OR o The GAWA prior to Step-Up. ------------------------------------------------------ The highest quarterly Contract Value equals the highest of the quarterly adjusted Contract Values from the four most recent Contract Quarterly Anniversaries, including the Contract Anniversary upon which the Step-Up is determined. The quarterly adjusted Contract Value equals the Contract Value on the Contract Quarterly Anniversary, plus any premium paid subsequent to that Contract Quarterly Anniversary, net of any applicable premium taxes, adjusted for any partial withdrawals taken subsequent to that Contract Quarterly Anniversary. Partial withdrawals will affect the quarterly adjusted Contract Value as follows: ------------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The quarterly adjusted Contract Value is equal to PRIOR WITHDRAWALS IN THE the greater of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The quarterly adjusted Contract Value before the withdrawal less the withdrawal; OR o Zero. ------------------------------------------------- ------------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The quarterly adjusted Contract Value is equal to PRIOR WITHDRAWALS IN THE the greater of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The quarterly adjusted Contract Value prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see above), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. ------------------------------------------------- UPON STEP-UP ON OR AFTER THE 11TH CONTRACT ANNIVERSARY FOLLOWING THE EFFECTIVE DATE OF THIS GMWB, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM ANNUAL CHARGE OF 1.50%. You will be notified in advance of a GMWB Charge increase and may elect to discontinue the automatic step-ups. Such election must be received in Good Order prior to the Contract Anniversary. You may subsequently elect to reinstate the Step-Up provision at the then current GMWB Charge. All requests will be effective on the Contract Anniversary following receipt of the request in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon Step-Up, the applicable GMWB charge will be reflected in your confirmation. OWNER'S DEATH. The Contract's death benefit is not affected by this GMWB SO LONG AS CONTRACT VALUE IS GREATER THAN ZERO and the Contract is still in the accumulation phase. Upon your death (or the first Owner's death with joint Owners) while the Contract is still in force, this GMWB terminates without value. CONTRACT VALUE IS ZERO. With this GMWB, in the event the Contract Value is zero, the Owner will receive annual payments of the GAWA until the death of the Owner (or the death of any joint Owner), SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT and the Contract is still in the accumulation phase. If the For Life Guarantee is not in effect, the Owner will receive annual payments of the GAWA until the earlier of the death of the Owner (or the death of any joint Owner) or the date the GWB, if any, is depleted, so long as the Contract is still in the accumulation phase. The last payment will not exceed the remaining GWB at the time of payment. If the GAWA percentage has not yet been determined, it will be set at the GAWA percentage corresponding to the Owner's (or oldest joint Owner's) attained age at the time the Contract Value falls to zero and the GAWA will be equal to the GAWA percentage multiplied to the GWB. ----------------------------------------------- AFTER EACH PAYMENT WHEN THE The GWB is recalculated, equaling the greater CONTRACT VALUE IS ZERO - of: o The GWB before the payment less the payment; OR o Zero. The GAWA: o Is unchanged SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. ----------------------------------------------- Payments are made on the periodic basis you elect, but no less frequently than annually. If you die, all rights under your Contract cease. No subsequent premium payments will be accepted. All optional endorsements terminate without value. And no death benefit is payable, including the Earnings Protection Benefit. SPOUSAL CONTINUATION. In the event of the Owner's death (or the first Owner's death with joint Owners), the Beneficiary who is the Owner's spouse may elect to: o Continue the Contract WITH this GMWB - so long as Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal Beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o Upon the Owner's death, the For Life Guarantee is void. o Only the GWB is payable while there is value to it (until depleted). o Step-Ups will continue as permitted in accordance with the Step-Up rules above. o Contract Anniversaries will continue to be based on the Contract's Issue Date. o If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the original Owner's (or oldest joint Owner's) attained age on the continuation date. o The Latest Income Date is based on the age of the surviving spouse. Please refer to "Annuitization" subsection below for information regarding the availability of the "Specified Period Income of the GAWA" option if the GWB has been continued by a spousal Beneficiary upon the death of the original Owner. o Continue the Contract WITHOUT this GMWB (GMWB is terminated). o Add this GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the Beneficiary's eligibility - WHETHER OR NOT THE SPOUSAL BENEFICIARY TERMINATED THE GMWB IN CONTINUING THE CONTRACT. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 142. TERMINATION. This GMWB terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); In surrendering your Contract, you will receive the Contract Value less any applicable charges and adjustments and not the GWB or the GAWA you would have received under this GMWB. o The date of the Owner's death (or the first Owner's death with joint Owners), UNLESS the Beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB; o The Continuation Date if the spousal Beneficiary elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract has been terminated. ANNUITIZATION. LIFE INCOME OF GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of the Owner (or, with joint Owners, the lifetime of joint Owner who dies first). The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the Owner (or the first Owner's death with joint Owners), and there is no provision for a death benefit payable to the Beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if the Owner dies before the due date of the second payment. If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the Owner's (or oldest joint Owner's) attained age at the time of election of this option. The GAWA percentage will not change after election of this option. SPECIFIED PERIOD INCOME OF THE GAWA. On the Latest Income Date if the For Life Guarantee is NOT in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (THIS INCOME OPTION ONLY APPLIES IF THE GMWB HAS BEEN CONTINUED BY THE SPOUSAL BENEFICIARY UPON THE DEATH OF THE ORIGINAL OWNER, IN WHICH CASE THE SPOUSE BECOMES THE OWNER OF THE CONTRACT AND THE LATEST INCOME DATE IS BASED ON THE AGE OF THE SPOUSE.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the Beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. BONUS. The description of the bonus feature is supplemented by the examples in Appendix C, particularly example 8. The bonus is an incentive for you NOT to utilize this GMWB (take withdrawals) during a limited period of time, subject to conditions and limitations, allowing the GWB and GAWA to increase (even in a down market relative to your Contract Value allocated to any Investment Divisions). The increase, however, may not equal the amount that your Contract Value has declined. The bonus is a percentage of a sum called the Bonus Base (defined below). The box below has more information about the bonus, including: o How the bonus is calculated; o What happens to the Bonus Base (and bonus) with a withdrawal, premium payment, and any Step-Up; o For how long the bonus is available; and o When and what happens when the bonus is applied to the GWB. -------------------------------------------------------------------------------- The bonus equals 7% and is based on a sum that may vary after this GMWB is added to the Contract (the "Bonus Base"), as described immediately below. o WHEN THIS GMWB IS ADDED TO THE CONTRACT, the Bonus Base equals the GWB. o WITH A WITHDRAWAL, if that withdrawal, and all prior withdrawals in the current Contract Year, exceeds the greater of the GAWA and the RMD, as applicable, then the Bonus Base is set to the lesser of the GWB after, and the Bonus Base before, the withdrawal. Otherwise, there is no adjustment to the Bonus Base with withdrawals. o All withdrawals count, including: systematic withdrawals; RMDs for certain tax-qualified Contracts; withdrawals of asset allocation and advisory fees; and free withdrawals under the Contract. o A withdrawal in a Contract Year during the Bonus Period (defined below) precludes a bonus for that Contract Year. o WITH A PREMIUM PAYMENT, the Bonus Base increases by the amount of the premium net of any applicable premium taxes. o WITH ANY STEP-UP (IF THE GWB INCREASES UPON STEP-UP), the Bonus Base is set to the greater of the GWB after, and the Bonus Base before, the Step-Up. THE BONUS BASE CAN NEVER BE MORE THAN $5 MILLION. The Bonus is available for a limited time (the "Bonus Period"). The Bonus Period runs from the date this GMWB is added to the Contract through the earliest of: o The tenth Contract Anniversary after the effective date of the endorsement; o The Contract Anniversary on or immediately following the Owner's (if joint Owners, the oldest Owner's) 81st birthday; or o The date Contract Value is zero. Spousal continuation of a Contract with this GMWB does not affect the Bonus Period; Contract Anniversaries are based on the Contract's Issue Date. The bonus is applied at the end of each Contract Year during the Bonus Period, if there have been no withdrawals during that Contract Year. Conversely, ANY withdrawal, including but not limited to systematic withdrawals and required minimum distributions, taken in a Contract Year during the Bonus Period causes the bonus NOT to be applied. When the bonus is applied: o The GWB is recalculated, increasing by 7% of the Bonus Base. o If the Bonus is applied after the first withdrawal, the GAWA is then recalculated, equaling the greater of the GAWA percentage multiplied by the new GWB or the GAWA before the bonus. Applying the bonus to the GWB does not affect the Bonus Base. -------------------------------------------------------------------------------- JOINT FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS AND ANNUAL STEP-UP ("LIFEGUARD FREEDOM WITH JOINT OPTION"). THE DESCRIPTION OF THIS GMWB IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C, PARTICULARLY EXAMPLE 2 FOR THE VARYING BENEFIT PERCENTAGE, EXAMPLES 6 AND 7 FOR THE STEP-UPS AND EXAMPLE 10 FOR THE FOR LIFE GUARANTEES. The election of this GMWB under a non-qualified Contract requires the joint Owners to be spouses (as defined under the Internal Revenue Code) and each joint Owner is considered to be a "Covered Life." The Owners cannot be subsequently changed and new Owners cannot be added. Upon death of either joint Owner, the surviving joint Owner will be treated as the primary Beneficiary and all other Beneficiaries will be treated as contingent Beneficiaries. The For Life Guarantee will not apply to these contingent Beneficiaries, as they are not Covered Lives. This GMWB is available on a limited basis under non-qualified Contracts for certain kinds of legal entities, such as (i) custodial accounts where the spouses are the joint Annuitants and (ii) trusts where the spouses are the sole beneficial owners, and the For Life Guarantee is based on the Annuitant's life who dies last. Tax-qualified Contracts cannot be issued to joint Owners and require the Owner and Annuitant to be the same person. Under a tax-qualified Contract, the election of this GMWB requires the Owner and primary Beneficiary to be spouses (as defined in the Internal Revenue Code). The Owner and only the primary spousal Beneficiary named at the election of this GMWB under a tax-qualified Contract will also each be considered a Covered Life, and these Covered Lives cannot be subsequently changed. For tax-qualified Contracts, the Owner and primary spousal Beneficiary cannot be changed while both are living. If the Owner dies first, the primary spousal Beneficiary will become the Owner upon Spousal Continuation and he or she may name a Beneficiary; however, that Beneficiary is not considered a Covered Life. Likewise, if the primary spousal Beneficiary dies first, the Owner may name a new Beneficiary; however, that Beneficiary is also not considered a Covered Life and consequently the For Life Guarantee will not apply to the new Beneficiary. For both non-qualified and tax-qualified Contracts, this GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the LONGER of: o The lifetime of the last surviving Covered Life if the For Life Guarantee is in effect; The For Life Guarantee becomes effective on the Contract Anniversary on or immediately following the youngest Covered Life attaining the age of 59 1/2. If the youngest Covered Life is 59 1/2 years old or older on the endorsement's effective date, then the For Life Guarantee is effective when this GMWB is added to the Contract. The For Life Guarantee remains effective until the date this endorsement is terminated, as described below, or until the Continuation Date on which a spousal Beneficiary who is not a Covered Life continues this GMWB endorsement under spousal continuation. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event Contract Value is reduced to zero. OR o Until all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB is the guaranteed amount available for future periodic withdrawals. BECAUSE OF THE FOR LIFE GUARANTEE, YOUR WITHDRAWALS COULD AMOUNT TO MORE THAN THE GWB. BUT PLEASE NOTE: THE GUARANTEES OF THIS GMWB ARE SUBJECT TO THE ENDORSEMENT'S TERMS, CONDITIONS, AND LIMITATIONS THAT ARE EXPLAINED BELOW. Please consult the representative who is helping, or who helped, you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Covered Lives 45 to 80 years old (proof of age is required and both Covered Lives must be within the eligible age range). This GMWB may be added to a Contract on the Issue Date or on any Contract Anniversary and cannot be canceled except by a spousal Beneficiary who is not a Covered Life, who, upon the Owner's death, may elect to continue the Contract without the GMWB. To continue joint GMWB coverage upon the death of the Owner (or the death of either joint Owner of a non-qualified Contract), provided that the other Covered Life is still living, the Contract must be continued by election of Spousal Continuation. Upon continuation, the spouse becomes the Owner and obtains all rights as the Owner. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. THIS GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONLY ONE GMWB PER CONTRACT). Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. ELECTION. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. ------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals initial premium net of any TO THE CONTRACT ON THE applicable premium taxes. ISSUE DATE - The GAWA is determined based on the youngest Covered Life's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. ------------------------------------------------- ------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals Contract Value. TO THE CONTRACT ON ANY CONTRACT ANNIVERSARY - The GAWA is determined based on the youngest Covered Life's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. ------------------------------------------------- Premium (net of any applicable premium taxes) is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on that date. THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon Step-Up), and the GWB is reduced by each withdrawal. PLEASE NOTE: Upon the Owner's death, the For Life Guarantee is void unless this GMWB is continued by a spousal beneficiary who is a Covered Life. However, it is possible for this GMWB to be continued without the For Life Guarantee by a spousal Beneficiary who is not a Covered Life. Please see the "Spousal Continuation" subsection below for more information. WITHDRAWALS. The GAWA percentage and the GAWA are determined at the time of the first withdrawal. The GAWA is equal to the GAWA percentage multiplied by the GWB prior to the partial withdrawal. The GAWA percentage varies according to age group and is determined based on the youngest Covered Life's attained age at the time of the first withdrawal. (In the examples in Appendix C and elsewhere in this prospectus we refer to this varying GAWA percentage structure as the "varying benefit percentage".) THE GAWA PERCENTAGE FOR EACH AGE GROUP IS: Ages GAWA Percentage ------------------- ------------------------ ------------------- ------------------------ 45 - 74 5% 75 - 80 6% 81+ 7% Withdrawals cause the GWB to be recalculated. Withdrawals may also cause the GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. ----------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB before the withdrawal less the withdrawal; OR o Zero. The GAWA: o Is unchanged WHILE THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. ----------------------------------------------- The GAWA is generally NOT reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable, unless the For Life Guarantee is not in effect and the GWB is nearly depleted, resulting in a GWB that is less than the GAWA. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 5 in Appendix C). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount. The GAWA is also likely to be reduced. ----------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see below), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. The GAWA is recalculated as follows: o If the For Life Guarantee is in force, the GAWA prior to the partial withdrawal is reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal. o If the For Life Guarantee is not in force, the GAWA is equal to the lesser of: o The GAWA prior to the partial withdrawal reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal, OR o The GWB after the withdrawal. ----------------------------------------------- The Excess Withdrawal is defined to be the lesser of: o The total amount of the current partial withdrawal, or o The amount by which the cumulative partial withdrawals for the current Contract Year exceeds the greater of the GAWA or the RMD, as applicable. Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a guaranteed fixed account may be subject to an interest rate adjustment. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 143. If the age of any Covered Life is incorrectly stated at the time of election of the GMWB, on the date the misstatement is discovered, the GWB and the GAWA will be recalculated based on the GAWA percentage applicable at the correct age. Any future GAWA percentage recalculation will be based on the correct age. If the age at election of either Covered Life falls outside the allowable age range, the GMWB will be null and void and all GMWB charges will be refunded. ---------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMDs for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT OR SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THIS GMWB, IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO IS HELPING, OR WHO HELPED, YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THIS GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. ---------------------------------------------------------------------- PREMIUMS. ------------------------------------------------ WITH EACH SUBSEQUENT The GWB is recalculated, increasing by the PREMIUM PAYMENT ON THE amount of the premium net of any applicable CONTRACT - premium taxes. If the premium payment is received after the first withdrawal, the GAWA is also recalculated, increasing by: o The GAWA percentage multiplied by the subsequent premium payment net of any applicable premium taxes; OR o The GAWA percentage multiplied by the increase in the GWB - IF THE MAXIMUM GWB IS HIT. ------------------------------------------------ We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. THE GWB CAN NEVER BE MORE THAN $5 MILLION. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is hit. STEP-UP. On each Contract Anniversary following the effective date of this GMWB, if the highest quarterly Contract Value is greater than the GWB, the GWB will be automatically re-set to the highest quarterly Contract Value (a "Step-Up"). ---------------------------------------------------------- WITH A STEP-UP - The GWB equals the highest quarterly Contract Value (SUBJECT TO A $5 MILLION MAXIMUM). If the Step-Up occurs after the first withdrawal, the GAWA is recalculated, equaling the greater of: o The GAWA percentage multiplied by the new GWB, OR o The GAWA prior to Step-Up. ---------------------------------------------------------- The highest quarterly Contract Value equals the highest of the quarterly adjusted Contract Values from the four most recent Contract Quarterly Anniversaries, including the Contract Anniversary upon which the Step-Up is determined. The quarterly adjusted Contract Value equals the Contract Value on the Contract Quarterly Anniversary, plus any premium paid subsequent to that Contract Quarterly Anniversary, net of any applicable premium taxes, adjusted for any partial withdrawals taken subsequent to that Contract Quarterly Anniversary. Partial withdrawals will affect the quarterly adjusted Contract Value as follows: ------------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The quarterly adjusted Contract Value is equal to PRIOR WITHDRAWALS IN THE the greater of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The quarterly adjusted Contract Value before the withdrawal less the withdrawal; OR o Zero. ------------------------------------------------- ------------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The quarterly adjusted Contract Value is equal to PRIOR WITHDRAWALS IN THE the greater of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The quarterly adjusted Contract Value prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see above), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. ------------------------------------------------- UPON STEP-UP ON OR AFTER THE 11TH CONTRACT ANNIVERSARY FOLLOWING THE EFFECTIVE DATE OF THIS GMWB, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM ANNUAL CHARGE OF 1.86%. You will be notified in advance of a GMWB Charge increase and may elect to discontinue the automatic step-ups. Such election must be received in Good Order prior to the Contract Anniversary. You may subsequently elect to reinstate the Step-Up provision at the then current GMWB Charge. All requests will be effective on the Contract Anniversary following receipt of the request in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon Step-Up, the applicable GMWB charge will be reflected in your confirmation. OWNER'S DEATH. The Contract's death benefit is not affected by this GMWB SO LONG AS CONTRACT VALUE IS GREATER THAN ZERO and the Contract is still in the accumulation phase. Upon the death of the sole Owner of a qualified Contract or the death of either joint Owner of a non-qualified Contract while the Contract is still in force, this GMWB terminates without value. Please see the information beginning on page 103 regarding the required ownership and beneficiary structure under both qualified and non-qualified Contracts when selecting the Joint For Life GMWB With Bonus and Annual Step-Up benefit. CONTRACT VALUE IS ZERO. With this GMWB, in the event the Contract Value is zero, the Owner will receive annual payments of the GAWA until the death of the last surviving Covered Life, SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT and the Contract is still in the accumulation phase. If the For Life Guarantee is not in effect, the Owner will receive annual payments of the GAWA until the earlier of the death of the Owner (or the death of any joint Owner) or the date the GWB, if any, is depleted, so long as the Contract is still in the accumulation phase. The last payment will not exceed the remaining GWB at the time of payment. If the GAWA percentage has not yet been determined, it will be set at the GAWA percentage corresponding to the youngest Covered Life's attained age at the time the Contract Value falls to zero and the GAWA will be equal to the GAWA percentage multiplied to the GWB. ----------------------------------------------- AFTER EACH PAYMENT WHEN THE The GWB is recalculated, equaling the greater CONTRACT VALUE IS ZERO - of: o The GWB before the payment less the payment; OR o Zero. The GAWA: o Is unchanged SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. ----------------------------------------------- Payments are made on the periodic basis you elect, but no less frequently than annually. Upon death of the last surviving Covered Life, all rights under the Contract cease. No subsequent premium payments will be accepted. All optional endorsements terminate without value. And no death benefit is payable, including the Earnings Protection Benefit. SPOUSAL CONTINUATION. In the event of the Owner's (or either joint Owner's) death, the surviving spousal beneficiary may elect to: o Continue the Contract WITH this GMWB - so long as Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal Beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o If the surviving spouse is a Covered Life, then the For Life Guarantee remains effective on and after the Continuation Date. If the surviving spouse is not a Covered Life, the For Life Guarantee is null and void. However, the surviving spouse will be entitled to make withdrawals until the GWB is exhausted. o For a surviving spouse who is a Covered Life, continuing the Contract with this GMWB is necessary to be able to fully realize the benefit of the For Life Guarantee. The For Life Guarantee is not a separate guarantee and only applies if the related GMWB has not terminated. o Step-Ups will continue as permitted in accordance with the Step-Up rules above. o Contract Anniversaries will continue to be based on the original Contract's Issue Date. o If the surviving spouse is a Covered Life, the GAWA percentage will continue to be calculated based on the youngest Covered Life's attained age. o If the surviving spouse is not a Covered Life and if the GAWA percentage has not yet been determined, the GAWA percentage will be based on the youngest Covered Life's attained age on the continuation date. o The Latest Income Date is based on the age of the surviving spouse. Please refer to "Annuitization" subsection below for information regarding the additional Income Options available on the Latest Income Date. o A new joint Owner may not be added in a non-qualified Contract if a surviving spouse continues the Contract. o Continue the Contract WITHOUT this GMWB (GMWB is terminated) if the surviving spouse is not a Covered Life. Thereafter, no GMWB charge will be assessed. If the surviving spouse is a Covered Life, the Contract cannot be continued without this GMWB. o Add another GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the spousal Beneficiary's eligibility, and provided that this GMWB was terminated on the Continuation Date. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 142. TERMINATION. This GMWB terminates subject to a prorated GMWB Charge assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); In surrendering your Contract, you will receive the Contract Value less any applicable charges and adjustments and not the GWB or the GAWA you would have received under this GMWB. o The date of death of the Owner (or either joint Owner), UNLESS the Beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB (continuing the Contract with this GMWB is necessary to be able to fully realize the benefit of the For Life Guarantee if the surviving spouse is a Covered Life); o The Continuation Date on a Contract if the spousal Beneficiary, who is not a Covered Life, elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract has been terminated. ANNUITIZATION. JOINT LIFE INCOME OF GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of last surviving Covered Life. The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the last surviving Covered Life, and there is no provision for a death benefit payable to the Beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if both Covered Lives die before the due date of the second payment. If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the youngest Covered Life's attained age at the time of election of this option. The GAWA percentage will not change after election of this option. SPECIFIED PERIOD INCOME OF THE GAWA. On the Latest Income Date if the For Life Guarantee is NOT in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (THIS INCOME OPTION ONLY APPLIES IF THE GMWB HAS BEEN CONTINUED BY THE SPOUSAL BENEFICIARY AND THE SPOUSAL BENEFICIARY IS NOT A COVERED LIFE IN WHICH CASE THE SPOUSE BECOMES THE OWNER OF THE CONTRACT AND THE LATEST INCOME DATE IS BASED ON THE AGE OF THE SPOUSE.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the Beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. BONUS. The description of the bonus feature is supplemented by the examples in Appendix C, particularly example 8. The bonus is an incentive for you NOT to utilize this GMWB (take withdrawals) during a limited period of time, subject to conditions and limitations, allowing the GWB and GAWA to increase (even in a down market relative to your Contract Value allocated to any Investment Divisions). The increase, however, may not equal the amount that your Contract Value has declined. The bonus is a percentage of a sum called the Bonus Base (defined below). The box below has more information about the bonus, including: o How the bonus is calculated; o What happens to the Bonus Base (and bonus) with a withdrawal, premium payment, and any Step-Up; o For how long the bonus is available; and o When and what happens when the bonus is applied to the GWB. -------------------------------------------------------------------------------- The bonus equals 7% and is based on a sum that may vary after this GMWB is added to the Contract (the "Bonus Base"), as described immediately below. o WHEN THIS GMWB IS ADDED TO THE CONTRACT, the Bonus Base equals the GWB. o WITH A WITHDRAWAL, if that withdrawal, and all prior withdrawals in the current Contract Year, exceeds the greater of the GAWA and the RMD, as applicable, then the Bonus Base is set to the lesser of the GWB after, and the Bonus Base before, the withdrawal. Otherwise, there is no adjustment to the Bonus Base with withdrawals. o All withdrawals count, including: systematic withdrawals; RMDs for certain tax-qualified Contracts; withdrawals of asset allocation and advisory fees; and free withdrawals under the Contract. o A withdrawal in a Contract Year during the Bonus Period (defined below) precludes a bonus for that Contract Year. o WITH A PREMIUM PAYMENT, the Bonus Base increases by the amount of the premium net of any applicable premium taxes. o WITH ANY STEP-UP (IF THE GWB INCREASES UPON STEP-UP), the Bonus Base is set to the greater of the GWB after, and the Bonus Base before, the Step-Up. THE BONUS BASE CAN NEVER BE MORE THAN $5 MILLION. The Bonus is available for a limited time (the "Bonus Period"). The Bonus Period runs from the date this GMWB is added to the Contract through the earliest of: o The tenth Contract Anniversary after the effective date of the endorsement; o The Contract Anniversary on or immediately following the youngest Covered Life's 81st birthday; or o The date Contract Value is zero. Spousal continuation of a Contract with this GMWB does not affect the Bonus Period; Contract Anniversaries are based on the Contract's Issue Date. The bonus is applied at the end of each Contract Year during the Bonus Period, if there have been no withdrawals during that Contract Year. Conversely, ANY withdrawal, including but not limited to systematic withdrawals and required minimum distributions, taken in a Contract Year during the Bonus Period causes the bonus NOT to be applied. When the bonus is applied: o The GWB is recalculated, increasing by 7% of the Bonus Base. o If the Bonus is applied after the first withdrawal, the GAWA is then recalculated, equaling the greater of the GAWA percentage multiplied by the new GWB or the GAWA before the bonus. Applying the bonus to the GWB does not affect the Bonus Base. -------------------------------------------------------------------------------- FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS, GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT AND ANNUAL STEP-UP ("LIFEGUARD SELECT"). This is a Guaranteed Minimum Withdrawal Benefit (GMWB) that guarantees the withdrawal of a minimum annual amount for the duration of the life of the Owner (or, in the case of joint Owners, until the death of the first Owner to die) regardless of the performance of the underlying investment options. This benefit may be appropriate for those individuals who are looking for a number of features, within the GMWB, that may offer a higher level of guarantee and who are not averse to allowing Jackson to transfer assets between investment options, on a formulaic basis, in order to protect its risk. THE FOLLOWING DESCRIPTION OF THIS GMWB IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C, PARTICULARLY EXAMPLE 2 FOR THE VARYING BENEFIT PERCENTAGE, EXAMPLES 6 AND 7 FOR THE STEP-UPS, EXAMPLE 8 FOR THE BONUS, EXAMPLE 11 FOR THE GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT AND EXAMPLE 12 FOR TRANSFER OF ASSETS. This GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the LONGER of: o The Owner's life (the "For Life Guarantee") if the For Life Guarantee is in effect; The For Life Guarantee is based on the life of the first Owner to die with joint Owners. There are also other GMWB options for joint Owners that are spouses, as described elsewhere in this prospectus. For the Owner that is a legal entity, the For Life Guarantee is based on the Annuitant's life (or the life of the first Annuitant to die if there is more than one Annuitant). The For Life Guarantee becomes effective when this GMWB is added to the Contract. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event the Contract Value is reduced to zero. OR o If the For Life Guarantee is not in effect, until the earlier of (1) the death of the Owner (or any joint Owner) or (2) all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB depends on when this GMWB is added to the Contract (as explained below). BECAUSE OF THE FOR LIFE GUARANTEE, YOUR WITHDRAWALS COULD AMOUNT TO MORE THAN THE GWB. BUT PLEASE NOTE: THE GUARANTEES OF THIS GMWB ARE SUBJECT TO THE ENDORSEMENT'S TERMS, CONDITIONS, AND LIMITATIONS THAT ARE EXPLAINED BELOW. Please consult the representative who is helping, or who helped, you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Owners 55 to 80 years old (proof of age is required) and may be added to a Contract on the Issue Date or any Contract Anniversary. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. The Owner may terminate this GMWB on any Contract Anniversary but a request for termination must be received in writing in Good Order within 30 calendar days' prior to the Contract Anniversary. This GMWB may also be terminated by a Beneficiary who is the Owner's spouse, who, upon the Owner's death, may elect to continue the Contract without the GMWB. THIS GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONLY ONE GMWB PER CONTRACT). We allow ownership changes of a Contract with this GMWB when the Owner is a legal entity - to another legal entity or the Annuitant. Otherwise, ownership changes are not allowed. When the Owner is a legal entity, changing Annuitants is not allowed. Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. ELECTION. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. -------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals initial premium net of any TO THE CONTRACT ON THE applicable premium taxes. ISSUE DATE - The GAWA is determined based on the Owner's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. The For Life Guarantee becomes effective on the Contract Issue Date. -------------------------------------------------- -------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals Contract Value. TO THE CONTRACT ON ANY CONTRACT ANNIVERSARY - The GAWA is determined based on the Owner's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. The For Life Guarantee becomes effective on the Contract Anniversary on which the endorsement is added. -------------------------------------------------- Premium (net of any applicable premium taxes) is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on that date. THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon Step-Up, the application of the GWB adjustment or the application of any bonus), and the GWB is reduced by each withdrawal. PLEASE NOTE: Upon the Owner's death, the For Life Guarantee is void. However, this GMWB may be continued by a spousal Beneficiary without the For Life Guarantee. Please see the "Spousal Continuation" subsection below for more information. WITHDRAWALS. The GAWA percentage and the GAWA are determined at the time of the first withdrawal. The GAWA is equal to the GAWA percentage multiplied by the GWB prior to the partial withdrawal. The GAWA percentage varies according to age group and is determined based on the Owner's attained age at the time of the first withdrawal. If there are joint Owners, the GAWA percentage is based on the attained age of the oldest joint Owner. (In the examples in Appendix C and elsewhere in this prospectus we refer to this varying GAWA percentage structure as the "varying benefit percentage".) THE GAWA PERCENTAGE FOR EACH AGE GROUP IS: Ages GAWA Percentage ------------------- ------------------------ ------------------- ------------------------ 55 - 74 5% 75 - 84 6% 85+ 7% Withdrawals cause the GWB to be recalculated. Withdrawals may also cause the GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. ----------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB before the withdrawal less the withdrawal; OR o Zero. The GAWA: o Is unchanged WHILE THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. ----------------------------------------------- The GAWA is NOT reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 5 in Appendix C). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount. The GAWA is also likely to be reduced. ----------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see below), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. The GAWA is recalculated as follows: o If the For Life Guarantee is in force, the GAWA prior to the partial withdrawal is reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal. o If the For Life Guarantee is not in force, the GAWA is equal to the lesser of: o The GAWA prior to the partial withdrawal reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal (see below), OR o The GWB after the withdrawal. ----------------------------------------------- The Excess Withdrawal is defined to be the lesser of: o The total amount of the current partial withdrawal, OR o The amount by which the cumulative partial withdrawals for the current Contract Year exceeds the greater of the GAWA or the RMD, as applicable. Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a guaranteed fixed account may be subject to an interest rate adjustment. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's standard death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 143. If the age of any Owner is incorrectly stated at the time of election of the GMWB, on the date the misstatement is discovered, the GWB and the GAWA will be recalculated based on the GAWA percentage applicable at the correct age. If the age at election of the Owner (or oldest joint Owner) falls outside the allowable age range, the GMWB will be null and void and all GMWB charges will be refunded. ---------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMDs for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2006 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT OR SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THIS GMWB, IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO IS HELPING, OR WHO HELPED, YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THIS GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. ---------------------------------------------------------------------- GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT. If no withdrawals are taken from the Contract on or prior to the GWB Adjustment Date (as defined below), then you will receive a GWB adjustment. The GWB Adjustment Date is the later of: o The Contract Anniversary on or immediately following the Owner's (or oldest joint Owner's) 70th birthday, OR o The 10th Contract Anniversary following the effective date of this endorsement. The GWB adjustment is determined as follows: o On the effective date of this endorsement, the GWB adjustment is equal to 200% of the GWB, subject to a maximum of $5,000,000. o With each subsequent premium received after this GMWB is effective and prior to the first Contract Anniversary following this GMWB's effective date, the GWB adjustment is recalculated to equal the GWB adjustment prior to the premium payment plus 200% of the amount of the premium payment, net of any applicable premium taxes, subject to a maximum of $5,000,000. (See Example 3 in Appendix C.) o With each subsequent premium received on or after the first Contract Anniversary following this GMWB's effective date, the GWB adjustment is recalculated to equal the GWB adjustment prior to the premium payment plus the amount of the premium payment, net of any applicable premium taxes, subject to a maximum of $5,000,000. See Example 3 in Appendix C.) If no partial withdrawals are taken on or prior to the GWB Adjustment Date, the GWB will be re-set on that date to equal the greater of the current GWB or the GWB adjustment. No adjustments are made to the Bonus Base or the GMWB Death Benefit. Once the GWB is re-set, this GWB adjustment provision terminates. In addition, if a withdrawal is taken on or before the GWB Adjustment Date, this GWB adjustment provision terminates without value. (Please see example 11 in Appendix C for an illustration of this GWB adjustment provision.) PREMIUMS. -------------------------------------------------- WITH EACH SUBSEQUENT The GWB is recalculated, increasing by the amount PREMIUM PAYMENT ON THE of the premium net of any applicable premium CONTRACT - taxes. If the premium payment is received after the first withdrawal, the GAWA is also recalculated, increasing by: o The GAWA percentage multiplied by the subsequent premium payment net of any applicable premium taxes; OR o The GAWA percentage multiplied by the increase in the GWB - IF THE MAXIMUM GWB IS HIT. -------------------------------------------------- We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. THE GWB CAN NEVER BE MORE THAN $5 MILLION. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is hit. STEP-UP. On each Contract Anniversary following the effective date of this GMWB, if the highest quarterly Contract Value is greater than the GWB, the GWB will be automatically re-set to the highest quarterly Contract Value (a "Step-Up"). -------------------------------------------------- WITH A STEP-UP - The GWB equals the highest quarterly Contract Value (SUBJECT TO A $5 MILLION MAXIMUM). If the Step-Up occurs after the first withdrawal, the GAWA is recalculated, equaling the greater of: o The GAWA percentage multiplied by the new GWB, OR o The GAWA prior to Step-Up. -------------------------------------------------- The highest quarterly Contract Value equals the highest of the quarterly adjusted Contract Values from the four most recent Contract Quarterly Anniversaries, including the Contract Anniversary upon which the Step-Up is determined. The quarterly adjusted Contract Value equals the Contract Value on the Contract Quarterly Anniversary, plus any premium paid subsequent to that Contract Quarterly Anniversary, net of any applicable premium taxes, adjusted for any partial withdrawals taken subsequent to that Contract Quarterly Anniversary. When determining the quarterly adjusted Contract Value on a Contract Anniversary, the quarterly adjusted Contract Value will be determined prior to any automatic transfer, as required under this GMWB's Transfer of Assets provision (see below), occurring on the Contract Anniversary. Partial withdrawals will affect the quarterly adjusted Contract Value as follows: -------------------------------------------------- WHEN A WITHDRAWAL, PLUS The quarterly adjusted Contract Value is equal to ALL PRIOR WITHDRAWALS IN the greater of: THE CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The quarterly adjusted Contract Value before the withdrawal less the withdrawal; OR o Zero. -------------------------------------------------- -------------------------------------------------- WHEN A WITHDRAWAL, PLUS The quarterly adjusted Contract Value is equal to THE CURRENT CONTRACT the greater of: YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The quarterly adjusted Contract Value prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see above), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. -------------------------------------------------- UPON STEP-UP ON OR AFTER THE 11TH CONTRACT ANNIVERSARY FOLLOWING THE EFFECTIVE DATE OF THIS GMWB, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM ANNUAL CHARGE OF 1.20%. You will be notified in advance of a GMWB Charge increase and may elect to discontinue the automatic step-ups. Such election must be received in Good Order prior to the Contract Anniversary. You may subsequently elect to reinstate the Step-Up provision at the then current GMWB Charge. All requests will be effective on the Contract Anniversary following receipt of the request in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon Step-Up, the applicable GMWB charge will be reflected in your confirmation. GMWB DEATH BENEFIT. Upon the death of the Owner (or death of any joint Owner) while the Contract is still in force, the Contract's death benefit payable is guaranteed not to be less than the GMWB death benefit. On the effective date of this GMWB endorsement, the GMWB death benefit is equal to the GWB. With each subsequent Premium received after this endorsement is effective, the GMWB death benefit is recalculated to equal the GMWB death benefit prior to the premium plus the amount of the premium payment, net of any applicable premium taxes, SUBJECT TO A MAXIMUM OF $5 MILLION. Partial withdrawals will affect the GMWB death benefit as follows: -------------------------------------------------- WHEN A WITHDRAWAL, PLUS The GMWB death benefit is equal to the greater of: ALL PRIOR WITHDRAWALS IN THE CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GMWB death benefit before the withdrawal less the withdrawal; OR o Zero. -------------------------------------------------- -------------------------------------------------- WHEN A WITHDRAWAL, PLUS The GMWB death benefit is equal to the greater of: ALL PRIOR WITHDRAWALS IN THE CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GMWB death benefit prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see above), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. -------------------------------------------------- THE GMWB DEATH BENEFIT IS NOT ADJUSTED UPON STEP-UP, THE APPLICATION OF ANY BONUS, OR THE APPLICATION OF THE GWB ADJUSTMENT. The GMWB death benefit will terminate on the date the Contract Value is zero and no death benefit will be payable, including this Contract's basic death benefit or any optional death benefit (i.e., the Earnings Protection Benefit, the Maximum Anniversary Value Death Benefit, etc.). The GMWB death benefit will also terminate and will not be included in any applicable continuation adjustment should this GMWB be continued through Spousal continuation of a Contract. TRANSFER OF ASSETS. This GMWB requires automatic transfers between your elected Investment Divisions/guaranteed fixed accounts and the GMWB Fixed Account in accordance with the non-discretionary formulas defined in the Transfer of Assets Methodology found in Appendix D. The formulas are generally designed to mitigate the financial risks to which we are subjected by providing this GMWB's guarantees. By electing this GMWB, you are giving control to us of all or a portion of your Contract Value. By way of the non-discretionary formulas, we determine whether to make a transfer and the amount of any transfer. Under this automatic transfer provision, we monitor your Contract Value each Contract Monthly Anniversary and, if necessary, systematically transfer amounts between your elected Investment Divisions/guaranteed fixed accounts and the GMWB Fixed Account. Amounts transferred to the GMWB Fixed Account will be transferred from each Investment Division/guaranteed fixed account in proportion to their current value. Transfers from guaranteed fixed accounts will be subject to an interest rate adjustment, if applicable. There is no interest rate adjustment on transfers from the GMWB Fixed Account. Generally, automatic transfers to the GMWB Fixed Account from your elected Investment Divisions/guaranteed fixed accounts will occur when your Contract Value declines due to withdrawals or negative investment returns. However, there may be an automatic transfer to the GMWB Fixed Account even when you experience positive investment returns if your Contract Value does not sufficiently increase relative to the projected value of the benefits, as reflected in the use of the GAWA and annuity factors in the Liability calculation under the Transfer of Assets Methodology (see Appendix D for the Liability formula, the calculation of which is designed to represent the projected value of this GMWB's benefits). In other words, any increase in the GAWA (due to, for example, a premium payment, a Step-Up, the application of any bonus or the application of the GWB adjustment) may also cause an automatic transfer to the GMWB Fixed Account from your elected Investment Divisions/guaranteed fixed accounts. For an example of how this Transfer of Assets provision and the non-discretionary formulas work, let us assume that, on your first Contract Monthly Anniversary, your annuity factor is 15.26, your GAWA is $6,000, your GMWB Fixed Account Contract Value is $0, your Separate Account Contract Value is $95,000 and your Fixed Account Contract Value is $5,000. Your Liability would then be $91,560, which is your GAWA multiplied by your annuity factor. Using the Liability amount, a ratio is then calculated that determines whether a transfer is necessary. Generally, if the ratio is lower than 77%, funds will be transferred FROM the GMWB Fixed Account. If the ratio is more than 83%, then funds are transferred TO the GMWB Fixed Account. In this example, the ratio is 91.56, which is the Liability amount ($91,560) minus any GMWB Fixed Account Contract Value ($0), then divided by the sum of the Separate Account Contract Value ($95,000) and the Fixed Account Contract Value ($5,000). Since the ratio is more than the 83%, funds are transferred TO the GMWB Fixed Account from the Investment Divisions and the Fixed Account. Regarding the amount to be transferred when the ratio is above 83%, the amount is determined by taking the lesser of (a) the Separate Account Value plus the Fixed Account Contract Value; or (b) the Liability amount minus the GMWB Fixed Account Contract Value, less 80% of the Separate Account Value and the Fixed Account Contract Value, divided by 20% (1-80%). Applying this calculation to our example, (a) would be $100,000 [$95,000 + $5,000] and (b) would be $57,800 [($91,560 - $0 - 0.80*($95,000 + $5,000)) / (1 - .80)] so the lesser of the two and, therefore, the amount transferred to the GMWB Fixed Account is $57,800. To determine how much of the $57,800 transfer is taken from the Fixed Account and how much from the Investment Divisions, we multiply the transfer amount by the proportion of the Contract Value in each the Fixed Account and the Investment Divisions before the transfer. That is, of the $100,000 total Contract Value in our example, 5% of it was in the Fixed Account ($5,000 /$100,000) and 95% of it was in the Investment Divisions ($95,000/$100,000); therefore, $2,890 ($57,800 multiplied by 5%) is transferred from the Fixed Account to the GMWB Fixed Account and $54,910 ($57,800 multiplied by 95%) is transferred from the Investment Divisions to the GMWB Fixed Account. AFTER the transfer in this example, the GMWB Fixed Account Contract Value is $57,800, the Separate Account Contract Value is $40,090 and the Fixed Account Contract Value is $2,110. For more information regarding the example above and to see this Transfer of Assets Provision applied using other assumptions, please see Example 12 in Appendix C. Please also see the Transfer of Assets Methodology in Appendix D, which contains the non-discretionary formulas. By electing this GMWB, it is possible that a significant amount of your Contract Value - possibly your entire Contract Value - may be transferred to the GMWB Fixed Account. It is also possible that amounts in the GMWB Fixed Account will never be transferred back to your elected Investment Divisions/guaranteed fixed accounts. If any of your Contract Value is automatically transferred to and held in the GMWB Fixed Account, less of your Contract Value may be allocated to the Investment Divisions, which will limit your participation in any market gains and limit the potential for any Step-Ups and increases in your GAWA. If you are uncomfortable with the possibility of some or all of your Contract Value being automatically moved into the GMWB Fixed Account, this particular GMWB may not be appropriate for you. Amounts transferred from the GMWB Fixed Account will be allocated to the Investment Divisions and guaranteed fixed accounts according to your most recent allocation instructions on file with us. The automatic transfers under this Transfer of Assets provision will not count against the 15 free transfers in a Contract Year. No adjustment will be made to the GWB, GAWA, GWB adjustment, GMWB death benefit or Bonus Base as a result of these transfers. You will receive a confirmation statement reflecting the automatic transfer of any Contract Value to and from the GMWB Fixed Account. Once you purchase your Contract, the non-discretionary formulas are fixed and not subject to change. However, we reserve the right to change the formulas for Contracts issued in the future. GUARANTEED MINIMUM WITHDRAWAL BENEFIT FIXED ACCOUNT. A certain percentage of the value in your Contract, as explained above, may be allocated to the GMWB Fixed Account in accordance with non-discretionary formulas. You may not allocate additional monies to the GMWB Fixed Account. The Contract Value in the GMWB Fixed Account is credited with a specific interest rate. The interest rate initially declared for each transfer to the GMWB Fixed Account will remain in effect for a period of not less than one year. GMWB Fixed Account interest rates for subsequent periods may be higher or lower than the rates previously declared. The interest rate is credited daily to the Contract Value in the GMWB Fixed Account and the rate may vary by state but will never be less than 3%. Please contact us at the Annuity Service Center or contact your representative to obtain the currently declared GMWB Fixed Account interest rate for your state. Our contact information is on the cover page of this prospectus. Contract charges deducted from the Fixed Account and Investment Divisions are also deducted from the GMWB Fixed Account in accordance with your Contract's provisions. The deduction of charges may cause an automatic transfer under the Transfer of Assets provision. DCA, DCA+, Earnings Sweep and Automatic Rebalancing are not available to or from the GMWB Fixed Account. There is no interest rate adjustment on transfers, withdrawals or deductions from the GMWB Fixed Account. Transfers to and from the GMWB Fixed Account are AUTOMATIC; you may not CHOOSE to transfer amounts to and from the GMWB Fixed Account. CONTRACT VALUE IS ZERO. With this GMWB, in the event the Contract Value is zero, the Owner will receive annual payments of the GAWA until the death of the Owner (or the death of any joint Owner), SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT AND THE CONTRACT IS STILL IN THE ACCUMULATION PHASE. If the For Life Guarantee is not in effect, the Owner will receive annual payments of the GAWA until the earlier of the death of the Owner (or the death of any joint Owner) or the date the GWB, if any, is depleted, so long as the Contract is still in the accumulation phase. The last payment will not exceed the remaining GWB at the time of payment. If the GAWA percentage has not yet been determined, it will be set at the GAWA percentage corresponding to the Owner's (or oldest joint Owner's) attained age at the time the Contract Value falls to zero and the GAWA will be equal to the GAWA percentage multiplied to the GWB. ------------------------------------------------- AFTER EACH PAYMENT WHEN THE The GWB is recalculated, equaling the greater of: CONTRACT VALUE IS ZERO - o The GWB before the payment less the payment; OR o Zero. The GAWA: o Is unchanged SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. ------------------------------------------------- Payments are made on the periodic basis you elect, but no less frequently than annually. If you die, all rights under your Contract cease. No subsequent premium payments will be accepted. All optional endorsements terminate without value. And no death benefit is payable, including the GMWB death benefit and the Earnings Protection Benefit. SPOUSAL CONTINUATION. In the event of the Owner's death (or the first Owner's death with joint Owners), the Beneficiary who is the Owner's spouse may elect to: o Continue the Contract WITH this GMWB - so long as Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal Beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o Upon the Owner's death, the For Life Guarantee is void. o Only the GWB is payable while there is value to it (until depleted). o The GMWB death benefit is void and will not be included in the continuation adjustment. o The GWB adjustment provision is void. o The Bonus provision is void. o Step-Ups will continue as permitted; otherwise, the above rules for Step-Ups apply. o Contract Anniversaries will continue to be based on the Contract's Issue Date. o The Liability factors for the transfer of assets formulas (see Appendix D) will continue to be based on the duration since the effective date of the GMWB endorsement. o If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the Owner's (or oldest joint Owner's) attained age at the time of death. o The Latest Income Date is based on the age of the surviving spouse. Please refer to the "Annuitization" subsection below for information regarding the availability of the "Specified Period Income of the GAWA" option if the GWB has been continued by a spousal Beneficiary upon the death of the original Owner. o The spousal Beneficiary may terminate the GMWB on any subsequent Contract Anniversary. o Continue the Contract WITHOUT this GMWB (GMWB is terminated). o The GMWB death benefit will be included in the calculation of the Continuation Adjustment. o The GMWB Fixed Account value will be transferred to the Investment Divisions and guaranteed fixed accounts based on the current premium allocation for the Contract. o Add this GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the Beneficiary's eligibility - WHETHER OR NOT THE SPOUSAL BENEFICIARY TERMINATED THE GMWB IN CONTINUING THE CONTRACT. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 142. TERMINATION. This GMWB terminates subject to a prorated GMWB Charge, when applicable, assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Contract Anniversary following the Company's receipt of the Owner's request for termination in Good Order; o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); o The date of the Owner's death (or the first Owner's death with joint Owners), UNLESS the Beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB; o The Continuation Date if the spousal Beneficiary elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract has been terminated. If this GMWB is terminated and the Contract remains in force, the GMWB Fixed Account value will be transferred to the Investment Divisions and guaranteed fixed accounts based on the current premium allocation for the Contract. ANNUITIZATION. LIFE INCOME OF GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of the Owner (or, with joint Owners, the lifetime of joint Owner who dies first). The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the Owner (or the first Owner's death with joint Owners), and there is no provision for a death benefit payable to the Beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if the Owner dies before the due date of the second payment. If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the Owner's (or oldest joint Owner's) attained age at the time of election of this option. The GAWA percentage will not change after election of this option. SPECIFIED PERIOD INCOME OF THE GAWA. On the Latest Income Date if the For Life Guarantee is NOT in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (THIS INCOME OPTION ONLY APPLIES IF THE GMWB HAS BEEN CONTINUED BY THE SPOUSAL BENEFICIARY UPON THE DEATH OF THE ORIGINAL OWNER, IN WHICH CASE THE SPOUSE BECOMES THE OWNER OF THE CONTRACT AND THE LATEST INCOME DATE IS BASED ON THE AGE OF THE SPOUSE.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the Beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. BONUS. The description of the bonus feature is supplemented by the examples in Appendix C, particularly example 8. The bonus is an incentive for you NOT to utilize this GMWB (take withdrawals) during a limited period of time, subject to conditions and limitations, allowing the GWB and GAWA to increase (even in a down market relative to your Contract Value allocated to any Investment Divisions). The increase, however, may not equal the amount that your Contract Value has declined. The bonus is a percentage of a sum called the Bonus Base (defined below). The box below has more information about the bonus, including: o How the bonus is calculated; o What happens to the Bonus Base (and bonus) with a withdrawal, premium payment, and any Step-Up; o For how long the bonus is available; and o When and what happens when the bonus is applied to the GWB. -------------------------------------------------------------------------------- The bonus equals 7% and is based on a sum that may vary after this GMWB is added to the Contract (the "Bonus Base"), as described immediately below. o WHEN THIS GMWB IS ADDED TO THE CONTRACT, the Bonus Base equals the GWB. o WITH A WITHDRAWAL, if that withdrawal, and all prior withdrawals in the current Contract Year, exceeds the greater of the GAWA and the RMD, as applicable, then the Bonus Base is set to the lesser of the GWB after, and the Bonus Base before, the withdrawal. Otherwise, there is no adjustment to the Bonus Base with withdrawals. o All withdrawals count, including: systematic withdrawals; RMDs for certain tax-qualified Contracts; withdrawals of asset allocation and advisory fees; and free withdrawals under the Contract. o A withdrawal in a Contract Year during the Bonus Period (defined below) precludes a bonus for that Contract Year. o WITH A PREMIUM PAYMENT, the Bonus Base increases by the amount of the premium net of any applicable premium taxes. o WITH ANY STEP-UP (IF THE GWB INCREASES UPON STEP-UP), the Bonus Base is set to the greater of the GWB after, and the Bonus Base before, the Step-Up. THE BONUS BASE CAN NEVER BE MORE THAN $5 MILLION. The Bonus is available for a limited time (the "Bonus Period"). The Bonus Period begins on the effective date of this GMWB endorsement and will re-start at the time of a Bonus Base Step-Up if the Bonus Base increases due to the Step-Up and if the Step-Up occurs on or before the Contract Anniversary immediately following the Owner's (if Joint Owners, the oldest Owner's) 80th birthday. The Bonus Period ends on the earlier of: o The tenth Contract Anniversary following the effective date of the endorsement or the most recent Bonus Base Step-Up, if later; or o The date the Contract Value is zero. This GWB Bonus provision is terminated when this GMWB is terminated or if this GMWB is continued through Spousal continuation of a Contract; Contract Anniversaries are based on the Contract's Issue Date. The bonus is applied at the end of each Contract Year during the Bonus Period, if there have been no withdrawals during that Contract Year. Conversely, any withdrawal, including but not limited to systematic withdrawals and required minimum distributions, taken in a Contract Year during the Bonus Period causes the bonus not to be applied. When the bonus is applied: o The GWB is recalculated, increasing by 7% of the Bonus Base. o If the Bonus is applied after the first withdrawal, the GAWA is recalculated, equaling the greater of the GAWA percentage multiplied by the new GWB or the GAWA before the bonus. Applying the bonus to the GWB does not affect the Bonus Base, GWB adjustment, or GMWB death benefit. -------------------------------------------------------------------------------- JOINT FOR LIFE GUARANTEED MINIMUM WITHDRAWAL BENEFIT WITH BONUS, GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT AND ANNUAL STEP-UP ("LIFEGUARD SELECT WITH JOINT OPTION"). This is a new Guaranteed Minimum Withdrawal Benefit (GMWB) that guarantees the withdrawal of a minimum annual amount for the duration of the life of the Owner and the Owner's spouse regardless of the performance of the underlying investment options. This benefit may be appropriate for those individuals who are looking for a number of features, within the GMWB, that may offer a higher level of guarantee and who are not averse to allowing Jackson to transfer assets between investment options, on a formulaic basis, in order to protect its risk. THE FOLLOWING DESCRIPTION OF THIS GMWB IS SUPPLEMENTED BY THE EXAMPLES IN APPENDIX C, PARTICULARLY EXAMPLE 2 FOR THE VARYING BENEFIT PERCENTAGE, EXAMPLES 6 AND 7 FOR THE STEP-UPS, EXAMPLE 8 FOR THE BONUS, EXAMPLE 11 FOR THE GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT AND EXAMPLE 12 FOR TRANSFER OF ASSETS. The election of this GMWB under a non-qualified Contract requires the joint Owners to be spouses (as defined under the Internal Revenue Code) and each joint Owner is considered to be a "Covered Life." The Owners cannot be subsequently changed and new Owners cannot be added. Upon death of either joint Owner, the surviving joint Owner will be treated as the primary Beneficiary and all other Beneficiaries will be treated as contingent Beneficiaries. The For Life Guarantee will not apply to these contingent Beneficiaries, as they are not Covered Lives. This GMWB is available on a limited basis under non-qualified Contracts for certain kinds of legal entities, such as (i) custodial accounts where the spouses are the joint Annuitants and (ii) trusts where the spouses are the sole beneficial owners, and the For Life Guarantee is based on the Annuitant's life who dies last. Tax-qualified Contracts cannot be issued to joint Owners and require the Owner and Annuitant to be the same person. Under a tax-qualified Contract, the election of this GMWB requires the Owner and primary Beneficiary to be spouses (as defined in the Internal Revenue Code). The Owner and only the primary spousal Beneficiary named at the election of this GMWB under a tax-qualified Contract will also each be considered a Covered Life, and these Covered Lives cannot be subsequently changed. For tax-qualified Contracts, the Owner and primary spousal Beneficiary cannot be changed while both are living. If the Owner dies first, the primary spousal Beneficiary will become the Owner upon Spousal Continuation and he or she may name a Beneficiary; however, that Beneficiary is not considered a Covered Life. Likewise, if the primary spousal Beneficiary dies first, the Owner may name a new Beneficiary; however, that Beneficiary is also not considered a Covered Life and consequently the For Life Guarantee will not apply to the new Beneficiary. For both non-qualified and tax-qualified Contracts, this GMWB guarantees partial withdrawals during the Contract's accumulation phase (i.e., before the Income Date) for the LONGER of: o The lifetime of the last surviving Covered Life if the For Life Guarantee is in effect; The For Life Guarantee becomes effective when this GMWB is added to the Contract. So long as the For Life Guarantee is in effect, withdrawals are guaranteed even in the event the Contract Value is reduced to zero. OR o If the For Life Guarantee is not in effect, until the earlier of (1) the death of the Owner (or any joint Owner) or (2) all withdrawals under the Contract equal the Guaranteed Withdrawal Balance (GWB), without regard to Contract Value. The GWB depends on when this GMWB is added to the Contract (as explained below). BECAUSE OF THE FOR LIFE GUARANTEE, YOUR WITHDRAWALS COULD AMOUNT TO MORE THAN THE GWB. BUT PLEASE NOTE: THE GUARANTEES OF THIS GMWB ARE SUBJECT TO THE ENDORSEMENT'S TERMS, CONDITIONS, AND LIMITATIONS THAT ARE EXPLAINED BELOW. Please consult the representative who is helping, or who helped, you purchase your Contract to be sure that this GMWB ultimately suits your needs. This GMWB is available to Owners 55 to 80 years old (proof of age is required) and may be added to a Contract on the Issue Date or any Contract Anniversary. The Owner may terminate this GMWB on any Contract Anniversary but a request for termination must be received in writing in Good Order within 30 calendar days' prior to the Contract Anniversary. This GMWB may also be terminated by a spousal Beneficiary who is not a Covered Life, who, upon the Owner's death, may elect to continue the Contract without the GMWB. To continue joint GMWB coverage upon the death of the Owner (or the death of either joint Owner of a non-qualified Contract), provided that the other Covered Life is still living, the Contract must be continued by election of Spousal Continuation. Upon continuation, the spouse becomes the Owner and obtains all rights as the Owner. At least 30 calendar days' prior notice and proof of age is required for Good Order to add this GMWB to a Contract on a Contract Anniversary. THIS GMWB IS NOT AVAILABLE ON A CONTRACT THAT ALREADY HAS A GMWB (ONLY ONE GMWB PER CONTRACT). Availability of this GMWB may be subject to further limitation. There is a limit on withdrawals each Contract Year to keep the guarantees of this GMWB in full effect - the greater of the Guaranteed Annual Withdrawal Amount (GAWA) and for certain tax-qualified Contracts, the required minimum distribution (RMD) under the Internal Revenue Code. Withdrawals exceeding the limit do not invalidate the For Life Guarantee, but cause the GWB and GAWA to be recalculated. ELECTION. The GWB depends on when this GMWB is added to the Contract, and the GAWA derives from the GWB. -------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals initial premium net of any TO THE CONTRACT ON THE applicable premium taxes. ISSUE DATE - The GAWA is determined based on the youngest Covered Life's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. The For Life Guarantee becomes effective on the Contract Issue Date. -------------------------------------------------- -------------------------------------------------- WHEN THIS GMWB IS ADDED The GWB equals Contract Value. TO THE CONTRACT ON ANY CONTRACT ANNIVERSARY - The GAWA is determined based on the youngest Covered Life's attained age at the time of first withdrawal and equals the GAWA percentage multiplied by the GWB prior to the partial withdrawal. See the GAWA percentage table below. The For Life Guarantee becomes effective on the Contract Anniversary on which the endorsement is added. -------------------------------------------------- Premium (net of any applicable premium taxes) is used to calculate the GWB when this GMWB is added to the Contract on the Issue Date. If you were to instead add this GMWB to your Contract post issue on any Contract Anniversary, the GWB is calculated based on Contract Value on that date. THE GWB CAN NEVER BE MORE THAN $5 MILLION (including upon Step-Up, the application of the GWB adjustment or the application of any bonus), and the GWB is reduced by each withdrawal. PLEASE NOTE: Upon the Owner's death, the For Life Guarantee is void unless this GMWB is continued by a spousal beneficiary who is a Covered Life. However, it is possible for this GMWB to be continued without the For Life Guarantee by a spousal Beneficiary who is not a Covered Life. Please see the "Spousal Continuation" subsection below for more information. WITHDRAWALS. The GAWA percentage and the GAWA are determined at the time of the first withdrawal. The GAWA is equal to the GAWA percentage multiplied by the GWB prior to the partial withdrawal. The GAWA percentage varies according to age group and is determined based on the youngest Covered Life's attained age at the time of the first withdrawal. (In the examples in Appendix C and elsewhere in this prospectus we refer to this varying GAWA percentage structure as the "varying benefit percentage".) THE GAWA PERCENTAGE FOR EACH AGE GROUP IS: Ages GAWA Percentage ------------------- ------------------------ ------------------- ------------------------ 55 - 74 5% 75 - 84 6% 85+ 7% Withdrawals cause the GWB to be recalculated. Withdrawals may also cause the GAWA to be recalculated, depending on whether or not the withdrawal, plus all prior withdrawals in the current Contract Year, is less than or equal to the GAWA, or for certain tax-qualified Contracts only, the RMD (if greater than the GAWA). The tables below clarify what happens in either instance. RMD denotes the required minimum distribution under the Internal Revenue Code for certain tax-qualified Contracts only. (There is no RMD for non-qualified Contracts.) For certain tax-qualified Contracts, this GMWB allows withdrawals greater than GAWA to meet the Contract's RMD without compromising the endorsement's guarantees. Examples 4, 5 and 7 in Appendix C supplement this description. Because the intervals for the GAWA and RMDs are different, namely Contract Years versus calendar years, and because RMDs are subject to other conditions and limitations, if your Contract is a tax-qualified Contract, then please see "RMD NOTES" below for more information. ---------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB before the withdrawal less the withdrawal; OR o Zero. The GAWA: o Is unchanged WHILE THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before the withdrawal, or the GWB after the withdrawal. ---------------------------------------------- The GAWA is NOT reduced if all withdrawals during any one Contract Year do not exceed the greater of the GAWA or RMD, as applicable. You may withdraw the greater of the GAWA or RMD, as applicable, all at once or throughout the Contract Year. Withdrawing less than the greater of the GAWA or RMD, as applicable, in a Contract Year does not entitle you to withdraw more than the greater of the GAWA or RMD, as applicable, in the next Contract Year. The amount you may withdraw each Contract Year and not cause the GWB and GAWA to be recalculated does not accumulate. Withdrawing more than the greater of the GAWA or RMD, as applicable, in a Contract Year causes the GWB and GAWA to be recalculated (see below and Example 5 in Appendix C). In recalculating the GWB, the GWB could be reduced by more than the withdrawal amount. The GAWA is also likely to be reduced. ---------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The GWB is recalculated, equaling the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GWB prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see below), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. The GAWA is recalculated as follows: o If the For Life Guarantee is in force, the GAWA prior to the partial withdrawal is reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal. o If the For Life Guarantee is not in force, the GAWA is equal to the lesser of: o The GAWA prior to the partial withdrawal reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal (see below), OR o The GWB after the withdrawal. ---------------------------------------------- The Excess Withdrawal is defined to be the lesser of: o The total amount of the current partial withdrawal, OR o The amount by which the cumulative partial withdrawals for the current Contract Year exceeds the greater of the GAWA or the RMD, as applicable. Withdrawals under this GMWB are assumed to be the total amount deducted from the Contract Value, including any withdrawal charges and other charges or adjustments. Any withdrawals from Contract Value allocated to a guaranteed fixed account may be subject to an interest rate adjustment. Withdrawals in excess of free withdrawals may be subject to a withdrawal charge. Withdrawals under this GMWB are considered the same as any other partial withdrawals for the purposes of calculating any other values under the Contract and any other endorsements (for example, the Contract's standard death benefit). All withdrawals count toward the total amount withdrawn in a Contract Year, including systematic withdrawals, RMDs for certain tax-qualified Contracts, withdrawals of asset allocation and advisory fees, and free withdrawals under the Contract. They are subject to the same restrictions and processing rules as described in the Contract. They are also treated the same for federal income tax purposes. For more information about tax-qualified and non-qualified Contracts, please see "TAXES" beginning on page 143. If the age of any Covered Life is incorrectly stated at the time of election of the GMWB, on the date the misstatement is discovered, the GWB and the GAWA will be recalculated based on the GAWA percentage applicable at the correct age. If the age at election of either Covered Life's falls outside the allowable age range, the GMWB will be null and void and all GMWB charges will be refunded. ---------------------------------------------------------------------- RMD NOTES: Notice of an RMD is required at the time of your withdrawal request, and there is an administrative form for such notice. The administrative form allows for one time or systematic withdrawals. Eligible withdrawals that are specified as RMDs may only be taken based on the value of the Contract to which the endorsement applies, even where the Internal Revenue Code allows for the taking of RMDs for multiple contracts from a single contract. Initiating and monitoring for compliance with the RMD requirements is the responsibility of the Owner. Under the Internal Revenue Code, RMDs are calculated and taken on a calendar year basis. But with this GMWB, the GAWA is based on Contract Years. Because the intervals for the GAWA and RMDs are different, the For Life Guarantee may be more susceptible to being compromised. With tax-qualified Contracts, if the sum of your total partial withdrawals in a Contract Year exceed the greatest of the RMD for each of the two calendar years occurring in that Contract Year and the GAWA for that Contract Year, then the GWB and GAWA could be adversely recalculated, as described above. (If your Contract Year is the same as the calendar year, then the sum of your total partial withdrawals should not exceed the greater of the RMD and the GAWA.) Below is an example of how this modified limit would apply. Assume a tax-qualified Contract with a Contract Year that runs from July 1 to June 30, and that there are no withdrawals other than as described. The GAWA for the 2007 Contract Year (ending June 30) is $10. The RMDs for calendar years 2006 and 2007 are $14 and $16, respectively. If the Owner takes $7 in each of the two halves of calendar year 2006 and $8 in each of the two halves of calendar year 2007, then at the time the withdrawal in the first half of calendar year 2007 is taken, the Owner will have withdrawn $15. Because the sum of the Owner's withdrawals for the 2007 Contract Year is less than the higher RMD for either of the two calendar years occurring in that Contract Year, the GWB and GAWA would not be adversely recalculated. AN EXCEPTION TO THIS GENERAL RULE IS THAT WITH THE CALENDAR YEAR IN WHICH YOUR RMDS ARE TO BEGIN (GENERALLY, WHEN YOU REACH AGE 70 1/2), HOWEVER, YOU MAY TAKE YOUR RMDS FOR THE CURRENT AND NEXT CALENDAR YEARS DURING THE SAME CONTRACT YEAR, AS NECESSARY (SEE EXAMPLE BELOW). The following example illustrates this exception. It assumes an individual Owner, born January 1, 1936, of a tax-qualified Contract with a Contract Year that runs from July 1 to June 30. If the Owner delays taking his first RMD (the 2006 RMD) until March 30, 2007, he may still take the 2007 RMD before the next Contract Year begins, June 30, 2007 without exposing the GWB and GAWA to the possibility of adverse recalculation. However, if he takes his second RMD (the 2007 RMD) after June 30, 2007, he should wait until the next Contract Year begins (that is after June 30, 2008) to take his third RMD (the 2008 RMD). Because, except for the calendar year in which RMDs begin, taking two RMDs in a single Contract Year could cause the GWB and GAWA to be adversely recalculated (if the two RMDs exceeded the applicable GAWA for that Contract Year). EXAMPLES THAT ARE RELEVANT OR SPECIFIC TO TAX-QUALIFIED CONTRACTS, ILLUSTRATING THIS GMWB, IN VARYING CIRCUMSTANCES AND WITH SPECIFIC FACTUAL ASSUMPTIONS, ARE AT THE END OF THE PROSPECTUS IN APPENDIX C, PARTICULARLY EXAMPLES 4, 5, AND 7. PLEASE CONSULT THE REPRESENTATIVE WHO IS HELPING, OR WHO HELPED, YOU PURCHASE YOUR TAX-QUALIFIED CONTRACT, AND YOUR TAX ADVISER, TO BE SURE THAT THIS GMWB ULTIMATELY SUITS YOUR NEEDS RELATIVE TO YOUR RMD. ---------------------------------------------------------------------- GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT. If no withdrawals are taken from the Contract on or prior to the GWB Adjustment Date (as defined below), then you will receive a GWB adjustment. The GWB Adjustment Date is the later of: o The Contract Anniversary on or immediately following the youngest Covered Life's 70th birthday, OR o The 10th Contract Anniversary following the effective date of this endorsement. The GWB adjustment is determined as follows: o On the effective date of this endorsement, the GWB adjustment is equal to 200% of the GWB, subject to a maximum of $5,000,000. o With each subsequent premium received after this GMWB is effective and prior to the first Contract Anniversary following this GMWB's effective date, the GWB adjustment is recalculated to equal the GWB adjustment prior to the premium payment plus 200% of the amount of the premium payment, net of any applicable premium taxes, subject to a maximum of $5,000,000. (See Example 3 in Appendix C.) o With each subsequent premium received on or after the first Contract Anniversary following this GMWB's effective date, the GWB adjustment is recalculated to equal the GWB adjustment prior to the premium payment plus the amount of the premium payment, net of any applicable premium taxes, subject to a maximum of $5,000,000. (See Example 3 in Appendix C.) If no partial withdrawals are taken on or prior to the GWB Adjustment Date, the GWB will be re-set on that date to equal the greater of the current GWB or the GWB adjustment. No adjustments are made to the Bonus Base or the GMWB Death Benefit. Once the GWB is re-set, this GWB adjustment provision terminates. In addition, if a withdrawal is taken on or before the GWB Adjustment Date, this GWB adjustment provision terminates without value. (Please see example 11 in Appendix C for an illustration of this GWB adjustment provision.) PREMIUMS. -------------------------------------------------- WITH EACH SUBSEQUENT The GWB is recalculated, increasing by the amount PREMIUM PAYMENT ON THE of the premium net of any applicable premium CONTRACT - taxes. If the premium payment is received after the first withdrawal, the GAWA is also recalculated, increasing by: o The GAWA percentage multiplied by the subsequent premium payment net of any applicable premium taxes; OR o The GAWA percentage multiplied by the increase in the GWB - IF THE MAXIMUM GWB IS HIT. -------------------------------------------------- We require prior approval for a subsequent premium payment that would result in your Contract having $1 million of premiums in the aggregate. We also reserve the right to refuse subsequent premium payments. THE GWB CAN NEVER BE MORE THAN $5 MILLION. See Example 3b in Appendix C to see how the GWB is recalculated when the $5 million maximum is hit. STEP-UP. On each Contract Anniversary following the effective date of this GMWB, if the highest quarterly Contract Value is greater than the GWB, the GWB will be automatically re-set to the highest quarterly Contract Value (a "Step-Up"). ------------------------------------------------------ WITH A STEP-UP - The GWB equals the highest quarterly Contract Value (SUBJECT TO A $5 MILLION MAXIMUM). If the Step-Up occurs after the first withdrawal, the GAWA is recalculated, equaling the greater of: o The GAWA percentage multiplied by the new GWB, OR o The GAWA prior to Step-Up. ------------------------------------------------------ The highest quarterly Contract Value equals the highest of the quarterly adjusted Contract Values from the four most recent Contract Quarterly Anniversaries, including the Contract Anniversary upon which the Step-Up is determined. The quarterly adjusted Contract Value equals the Contract Value on the Contract Quarterly Anniversary, plus any premium paid subsequent to that Contract Quarterly Anniversary, net of any applicable premium taxes, adjusted for any partial withdrawals taken subsequent to that Contract Quarterly Anniversary. When determining the quarterly adjusted Contract Value on a Contract Anniversary, the quarterly adjusted Contract Value will be determined prior to any automatic transfer, as required under this GMWB's Transfer of Assets provision (see below), occurring on the Contract Anniversary. Partial withdrawals will affect the quarterly adjusted Contract Value as follows: ----------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The quarterly adjusted Contract Value is equal PRIOR WITHDRAWALS IN THE to the greater of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The quarterly adjusted Contract Value before the withdrawal less the withdrawal; OR o Zero. ----------------------------------------------- ----------------------------------------------- WHEN A WITHDRAWAL, PLUS ALL The quarterly adjusted Contract Value is equal PRIOR WITHDRAWALS IN THE to the greater of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The quarterly adjusted Contract Value prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see above), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. ----------------------------------------------- UPON STEP-UP ON OR AFTER THE 11TH CONTRACT ANNIVERSARY FOLLOWING THE EFFECTIVE DATE OF THIS GMWB, THE GMWB CHARGE MAY BE INCREASED, SUBJECT TO THE MAXIMUM ANNUAL CHARGE OF 1.50%. You will be notified in advance of a GMWB Charge increase and may elect to discontinue the automatic step-ups. Such election must be received in Good Order prior to the Contract Anniversary. You may subsequently elect to reinstate the Step-Up provision at the then current GMWB Charge. All requests will be effective on the Contract Anniversary following receipt of the request in Good Order. Please consult the representative who helped you purchase your Contract to be sure if a Step-Up is right for you and about any increase in charges upon a Step-Up. Upon Step-Up, the applicable GMWB charge will be reflected in your confirmation. GMWB DEATH BENEFIT. Upon the death of the Owner (or death of any joint Owner) while the Contract is still in force, the Contract's death benefit payable is guaranteed not to be less than the GMWB death benefit. On the effective date of this GMWB endorsement, the GMWB death benefit is equal to the GWB. With each subsequent Premium received after this endorsement is effective, the GMWB death benefit is recalculated to equal the GMWB death benefit prior to the premium plus the amount of the premium payment, net of any applicable premium taxes, SUBJECT TO A MAXIMUM OF $5 MILLION. Partial withdrawals will affect the GMWB death benefit as follows: ------------------------------------------------ WHEN A WITHDRAWAL, PLUS ALL The GMWB death benefit is equal to the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, IS LESS THAN OR EQUAL TO THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GMWB death benefit before the withdrawal less the withdrawal; OR o Zero. ------------------------------------------------ ------------------------------------------------ WHEN A WITHDRAWAL, PLUS ALL The GMWB death benefit is equal to the greater PRIOR WITHDRAWALS IN THE of: CURRENT CONTRACT YEAR, EXCEEDS THE GREATER OF THE GAWA OR RMD, AS APPLICABLE - o The GMWB death benefit prior to the partial withdrawal, first reduced dollar-for-dollar for any portion of the partial withdrawal not defined as an Excess Withdrawal (see above), then reduced in the same proportion that the Contract Value is reduced by the Excess Withdrawal; OR o Zero. ------------------------------------------------ THE GMWB DEATH BENEFIT IS NOT ADJUSTED UPON STEP-UP, THE APPLICATION OF ANY BONUS, OR THE APPLICATION OF THE GWB ADJUSTMENT. The GMWB death benefit will terminate on the date the Contract Value is zero and no death benefit will be payable, including this Contract's basic death benefit or any optional death benefit (i.e., the Earnings Protection Benefit, the Maximum Anniversary Value Death Benefit, etc.). The GMWB death benefit will also terminate and will not be included in any applicable continuation adjustment should this GMWB be continued through Spousal continuation of a Contract. TRANSFER OF ASSETS. This GMWB requires automatic transfers between your elected Investment Divisions/guaranteed fixed accounts and the GMWB Fixed Account in accordance with the non-discretionary formulas defined in the Transfer of Assets Methodology found in Appendix D. The formulas are generally designed to mitigate the financial risks to which we are subjected by providing this GMWB's guarantees. By electing this GMWB, you are giving control to us of all or a portion of your Contract Value. By way of the non-discretionary formulas, we determine whether to make a transfer and the amount of any transfer. Under this automatic transfer provision, we monitor your Contract Value each Contract Monthly Anniversary and, if necessary, systematically transfer amounts between your elected Investment Divisions/guaranteed fixed accounts and the GMWB Fixed Account. Amounts transferred to the GMWB Fixed Account will be transferred from each Investment Division/guaranteed fixed account in proportion to their current value. Transfers from guaranteed fixed accounts will be subject to an interest rate adjustment, if applicable. There is no interest rate adjustment on transfers from the GMWB Fixed Account. Generally, automatic transfers to the GMWB Fixed Account from your elected Investment Divisions/guaranteed fixed accounts will occur when your Contract Value declines due to withdrawals or negative investment returns. However, there may be an automatic transfer to the GMWB Fixed Account even when you experience positive investment returns if your Contract Value does not sufficiently increase relative to the projected value of the benefits, as reflected in the use of the GAWA and annuity factors in the Liability calculation under the Transfer of Assets Methodology (see Appendix D for the Liability formula, the calculation of which is designed to represent the projected value of this GMWB's benefits). In other words, any increase in the GAWA (due to, for example, a premium payment, a Step-Up, the application of any bonus or the application of the GWB adjustment) may also cause an automatic transfer to the GMWB Fixed Account from your elected Investment Divisions/guaranteed fixed accounts. For an example of how this Transfer of Assets provision and the non-discretionary formulas work, let us assume that, on your first Contract Monthly Anniversary, your annuity factor is 15.26, your GAWA is $6,000, your GMWB Fixed Account Contract Value is $0, your Separate Account Contract Value is $95,000 and your Fixed Account Contract Value is $5,000. Your Liability would then be $91,560, which is your GAWA multiplied by your annuity factor. Using the Liability amount, a ratio is then calculated that determines whether a transfer is necessary. Generally, if the ratio is lower than 77%, funds will be transferred FROM the GMWB Fixed Account. If the ratio is more than 83%, then funds are transferred TO the GMWB Fixed Account. In this example, the ratio is 91.56, which is the Liability amount ($91,560) minus any GMWB Fixed Account Contract Value ($0), then divided by the sum of the Separate Account Contract Value ($95,000) and the Fixed Account Contract Value ($5,000). Since the ratio is more than the 83%, funds are transferred TO the GMWB Fixed Account from the Investment Divisions and the Fixed Account. Regarding the amount to be transferred when the ratio is above 83%, the amount is determined by taking the lesser of (a) the Separate Account Value plus the Fixed Account Contract Value; or (b) the Liability amount minus the GMWB Fixed Account Contract Value, less 80% of the Separate Account Value and the Fixed Account Contract Value, divided by 20% (1-80%). Applying this calculation to our example, (a) would be $100,000 [$95,000 + $5,000] and (b) would be $57,800 [($91,560 - $0 - 0.80*($95,000 + $5,000)) / (1 - .80)] so the lesser of the two and, therefore, the amount transferred to the GMWB Fixed Account is $57,800. To determine how much of the $57,800 transfer is taken from the Fixed Account and how much from the Investment Divisions, we multiply the transfer amount by the proportion of the Contract Value in each the Fixed Account and the Investment Divisions before the transfer. That is, of the $100,000 total Contract Value in our example, 5% of it was in the Fixed Account ($5,000 /$100,000) and 95% of it was in the Investment Divisions ($95,000/$100,000); therefore, $2,890 ($57,800 multiplied by 5%) is transferred from the Fixed Account to the GMWB Fixed Account and $54,910 ($57,800 multiplied by 95%) is transferred from the Investment Divisions to the GMWB Fixed Account. AFTER the transfer in this example, the GMWB Fixed Account Contract Value is $57,800, the Separate Account Contract Value is $40,090 and the Fixed Account Contract Value is $2,110. For more information regarding the example above and to see this Transfer of Assets Provision applied using other assumptions, please see Example 12 in Appendix C. Please also see the Transfer of Assets Methodology in Appendix D, which contains the non-discretionary formulas. By electing this GMWB, it is possible that a significant amount of your Contract Value - possibly your entire Contract Value - may be transferred to the GMWB Fixed Account. It is also possible that amounts in the GMWB Fixed Account will never be transferred back to your elected Investment Divisions/guaranteed fixed accounts. If any of your Contract Value is automatically transferred to and held in the GMWB Fixed Account, less of your Contract Value may be allocated to the Investment Divisions, which will limit your participation in any market gains and limit the potential for any Step-Ups and increases in your GAWA. If you are uncomfortable with the possibility of some or all of your Contract Value being automatically moved into the GMWB Fixed Account, this particular GMWB may not be appropriate for you. Amounts transferred from the GMWB Fixed Account will be allocated to the Investment Divisions and guaranteed fixed accounts according to your most recent allocation instructions on file with us. The automatic transfers under this Transfer of Assets provision will not count against the 15 free transfers in a Contract Year. No adjustment will be made to the GWB, GAWA, GWB adjustment, GMWB death benefit or Bonus Base as a result of these transfers. You will receive a confirmation statement reflecting the automatic transfer of any Contract Value to and from the GMWB Fixed Account. Once you purchase your Contract, the non-discretionary formulas are fixed and not subject to change. However, we reserve the right to change the formulas for Contracts issued in the future. GUARANTEED MINIMUM WITHDRAWAL BENEFIT FIXED ACCOUNT. A certain percentage of the value in your Contract, as explained above, may be allocated to the GMWB Fixed Account in accordance with non-discretionary formulas. You may not allocate additional monies to the GMWB Fixed Account. The Contract Value in the GMWB Fixed Account is credited with a specific interest rate. The interest rate initially declared for each transfer to the GMWB Fixed Account will remain in effect for a period of not less than one year. GMWB Fixed Account interest rates for subsequent periods may be higher or lower than the rates previously declared. The interest rate is credited daily to the Contract Value in the GMWB Fixed Account and the rate may vary by state but will never be less than 3%. Please contact us at the Annuity Service Center or contact your representative to obtain the currently declared GMWB Fixed Account interest rate for your state. Our contact information is on the cover page of this prospectus. Contract charges deducted from the Fixed Account and Investment Divisions are also deducted from the GMWB Fixed Account in accordance with your Contract's provisions. The deduction of charges may cause an automatic transfer under the Transfer of Assets provision. DCA, DCA+, Earnings Sweep and Automatic Rebalancing are not available to or from the GMWB Fixed Account. There is no interest rate adjustment on transfers, withdrawals or deductions from the GMWB Fixed Account. Transfers to and from the GMWB Fixed Account are AUTOMATIC; you may not CHOOSE to transfer amounts to and from the GMWB Fixed Account. CONTRACT VALUE IS ZERO. With this GMWB, in the event the Contract Value is zero, the Owner will receive annual payments of the GAWA until the death of the last surviving Covered Life, SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT and the Contract is still in the accumulation phase. If the For Life Guarantee is not in effect, the Owner will receive annual payments of the GAWA until the earlier of the death of the Owner (or the death of any joint Owner) or the date the GWB, if any, is depleted, so long as the Contract is still in the accumulation phase. The last payment will not exceed the remaining GWB at the time of payment. If the GAWA percentage has not yet been determined, it will be set at the GAWA percentage corresponding to the youngest Covered Life's attained age at the time the Contract Value falls to zero and the GAWA will be equal to the GAWA percentage multiplied to the GWB. ----------------------------------------------- AFTER EACH PAYMENT WHEN THE The GWB is recalculated, equaling the greater CONTRACT VALUE IS ZERO - of: o The GWB before the payment less the payment; OR o Zero. The GAWA: o Is unchanged SO LONG AS THE FOR LIFE GUARANTEE IS IN EFFECT; OTHERWISE o Is recalculated, equaling the lesser of the GAWA before, or the GWB after, the payment. ----------------------------------------------- Payments are made on the periodic basis you elect, but no less frequently than annually. Upon death of the last surviving Covered Life, all rights under your Contract cease. No subsequent premium payments will be accepted. All optional endorsements terminate without value. And no death benefit is payable, including the GMWB death benefit and the Earnings Protection Benefit. SPOUSAL CONTINUATION. In the event of the Owner's (or either joint Owner's) death, the surviving spousal Beneficiary may elect to: o Continue the Contract WITH this GMWB - so long as Contract Value is greater than zero, and the Contract is still in the accumulation phase. (The date the spousal Beneficiary's election to continue the Contract is in Good Order is called the Continuation Date.) o If the surviving spouse is a Covered Life, then the For Life Guarantee remains effective on and after the Continuation Date. If the surviving spouse is not a Covered Life, the For Life Guarantee is null and void. However, the surviving spouse will be entitled to make withdrawals until the GWB is exhausted. o For a surviving spouse who is a Covered Life, continuing the Contract with this GMWB is necessary to be able to fully realize the benefit of the For Life GuaranHtee. The For Life Guarantee is not a separate guarantee and only applies if the related GMWB has not terminated. o For a surviving spouse who is a Covered Life, the GMWB death benefit remains in force but will not be included in the continuation adjustment. If the surviving spouse it not a Covered Life, the GMWB death benefit is null and void and will not be included in the continuation adjustment. o If the surviving spouse is a Covered Life and the GWB adjustment provision is in force on the continuation date then the provision will continue to apply in accordance with the GWB adjustment provision rules above. The GWB adjustment date will continue to be based on the original effective date of the endorsement or the youngest Covered Life's attained age, as applicable. If the surviving spouse it not a Covered Life, the GWB adjustment is null and void. o For a surviving spouse who is a Covered Life, the Bonus provision will continue as permitted in accordance with the Bonus rules above. The Bonus Period will continue to be based on the original effective date of the endorsement, the most recent Bonus Base Step-Up, or the youngest Covered Life's attained age, as applicable. If the surviving spouse it not a Covered Life, the Bonus provision is null and void. o Step-Ups will continue as permitted in accordance with the Step-Up rules above. o Contract Anniversaries will continue to be based on the Contract's Issue Date. o The Liability factors for the transfer of assets formulas (see Appendix D) will continue to be based on the youngest Covered Life's attained age on the effective date of the endorsement and the duration since the effective date of the GMWB endorsement. o If the surviving spouse is a Covered Life and the GAWA percentage has not yet been determined, the GAWA percentage will be based on the youngest Covered Life's attained age. o If the surviving spouse is not a Covered Life and the GAWA percentage has not yet been determined, the GAWA percentage will be based on the youngest Covered Life's attained age on the continuation date. o The Latest Income Date is based on the age of the surviving spouse. Please refer to the "Annuitization" subsection below for information regarding the availability of the "Specified Period Income of the GAWA" option if the GWB has been continued by a spousal Beneficiary upon the death of the original Owner. o The spousal Beneficiary may terminate the GMWB on any subsequent Contract Anniversary. Such a request must be received in Good Order within 30 calendar days prior to the Contract Anniversary. o Continue the Contract WITHOUT this GMWB (GMWB is terminated). Thereafter, no GMWB charge will be assessed. o The GMWB death benefit will be included in the calculation of the Continuation Adjustment. o The GMWB Fixed Account value will be transferred to the Investment Divisions and guaranteed fixed accounts based on the current premium allocation for the Contract. o Add this GMWB to the Contract on any Contract Anniversary after the Continuation Date, subject to the Beneficiary's eligibility - WHETHER OR NOT THE SPOUSAL BENEFICIARY TERMINATED THE GMWB IN CONTINUING THE CONTRACT. For more information about spousal continuation of a Contract, please see "Special Spousal Continuation Option" beginning on page 142. TERMINATION. This GMWB terminates subject to a prorated GMWB Charge, when applicable, assessed for the period since the last quarterly or monthly charge and all benefits cease on the earliest of: o The Contract Anniversary following the Company's receipt of the Owner's request for termination in Good Order; o The Income Date; o The date of complete withdrawal of Contract Value (full surrender of the Contract); o The date of the Owner's death (or the first Owner's death with joint Owners), unless the Beneficiary who is the Owner's spouse elects to continue the Contract with the GMWB; o The Continuation Date if the spousal Beneficiary elects to continue the Contract without the GMWB; or o The date all obligations under this GMWB are satisfied after the Contract has been terminated. If this GMWB is terminated and the Contract remains in force, the GMWB Fixed Account value will be transferred to the Investment Divisions and guaranteed fixed accounts based on the current premium allocation for the Contract. ANNUITIZATION. JOINT LIFE INCOME OF GAWA. On the Latest Income Date if the For Life Guarantee is in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. This income option provides payments in a fixed dollar amount for the lifetime of last surviving Covered Life. The total annual amount payable will equal the GAWA in effect at the time of election of this option. This annualized amount will be paid in the frequency (no less frequently than annually) that the Owner selects. No further annuity payments are payable after the death of the last surviving Covered Life, and there is no provision for a death benefit payable to the Beneficiary. Therefore, it is possible for only one annuity payment to be made under this Income Option if both Covered Lives die before the due date of the second payment. If the GAWA percentage has not yet been determined, the GAWA percentage will be based on the youngest Covered Life's attained age at the time of election of this option. The GAWA percentage will not change after election of this option. SPECIFIED PERIOD INCOME OF THE GAWA. On the Latest Income Date if the For Life Guarantee is NOT in effect, the Owner may choose this income option instead of one of the other income options listed in the Contract. (THIS INCOME OPTION ONLY APPLIES IF THE GMWB HAS BEEN CONTINUED BY THE SPOUSAL BENEFICIARY AND THE SPOUSAL BENEFICIARY IS NOT A COVERED LIFE IN WHICH CASE THE SPOUSE BECOMES THE OWNER OF THE CONTRACT AND THE LATEST INCOME DATE IS BASED ON THE AGE OF THE SPOUSE.) This income option provides payments in a fixed dollar amount for a specific number of years. The actual number of years that payments will be made is determined on the calculation date by dividing the GWB by the GAWA. Upon each payment, the GWB will be reduced by the payment amount. The total annual amount payable will equal the GAWA but will never exceed the current GWB. This annualized amount will be paid over the specific number of years in the frequency (no less frequently than annually) that the Owner selects. If the Owner should die before the payments have been completed, the remaining payments will be made to the Beneficiary, as scheduled. The "Specified Period Income of the GAWA" income option may not be available if the Contract is issued to qualify under Sections 401, 403, 408 or 457 of the Internal Revenue Code. For such Contracts, this income option will only be available if the guaranteed period is less than the life expectancy of the spouse at the time the option becomes effective. SEE "GUARANTEED MINIMUM WITHDRAWAL BENEFIT GENERAL CONSIDERATIONS" AND "GUARANTEED MINIMUM WITHDRAWAL BENEFIT IMPORTANT SPECIAL CONSIDERATIONS" BEGINNING ON PAGE 50 FOR ADDITIONAL THINGS TO CONSIDER BEFORE ELECTING A GMWB; WHEN ELECTING TO ANNUITIZE YOUR CONTRACT AFTER HAVING PURCHASED A GMWB; OR WHEN THE LATEST INCOME DATE IS APPROACHING AND YOU ARE THINKING ABOUT ELECTING OR HAVE ELECTED A GMWB. EFFECT OF GMWB ON TAX DEFERRAL. This GMWB may not be appropriate for Owners who have as a primary objective taking maximum advantage of the tax deferral that is available to them under an annuity contract to accumulate assets. Please consult your tax and financial advisors before adding this GMWB to a Contract. BONUS. The description of the bonus feature is supplemented by the examples in Appendix C, particularly example 8. The bonus is an incentive for you NOT to utilize this GMWB (take withdrawals) during a limited period of time, subject to conditions and limitations, allowing the GWB and GAWA to increase (even in a down market relative to your Contract Value allocated to any Investment Divisions). The increase, however, may not equal the amount that your Contract Value has declined. The bonus is a percentage of a sum called the Bonus Base (defined below). The box below has more information about the bonus, including: o How the bonus is calculated; o What happens to the Bonus Base (and bonus) with a withdrawal, premium payment, and any Step-Up; o For how long the bonus is available; and o When and what happens when the bonus is applied to the GWB. -------------------------------------------------------------------------------- The bonus equals 7% and is based on a sum that may vary after this GMWB is added to the Contract (the "Bonus Base"), as described immediately below. o WHEN THIS GMWB IS ADDED TO THE CONTRACT, the Bonus Base equals the GWB. o WITH A WITHDRAWAL, if that withdrawal, and all prior withdrawals in the current Contract Year, exceeds the greater of the GAWA and the RMD, as applicable, then the Bonus Base is set to the lesser of the GWB after, and the Bonus Base before, the withdrawal. Otherwise, there is no adjustment to the Bonus Base with withdrawals. o All withdrawals count, including: systematic withdrawals; RMDs for certain tax-qualified Contracts; withdrawals of asset allocation and advisory fees; and free withdrawals under the Contract. o A withdrawal in a Contract Year during the Bonus Period (defined below) precludes a bonus for that Contract Year. o WITH A PREMIUM PAYMENT, the Bonus Base increases by the amount of the premium net of any applicable premium taxes. o WITH ANY STEP-UP (IF THE GWB INCREASES UPON STEP-UP), the Bonus Base is set to the greater of the GWB after, and the Bonus Base before, the Step-Up. THE BONUS BASE CAN NEVER BE MORE THAN $5 MILLION. The Bonus is available for a limited time (the "Bonus Period"). The Bonus Period begins on the effective date of this GMWB endorsement and will re-start at the time of a Bonus Base Step-Up if the Bonus Base increases due to the Step-Up and if the Step-Up occurs on or before the Contract Anniversary immediately following the youngest Covered Life's 80th birthday. The Bonus Period ends on the earlier of: o The tenth Contract Anniversary following the effective date of the endorsement or the most recent Bonus Base Step-Up, if later; or o The date the Contract Value is zero. This GWB Bonus provision is terminated when this GMWB is terminated or if this GMWB is continued through Spousal continuation of a Contract and the surviving spouse is not a Covered Life. If the surviving spouse is a Covered Life, spousal continuation of a Contract with this GMWB does not affect the Bonus Period; Contract Anniversaries are based on the Contract's Issue Date. The bonus is applied at the end of each Contract Year during the Bonus Period, if there have been no withdrawals during that Contract Year. Conversely, ANY withdrawal, including but not limited to systematic withdrawals and required minimum distributions, taken in a Contract Year during the Bonus Period causes the bonus NOT to be applied. When the bonus is applied: o The GWB is recalculated, increasing by 7% of the Bonus Base. o If the Bonus is applied after the first withdrawal, the GAWA is recalculated, equaling the greater of the GAWA percentage multiplied by the new GWB or the GAWA before the bonus. Applying the bonus to the GWB does not affect the Bonus Base, GWB adjustment, or GMWB death benefit. -------------------------------------------------------------------------------- SYSTEMATIC WITHDRAWAL PROGRAM. You can arrange to have money automatically sent to you periodically while your Contract is still in the accumulation phase. You may withdraw a specified dollar amount (of at least $50 per withdrawal), a specified percentage or earnings. Your withdrawals may be on a monthly, quarterly, semi-annual or annual basis. If you have arranged for systematic withdrawals, schedule any planned Step-Up under a GMWB to occur prior to the withdrawal. Example 7 in Appendix C illustrates the consequences of a withdrawal preceding a Step-Up. There is no charge for the Systematic Withdrawal Program; however, you will have to pay taxes on the money you receive. In addition, withdrawals you make before you reach 59 1/2 may be subject to a 10% tax penalty. You may also be subject to a withdrawal charge and an interest rate adjustment. If your Contract contains LifeGuard Select GMWB or the LifeGuard Select with Joint Option GMWB, systematic withdrawals are only allowed on a pro-rata basis including all investment options (including the GMWB Fixed Account) or, in the alternative, may be requested from specified investment options, excluding the GMWB Fixed Account. A specified withdrawal request may cause an automatic transfer from the GMWB Fixed Account on the following Contract Monthly Anniversary. In addition, for Contracts with the LifeGuard Select GMWB or the LifeGuard Select with Joint Option GMWB, the percentage of the partial withdrawal taken from the GMWB Fixed Account cannot exceed the ratio of the GMWB Fixed Account value to the Contract Value. We reserve the right to discontinue offering this program in the future. SUSPENSION OF WITHDRAWALS OR TRANSFERS. Jackson may be required to suspend or delay withdrawals or transfers from an Investment Division when: a) the New York Stock Exchange is closed (other than customary weekend and holiday closings); b) trading on the New York Stock Exchange is restricted; c) an emergency exists so that it is not reasonably practicable to dispose of securities in the Separate Account or determine the division value of its assets; or d) the SEC, by order, may permit for the protection of Owners. The applicable rules and regulations of the SEC will govern whether the conditions described in (b) and/or (c) exist. Jackson has reserved the right to defer payment for a withdrawal or transfer from the guaranteed fixed accounts and the GMWB Fixed Account for the period permitted by law, but not more than six months. INCOME PAYMENTS (THE INCOME PHASE) The income phase occurs when you begin receiving regular payments from your Contract. The Income Date is the day on which those payments begin. The Income Date must be at least one year after your Contract is issued. You can choose the Income Date and an income option. The income options are described below. If you do not choose an income option, we will assume that you selected Option 3 which provides a life annuity with 120 months of guaranteed payments. You can change the Income Date or income option at least 7 days before the income date. You must give us notice seven days before the scheduled income date. Income payments must begin by your 90th birthday under a non-qualified Contract (or an earlier date if required by law). At the income date, you can choose whether payments will come from the guaranteed fixed accounts, the Investment Divisions or both. Unless you tell us otherwise, your income payments will be based on the Allocation Options that were in place on the income date. You can choose to have income payments made monthly, quarterly, semi-annually, or annually. However, if you have less than $5,000 to apply toward an income option and state law permits, Jackson may provide your payment in a single lump sum, part of which may be taxable as Federal Income. Likewise, if your first income payment would be less than $50 and state law permits, Jackson may set the frequency of payments so that the first payment would be at least $50. If the assumed net investment rate is a lower percentage, for example, 3% versus 4.5% under a particular Annuity Option, the initial payment will be smaller if a 3% assumed net investment rate applies instead of a 4.5% assumed net investment rate, but, all other things being equal, the subsequent 3% assumed net investment rate payments have the potential for increasing in amount by a larger percentage and for decreasing in amount by a smaller percentage. INCOME PAYMENTS FROM INVESTMENT DIVISIONS. If you choose to have any portion of your income payments come from the Investment Division(s), the dollar amount of your payment will depend upon three things: 1. the value of your Contract in the Investment Division(s) on the income date; 2. the 3% assumed investment rate used in the annuity table for the Contract; and 3. the performance of the Investment Divisions you selected. Jackson calculates the dollar amount of the first income payment that you receive from the Investment Divisions. We then use that amount to determine the number of annuity units that you hold in each Investment Division. The amount of each subsequent income payment is determined by multiplying the number of annuity units that you hold in an Investment Division by the annuity unit value for that Investment Division. The number of annuity units that you hold in each Investment Division does not change unless you reallocate your Contract Value among the Investment Divisions. The annuity unit value of each Investment Division will vary based on the investment performance of the Funds. If the actual investment performance exactly matches the assumed rate at all times, the amount of each income payment will remain equal. If the actual investment performance exceeds the assumed rate, your income payments will increase. Similarly, if the actual investment performance is less than the assumed rate, your income payments will decrease. INCOME OPTIONS. The annuitant is the person whose life we look to when we make income payments. (Each description assumes that you are the Owner and annuitant.) The following income options may not be available in all states. OPTION 1 - Life Income. This income option provides monthly payments for your life. OPTION 2 - Joint and Survivor Annuity. This income option provides monthly payments for your life and for the life of another person (usually your spouse) selected by you. OPTION 3 - Life Annuity With 120 or 240 Monthly Payments. This income option provides monthly payments for the annuitant's life, but with payments continuing to the beneficiary for the remainder of 10 or 20 years (as you select) if the annuitant dies before the end of the selected period. If the beneficiary does not want to receive the remaining scheduled payments, a single lump sum payment may be requested, which will be equal to the present value of the remaining payments (as of the date of calculation) discounted at an interest rate that will be no more than 1% higher than the rate used to calculate the initial payment. OPTION 4 - Income for a Specified Period. This income option provides monthly payments for any number of years from 5 to 30. If the beneficiary does not want to receive the remaining scheduled payments, a single lump sum may be requested, which will be equal to the present value of the remaining payments (as of the date of calculation) discounted at an interest rate that will be no more than 1% higher than the rate used to calculate the initial payment. ADDITIONAL OPTIONS - Other income options may be made available by Jackson. DEATH BENEFIT The death benefit paid to your beneficiary upon your death is calculated as of the date we receive all required documentation which includes but is not limited to due proof of death and a completed claim form from the beneficiary of record (if there are multiple beneficiaries, we will calculate the death benefit when we receive this documentation from the first beneficiary). The death benefit paid will be the basic Contract death benefit unless you have selected the Maximum Anniversary Value death benefit. If you have the Maximum Anniversary Value death benefit, the difference between the account value and the Maximum Anniversary Value death benefit will be put into your account as of the date we receive completed claim forms and proof of death from the beneficiary of record and will be allocated among investment options according to future allocations on file for your account as of that date. Each beneficiary will receive their portion of the remaining value, subject to market fluctuations, when their option election form is received at our Home Office in Lansing, Michigan. The effects of any GMWB on the amount payable to your beneficiaries upon your death should be considered before selecting a GMWB. Except as provided in certain of the GMWB endorsements, no death benefit will be paid upon your death in the event the Contract Value falls to zero. See the individual GMWB subsections earlier in this prospectus under "ACCESS TO YOUR MONEY" for information about how the GMWB endorsements work. DEATH OF OWNER BEFORE THE INCOME DATE. If you die before moving to the income phase, the person you have chosen as your beneficiary will receive a death benefit. If you have a joint Owner, the death benefit will be paid when the first joint Owner dies. The surviving joint Owner will be treated as the beneficiary. Any other beneficiary designated will be treated as a contingent beneficiary. Jackson may limit permissible joint Owners to spouses. BASE CONTRACT DEATH BENEFIT The death benefit equals: 1. current Contract Value; OR 2. the total premiums (less withdrawals, charges and premium taxes) compounded at 5% (4% if the Owner is age 70 or older at the date of issue); OR 3. the Contract Value at the end of the 7th Contract year PLUS all premiums paid since the 7th year (less withdrawals, withdrawal charges and premium taxes incurred since the 7th year) compounded at 5% (4% if the Owner is age 70 or older at the date of issue); -- whichever is GREATEST. The death benefit under 2 and 3 will never exceed 250% of premiums paid, less partial withdrawals, charges and tax incurred. The death benefit under 2 and 3 may not be available in all states. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT OPTION (must be elected at issue) The death benefit equals: 1. current Contract Value; OR 2. the total premiums (less withdrawals, charges and taxes) compounded at 5% (4% if the Owner is age 70 or older at the date of issue) OR 3. the Contract Value at the end of the 7th Contract year PLUS all premiums paid since the 7th year (less withdrawals, charges and taxes incurred since the 7th year) compounded at 5% (4% if the Owner is age 70 or older at the date of issue); OR 4. the greatest Contract Value at any Contract anniversary prior to the Owner's 81st birthday, reduced proportionally by any withdrawals subsequent to that Contract anniversary in the same proportion that the Contract Value was reduced on the date of a withdrawal, plus any premium paid subsequent to that Contract anniversary. -- whichever is GREATEST. The Maximum Anniversary Value Death Benefit Option may not be available in all states and is not available to Contract Owners greater than age 80. The death benefit determined under item 2 or item 3 of the Maximum Anniversary Value Death Benefit Option is limited to never exceed 250% of premiums paid, less withdrawals, charges, and taxes incurred. The additional insurance charge for the Maximum Anniversary Value Death Benefit Option will continue to be deducted after you reach age 81, although the highest Contract Value on any anniversary after age 81 will not be paid. This amount will be determined as of the end of the Business Day when due proof of the Owner's death is satisfactory to us and an election as to the type of Death Benefit Option is received by the Company at its Annuity Service Center. From the time of death of the Owner until the death benefit amount is determined, any amount allocated to an Investment Division will be subject to investment risk. This investment risk is borne by the beneficiary(ies). The death benefit can be paid under one of the following death benefit options: o single lump sum payment; or o payment of entire death benefit within 5 years of the date of death; or o payment of the entire death benefit under an income option over the beneficiary's lifetime or for a period not extending beyond the beneficiary's life expectancy; or payment of a portion of the death benefit under an income option over the beneficiary's lifetime or for a period not extending beyond the beneficiary's life expectancy, with the balance of the death benefit payable to the beneficiary. Under these income options, the beneficiary may also elect to receive additional lump sums at any time. The receipt of any additional lump sums will reduce the future income payments to the beneficiary. Unless the beneficiary chooses to receive the entire death benefit in a single sum, the beneficiary must elect an income option within the 60-day period beginning with the date Jackson receives proof of death and payments must begin within one year of the date of death. If the beneficiary chooses to receive some or all of the death benefit in a single sum and all the necessary requirements are met, Jackson will pay the death benefit within seven days. If the beneficiary is your spouse, he/she can continue the Contract in his/her own name at the then current Contract Value. As Owner, you may also make a predetermined selection of the death benefit option to be paid if your death occurs before the income date. If this Preselected Death Benefit Option Election is in force at the time of your death, the payment of the death benefit may not be postponed, nor can the Contract be continued under any other provisions of this Contract. This restriction applies even if the beneficiary is your spouse, unless such restriction is prohibited by the Internal Revenue Code. The Preselected Death Benefit Option may not be available in your state. EARNINGS PROTECTION BENEFIT ("EARNINGSMAX"). The Earnings Protection Benefit is an optional benefit that may increase the amount of the death benefit payable at your death. If you are 75 years of age or younger when your Contract is issued, you may elect the Earnings Protection Benefit when the Contract is issued. If you are under the age of 70 when your Contract is issued and you elect the Earnings Protection Benefit then, the amount that will be added to the death benefit that is otherwise payable is 40% of the earnings in your Contract, subject to the limit described below. If you are between the ages of 70 - 75 when your Contract is issued and you elect the Earnings Protection Benefit, the amount that will be added to the death benefit that is otherwise payable is 25% of the earnings in your Contract, subject to the limit described below. For purposes of this benefit, we define earnings as the amount by which the sum of your Contract Value in the Separate Account and the Fixed Account exceeds the total premiums paid into the Contract (less prior withdrawals, withdrawal charges and premium taxes applicable to the withdrawals). If the earnings amount is negative, i.e., the total premiums paid into your Contract (adjusted for any withdrawals and associated charges) are greater than the Contract Value, no Earnings Protection Benefit will be paid. In determining the maximum amount of earnings on which we will calculate your Earnings Protection Benefit, we do not take into consideration any earnings above 100% of the total premiums paid (adjusted for any withdrawals and associated charges). Premiums paid in the 12 months prior to the date of your death (other than your initial premium if you die in the first Contract Year) are excluded. As described below, if your spouse exercises the Special Spousal Continuation Option upon your death, we will increase the Contract Value at that time to reflect any otherwise payable Earnings Protection Benefit. In addition, upon your spouse's death we will pay an Earnings Protection Benefit if your Contract has accrued additional earnings since your death. In calculating that benefit, we will not take into consideration earnings accrued on or prior to the Continuation Date (as defined in "Special Spousal Continuation Option" below). In addition, the maximum earnings on which we calculate the Earnings Protection Benefit will be based solely upon premiums paid after the Continuation Date (adjusted for withdrawals and associated charges). Premiums paid in the 12 months prior to the date of your spouse's death are excluded. You must elect the Earnings Protection Benefit when you apply for your Contract. Once elected, the benefit may not be terminated. No Earnings Protection Benefit will be paid: 1. if the Contract is in the income phase at the time of your death; 2. if there are no earnings in the Contract. Moreover, no additional Earnings Protection Benefit will be paid if your spouse exercises the Special Spousal Continuation Option (described below) after your death and does not pay any premiums into the Contract after the Continuation Date. If you elect this benefit, during the accumulation phase of the Contract we will deduct a charge of 0.20% of the daily net asset value of the Funds. This charge is in addition to the other charges that are deducted from your Contract. This charge continues if your spouse elects to continue the Contract under the Special Spousal Continuation Option. Please note that we collect this charge even if your spouse does not pay any additional premium after the Continuation Date and therefore is not eligible for an Earnings Protection Benefit upon his or her death. In addition, if your spouse pays little or no premium after the Continuation Date, the potential Earnings Protection Benefit may be much lower than it was prior to the Continuation Date. We continue to collect this charge at the same rate because the level of this charge is based on the expected Contract Value and duration of all Contracts having the Earnings Protection Benefit and Special Spousal Continuation Option Endorsements. Contract value is determined as of the date we receive complete claim forms and due proof of death from the beneficiary of record. The Earnings Protection Benefit may not be available in your state or through the broker-dealer with which your financial advisor is affiliated. See your financial advisor for information regarding the availability of the Earnings Protection Benefit. SPECIAL SPOUSAL CONTINUATION OPTION. If your spouse is the beneficiary and elects to continue the Contract in his or her own name after your death, pursuant to the Special Spousal Continuation Option no death benefit will be paid at that time. Instead, we will contribute to the Contract a Continuation Adjustment, which is the amount by which the death benefit that would have been payable (including the Earnings Enhancement Benefit, if any) exceeds the Contract Value. We calculate this amount using the Contract Value and death benefit as of the date we receive complete forms and due proof of death from the beneficiary of record and the spousal beneficiary's written request to continue the Contract (the "Continuation Date"). We will add this amount to the Contract based on the allocation instructions at the time of your death subject to any minimum allocation restrictions, unless we receive other allocation instructions from your spouse. The Special Spousal Continuation Option may not be available in your state or through the broker-dealer with which your financial advisor is affiliated. See your financial advisor for information regarding the availability of the Special Spousal Continuation Option. If your spouse continues the Contract in his/her own name, the new Contract Value will be considered the initial premium for purposes of determining any future death benefit, including any Earnings Protection Benefit, under the Contract. The age of the surviving spouse at the time of the continuation of the Contract will be used to determine all benefits under the Contract. If your spouse elects to continue the Contract, your spouse, as new Owner, cannot terminate certain optional benefits you might have elected. However, a GMWB will terminate upon your death (and no further GMWB charges will be deducted), unless your spouse is eligible for the benefit and elects to continue it with the Contract. For more information, please see the individual GMWB subsections earlier in this prospectus under "Access To Your Money." The optional benefits that cannot be terminated by your spouse are the Maximum Anniversary Value Death Benefit and the Earnings Protection Benefit. The Contract, and these two optional benefits, remain the same. Your spouse will also be subject to the same fees, charges and expenses under the Contract as you were. In particular, the charge for the Earnings Protection Benefit will remain the same even though, as discussed in "Earnings Protection Benefit" above, in certain circumstances the potential benefit will be lower after the Continuation Date. Your spouse should weigh this cost against the potential benefits, in deciding whether to exercise the Special Spousal Continuation Option. Even if your spouse pays premiums after the Continuation Date, no Earnings Protection Benefit will apply if your spouse is 76 or older when the Contract is continued, even though charges for the benefit are assessed. If you have elected the Preselected Death Benefit Option the Contract cannot be continued under the Special Spousal Continuation Option, unless preventing continuation would be prohibited by the Internal Revenue Code. The Preselected Death Benefit Option may not be available in your state. DEATH OF OWNER ON OR AFTER THE INCOME DATE. If you or a joint Owner die on or after the income date, any remaining payments under the income option elected will continue at least as rapidly as under the method of distribution in effect at the date of death. If you die, the beneficiary becomes the Owner. If the joint Owner dies, the surviving joint Owner, if any, will be the designated beneficiary. Any other beneficiary designation on record at the time of death will be treated as a contingent beneficiary. A contingent beneficiary is entitled to receive payment only after the beneficiary dies. DEATH OF ANNUITANT. If the annuitant is not an Owner or joint Owner and the annuitant dies before the income date, you can name a new annuitant, subject to our underwriting rules. If you do not name a new annuitant within 30 days of the death of the annuitant, you will become the annuitant. However, if the Owner is a non-natural person (for example, a corporation), then the death of the annuitant will be treated as the death of the Owner, and a new annuitant may not be named. If the annuitant dies on or after the income date, any remaining payments will be as provided for in the income option selected. Any remaining payments will be paid at least as rapidly as under the method of distribution in effect at the annuitant's death. TAXES THE FOLLOWING IS ONLY GENERAL INFORMATION AND IS NOT INTENDED AS TAX ADVICE TO ANY INDIVIDUAL. ADDITIONAL TAX INFORMATION IS INCLUDED IN THE SAI. YOU SHOULD CONSULT YOUR OWN TAX ADVISER AS TO HOW THESE GENERAL RULES WILL APPLY TO YOU IF YOU PURCHASE A CONTRACT. CONTRACT OWNER TAXATION TAX-QUALIFIED AND NON-QUALIFIED CONTRACTS. If you purchase the Contract as a part of a tax-qualified plan such as an Individual Retirement Annuity (IRA), Tax-Sheltered Annuity (sometimes referred to as 403(b) Contract), or pension or profit-sharing plan (including a 401(k) Plan or H.R. 10 Plan), your Contract will be what is referred to as a tax-qualified contract. Tax deferral under a tax-qualified contract arises under the specific provisions of the Internal Revenue Code (Code) governing the tax-qualified plan, so a tax-qualified contract should be purchased only for the features and benefits other than tax deferral that are available under a tax-qualified contract, and not for the purpose of obtaining tax deferral. You should consult your own adviser regarding these features and benefits of the Contract prior to purchasing a tax-qualified Contract. If you do not purchase the Contract as a part of any tax-qualified pension plan, specially sponsored program or an individual retirement annuity, your Contract will be what is referred to as a non-qualified contract. The amount of your tax liability on the earnings under and the amounts received from either a tax-qualified or a non-qualified Contract will vary depending on the specific tax rules applicable to your Contract and your particular circumstances. NON-QUALIFIED CONTRACTS - GENERAL TAXATION. Increases in the value of a non-qualified Contract attributable to undistributed earnings are generally not taxable to the Contract Owner or the annuitant until a distribution (either as a withdrawal, including withdrawals under any GMWB you may elect, or as an income payment) is made from the Contract. This tax deferral is generally not available under a non-qualified Contract owned by a non-natural person (e.g., corporation or certain other entities other than a trust holding the Contract as an agent for a natural person). Also loans based on a non-qualified Contract are treated as distributions. NON-QUALIFIED CONTRACTS - AGGREGATION OF CONTRACTS. For purposes of determining the taxability of a distribution, the Code provides that all non-qualified contracts issued by us (or an affiliate) to you during any calendar year must be treated as one annuity contract. Additional rules may be promulgated under this Code provision to prevent avoidance of its effect through the ownership of serial contracts or otherwise. NON-QUALIFIED CONTRACTS - WITHDRAWALS AND INCOME PAYMENTS. Any withdrawal from a non-qualified Contract, including withdrawals under any GMWB you may elect, is taxable as ordinary income to the extent it does not exceed the accumulated earnings under the Contract. In contrast, a part of each income payment under a nonqualified Contract is generally treated as a non-taxable return of premium. The balance of each income payment is taxable as ordinary income. The amounts of the taxable and non-taxable portions of each income payment are determined based on the amount of the investment in the Contract and the length of the period over which income payments are to be made. Income payments received after all of your investment in the Contract is recovered are fully taxable as ordinary income. Additional information is provided in the SAI. The Code also imposes a 10% penalty on certain taxable amounts received under a non-qualified Contract. This penalty tax will not apply to any amounts: (1) paid on or after the taxpayer reaches age 59 1/2; (2) paid to a beneficiary after you die; (3) paid if the recipient becomes totally disabled (as that term is defined in the Code); (4) paid in a series of substantially equal periodic payments made annually (or more frequently) for life (or life expectancy) or a period not exceeding the joint lives (or joint life expectancies) of the recipient and a beneficiary; (5) paid under an immediate annuity; or (6) which come from premiums made prior to August 14, 1982. NON-QUALIFIED CONTRACTS - REQUIRED DISTRIBUTIONS. In order to be treated as an annuity contract for federal income tax purposes, the Code requires any nonqualified contract issued after January 18, 1985 to provide that (a) if an owner dies on or after the annuity starting date but prior to the time the entire interest in the contract has been distributed, the remaining portion of such interest will be distributed at least as rapidly as under the method of distribution being used as of the date of that owner's death; and (b) if an owner dies prior to the annuity starting date, the entire interest in the contract must be distributed within five years after the date of the owner's death. The requirements of (b) above can be considered satisfied if any portion of the Owner's interest which is payable to or for the benefit of a "designated beneficiary" is distributed over the life of such beneficiary or over a period not extending beyond the life expectancy of that beneficiary and such distributions begin within one year of that Owner's death. The Owner's "designated beneficiary," who must be a natural person, is the person designated by such Owner as a beneficiary and to whom ownership of the Contract passes by reason of death. However, if the Owner's "designated beneficiary" is the surviving spouse of the Owner, the contract may be continued with the surviving spouse as the new Owner. TAX-QUALIFIED CONTRACTS - WITHDRAWALS AND INCOME PAYMENTS. The Code imposes limits on loans, withdrawals, and income payments under tax-qualified Contracts. The Code also imposes required minimum distribution for tax-qualified Contracts and a 10% penalty on certain taxable amounts received prematurely under a tax-qualified Contract. These limits, required minimum distributions, tax penalties and the tax computation rules are summarized in the SAI. Any withdrawals under a tax-qualified Contract, including withdrawals under any GMWB you may elect, will be taxable except to the extent they are allocable to an investment in the Contract (any after-tax contributions). In most cases, there will be little or no investment in the Contract for a tax-qualified Contract because contributions will have been made on a pre-tax or tax-deductible basis. WITHDRAWALS - TAX-SHELTERED ANNUITIES. The Code limits the withdrawal of amounts attributable to purchase payments made under a salary reduction agreement from Tax-Sheltered Annuities. Withdrawals can only be made when an Owner: (1) reaches age 59 1/2; (2) leaves his/her job; (3) dies; (4) becomes disabled (as that term is defined in the Code); or (5) in the case of hardship. However, in the case of hardship, the Owner can only withdraw the premium and not any earnings. WITHDRAWALS - ROTH IRAS. Subject to certain limitations, individuals may also purchase a new type of non-deductible IRA annuity, known as a Roth IRA annuity. Qualified distributions from Roth IRA annuities are entirely federal income tax free. A qualified distribution requires that the individual has held the Roth IRA annuity for at least five years and, in addition, that the distribution is made either after the individual reaches age 59 1/2, on account of the individual's death or disability, or as a qualified first-time home purchase, subject to a $10,000 lifetime maximum, for the individual or for a spouse, child, grandchild, or ancestor. CONSTRUCTIVE WITHDRAWALS - INVESTMENT ADVISER FEES. Withdrawals from non-qualified Contracts for the payment of investment adviser fees will be considered taxable distributions from the Contract. In a series of Private Letter Rulings, however, the Internal Revenue Service has held that the payment of investment adviser fees from a tax-qualified Contract need not be considered a distribution for income tax purposes. Under the facts in these Rulings: (i) there was a written agreement providing for payments of the fees solely from the annuity Contract, (ii) the Contract Owner had no liability for the fees, and (iii) the fees were paid solely from the annuity Contract to the adviser. EXTENSION OF LATEST INCOME DATE. If you do not annuitize your non-qualified Contract on or before the latest income date, it is possible that the IRS could challenge the status of your Contract as an annuity Contract for tax purposes. The result of such a challenge could be that you would be viewed as either constructively receiving the increase in the Contract Value each year from the inception of the Contract or the entire increase in the Contract Value would be taxable in the year you attain age 90. In either situation, you could realize taxable income even if the Contract proceeds are not distributed to you at that time. Accordingly, before purchasing a Contract, you should consult your tax advisor with respect to these issues. DEATH BENEFITS. None of the death benefits paid under the Contract to the beneficiary will be tax-exempt life insurance benefits. The rules governing the taxation of payments from an annuity Contract, as discussed above, generally apply to the payment of death benefits and depend on whether the death benefits are paid as a lump sum or as annuity payments. Estate or gift taxes may also apply. IRS APPROVAL. The Contract, and all riders attached thereto, have been approved by the IRS for use as an Individual Retirement Annuity prototype. ASSIGNMENT. An assignment of a Contract will generally be a taxable event. Assignments of a tax-qualified Contract may also be limited by the Code and ERISA. These limits are summarized in the SAI. You should consult your tax adviser prior to making any assignment of a Contract. DIVERSIFICATION. The Code provides that the underlying investments for a non-qualified variable annuity must satisfy certain diversification requirements in order to be treated as an annuity Contract. Jackson believes that the underlying investments are being managed so as to comply with these requirements. A fuller discussion of the diversification requirements is contained in the SAI. OWNER CONTROL. In a Revenue Ruling issued in 2003, the Internal Revenue Service (IRS) considered certain variable annuity and variable life insurance contracts and held that the types of actual and potential control that the contract owners could exercise over the investment assets held by the insurance company under these variable contracts was not sufficient to cause the contract owners to be treated as the owners of those assets and thus to be subject to current income tax on the income and gains produced by those assets. Under the Contract, like the contracts described in the Revenue Ruling, there will be no arrangement, plan, contract or agreement between the contract owner and Jackson regarding the availability of a particular investment option and other than the contract owner's right to allocate premiums and transfer Funds among the available sub-accounts, all investment decisions concerning the sub-accounts will be made by the insurance company or an advisor in its sole and absolute discretion. The Contract will differ from the contracts described in the Revenue Ruling, in two respects. The first difference is that the contract in the Revenue Ruling provided only 12 investment options with the insurance company having the ability to add an additional 8 options whereas a Contract offers 87 Investment Divisions and at least one guaranteed fixed account, although a Contract Owner can select no more than 18 Allocation Options at any one time. The second difference is that the owner of a contract in the Revenue Ruling could only make one transfer per 30-day period without a fee whereas during the accumulation phase, a Contract Owner will be permitted to make up to 15 transfers in any one year without a charge. The Revenue Ruling states that whether the owner of a variable contract is to be treated as the owner of the assets held by the insurance company under the contract will depend on all of the facts and circumstances. Jackson does not believe that the differences between the Contract and the contracts described in the Revenue Ruling with respect to the number of investment choices and the number of investment transfers that can be made under the contract without an additional charge should prevent the holding in the Revenue Ruling from applying to the owner of a Contract. At this time, however, it cannot be determined whether additional guidance will be provided by the IRS on this issue and what standards may be contained in such guidance. We reserve the right to modify the Contract to the extent required to maintain favorable tax treatment. WITHHOLDING. In general, the income portion of distributions from a Contract are subject to 10% federal income tax and the income portion of income payments are subject to withholding at the same rate as wages withholding unless you elect not to have tax withheld. Some states have enacted similar rules. Different rules may apply to payments delivered outside the United States. Any distribution from a tax-qualified contract eligible for rollover will be subject to federal tax withholding at a mandatory 20% rate unless the distribution is made as a direct rollover to a tax-qualified plan or to an individual retirement account or annuity. The Code generally allows the rollover of most distributions to and from tax-qualified plans, tax-sheltered annuities, Individual Retirement Annuities and eligible deferred compensation plans of state or local governments. Distributions which may not be rolled over are those which are: (a) one of a series of substantially equal annual (or more frequent) payments made (a) over the life or life expectancy of the employee, (b) the joint lives or joint life expectancies of the employee and the employee's beneficiary, or (c) for a specified period of ten years or more; (b) a required minimum distribution; (c) a hardship withdrawal; or (d) the non-taxable portion of a distribution. JACKSON TAXATION We will pay company income taxes on the taxable corporate earnings created by this separate account product adjusted for various permissible deductions and certain tax benefits discussed below. While we may consider company income tax liabilities and tax benefits when pricing our products, we do not currently include our income tax liabilities in the charges you pay under the contract. We will periodically review the issue of charging for these taxes and may impose a charge in the future. (We do impose a so-called "Federal (DAC) Tax Charge" under variable life insurance policies, but the "Federal (DAC) Tax Charge" merely compensates us for the required deferral of acquisition cost and does not constitute company income taxes.) In calculating our corporate income tax liability, we derive certain corporate income tax benefits associated with the investment of company assets, including separate account assets that are treated as company assets under applicable income tax law. These benefits reduce our overall corporate income tax liability. Under current law, such benefits may include dividends received deductions and foreign tax credits which can be material. We do not pass these benefits through to the separate accounts, principally because: (i) the great bulk of the benefits results from the dividends received deduction, which involves no reduction in the dollar amount of dividends that the separate account receives; (ii) product Owners are not the owners of the assets generating the benefits under applicable income tax law; and (iii), while we impose a so-called "Federal (DAC) tax charge" under variable life insurance policies, we do not currently include company income taxes in the charges Owners pay under the products. OTHER INFORMATION DOLLAR COST AVERAGING. You can arrange to have a regular amount of money periodically transferred automatically into the Investment Divisions and other guaranteed fixed accounts from the one-year guaranteed fixed account or any of the other Investment Divisions. This theoretically gives you a lower average cost per unit for the Investment Divisions over time than you would receive if you made a one-time purchase. The more volatile Investment Divisions may not result in lower average costs, and such divisions may not be an appropriate source of dollar cost averaging transfers in volatile markets. Certain restrictions may apply. DOLLAR COST AVERAGING PLUS (DCA+). The DCA+ account is a "source account" designed for Dollar-Cost Averaging. The DCA+ account is credited with an enhanced interest rate. If a DCA+ account is selected, monies in the DCA+ fixed account will be systematically transferred to the Investment Divisions or other guaranteed fixed accounts chosen over the DCA+ term selected. EARNINGS SWEEP. You can choose to move your earnings from the source accounts (only applicable from the 1-year guaranteed fixed account and the JNL/Select Money Market Fund). There is no charge for Earnings Sweep. REBALANCING. You can arrange to have Jackson automatically reallocate your Contract Value among Investment Divisions and the guaranteed fixed account periodically to maintain your selected allocation percentages. Rebalancing is consistent with maintaining your allocation of investments among market segments, although it is accomplished by reducing your Contract Value allocated to the better performing Investment Divisions. FREE LOOK. You may return your Contract to the selling agent or Jackson within 20 days after receiving it. Jackson will return the Contract Value in the Investment Divisions plus any fees and expenses deducted from the premiums allocated to the Investment Divisions plus the full amount of premiums allocated to the guaranteed fixed account and the GMWB Fixed Account. We will determine the Contract Value in the Investment Divisions as of the date we receive the Contract or the date you return it to the selling agent. Jackson will return premium payments where required by law. In some states, we are required to hold the premiums of a senior citizen in a Fixed Account during the free look period, unless we are specifically directed to allocate the premiums to the Investment Divisions. State laws vary; your free look rights will depend on the laws of the state in which you purchased the Contract. ADVERTISING. From time to time, Jackson may advertise several types of performance for the Investment Divisions. o TOTAL RETURN is the overall change in the value of an investment in an Investment Division over a given period of time. o STANDARDIZED AVERAGE ANNUAL TOTAL RETURN is calculated in accordance with SEC guidelines. o NON-STANDARDIZED TOTAL RETURN may be for periods other than those required or may otherwise differ from standardized average annual total return. For example, if a Fund has been in existence longer than the Investment Division, we may show non-standardized performance for periods that begin on the inception date of the series, rather than the inception date of the Investment Division. o YIELD refers to the income generated by an investment over a given period of time. Performance will be calculated by determining the percentage change in the value of an accumulation unit by dividing the increase (decrease) for that unit by the value of the accumulation unit at the beginning of the period. Performance will reflect the deduction of the insurance charges and may reflect the deduction of the annual contract maintenance charge and withdrawal charge. The deduction of the Contract maintenance and/or the withdrawal charge would reduce the percentage increase or make greater any percentage decrease. RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM (ORP). Contracts issued to participants in ORP contain restrictions required under the Texas Administrative Code. In accordance with those restrictions, a participant in ORP will not be permitted to make withdrawals prior to such participant's retirement, death, attainment of age 70 1/2 or termination of employment in a Texas public institution of higher education. The restrictions on withdrawal do not apply in the event a participant in ORP transfers the Contract Value to another approved Contract or vendor during the period of ORP participation. These requirements will apply to any other jurisdiction with comparable requirements. MODIFICATION OF THE CONTRACT. Only the President, Vice President, Secretary or Assistant Secretary of Jackson may approve a change to or waive a provision of the Contract. Any change or waiver must be in writing. Jackson may change the terms of the Contract in order to comply with changes in applicable law, or otherwise as deemed necessary by Jackson. LEGAL PROCEEDINGS. Jackson is a defendant in a number of civil proceedings substantially similar to other litigation brought against many life insurers alleging misconduct in the sale or administration of insurance products. These matters are sometimes referred to as market conduct litigation. The market conduct litigation currently pending against Jackson asserts various theories of liability and purports to be filed on behalf of individuals or differing classes of persons in the United States who purchased either life insurance or annuity products from Jackson during periods ranging from 1981 to present. Jackson has retained national and local counsel experienced in the handling of such litigation. To date, such litigation has either been resolved by Jackson on a non-material basis, or is being vigorously defended. Jackson accrues for legal contingencies once the contingency is deemed to be probable and estimable. Please see the Jackson National Life Insurance Company and Subsidiaries Consolidated Financial Statements for the year ending December 31, 2007, for information concerning such amounts that have been accrued. At this time, it is not feasible to make a meaningful estimate of the amount or range of any additional losses that could result from an unfavorable outcome in such actions. PRIVACY POLICY COLLECTION OF NONPUBLIC PERSONAL INFORMATION. We collect nonpublic personal information (financial and health) about you from some or all of the following sources: o Information we receive from you on applications or other forms; o Information about your transactions with us; o Information we receive from a consumer reporting agency; o Information we obtain from others in the process of verifying information you provide us; and o Individually identifiable health information, such as your medical history, when you have applied for a life insurance policy. DISCLOSURE OF CURRENT AND FORMER CUSTOMER NONPUBLIC PERSONAL INFORMATION. We WILL NOT DISCLOSE our current and former customers' nonpublic personal information to affiliated or nonaffiliated third parties, EXCEPT AS PERMITTED BY LAW. TO THE EXTENT PERMITTED BY LAW, WE MAY DISCLOSE to either affiliated or nonaffiliated third parties all of the nonpublic personal financial information that we collect about our customers, as described above. In general, any disclosures to affiliated or nonaffiliated parties will be for the purpose of them providing services for us so that we may more efficiently administer your Contract and process the transactions and services you request. WE DO NOT SELL INFORMATION TO EITHER AFFILIATED OR NON-AFFILIATED PARTIES. We also share customer name and address information with unaffiliated mailers to assist in the mailing of company newsletters and other Contract Owner communications. Our agreements with these third party mailers require them to use this information responsibly and restrict their ability to share this information with other parties. We do not internally or externally share nonpublic personal health information other than, as permitted by law, to process transactions or to provide services that you have requested. These transactions or services include, but are not limited to, underwriting life insurance policies, obtaining reinsurance of life policies, and processing claims for waiver of premium, accelerated death benefits, terminal illness benefits or death benefits. SECURITY TO PROTECT THE CONFIDENTIALITY OF NONPUBLIC PERSONAL INFORMATION. We HAVE SECURITY PRACTICES AND PROCEDURES in place to prevent unauthorized access to your nonpublic personal information. Our practices of safeguarding your information help protect against the criminal use of the information. Our employees are bound by a Code of Conduct requiring that all information be kept in strict confidence, and they are subject to disciplinary action for violation of the Code. We RESTRICT ACCESS to nonpublic personal information about you to those employees who need to know that information to provide products or services to you. We MAINTAIN PHYSICAL, ELECTRONIC, AND PROCEDURAL SAFEGUARDS that comply with federal and state regulations to guard your nonpublic personal information. -------------------------------------------------------------------------------- QUESTIONS. If you have questions about your Contract, you may call or write to us at: o Jackson Annuity Service Center: 1 (800) 766-4683 P.O. Box 17240, Denver, Colorado 80217-9959 o Institutional Marketing Group Service Center: 1 (800) 777-7779 P.O. Box 30392, Lansing, Michigan 48909-7892 -------------------------------------------------------------------------------- "JNL(R)," "Jackson National(R)," and "JacksonSM" are trademarks or service marks of Jackson National Life Insurance Company. "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500," "S&P MidCap 400 Index," "S&P 500/Citigroup Value Index," and "S&P MidCap 400/Citigroup Value Index" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Jackson National Life Insurance Company ("Jackson"). The JNL/Mellon Capital Management Enhanced S&P 500 Stock Index Fund, the JNL/Mellon Capital Management S&P 500 Index Fund, the JNL/Mellon Capital Management S&P 400 MidCap Index Fund, the JNL/Mellon Capital Management S&P(R) 10 Fund, the JNL/Mellon Capital Management S&P(R) SMid 60 Fund, the JNL/Mellon Capital Management JNL 5 Fund, the JNL/Mellon Capital Management VIP Fund, the JNL/Mellon Capital Management S&P(R) 24 Fund and any other investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any Standard & Poor's Index are not sponsored, endorsed, sold or promoted by Standard & Poor's (S&P) and its affiliates and S&P and its affiliates make no representation regarding the advisability of investing in these Funds. Among the fund options considered are index funds based on the S&P 500 and other indexes that are published by S&P. S&P typically receives license fees from the issuers of such funds, some of which may be based on the amount of assets invested in the fund. Please see the Statement of Additional Information which sets forth certain additional disclaimers and limitations of liabilities on behalf of S&P. The Funds are not sponsored, endorsed, sold or promoted by S&P and its affiliates and S&P and its affiliates make no representation regarding the advisability of investing in the Funds. "Dow Jones," "Dow Jones Industrial AverageSM," "Dow Jones Select Dividend IndexSM," "DJIASM," "DowSM" and "Dow 10SM " are service marks of Dow Jones & Company, Inc. (Dow Jones) and have been licensed for use for certain purposes by Jackson. Dow Jones has no relationship to the annuity and Jackson, other than the licensing of the Dow Jones Industrial Average (DJIA) and its service marks for use in connection with the JNL/Mellon Capital Management DowSM 10 Fund, the JNL/Mellon Capital Management DowSM Dividend Fund, the JNL/Mellon Capital Management JNL Optimized 5 Fund, the JNL/Mellon Capital Management Communications Sector Fund, the JNL/Mellon Capital Management Consumer Brands Sector Fund, the JNL/Mellon Capital Management Oil & Gas Sector Fund, the JNL/Mellon Capital Management Financial Sector Fund, the JNL/Mellon Capital Management Healthcare Sector Fund, and the JNL/Mellon Capital Management Technology Sector Fund. Please see Appendix A for additional information. The JNL/Mellon Capital Management DowSM 10 Fund, the JNL/Mellon Capital Management DowSM Dividend Fund, the JNL/Mellon Capital Management JNL Optimized 5 Fund, the JNL/Mellon Capital Management Communications Sector Fund, the JNL/Mellon Capital Management Consumer Brands Sector Fund, the JNL/Mellon Capital Management Oil & Gas Sector Fund, the JNL/Mellon Capital Management Financial Sector Fund, the JNL/Mellon Capital Management Healthcare Sector Fund, and the JNL/Mellon Capital Management Technology Sector Fund are not sponsored, endorsed, sold or promoted by Dow Jones, and Dow Jones makes no representation regarding the advisability of investing in such product. The Product(s) is not sponsored, endorsed, sold or promoted by The Nasdaq Stock Market, Inc. (including its affiliates)(Nasdaq, with its affiliates, are referred to as the CORPORATIONS). The Corporations have not passed on the legality or suitability of or the accuracy or adequacy of descriptions and disclosures relating to the Product(s). The Corporations make no representation or warranty, express or implied to the owners of the Product(s) or any member of the public regarding the advisability of investing in securities generally or in the Product(s) particularly, or the ability of the Nasdaq-100 Index(R) to track general stock market performance. The Corporations' only relationship to Jackson National Life Insurance Company (LICENSEE) is in the licensing of the Nasdaq-100(R), Nasdaq-100 Index(R) and Nasdaq(R) trademarks or service marks, and certain trade names of the Corporations and the use of the Nasdaq-100 Index(R) which is determined, composed and calculated by Nasdaq without regard to Licensee or the Product(s). Nasdaq has no obligation to take the needs of the Licensee or the owners of the Product(s) into consideration in determining, composing or calculating the Nasdaq-100 Index(R). The Corporations are not responsible for and have not participated in the determination of the timing of, prices at or quantities of the Product(s) to be issued or in the determination or calculation of the equation by which the Product(s) is to be converted into cash. The Corporations have no liability in connection with the administration, marketing or trading of the Product(s). THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT(S) OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. "The Nasdaq-100(R)," "Nasdaq-100 Index(R)," "Nasdaq Stock Market(R)" and "Nasdaq(R)" are trade or service marks of The Nasdaq, Inc. (which with its affiliates are the "Corporations") and have been licensed for use by Jackson National Life Insurance Company. The Corporations have not passed on the legality or suitability of the JNL/Mellon Capital Management Nasdaq(R)15 Fund, the JNL/Mellon Capital Management JNL Optimized 5 Fund, or the JNL/Mellon Capital Management VIP Fund. The JNL/Mellon Capital Management Nasdaq(R) 15 Fund, the JNL/Mellon Capital Management VIP Fund and the JNL/Mellon Capital Management JNL Optimized 5 Fund are not issued, endorsed, sponsored, managed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE JNL/MELLON CAPITAL MANAGEMENT NASDAQ(R) 15 FUND, THE JNL/MELLON CAPITAL MANAGEMENT VIP FUND AND THE JNL/MELLON CAPITAL MANAGEMENT JNL OPTIMIZED 5 FUND. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell is a trademark of Russell Investment Group. JNL/Mellon Capital Management Small Cap Index Fund is not promoted, sponsored or endorsed by, nor in any way affiliated with Russell Investment Group ("Russell"). Russell is not responsible for and has not reviewed JNL/Mellon Capital Management Small Cap Index Fund nor any associated literature or publications and Russell makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. Russell reserves the right, at any time and without notice, to alter, amend, terminate or in any way change the Russell Indexes. Russell has no obligation to take the needs of any particular fund or its participants or any other product or person into consideration in determining, composing or calculating any of the Russell Indexes. Russell's publication of the Russell Indexes in no way suggests or implies an opinion by Russell as to the attractiveness or appropriateness of investment in any or all securities upon which the Russell Indexes are based. RUSSELL MAKES NO REPRESENTATION, WARRANTY, OR GUARANTEE AS TO THE ACCURACY COMPLETENESS, RELIABILITY, OR OTHERWISE OF THE RUSSELL INDEXES. RUSSELL MAKES NO REPRESENTATION, WARRANTY OR GUARANTEE REGARDING THE USE, OR THE RESULTS OF USE, OF THE RUSSELL INDEXES OR ANY DATA INCLUDED THEREIN, OR ANY SECURITY (OR COMBINATION THEREOF) COMPRISING THE RUSSELL INDEXES. RUSSELL MAKES NO OTHER EXPRESS OR IMPLIED WARRANTY, AND EXPRESSLY DISCLAIMS ANY WARRANTY, OF ANY KIND, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE RUSSELL INDEX(ES) OR ANY DATA OR ANY SECURITY (OR COMBINATION THEREOF) INCLUDED THEREIN. "Value Line(R)," "The Value Line Investment Survey," and "Value Line TimelinessTM Ranking System" are trademarks of Value Line Securities, Inc. or Value Line Publishing, Inc. that have been licensed to Jackson National Life Insurance Company. The JNL/Mellon Capital Management Value Line(R) 25 Fund, the JNL/Mellon Capital Management VIP Fund and the JNL/Mellon Capital Management JNL Optimized 5 Fund are not sponsored, recommended, sold or promoted by Value Line Publishing, Inc., Value Line, Inc. or Value Line Securities, Inc. ("Value Line"). Value Line makes no representation regarding the advisability of investing in the JNL/Mellon Capital Management Value Line(R) 25 Fund, the JNL/Mellon Capital Management VIP Fund, and the JNL/Mellon Capital Management JNL Optimized 5 Fund. Jackson National Life Insurance Company is not affiliated with any Value Line Company. "NYSE(R)" is a registered mark of, and "NYSE International 100 IndexSM" is a service mark of, the New York Stock Exchange, Inc. ("NYSE") and have been licensed for use for certain purposes by Jackson National Asset Management, LLC. The JNL/Mellon Capital Management NYSE(R) International 25 Fund is not sponsored, endorsed, sold or promoted by NYSE, and NYSE makes no representation regarding the advisability of investing in the JNL/Mellon Capital Management NYSE(R) International 25 Fund. "NYSE International 100 IndexSM" is a service mark of NYSE Group, Inc. NYSE Group, Inc. has no relationship to Jackson National Asset Management, LLC, other than the licensing of the "NYSE International 100 IndexSM" (the "Index") and its service marks for use in connection with the JNL/Mellon Capital Management NYSE(R) International 25 Fund. NYSE Group, Inc. DOES NOT: o Sponsor, endorse, sell or promote the JNL/Mellon Capital Management NYSE(R) International 25 Fund. o Recommend that any person invest in the JNL/Mellon Capital Management NYSE(R) International 25 Fund or any other securities. o Have any responsibility or liability for or make any decisions about the timing, amount or pricing of JNL/Mellon Capital Management NYSE(R) International 25 Fund. o Have any responsibility or liability for the administration, management or marketing of the JNL/Mellon Capital Management NYSE(R) International 25 Fund. o Consider the needs of the JNL/Mellon Capital Management NYSE(R) International 25 Fund or the owners of the JNL/Mellon Capital Management NYSE(R) International 25 Fund in determining, composing or calculating the NYSE International 100 IndexSM or have any obligation to do so. -------------------------------------------------------------------------------- NYSE GROUP, INC. AND ITS AFFILIATES WILL NOT HAVE ANY LIABILITY IN CONNECTION WITH THE JNL/MELLON CAPITAL MANAGEMENT NYSE(R) INTERNATIONAL 25 FUND. SPECIFICALLY, o NYSE GROUP, INC. AND ITS AFFILIATES MAKE NO WARRANTY, EXPRESS OR IMPLIED, AND NYSE GROUP, INC. AND ITS AFFILIATES DISCLAIM ANY WARRANTY ABOUT: o THE RESULTS TO BE OBTAINED BY THE JNL/MELLON CAPITAL MANAGEMENT NYSE(R) INTERNATIONAL 25 FUND, THE OWNER OF THE JNL/MELLON CAPITAL MANAGEMENT NYSE(R) INTERNATIONAL 25 FUND OR ANY OTHER PERSON IN CONNECTION WITH THE USE OF THE INDEX AND THE DATA INCLUDED IN THE NYSE INTERNATIONAL 100 INDEXSM; o THE ACCURACY OR COMPLETENESS OF THE INDEX AND ITS DATA; o THE MERCHANTABILITY AND THE FITNESS FOR A PARTICULAR PURPOSE OR USE OF THE INDEX AND ITS DATA; o NYSE GROUP, INC. WILL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS IN THE INDEX OR ITS DATA; o UNDER NO CIRCUMSTANCES WILL NYSE GROUP, INC. OR ANY OF ITS AFFILIATES BE LIABLE FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF NYSE GROUP, INC. KNOWS THAT THEY MIGHT OCCUR. THE LICENSING AGREEMENT BETWEEN JACKSON NATIONAL ASSET MANAGEMENT, LLC AND NYSE GROUP, INC. IS SOLELY FOR THEIR BENEFIT AND NOT FOR THE BENEFIT OF THE OWNERS OF THE JNL/MELLON CAPITAL MANAGEMENT NYSE(R) INTERNATIONAL 25 FUND OR ANY OTHER THIRD PARTIES. -------------------------------------------------------------------------------- TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION General Information and History..........................................2 Services.................................................................5 Purchase of Securities Being Offered.....................................5 Underwriters.............................................................6 Calculation of Performance...............................................6 Additional Tax Information...............................................8 Annuity Provisions......................................................18 Net Investment Factor...................................................19 Condensed Financial Information.........................................20 APPENDIX A DOW JONES DOES NOT: o Sponsor, endorse, sell or promote the JNL/Mellon Capital Management Dow SM 10 Fund, the JNL/Mellon Capital Management JNL 5 Fund, the JNL/Mellon Capital Management VIP Fund, the JNL/Mellon Capital Management DowSM Dividend Fund, the JNL/Mellon Capital Management JNL Optimized 5 Fund, the JNL/Mellon Capital Management Communications Sector Fund, the JNL/Mellon Capital Management Consumer Brands Sector Fund, the JNL/Mellon Capital Management Oil & Gas Sector Fund, the JNL/Mellon Capital Management Financial Sector Fund, the JNL/Mellon Capital Management Healthcare Sector Fund, and the JNL/Mellon Capital Management Technology Sector Fund. o Recommend that any person invest in the JNL/Mellon Capital Management Dow SM 10 Fund, the JNL/Mellon Capital Management JNL 5 Fund, the JNL/Mellon Capital Management VIP Fund, JNL/Mellon Capital Management DowSM Dividend Fund, the JNL/Mellon Capital Management JNL Optimized 5 Fund, the JNL/Mellon Capital Management Communications Sector Fund, the JNL/Mellon Capital Management Consumer Brands Sector Fund, the JNL/Mellon Capital Management Oil & Gas Sector Fund, the JNL/Mellon Capital Management Financial Sector Fund, the JNL/Mellon Capital Management Healthcare Sector Fund, and the JNL/Mellon Capital Management Technology Sector Fund or any other securities. o Have any responsibility or liability for or make any decisions about the timing, amount or pricing of the JNL/Mellon Capital Management Dow SM 10 Fund, the JNL/Mellon Capital Management JNL 5 Fund, the JNL/Mellon Capital Management VIP Fund, the JNL/Mellon Capital Management DowSM Dividend Fund, the JNL/Mellon Capital Management JNL Optimized 5 Fund, the JNL/Mellon Capital Management Communications Sector Fund, the JNL/Mellon Capital Management Consumer Brands Sector Fund, the JNL/Mellon Capital Management Oil & Gas Sector Fund, the JNL/Mellon Capital Management Financial Sector Fund, the JNL/Mellon Capital Management Healthcare Sector Fund, and the JNL/Mellon Capital Management Technology Sector Fund. o Have any responsibility or liability for the administration, management or marketing of the JNL/Mellon Capital Management Dow SM 10 Fund, the JNL/Mellon Capital Management JNL 5 Fund, the JNL/Mellon Capital Management VIP Fund, the JNL/Mellon Capital Management DowSM Dividend Fund, the JNL/Mellon Capital Management JNL Optimized 5 Fund, the JNL/Mellon Capital Management Communications Sector Fund, the JNL/Mellon Capital Management Consumer Brands Sector Fund, the JNL/Mellon Capital Management Oil & Gas Sector Fund, the JNL/Mellon Capital Management Financial Sector Fund, the JNL/Mellon Capital Management Healthcare Sector Fund, and the JNL/Mellon Capital Management Technology Sector Fund. o Consider the needs of the JNL/Mellon Capital Management Dow SM 10 Fund, the JNL/Mellon Capital Management JNL 5 Fund, the JNL/Mellon Capital Management VIP Fund, the JNL/Mellon Capital Management DowSM Dividend Fund or the owners of the JNL/Mellon Capital Management Dow SM 10 Fund, the JNL/Mellon Capital Management JNL 5 Fund, the JNL/Mellon Capital Management VIP Fund, the JNL/Mellon Capital Management DowSM Dividend Fund or the JNL/Mellon Capital Management JNL Optimized 5 Fund, the JNL/Mellon Capital Management Communications Sector Fund, the JNL/Mellon Capital Management Consumer Brands Sector Fund, the JNL/Mellon Capital Management Oil & Gas Sector Fund, the JNL/Mellon Capital Management Financial Sector Fund, the JNL/Mellon Capital Management Healthcare Sector Fund, and the JNL/Mellon Capital Management Technology Sector Fund in determining, composing or calculating the DJIA or have any obligation to do so. -------------------------------------------------------------------------------- DOW JONES WILL NOT HAVE ANY LIABILITY IN CONNECTION WITH THE JNL/MELLON CAPITAL MANAGEMENT DOW SM 10 FUND, THE JNL/MELLON CAPITAL MANAGEMENT JNL 5 FUND, THE JNL/MELLON CAPITAL MANAGEMENT VIP FUND, THE JNL/MELLON CAPITAL MANAGEMENT DOWSM DIVIDEND FUND, THE JNL/MELLON CAPITAL MANAGEMENT JNL OPTIMIZED 5 FUND, THE JNL/MELLON CAPITAL MANAGEMENT COMMUNICATIONS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT CONSUMER BRANDS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT OIL & GAS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT FINANCIAL SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT HEALTHCARE SECTOR FUND, AND THE JNL/MELLON CAPITAL MANAGEMENT TECHNOLOGY SECTOR FUND. SPECIFICALLY, o DOW JONES DOES NOT MAKE ANY WARRANTY, EXPRESS OR IMPLIED, AND DOW JONES DISCLAIMS ANY WARRANTY ABOUT: o THE RESULTS TO BE OBTAINED BY THE JNL/MELLON CAPITAL MANAGEMENT DOW SM 10 FUND, THE JNL/MELLON CAPITAL MANAGEMENT JNL 5 FUND, THE JNL/MELLON CAPITAL MANAGEMENT VIP FUND, THE JNL/MELLON CAPITAL MANAGEMENT DOWSM DIVIDEND FUND, THE JNL/MELLON CAPITAL MANAGEMENT JNL OPTIMIZED 5 FUND, THE JNL/MELLON CAPITAL MANAGEMENT COMMUNICATIONS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT CONSUMER BRANDS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT OIL & GAS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT FINANCIAL SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT HEALTHCARE SECTOR FUND, AND THE JNL/MELLON CAPITAL MANAGEMENT TECHNOLOGY SECTOR FUND, THE OWNERS OF THE JNL/MELLON CAPITAL MANAGEMENT DOW SM 10 FUND, THE JNL/MELLON CAPITAL MANAGEMENT JNL 5 FUND, THE JNL/MELLON CAPITAL MANAGEMENT VIP FUND, THE JNL/MELLON CAPITAL MANAGEMENT DOWSM DIVIDEND FUND, THE JNL/MELLON CAPITAL MANAGEMENT JNL OPTIMIZED 5 FUND, THE JNL/MELLON CAPITAL MANAGEMENT COMMUNICATIONS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT CONSUMER BRANDS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT OIL & GAS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT FINANCIAL SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT HEALTHCARE SECTOR FUND, AND THE JNL/MELLON CAPITAL MANAGEMENT TECHNOLOGY SECTOR FUND OR ANY OTHER PERSON IN CONNECTION WITH THE USE OF THE DJIA AND THE DATA INCLUDED IN THE DJIA; o THE ACCURACY OR COMPLETENESS OF THE DJIA AND ITS DATA; o THE MERCHANTABILITY AND THE FITNESS FOR A PARTICULAR PURPOSE OR USE OF THE DJIA AND ITS DATA. o DOW JONES WILL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS IN THE DJIA OR ITS DATA. o UNDER NO CIRCUMSTANCES WILL DOW JONES BE LIABLE FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF DOW JONES KNOWS THAT THEY MIGHT OCCUR. THE LICENSING AGREEMENT BETWEEN JACKSON NATIONAL LIFE INSURANCE COMPANY(R) AND DOW JONES IS SOLELY FOR THEIR BENEFIT AND NOT FOR THE BENEFIT OF THE OWNERS OF THE JNL/MELLON CAPITAL MANAGEMENT DOWSM 10 FUND, THE JNL/MELLON CAPITAL MANAGEMENT JNL 5 FUND, THE JNL/MELLON CAPITAL MANAGEMENT VIP FUND, THE JNL/MELLON CAPITAL MANAGEMENT DOWSM DIVIDEND FUND, THE JNL/MELLON CAPITAL MANAGEMENT JNL OPTIMIZED 5 FUND, THE JNL/MELLON CAPITAL MANAGEMENT COMMUNICATIONS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT CONSUMER BRANDS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT OIL & GAS SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT FINANCIAL SECTOR FUND, THE JNL/MELLON CAPITAL MANAGEMENT HEALTHCARE SECTOR FUND, AND THE JNL/MELLON CAPITAL MANAGEMENT TECHNOLOGY SECTOR FUND OR ANY OTHER THIRD PARTIES. -------------------------------------------------------------------------------- APPENDIX B BROKER-DEALER SUPPORT Below is a complete list of broker-dealers that received marketing and distribution and/or administrative support in 2007 from the Distributor in relation to the sale of our variable insurance products. 1717 Capital Management Co. Capital Investment Group 1st Discount Brokerage Inc. Capital Strategies Financial 1st Global Capital Corporation Capwest Securities Inc. 1st Worldwide Financial Partners Centaurus Financial Inc. A G Edwards & Sons Century Securities Advanced Advisor Group LLC CFD Investments Inc. AFS Brokerage Inc. Chevy Chase Securities Inc. AIG Financial Advisors Choice Investments Inc. American General Securities Colonial Brokerage Inc. American Investment Colonial Investments Services American Portfolios Financial Services Commonwealth Financial Network Ameritas Investment Corp Countrywide Investment Service Askar Corp Crowell Weedon & Co Associated Securities Corp Crown Capital Securities LP Axa Advisors LLC Cue Financial Group B C Ziegler & Company Cumberland Brokerage Corp Bancwest Investment Services Inc. CUSO Financial Services BB&T Investment Services Inc. Despain Financial Corporation BCG Securities E Planning Securities Inc. Beneficial Investment Services Equable Securities Corp Bentley Lawrence Securities Equitas America BI Investments ESI Financial BOSC, Inc. Fenwick Securities Brecek & Young Advisors Inc. Ferris Baker Watts Inc. Brewer Financial Services FFP Securities Inc. Broker Dealer Financial Services Corp Fifth Third Securities Brookstone Securities Financial Network Investment Brookstreet Securities Corp Financial Security Management Bueter & Company Inc. Financial Services Butler Freeman Tally Group Financial Financial West Investment Group Cadaret Grant & Company First Allied Securities Calton & Associates Inc. First Brokerage American LLC Cambridge Investment Research First Financial Equity Capital Analysts Inc. First Heartland Capital Inc. Capital Financial Services First Merit FNB Brokerage Services Infinex Investments Inc. Foothill Securities Inc. ING Financial Fortune Financial Services Institutional Securities Corp Founders Financial Securities Inter Securities Inc. FSC Securities Corporation Intercarolina Financial Services Fulcrum Securities Inc. Intervest International Equities Corp GA Repple & Company Invest Financial Corporation Geneos Wealth Management Inc. Investacorp Inc. Gilman Ciocia Investment Centers of America, Inc. Great American Advisors Inc. Investment Professionals Inc. Great Nation Investment Corp Investors Capital Corp Gunn Allen Financial Inc. Investors Security Co Inc. GW Sherwold J P Turner & Co LLC GWN Securities Inc. J W Cole Financial Inc. H Beck Inc. Janney Montgomery Scott LLC H D Vest Investment Securities Jefferson Pilot Securities Corp H&R Block Financial Advisors Jesup & Lamont Securities Corp H.S. Dent JJB Hilliard WL Lyons Inc. Haas Financial Products JRL Capital Corporation Hantz Financial Services KCD Financial Harbour Investment Inc. Kenai Investments Inc. Harvest Capital LLC Key Investments Harvest Companies KMS Financial Services HBW Securities Koehler Financial LLC Heim Young & Associates Inc. Kovack Securities Inc. Heritage Study Group Labrunerie Financial Inc. Hornor Townsend & Kent Inc. Lasalle St Securities LLC HSBC Legacy Financial Services Huckin Financial Group Inc. Legend Equities Huntleigh Securities Corp Leonard & Company ICBA Financial Services Liberty Partners Financial Services IFMG Securities Lincoln Financial Advisors IMS Securities Lincoln Investment Planning Independent Financial Group Linsco/Private Ledger Corporation Indiana Merchant Banking M&T Securities Main Street Securities Packerland Brokerage Services Medallion Investment Services Park Avenue Securities Michigan Securities Inc. Peak Securities Mid Atlantic Securities Inc. Pension Planners Securities Midwest Financial & Inv Services Peoples Securities Milkie/Ferguson Investments PFIC Securities MML Investors Services Inc. Planmember Securities Money Concepts Capital Corp Prime Capital Services Inc. Money Management Advisory Prime Vest Financial Services Moors & Cabot Inc. Princor Financial Services Corp Morgan Keegan Pro Equities Inc. Morgan Peabody Inc. Professional Asset Management MTL Equity Products Inc. Purshe Kaplan Sterling Investments Multi-Financial Securities Corp QA3 Financial Corporation Mutual Service Corporation Questar Capital Corporation MWA Financial Services Inc. R.L. Harger & Associates Inc. National Planning Corporation Raymond James Financial National Securities Corp RBC Dain Rauscher Inc. New Alliance Investments Inc. Regal Securities Inc. New England Securities Resource Horizons Group Newbridge Securities Corp River Stone Wealth Management Next Financial Group Inc. RMIN Securities Inc. NFP Securities Inc. RNR Securities LLC North Atlantic Securities LLC Robert W Baird & Co Inc. Northridge Securities Corp Royal Alliance Associates Inc. NPB Financial Group Ryan Beck & Co NPF Securities Rydex Distributors Inc. O.N. Equity Sales Company Sammons Securities Company Inc. Ogilvie Securities Sanders Morris Harris Inc. Oneamerica Securities SCF Securities Oppenheimer & Co Schlitt Investor Services Inc. Pacific RP Group Scott & Stringfellow Inc. Pacific West Securian Financial Services Securities America UBOC Union Banc Securities Service Network UBS Financial Services Inc. Sicor Securities Inc. United Equity Securities Sigma Financial Corporation United Planners Financial Signator Investors Inc. United Securities Alliance Inc. SII Investments, Inc. USA Advanced Planners Inc. Silver Oak Securities USA Financial Securities Corp Sky Bank UVEST Financial Sorrento Pacific Valmark Securities Inc. Southwest Investments VSR Financial Services Inc. Southwest Securities Financial Services W.H. Colson Securities Stanford Group Company Wachovia Securities Inc. Steadfast Foundation Wall Street Financial Group Sterne Agee Financial Services Walnut Street Securities Inc. Stifel Nicolaus & Company Waterstone Financial Group Strategic Financial Alliance Webster Investments Summit Brokerage Services Inc. Wellstone Securities Summit Equities Inc. Western Equity Group SummitAlliance Securities LLC Western International Securities Inc. Sunset Financial Services Inc. Westminster Financial SWBC Investments Wilbanks Securities SWS Financial Service Inc. William R Pintaric & Assoc Synergy Investment Group Williams Financial Group TFS Securities Inc. WM Financial Services Inc. Thomas McDonald Partners Woodbury Financial Services Inc. Thrivent Investment Management Workman Securities Corp Tower Square Securities World Choice Securities Inc. Traderlight Securities Inc. World Equity Group Inc. Traid Advisors Inc. World Group Securities Inc. Transamerica Financial WRP Investments Inc. Tricor XCU Capital Triune Capital Advisors Trustmont Financial APPENDIX C GMWB PROSPECTUS EXAMPLES Unless otherwise specified, the following examples assume you elected a GMWB with a 5% benefit when you purchased your Contract, no other optional benefits were elected, your initial premium payment was $100,000, your GAWA is greater than your RMD (if applicable) at the time a withdrawal is requested, all partial withdrawals requested include any applicable charges, no prior partial withdrawals have been made, and the bonus percentage (if applicable) is 7%. The examples also assume that the GMWB and any For Life Guarantee have not been terminated as described in the Access to Your Money section of this prospectus. If you elected a GMWB other than a GMWB with a 5% benefit, the examples will still apply, given that you replace the 5% in each of the GAWA calculations with the appropriate GAWA%. If you elected a GMWB with a bonus percentage other than 7%, the examples will still apply if you replace the 7% in each of the bonus calculations with the appropriate bonus percentage. EXAMPLE 1: AT ELECTION, YOUR GWB IS SET AND YOUR GAWA IS DETERMINED BASED ON THAT VALUE. o Example 1a: If the GMWB is elected at issue: * Your initial GWB is $100,000, which is your initial Premium payment. * Your GAWA is $5,000, which is 5% of your initial GWB ($100,000*0.05 = $5,000). o Example 1b: If the GMWB is elected after issue when the Contract Value is $105,000: * Your initial GWB is $105,000, which is your Contract Value on the effective date of the endorsement. * Your GAWA is $5,250, which is 5% of your initial GWB ($105,000*0.05 = $5,250). o Notes: * If your endorsement contains a varying benefit percentage: - Your GAWA% and GAWA are not determined until the earlier of the time of your first withdrawal, the date that your Contract Value reduces to zero, the date that the GMWB is continued by a spousal Beneficiary who is not a Covered Life, or upon election of a GMWB Income Option. - If your endorsement allows for re-determination of the GAWA%, your initial Benefit Determination Baseline (BDB) is set equal to your initial Premium payment if the endorsement is elected at issue or your Contract Value if the endorsement is elected after issuance of the Contract. * If your endorsement includes a Guaranteed Withdrawal Balance Bonus provision, your bonus base is set equal to your GWB at the time of election. * If your endorsement includes a Guaranteed Withdrawal Balance Adjustment provision, your initial GWB adjustment is set equal to 200% times your initial GWB. * If your endorsement includes a GMWB Death Benefit provision, your initial GMWB death benefit is set equal to your initial GWB. EXAMPLE 2: IF YOUR ENDORSEMENT CONTAINS A VARYING BENEFIT PERCENTAGE, YOUR GAWA% IS DETERMINED ON THE EARLIER OF THE TIME OF YOUR FIRST WITHDRAWAL, THE DATE THAT YOUR CONTRACT VALUE REDUCES TO ZERO, THE DATE THAT THE GMWB IS CONTINUED BY A SPOUSAL BENEFICIARY WHO IS NOT A COVERED LIFE, OR UPON ELECTION OF THE LIFE INCOME OF A GMWB INCOME OPTION. YOUR GAWA% IS SET BASED UPON YOUR ATTAINED AGE AT THAT TIME. YOUR INITIAL GAWA IS DETERMINED BASED ON THIS GAWA% AND THE GWB AT THAT TIME. o If, at the time the GAWA% is determined, your GAWA% is 5% based on your attained age and your GWB is $100,000, your initial GAWA is $5,000, which is your GAWA% multiplied by your GWB at that time ($100,000 * 0.05 = $5,000). o If your endorsement allows for re-determination of the GAWA%, your GAWA% will be re-determined based on your attained age if your Contract Value at the time of a step-up is greater than the BDB. EXAMPLE 3: UPON PAYMENT OF A SUBSEQUENT PREMIUM, YOUR GWB AND GAWA ARE RE-DETERMINED. YOUR GWB IS SUBJECT TO A MAXIMUM OF $5,000,000. o Example 3a: If you make an additional Premium payment of $50,000 and your GWB is $100,000 at the time of payment: * Your new GWB is $150,000, which is your GWB prior to the additional Premium payment ($100,000) plus your additional Premium payment ($50,000). * Your GAWA is $7,500, which is your GAWA prior to the additional Premium payment ($5,000) plus 5% of your additional Premium payment ($50,000*0.05 = $2,500). o Example 3b: If you make an additional Premium payment of $100,000 and your GWB is $4,950,000 and your GAWA is $247,500 at the time of payment: * Your new GWB is $5,000,000, which is the maximum, since your GWB prior to the additional Premium payment ($4,950,000) plus your additional Premium payment ($100,000) exceeds the maximum of $5,000,000. * Your GAWA is $250,000, which is your GAWA prior to the additional Premium payment ($247,500) plus 5% of the allowable $50,000 increase in your GWB (($5,000,000 - $4,950,000)*0.05 = $2,500). o Notes: * If your endorsement contains a varying benefit percentage: - Your GAWA is recalculated upon payment of an additional Premium (as described above) only if such payment occurs after your GAWA% has been determined. - If your endorsement allows for re-determination of the GAWA%, your BDB is increased by the Premium payment. * If your endorsement includes a Guaranteed Withdrawal Balance Bonus provision, your bonus base is increased by the Premium payment, subject to a maximum of $5,000,000 * If your endorsement includes a Guaranteed Withdrawal Balance Adjustment provision: - If the Premium payment occurs prior to the first Contract Anniversary following the effective date of the endorsement, your GWB adjustment is increased by the Premium payment times 200%, subject to a maximum of $5,000,000. For example, if, as in Example 3a, you make an additional Premium payment of $50,000 prior to your first Contract Anniversary following the effective date of the endorsement, and your GWB adjustment value before the additional Premium payment is $200,000, then the GWB adjustment is increased by 200% of the additional premium payment. The resulting GWB adjustment is $200,000 + $100,000 = $300,000. - If the Premium payment occurs on or after the first Contract Anniversary following the effective date of the endorsement, your GWB adjustment is increased by the Premium payment, subject to a maximum of $5,000,000. For example, if you make an additional Premium payment of $50,000 AFTER your first Contract Anniversary following the effective date of the endorsement, and your GWB adjustment value before the additional Premium payment is $200,000, then the GWB adjustment is increased by 100% of the additional premium payment. The resulting GWB adjustment is $200,000 + $50,000 = $250,000. * If your endorsement includes a GMWB Death Benefit provision, your GMWB death benefit is increased by the Premium payment, subject to a maximum of $5,000,000. EXAMPLE 4: UPON WITHDRAWAL OF THE GUARANTEED AMOUNT (WHICH IS THE GREATER OF YOUR GAWA OR YOUR RMD), YOUR GWB AND GAWA ARE RE-DETERMINED. o Example 4a: If you withdraw an amount equal to your GAWA ($5,000) when your GWB is $100,000: * Your new GWB is $95,000, which is your GWB prior to the withdrawal ($100,000) less the amount of the withdrawal ($5,000). * Your GAWA for the next year remains $5,000, since you did not withdraw an amount that exceeds your GAWA. * If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($95,000 / $5,000 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 19 years, provided that the withdrawals are taken prior to the Latest Income Date. o Example 4b: If you withdraw an amount equal to your RMD ($7,500), which is greater than your GAWA ($5,000) when your GWB is $100,000 and the RMD provision is in effect for your endorsement: * Your new GWB is $92,500, which is your GWB prior to the withdrawal ($100,000) less the amount of the withdrawal ($7,500). * Your GAWA for the next year remains $5,000, since your withdrawal did not exceed the greater of your GAWA ($5,000) or your RMD ($7,500). * If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($92,500 / $5,000 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 19 years, provided that the withdrawals are taken prior to the Latest Income Date. o Notes: * If your endorsement allows for re-determination of the GAWA%, your BDB remains unchanged since the BDB is not adjusted for partial withdrawals. * If your endorsement includes a Guaranteed Withdrawal Balance Bonus provision, your bonus base remains unchanged since the withdrawal did not exceed the guaranteed amount; however, no bonus will be applied to your GWB at the end of the Contract Year in which the withdrawal is taken. * If your endorsement includes a Guaranteed Withdrawal Balance Adjustment provision, your Guaranteed Withdrawal Balance Adjustment provision is terminated since a withdrawal is taken. * If your endorsement includes a GMWB Death Benefit provision, your GMWB death benefit is reduced by the amount of the withdrawal since the withdrawal did not exceed the greater of the GAWA or the RMD. * If your endorsement does not include a For Life Guarantee or if the For Life Guarantee is not in effect, your GAWA would not be permitted to exceed your new GWB. * Withdrawals taken in connection with a GMWB are considered the same as any other withdrawal for the purpose of determining all other values under the Contract. In the case where your minimum death benefit is reduced proportionately for withdrawals, your death benefit may be reduced by more than the amount of the withdrawal. EXAMPLE 5: UPON WITHDRAWAL OF AN AMOUNT THAT EXCEEDS YOUR GUARANTEED AMOUNT (AS DEFINED IN EXAMPLE 4), YOUR GWB AND GAWA ARE RE-DETERMINED. o Example 5a: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $130,000 and your GWB is $100,000: * Your GWB is recalculated based on the type of endorsement you have elected and the effective date of the endorsement. - If your endorsement contains an annual Step-Up provision and is effective on or after 03/31/2008, your new GWB is $91,200, which is your GWB reduced dollar for dollar for your GAWA, then reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [($100,000 - $5,000)*(1 - ($10,000 - $5,000) / ($130,000 - $5,000)) = $91,200]. - Otherwise, your new GWB is $90,000, which is the lesser of 1) your GWB prior to the withdrawal less the amount of the withdrawal ($100,000 - $10,000 = $90,000) or 2) your Contract Value prior to the withdrawal less the amount of the withdrawal ($130,000 - $10,000 = $120,000) * Your GAWA is recalculated based on the type of endorsement you have elected and the effective date of the endorsement. In addition, if you have elected a For Life GMWB, your For Life Guarantee may be impacted depending on the effective date of the endorsement. - If your endorsement contains an annual Step-Up provision and is effective on or after 03/31/2008, your GAWA is recalculated to equal $4,800, which is your current GAWA reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [$5,000 * (1 - ($10,000 - $5,000) / ($130,000 - $5,000)) = $4,800]. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($91,200 / $4,800 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 19 years, provided that the withdrawals are taken prior to the Latest Income Date. - Otherwise, if your endorsement is not a For Life GMWB and is effective prior to 05/01/2006 or if your endorsement is not a For Life GMWB, your GAWA for the next year remains $5,000, since it is recalculated to equal the lesser of 1) your GAWA prior to the withdrawal ($5,000) or 2) 5% of your Contract Value after the withdrawal ($120,000*0.05 = $6,000). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 18 years to deplete your GWB ($90,000 / $5,000 per year = 18 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. - Otherwise, your GAWA is recalculated to equal $4,500, which is 5% of your new GWB ($90,000*0.05 = $4,500). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($90,000 / $4,500 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, provided that the withdrawals are taken prior to the Latest Income Date. o Example 5b: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $105,000 and your GWB is $100,000: * Your GWB is recalculated based on the type of endorsement you have elected and the effective date of the endorsement. - If your endorsement contains an annual Step-Up provision and is effective on or after 03/31/2008, your new GWB is $90,250, which is your GWB reduced dollar for dollar for your GAWA, then reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [($100,000 - $5,000)*(1 - ($10,000 - $5,000) / ($105,000 - $5,000)) = $90,250]. - Otherwise, your new GWB is $90,000, which is the lesser of 1) your GWB prior to the withdrawal less the amount of the withdrawal ($100,000 - $10,000 = $90,000) or 2) your Contract Value prior to the withdrawal less the amount of the withdrawal ($105,000 - $10,000 = $95,000). * Your GAWA is recalculated based on the type of endorsement you have elected and the effective date of the endorsement. In addition, if you have elected a For Life GMWB, your For Life Guarantee may be impacted depending on the effective date of the endorsement. - If your endorsement contains an annual Step-Up provision and is effective on or after 03/31/2008, your GAWA is recalculated to equal $4,750, which is your current GAWA reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [$5,000 * (1 - ($10,000 - $5,000)/($105,000 - $5,000)) = $4,750]. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($90,250 / $4,750 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 19 years, provided that the withdrawals are taken prior to the Latest Income Date. - Otherwise, if your endorsement is a For Life GMWB and is effective prior to 05/01/2006 or if your endorsement is not a For Life GMWB, your GAWA for the next year is recalculated to equal $4,750, which is the lesser of 1) your GAWA prior to the withdrawal ($5,000) or 2) 5% of your Contract Value after the withdrawal ($95,000*0.05 = $4,750). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($90,000 / $4,750 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date, and the amount of your final withdrawal would be less than your GAWA (and equal to your remaining GWB). In addition, if you have elected a For Life GMWB, your For Life Guarantee becomes null and void since the amount of the withdrawal exceeds your GAWA. - Otherwise, your GAWA is recalculated to equal $4,500, which is 5% of your new GWB ($90,000*0.05 = $4,500. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($90,000 / $4,500 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, provided that the withdrawals are taken prior to the Latest Income Date. o Example 5c: If you withdraw an amount ($10,000) that exceeds your GAWA ($5,000) when your Contract Value is $55,000 and your GWB is $100,000: * Your GWB is recalculated based on the type of endorsement you have elected and the effective date of the endorsement. - If your endorsement contains an annual Step-Up provision and is effective on or after 03/31/2008, your new GWB is $85,500, which is your GWB reduced dollar for dollar for your GAWA, then reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [($100,000 - $5,000) * (1 - ($10,000 - $5,000) / ($55,000 - $5,000)) = $85,500]. - Otherwise, your new GWB is $45,000, which is the lesser of 1) your GWB prior to the withdrawal less the amount of the withdrawal ($100,000 - $10,000 = $90,000) or 2) your Contract Value prior to the withdrawal less the amount of the withdrawal ($55,000 - $10,000 = $45,000). * Your GAWA is recalculated based on the type of endorsement you have elected and/or the effective date of the endorsement. In addition, if you have elected a For Life GMWB, your For Life Guarantee may be impacted depending on the effective date of the endorsement. - If your endorsement contains an annual Step-Up provision and is effective on or after 03/31/2008, your GAWA is recalculated to equal $4,500, which is your current GAWA reduced in the same proportion that the Contract Value is reduced for the portion of the withdrawal that is in excess of the GAWA [$5,000*(1-($10,000-$5,000)/($55,000 - $5,000))=$4,500]. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 19 years to deplete your GWB ($85,500 / $4,500 per year = 19 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 19 years, provided that the withdrawals are taken prior to the Latest Income Date. - Otherwise, if your endorsement is a For Life GMWB and is effective prior to 05/01/2006 or if your endorsement is not a For Life GMWB, your GAWA for the next year is recalculated to equal $2,250, which is the lesser of 1) your GAWA prior to the withdrawal ($5,000) or 2) 5% of your Contract Value after the withdrawal ($45,000*0.05 = $2,250). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($45,000 / $2,250 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. In addition, if you have elected a For Life GMWB, your For Life Guarantee becomes null and void since the amount of the withdrawal exceeds your GAWA. - Otherwise, your GAWA is recalculated to equal $2,250, which is 5% of your new GWB ($45,000*0.05 = $2,250). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($45,000 / $2,250 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if your For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, provided that the withdrawals are taken prior to the Latest Income Date. o Notes: * If your endorsement contains a varying benefit percentage and allows for re-determination of your GAWA%, your BDB remains unchanged since the BDB is not adjusted for partial withdrawals. * If your endorsement includes a Guaranteed Withdrawal Balance Bonus provision, your bonus base is recalculated to equal the lesser of 1) your bonus base prior to the withdrawal or 2) your GWB following the withdrawal. In addition, no bonus will be applied to your GWB at the end of the Contract Year in which the withdrawal is taken. * If your endorsement includes a Guaranteed Withdrawal Balance Adjustment provision, your Guaranteed Withdrawal Balance Adjustment provision is terminated since a withdrawal is taken. * If your endorsement includes a GMWB Death Benefit provision, your GMWB death benefit is reduced in the same manner that the GWB is reduced; it is first reduced dollar for dollar for the GAWA and then is reduced in the same proportion that the Contract Value is reduced for the amount of the withdrawal in excess of the GAWA. * If your endorsement does not include a For Life Guarantee or if the For Life Guarantee is not in effect, your GAWA would not be permitted to exceed your remaining GWB. * Withdrawals taken in connection with a GMWB are considered the same as any other withdrawal for the purpose of determining all other values under the Contract. In the case where your minimum death benefit is reduced proportionately for withdrawals, your death benefit may be reduced by more than the amount of the withdrawal. EXAMPLE 6: UPON STEP-UP, YOUR GWB AND GAWA ARE RE-DETERMINED. (THIS EXAMPLE ONLY APPLIES IF YOUR ENDORSEMENT CONTAINS A STEP-UP PROVISION.) o Example 6a: If at the time of step-up your Contract Value (or highest quarterly Contract Value, as applicable) is $200,000, your GWB is $90,000, and your GAWA is $5,000: * Your new GWB is recalculated to equal $200,000, which is equal to your Contract Value (or highest quarterly Contract Value, as applicable). * If your GAWA% is not eligible for re-determination, your GAWA for the next year is recalculated to equal $10,000, which is the greater of 1) your GAWA prior to the step-up ($5,000) or 2) 5% of your new GWB ($200,000*0.05 = $10,000). - After step-up, if you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($200,000 / $10,000 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, provided that the withdrawals are taken prior to the Latest Income Date. * However, if your GAWA% is eligible for re-determination and the step-up occurs after theinitial determination of your GAWA%, the GAWA% will be re-determined based on your attained age (or the youngest covered Life's attained age if your endorsement is a For Life GMWB with Joint Option) if your Contract Value at the time of the step-up is greater than your BDB. - If, in the example above, your BDB is $100,000 and the GAWA% at the applicable attained age is 6%: - Your GAWA% is set to 6%, since your Contract Value ($200,000) is greater than your BDB ($100,000). - Your GAWA is equal to $12,000, which is your new GWB multiplied by your new GAWA% ($200,000 * 0.06 = $12,000). - Your BDB is recalculated to equal $200,000, which is the greater of 1) your BDB prior to the step-up ($100,000) or 2) your Contract Value at the time of step-up ($200,000). * If your endorsement includes a Guaranteed Withdrawal Balance Bonus provision your bonus base is $100,000 just prior to the step-up, your bonus base is recalculated to equal $200,000, which is the greater of 1) your bonus base prior to the step-up ($100,000) or 2) your GWB following the step-up ($200,000). - If your endorsement allows for the Bonus Period to re-start and you have not passed your Contract Anniversary immediately following your 80th birthday (or the youngest Covered Life's 80th birthday if your endorsement is a For Life GMWB with Joint Option), your Bonus Period will re-start since your bonus base has been increased due to the step-up. o Example 6b: If at the time of step-up your Contract Value (or highest quarterly Contract Value, as applicable) is $90,000, your GWB is $80,000, and your GAWA is $5,000: * Your new GWB is recalculated to equal $90,000, which is equal to your Contract Value (or highest quarterly Contract Value, as applicable). * Your GAWA for the next year remains $5,000, which is the greater of 1) your GAWA prior to the step-up ($5,000) or 2) 5% of your new GWB ($90,000*0.05 = $4,500). - After step-up, if you continued to take annual withdrawals equal to your GAWA, it would take an additional 18 years to deplete your GWB ($90,000 / $5,000 per year = 18 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 18 years, provided that the withdrawals are taken prior to the Latest Income Date. * If your GAWA% is eligible for re-determination and the step-up occurs after the initial determination of your GAWA%, the GAWA% will be re-determined based on your attained age (or the youngest Covered Life's attained age if your endorsement is a For Life GMWB with Joint Option) if your Contract Value is greater than your BDB. However, in this case, it is assumed that your initial Premium is $100,000. Your BDB would not be less than $100,000, implying that this would not be an opportunity for a re-determination of the GAWA%. In addition, if your BDB is $100,000 prior to the step-up, your BDB remains $100,000, which is the greater of 1) your BDB prior to the step-up ($100,000) or 2) your Contract Value at the time of step-up ($90,000). * If your endorsement includes a Guaranteed Withdrawal Balance Bonus provision and your bonus base is $100,000 just prior to the step-up, your bonus base remains $100,000, which is the greater of 1) your bonus base prior to the step-up ($100,000) or 2) your GWB following the step-up ($90,000). - Even if your endorsement allows for the bonus Period to re-start, your bonus Period will not re-start since your bonus base has not been increased due to the step-up. o Notes: * Your endorsement may contain a provision allowing the Company to increase the GMWB charge upon step-up. If the charge does increase, a separate calculation would be recommended to establish if the step-up is beneficial. * If your endorsement contains a provision for automatic step-ups, your GWB will only step up to the Contract Value (or highest quarterly contract Value, as applicable) if the Contract Value (or highest quarterly Contract Value, as applicable) is greater than your GWB at the time of the automatic step-up. * If your endorsement contains a Guaranteed Withdrawal Balance Bonus provision and a provision for automatic step-ups, your bonus base will be re-determined only if your GWB is increased upon step-up to a value above your bonus base just prior to the step-up. * If your endorsement contains a varying benefit percentage, your GAWA is recalculated upon step-up (as described above) only if the step-up occurs after your GAWA% has been determined. * If your endorsement contains a Guaranteed Withdrawal Balance Adjustment provision, your GWB adjustment remains unchanged since step-ups do not impact the GWB adjustment. * If your endorsement contains a GMWB Death Benefit provision, your GMWB death benefit remains unchanged since step-ups do not impact the GMWB death benefit. * If your endorsement bases step-ups on the highest quarterly Contract Value, the highest quarterly Contract Value is equal to the greatest of the four most recent quarterly adjusted Contract Values. The quarterly adjusted Contract Values are initialized on each Contract Quarterly Anniversary and are adjusted for any premiums and/or withdrawals subsequent to the initialization in the same manner as the GWB. EXAMPLE 7: IMPACT OF THE ORDER OF TRANSACTIONS. (THIS EXAMPLE ONLY APPLIES IF YOUR ENDORSEMENT CONTAINS A STEP-UP PROVISION.) o Example 7a: If prior to any transactions your Contract Value (or highest quarterly Contract Value, as applicable) is $200,000, your GAWA is $5,000, your GAWA% is not eligible for re-determination upon step-up, your GWB is $100,000 and you wish to step up your GWB (or your GWB is due to step up automatically) and you also wish to take a withdrawal of an amount equal to $5,000: * If you request the withdrawal the day after the step-up, upon step-up, your GWB is set equal to $200,000, which is your Contract Value (or highest quarterly Contract Value, as applicable). At that time, your GAWA is recalculated and is equal to $10,000, which is the greater of 1) your GAWA prior to the step-up ($5,000) or 2) 5% of your new GWB ($200,000*0.05 = $10,000). On the day following the step-up and after the withdrawal of $5,000, your new GWB is $195,000, which is your GWB less the amount of the withdrawal ($200,000 - $5,000 = $195,000) and your GAWA will remain at $10,000 since the amount of the withdrawal does not exceed your GAWA. If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($195,000 / $10,000 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, provided that the withdrawals are taken prior to the Latest Income Date. - If your endorsement contains a Guaranteed Withdrawal Balance Bonus provision and your bonus base is $100,000 just prior to the step-up, at the time of step-up, your bonus base is recalculated and is equal to $200,000, which is the greater of 1) your bonus base prior to the step-up ($100,000) or 2) your GWB following the step-up ($200,000). Your bonus base is not adjusted upon withdrawal since the amount of the withdrawal does not exceed your GAWA. - If your endorsement allows for the Bonus Period to re-start and you have not passed the Contract Anniversary immediately following your 80th birthday (or the youngest Covered Life's 80th birthday if your endorsement is a For Life GMWB with Joint Option), your bonus Period will re-start since your bonus base has been increased due to the step-up. - If your endorsement allows for re-determination of the GAWA% and your BDB is $100,000 just prior to the step-up, then at the time of step-up, your BDB is recalculated and is equal to $200,000, which is the greater of 1) your BDB prior to the step-up ($100,000) or 2) your Contract Value at the time of step-up ($200,000). Your BDB is not adjusted upon withdrawal since the BDB is not reduced for partial withdrawals. * If you request the withdrawal prior to the step-up, immediately following the withdrawal transaction, your new GWB is $95,000, which is your GWB less the amount of the withdrawal ($100,000 - $5,000 = $95,000) and your Contract Value becomes $195,000, which is your Contract Value prior to the withdrawal less the amount of the withdrawal ($200,000 - $5,000 = $195,000). Upon step-up following the withdrawal, your GWB is set equal to $195,000, which is your Contract Value. At that time, your GAWA is recalculated and is equal to $9,750, which is the greater of 1) your GAWA prior to the step-up ($5,000) or 2) 5% of your new GWB ($195,000*0.05 = $9,750). If you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($195,000 / $9,750 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, provided that the withdrawals are taken prior to the Latest Income Date. - If your endorsement contains a Guaranteed Withdrawal Balance Bonus provision and your bonus base is $100,000 just prior to the withdrawal, then at the time of the withdrawal, your bonus base is not adjusted since the amount of the withdrawal does not exceed your GAWA. At the time of step-up, your bonus base is recalculated and is equal to $195,000, which is the greater of 1) your bonus base prior to the step-up ($100,000) or 2) your GWB following the step-up ($195,000). - If your endorsement allows for the Bonus Period to re-start and you have not passed the Contract Anniversary immediately following your 80th birthday (or the youngest Covered Life's 80th birthday if your endorsement is a For Life GMWB with Joint Option), your Bonus Period will re-start since your bonus base has been increased due to the step-up. - If your endorsement allows for re-determination of the GAWA% and your BDB is $100,000 just prior to the withdrawal, then at the time of the withdrawal, your BDB is not adjusted since the BDB is not reduced for partial withdrawals. At the time of step-up, your BDB is recalculated and is equal to $195,000, which is the greater of 1) your BDB prior to the step-up ($100,000) or 2) your Contract Value at the time of step-up ($195,000). o Notes: * As the example illustrates, when considering a request for a withdrawal at or near the same time as the election or automatic application of a step-up, the order of the transactions may impact your GAWA. - If the step-up would result in an increase in your GAWA and the requested withdrawal is less than or equal to your new GAWA, your GAWA resulting after the two transactions would be greater if the withdrawal is requested after the step-up is applied. This is especially true if your endorsement allows for re-determination of the GAWA% and the step-up would result in a re-determination of the GAWA%. - If your endorsement contains an annual Step-Up provision and is effective on or after 03/31/2008, the step-up would result in an increase in your GAWA, and the withdrawal requested is greater than your new GAWA, your GAWA resulting after the two transactions would be greater if the withdrawal is requested after the step-up is applied. - Otherwise, your GAWA resulting from the transactions is the same regardless of the order of transactions. * This example would also apply in situations when the withdrawal exceeded your GAWA but not your permissible RMD. * Your endorsement may contain a provision allowing the Company to increase the GMWB charge upon step-up. * If your endorsement contains a provision for automatic step-ups, your GWB will only step up to the Contract Value (or highest quarterly Contract Value, as applicable) if the Contract Value (or highest quarterly Contract Value, as applicable) is greater than your GWB at the time of the automatic step-up. * If your endorsement contains a Guaranteed Withdrawal Balance Bonus provision and a provision for automatic step-ups, your bonus base will be re-determined only if your GWB is increased upon step-up to a value above your bonus base just prior to the step-up. * If your endorsement contains a varying benefit percentage, the GAWA% is determined at the time of the withdrawal (if not previously determined). - If your endorsement allows for re-determination of the GAWA%, the GAWA% is re-determined upon step-up if your Contract Value is greater than your BDB. * If your endorsement contains a Guaranteed Withdrawal Balance Adjustment provision, your Guaranteed Withdrawal Balance Adjustment provision is terminated at the time of the withdrawal. * If your endorsement contains a GMWB Death Benefit provision, the GMWB death benefit would not be adjusted for the step-up since step-ups do not impact the GMWB death benefit, but your GMWB death benefit will be reduced dollar for dollar for the amount of the withdrawal since the withdrawal did not exceed the greater of the GAWA or the RMD. * If your endorsement bases step-ups on the highest quarterly Contract Value, the highest quarterly Contract Value is equal to the greatest of the four most recent quarterly adjusted Contract Values. The quarterly adjusted Contract Values are initialized on each Contract Quarterly Anniversary and are adjusted for any premiums and/or withdrawals subsequent to the initialization in the same manner as the GWB. * If your endorsement does not include a For Life Guarantee or if the For Life Guarantee is not in effect, your GAWA would not be permitted to exceed your remaining GWB. * Withdrawals taken in connection with a GMWB are considered the same as any other withdrawal for the purpose of determining all other values under the Contract. In the case where a minimum death benefit is reduced proportionately for withdrawals, the death benefit may be reduced by more than the amount of the withdrawal. EXAMPLE 8: UPON APPLICATION OF THE GUARANTEED WITHDRAWAL BALANCE BONUS, YOUR GWB AND GAWA ARE RE-DETERMINED. (THIS EXAMPLE ONLY APPLIES DURING THE BONUS PERIOD IF YOUR ENDORSEMENT CONTAINS A GUARANTEED WITHDRAWAL BALANCE BONUS PROVISION.) o Example 8a: If at the end of a Contract Year in which you have taken no withdrawals, your GWB is $100,000, your bonus base is $100,000, and your GAWA is $5,000: * Your new GWB is recalculated to equal $107,000, which is equal to your GWB plus 7% of your bonus base ($100,000 + $100,000*0.07 = $107,000). * Your GAWA for the next year is recalculated to equal $5,350, which is the greater of 1) your GAWA prior to the application of the bonus ($5,000) or 2) 5% of your new GWB ($107,000*0.05 = $5,350). * After the application of the bonus, if you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($107,000 / $5,350 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, provided that the withdrawals are taken prior to the Latest Income Date. o Example 8b: If at the end of a Contract Year in which you have taken no withdrawals, your GWB is $90,000, your bonus base is $100,000, and your GAWA is $5,000: * Your new GWB is recalculated to equal $97,000, which is equal to your GWB plus 7% of your bonus base ($90,000 + $100,000*0.07 = $97,000). * Your GAWA for the next year remains $5,000, which is the greater of 1) your GAWA prior to the application of the bonus ($5,000) or 2) 5% of your new GWB ($97,000*0.05 = $4,850). * After the application of the bonus, if you continued to take annual withdrawals equal to your GAWA, it would take an additional 20 years to deplete your GWB ($97,000 / $5,000 per year = 20 years), provided that there are no further adjustments made to your GWB or your GAWA (besides the annual reduction of your GWB by the amount of the withdrawal) and that the withdrawals are taken prior to the Latest Income Date. However, if you have elected a For Life GMWB and the For Life Guarantee is in effect, withdrawals equal to your GAWA could continue for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), even beyond 20 years, provided that the withdrawals are taken prior to the Latest Income Date. o Notes: * Your bonus base is not recalculated upon the application of the bonus to your GWB. * If your endorsement contains a varying benefit percentage, your GAWA is recalculated upon the application of the bonus (as described above) only if the application of the bonus occurs after your GAWA% has been determined. * If your endorsement includes a Guaranteed Withdrawal Balance Adjustment provision, your GWB adjustment remains unchanged since the GWB adjustment is not impacted by the application of the bonus. * If your endorsement includes a GMWB Death Benefit provision, your GMWB death benefit remains unchanged since the GMWB death benefit is not impacted by the application of the bonus. * If the For Life Guarantee is not in effect, your GAWA would not be permitted to exceed your remaining GWB. EXAMPLE 9: FOR LIFE GUARANTEE BECOMES EFFECTIVE AFTER THE EFFECTIVE DATE OF THE ENDORSEMENT. AT THE TIME THE FOR LIFE GUARANTEE BECOMES EFFECTIVE, YOUR GAWA IS RE-DETERMINED. (THIS EXAMPLE ONLY APPLIES IF YOUR ENDORSEMENT IS A FOR LIFE GMWB THAT CONTAINS A FOR LIFE GUARANTEE THAT BECOMES EFFECTIVE AFTER THE EFFECTIVE DATE OF THE ENDORSEMENT.) o Example 9a: If on the reset date your Contract Value is $30,000, your GWB is $50,000, and your GAWA is $5,000: * Your GAWA for the next year is recalculated to equal $2,500, which is equal to 5% of the current GWB ($50,000*0.05 = $2,500). * The For Life Guarantee becomes effective, thus allowing you to make annual withdrawals equal to your GAWA for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), provided that the withdrawals are taken prior to the Latest Income Date. Once the For Life Guarantee becomes effective, it remains in effect until the endorsement is terminated, as described in the Access to Your Money section of this prospectus, or upon continuation of the Contract by the spouse (unless your endorsement is a For Life GMWB with Joint Option and the spouse continuing the Contract is a Covered Life in which case the For Life Guarantee remains in effect upon continuation of the Contract by the spouse). o Example 9b: If your Contract Value has fallen to $0 prior to the reset date, your GWB is $50,000 and your GAWA is $5,000: You will continue to receive automatic payments of a total annual amount that equals your GAWA until your GWB is depleted. * However, your GAWA would not be permitted to exceed your remaining GWB. Your GAWA is not recalculated since the Contract Value is $0. * The For Life Guarantee does not become effective due to the depletion of the Contract Value prior to the effective date of the For Life Guarantee. o Example 9c: If on the reset date, your Contract Value is $50,000, your GWB is $0, and your GAWA is $5,000: * Your GAWA for the next year is recalculated to equal $0, which is equal to 5% of the current GWB ($0*0.05 = $0). * The For Life Guarantee becomes effective, thus allowing you to make annual withdrawals equal to your GAWA for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), provided that the withdrawals are taken prior to the Latest Income Date. Once the For Life Guarantee becomes effective, it remains in effect until the endorsement is terminated, as described in the Access to Your Money section of this prospectus, or upon continuation of the Contract by the spouse (unless your endorsement is a For Life GMWB with Joint Option and the spouse continuing the Contract is a Covered Life in which case the For Life Guarantee remains in effect upon continuation of the Contract by the spouse). * Although your GAWA is $0, upon step-up or subsequent premium payments, your GWB and your GAWA would increase to values greater than $0 and since the For Life Guarantee has become effective, you could withdraw an annual amount equal to your GAWA for the rest of your life (or in the case of Joint Owners, until the first death of the Joint Owners or until the death of the last surviving Covered Life if your endorsement is a For Life GMWB with Joint Option), provided that the withdrawals are taken prior to the Latest Income Date. o Notes: * If your endorsement is effective on or after 03/31/2008, your reset date is the Contract Anniversary on or immediately following the date you attain age 59 1/2 (or the date the youngest Covered Life attains, or would have attained, age 59 1/2 if your endorsement is a For Life GMWB with Joint Option). If your endorsement is effective prior to 03/31/2008, your reset date is the Contract Anniversary on or immediately following your 65th birthday (or the youngest Covered Life's 65th birthday if your endorsement is a For Life GMWB with Joint Option). . EXAMPLE 10: FOR LIFE GUARANTEE ON A FOR LIFE GMWB WITH JOINT OPTION. (THIS EXAMPLE ONLY APPLIES IF YOUR ENDORSEMENT IS A FOR LIFE GMWB WITH JOINT OPTION.) o If at the time of the death of the Owner (or either Joint Owner) the Contract Value is $105,000 and your GWB is $100,000: * If your endorsement has a For Life Guarantee that becomes effective after the effective date of the endorsement, the surviving Covered Life may continue the Contract and the For Life Guarantee will remain in effect or become effective on the Contract Anniversary on the reset date. Once the For Life Guarantee becomes effective, the surviving Covered Life will be able to take annual withdrawals equal to the GAWA for the rest of his or her life, provided that the withdrawals are taken prior to the Latest Income Date. * If your endorsement has a For Life Guarantee that becomes effective on the effective date of the endorsement, the surviving Covered Life may continue the Contract and the For Life Guarantee will remain in effect. The GAWA% and the GAWA will continue to be determined or re-determined based on the youngest Covered Life's attained age (or the age he or she would have attained). The surviving Covered Life will be able to take annual withdrawals equal to the GAWA for the rest of his or her life, provided that the withdrawals are taken prior to the Latest Income Date. * The surviving spouse who is not a Covered Life may continue the Contract and the For Life Guarantee is null and void. However, the surviving spouse will be entitled to make withdrawals until the GWB is exhausted, provided that the withdrawals are taken prior to the Latest Income Date. * Your GWB remains $100,000 and your GAWA remains unchanged at the time of continuation. o Notes: * If your endorsement is effective on or after 03/31/2008 and has a For Life Guarantee that becomes effective after the effective date of the endorsement, your reset date is the Contract Anniversary on or immediately following the date that the youngest Covered Life attains (or would have attained) age 59 1/2. If your endorsement is effective prior to 03/31/2008 and has a For Life Guarantee that becomes effective after the effective date of the endorsement, your reset date is the Contract Anniversary on or immediately following the youngest Covered Life's 65th birthday. * If your endorsement contains a Guaranteed Withdrawal Balance Bonus provision, your bonus base remains unchanged at the time of continuation. * If your endorsement allows for re-determination of the GAWA%, your BDB remains unchanged at the time of continuation. EXAMPLE 11: UPON APPLICATION OF THE GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT, YOUR GWB IS RE-DETERMINED. (THIS EXAMPLE ONLY APPLIES IF YOUR ENDORSEMENT CONTAINS A GUARANTEED WITHDRAWAL BALANCE ADJUSTMENT PROVISION.) o Example 11a: If on the GWB Adjustment Date, your GWB is $160,000, your GWB adjustment is $200,000, and you have taken no withdrawals on or prior to the GWB Adjustment Date: * Your new GWB is recalculated to equal $200,000, which is the greater of 1) your GWB prior to the application of the GWB adjustment ($160,000) or 2) the GWB adjustment ($200,000). o Example 11b: If on the GWB Adjustment Date, your GWB is $210,000, your GWB adjustment is $200,000, and you have taken no withdrawals on or prior to the GWB Adjustment Date: * Your new GWB is recalculated to equal $210,000, which is the greater of 1) your GWB prior to the application of the GWB adjustment ($210,000) or 2) the GWB adjustment ($200,000). o Notes: * The GWB adjustment provision is terminated on the GWB Adjustment Date after the GWB adjustment is applied (if any). * Since you have taken no withdrawals, your GAWA% and GAWA have not yet been determined, thus no adjustment is made to your GAWA. * No adjustment is made to your bonus base since the bonus base is not impacted by the GWB adjustment. * No adjustment is made to your GMWB death benefit since the GMWB death benefit is not impacted by the GWB adjustment. EXAMPLE 12: ON EACH CONTRACT MONTHLY ANNIVERSARY, FUNDS ARE TRANSFERRED TO OR FROM THE GMWB FIXED ACCOUNT VIA THE FORMULAS DEFINED IN THE TRANSFER OF ASSETS METHODOLOGY IN APPENDIX D. THE ANNUITY FACTORS REFERENCED IN THIS EXAMPLE ARE ALSO FOUND IN APPENDIX D. (THIS EXAMPLE ONLY APPLIES IF YOUR ENDORSEMENT CONTAINS A TRANSFER OF ASSETS PROVISION.) o Example 12a: If on your first Contract Monthly Anniversary, your annuity factor is 15.26, your GAWA is $6,000, your GMWB Fixed Account Contract Value is $0, your Separate Account Contract Value is $95,000, and your Fixed Account Contract Value is $5,000: * Your liability is equal to $91,560, which is your GAWA multiplied by your annuity factor ($6,000 * 15.26 = $91,560). * The ratio is equal to 91.56%, which is the liability (net of the GMWB Fixed Account Contract Value) divided by the sum of the Separate Account Contract Value and the Fixed Account Contract Value [($91,560 - $0) / ($95,000 + $5,000) = 91.56%]. * Since the ratio (91.56%) is greater than the upper breakpoint (83%), funds are transferred from the Investment Divisions and the guaranteed fixed accounts to the GMWB Fixed Account. The amount of the transfer is equal to $57,800, which is the lesser of 1) the Separate Account Contract Value plus the Fixed Account Contract Value ($95,000 + $5,000 = $100,000) or 2) the liability (net of the GMWB Fixed Account Contract Value) less 80% of the sum of the Separate Account Contract Value and the Fixed Account Contract Value, divided by the difference between one and 80% [($91,560 - $0 - 0.80*($95,000 + $5,000)) / (1 - 0.80) = $57,800]. * Your GMWB Fixed Account Contract Value is $57,800, which is your previous GMWB Fixed Account Contract Value plus the amount of the transfer ($0 + $57,800 = $57,800). * Your Separate Account Contract Value is $40,090, which is your previous Separate Account Contract Value less the amount of the transfer multiplied by the ratio of the Separate Account Contract Value to the sum of the Separate Account Contract Value and the Fixed Account Contract Value [$95,000 - $57,800 * ($95,000 / ($95,000 + $5,000)) = $40,090]. * Your Fixed Account Contract Value is $2,110, which is your previous Fixed Account Contract Value less the amount of the transfer multiplied by the ratio of the Fixed Account Contract Value to the sum of the Separate Account Contract Value and the Fixed Account Contract Value [$5,000 - $57,800 * ($5,000 / ($95,000 + $5,000)) = $2,110]. o Example 12b: If on your 13th Contract Monthly Anniversary, your annuity factor is 14.83, your GAWA is $6,000, your GMWB Fixed Account Contract Value is $15,000, your Separate Account Contract Value is $90,000, your Fixed Account Contract Value is $10,000, your current allocation percentage to the Investment Divisions is 95%, and your current allocation percentage to the guaranteed fixed accounts is 5%: * Your liability is equal to $88,980, which is your GAWA multiplied by your annuity factor ($6,000 * 14.83 = $88,980). * The ratio is equal to 73.98%, which is the liability (net of the GMWB Fixed Account Contract Value) divided by the sum of the Separate Account Contract Value and the Fixed Account Contract Value [($88,980 - $15,000) / ($90,000 + $10,000) = 73.98%]. * Since the ratio (73.98%) is less than the lower breakpoint (77%), funds are transferred from the GMWB Fixed Account to the Investment Divisions and the guaranteed fixed accounts. The amount of the transfer is equal to $15,000, which is the lesser of 1) the GMWB Fixed Account Contract Value ($15,000) or 2) the GMWB Fixed Account Contract Value less the liability plus 80% of the sum of the Separate Account Contract Value and the Fixed Account Contract Value, divided by the difference between one and 80% [($15,000 - $88,980 + 0.80 * ($90,000 + $10,000)) / (1 - 0.80) = $30,100]. * Your GMWB Fixed Account Contract Value is $0, which is your previous GMWB Fixed Account Contract Value less the amount of the transfer ($15,000 - $15,000 = $0). * Your Separate Account Contract Value is $104,250, which is your previous Separate Account Contract Value plus the amount of the transfer multiplied by your current allocation percentage to the Investment Divisions ($90,000 + $15,000 * 0.95 = $104,250). * Your Fixed Account Contract Value is $10,750, which is your previous Fixed Account Contract Value plus the amount of the transfer multiplied by your current allocation percentage to the guaranteed fixed accounts ($10,000 + $15,000 * 0.05 = $10,750). o Example 12c: If on your 25th Contract Monthly Anniversary, your annuity factor is 14.39, your GAWA is $6,000, your GMWB Fixed Account Contract Value is $100,000, your Separate Account Contract Value is $0, your Fixed Account Contract Value is $0, your current allocation percentage to the Investment Divisions is 95%, and your current allocation percentage to the guaranteed fixed accounts is 5%: * Your liability is equal to $86,340, which is your GAWA multiplied by your annuity factor ($6,000 * 14.39 = $86,340). * The ratio is not calculated since the sum of the Separate Account Contract Value and the Fixed Account Contract Value is equal to zero. * Since all funds are allocated to the GMWB Fixed Account and the GMWB Fixed Account Contract Value ($100,000) is greater than the liability ($86,340), funds are transferred from the GMWB Fixed Account to the Investment Divisions and the guaranteed fixed accounts. The amount of the transfer is equal to $68,300, which is the lesser of 1) the GMWB Fixed Account Contract Value ($100,000) or 2) the GMWB Fixed Account Contract Value less the liability plus 80% of the sum of the Separate Account Contract Value and the Fixed Account Contract Value, divided by the difference between one and 80% [($100,000 - $86,340 + 0.80 * ($0 + $0)) / (1 - 0.80) = $68,300]. * Your GMWB Fixed Account Contract Value is $31,700, which is your previous GMWB Fixed Account Contract Value less the amount of the transfer ($100,000 - $68,300 = $31,700). * Your Separate Account Contract Value is $64,885, which is your previous Separate Account Contract Value plus the amount of the transfer multiplied by your current allocation percentage to the Investment Divisions ($0 + $68,300 * 0.95 = $64,885). * Your Fixed Account Contract Value is $3,415, which is your previous Fixed Account Contract Value plus the amount of the transfer multiplied by your current allocation percentage to the guaranteed fixed accounts ($0 + $68,300 * 0.05 = $3,415). o Notes: * If your GAWA had not yet been determined prior to the transfer of assets calculation, the GAWA used in the liability calculation will be based on the GAWA% for your attained age (or the attained age of the youngest Covered Life if your endorsement is a For Life GMWB with Joint Option) at the time of the calculation multiplied by your GWB at that time. * The amount transferred from each Investment Division and guaranteed fixed account to the GMWB Fixed Account will be in proportion to their current value. The amount transferred to each Investment Division and guaranteed fixed account will be based on your most current premium allocation instructions. * Funds transferred out of the guaranteed fixed account(s) will be subject to an interest rate adjustment (if applicable). * No adjustments are made to the GWB, the GAWA, the bonus base, the GWB adjustment, or the GMWB death benefit as a result of the transfer. APPENDIX D LIFEGUARD SELECT GMWB AND LIFEGUARD SELECT WITH JOINT OPTION TRANSFER OF ASSETS METHODOLOGY On each Contract Monthly Anniversary, transfers to or from the GMWB Fixed Account will be determined based on the formulas defined below. LIABILITY = GAWA X ANNUITY FACTOR The Liability calculated in the above formula is designed to represent the projected value of this GMWB's benefits. If the GAWA% has not yet been determined, the GAWA used in the Liability calculation will be based on the GAWA% corresponding to the Owner's (or oldest Joint Owner's) attained age at the time the Liability is calculated, multiplied by the GWB at that time. The tables of annuity factors (as shown below) are set at election of the LifeGuard Select GMWB or the LifeGuard Select with Joint Option GMWB, as applicable, and do not change. RATIO = (LIABILITY - GMWB FIXED ACCOUNT CONTRACT VALUE) / (SEPARATE ACCOUNT CONTRACT VALUE + FIXED ACCOUNT CONTRACT VALUE) If the sum of the Separate Account Contract Value and the Fixed Account Contract Value is equal to zero, the Ratio will not be calculated. THE TRANSFER AMOUNT IS DETERMINED AS FOLLOWS: If the Ratio is less than the lower breakpoint of 77% or if the GMWB Fixed Account Contract Value is greater than the Liability and all funds are allocated to the GMWB Fixed Account, the amount transferred from the GMWB Fixed Account is equal to the lesser of: 1. The GMWB Fixed Account Contract Value; or 2. (GMWB Fixed Account Contract Value + 80% x (Separate Account Contract Value + Fixed Account Contract Value) - Liability) / (1-80%). If the Ratio is greater than the upper breakpoint of 83%, the amount transferred to the GMWB Fixed Account is equal to the lesser of: 1. Separate Account Contract Value + Fixed Account Contract Value; or 2. (Liability - GMWB Fixed Account Contract Value - 80% x (Separate Account Contract Value + Fixed Account Contract Value)) / (1-80%). Otherwise, no funds are transferred. LIFEGUARD SELECT Transfer of Assets Provision Annuity Factors*
Age** Contract Monthly Anniversary 1 2 3 4 5 6 7 8 9 10 11 12 -------- --------- --------- -------- --------- --------- -------- --------- --------- --------- -------- --------- -------- --------- --------- -------- --------- --------- -------- --------- --------- --------- -------- --------- 65 15.26 15.22 15.19 15.15 15.12 15.08 15.05 15.01 14.97 14.94 14.90 14.87 66 14.83 14.79 14.76 14.72 14.68 14.65 14.61 14.57 14.54 14.50 14.46 14.43 67 14.39 14.35 14.32 14.28 14.25 14.21 14.18 14.14 14.10 14.07 14.03 14.00 68 13.96 13.92 13.89 13.85 13.81 13.77 13.74 13.70 13.66 13.62 13.59 13.55 69 13.51 13.47 13.44 13.40 13.37 13.33 13.30 13.26 13.22 13.19 13.15 13.12 70 13.08 13.04 13.01 12.97 12.93 12.89 12.86 12.82 12.78 12.74 12.71 12.67 71 12.63 12.59 12.56 12.52 12.48 12.44 12.41 12.37 12.33 12.29 12.26 12.22 72 12.18 12.14 12.11 12.07 12.03 12.00 11.96 11.92 11.89 11.85 11.81 11.78 73 11.74 11.70 11.67 11.63 11.60 11.56 11.53 11.49 11.45 11.42 11.38 11.35 74 11.31 11.27 11.24 11.20 11.16 11.12 11.09 11.05 11.01 10.97 10.94 10.90 75 10.86 10.82 10.79 10.75 10.72 10.68 10.65 10.61 10.57 10.54 10.50 10.47 76 10.43 10.39 10.36 10.32 10.28 10.25 10.21 10.17 10.14 10.10 10.06 10.03 77 9.99 9.96 9.92 9.89 9.85 9.82 9.78 9.75 9.71 9.68 9.64 9.61 78 9.57 9.54 9.50 9.47 9.43 9.40 9.36 9.33 9.29 9.26 9.22 9.19 79 9.15 9.12 9.08 9.05 9.01 8.98 8.94 8.91 8.87 8.84 8.80 8.77 80 8.73 8.70 8.66 8.63 8.60 8.56 8.53 8.50 8.46 8.43 8.40 8.36 81 8.33 8.30 8.26 8.23 8.20 8.16 8.13 8.10 8.06 8.03 8.00 7.96 82 7.93 7.90 7.86 7.83 7.80 7.76 7.73 7.70 7.66 7.63 7.60 7.56 83 7.53 7.50 7.47 7.44 7.41 7.38 7.35 7.31 7.28 7.25 7.22 7.19 84 7.16 7.13 7.10 7.07 7.04 7.01 6.98 6.95 6.92 6.89 6.86 6.83 85 6.80 6.77 6.74 6.71 6.68 6.65 6.62 6.59 6.56 6.53 6.50 6.47 86 6.44 6.41 6.39 6.36 6.33 6.30 6.28 6.25 6.22 6.19 6.17 6.14 87 6.11 6.08 6.06 6.03 6.00 5.98 5.95 5.92 5.90 5.87 5.84 5.82 88 5.79 5.76 5.74 5.71 5.69 5.66 5.64 5.61 5.58 5.56 5.53 5.51 89 5.48 5.46 5.43 5.41 5.38 5.36 5.34 5.31 5.29 5.26 5.24 5.21 90 5.19 5.17 5.14 5.12 5.10 5.07 5.05 5.03 5.00 4.98 4.96 4.93 91 4.91 4.89 4.87 4.85 4.83 4.81 4.79 4.76 4.74 4.72 4.70 4.68 92 4.66 4.64 4.62 4.60 4.58 4.56 4.54 4.51 4.49 4.47 4.45 4.43 93 4.41 4.39 4.37 4.35 4.33 4.31 4.30 4.28 4.26 4.24 4.22 4.20 94 4.18 4.16 4.14 4.13 4.11 4.09 4.07 4.05 4.03 4.02 4.00 3.98 95 3.96 3.94 3.93 3.91 3.89 3.87 3.86 3.84 3.82 3.80 3.79 3.77 96 3.75 3.73 3.72 3.70 3.68 3.66 3.65 3.63 3.61 3.59 3.58 3.56 97 3.54 3.52 3.51 3.49 3.47 3.46 3.44 3.42 3.41 3.39 3.37 3.36 98 3.34 3.32 3.31 3.29 3.27 3.26 3.24 3.22 3.21 3.19 3.17 3.16 99 3.14 3.12 3.11 3.09 3.07 3.06 3.04 3.02 3.01 2.99 2.97 2.96 100 2.94 2.92 2.91 2.89 2.87 2.85 2.84 2.82 2.80 2.78 2.77 2.75 101 2.73 2.71 2.70 2.68 2.66 2.65 2.63 2.61 2.60 2.58 2.56 2.55 102 2.53 2.51 2.50 2.48 2.46 2.45 2.43 2.41 2.40 2.38 2.36 2.35 103 2.33 2.31 2.30 2.28 2.26 2.24 2.23 2.21 2.19 2.17 2.16 2.14 104 2.12 2.10 2.09 2.07 2.06 2.04 2.03 2.01 1.99 1.98 1.96 1.95 105 1.93 1.91 1.90 1.88 1.87 1.85 1.84 1.82 1.80 1.79 1.77 1.76 106 1.74 1.73 1.71 1.70 1.68 1.67 1.65 1.64 1.62 1.61 1.59 1.58 107 1.56 1.55 1.53 1.52 1.50 1.49 1.47 1.46 1.44 1.43 1.41 1.40 108 1.38 1.37 1.35 1.34 1.33 1.31 1.30 1.29 1.27 1.26 1.25 1.23 109 1.22 1.21 1.19 1.18 1.17 1.15 1.14 1.13 1.11 1.10 1.09 1.07 110 1.06 1.05 1.04 1.03 1.01 1.00 0.99 0.98 0.97 0.96 0.94 0.93 111 0.92 0.91 0.90 0.89 0.88 0.87 0.86 0.84 0.83 0.82 0.81 0.80 112 0.79 0.78 0.77 0.76 0.75 0.74 0.73 0.72 0.71 0.70 0.69 0.68 113 0.67 0.66 0.65 0.64 0.63 0.62 0.62 0.61 0.60 0.59 0.58 0.57 114 0.56 0.55 0.54 0.54 0.53 0.52 0.51 0.50 0.49 0.49 0.48 0.47 115 0.46 0.42 0.38 0.35 0.31 0.27 0.23 0.19 0.15 0.12 0.08 0.04 -------- --------- --------- -------- --------- --------- -------- --------- --------- --------- -------- ---------
* Annuity factors are based on the Annuity 2000 Mortality Table and 3.00% interest. ** The age of the Owner as of the effective date or the most recent Contract Anniversary. All Owners aged 55-65 on the effective date of the endorsement will be assumed to be age 65 on the effective date of the endorsement for the purpose of determining the applicable annuity factor. LIFEGUARD SELECT WITH JOINT OPTION Transfer of Assets Provision Annuity Factors
Age* Contract Monthly Anniversary 1 2 3 4 5 6 7 8 9 10 11 12 ------------------------------------------------------------------------------------------------------------------- 65 15.26 15.24 15.23 15.21 15.19 15.17 15.16 15.14 15.12 15.10 15.09 15.07 66 15.05 15.03 15.01 14.99 14.97 14.95 14.94 14.92 14.90 14.88 14.86 14.84 67 14.82 14.81 14.79 14.78 14.77 14.75 14.74 14.73 14.71 14.70 14.69 14.67 68 14.66 14.64 14.63 14.61 14.59 14.58 14.56 14.54 14.53 14.51 14.49 14.48 69 14.46 14.44 14.43 14.41 14.39 14.38 14.36 14.34 14.33 14.31 14.29 14.28 70 14.26 14.24 14.22 14.20 14.18 14.16 14.14 14.12 14.10 14.08 14.06 14.04 71 14.02 14.00 13.98 13.96 13.93 13.91 13.89 13.87 13.85 13.83 13.80 13.78 72 13.76 13.74 13.72 13.70 13.67 13.65 13.63 13.61 13.59 13.57 13.54 13.52 73 13.50 13.48 13.46 13.43 13.41 13.39 13.37 13.34 13.32 13.30 13.28 13.25 74 13.23 13.20 13.18 13.15 13.13 13.10 13.08 13.05 13.02 13.00 12.97 12.95 75 12.92 12.88 12.84 12.81 12.77 12.73 12.69 12.65 12.61 12.58 12.54 12.50 76 12.46 12.42 12.38 12.34 12.30 12.26 12.22 12.17 12.13 12.09 12.05 12.01 77 11.97 11.93 11.89 11.86 11.82 11.78 11.74 11.70 11.66 11.63 11.59 11.55 78 11.51 11.47 11.43 11.39 11.35 11.31 11.28 11.24 11.20 11.16 11.12 11.08 79 11.04 11.00 10.96 10.93 10.89 10.85 10.81 10.77 10.73 10.70 10.66 10.62 80 10.58 10.54 10.50 10.46 10.42 10.38 10.35 10.31 10.27 10.23 10.19 10.15 81 10.11 10.07 10.04 10.00 9.96 9.93 9.89 9.85 9.82 9.78 9.74 9.71 82 9.67 9.63 9.60 9.56 9.52 9.49 9.45 9.41 9.38 9.34 9.30 9.27 83 9.23 9.19 9.16 9.12 9.08 9.05 9.01 8.97 8.94 8.90 8.86 8.83 84 8.79 8.76 8.72 8.69 8.65 8.62 8.59 8.55 8.52 8.48 8.45 8.41 85 8.38 8.35 8.31 8.28 8.24 8.21 8.18 8.14 8.11 8.07 8.04 8.00 86 7.97 7.94 7.90 7.87 7.84 7.80 7.77 7.74 7.70 7.67 7.64 7.60 87 7.57 7.54 7.51 7.48 7.44 7.41 7.38 7.35 7.32 7.29 7.25 7.22 88 7.19 7.16 7.13 7.10 7.07 7.04 7.01 6.98 6.95 6.92 6.89 6.86 89 6.83 6.80 6.77 6.74 6.71 6.68 6.66 6.63 6.60 6.57 6.54 6.51 90 6.48 6.45 6.43 6.40 6.37 6.34 6.32 6.29 6.26 6.23 6.21 6.18 91 6.15 6.12 6.10 6.07 6.04 6.01 5.99 5.96 5.93 5.90 5.88 5.85 92 5.82 5.80 5.77 5.75 5.72 5.70 5.67 5.65 5.62 5.60 5.57 5.55 93 5.52 5.50 5.47 5.45 5.42 5.40 5.37 5.35 5.32 5.30 5.27 5.25 94 5.22 5.20 5.17 5.15 5.12 5.10 5.08 5.05 5.03 5.00 4.98 4.95 95 4.93 4.91 4.88 4.86 4.84 4.81 4.79 4.77 4.74 4.72 4.70 4.67 96 4.65 4.63 4.60 4.58 4.56 4.53 4.51 4.49 4.46 4.44 4.42 4.39 97 4.37 4.35 4.33 4.30 4.28 4.26 4.24 4.21 4.19 4.17 4.15 4.12 98 4.10 4.08 4.05 4.03 4.01 3.98 3.96 3.94 3.91 3.89 3.87 3.84 99 3.82 3.80 3.78 3.75 3.73 3.71 3.69 3.66 3.64 3.62 3.60 3.57 100 3.55 3.53 3.51 3.48 3.46 3.44 3.42 3.39 3.37 3.35 3.33 3.30 101 3.28 3.26 3.24 3.21 3.19 3.17 3.15 3.12 3.10 3.08 3.06 3.03 102 3.01 2.99 2.97 2.94 2.92 2.90 2.88 2.85 2.83 2.81 2.79 2.76 103 2.74 2.72 2.70 2.68 2.65 2.63 2.61 2.59 2.57 2.55 2.52 2.50 104 2.48 2.46 2.44 2.42 2.40 2.38 2.36 2.33 2.31 2.29 2.27 2.25 105 2.23 2.21 2.19 2.17 2.15 2.13 2.11 2.08 2.06 2.04 2.02 2.00 106 1.98 1.96 1.94 1.92 1.90 1.88 1.86 1.84 1.82 1.80 1.78 1.76 107 1.74 1.72 1.70 1.68 1.66 1.64 1.63 1.61 1.59 1.57 1.55 1.53 108 1.51 1.49 1.48 1.46 1.44 1.42 1.41 1.39 1.37 1.35 1.34 1.32 109 1.30 1.28 1.27 1.25 1.23 1.21 1.20 1.18 1.16 1.14 1.13 1.11 110 1.09 1.08 1.07 1.06 1.04 1.03 1.02 1.01 1.00 0.99 0.97 0.96 111 0.95 0.94 0.93 0.92 0.90 0.89 0.88 0.87 0.86 0.85 0.83 0.82 112 0.81 0.80 0.79 0.78 0.77 0.76 0.75 0.74 0.73 0.72 0.71 0.70 113 0.69 0.68 0.67 0.66 0.65 0.64 0.64 0.63 0.62 0.61 0.60 0.59 114 0.58 0.57 0.56 0.55 0.54 0.53 0.53 0.52 0.51 0.50 0.49 0.48 115 0.47 0.43 0.39 0.35 0.31 0.27 0.24 0.20 0.16 0.12 0.08 0.04 ------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------
* The age of the youngest Covered Life as of the effective date of the endorsement or the most recent Contract Anniversary. A Covered Life aged 55-65 on the effective date of the endorsement will be assumed to be age 65 on the effective date of the endorsement for the purpose of determining the applicable annuity factor. APPENDIX E ACCUMULATION UNIT VALUES The tables reflect the values of accumulation units for each Investment Division for the beginning and end of the periods indicated, and the number of accumulation units outstanding as of the end of the periods indicated - for each of a base Contract (with no optional endorsements) and for each Contract with the most expensive combination of optional endorsements (through the end of the most recent period). This information derives from the financial statements of the Separate Account, which together constitute the Separate Account's condensed financial information. The annualized charge for your Contract may fall in between the charge for a base Contract and a Contract with the most expensive combination of optional endorsements, and complete condensed financial information about the Separate Account is available in the SAI. Contact the Annuity Service Center to request your copy free of charge, and contact information is on the cover page of the prospectus. Also, please ask about the more timely accumulation unit values that are available for each Investment Division. Effective March 31, 2008, the names of the following Investment Divisions changed (whether or not in connection with a sub-adviser change): JNL/Lazard Mid Cap Value Fund to JNL/Lazard Mid Cap Equity Fund; and JNL/Lazard Small Cap Value Fund to JNL/Lazard Small Cap Equity Fund. Also effective March 31, 2008, the Separate Account has the following new Investment Divisions, on which no Accumulation Unit information is available yet: JNL/PAM Asia ex-Japan Fund; JNL/PAM China-India Fund; JNL/PPM America Mid Cap Value Fund; and JNL/PPM America Small Cap Value Fund. At the end of the tables in the SAI are the footnotes with the beginning dates of activity for each Investment Division at every applicable charge level (annualized) under the Contract.
Accumulation Unit Values Base Contract - 1.40% Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM International Growth Division Accumulation unit value: Beginning of period $17.57 $14.53 $13.31 $11.60 $9.16 End of period $19.01 $17.57 $14.53 $13.31 $11.60 Accumulation units outstanding at the end of period 2,281,385 2,780,148 3,298,190 4,007,667 5,340,224 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM International Growth Division Accumulation unit value: Beginning of period $11.69 $14.87 $17.53 $13.46 $11.94 End of period $9.16 $11.69 $14.87 $17.53 $13.46 Accumulation units outstanding at the end of period 6,591,626 7,467,615 7,353,097 5,507,406 4,828,701 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Large Cap Growth Division(30) Accumulation unit value: Beginning of period $12.58 $11.83 $11.19 $10.31 $8.04 End of period $14.36 $12.58 $11.83 $11.19 $10.31 Accumulation units outstanding at the end of period 953,043 676,803 823,898 949,952 848,882 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Large Cap Growth Division(30) Accumulation unit value: Beginning of period $10.94 $10.00 N/A N/A N/A End of period $8.04 $10.94 N/A N/A N/A Accumulation units outstanding at the end of period 257,926 41,057 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Premier Equity II Division(30) Accumulation unit value: Beginning of period N/A N/A N/A $9.44 $7.80 End of period N/A N/A N/A $9.23 $9.44 Accumulation units outstanding at the end of period N/A N/A N/A - 312,288 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Premier Equity II Division(30) Accumulation unit value: Beginning of period $11.02 $10.00 N/A N/A N/A End of period $7.80 $11.02 N/A N/A N/A Accumulation units outstanding at the end of period 331,809 71,912 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Real Estate Division(821) Accumulation unit value: Beginning of period $15.59 $11.59 $10.00 N/A N/A End of period $13.06 $15.59 $11.59 N/A N/A Accumulation units outstanding at the end of period 370,640 590,541 273,148 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Real Estate Division(821) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Small Cap Growth Division(30) Accumulation unit value: Beginning of period $14.40 $12.75 $11.93 $11.32 $8.29 End of period $15.81 $14.40 $12.75 $11.93 $11.32 Accumulation units outstanding at the end of period 290,349 385,179 509,403 652,791 1,282,024 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Small Cap Growth Division(30) Accumulation unit value: Beginning of period $11.57 $10.00 N/A N/A N/A End of period $8.29 $11.57 N/A N/A N/A Accumulation units outstanding at the end of period 822,117 154,845 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Alger Growth Division Accumulation unit value: Beginning of period $20.25 $19.57 $17.67 $17.06 $12.79 End of period $22.00 $20.25 $19.57 $17.67 $17.06 Accumulation units outstanding at the end of period - 4,459,844 5,978,491 7,551,774 9,520,393 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Alger Growth Division Accumulation unit value: Beginning of period $19.41 $22.36 $26.20 $19.86 $13.82 End of period $12.79 $19.41 $22.36 $26.20 $19.86 Accumulation units outstanding at the end of period 10,831,130 14,789,965 16,136,216 12,779,325 7,704,990 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Alliance Capital Growth Division(19) Accumulation unit value: Beginning of period N/A N/A $5.86 $5.59 $4.56 End of period N/A N/A $5.33 $5.86 $5.59 Accumulation units outstanding at the end of period N/A N/A - 2,460,607 4,066,562 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Alliance Capital Growth Division(19) Accumulation unit value: Beginning of period $6.71 $7.96 $10.00 N/A N/A End of period $4.56 $6.71 $7.96 N/A N/A Accumulation units outstanding at the end of period 4,300,783 4,686,195 2,233,453 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian Global Balanced Division(19) Accumulation unit value: Beginning of period $12.16 $11.13 $10.26 $9.51 $8.48 End of period $12.95 $12.16 $11.13 $10.26 $9.51 Accumulation units outstanding at the end of period 2,608,204 3,330,738 3,821,380 4,336,372 5,316,061 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian Global Balanced Division(19) Accumulation unit value: Beginning of period $9.20 $9.77 $10.00 N/A N/A End of period $8.48 $9.20 $9.77 N/A N/A Accumulation units outstanding at the end of period 5,839,788 5,987,405 2,453,090 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian Global Diversified Research Division Accumulation unit value: Beginning of period $21.29 $19.06 $18.96 $17.27 $14.12 End of period $25.33 $21.29 $19.06 $18.96 $17.27 Accumulation units outstanding at the end of period 3,594,221 4,550,794 5,915,085 7,435,249 9,420,842 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian Global Diversified Research Division Accumulation unit value: Beginning of period $19.65 $26.06 $32.33 $19.92 $15.93 End of period $14.12 $19.65 $26.06 $32.33 $19.92 Accumulation units outstanding at the end of period 12,349,379 16,824,375 20,248,887 15,866,078 11,242,198 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian International Small Cap Division(1451) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $9.86 N/A N/A N/A N/A Accumulation units outstanding at the end of period 2,102 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian International Small Cap Division(1451) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian U.S. Growth Equity Division Accumulation unit value: Beginning of period $23.01 $22.31 $21.61 $19.63 $14.69 End of period $24.90 $23.01 $22.31 $21.61 $19.63 Accumulation units outstanding at the end of period 3,625,321 4,569,474 5,935,444 7,702,803 9,277,974 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian U.S. Growth Equity Division Accumulation unit value: Beginning of period $21.21 $30.83 $39.54 $20.62 $13.26 End of period $14.69 $21.21 $30.83 $39.54 $20.62 Accumulation units outstanding at the end of period 11,223,192 15,754,272 17,580,395 13,399,786 6,839,305 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Credit Suisse Global Natural Resources Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $13.72 N/A N/A N/A N/A Accumulation units outstanding at the end of period 510,392 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Credit Suisse Global Natural Resources Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Credit Suisse Long/Short Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.71 N/A N/A N/A N/A Accumulation units outstanding at the end of period 20,548 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Credit Suisse Long/Short Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Eagle Core Equity Division(1) Accumulation unit value: Beginning of period $19.24 $17.37 $17.04 $16.25 $13.23 End of period $19.09 $19.24 $17.37 $17.04 $16.25 Accumulation units outstanding at the end of period 1,185,025 1,545,363 2,066,108 2,665,395 3,269,083 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Eagle Core Equity Division(1) Accumulation unit value: Beginning of period $16.89 $19.00 $19.21 $15.77 $13.72 End of period $13.23 $16.89 $19.00 $19.21 $15.77 Accumulation units outstanding at the end of period 3,659,294 4,335,797 4,549,021 3,154,438 1,829,363 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Eagle SmallCap Equity Division(1) Accumulation unit value: Beginning of period $22.69 $19.16 $18.95 $16.18 $11.72 End of period $25.08 $22.69 $19.16 $18.95 $16.18 Accumulation units outstanding at the end of period 1,449,494 1,865,976 2,390,488 3,247,748 3,988,451 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Eagle SmallCap Equity Division(1) Accumulation unit value: Beginning of period $15.39 $14.07 $16.44 $13.98 $14.00 End of period $11.72 $15.39 $14.07 $16.44 $13.98 Accumulation units outstanding at the end of period 4,636,439 5,477,543 4,810,070 3,152,948 2,274,545 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Founding Strategy Division Accumulation unit value: Beginning of period $10.23 N/A N/A N/A N/A End of period $9.96 N/A N/A N/A N/A Accumulation units outstanding at the end of period 944,022 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Founding Strategy Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Global Growth Division Accumulation unit value: Beginning of period $9.99 N/A N/A N/A N/A End of period $9.93 N/A N/A N/A N/A Accumulation units outstanding at the end of period 142,159 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Global Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Income Division(1073) Accumulation unit value: Beginning of period $10.88 $9.89 N/A N/A N/A End of period $10.92 $10.88 N/A N/A N/A Accumulation units outstanding at the end of period 780,043 287,731 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Income Division(1073) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Mutual Shares Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $9.89 N/A N/A N/A N/A Accumulation units outstanding at the end of period 298,302 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Mutual Shares Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Small Cap Value Division(826) Accumulation unit value: Beginning of period $12.59 $10.85 $10.07 N/A N/A End of period $11.65 $12.59 $10.85 N/A N/A Accumulation units outstanding at the end of period 288,850 400,616 217,244 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Small Cap Value Division(826) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Core Plus Bond Division Accumulation unit value: Beginning of period $19.06 $18.46 $18.25 $17.31 $15.46 End of period $20.11 $19.06 $18.46 $18.25 $17.31 Accumulation units outstanding at the end of period 1,868,079 2,229,367 2,799,482 3,129,555 3,622,211 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Core Plus Bond Division Accumulation unit value: Beginning of period $14.46 $13.73 $12.99 $12.94 $12.80 End of period $15.46 $14.46 $13.73 $12.99 $12.94 Accumulation units outstanding at the end of period 3,816,201 4,053,144 4,116,938 3,970,746 3,166,154 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Mid Cap Value Division(828) Accumulation unit value: Beginning of period $12.90 $11.30 $10.00 N/A N/A End of period $13.07 $12.90 $11.30 N/A N/A Accumulation units outstanding at the end of period 336,617 497,041 420,400 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Mid Cap Value Division(828) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Short Duration Bond Division(1068) Accumulation unit value: Beginning of period $10.21 $10.00 N/A N/A N/A End of period $10.56 $10.21 N/A N/A N/A Accumulation units outstanding at the end of period 251,201 279,821 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Short Duration Bond Division(1068) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan International Value Division(203) Accumulation unit value: Beginning of period $25.64 $19.70 $16.85 $13.94 $10.14 End of period $28.30 $25.64 $19.70 $16.85 $13.94 Accumulation units outstanding at the end of period 1,122,706 1,449,406 1,256,867 1,316,984 739,134 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan International Value Division(203) Accumulation unit value: Beginning of period $9.33 N/A N/A N/A N/A End of period $10.14 N/A N/A N/A N/A Accumulation units outstanding at the end of period 22,509 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan MidCap Growth Division Accumulation unit value: Beginning of period $18.92 $17.12 $16.35 $14.05 $10.51 End of period $20.14 $18.92 $17.12 $16.35 $14.05 Accumulation units outstanding at the end of period 3,908,543 4,665,709 5,975,265 7,525,469 9,476,936 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan MidCap Growth Division Accumulation unit value: Beginning of period $15.05 $25.52 $39.66 $17.94 $13.46 End of period $10.51 $15.05 $25.52 $39.66 $17.94 Accumulation units outstanding at the end of period 11,407,014 15,885,658 17,431,473 12,048,149 5,849,883 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan U.S. Government & Quality Bond Division Accumulation unit value: Beginning of period $15.43 $15.16 $15.02 $14.66 $14.70 End of period $16.19 $15.43 $15.16 $15.02 $14.66 Accumulation units outstanding at the end of period 3,374,037 4,225,816 5,500,651 6,692,120 9,069,174 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan U.S. Government & Quality Bond Division Accumulation unit value: Beginning of period $13.37 $12.67 $11.53 $12.00 $11.12 End of period $14.70 $13.37 $12.67 $11.53 $12.00 Accumulation units outstanding at the end of period 14,668,784 12,659,553 8,258,157 7,963,550 5,006,001 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Emerging Markets Division(1079) Accumulation unit value: Beginning of period $10.89 $8.93 N/A N/A N/A End of period $14.15 $10.89 N/A N/A N/A Accumulation units outstanding at the end of period 693,613 114,166 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Emerging Markets Division(1079) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Mid Cap Value Division(30) Accumulation unit value: Beginning of period $17.98 $15.92 $14.83 $12.06 $9.49 End of period $17.27 $17.98 $15.92 $14.83 $12.06 Accumulation units outstanding at the end of period 1,472,908 1,840,468 2,303,023 2,937,925 2,071,739 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Mid Cap Value Division(30) Accumulation unit value: Beginning of period $11.20 $10.00 N/A N/A N/A End of period $9.49 $11.20 N/A N/A N/A Accumulation units outstanding at the end of period 1,945,294 102,381 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Small Cap Value Division(30) Accumulation unit value: Beginning of period $17.27 $15.00 $14.53 $12.77 $9.33 End of period $15.87 $17.27 $15.00 $14.53 $12.77 Accumulation units outstanding at the end of period 991,400 1,306,536 1,817,551 2,444,452 2,542,468 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Small Cap Value Division(30) Accumulation unit value: Beginning of period $11.43 $10.00 N/A N/A N/A End of period $9.33 $11.43 N/A N/A N/A Accumulation units outstanding at the end of period 2,022,206 161,376 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Mellon Capital Management (MCM) 10 x 10 Division(1304) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $9.83 N/A N/A N/A N/A Accumulation units outstanding at the end of period 23,115 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Mellon Capital Management (MCM) 10 x 10 Division(1304) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM 25 Division(17) Accumulation unit value: Beginning of period $12.72 $11.50 $12.01 $9.99 $7.63 End of period $12.19 $12.72 $11.50 $12.01 $9.99 Accumulation units outstanding at the end of period 1,348,555 1,682,667 2,032,427 1,944,847 2,524,900 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM 25 Division(17) Accumulation unit value: Beginning of period $8.76 $7.78 $8.24 $10.00 N/A End of period $7.63 $8.76 $7.78 $8.24 N/A Accumulation units outstanding at the end of period 1,813,423 927,576 458,998 225,236 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Bond Index Division(198) Accumulation unit value: Beginning of period $10.78 $10.54 $10.50 $10.27 $10.12 End of period $11.31 $10.78 $10.54 $10.50 $10.27 Accumulation units outstanding at the end of period 582,533 547,428 637,462 591,852 181,155 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Bond Index Division(198) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.12 N/A N/A N/A N/A Accumulation units outstanding at the end of period 79,158 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Communications Sector Division(17) Accumulation unit value: Beginning of period $6.10 $4.55 $4.57 $3.93 $5.59 End of period $6.27 $6.10 $4.55 $4.57 $3.93 Accumulation units outstanding at the end of period 465,664 499,438 152,941 200,248 2,004,639 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Communications Sector Division(17) Accumulation unit value: Beginning of period $5.59 $10.79 $14.99 $10.00 N/A End of period $3.00 $5.59 $10.79 $14.99 N/A Accumulation units outstanding at the end of period 1,953,721 1,834,516 1,158,100 336,879 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Consumer Brands Sector Division(17) Accumulation unit value: Beginning of period $11.75 $10.51 $10.92 $10.06 $8.44 End of period $10.68 $11.75 $10.51 $10.92 $10.06 Accumulation units outstanding at the end of period 32,306 34,048 51,898 56,224 1,022,740 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Consumer Brands Sector Division(17) Accumulation unit value: Beginning of period $9.10 $10.10 $9.48 $10.00 N/A End of period $8.44 $9.10 $10.10 $9.48 N/A Accumulation units outstanding at the end of period 1,079,249 864,203 426,052 176,274 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Dow 10 Division(17) Accumulation unit value: Beginning of period $11.44 $8.96 $9.63 $9.49 $7.66 End of period $11.40 $11.44 $8.96 $9.63 $9.49 Accumulation units outstanding at the end of period 2,613,874 3,502,291 3,954,269 4,246,007 4,260,951 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Dow 10 Division(17) Accumulation unit value: Beginning of period $8.61 $9.00 $8.67 $10.00 N/A End of period $7.66 $8.61 $9.00 $8.67 N/A Accumulation units outstanding at the end of period 4,204,922 2,654,212 2,340,312 898,160 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Dow Dividend Division(992) Accumulation unit value: Beginning of period $11.83 $10.00 N/A N/A N/A End of period $10.50 $11.83 N/A N/A N/A Accumulation units outstanding at the end of period 344,710 362,255 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Dow Dividend Division(992) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Enhanced S&P 500 Stock Index Division(198) Accumulation unit value: Beginning of period $17.60 $15.28 $14.86 $13.55 $10.64 End of period $18.01 $17.60 $15.28 $14.86 $13.55 Accumulation units outstanding at the end of period 318,286 451,347 442,642 567,683 548,237 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Enhanced S&P 500 Stock Index Division(198) Accumulation unit value: Beginning of period $10.22 N/A N/A N/A N/A End of period $10.64 N/A N/A N/A N/A Accumulation units outstanding at the end of period 83,108 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Financial Sector Division(17) Accumulation unit value: Beginning of period $14.89 $12.72 $12.16 $10.86 $8.27 End of period $12.13 $14.89 $12.72 $12.16 $10.86 Accumulation units outstanding at the end of period 112,138 175,497 151,697 74,051 1,571,108 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Financial Sector Division(17) Accumulation unit value: Beginning of period $9.75 $11.18 $8.91 $10.00 N/A End of period $8.27 $9.75 $11.18 $8.91 N/A Accumulation units outstanding at the end of period 1,660,329 1,596,407 1,008,606 280,321 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Global 15 Division(17) Accumulation unit value: Beginning of period $17.74 $12.84 $11.81 $9.35 $7.12 End of period $19.43 $17.74 $12.84 $11.81 $9.35 Accumulation units outstanding at the end of period 2,091,618 2,554,101 2,515,948 2,065,880 2,367,531 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Global 15 Division(17) Accumulation unit value: Beginning of period $8.38 $8.56 $8.93 $10.00 N/A End of period $7.12 $8.38 $8.56 $8.93 N/A Accumulation units outstanding at the end of period 1,663,442 940,817 588,686 227,870 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Healthcare Sector Division(17) Accumulation unit value: Beginning of period $12.02 $11.47 $10.81 $10.59 $8.37 End of period $12.75 $12.02 $11.47 $10.81 $10.59 Accumulation units outstanding at the end of period 292,483 335,942 372,544 121,521 2,061,617 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Healthcare Sector Division(17) Accumulation unit value: Beginning of period $12.23 $13.32 $9.67 $10.00 N/A End of period $8.37 $12.23 $13.32 $9.67 N/A Accumulation units outstanding at the end of period 2,094,390 1,953,625 1,311,066 418,359 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Index 5 Division(1304) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $9.91 N/A N/A N/A N/A Accumulation units outstanding at the end of period 22,227 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Index 5 Division(1304) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM International Index Division(199) Accumulation unit value: Beginning of period $22.76 $18.38 $16.45 $13.96 $10.31 End of period $24.77 $22.76 $18.38 $16.45 $13.96 Accumulation units outstanding at the end of period 864,961 1,004,678 922,314 758,714 428,981 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM International Index Division(199) Accumulation unit value: Beginning of period $9.93 N/A N/A N/A N/A End of period $10.31 N/A N/A N/A N/A Accumulation units outstanding at the end of period 30,077 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM JNL 5 Division(679) Accumulation unit value: Beginning of period $14.13 $12.06 $11.06 $10.00 N/A End of period $9.38 $14.13 $12.06 $11.06 N/A Accumulation units outstanding at the end of period 4,425,288 4,561,682 3,094,336 430,370 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM JNL 5 Division(679) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM JNL Optimized 5 Division(1072) Accumulation unit value: Beginning of period $10.73 $9.52 N/A N/A N/A End of period $12.02 $10.73 N/A N/A N/A Accumulation units outstanding at the end of period 256,642 81,783 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM JNL Optimized 5 Division(1072) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Nasdaq 25 Division(684) Accumulation unit value: Beginning of period $11.08 $10.73 $10.99 $10.00 N/A End of period $13.01 $11.08 $10.73 $10.99 N/A Accumulation units outstanding at the end of period 158,044 144,768 124,582 41,904 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Nasdaq 25 Division(684) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM NYSE International 25 Division(1332) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $11.17 N/A N/A N/A N/A Accumulation units outstanding at the end of period 28,858 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM NYSE International 25 Division(1332) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Oil & Gas Sector Division(17) Accumulation unit value: Beginning of period $28.03 $23.53 $17.44 $13.27 $10.21 End of period $37.39 $28.03 $23.53 $17.44 $13.27 Accumulation units outstanding at the end of period 761,165 855,265 992,637 412,820 646,956 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Oil & Gas Sector Division(17) Accumulation unit value: Beginning of period $10.73 $14.61 $10.20 $10.00 N/A End of period $10.21 $10.73 $14.61 $10.20 N/A Accumulation units outstanding at the end of period 692,179 673,841 357,749 74,681 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 10 Division(17) Accumulation unit value: Beginning of period $13.96 $13.52 $9.99 $8.61 $7.34 End of period $14.45 $13.96 $13.52 $9.99 $8.61 Accumulation units outstanding at the end of period 1,410,945 1,833,330 2,340,607 1,585,294 3,227,038 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 10 Division(17) Accumulation unit value: Beginning of period $9.09 $11.72 $10.98 $10.00 N/A End of period $7.34 $9.09 $11.72 $10.98 N/A Accumulation units outstanding at the end of period 2,794,216 2,181,891 1,617,989 836,713 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 24 Division(1147) Accumulation unit value: Beginning of period $10.20 $9.89 N/A N/A N/A End of period $10.82 $10.20 N/A N/A N/A Accumulation units outstanding at the end of period 15,925 4,764 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 24 Division(1147) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 400 MidCap Index Division(199) Accumulation unit value: Beginning of period $18.88 $17.45 $15.80 $13.84 $10.43 End of period $20.00 $18.88 $17.45 $15.80 $13.84 Accumulation units outstanding at the end of period 557,477 695,721 724,394 751,941 480,791 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 400 MidCap Index Division(199) Accumulation unit value: Beginning of period $9.85 N/A N/A N/A N/A End of period $10.43 N/A N/A N/A N/A Accumulation units outstanding at the end of period 87,434 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 500 Index Division(198) Accumulation unit value: Beginning of period $16.96 $14.95 $14.52 $13.38 $10.62 End of period $17.54 $16.96 $14.95 $14.52 $13.38 Accumulation units outstanding at the end of period 1,024,033 1,237,693 1,350,070 1,291,259 939,907 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 500 Index Division(198) Accumulation unit value: Beginning of period $10.22 N/A N/A N/A N/A End of period $10.62 N/A N/A N/A N/A Accumulation units outstanding at the end of period 212,193 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P SMid 60 Division(1304) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $8.85 N/A N/A N/A N/A Accumulation units outstanding at the end of period 18,493 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P SMid 60 Division(1304) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Select Small-Cap Division(17) Accumulation unit value: Beginning of period $21.42 $19.84 $18.47 $16.64 $11.40 End of period $18.91 $21.42 $19.84 $18.47 $16.64 Accumulation units outstanding at the end of period 883,595 1,078,687 1,238,136 1,060,719 2,134,597 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Select Small-Cap Division(17) Accumulation unit value: Beginning of period $14.04 $14.82 $12.29 $10.00 N/A End of period $11.40 $14.04 $14.82 $12.29 N/A Accumulation units outstanding at the end of period 1,570,798 997,595 521,580 170,871 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Small Cap Index Division(199) Accumulation unit value: Beginning of period $20.89 $18.03 $17.54 $15.15 $10.53 End of period $20.16 $20.89 $18.03 $17.54 $15.15 Accumulation units outstanding at the end of period 470,019 606,369 580,685 669,538 501,743 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Small Cap Index Division(199) Accumulation unit value: Beginning of period $9.96 N/A N/A N/A N/A End of period $10.53 N/A N/A N/A N/A Accumulation units outstanding at the end of period 57,890 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Technology Sector Division(17) Accumulation unit value: Beginning of period $6.25 $5.80 $5.74 $5.76 $4.02 End of period $7.06 $6.25 $5.80 $5.74 $5.76 Accumulation units outstanding at the end of period 345,331 330,878 337,072 223,808 3,401,629 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Technology Sector Division(17) Accumulation unit value: Beginning of period $6.49 $11.93 $15.28 $10.00 N/A End of period $4.02 $6.49 $11.93 $15.28 N/A Accumulation units outstanding at the end of period 3,471,994 3,016,465 1,683,181 512,510 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Value Line 30 Division(679) Accumulation unit value: Beginning of period $15.58 $16.02 $11.70 $10.00 N/A End of period $18.35 $15.58 $16.02 $11.70 N/A Accumulation units outstanding at the end of period 824,345 1,083,981 1,238,076 98,576 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Value Line 30 Division(679) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM VIP Division(684) Accumulation unit value: Beginning of period $13.57 $12.27 $11.33 $10.00 N/A End of period $14.82 $13.57 $12.27 $11.33 N/A Accumulation units outstanding at the end of period 589,327 1,115,805 1,056,782 52,967 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM VIP Division(684) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Oppenheimer Global Growth Division(27) Accumulation unit value: Beginning of period $14.67 $12.72 $11.34 $9.75 $7.03 End of period $15.38 $14.67 $12.72 $11.34 $9.75 Accumulation units outstanding at the end of period 1,737,599 2,366,005 2,697,539 3,005,388 2,531,796 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Oppenheimer Global Growth Division(27) Accumulation unit value: Beginning of period $9.18 $10.00 N/A N/A N/A End of period $7.03 $9.18 N/A N/A N/A Accumulation units outstanding at the end of period 2,229,767 866,690 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Oppenheimer Growth Division(27) Accumulation unit value: Beginning of period $9.14 $8.83 $8.21 $7.98 $6.87 End of period $9.87 $9.14 $8.83 $8.21 $7.98 Accumulation units outstanding at the end of period - 525,925 626,735 641,932 802,482 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Oppenheimer Growth Division(27) Accumulation unit value: Beginning of period $9.33 $10.00 N/A N/A N/A End of period $6.87 $9.33 N/A N/A N/A Accumulation units outstanding at the end of period 596,099 399,449 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PIMCO Real Return Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.94 N/A N/A N/A N/A Accumulation units outstanding at the end of period 155,541 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PIMCO Real Return Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PIMCO Total Return Bond Division(30) Accumulation unit value: Beginning of period $11.59 $11.36 $11.26 $10.93 $10.58 End of period $12.37 $11.59 $11.36 $11.26 $10.93 Accumulation units outstanding at the end of period 3,121,775 3,567,485 3,949,820 4,242,669 5,266,037 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PIMCO Total Return Bond Division(30) Accumulation unit value: Beginning of period $9.85 $10.00 N/A N/A N/A End of period $10.58 $9.85 N/A N/A N/A Accumulation units outstanding at the end of period 6,035,970 851,411 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America Core Equity Division Accumulation unit value: Beginning of period $20.33 $18.13 $16.91 $15.17 $12.09 End of period $18.60 $20.33 $18.13 $16.91 $15.17 Accumulation units outstanding at the end of period 3,531,111 4,543,265 6,025,199 7,556,994 9,434,893 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America Core Equity Division Accumulation unit value: Beginning of period $16.15 $21.84 $26.96 $21.13 $15.88 End of period $12.09 $16.15 $21.84 $26.96 $21.13 Accumulation units outstanding at the end of period 11,426,408 15,246,847 16,776,830 14,056,305 8,348,592 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America High Yield Bond Division(946) Accumulation unit value: Beginning of period N/A N/A N/A $14.87 $12.70 End of period N/A N/A N/A $15.37 $14.87 Accumulation units outstanding at the end of period N/A N/A N/A - 7,501,178 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America High Yield Bond Division(946) Accumulation unit value: Beginning of period $12.62 $12.12 $13.02 $13.06 $12.75 End of period $12.70 $12.62 $12.12 $13.02 $13.06 Accumulation units outstanding at the end of period 8,221,752 9,858,774 9,117,909 9,672,921 7,350,674 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America High Yield Bond Division(674) Accumulation unit value: Beginning of period $11.24 $10.31 $10.28 $10.00 N/A End of period $10.96 $11.24 $10.31 $10.28 N/A Accumulation units outstanding at the end of period 4,420,467 5,858,517 7,310,204 9,523,409 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America High Yield Bond Division(674) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America Value Equity Division Accumulation unit value: Beginning of period $19.91 $17.86 $17.27 $15.96 $12.99 End of period $18.53 $19.91 $17.86 $17.27 $15.96 Accumulation units outstanding at the end of period 4,397,670 5,719,045 7,449,847 9,322,373 11,465,841 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America Value Equity Division Accumulation unit value: Beginning of period $16.44 $17.80 $16.87 $17.29 $15.59 End of period $12.99 $16.44 $17.80 $16.87 $17.29 Accumulation units outstanding at the end of period 13,958,334 17,374,199 18,374,087 16,357,203 10,899,898 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Putnam Midcap Growth Division(19) Accumulation unit value: Beginning of period $8.74 $8.38 $7.58 $6.48 $4.92 End of period $8.54 $8.74 $8.38 $7.58 $6.48 Accumulation units outstanding at the end of period - 1,198,802 1,447,423 1,831,953 2,031,174 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Putnam Midcap Growth Division(19) Accumulation unit value: Beginning of period $7.06 $9.81 $10.00 N/A N/A End of period $4.92 $7.06 $9.81 N/A N/A Accumulation units outstanding at the end of period 2,256,106 2,574,918 1,840,603 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P 4 Division(1451) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $9.92 N/A N/A N/A N/A Accumulation units outstanding at the end of period 26,347 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P 4 Division(1451) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Competitive Advantage Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Competitive Advantage Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 100 Division(199) Accumulation unit value: Beginning of period N/A N/A N/A $12.57 $10.45 End of period N/A N/A N/A $12.81 $12.57 Accumulation units outstanding at the end of period N/A N/A N/A - 159,062 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 100 Division(199) Accumulation unit value: Beginning of period $9.77 N/A N/A N/A N/A End of period $10.45 N/A N/A N/A N/A Accumulation units outstanding at the end of period 26,462 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 50 Division(232) Accumulation unit value: Beginning of period N/A N/A N/A $13.52 $10.47 End of period N/A N/A N/A $13.79 $13.52 Accumulation units outstanding at the end of period N/A N/A N/A - 63,894 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 50 Division(232) Accumulation unit value: Beginning of period $11.06 N/A N/A N/A N/A End of period $10.47 N/A N/A N/A N/A Accumulation units outstanding at the end of period 1,932 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 75 Division(216) Accumulation unit value: Beginning of period N/A N/A N/A $13.06 $10.47 End of period N/A N/A N/A $13.34 $13.06 Accumulation units outstanding at the end of period N/A N/A N/A - 19,501 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 75 Division(216) Accumulation unit value: Beginning of period $10.42 N/A N/A N/A N/A End of period $10.47 N/A N/A N/A N/A Accumulation units outstanding at the end of period 7,572 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Growth Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.51 N/A N/A N/A N/A Accumulation units outstanding at the end of period 6,101 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Moderate Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.56 N/A N/A N/A N/A Accumulation units outstanding at the end of period 86,939 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Moderate Growth Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.53 N/A N/A N/A N/A Accumulation units outstanding at the end of period 53,274 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Moderate Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Dividend Income & Growth Division(1451) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $9.77 N/A N/A N/A N/A Accumulation units outstanding at the end of period 2,648 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Dividend Income & Growth Division(1451) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Equity Aggressive Growth Division I(6) Accumulation unit value: Beginning of period N/A N/A N/A $10.52 $8.21 End of period N/A N/A N/A $10.75 $10.52 Accumulation units outstanding at the end of period N/A N/A N/A - 2,651,294 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Equity Aggressive Growth Division I(6) Accumulation unit value: Beginning of period $10.84 $12.75 $15.24 $10.64 $10.00 End of period $8.21 $10.84 $12.75 $15.24 $10.64 Accumulation units outstanding at the end of period 2,991,831 3,663,573 3,066,578 1,183,888 304,127 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Equity Growth Division I(5) Accumulation unit value: Beginning of period N/A N/A N/A $10.28 $8.05 End of period N/A N/A N/A $10.48 $10.28 Accumulation units outstanding at the end of period N/A N/A N/A - 9,720,273 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Equity Growth Division I(5) Accumulation unit value: Beginning of period $10.65 $12.61 $14.87 $10.53 $10.00 End of period $8.05 $10.65 $12.61 $14.87 $10.53 Accumulation units outstanding at the end of period 10,657,778 13,042,220 10,443,838 3,994,657 478,149 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Intrinsic Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Intrinsic Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Aggressive Growth Division(3) Accumulation unit value: Beginning of period $15.46 $13.56 $12.68 $11.42 $9.13 End of period $16.64 $15.46 $13.56 $12.68 $11.42 Accumulation units outstanding at the end of period 8,638,919 11,398,605 14,771,865 19,109,930 7,250,948 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Aggressive Growth Division(3) Accumulation unit value: Beginning of period $11.33 $12.85 $14.38 $10.77 $10.00 End of period $9.13 $11.33 $12.85 $14.38 $10.77 Accumulation units outstanding at the end of period 7,814,916 9,087,381 7,064,128 2,790,656 410,888 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Conservative Division(683) Accumulation unit value: Beginning of period $11.27 $10.60 $10.36 $10.00 N/A End of period $11.81 $11.27 $10.60 $10.36 N/A Accumulation units outstanding at the end of period 447,777 418,780 453,860 71,770 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Conservative Division(683) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Growth Division(3) Accumulation unit value: Beginning of period $15.40 $13.68 $12.91 $11.75 $9.79 End of period $16.50 $15.40 $13.68 $12.91 $11.75 Accumulation units outstanding at the end of period 10,473,003 13,384,367 16,904,102 20,710,783 22,234,816 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Growth Division(3) Accumulation unit value: Beginning of period $11.33 $12.40 $13.15 $10.52 $10.00 End of period $9.79 $11.33 $12.40 $13.15 $10.52 Accumulation units outstanding at the end of period 23,364,549 25,281,429 17,565,944 8,312,453 1,198,566 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Moderate Division(685) Accumulation unit value: Beginning of period $11.94 $10.97 $10.59 $10.00 N/A End of period $12.69 $11.94 $10.97 $10.59 N/A Accumulation units outstanding at the end of period 856,526 670,900 460,905 69,719 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Moderate Division(685) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Moderate Growth Division(4) Accumulation unit value: Beginning of period $14.63 $13.23 $12.60 $11.67 $10.05 End of period $15.68 $14.63 $13.23 $12.60 $11.67 Accumulation units outstanding at the end of period 7,693,737 9,979,442 12,141,963 13,786,661 15,113,050 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Moderate Growth Division(4) Accumulation unit value: Beginning of period $11.13 $11.85 $12.21 $10.36 $10.00 End of period $10.05 $11.13 $11.85 $12.21 $10.36 Accumulation units outstanding at the end of period 16,064,876 16,213,693 11,548,615 5,873,298 967,674 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2015 Division(1017) Accumulation unit value: Beginning of period $10.86 $10.12 N/A N/A N/A End of period $11.69 $10.86 N/A N/A N/A Accumulation units outstanding at the end of period 19,305 8,770 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2015 Division(1017) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2020 Division Accumulation unit value: Beginning of period $10.98 $10.00 N/A N/A N/A End of period $11.85 $10.98 N/A N/A N/A Accumulation units outstanding at the end of period 21,199 7,850 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2020 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2025 Division(1208) Accumulation unit value: Beginning of period $11.05 $11.01 N/A N/A N/A End of period $12.00 $11.05 N/A N/A N/A Accumulation units outstanding at the end of period 11,298 2,452 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2025 Division(1208) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement Income Division Accumulation unit value: Beginning of period $10.62 $10.00 N/A N/A N/A End of period $11.19 $10.62 N/A N/A N/A Accumulation units outstanding at the end of period 33,776 18,460 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement Income Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Total Yield Division(1451) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.06 N/A N/A N/A N/A Accumulation units outstanding at the end of period 1,666 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Total Yield Division(1451) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Very Aggressive Growth Division I(2) Accumulation unit value: Beginning of period N/A N/A N/A $11.02 $8.55 End of period N/A N/A N/A $11.27 $11.02 Accumulation units outstanding at the end of period N/A N/A N/A - 3,663,862 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Very Aggressive Growth Division I(2) Accumulation unit value: Beginning of period $11.30 $13.28 $16.25 $11.07 $10.00 End of period $8.55 $11.30 $13.28 $16.25 $11.07 Accumulation units outstanding at the end of period 4,308,780 5,007,185 4,279,446 1,438,910 220,495 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Balanced Division Accumulation unit value: Beginning of period $24.20 $21.59 $20.80 $19.02 $15.87 End of period $25.65 $24.20 $21.59 $20.80 $19.02 Accumulation units outstanding at the end of period 5,418,658 6,860,597 8,672,411 10,080,607 10,817,218 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Balanced Division Accumulation unit value: Beginning of period $16.41 $15.05 $14.10 $14.31 $13.19 End of period $15.87 $16.41 $15.05 $14.10 $14.31 Accumulation units outstanding at the end of period 11,302,837 11,986,416 10,032,286 9,940,416 6,574,171 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Money Market Division Accumulation unit value: Beginning of period $12.52 $12.14 $11.99 $12.06 $12.18 End of period $12.93 $12.52 $12.14 $11.99 $12.06 Accumulation units outstanding at the end of period 3,370,038 2,998,907 2,705,617 3,232,514 4,703,950 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Money Market Division Accumulation unit value: Beginning of period $12.22 $11.98 $11.48 $11.12 $10.74 End of period $12.18 $12.22 $11.98 $11.48 $11.12 Accumulation units outstanding at the end of period 7,398,187 10,944,112 8,517,299 11,491,181 4,713,958 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Value Division(205) Accumulation unit value: Beginning of period $20.91 $17.54 $16.45 $14.53 $10.93 End of period $22.24 $20.91 $17.54 $16.45 $14.53 Accumulation units outstanding at the end of period 1,032,112 1,341,566 1,111,423 1,031,458 562,971 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Value Division(205) Accumulation unit value: Beginning of period $9.50 N/A N/A N/A N/A End of period $10.93 N/A N/A N/A N/A Accumulation units outstanding at the end of period 30,771 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Established Growth Division Accumulation unit value: Beginning of period $26.03 $23.21 $22.19 $20.48 $15.91 End of period $28.26 $26.03 $23.21 $22.19 $20.48 Accumulation units outstanding at the end of period 8,173,645 6,869,778 8,725,276 10,119,927 11,790,991 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Established Growth Division Accumulation unit value: Beginning of period $21.04 $23.77 $24.19 $20.14 $15.99 End of period $15.91 $21.04 $23.77 $24.19 $20.14 Accumulation units outstanding at the end of period 12,765,760 15,911,916 16,685,946 14,057,518 10,399,047 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Mid-Cap Growth Division Accumulation unit value: Beginning of period $32.03 $30.41 $27.03 $23.22 $16.99 End of period $37.02 $32.03 $30.41 $27.03 $23.22 Accumulation units outstanding at the end of period 4,227,393 5,523,883 7,110,718 8,830,489 10,141,081 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Mid-Cap Growth Division Accumulation unit value: Beginning of period $22.07 $22.72 $21.50 $17.58 $14.68 End of period $16.99 $22.07 $22.72 $21.50 $17.58 Accumulation units outstanding at the end of period 10,928,820 13,844,072 15,106,446 11,658,193 9,941,003 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Value Division(19) Accumulation unit value: Beginning of period $16.58 $14.01 $13.38 $11.78 $9.20 End of period $16.48 $16.58 $14.01 $13.38 $11.78 Accumulation units outstanding at the end of period 3,732,813 4,684,253 5,635,532 7,053,450 7,141,219 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Value Division(19) Accumulation unit value: Beginning of period $11.21 $11.29 $10.00 N/A N/A End of period $9.20 $11.21 $11.29 N/A N/A Accumulation units outstanding at the end of period 7,225,836 7,290,624 1,379,388 N/A N/A Accumulation Unit Values Contract with Endorsements - 1.70% Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM International Growth Division(30) Accumulation unit value: Beginning of period $15.08 $12.51 $11.49 $10.05 $7.95 End of period $16.27 $15.08 $12.51 $11.49 $10.05 Accumulation units outstanding at the end of period 1,449 75 149 149 6,365 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM International Growth Division(30) Accumulation unit value: Beginning of period $10.19 $10.00 N/A N/A N/A End of period $7.95 $10.19 N/A N/A N/A Accumulation units outstanding at the end of period 5,535 2,859 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Large Cap Growth Division(57) Accumulation unit value: Beginning of period $12.15 $11.46 $10.87 $10.05 $7.86 End of period $13.82 $12.15 $11.46 $10.87 $10.05 Accumulation units outstanding at the end of period 5,316 2,458 2,627 2,731 854 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Large Cap Growth Division(57) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $7.86 N/A N/A N/A N/A Accumulation units outstanding at the end of period 437 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Premier Equity II Division(32) Accumulation unit value: Beginning of period N/A N/A N/A $8.54 $7.08 End of period N/A N/A N/A $8.35 $8.54 Accumulation units outstanding at the end of period N/A N/A N/A - 2,330 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Premier Equity II Division(32) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $7.08 N/A N/A N/A N/A Accumulation units outstanding at the end of period 2,331 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Real Estate Division(1182) Accumulation unit value: Beginning of period $10.49 $10.00 N/A N/A N/A End of period $8.77 $10.49 N/A N/A N/A Accumulation units outstanding at the end of period - 3,812 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Real Estate Division(1182) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Small Cap Growth Division(30) Accumulation unit value: Beginning of period $13.34 $11.85 $11.12 $10.58 $7.78 End of period $14.61 $13.34 $11.85 $11.12 $10.58 Accumulation units outstanding at the end of period 616 646 702 702 4,432 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Small Cap Growth Division(30) Accumulation unit value: Beginning of period $10.88 $10.00 N/A N/A N/A End of period $7.78 $10.88 N/A N/A N/A Accumulation units outstanding at the end of period 2,341 150 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Alger Growth Division(30) Accumulation unit value: Beginning of period $10.46 $10.13 $9.18 $8.89 $6.68 End of period $11.35 $10.46 $10.13 $9.18 $8.89 Accumulation units outstanding at the end of period - 1,310 1,351 1,393 4,738 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Alger Growth Division(30) Accumulation unit value: Beginning of period $10.17 $10.00 N/A N/A N/A End of period $6.68 $10.17 N/A N/A N/A Accumulation units outstanding at the end of period 1,332 150 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Alliance Capital Growth Division(30) Accumulation unit value: Beginning of period N/A N/A $8.73 $8.35 $6.83 End of period N/A N/A $7.93 $8.73 $8.35 Accumulation units outstanding at the end of period N/A N/A - 650 13,608 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Alliance Capital Growth Division(30) Accumulation unit value: Beginning of period $10.08 $10.00 N/A N/A N/A End of period $6.83 $10.08 N/A N/A N/A Accumulation units outstanding at the end of period 13,895 4,805 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian Global Balanced Division(30) Accumulation unit value: Beginning of period $12.95 $11.89 $10.98 $10.21 $9.13 End of period $13.74 $12.95 $11.89 $10.98 $10.21 Accumulation units outstanding at the end of period 10,464 3,549 3,581 3,678 4,590 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian Global Balanced Division(30) Accumulation unit value: Beginning of period $9.94 $10.00 N/A N/A N/A End of period $9.13 $9.94 N/A N/A N/A Accumulation units outstanding at the end of period 4,540 1,584 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian Global Diversified Research Division(569) Accumulation unit value: Beginning of period $12.36 $11.10 $11.07 $10.00 N/A End of period $14.66 $12.36 $11.10 $11.07 N/A Accumulation units outstanding at the end of period - - - - N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian Global Diversified Research Division(569) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian International Small Cap Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian International Small Cap Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian U.S. Growth Equity Division(30) Accumulation unit value: Beginning of period $10.93 $10.62 $10.32 $9.40 $7.06 End of period $11.79 $10.93 $10.62 $10.32 $9.40 Accumulation units outstanding at the end of period 1,838 1,861 1,950 9,495 2,821 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian U.S. Growth Equity Division(30) Accumulation unit value: Beginning of period $10.22 $10.00 N/A N/A N/A End of period $7.06 $10.22 N/A N/A N/A Accumulation units outstanding at the end of period 2,823 3,741 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Credit Suisse Global Natural Resources Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Credit Suisse Global Natural Resources Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Credit Suisse Long/Short Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Credit Suisse Long/Short Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Eagle Core Equity Division(30) Accumulation unit value: Beginning of period $11.38 $10.30 $10.13 $9.70 $7.92 End of period $11.25 $11.38 $10.30 $10.13 $9.70 Accumulation units outstanding at the end of period 500 509 368 367 2,311 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Eagle Core Equity Division(30) Accumulation unit value: Beginning of period $10.14 $10.00 N/A N/A N/A End of period $7.92 $10.14 N/A N/A N/A Accumulation units outstanding at the end of period 2,483 1,955 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Eagle SmallCap Equity Division(30) Accumulation unit value: Beginning of period $15.93 $13.49 $13.39 $11.46 $8.33 End of period $17.56 $15.93 $13.49 $13.39 $11.46 Accumulation units outstanding at the end of period 1,074 1,028 1,090 1,158 1,191 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Eagle SmallCap Equity Division(30) Accumulation unit value: Beginning of period $10.97 $10.00 N/A N/A N/A End of period $8.33 $10.97 N/A N/A N/A Accumulation units outstanding at the end of period 5,505 7,152 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Founding Strategy Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Founding Strategy Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Global Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Global Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Income Division(1069) Accumulation unit value: Beginning of period $10.86 $9.94 N/A N/A N/A End of period $10.87 $10.86 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Income Division(1069) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Mutual Shares Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Mutual Shares Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Small Cap Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Small Cap Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Core Plus Bond Division(30) Accumulation unit value: Beginning of period $12.84 $12.48 $12.37 $11.77 $10.54 End of period $13.51 $12.84 $12.48 $12.37 $11.77 Accumulation units outstanding at the end of period 3,738 1,590 2,155 1,046 779 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Core Plus Bond Division(30) Accumulation unit value: Beginning of period $9.89 $10.00 N/A N/A N/A End of period $10.54 $9.89 N/A N/A N/A Accumulation units outstanding at the end of period 782 964 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Mid Cap Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Mid Cap Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Short Duration Bond Division(1066) Accumulation unit value: Beginning of period $10.19 $10.00 N/A N/A N/A End of period $10.50 $10.19 N/A N/A N/A Accumulation units outstanding at the end of period 2,661 5,458 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Short Duration Bond Division(1066) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan International Value Division(444) Accumulation unit value: Beginning of period $25.31 $19.51 $16.73 $13.89 $12.70 End of period $27.86 $25.31 $19.51 $16.73 $13.89 Accumulation units outstanding at the end of period 534 4,379 2,598 4,482 2,427 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan International Value Division(444) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan MidCap Growth Division(30) Accumulation unit value: Beginning of period $12.56 $11.40 $10.93 $9.42 $7.06 End of period $13.33 $12.56 $11.40 $10.93 $9.42 Accumulation units outstanding at the end of period 93 86 172 172 172 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan MidCap Growth Division(30) Accumulation unit value: Beginning of period $10.15 $10.00 N/A N/A N/A End of period $7.06 $10.15 N/A N/A N/A Accumulation units outstanding at the end of period 173 1,720 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan U.S. Government & Quality Bond Division(30) Accumulation unit value: Beginning of period $10.94 $10.78 $10.71 $10.49 $10.55 End of period $11.44 $10.94 $10.78 $10.71 $10.49 Accumulation units outstanding at the end of period 2,396 2,411 2,393 2,972 4,664 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan U.S. Government & Quality Bond Division(30) Accumulation unit value: Beginning of period $9.62 $10.00 N/A N/A N/A End of period $10.55 $9.62 N/A N/A N/A Accumulation units outstanding at the end of period 15,985 4,300 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Emerging Markets Division(1064) Accumulation unit value: Beginning of period $10.87 $10.07 N/A N/A N/A End of period $14.08 $10.87 N/A N/A N/A Accumulation units outstanding at the end of period 111 - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Emerging Markets Division(1064) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Mid Cap Value Division(30) Accumulation unit value: Beginning of period $16.75 $14.87 $13.90 $11.34 $8.95 End of period $16.04 $16.75 $14.87 $13.90 $11.34 Accumulation units outstanding at the end of period 1,092 504 494 495 494 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Mid Cap Value Division(30) Accumulation unit value: Beginning of period $10.59 $10.00 N/A N/A N/A End of period $8.95 $10.59 N/A N/A N/A Accumulation units outstanding at the end of period 476 150 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Small Cap Value Division(35) Accumulation unit value: Beginning of period $14.88 $12.96 $12.59 $11.10 $8.13 End of period $13.63 $14.88 $12.96 $12.59 $11.10 Accumulation units outstanding at the end of period 163 164 1,889 2,841 3,869 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Small Cap Value Division(35) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $8.13 N/A N/A N/A N/A Accumulation units outstanding at the end of period 81 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Mellon Capital Management (MCM) 10 x 10 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Mellon Capital Management (MCM) 10 x 10 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM 25 Division(871) Accumulation unit value: Beginning of period $16.81 $15.23 $15.22 N/A N/A End of period $16.06 $16.81 $15.23 N/A N/A Accumulation units outstanding at the end of period 252 272 351 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM 25 Division(871) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Bond Index Division(196) Accumulation unit value: Beginning of period $10.64 $10.44 $10.43 $10.23 $10.11 End of period $11.13 $10.64 $10.44 $10.43 $10.23 Accumulation units outstanding at the end of period - - 4,089 4,103 - Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Bond Index Division(196) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.11 N/A N/A N/A N/A Accumulation units outstanding at the end of period - N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Communications Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Communications Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Consumer Brands Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Consumer Brands Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Dow 10 Division(35) Accumulation unit value: Beginning of period $13.13 $10.30 $11.11 $10.99 $8.89 End of period $13.04 $13.13 $10.30 $11.11 $10.99 Accumulation units outstanding at the end of period 6,234 6,365 2,912 2,674 2,666 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Dow 10 Division(35) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $8.89 N/A N/A N/A N/A Accumulation units outstanding at the end of period 2,541 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Dow Dividend Division(992) Accumulation unit value: Beginning of period $11.80 $10.00 N/A N/A N/A End of period $10.44 $11.80 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Dow Dividend Division(992) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Enhanced S&P 500 Stock Index Division Accumulation unit value: Beginning of period $17.38 N/A N/A N/A N/A End of period $17.73 N/A N/A N/A N/A Accumulation units outstanding at the end of period 589 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Enhanced S&P 500 Stock Index Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Financial Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Financial Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Global 15 Division(871) Accumulation unit value: Beginning of period $24.97 $18.12 $16.87 N/A N/A End of period $27.27 $24.97 $18.12 N/A N/A Accumulation units outstanding at the end of period 2,073 3,770 312 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Global 15 Division(871) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Healthcare Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Healthcare Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Index 5 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Index 5 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM International Index Division Accumulation unit value: Beginning of period $22.55 N/A N/A N/A N/A End of period $24.38 N/A N/A N/A N/A Accumulation units outstanding at the end of period 1,341 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM International Index Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM JNL 5 Division(855) Accumulation unit value: Beginning of period $12.37 $10.59 $10.00 N/A N/A End of period $12.33 $12.37 $10.59 N/A N/A Accumulation units outstanding at the end of period 830 9,263 10,354 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM JNL 5 Division(855) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM JNL Optimized 5 Division(1069) Accumulation unit value: Beginning of period $10.71 $9.82 N/A N/A N/A End of period $11.96 $10.71 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM JNL Optimized 5 Division(1069) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Nasdaq 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Nasdaq 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM NYSE International 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM NYSE International 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Oil & Gas Sector Division(884) Accumulation unit value: Beginning of period $12.17 $10.26 $10.00 N/A N/A End of period $16.19 $12.17 $10.26 N/A N/A Accumulation units outstanding at the end of period 50 50 50 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Oil & Gas Sector Division(884) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 10 Division(935) Accumulation unit value: Beginning of period $17.10 $16.62 $15.81 N/A N/A End of period $17.66 $17.10 $16.62 N/A N/A Accumulation units outstanding at the end of period 2,126 2,203 150 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 10 Division(935) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 24 Division(1085) Accumulation unit value: Beginning of period $10.18 $9.58 N/A N/A N/A End of period $10.77 $10.18 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 24 Division(1085) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 400 MidCap Index Division(572) Accumulation unit value: Beginning of period $18.64 $14.04 $12.75 $11.49 N/A End of period $19.69 $18.64 $14.04 $12.75 N/A Accumulation units outstanding at the end of period 2,476 2,024 - - N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 400 MidCap Index Division(572) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 500 Index Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 500 Index Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P SMid 60 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P SMid 60 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Select Small-Cap Division(935) Accumulation unit value: Beginning of period $19.69 $18.29 $16.77 N/A N/A End of period $17.33 $19.69 $18.29 N/A N/A Accumulation units outstanding at the end of period 2,036 2,110 141 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Select Small-Cap Division(935) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Small Cap Index Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Small Cap Index Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Technology Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Technology Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Value Line 30 Division(871) Accumulation unit value: Beginning of period $11.89 $12.26 $10.00 N/A N/A End of period $13.97 $11.89 $12.26 N/A N/A Accumulation units outstanding at the end of period 5,049 5,262 291 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Value Line 30 Division(871) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM VIP Division(855) Accumulation unit value: Beginning of period $11.76 $10.66 $10.00 N/A N/A End of period $12.80 $11.76 $10.66 N/A N/A Accumulation units outstanding at the end of period - 9,611 9,992 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM VIP Division(855) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Oppenheimer Global Growth Division(27) Accumulation unit value: Beginning of period $15.83 $13.76 $12.31 $10.61 $7.68 End of period $16.54 $15.83 $13.76 $12.31 $10.61 Accumulation units outstanding at the end of period 334 388 2,138 2,213 1,894 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Oppenheimer Global Growth Division(27) Accumulation unit value: Beginning of period $10.06 $10.00 N/A N/A N/A End of period $7.68 $10.06 N/A N/A N/A Accumulation units outstanding at the end of period 5,471 1,746 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Oppenheimer Growth Division(27) Accumulation unit value: Beginning of period $9.81 $9.52 $8.87 $8.65 $7.47 End of period $10.59 $9.81 $9.52 $8.87 $8.65 Accumulation units outstanding at the end of period - 398 399 439 438 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Oppenheimer Growth Division(27) Accumulation unit value: Beginning of period $10.17 $10.00 N/A N/A N/A End of period $7.47 $10.17 N/A N/A N/A Accumulation units outstanding at the end of period 1,783 499 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PIMCO Real Return Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PIMCO Real Return Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PIMCO Total Return Bond Division(30) Accumulation unit value: Beginning of period $11.58 $11.39 $11.32 $11.02 $10.70 End of period $12.33 $11.58 $11.39 $11.32 $11.02 Accumulation units outstanding at the end of period 1,400 1,450 1,482 2,865 7,542 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PIMCO Total Return Bond Division(30) Accumulation unit value: Beginning of period $10.00 $10.00 N/A N/A N/A End of period $10.70 $10.00 N/A N/A N/A Accumulation units outstanding at the end of period 4,196 300 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America Core Equity Division(37) Accumulation unit value: Beginning of period $12.51 $11.19 $10.47 $9.42 $7.53 End of period $11.41 $12.51 $11.19 $10.47 $9.42 Accumulation units outstanding at the end of period 834 1,124 1,275 1,060 1,049 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America Core Equity Division(37) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $7.53 N/A N/A N/A N/A Accumulation units outstanding at the end of period 1,037 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America High Yield Bond Division(30) Accumulation unit value: Beginning of period N/A N/A N/A $11.68 $10.01 End of period N/A N/A N/A $12.05 $11.68 Accumulation units outstanding at the end of period N/A N/A N/A - 4,802 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America High Yield Bond Division(30) Accumulation unit value: Beginning of period $9.98 $10.00 N/A N/A N/A End of period $10.01 $9.98 N/A N/A N/A Accumulation units outstanding at the end of period 4,217 1,029 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America High Yield Bond Division(674) Accumulation unit value: Beginning of period $11.18 $10.28 $10.28 $10.00 N/A End of period $10.87 $11.18 $10.28 $10.28 N/A Accumulation units outstanding at the end of period 147 141 68 4,941 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America High Yield Bond Division(674) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America Value Equity Division(30) Accumulation unit value: Beginning of period $12.14 $10.92 $10.59 $9.81 $8.01 End of period $11.26 $12.14 $10.92 $10.59 $9.81 Accumulation units outstanding at the end of period 1,111 997 923 910 5,756 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America Value Equity Division(30) Accumulation unit value: Beginning of period $10.17 $10.00 N/A N/A N/A End of period $8.01 $10.17 N/A N/A N/A Accumulation units outstanding at the end of period 5,738 5,048 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Putnam Midcap Growth Division(30) Accumulation unit value: Beginning of period $12.83 $12.35 $11.23 $9.61 $7.32 End of period $12.50 $12.83 $12.35 $11.23 $9.61 Accumulation units outstanding at the end of period - 30 30 30 29 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Putnam Midcap Growth Division(30) Accumulation unit value: Beginning of period $10.54 $10.00 N/A N/A N/A End of period $7.32 $10.54 N/A N/A N/A Accumulation units outstanding at the end of period 1,358 494 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P 4 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P 4 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Competitive Advantage Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Competitive Advantage Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 100 Division(945) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 100 Division(945) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 50 Division(949) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 50 Division(949) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 75 Division(941) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 75 Division(941) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Moderate Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Moderate Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Dividend Income & Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Dividend Income & Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Equity Aggressive Growth Division I(939) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Equity Aggressive Growth Division I(939) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Equity Growth Division I(40) Accumulation unit value: Beginning of period N/A N/A N/A $9.83 $7.72 End of period N/A N/A N/A $10.00 $9.83 Accumulation units outstanding at the end of period N/A N/A N/A - 3,459 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Equity Growth Division I(40) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $7.72 N/A N/A N/A N/A Accumulation units outstanding at the end of period 3,464 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Intrinsic Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Intrinsic Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Aggressive Growth Division(30) Accumulation unit value: Beginning of period $13.57 $11.95 $11.20 $10.12 $8.12 End of period $14.57 $13.57 $11.95 $11.20 $10.12 Accumulation units outstanding at the end of period 4,228 4,244 4,150 7,786 4,410 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Aggressive Growth Division(30) Accumulation unit value: Beginning of period $10.10 $10.00 N/A N/A N/A End of period $8.12 $10.10 N/A N/A N/A Accumulation units outstanding at the end of period 6,585 42 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Conservative Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Conservative Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Growth Division(30) Accumulation unit value: Beginning of period $13.58 $12.10 $11.46 $10.46 $8.74 End of period $14.51 $13.58 $12.10 $11.46 $10.46 Accumulation units outstanding at the end of period 184,091 185,793 206,585 215,690 216,117 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Growth Division(30) Accumulation unit value: Beginning of period $10.15 $10.00 N/A N/A N/A End of period $8.74 $10.15 N/A N/A N/A Accumulation units outstanding at the end of period 222,262 1,720 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Moderate Growth Division(30) Accumulation unit value: Beginning of period $13.05 $11.83 $11.31 $10.50 $9.07 End of period $13.94 $13.05 $11.83 $11.31 $10.50 Accumulation units outstanding at the end of period 13,222 15,673 15,728 20,553 20,770 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Moderate Growth Division(30) Accumulation unit value: Beginning of period $10.08 $10.00 N/A N/A N/A End of period $9.07 $10.08 N/A N/A N/A Accumulation units outstanding at the end of period 29,183 4,715 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2015 Division(1078) Accumulation unit value: Beginning of period $10.82 $9.95 N/A N/A N/A End of period $11.62 $10.82 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2015 Division(1078) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2020 Division(992) Accumulation unit value: Beginning of period $10.95 $10.00 N/A N/A N/A End of period $11.79 $10.95 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2020 Division(992) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2025 Division(992) Accumulation unit value: Beginning of period $11.02 $10.00 N/A N/A N/A End of period $11.93 $11.02 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2025 Division(992) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement Income Division(1004) Accumulation unit value: Beginning of period $10.57 $9.97 N/A N/A N/A End of period $11.11 $10.57 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement Income Division(1004) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Total Yield Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Total Yield Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Very Aggressive Growth Division I(950) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Very Aggressive Growth Division I(950) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Balanced Division(30) Accumulation unit value: Beginning of period $14.79 $13.24 $12.79 $11.73 $9.81 End of period $15.63 $14.79 $13.24 $12.79 $11.73 Accumulation units outstanding at the end of period 5,268 5,710 13,208 6,673 6,796 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Balanced Division(30) Accumulation unit value: Beginning of period $10.18 $10.00 N/A N/A N/A End of period $9.81 $10.18 N/A N/A N/A Accumulation units outstanding at the end of period 7,242 102 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Money Market Division(30) Accumulation unit value: Beginning of period $10.09 $9.82 $9.72 $9.81 $9.93 End of period $10.39 $10.09 $9.82 $9.72 $9.81 Accumulation units outstanding at the end of period 1,034 4,564 - - - Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Money Market Division(30) Accumulation unit value: Beginning of period $10.00 $10.00 N/A N/A N/A End of period $9.93 $10.00 N/A N/A N/A Accumulation units outstanding at the end of period 1,349 500 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Value Division(572) Accumulation unit value: Beginning of period $20.65 $17.37 $16.33 $14.88 N/A End of period $21.89 $20.65 $17.37 $16.33 N/A Accumulation units outstanding at the end of period - 1,915 - - N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Value Division(572) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Established Growth Division(30) Accumulation unit value: Beginning of period $12.34 $11.03 $10.58 $9.79 $7.63 End of period $13.35 $12.34 $11.03 $10.58 $9.79 Accumulation units outstanding at the end of period 4,866 2,097 2,237 1,697 1,686 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Established Growth Division(30) Accumulation unit value: Beginning of period $10.12 $10.00 N/A N/A N/A End of period $7.63 $10.12 N/A N/A N/A Accumulation units outstanding at the end of period 1,647 619 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Mid-Cap Growth Division(30) Accumulation unit value: Beginning of period $15.26 $14.53 $12.96 $11.16 $8.19 End of period $17.58 $15.26 $14.53 $12.96 $11.16 Accumulation units outstanding at the end of period 2,504 4,034 2,741 4,660 2,335 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Mid-Cap Growth Division(30) Accumulation unit value: Beginning of period $10.67 $10.00 N/A N/A N/A End of period $8.19 $10.67 N/A N/A N/A Accumulation units outstanding at the end of period 2,500 3,550 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Value Division(30) Accumulation unit value: Beginning of period $14.89 $12.62 $12.09 $10.67 $8.36 End of period $14.76 $14.89 $12.62 $12.09 $10.67 Accumulation units outstanding at the end of period 4,971 3,253 4,995 9,781 9,215 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Value Division(30) Accumulation unit value: Beginning of period $10.22 $10.00 N/A N/A N/A End of period $8.36 $10.22 N/A N/A N/A Accumulation units outstanding at the end of period 8,098 300 N/A N/A N/A
STATEMENT OF ADDITIONAL INFORMATION March 31, 2008 INDIVIDUAL AND GROUP DEFERRED FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS ISSUED BY THE JACKSON NATIONAL SEPARATE ACCOUNT - I OF JACKSON NATIONAL LIFE INSURANCE COMPANY(R) This Statement of Additional Information is not a prospectus. It contains information in addition to and more detailed than set forth in the Prospectus and should be read in conjunction with the Prospectus dated March 31, 2008. The Prospectus may be obtained from Jackson National Life Insurance Company (JacksonSM) by writing P.O. Box 17240, Denver, Colorado 80217-0240, or calling 1-800-766-4683. Not all Investment Divisions described in this SAI may be available for investment. TABLE OF CONTENTS Page General Information and History 2 Services 5 Purchase of Securities Being Offered 5 Underwriters 6 Calculation of Performance 6 Additional Tax Information 8 Annuity Provisions 18 Net Investment Factor 19 Condensed Financial Information 20 General Information and History Jackson National Separate Account - I (Separate Account) is a separate investment account of Jackson National Life Insurance Company (JacksonSM). Jackson is a wholly owned subsidiary of Brooke Life Insurance Company and is ultimately a wholly owned subsidiary of Prudential plc, London, England, a publicly traded life insurance company in the United Kingdom. The JNL/Mellon Capital Management S&P Divisions and JNL/S&P Divisions, and any other investment fund or other vehicle that is offered by third parties and that seeks to provide an investment return based on the returns of any Standard & Poor's Index are not sponsored, endorsed, sold or promoted by Standard & Poor's (S&P(R)), a division of The McGraw-Hill Companies, Inc. and its affiliates. S&P and its affiliates make no representation or warranty, express or implied, to the owners of the Divisions or any member of the public regarding the advisability of investing in securities generally or in the Divisions particularly or the ability of the S&P 500 Index, the S&P MidCap 400 Index, or any other S&P Index to track general stock market performance. S&P's only relationship to the Separate Account (Licensee) is the licensing of certain trademarks and trade names of S&P and of the S&P 500(R) and S&P MidCap 400 Index which are determined, composed and calculated by S&P without regard to the Licensee or the Divisions. S&P has no obligation to take the needs of the Licensee or the owners of the Divisions into consideration in determining, composing or calculating the S&P 500 Index, S&P 400 Index, or any other S&P Index. S&P is not responsible for and has not participated in the determination of the prices and amount of the Divisions or the timing of the issuance or sale of the Divisions or in the determination or calculation of the equation by which the Divisions are to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Divisions. S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX, THE S&P MIDCAP 400 INDEX, OR ANY OTHER S&P INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE DIVISIONS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX, THE S&P MIDCAP 400 INDEX, OR ANY OTHER S&P INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX, THE S&P MIDCAP 400 INDEX, OR ANY OTHER S&P INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell is a trademark of Russell Investment Group. JNL/Mellon Capital Management Small Cap Index Fund is not promoted, sponsored or endorsed by, nor in any way affiliated with Russell Investment Group ("Russell"). Russell is not responsible for and has not reviewed JNL/Mellon Capital Management Small Cap Index Fund nor any associated literature or publications and Russell makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise. Russell reserves the right, at any time and without notice, to alter, amend, terminate or in any way change the Russell Indexes. Russell has no obligation to take the needs of any particular fund or its participants or any other product or person into consideration in determining, composing or calculating any of the Russell Indexes. Russell's publication of the Russell Indexes in no way suggests or implies an opinion by Russell as to the attractiveness or appropriateness of investment in any or all securities upon which the Russell Indexes are based. RUSSELL MAKES NO REPRESENTATION, WARRANTY, OR GUARANTEE AS TO THE ACCURACY COMPLETENESS, RELIABILITY, OR OTHERWISE OF THE RUSSELL INDEXES. RUSSELL MAKES NO REPRESENTATION, WARRANTY OR GUARANTEE REGARDING THE USE, OR THE RESULTS OF USE, OF THE RUSSELL INDEXES OR ANY DATA INCLUDED THEREIN, OR ANY SECURITY (OR COMBINATION THEREOF) COMPRISING THE RUSSELL INDEXES. RUSSELL MAKES NO OTHER EXPRESS OR IMPLIED WARRANTY, AND EXPRESSLY DISCLAIMS ANY WARRANTY, OF ANY KIND, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE RUSSELL INDEX(ES) OR ANY DATA OR ANY SECURITY (OR COMBINATION THEREOF) INCLUDED THEREIN. Value Line Publishing, Inc.'s ("VLPI") only relationship to JNL is VLPI's licensing to JNL of certain VLPI trademarks and trade names and the Value Line Timeliness Ranking System (the "System"), which is composed by VLPI without regard to JNL, this Product or any investor. VLPI has no obligation to take the needs of JNL or any investor in the Product into consideration in composing the System. The Product results may differ from the hypothetical or published results of the Value Line Timeliness Ranking System. VLPI is not responsible for and has not participated in the determination of the prices and composition of the Product or the timing of the issuance for sale of the Product or in the calculation of the equations by which the Product is to be converted into cash. VLPI MAKES NO WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING FROM USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, AND VLPI MAKES NO WARRANTY AS TO THE POTENTIAL PROFITS OR ANY OTHER BENEFITS THAT MAY BE ACHIEVED BY USING THE SYSTEM OR ANY INFORMATION OR MATERIALS GENERATED THEREFROM. VLPI DOES NOT WARRANT THAT THE SYSTEM WILL MEET ANY REQUIREMENTS OR THAT IT WILL BE ACCURATE OR ERROR-FREE. VLPI ALSO DOES NOT GUARANTEE ANY USES, INFORMATION, DATA OR OTHER RESULTS GENERATED FROM THE SYSTEM. VLPI HAS NO OBLIGATION OR LIABILITY (I) IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE PRODUCT; OR (II) FOR ANY LOSS, DAMAGE, COST OR EXPENSE SUFFERED OR INCURRED BY ANY INVESTOR OR OTHER PERSON OR ENTITY IN CONNECTION WITH THIS PRODUCT, AND IN NO EVENT SHALL VLPI BE LIABLE FOR ANY LOST PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES IN CONNECTION WITH THE PRODUCT. The Product(s) is not sponsored, endorsed, sold or promoted by The Nasdaq Stock Market, Inc. (including its affiliates) (Nasdaq, with its affiliates, are referred to as the Corporations). The Corporations have not passed on the legality or suitability of or the accuracy or adequacy of descriptions and disclosures relating to the Product(s). The Corporations make no representation or warranty, express or implied to the owners of the Product(s) or any member of the public regarding the advisability of investing in securities generally or in the Product(s) particularly, or the ability of the Nasdaq-100 Index(R) to track general stock market performance. The Corporations' only relationship to Jackson National Life Insurance Company (Licensee) is in the licensing of the Nasdaq-100(R), Nasdaq-100 Index(R) and Nasdaq(R) trademarks or service marks, and certain trade names of the Corporations and the use of the Nasdaq-100 Index(R) which is determined, composed and calculated by Nasdaq without regard to Licensee or the Product(s). Nasdaq has no obligation to take the needs of the Licensee or the owners of the Product(s) into consideration in determining, composing or calculating the Nasdaq-100 Index(R). The Corporations are not responsible for and have not participated in the determination of the timing of, prices at or quantities of the Product(s) to be issued or in the determination or calculation of the equation by which the Product(s) is to be converted into cash. The Corporations have no liability in connection with the administration, marketing or trading of the Product(s). THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT(S) OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. "The Nasdaq-100(R)," "Nasdaq-100 Index(R)," "Nasdaq Stock Market(R)" and "Nasdaq(R)" are trade or service marks of The Nasdaq, Inc. (which with its affiliates are the "Corporations") and have been licensed for use by Jackson National Life Insurance Company. The Corporations have not passed on the legality or suitability of the JNL/Mellon Capital Management Nasdaq(R)15 Fund, the JNL/Mellon Capital Management VIP Fund or the JNL/Mellon Capital Management JNL Optimized 5 Fund. The JNL/Mellon Capital Management Nasdaq(R) 25 Fund, the JNL/Mellon Capital Management VIP Fund and the JNL/Mellon Capital Management JNL Optimized 5 Fund are not issued, endorsed, sponsored, managed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE JNL/MELLON CAPITAL MANAGEMENT NASDAQ(R) 25 FUND FUND. THE JNL/MELLON CAPITAL MANAGEMENT VIP FUND AND THE JNL/MELLON CAPITAL MANAGEMENT JNL OPTIMIZED 5 FUND. "NYSE(R)" is a registered mark of, and "NYSE International 100 IndexSM" is a service mark of, the New York Stock Exchange, Inc. ("NYSE") and have been licensed for use for certain purposes by Jackson National Asset Management, LLC. The JNL/Mellon Capital Management NYSE(R) International 25 Fund is not sponsored, endorsed, sold or promoted by NYSE, and NYSE makes no representation regarding the advisability of investing in the JNL/Mellon Capital Management NYSE(R) International 25 Fund. "NYSE International 100 IndexSM" is a service mark of NYSE Group, Inc. NYSE Group, Inc. has no relationship to Jackson National Asset Management, LLC, other than the licensing of the "NYSE International 100 IndexSM" (the "Index") and its service marks for use in connection with the JNL/Mellon Capital Management NYSE(R) International 25 Fund. NYSE Group, Inc. does not: o Sponsor, endorse, sell or promote the JNL/Mellon Capital Management NYSE(R) International 25 Fund. o Recommend that any person invest in the JNL/Mellon Capital Management NYSE(R) International 25 Fund or any other securities. o Have any responsibility or liability for or make any decisions about the timing, amount or pricing of JNL/Mellon Capital Management NYSE(R) International 25 Fund. o Have any responsibility or liability for the administration, management or marketing of the JNL/Mellon Capital Management NYSE(R) International 25 Fund. o Consider the needs of the JNL/Mellon Capital Management NYSE(R) International 25 Fund or the owners of the JNL/Mellon Capital Management NYSE(R) International 25 Fund in determining, composing or calculating the NYSE International 100 IndexSM or have any obligation to do so. -------------------------------------------------------------------------------- NYSE Group, Inc. and its affiliates will not have any liability in connection with the JNL/Mellon Capital Management NYSE(R) International 25 Fund. Specifically, o NYSE Group, Inc. and its affiliates make no warranty, express or implied, and NYSE Group, Inc. and its affiliates disclaim any warranty about: o The results to be obtained by the JNL/Mellon Capital Management NYSE(R) International 25 Fund, the owner of the JNL/Mellon Capital Management NYSE(R) International 25 Fund or any other person in connection with the use of the Index and the data included in the NYSE International 100 IndexSM; o The accuracy or completeness of the Index and its data; o The merchantability and the fitness for a particular purpose or use of the Index and its data; o NYSE Group, Inc. will have no liability for any errors, omissions or interruptions in the Index or its data; o Under no circumstances will NYSE Group, Inc. or any of its affiliates be liable for any lost profits or indirect, punitive, special or consequential damages or losses, even if NYSE Group, Inc. knows that they might occur. The licensing agreement between Jackson National Asset Management, LLC and NYSE Group, Inc. is solely for their benefit and not for the benefit of the owners of the JNL/Mellon Capital Management NYSE(R) International 25 Fund or any other third parties. -------------------------------------------------------------------------------- Services Jackson keeps the assets of the Separate Account. Jackson holds all cash of the Separate Account and attends to the collection of proceeds of shares of the underlying Funds bought and sold by the Separate Account. The financial statements of Jackson National Separate Account - I and Jackson National Life Insurance Company for the periods indicated have been included herein in reliance upon the reports of KPMG LLP, an independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. KPMG LLP is located at 303 East Wacker Drive, Chicago, Illinois 60601. Purchase of Securities Being Offered The Contracts will be sold by licensed insurance agents in states where the Contracts may be lawfully sold. The agents will be registered representatives of broker-dealers that are registered under the Securities Exchange Act of 1934 and members of the Financial Industry Regulatory Authority (FINRA). Underwriters The Contracts are offered continuously and are distributed by Jackson National Life Distributors LLC(JNLD), 7601 Technology Way, Denver, Colorado 80237. JNLD is a subsidiary of Jackson. For Perspective, the aggregate amount of underwriting commissions paid to broker/dealers were: $9,836,727 in 2005, $8,562,298 in 2006, and $8,637,236 in 2007. JNLD did not retain any portion of the commissions. For Defined Strategies, the aggregate amount of underwriting commissions paid to broker/dealers were: $631,101 in 2005, $602,385 in 2006 and $600,254 in 2007. JNLD did not retain any portion of the commissions. Calculation of Performance When Jackson advertises performance for an Investment Division (except the JNL/Select Money Market Division), we will include quotations of standardized average annual total return to facilitate comparison with standardized average annual total return advertised by other variable annuity separate accounts. Standardized average annual total return for an Investment Division will be shown for periods beginning on the date the Investment Division first invested in the corresponding Fund. We will calculate standardized average annual total return according to the standard methods prescribed by rules of the Securities and Exchange Commission. Standardized average annual total return for a specific period is calculated by taking a hypothetical $1,000 investment in an Investment Division at the offering on the first day of the period ("initial investment") and computing the ending redeemable value ("redeemable value") of that investment at the end of the period. The redeemable value is then divided by the initial investment and expressed as a percentage, carried to at least the nearest hundredth of a percent. Standardized average annual total return is annualized and reflects the deduction of the insurance charges and the Contract maintenance charge. The redeemable value also reflects the effect of any applicable withdrawal charge that may be imposed at the end of the period. No deduction is made for premium taxes, which may be assessed by certain states. Jackson may also advertise non-standardized total return on an annualized and cumulative basis. Non-standardized total return may be for periods other than those required to be presented or may otherwise differ from standardized average annual total return. The Contract is designed for long-term investment, therefore Jackson believes that non-standardized total return that does not reflect the deduction of any applicable withdrawal charge may be useful to investors. Reflecting the deduction of the withdrawal charge decreases the level of performance advertised. Non-standardized total return may also assume a larger initial investment, which more closely approximates the size of a typical Contract. Standardized average annual total return quotations will be current to the last day of the calendar quarter preceding the date on which an advertisement is submitted for publication. Both standardized average annual total return quotations and non-standardized total return quotations will be based on rolling calendar quarters and will cover at least periods of one, five, and ten years, or a period covering the time the Investment Division has been in existence, if it has not been in existence for one of the prescribed periods. If the corresponding Fund has been in existence for longer than the Investment Division, the non-standardized total return quotations will show the investment performance the Investment Division would have achieved (reduced by the applicable charges) had it been invested in the Fund for the period quoted. Quotations of standardized average annual total return and non-standardized total return are based upon historical earnings and will fluctuate. Any quotation of performance should not be considered a guarantee of future performance. Factors affecting the performance of an Investment Division and its corresponding Fund include general market conditions, operating expenses and investment management. An owner's withdrawal value upon surrender of a Contract may be more or less than original cost. Jackson may advertise the current annualized yield for a 30-day period for an Investment Division. The annualized yield of an Investment Division refers to the income generated by the Investment Division over a specified 30-day period. Because this yield is annualized, the yield generated by an Investment Division during the 30-day period is assumed to be generated each 30-day period. The yield is computed by dividing the net investment income per accumulation unit earned during the period by the price per unit on the last day of the period, according to the following formula: ( a-b )6 YIELD = 2 [( --- + 1) -1] ( cd ) Where: a = net investment income earned during the period by the Fund attributable to shares owned by the Investment Division. b = expenses for the Investment Division accrued for the period (net of reimbursements). c = the average daily number of accumulation units outstanding during the period. d = the maximum offering price per accumulation unit on the last day of the period. The maximum withdrawal charge is 7%. Net investment income will be determined in accordance with rules established by the Securities and Exchange Commission. Accrued expenses will include all recurring fees that are charged to all Contracts. Because of the charges and deductions imposed by the Separate Account, the yield for an Investment Division will be lower than the yield for the corresponding Fund. The yield on amounts held in the Investment Division normally will fluctuate over time. Therefore, the disclosed yield for any given period is not an indication or representation of future yields or rates of return. An Investment Division's actual yield will be affected by the types and quality of portfolio securities held by the Fund and the Fund operating expenses. Any current yield quotations of the JNL/Select Money Market Division will consist of a seven calendar day historical yield, carried at least to the nearest hundredth of a percent. We may advertise yield for the Division based on different time periods, but we will accompany it with a yield quotation based on a seven day calendar period. The JNL/Select Money Market Division's yield will be calculated by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one accumulation unit at the beginning of the base period, subtracting a hypothetical charge reflecting deductions from Contracts, and dividing the net change in account value by the value of the account at the beginning of the period to obtain a base period return and multiplying the base period return by (365/7). The JNL/Select Money Market Division's effective yield is computed similarly but includes the effect of assumed compounding on an annualized basis of the current yield quotations of the Division. The JNL/Select Money Market Division's yield and effective yield will fluctuate daily. Actual yields will depend on factors such as the type of instruments in the Fund's portfolio, portfolio quality and average maturity, changes in interest rates, and the Fund's expenses. Although the Investment Division determines its yield on the basis of a seven calendar day period, it may use a different time period on occasion. The yield quotes may reflect the expense limitations described in the Fund's Prospectus or Statement of Additional Information. There is no assurance that the yields quoted on any given occasion will be maintained for any period of time and there is no guarantee that the net asset values will remain constant. It should be noted that neither a Contract owner's investment in the JNL/Select Money Market Division nor that Division's investment in the JNL/Select Money Market Fund, is guaranteed or insured. Yields of other money market Funds may not be comparable if a different base or another method of calculation is used. Additional Tax Information NOTE: INFORMATION CONTAINED HEREIN SHOULD NOT BE SUBSTITUTED FOR THE ADVICE OF A PERSONAL TAX ADVISER. JACKSON DOES NOT MAKE ANY GUARANTEE REGARDING THE TAX STATUS OF ANY CONTRACT OR ANY TRANSACTION INVOLVING THE CONTRACTS. PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE TREATED AS "ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE FURTHER UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT OTHER SPECIAL RULES MAY BE APPLICABLE IN CERTAIN SITUATIONS. MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX LAWS OR TO COMPARE THE TAX TREATMENT OF THE CONTRACTS TO THE TAX TREATMENT OF ANY OTHER INVESTMENT. Jackson's Tax Status Jackson is taxed as a life insurance company under the Internal Revenue Code of 1986, as amended (the "Code"). For federal income tax purposes, the Separate Account is not a separate entity from Jackson and its operations form a part of Jackson. Taxation of Annuity Contracts in General Section 72 of the Code governs the taxation of annuities in general. An individual owner is not taxed on increases in the value of a Contract until distribution occurs, either in the form of a withdrawal or as annuity payments under the annuity option elected. For a withdrawal received as a total surrender (total redemption or a death benefit), the recipient is taxed on the portion of the payment that exceeds the cost basis of the Contract. For a payment received as a partial withdrawal from a non-qualified Contract, federal tax liability is generally determined on a last-in, first-out basis, meaning taxable income is withdrawn before the cost basis of the Contract is withdrawn. In the case of a partial withdrawal under a tax-qualified Contract, a ratable portion of the amount received is taxable. For Contracts issued in connection with non-qualified plans, the cost basis is generally the premiums, while for Contracts issued in connection with tax-qualified plans there may be no cost basis. The taxable portion of a withdrawal is taxed at ordinary income tax rates. Tax penalties may also apply. For annuity payments, a portion of each payment in excess of an exclusion amount is includable in taxable income. All annuity payments in excess of the exclusion amount are fully taxable at ordinary income rates. The exclusion amount for payments based on a fixed annuity option is determined by multiplying the payment by the ratio that the cost basis of the Contract (adjusted for any period certain or refund feature) bears to the expected return under the Contract. The exclusion amount for payments based on a variable annuity option is determined by dividing the cost basis of the Contract (adjusted for any period certain or refund guarantee) by the fixed or estimated number of years for which annuity payments are to be made. No exclusion is allowed with respect to any payments received after the investment in the Contract has been recovered (i.e., when the total of the excludable amounts equals the investment in the Contract). For certain types of tax-qualified plans there may be no cost basis in the Contract within the meaning of Section 72 of the Code. Owners, annuitants and beneficiaries under the Contracts should seek competent financial advice about the tax consequences of distributions. Withholding Tax on Distributions The Code generally requires Jackson (or, in some cases, a plan administrator) to withhold tax on the taxable portion of any distribution or withdrawal from a Contract. For "eligible rollover distributions" from Contracts issued under certain types of tax-qualified plans, 20% of the distribution must be withheld, unless the payee elects to have the distribution "rolled over" to another eligible plan in a direct transfer. This requirement is mandatory and cannot be waived by the owner. An "eligible rollover distribution" is the taxable portion of any amount received by a covered employee from a plan qualified under Section 401(a) or 403(a) of the Code, from a tax sheltered annuity qualified under Section 403(b) of the Code or an eligible deferred compensation plan of a state or local government under Section 457(b) of the Code (other than (1) a series of substantially equal periodic payments (not less frequently than annually) for the life (or life expectancy) of the employee, or joint lives (or joint life expectancies) of the employee, and his or her designated beneficiary, or for a specified period of ten years or more; (2) minimum distributions required to be made under the Code; and (3) hardship withdrawals). Failure to "roll over" the entire amount of an eligible rollover distribution (including the amount equal to the 20% portion of the distribution that was withheld) could have adverse tax consequences, including the imposition of a penalty tax on premature withdrawals, described later in this section. Withdrawals or distributions from a Contract other than eligible rollover distributions are also subject to withholding on the taxable portion of the distribution, but the owner may elect in such cases to waive the withholding requirement. If not waived, withholding is imposed (1) for periodic payments, at the rate that would be imposed if the payments were wages, or (2) for other distributions, at the rate of 10%. If no withholding exemption certificate is in effect for the payee, the rate under (1) above is computed by treating the payee as a married individual claiming three withholding exemptions. Generally, the amount of any payment of interest to a non-resident alien of the United States shall be subject to withholding of a tax equal to 30% of such amount or, if applicable, a lower treaty rate. A payment may not be subject to withholding where the recipient sufficiently establishes that such payment is effectively connected to the recipient's conduct of a trade or business in the United States and such payment is included in the recipient's gross income. Diversification -- Separate Account Investments Section 817(h) of the Code imposes certain asset diversification standards on variable annuity Contracts. The Code provides that a variable annuity Contract will not be treated as an annuity Contract for any period (and any subsequent period) for which the investments held in any segregated asset account underlying the Contract are not adequately diversified, in accordance with regulations prescribed by the United States Treasury Department ("Treasury Department"). Disqualification of the Contract as an annuity Contract would result in imposition of federal income tax to the owner with respect to earnings allocable to the Contract prior to the receipt of payments under the Contract. The Code contains a safe harbor provision which provides that annuity Contracts, such as the Contracts, meet the diversification requirements if, as of the last day of each calendar quarter, or within 30 days after such last day, the underlying assets meet the diversification standards for a regulated investment company and no more than 55% of the total assets consist of cash, cash items, U.S. government securities and securities of other regulated investment companies. The Treasury Department has issued Regulations establishing diversification requirements for the mutual Funds underlying variable Contracts. These Regulations amplify the diversification requirements for variable Contracts set forth in the Code and provide an alternative to the safe harbor provision described above. Under these Regulations, a mutual Fund will be deemed adequately diversified if (1) no more than 55% of the value of the total assets of the mutual Fund is represented by any one investment; (2) no more than 70% of the value of the total assets of the mutual Fund is represented by any two investments; (3) no more than 80% of the value of the total assets of the mutual Fund is represented by any three investments; and (4) no more than 90% of the value of the total assets of the mutual Fund is represented by any four investments. Jackson intends that each Fund of the JNL Series Trust will be managed by its respective investment adviser in such a manner as to comply with these diversification requirements. At the time the Treasury Department issued the diversification Regulations, it did not provide guidance regarding the circumstances under which Contract owner control of the investments of a segregated asset account would cause the Contract owner to be treated as the owner of the assets of the segregated asset account. Revenue Ruling 2003-91 provides such guidance by describing the circumstances under which the owner of a variable contract will not possess sufficient control over the assets underlying the contract to be treated as the owner of those assets for federal income tax purposes. Rev. Rul. 2003-91 considered certain variable annuity and variable life insurance contracts and held that the types of actual and potential control that the contract owners could exercise over the investment assets held by the insurance company under these variable contracts was not sufficient to cause the contract owners to be treated as the owners of those assets and thus to be subject to current income tax on the income and gains produced by those assets. Under the contracts in Rev. Rul. 2003-91 there was no arrangement, plan, contract or agreement between the contract owner and the insurance company regarding the availability of a particular investment option and other than the contract owner's right to allocate premiums and transfer funds among the available sub-accounts, all investment decisions concerning the sub-accounts were made by the insurance company or an advisor in its sole and absolute discretion. Twelve investment options were available under the contracts in Rev. Rul. 2003-91 although the insurance company had the right to increase (but to no more than 20) or decrease the number of sub-accounts at any time. The contract owner was permitted to transfer amounts among the various investment options without limitation, subject to incurring fees for more than one transfer per 30-day period. Like the contracts described in Rev. Rul. 2003-91, under the Contract there will be no arrangement, plan, contract or agreement between a Contract owner and Jackson regarding the availability of a particular Allocation Option and other than the Contract owner's right to allocate premiums and transfer funds among the available Allocation Options, all investment decisions concerning the Allocation Options will be made by Jackson or an advisor in its sole and absolute discretion. The Contract will differ from the contracts described in Rev. Rul. 2003-91 in two respects. The first difference is that the contracts described in Rev. Rul. 2003-91 provided twelve investment options with the insurance company having the ability to add an additional 8 options whereas the Defined Strategies Contract offers 12 Investment Divisions and multiple guaranteed Fixed Account options and the Perspective Contract offers 87 Investment Divisions and multiple guaranteed fixed account options, although a Contract owner can select no more than 18 Allocation Options at any one time. The second difference is that the owner of a contract in Rev. Rul. 2003-91 could only make one transfer per 30 day period without a fee whereas during the accumulation phase, a Contract owner can make 15 transfers in any one year without a charge. Rev. Rul. 2003-91 states that whether the owner of a variable contract is to be treated as the owner of the assets held by the insurance company under the contract will depend on all of the facts and circumstances. Jackson does not believe that the differences between the Contract and the contracts described in Rev. Rul. 2003-91 with respect to the number of investment choices and the number of investment transfers that can be made under the Contract without an additional charge should prevent the holding in Rev. Rul. 2003-91 from applying to the owner of a Contract. At this time, however, it cannot be determined whether additional guidance will be provided by the IRS on this issue and what standards may be contained in such guidance. Jackson reserves the right to modify the Contract to the extent required to maintain favorable tax treatment. Multiple Contracts The Code provides that multiple non-qualified annuity Contracts that are issued within a calendar year to the same Contract owner by one company or its affiliates are treated as one annuity Contract for purposes of determining the tax consequences of any distribution. Such treatment may result in adverse tax consequences including more rapid taxation of the distributed amounts from such multiple Contracts. For purposes of this rule, Contracts received in a Section 1035 exchange will be considered issued in the year of the exchange. Owners should consult a tax adviser prior to purchasing more than one annuity Contract in any calendar year. Partial 1035 Exchanges Section 1035 of the Code provides that an annuity Contract may be exchanged in a tax-free transaction for another annuity Contract. Historically, it was presumed that only the exchange of an entire Contract, as opposed to a partial exchange, would be accorded tax-free status. In 1998, in Conway v. Commissioner, the Tax Court held that the direct transfer of a portion of an annuity Contract into another annuity Contract qualified as a non-taxable exchange. In response to the Conway decision, the IRS issued Notice 2003-51 announcing that pending the publication of final regulations, the IRS will consider all the facts and circumstances, using general principles of tax law, to determine whether a partial exchange and a subsequent withdrawal from, or surrender of, either the surviving annuity contract or the new annuity contract within 24 months of the date on which the partial exchange was completed should be treated as an integrated transaction. In the absence of further guidance from the Internal Revenue Service it is unclear what specific types of partial exchange designs and transactions will be challenged by the Internal Revenue Service. Due to the uncertainty in this area, owners should consult their own tax advisers prior to entering into a partial exchange of an annuity Contract. Contracts Owned by Other Than Natural Persons Under Section 72(u) of the Code, the investment earnings on premiums for Contracts will be taxed currently to the owner if the owner is a non-natural person, e.g., a corporation or certain other entities. Such Contracts generally will not be treated as annuities for federal income tax purposes (except for the taxation of life insurance companies). However, this treatment is not applied to Contracts held by a trust or other entity as an agent for a natural person nor to Contracts held by certain tax-qualified plans. Purchasers should consult their own tax counsel or other tax adviser before purchasing a Contract to be owned by a non-natural person. Tax Treatment of Assignments An assignment or pledge of a Contract may have tax consequences. Any assignment or pledge of a tax-qualified Contract may also be prohibited by ERISA in some circumstances. Owners should, therefore, consult competent legal advisers should they wish to assign or pledge their Contracts. An assignment or pledge of all or any portion of the value of a Non-Qualified Contract is treated under Section 72 of the Code as an amount not received as an annuity. The value of the Contract assigned or pledged that exceeds the aggregate premiums paid will be included in the individual's gross income. In addition, the amount included in the individual's gross income could also be subject to the 10% penalty tax discussed below under Non-Qualified Contracts. An assignment or pledge of all or any portion of the value of a Qualified Contract will disqualify the Qualified Contract. If the Qualified Contract is part of a qualified pension or profit-sharing plan, the Code prohibits the assignment or alienation of benefits provided under the plan. If the Qualified Contract is an IRA annuity or a 403(b) annuity, the Code requires the Qualified Contract to be nontransferable. If the Qualified Contract is part of an eligible deferred compensation plan, amounts cannot be made available to plan participants or beneficiaries: (1) until the calendar year in which the participant attains age 70 1/2; (2) when the participant has a severance from employment; or (3) when the participant is faced with an unforeseeable emergency. Death Benefits Any death benefits paid under the Contract are taxable to the beneficiary. The rules governing the taxation of payments from an annuity Contract, as discussed above, generally apply to the payment of death benefits and depend on whether the death benefits are paid as a lump sum or as annuity payments. Estate or gift taxes may also apply. IRS Approval The Contract, and all riders attached thereto, have been approved by the IRS for use as an Individual Retirement Annuity prototype. Tax-Qualified Plans The Contracts offered by the Prospectus are designed to be suitable for use under various types of tax-qualified plans. Taxation of owners of a tax-qualified Contract will vary based on the type of plan and the terms and conditions of each specific plan. Owners, annuitants and beneficiaries are cautioned that benefits under a tax-qualified Contract may be subject to the terms and conditions of the plan, regardless of the terms and conditions of the Contracts issued to fund the plan. Owners, annuitant and beneficiaries are also reminded that a tax-qualified Contract will not provide any necessary or additional tax deferral if it is used to fund a tax-qualified plan that is already tax-deferred. Tax Treatment of Withdrawals Non-Qualified Contracts Section 72 of the Code governs treatment of distributions from annuity Contracts. It provides that if the Contract value exceeds the aggregate premiums made, any amount withdrawn not in the form of an annuity payment will be treated as coming first from the earnings and then, only after the income portion is exhausted, as coming from the principal. Withdrawn earnings are included in a taxpayer's gross income. Section 72 further provides that a 10% penalty will apply to the income portion of any distribution. The penalty is not imposed on amounts received: (1) after the taxpayer reaches 59 1/2; (2) upon the death of the owner; (3) if the taxpayer is totally disabled as defined in Section 72(m)(7) of the Code; (4) in a series of substantially equal periodic payments made at least annually for the life (or life expectancy) of the taxpayer or for the joint lives (or joint life expectancies) of the taxpayer and his beneficiary; (5) under an immediate annuity; or (6) which are allocable to premium payments made prior to August 14, 1982. With respect to (4) above, if the series of substantially equal periodic payments is modified before the later of your attaining age 59 1/2 or five years from the date of the first periodic payment, then the tax for the year of the modification is increased by an amount equal to the tax which would have been imposed (the 10% penalty tax) but for the exception, plus interest for the tax years in which the exception was used. Tax-Qualified Contracts In the case of a withdrawal under a tax-qualified Contract, a ratable portion of the amount received is taxable, generally based on the ratio of the individual's cost basis to the individual's total accrued benefit under the retirement plan. Special tax rules may be available for certain distributions from a tax-qualified Contract. Section 72(t) of the Code imposes a 10% penalty tax on the taxable portion of any distribution from qualified retirement plans, including Contracts issued and qualified under Code Sections 401 (pension and profit sharing plans), 403(b) (tax-sheltered annuities), individual retirement accounts and annuities under 408(a) and (b) (IRAs) and Roth IRAs under 408A. To the extent amounts are not included in gross income because they have been rolled over to an IRA or to another eligible qualified plan, no tax penalty will be imposed. The tax penalty will not apply to the following distributions: (1) distributions made on or after the date on which the owner or annuitant (as applicable) reaches age 59 1/2; (2) distributions following the death or disability of the owner or annuitant (as applicable) (for this purpose "disability" is defined in Section 72(m)(7) of the Code); (3) distributions that are part of a series of substantially equal periodic payments made not less frequently than annually for the life (or life expectancy) of the owner or annuitant (as applicable) or the joint lives (or joint life expectancies) of such owner or annuitant (as applicable) and his or her designated beneficiary; (4) distributions to an owner or annuitant (as applicable) who has separated from service after he has attained age 55; (5) distributions made to the owner or annuitant (as applicable) to the extent such distributions do not exceed the amount allowable as a deduction under Code Section 213 to the owner or annuitant (as applicable) for amounts paid during the taxable year for medical care; (6) distributions made to an alternate payee pursuant to a qualified domestic relations order; (7) distributions made on account of an IRS levy upon the qualified Contracts; (8) distributions from an IRA after separation from employment for the purchase of medical insurance (as described in Section 213(d)(1)(D) of the Code) for the Contract owner or annuitant (as applicable) and his or her spouse and dependents if the Contract owner or annuitant (as applicable) has received unemployment compensation for at least 12 weeks (this exception will no longer apply after the Contract owner or annuitant (as applicable) has been re-employed for at least 60 days); (9) distributions from an IRA made to the owner or annuitant (as applicable) to the extent such distributions do not exceed the qualified higher education expenses (as defined in Section 72(t)(7) of the Code) (as applicable) for the taxable year; and (10) distributions from an IRA made to the owner or annuitant (as applicable) which are qualified first time home buyer distributions (as defined in Section 72(t)(8) of the Code). The exceptions stated in items (4) and (6) above do not apply in the case of an IRA. The exception stated in (3) above applies to an IRA without the requirement that there be a separation from service. With respect to (3) above, if the series of substantially equal periodic payments is modified before the later of your attaining age 59 1/2 or five years from the date of the first periodic payment, then the tax for the year of the modification is increased by an amount equal to the tax which would have been imposed (the 10% penalty tax) but for the exception, plus interest for the tax years in which the exception was used. Withdrawals of amounts attributable to contributions made pursuant to a salary reduction agreement (in accordance with Section 403(b)(11) of the Code) are limited to the following: when the owner attains age 59 1/2, severs employment, dies, becomes disabled (within the meaning of Section 72(m)(7) of the Code), or in the case of hardship. Hardship withdrawals do not include any earnings on salary reduction contributions. These limitations on withdrawals apply to: (1) salary reduction contributions made after December 31, 1988; (2) income attributable to such contributions; and (3) income attributable to amounts held as of December 31, 1988. The limitations on withdrawals do not affect rollovers or exchanges between certain tax-qualified plans. Tax penalties may also apply. While the foregoing limitations only apply to certain Contracts issued in connection with Section 403(b) plans, all owners should seek competent tax advice regarding any withdrawals or distributions. The taxable portion of a withdrawal or distribution from tax-qualified Contracts may, under some circumstances, be "rolled over" into another eligible plan so as to continue to defer income tax on the taxable portion. Such treatment is available for an "eligible rollover distribution" made by certain types of plans (as described above under "Taxes - Withholding Tax on Distributions") that is transferred within 60 days of receipt into another eligible plan or an IRA. Plans making such eligible rollover distributions are also required, with some exceptions specified in the Code, to provide for a direct transfer of the distribution to the transferee plan designated by the recipient. Amounts received from IRAs may also be rolled over into other IRAs or certain other plans, subject to limitations set forth in the Code. Prior to the date that annuity payments begin under an annuity Contract, the required minimum distribution rules applicable to defined contribution plans and IRAs will be used. Generally, distributions from a tax-qualified plan must commence no later than April 1 of the calendar year following the year in which the employee attains the later of age 70 1/2 or the date of retirement. In the case of an IRA, distributions must commence no later than April 1 of the calendar year following the year in which the owner attains age 70 1/2. Required distributions from defined contribution plans and IRAs are determined by dividing the account balance by the appropriate distribution period found in a uniform lifetime distribution table set forth in IRS regulations. For this purpose, the entire interest under an annuity Contract is the account value under the Contract plus the actuarial value of any other benefits such as guaranteed death benefits that will be provided under the Contract. If the sole beneficiary is the Contract holder's or employee's spouse and the spouse is more than 10 years younger than the employee, a longer distribution period measured by the joint life and last survivor expectancy of the Contract holder employee and spouse is permitted to be used. Distributions under a defined benefit plan or an annuity Contract must be paid in the form of periodic annuity payments for the employee's life (or the joint lives of the employee and beneficiary) or over a period certain that does not exceed the period under the uniform lifetime table for the employee's age in the year in which the annuity starting date occurs. If the required minimum distributions are not made, a 50% penalty tax on the amount not distributed is imposed on the individual. Types of Tax-Qualified Plans The Contracts offered herein are designed to be suitable for use under various types of tax-qualified plans. Taxation of participants in each tax-qualified plan varies with the type of plan and terms and conditions of each specific plan. Owners, annuitants and beneficiaries are cautioned that benefits under a tax-qualified plan may be subject to the terms and conditions of the plan regardless of the terms and conditions of the Contracts issued pursuant to the plan. Some retirement plans are subject to distribution and other requirements that are not incorporated into Jackson's administrative procedures. Jackson is not bound by the terms and conditions of such plans to the extent such terms conflict with the terms of a Contract, unless Jackson specifically consents to be bound. Owners, annuitants and beneficiaries are responsible for determining that contributions, distributions and other transactions with respect to the Contracts comply with applicable law. A tax-qualified Contract will not provide any necessary or additional tax deferral if it is used to Fund a tax-qualified plan that is tax deferred. However, the Contract has features and benefits other than tax deferral that may make it an appropriate investment for a tax-qualified plan. Following are general descriptions of the types of tax-qualified plans with which the Contracts may be used. Such descriptions are not exhaustive and are for general informational purposes only. The tax rules regarding tax-qualified plans are very complex and will have differing applications depending on individual facts and circumstances. Each purchaser should obtain competent tax advice prior to purchasing a Contract issued under a tax-qualified plan. Contracts issued pursuant to tax-qualified plans include special provisions restricting Contract provisions that may otherwise be available as described herein. Generally, Contracts issued pursuant to tax-qualified plans are not transferable except upon surrender or annuitization. Various penalty and excise taxes may apply to contributions or distributions made in violation of applicable limitations. Furthermore, certain withdrawal penalties and restrictions may apply to surrenders from Tax-Qualified Contracts. (See "Tax Treatment of Withdrawals - Tax-Qualified Contracts" above.) On July 6, 1983, the Supreme Court decided in Arizona Governing Committee v. Norris that benefits provided under an employer's deferred compensation plan could not, under Title VII of the Civil Rights Act of 1964, vary between men and women. The Contracts sold by Jackson in connection with certain Tax-Qualified Plans will utilize tables that do not differentiate on the basis of sex. Such annuity tables will also be available for use in connection with certain non-qualified deferred compensation plans. (a) Tax-Sheltered Annuities Section 403(b) of the Code permits the purchase of "tax-sheltered annuities" by public schools and certain charitable, educational and scientific organizations described in Section 501(c)(3) of the Code. These qualifying employers may make contributions to the Contracts for the benefit of their employees. Such contributions are not included in the gross income of the employee until the employee receives distributions from the Contract. The amount of contributions to the tax-sheltered annuity is limited to certain maximums imposed by the Code. Furthermore, the Code sets forth additional restrictions governing such items as transferability, distributions, non- discrimination and withdrawals. Employee loans are not allowed under these Contracts. Any employee should obtain competent tax advice as to the tax treatment and suitability of such an investment. (b) Individual Retirement Annuities Section 408(b) of the Code permits eligible individuals to contribute to an individual retirement program known as an "individual retirement annuity" ("IRA annuity"). Under applicable limitations, certain amounts may be contributed to an IRA annuity which will be deductible from the individual's gross income. IRA annuities are subject to limitations on eligibility, contributions, transferability and distributions. Sales of IRA annuities are subject to special requirements imposed by the Code, including the requirement that certain informational disclosure be given to persons desiring to establish an IRA. Purchasers of Contracts to be qualified as IRA annuities should obtain competent tax advice as to the tax treatment and suitability of such an investment. (c) Roth IRA Annuities Section 408A of the Code provides that individuals may purchase a non- deductible IRA annuity, known as a Roth IRA annuity. Purchase payments for Roth IRA annuities are limited to a maximum of $4,000 for calendar year 2007 and $5,000 for 2008. After 2008, the limit will be adjusted annually for inflation in $500 increments. In addition, the Act allows individuals age 50 and older to make additional catch-up IRA contributions. The otherwise maximum contribution limit (before application of adjusted gross income phase-out limits) for an individual who had celebrated his or her 50th birthday before the end of the tax year is increased by $1,000. The same contribution and catch-up contributions are also available for purchasers of Traditional IRA annuities. Lower maximum limitations apply to individuals with adjusted gross incomes between $95,000 and $110,000 in the case of single taxpayers, between $150,000 and $160,000 in the case of married taxpayers filing joint returns, and between $0 and $10,000 in the case of married taxpayers filing separately. An overall $2,000 annual limitation (increased as discussed above) continues to apply to all of a taxpayer's IRA annuity contributions, including Roth IRA annuities and non-Roth IRA annuities. Qualified distributions from Roth IRA annuities are free from federal income tax. A qualified distribution requires that the individual has held the Roth IRA annuity for at least five years and, in addition, that the distribution is made either after the individual reaches age 59 1/2, on the individual's death or disability, or as a qualified first-time home purchase, subject to a $10,000 lifetime maximum, for the individual, a spouse, child, grandchild, or ancestor. Any distribution that is not a qualified distribution is taxable to the extent of earnings in the distribution. Distributions are treated as made from contributions first and therefore no distributions are taxable until distributions exceed the amount of contributions to the Roth IRA annuity. The 10% penalty tax and the regular IRA annuity exceptions to the 10% penalty tax apply to taxable distributions from Roth IRA annuities. Amounts may be rolled over from one Roth IRA annuity to another Roth IRA annuity. Furthermore, an individual may make a rollover contribution from a non-Roth IRA annuity to a Roth IRA annuity, unless the individual has adjusted gross income over $100,000 or the individual is a married taxpayer filing a separate return. The individual must pay tax on any portion of the IRA annuity being rolled over that would be included in income if the distributions were not rolled over. There are no similar limitations on rollovers from one Roth IRA annuity to another Roth IRA annuity. (d) Pension and Profit-Sharing Plans The Internal Revenue Code permits employers, including self-employed individuals, to establish various types of qualified retirement plans for employees. These retirement plans may permit the purchase of the Contracts to provide benefits under the plan. Contributions to the plan for the benefit of employees will not be included in the gross income of the employee until distributed from the plan. The tax consequences to owners may vary depending upon the particular plan design. However, the Code places limitations on all plans on such items as amount of allowable contributions; form, manner and timing of distributions; vesting and non-forfeitability of interests; nondiscrimination in eligibility and participation; and the tax treatment of distributions, transferability of benefits, withdrawals and surrenders. Purchasers of Contracts for use with pension or profit sharing plans should obtain competent tax advice as to the tax treatment and suitability of such an investment. (e) Eligible Deferred Compensation Plans -- Section 457 Under Code provisions, employees and independent contractors performing services for state and local governments and other tax-exempt organizations may participate in eligible deferred compensation plans under Section 457 of the Code. The amounts deferred under a Plan that meets the requirements of Section 457 of the Code are not taxable as income to the participant until paid or otherwise made available to the participant or beneficiary. As a general rule, the maximum amount that can be deferred in any one year is the lesser of 100% of the participant's includible compensation or the elective deferral limitation. The Act increases the dollar limit on deferrals to conform to the $15,000 elective deferral limitation in 2006. The limit is indexed for inflation after that in $500 increments annually thereafter. In addition, the Act allows individuals in eligible deferred compensation plans of state or local governments age 50 and older to make additional catch-up contributions. The otherwise maximum contribution limit for an individual who had celebrated his or her 50th birthday before the end of the tax year is increased by $5,000. The same contribution and catch-up contributions are also available for participants in qualified pension and profit-sharing plans and tax- sheltered annuities under Section 403(b) of the Code. In limited circumstances, the plan may provide for additional catch-up contributions in each of the last three years before normal retirement age. Furthermore, the Code provides additional requirements and restrictions regarding eligibility and distributions. All of the assets and income of an eligible deferred compensation plan established by a governmental employer must be held in trust for the exclusive benefit of participants and their beneficiaries. For this purpose, custodial accounts and certain annuity Contracts are treated as trusts. The requirement of a trust does not apply to amounts under a Plan of a tax-exempt (non-governmental) employer. In addition, the requirement of a trust does not apply to amounts under a Plan of a governmental employer if the Plan is not an eligible plan within the meaning of Section 457(b) of the Code. In the absence of such a trust, amounts under the plan will be subject to the claims of the employer's general creditors. In general, distributions from a Plan are prohibited under Section 457 of the Code unless made after the participant: * attains age 70 1/2, * severs employment, * dies, or * suffers an unforeseeable financial emergency as defined in the regulations. Under present federal tax law, amounts accumulated in a Plan of a tax-exempt (non-governmental) employer under Section 457 of the Code cannot be transferred or rolled over on a tax-deferred basis except for certain transfers to other Plans under Section 457. Amounts accumulated in a Plan of a state or local government employer may be transferred or rolled over to another eligible deferred compensation plan of a state or local government, an IRA, a qualified pension or profit-sharing plan or a tax-sheltered annuity under Section 403(b) of the Code. Annuity Provisions Variable Annuity Payment The initial annuity payment is determined by taking the Contract value allocated to that Investment Division, less any premium tax and any applicable Contract charges, and then applying it to the income option table specified in the Contract. The appropriate rate must be determined by the sex (except where, as in the case of certain Qualified Plans and other employer-sponsored retirement plans, such classification is not permitted) and age of the annuitant and designated second person, if any. The dollars applied are divided by 1,000 and the result multiplied by the appropriate annuity factor appearing in the table to compute the amount of the first monthly payment. That amount is divided by the value of an annuity unit as of the Income Date to establish the number of annuity units representing each variable payment. The number of annuity units determined for the first variable payment remains constant for the second and subsequent monthly variable payments, assuming that no reallocation of Contract values is made. The amount of the second and each subsequent monthly variable payment is determined by multiplying the number of annuity units by the annuity unit value as of the business day next preceding the date on which each payment is due. The mortality and expense experience will not adversely affect the dollar amount of the variable annuity payments once payments have commenced. Annuity Unit Value The initial value of an annuity unit of each Investment Division was set when the Investment Divisions were established. The value may increase or decrease from one business day to the next. The income option tables contained in the Contract are based on a 3% per annum assumed investment rate. The value of a fixed number of annuity units will reflect the investment performance of the Investment Divisions elected, and the amount of each payment will vary accordingly. For each Investment Division, the value of an annuity unit for any business day is determined by multiplying the annuity unit value for the immediately preceding business day by the percentage change in the value of an accumulation unit from the immediately preceding business day to the business day of valuation, calculated by use of the Net Investment Factor, described below. The result is then multiplied by a second factor which offsets the effect of the assumed net investment rate of 3% per annum. Net Investment Factor The net investment factor is an index applied to measure the net investment performance of an Investment Division from one valuation date to the next. The net investment factor for any Investment Division for any valuation period during the accumulation and annuity phases is determined by dividing (a) by (b) and then subtracting (c) from the result where: (a) is the net result of: (1) the net asset value of a Fund's share held in the Investment Division determined as of the valuation date at the end of the valuation period, plus (2) the per share amount of any dividend or other distribution declared by the Fund if the "ex-dividend" date occurs during the valuation period, plus or minus (3) a per share credit or charge with respect to any taxes paid or reserved for by Jackson during the valuation period which are determined by Jackson to be attributable to the operation of the Investment Division (no federal income taxes are applicable under present law); (b) is the net asset value of the Fund share held in the Investment Division determined as of the valuation date at the end of the preceding valuation period; and (c) is the asset charge factor determined by Jackson for the valuation period to reflect the asset-based charges (the mortality and expense risk charge), administration charge, and any applicable charges for optional benefits. Also see "Income Payments (The Income Phase)" in the Prospectus. Condensed Financial Information Accumulation Unit Values The tables reflect the values of accumulation units for each Investment Division for the beginning and end of the periods indicated, and the number of accumulation units outstanding as of the end of the periods indicated - for Contracts with all levels of charges (and combinations of optional endorsements). This information derives from the financial statements of the Separate Account, which together constitute the Separate Account's condensed financial information. Contact the Annuity Service Center to request your copy free of charge, and contact information is on the cover page of the prospectus. Also, please ask about the more timely accumulation unit values that are available for each Investment Division. Effective March 31, 2008, the names of the following Investment Divisions changed (whether or not in connection with a sub-adviser change): JNL/Lazard Mid Cap Value Fund to JNL/Lazard Mid Cap Equity Fund; and JNL/Lazard Small Cap Value Fund to JNL/Lazard Small Cap Equity Fund. Also effective March 31, 2008, the Separate Account has the following new Investment Divisions, on which no Accumulation Unit information is available yet: JNL/PAM Asia ex-Japan Fund; JNL/PAM China-India Fund; JNL/PPM America Mid Cap Value Fund; and JNL/PPM America Small Cap Value Fund. At the end of the tables are the footnotes with the beginning dates of activity for each Investment Division at every applicable charge level (annualized) under the Contract.
Accumulation Unit Values Contract with Endorsements - 1.50% Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM International Growth Division(36) Accumulation unit value: Beginning of period $15.26 $12.64 $11.59 $10.11 $7.99 End of period $16.50 $15.26 $12.64 $11.59 $10.11 Accumulation units outstanding at the end of period 1,849 2,052 2,152 1,603 5,460 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM International Growth Division(36) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $7.99 N/A N/A N/A N/A Accumulation units outstanding at the end of period 5,700 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Large Cap Growth Division(30) Accumulation unit value: Beginning of period $11.38 $10.71 $10.14 $9.36 $7.31 End of period $12.98 $11.38 $10.71 $10.14 $9.36 Accumulation units outstanding at the end of period 9,139 10,367 11,206 15,487 11,201 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Large Cap Growth Division(30) Accumulation unit value: Beginning of period $9.95 $10.00 N/A N/A N/A End of period $7.31 $9.95 N/A N/A N/A Accumulation units outstanding at the end of period 5,990 728 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Premier Equity II Division(30) Accumulation unit value: Beginning of period N/A N/A N/A $8.66 $7.16 End of period N/A N/A N/A $8.47 $8.66 Accumulation units outstanding at the end of period N/A N/A N/A - 8,826 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Premier Equity II Division(30) Accumulation unit value: Beginning of period $10.13 $10.00 N/A N/A N/A End of period $7.16 $10.13 N/A N/A N/A Accumulation units outstanding at the end of period 10,363 2,765 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Real Estate Division(1108) Accumulation unit value: Beginning of period $11.56 $10.00 N/A N/A N/A End of period $9.68 $11.56 N/A N/A N/A Accumulation units outstanding at the end of period 1,144 3,437 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Real Estate Division(1108) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Small Cap Growth Division(30) Accumulation unit value: Beginning of period $12.48 $11.06 $10.36 $9.84 $7.21 End of period $13.69 $12.48 $11.06 $10.36 $9.84 Accumulation units outstanding at the end of period 5,674 5,912 6,179 6,474 7,368 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Small Cap Growth Division(30) Accumulation unit value: Beginning of period $10.08 $10.00 N/A N/A N/A End of period $7.21 $10.08 N/A N/A N/A Accumulation units outstanding at the end of period 5,112 1,817 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Alger Growth Division(30) Accumulation unit value: Beginning of period $10.41 $10.07 $9.10 $8.80 $6.60 End of period $11.31 $10.41 $10.07 $9.10 $8.80 Accumulation units outstanding at the end of period - 4,722 4,936 21,856 27,907 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Alger Growth Division(30) Accumulation unit value: Beginning of period $10.03 $10.00 N/A N/A N/A End of period $6.60 $10.03 N/A N/A N/A Accumulation units outstanding at the end of period 30,756 3,935 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Alliance Capital Growth Division(30) Accumulation unit value: Beginning of period N/A N/A $8.57 $8.19 $6.68 End of period N/A N/A $8.97 $8.57 $8.19 Accumulation units outstanding at the end of period N/A N/A - 31,429 34,194 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Alliance Capital Growth Division(30) Accumulation unit value: Beginning of period $9.84 $10.00 N/A N/A N/A End of period $6.68 $9.84 N/A N/A N/A Accumulation units outstanding at the end of period 34,178 10,691 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian Global Balanced Division(30) Accumulation unit value: Beginning of period $13.20 $12.09 $11.15 $10.34 $9.23 End of period $14.03 $13.20 $12.09 $11.15 $10.34 Accumulation units outstanding at the end of period 28,504 30,374 31,788 33,440 37,190 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian Global Balanced Division(30) Accumulation unit value: Beginning of period $10.03 $10.00 N/A N/A N/A End of period $9.23 $10.03 N/A N/A N/A Accumulation units outstanding at the end of period 39,656 5,205 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian Global Diversified Research Division(569) Accumulation unit value: Beginning of period $12.43 $11.13 $11.09 $10.00 N/A End of period $14.77 $12.43 $11.13 $11.09 N/A Accumulation units outstanding at the end of period - - - - N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian Global Diversified Research Division(569) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian International Small Cap Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian International Small Cap Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian U.S. Growth Equity Division(30) Accumulation unit value: Beginning of period $10.51 $10.20 $9.89 $8.99 $6.74 End of period $11.36 $10.51 $10.20 $9.89 $8.99 Accumulation units outstanding at the end of period 3,589 4,103 5,314 5,061 5,237 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian U.S. Growth Equity Division(30) Accumulation unit value: Beginning of period $9.74 $10.00 N/A N/A N/A End of period $6.74 $9.74 N/A N/A N/A Accumulation units outstanding at the end of period 3,819 2,225 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Credit Suisse Global Natural Resources Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $13.70 N/A N/A N/A N/A Accumulation units outstanding at the end of period 3,047 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Credit Suisse Global Natural Resources Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Credit Suisse Long/Short Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Credit Suisse Long/Short Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Eagle Core Equity Division(30) Accumulation unit value: Beginning of period $11.71 $10.58 $10.39 $9.92 $8.09 End of period $11.61 $11.71 $10.58 $10.39 $9.92 Accumulation units outstanding at the end of period 4,858 5,400 8,362 10,149 7,926 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Eagle Core Equity Division(30) Accumulation unit value: Beginning of period $10.33 $10.00 N/A N/A N/A End of period $8.09 $10.33 N/A N/A N/A Accumulation units outstanding at the end of period 8,465 3,374 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Eagle SmallCap Equity Division(30) Accumulation unit value: Beginning of period $16.84 $14.24 $14.09 $12.04 $8.73 End of period $18.59 $16.84 $14.24 $14.09 $12.04 Accumulation units outstanding at the end of period 1,782 5,966 7,561 8,211 10,253 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Eagle SmallCap Equity Division(30) Accumulation unit value: Beginning of period $11.48 $10.00 N/A N/A N/A End of period $8.73 $11.48 N/A N/A N/A Accumulation units outstanding at the end of period 8,500 1,506 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Founding Strategy Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $9.95 N/A N/A N/A N/A Accumulation units outstanding at the end of period 6,404 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Founding Strategy Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Global Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Global Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Income Division(1068) Accumulation unit value: Beginning of period $10.87 $10.00 N/A N/A N/A End of period $10.90 $10.87 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Income Division(1068) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Mutual Shares Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Mutual Shares Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Small Cap Value Division(1053) Accumulation unit value: Beginning of period $10.15 $10.00 N/A N/A N/A End of period $9.38 $10.15 N/A N/A N/A Accumulation units outstanding at the end of period 443 445 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Small Cap Value Division(1053) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Core Plus Bond Division(30) Accumulation unit value: Beginning of period $13.21 $12.81 $12.67 $12.03 $10.75 End of period $13.92 $13.21 $12.81 $12.67 $12.03 Accumulation units outstanding at the end of period 3,578 3,723 4,184 4,048 4,008 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Core Plus Bond Division(30) Accumulation unit value: Beginning of period $10.07 $10.00 N/A N/A N/A End of period $10.75 $10.07 N/A N/A N/A Accumulation units outstanding at the end of period 6,298 1,120 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Mid Cap Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Mid Cap Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Short Duration Bond Division(1063) Accumulation unit value: Beginning of period $10.21 $10.00 N/A N/A N/A End of period $10.54 $10.21 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Short Duration Bond Division(1063) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan International Value Division(475) Accumulation unit value: Beginning of period $25.53 $19.63 $16.81 $13.93 $13.25 End of period $28.16 $25.53 $19.63 $16.81 $13.93 Accumulation units outstanding at the end of period 157 178 - - 4,819 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan International Value Division(475) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan MidCap Growth Division(30) Accumulation unit value: Beginning of period $12.56 $11.37 $10.88 $9.36 $7.00 End of period $13.35 $12.56 $11.37 $10.88 $9.36 Accumulation units outstanding at the end of period 6,758 4,435 5,152 6,246 6,586 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan MidCap Growth Division(30) Accumulation unit value: Beginning of period $10.04 $10.00 N/A N/A N/A End of period $7.00 $10.04 N/A N/A N/A Accumulation units outstanding at the end of period 5,601 1,912 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan U.S. Government & Quality Bond Division(30) Accumulation unit value: Beginning of period $11.31 $11.12 $11.03 $10.78 $10.81 End of period $11.85 $11.31 $11.12 $11.03 $10.78 Accumulation units outstanding at the end of period 18,831 19,521 21,345 40,155 48,729 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan U.S. Government & Quality Bond Division(30) Accumulation unit value: Beginning of period $9.85 $10.00 N/A N/A N/A End of period $10.81 $9.85 N/A N/A N/A Accumulation units outstanding at the end of period 63,443 1,845 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Emerging Markets Division(1062) Accumulation unit value: Beginning of period $10.88 $9.99 N/A N/A N/A End of period $14.13 $10.88 N/A N/A N/A Accumulation units outstanding at the end of period 397 - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Emerging Markets Division(1062) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Mid Cap Value Division(30) Accumulation unit value: Beginning of period $16.85 $14.93 $13.92 $11.33 $8.93 End of period $16.16 $16.85 $14.93 $13.92 $11.33 Accumulation units outstanding at the end of period 12,706 10,194 13,343 14,075 30,432 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Mid Cap Value Division(30) Accumulation unit value: Beginning of period $10.55 $10.00 N/A N/A N/A End of period $8.93 $10.55 N/A N/A N/A Accumulation units outstanding at the end of period 17,502 5,811 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Small Cap Value Division(30) Accumulation unit value: Beginning of period $15.29 $13.29 $12.89 $11.34 $8.29 End of period $14.03 $15.29 $13.29 $12.89 $11.34 Accumulation units outstanding at the end of period 8,819 13,713 15,064 2,881 11,156 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Small Cap Value Division(30) Accumulation unit value: Beginning of period $10.17 $10.00 N/A N/A N/A End of period $8.29 $10.17 N/A N/A N/A Accumulation units outstanding at the end of period 3,935 280 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Mellon Capital Management (MCM) 10 x 10 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Mellon Capital Management (MCM) 10 x 10 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM 25 Division(216) Accumulation unit value: Beginning of period $16.95 $15.33 $16.03 $13.35 $10.20 End of period $16.23 $16.95 $15.33 $16.03 $13.35 Accumulation units outstanding at the end of period 8,275 8,274 13,401 9,328 9,043 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM 25 Division(216) Accumulation unit value: Beginning of period $10.09 N/A N/A N/A N/A End of period $10.20 N/A N/A N/A N/A Accumulation units outstanding at the end of period 2,788 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Bond Index Division(314) Accumulation unit value: Beginning of period $10.73 $10.51 $10.47 $10.26 $10.17 End of period $11.25 $10.73 $10.51 $10.47 $10.26 Accumulation units outstanding at the end of period 1,989 4,180 4,912 4,572 261 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Bond Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Communications Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Communications Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Consumer Brands Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Consumer Brands Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Dow 10 Division(216) Accumulation unit value: Beginning of period $13.41 $10.51 $11.31 $11.16 $9.01 End of period $13.35 $13.41 $10.51 $11.31 $11.16 Accumulation units outstanding at the end of period 7,465 8,001 13,735 16,366 18,637 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Dow 10 Division(216) Accumulation unit value: Beginning of period $8.55 N/A N/A N/A N/A End of period $9.01 N/A N/A N/A N/A Accumulation units outstanding at the end of period 20,134 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Dow Dividend Division(992) Accumulation unit value: Beginning of period $11.82 $10.00 N/A N/A N/A End of period $10.48 $11.82 N/A N/A N/A Accumulation units outstanding at the end of period 22,374 1,621 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Dow Dividend Division(992) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Enhanced S&P 500 Stock Index Division(444) Accumulation unit value: Beginning of period $17.53 $15.23 $14.83 $13.53 $12.64 End of period $17.92 $17.53 $15.23 $14.83 $13.53 Accumulation units outstanding at the end of period 5,468 5,468 5,908 5,910 3,565 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Enhanced S&P 500 Stock Index Division(444) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Financial Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Financial Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Global 15 Division(216) Accumulation unit value: Beginning of period $25.18 $18.24 $16.80 $13.32 $10.15 End of period $27.56 $25.18 $18.24 $16.80 $13.32 Accumulation units outstanding at the end of period 7,438 8,168 10,607 8,350 8,542 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Global 15 Division(216) Accumulation unit value: Beginning of period $10.53 N/A N/A N/A N/A End of period $10.15 N/A N/A N/A N/A Accumulation units outstanding at the end of period 2,671 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Healthcare Sector Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.15 N/A N/A N/A N/A Accumulation units outstanding at the end of period 6,076 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Healthcare Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Index 5 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Index 5 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM International Index Division(314) Accumulation unit value: Beginning of period $22.66 $18.32 $16.41 $13.94 $10.21 End of period $24.64 $22.66 $18.32 $16.41 $13.94 Accumulation units outstanding at the end of period 1,384 2,595 3,422 5,170 260 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM International Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM JNL 5 Division(884) Accumulation unit value: Beginning of period $11.98 $10.24 $10.00 N/A N/A End of period $11.97 $11.98 $10.24 N/A N/A Accumulation units outstanding at the end of period 35,741 56,176 42,887 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM JNL 5 Division(884) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM JNL Optimized 5 Division(1073) Accumulation unit value: Beginning of period $10.73 $9.42 N/A N/A N/A End of period $12.00 $10.73 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM JNL Optimized 5 Division(1073) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Nasdaq 25 Division(709) Accumulation unit value: Beginning of period $10.40 $10.08 $10.33 $10.00 N/A End of period $12.20 $10.40 $10.08 $10.33 N/A Accumulation units outstanding at the end of period 591 651 718 791 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Nasdaq 25 Division(709) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM NYSE International 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM NYSE International 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Oil & Gas Sector Division(705) Accumulation unit value: Beginning of period $16.72 $14.05 $10.42 $10.00 N/A End of period $22.27 $16.72 $14.05 $10.42 N/A Accumulation units outstanding at the end of period 1,319 1,084 - 3,037 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Oil & Gas Sector Division(705) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 10 Division(216) Accumulation unit value: Beginning of period $17.25 $16.73 $12.37 $10.67 $9.11 End of period $17.85 $17.25 $16.73 $12.37 $10.67 Accumulation units outstanding at the end of period 3,664 3,589 9,275 9,413 9,570 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 10 Division(216) Accumulation unit value: Beginning of period $10.21 N/A N/A N/A N/A End of period $9.11 N/A N/A N/A N/A Accumulation units outstanding at the end of period 2,754 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 24 Division(1071) Accumulation unit value: Beginning of period $10.20 $9.90 N/A N/A N/A End of period $10.81 $10.20 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 24 Division(1071) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 400 MidCap Index Division(314) Accumulation unit value: Beginning of period $18.80 $17.39 $15.77 $13.82 $10.54 End of period $19.89 $18.80 $17.39 $15.77 $13.82 Accumulation units outstanding at the end of period 2,490 2,552 3,242 5,307 252 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 400 MidCap Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 500 Index Division(314) Accumulation unit value: Beginning of period $16.89 $14.90 $14.49 $13.36 $11.07 End of period $17.45 $16.89 $14.90 $14.49 $13.36 Accumulation units outstanding at the end of period 2,827 2,928 3,600 5,603 240 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 500 Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P SMid 60 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P SMid 60 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Select Small-Cap Division(216) Accumulation unit value: Beginning of period $19.86 $18.41 $17.16 $15.47 $10.61 End of period $17.52 $19.86 $18.41 $17.16 $15.47 Accumulation units outstanding at the end of period 4,317 4,273 8,664 8,697 8,834 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Select Small-Cap Division(216) Accumulation unit value: Beginning of period $10.35 N/A N/A N/A N/A End of period $10.61 N/A N/A N/A N/A Accumulation units outstanding at the end of period 2,717 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Small Cap Index Division(314) Accumulation unit value: Beginning of period $20.80 $17.97 $17.50 $15.13 $10.82 End of period $20.05 $20.80 $17.97 $17.50 $15.13 Accumulation units outstanding at the end of period 2,357 2,524 3,149 4,801 246 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Small Cap Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Technology Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Technology Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Value Line 30 Division(813) Accumulation unit value: Beginning of period $12.78 $13.15 $10.00 N/A N/A End of period $15.04 $12.78 $13.15 N/A N/A Accumulation units outstanding at the end of period 475 1,474 4,266 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Value Line 30 Division(813) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM VIP Division(813) Accumulation unit value: Beginning of period $12.42 $11.24 $10.00 N/A N/A End of period $13.55 $12.42 $11.24 N/A N/A Accumulation units outstanding at the end of period - - 4,658 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM VIP Division(813) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Oppenheimer Global Growth Division(27) Accumulation unit value: Beginning of period $16.59 $14.40 $12.85 $11.06 $7.99 End of period $17.38 $16.59 $14.40 $12.85 $11.06 Accumulation units outstanding at the end of period 5,651 5,837 9,205 13,421 9,465 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Oppenheimer Global Growth Division(27) Accumulation unit value: Beginning of period $10.44 $10.00 N/A N/A N/A End of period $7.99 $10.44 N/A N/A N/A Accumulation units outstanding at the end of period 13,107 7,308 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Oppenheimer Growth Division(27) Accumulation unit value: Beginning of period $9.87 $9.56 $8.89 $8.65 $7.46 End of period $10.67 $9.87 $9.56 $8.89 $8.65 Accumulation units outstanding at the end of period - 4,896 5,580 6,826 7,127 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Oppenheimer Growth Division(27) Accumulation unit value: Beginning of period $10.14 $10.00 N/A N/A N/A End of period $7.46 $10.14 N/A N/A N/A Accumulation units outstanding at the end of period 4,981 1,606 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PIMCO Real Return Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PIMCO Real Return Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PIMCO Total Return Bond Division(30) Accumulation unit value: Beginning of period $11.76 $11.54 $11.45 $11.13 $10.78 End of period $12.54 $11.76 $11.54 $11.45 $11.13 Accumulation units outstanding at the end of period 7,530 24,956 25,916 12,866 15,057 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PIMCO Total Return Bond Division(30) Accumulation unit value: Beginning of period $10.05 $10.00 N/A N/A N/A End of period $10.78 $10.05 N/A N/A N/A Accumulation units outstanding at the end of period 14,587 300 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America Core Equity Division(30) Accumulation unit value: Beginning of period $12.37 $11.04 $10.31 $9.26 $7.39 End of period $11.31 $12.37 $11.04 $10.31 $9.26 Accumulation units outstanding at the end of period 3,221 3,205 3,791 4,208 5,183 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America Core Equity Division(30) Accumulation unit value: Beginning of period $9.88 $10.00 N/A N/A N/A End of period $7.39 $9.88 N/A N/A N/A Accumulation units outstanding at the end of period 6,422 3,798 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America High Yield Bond Division(30) Accumulation unit value: Beginning of period N/A N/A N/A $11.68 $9.99 End of period N/A N/A N/A $12.07 $11.68 Accumulation units outstanding at the end of period N/A N/A N/A - 23,082 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America High Yield Bond Division(30) Accumulation unit value: Beginning of period $9.94 $10.00 N/A N/A N/A End of period $9.99 $9.94 N/A N/A N/A Accumulation units outstanding at the end of period 27,787 12,633 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America High Yield Bond Division(674) Accumulation unit value: Beginning of period $11.22 $10.31 $10.29 $10.00 N/A End of period $10.93 $11.22 $10.31 $10.29 N/A Accumulation units outstanding at the end of period 18,344 17,688 18,854 23,041 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America High Yield Bond Division(674) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America Value Equity Division(30) Accumulation unit value: Beginning of period $12.03 $10.81 $10.46 $9.67 $7.88 End of period $11.19 $12.03 $10.81 $10.46 $9.67 Accumulation units outstanding at the end of period 13,078 14,539 30,479 31,798 43,018 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America Value Equity Division(30) Accumulation unit value: Beginning of period $9.98 $10.00 N/A N/A N/A End of period $7.88 $9.98 N/A N/A N/A Accumulation units outstanding at the end of period 42,671 10,574 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Putnam Midcap Growth Division(30) Accumulation unit value: Beginning of period $12.86 $12.35 $11.18 $9.57 $7.28 End of period $12.56 $12.86 $12.35 $11.18 $9.57 Accumulation units outstanding at the end of period - 2,934 3,338 3,515 4,159 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Putnam Midcap Growth Division(30) Accumulation unit value: Beginning of period $10.45 $10.00 N/A N/A N/A End of period $7.28 $10.45 N/A N/A N/A Accumulation units outstanding at the end of period 3,568 642 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P 4 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P 4 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Competitive Advantage Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Competitive Advantage Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 100 Division(444) Accumulation unit value: Beginning of period N/A N/A N/A $12.56 $11.97 End of period N/A N/A N/A $12.79 $12.56 Accumulation units outstanding at the end of period N/A N/A N/A - 1,882 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 100 Division(444) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 50 Division(943) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 50 Division(943) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 75 Division(944) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 75 Division(944) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Moderate Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Moderate Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Dividend Income & Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Dividend Income & Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Equity Aggressive Growth Division I(35) Accumulation unit value: Beginning of period N/A N/A N/A $9.77 $7.63 End of period N/A N/A N/A $9.98 $9.77 Accumulation units outstanding at the end of period N/A N/A N/A - 3,952 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Equity Aggressive Growth Division I(35) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $7.63 N/A N/A N/A N/A Accumulation units outstanding at the end of period 3,015 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Equity Growth Division I(30) Accumulation unit value: Beginning of period N/A N/A N/A $9.81 $7.69 End of period N/A N/A N/A $9.99 $9.81 Accumulation units outstanding at the end of period N/A N/A N/A - 18,036 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Equity Growth Division I(30) Accumulation unit value: Beginning of period $10.18 $10.00 N/A N/A N/A End of period $7.69 $10.18 N/A N/A N/A Accumulation units outstanding at the end of period 16,432 46 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Intrinsic Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Intrinsic Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Aggressive Growth Division(30) Accumulation unit value: Beginning of period $14.15 $12.43 $11.63 $10.48 $8.39 End of period $15.22 $14.15 $12.43 $11.63 $10.48 Accumulation units outstanding at the end of period 30,496 54,280 55,865 52,573 24,829 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Aggressive Growth Division(30) Accumulation unit value: Beginning of period $10.42 $10.00 N/A N/A N/A End of period $8.39 $10.42 N/A N/A N/A Accumulation units outstanding at the end of period 6,312 6,449 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Conservative Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Conservative Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Growth Division(30) Accumulation unit value: Beginning of period $13.90 $12.36 $11.68 $10.64 $8.88 End of period $14.89 $13.90 $12.36 $11.68 $10.64 Accumulation units outstanding at the end of period 80,438 86,034 124,992 135,912 135,574 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Growth Division(30) Accumulation unit value: Beginning of period $10.29 $10.00 N/A N/A N/A End of period $8.88 $10.29 N/A N/A N/A Accumulation units outstanding at the end of period 130,392 19,997 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Moderate Growth Division(30) Accumulation unit value: Beginning of period $13.29 $12.03 $11.47 $10.63 $9.16 End of period $14.22 $13.29 $12.03 $11.47 $10.63 Accumulation units outstanding at the end of period 54,630 60,888 64,716 70,171 84,969 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Moderate Growth Division(30) Accumulation unit value: Beginning of period $10.16 $10.00 N/A N/A N/A End of period $9.16 $10.16 N/A N/A N/A Accumulation units outstanding at the end of period 102,423 14,893 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2015 Division(1046) Accumulation unit value: Beginning of period $10.84 $10.28 N/A N/A N/A End of period $11.67 $10.84 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2015 Division(1046) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2020 Division(1071) Accumulation unit value: Beginning of period $10.97 $10.23 N/A N/A N/A End of period $11.83 $10.97 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2020 Division(1071) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2025 Division(1040) Accumulation unit value: Beginning of period $11.04 $10.34 N/A N/A N/A End of period $11.98 $11.04 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2025 Division(1040) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement Income Division(1029) Accumulation unit value: Beginning of period $10.59 $9.97 N/A N/A N/A End of period $11.15 $10.59 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement Income Division(1029) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Total Yield Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Total Yield Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Very Aggressive Growth Division I(30) Accumulation unit value: Beginning of period N/A N/A N/A $10.01 $7.78 End of period N/A N/A N/A $10.24 $10.01 Accumulation units outstanding at the end of period N/A N/A N/A - 2,124 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Very Aggressive Growth Division I(30) Accumulation unit value: Beginning of period $10.29 $10.00 N/A N/A N/A End of period $7.78 $10.29 N/A N/A N/A Accumulation units outstanding at the end of period 1,895 978 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Balanced Division(30) Accumulation unit value: Beginning of period $14.99 $13.38 $12.90 $11.81 $9.86 End of period $15.87 $14.99 $13.38 $12.90 $11.81 Accumulation units outstanding at the end of period 15,676 16,996 16,806 40,734 41,148 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Balanced Division(30) Accumulation unit value: Beginning of period $10.21 $10.00 N/A N/A N/A End of period $9.86 $10.21 N/A N/A N/A Accumulation units outstanding at the end of period 62,497 1,614 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Money Market Division(30) Accumulation unit value: Beginning of period $10.19 $9.90 $9.78 $9.85 $9.95 End of period $10.52 $10.19 $9.90 $9.78 $9.85 Accumulation units outstanding at the end of period 10,333 370 385 5,991 11,993 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Money Market Division(30) Accumulation unit value: Beginning of period $10.00 $10.00 N/A N/A N/A End of period $9.95 $10.00 N/A N/A N/A Accumulation units outstanding at the end of period 16,117 343 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Value Division(444) Accumulation unit value: Beginning of period $20.83 $17.48 $16.41 $14.51 $13.46 End of period $22.12 $20.83 $17.48 $16.41 $14.51 Accumulation units outstanding at the end of period 3,320 3,371 3,540 2,161 1,674 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Value Division(444) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Established Growth Division(30) Accumulation unit value: Beginning of period $12.55 $11.20 $10.72 $9.90 $7.70 End of period $13.61 $12.55 $11.20 $10.72 $9.90 Accumulation units outstanding at the end of period 46,797 42,012 59,985 44,665 44,178 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Established Growth Division(30) Accumulation unit value: Beginning of period $10.19 $10.00 N/A N/A N/A End of period $7.70 $10.19 N/A N/A N/A Accumulation units outstanding at the end of period 41,937 11,575 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Mid-Cap Growth Division(30) Accumulation unit value: Beginning of period $15.82 $15.04 $13.38 $11.51 $8.43 End of period $18.27 $15.82 $15.04 $13.38 $11.51 Accumulation units outstanding at the end of period 22,767 23,521 43,291 55,246 54,038 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Mid-Cap Growth Division(30) Accumulation unit value: Beginning of period $10.96 $10.00 N/A N/A N/A End of period $8.43 $10.96 N/A N/A N/A Accumulation units outstanding at the end of period 67,120 5,006 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Value Division(30) Accumulation unit value: Beginning of period $15.05 $12.73 $12.17 $10.72 $8.38 End of period $14.95 $15.05 $12.73 $12.17 $10.72 Accumulation units outstanding at the end of period 26,731 27,865 32,990 43,850 36,189 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Value Division(30) Accumulation unit value: Beginning of period $10.23 $10.00 N/A N/A N/A End of period $8.38 $10.23 N/A N/A N/A Accumulation units outstanding at the end of period 34,851 14,085 N/A N/A N/A Accumulation Unit Values Contract with Endorsements - 1.60% Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM International Growth Division(28) Accumulation unit value: Beginning of period $14.36 $11.90 $10.93 $9.54 $7.54 End of period $15.51 $14.36 $11.90 $10.93 $9.54 Accumulation units outstanding at the end of period 7,448 7,524 11,411 14,603 18,625 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM International Growth Division(28) Accumulation unit value: Beginning of period $9.65 $10.00 N/A N/A N/A End of period $7.54 $9.65 N/A N/A N/A Accumulation units outstanding at the end of period 18,179 21,378 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Large Cap Growth Division(30) Accumulation unit value: Beginning of period $11.59 $10.91 $10.34 $9.55 $7.47 End of period $13.20 $11.59 $10.91 $10.34 $9.55 Accumulation units outstanding at the end of period 9,557 13,515 13,841 4,874 3,899 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Large Cap Growth Division(30) Accumulation unit value: Beginning of period $10.18 $10.00 N/A N/A N/A End of period $7.47 $10.18 N/A N/A N/A Accumulation units outstanding at the end of period 1,198 43 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Premier Equity II Division(38) Accumulation unit value: Beginning of period N/A N/A N/A $8.85 $7.33 End of period N/A N/A N/A $8.66 $8.85 Accumulation units outstanding at the end of period N/A N/A N/A - 3,611 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Premier Equity II Division(38) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $7.33 N/A N/A N/A N/A Accumulation units outstanding at the end of period 5,503 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Real Estate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Real Estate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/AIM Small Cap Growth Division(30) Accumulation unit value: Beginning of period $13.23 $11.74 $11.00 $10.46 $7.68 End of period $14.50 $13.23 $11.74 $11.00 $10.46 Accumulation units outstanding at the end of period 1,479 1,369 2,256 3,758 3,931 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/AIM Small Cap Growth Division(30) Accumulation unit value: Beginning of period $10.74 $10.00 N/A N/A N/A End of period $7.68 $10.74 N/A N/A N/A Accumulation units outstanding at the end of period 2,139 43 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Alger Growth Division(28) Accumulation unit value: Beginning of period $9.99 $9.67 $8.75 $8.46 $6.36 End of period $10.84 $9.99 $9.67 $8.75 $8.46 Accumulation units outstanding at the end of period - 25,837 29,048 31,438 34,344 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Alger Growth Division(28) Accumulation unit value: Beginning of period $9.67 $10.00 N/A N/A N/A End of period $6.36 $9.67 N/A N/A N/A Accumulation units outstanding at the end of period 34,641 16,398 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Alliance Capital Growth Division(28) Accumulation unit value: Beginning of period N/A N/A $8.44 $8.07 $6.59 End of period N/A N/A $8.90 $8.44 $8.07 Accumulation units outstanding at the end of period N/A N/A - 20,379 23,925 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Alliance Capital Growth Division(28) Accumulation unit value: Beginning of period $9.71 $10.00 N/A N/A N/A End of period $6.59 $9.71 N/A N/A N/A Accumulation units outstanding at the end of period 24,493 20,919 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian Global Balanced Division(28) Accumulation unit value: Beginning of period $12.96 $11.89 $10.97 $10.19 $9.10 End of period $13.77 $12.96 $11.89 $10.97 $10.19 Accumulation units outstanding at the end of period 26,883 28,448 33,449 33,894 34,651 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian Global Balanced Division(28) Accumulation unit value: Beginning of period $9.90 $10.00 N/A N/A N/A End of period $9.10 $9.90 N/A N/A N/A Accumulation units outstanding at the end of period 36,997 30,280 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian Global Diversified Research Division(569) Accumulation unit value: Beginning of period $12.39 $11.11 $11.08 $10.00 N/A End of period $14.71 $12.39 $11.11 $11.08 N/A Accumulation units outstanding at the end of period 489 - - - N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian Global Diversified Research Division(569) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian International Small Cap Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian International Small Cap Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Capital Guardian U.S. Growth Equity Division(28) Accumulation unit value: Beginning of period $9.65 $9.37 $9.10 $8.28 $6.21 End of period $10.42 $9.65 $9.37 $9.10 $8.28 Accumulation units outstanding at the end of period 16,515 18,752 25,257 27,463 30,512 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Capital Guardian U.S. Growth Equity Division(28) Accumulation unit value: Beginning of period $8.98 $10.00 N/A N/A N/A End of period $6.21 $8.98 N/A N/A N/A Accumulation units outstanding at the end of period 31,227 27,867 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Credit Suisse Global Natural Resources Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $13.69 N/A N/A N/A N/A Accumulation units outstanding at the end of period 68 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Credit Suisse Global Natural Resources Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Credit Suisse Long/Short Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Credit Suisse Long/Short Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Eagle Core Equity Division(28) Accumulation unit value: Beginning of period $10.61 $9.60 $9.43 $9.01 $7.35 End of period $10.50 $10.61 $9.60 $9.43 $9.01 Accumulation units outstanding at the end of period 11,256 11,874 12,186 19,538 27,488 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Eagle Core Equity Division(28) Accumulation unit value: Beginning of period $9.40 $10.00 N/A N/A N/A End of period $7.35 $9.40 N/A N/A N/A Accumulation units outstanding at the end of period 24,346 11,447 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Eagle SmallCap Equity Division(28) Accumulation unit value: Beginning of period $15.17 $12.84 $12.73 $10.88 $7.90 End of period $16.74 $15.17 $12.84 $12.73 $10.88 Accumulation units outstanding at the end of period 7,946 9,154 10,487 13,962 15,937 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Eagle SmallCap Equity Division(28) Accumulation unit value: Beginning of period $10.40 $10.00 N/A N/A N/A End of period $7.90 $10.40 N/A N/A N/A Accumulation units outstanding at the end of period 15,417 16,100 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Founding Strategy Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Founding Strategy Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Global Growth Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $9.91 N/A N/A N/A N/A Accumulation units outstanding at the end of period 136 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Global Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Income Division(1069) Accumulation unit value: Beginning of period $10.86 $9.95 N/A N/A N/A End of period $10.89 $10.86 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Income Division(1069) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Mutual Shares Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Mutual Shares Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Franklin Templeton Small Cap Value Division(834) Accumulation unit value: Beginning of period $12.64 $10.91 $10.26 N/A N/A End of period $8.63 $12.64 $10.91 N/A N/A Accumulation units outstanding at the end of period - - - N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Franklin Templeton Small Cap Value Division(834) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Core Plus Bond Division(28) Accumulation unit value: Beginning of period $13.39 $13.00 $12.87 $12.23 $10.95 End of period $14.10 $13.39 $13.00 $12.87 $12.23 Accumulation units outstanding at the end of period 22,542 18,313 18,995 14,383 13,670 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Core Plus Bond Division(28) Accumulation unit value: Beginning of period $10.27 $10.00 N/A N/A N/A End of period $10.95 $10.27 N/A N/A N/A Accumulation units outstanding at the end of period 11,306 6,473 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Mid Cap Value Division(861) Accumulation unit value: Beginning of period $11.98 $10.52 $10.00 N/A N/A End of period $12.12 $11.98 $10.52 N/A N/A Accumulation units outstanding at the end of period 5,133 5,063 5,132 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Mid Cap Value Division(861) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Goldman Sachs Short Duration Bond Division(1068) Accumulation unit value: Beginning of period $10.20 $10.00 N/A N/A N/A End of period $10.52 $10.20 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Goldman Sachs Short Duration Bond Division(1068) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan International Value Division(196) Accumulation unit value: Beginning of period $25.42 $19.57 $16.77 $13.91 $10.14 End of period $28.01 $25.42 $19.57 $16.77 $13.91 Accumulation units outstanding at the end of period 11,256 8,741 9,177 1,559 - Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan International Value Division(196) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.14 N/A N/A N/A N/A Accumulation units outstanding at the end of period - N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan MidCap Growth Division(28) Accumulation unit value: Beginning of period $10.83 $9.82 $9.40 $8.09 $6.06 End of period $11.50 $10.83 $9.82 $9.40 $8.09 Accumulation units outstanding at the end of period 27,838 17,630 18,319 18,998 20,283 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan MidCap Growth Division(28) Accumulation unit value: Beginning of period $8.70 $10.00 N/A N/A N/A End of period $6.06 $8.70 N/A N/A N/A Accumulation units outstanding at the end of period 21,474 15,767 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/JPMorgan U.S. Government & Quality Bond Division(28) Accumulation unit value: Beginning of period $11.75 $11.56 $11.48 $11.23 $11.28 End of period $12.30 $11.75 $11.56 $11.48 $11.23 Accumulation units outstanding at the end of period 21,784 24,736 25,986 37,109 51,593 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/JPMorgan U.S. Government & Quality Bond Division(28) Accumulation unit value: Beginning of period $10.28 $10.00 N/A N/A N/A End of period $11.28 $10.28 N/A N/A N/A Accumulation units outstanding at the end of period 63,735 59,794 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Emerging Markets Division(1063) Accumulation unit value: Beginning of period $10.87 $9.98 N/A N/A N/A End of period $14.10 $10.87 N/A N/A N/A Accumulation units outstanding at the end of period 3,500 3,409 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Emerging Markets Division(1063) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Mid Cap Value Division(34) Accumulation unit value: Beginning of period $15.81 $14.02 $13.09 $10.67 $8.41 End of period $15.15 $15.81 $14.02 $13.09 $10.67 Accumulation units outstanding at the end of period 7,635 7,675 7,504 5,025 8,312 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Mid Cap Value Division(34) Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $8.41 N/A N/A N/A N/A Accumulation units outstanding at the end of period 5,755 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Lazard Small Cap Value Division(30) Accumulation unit value: Beginning of period $16.06 $13.97 $13.57 $11.95 $8.75 End of period $14.73 $16.06 $13.97 $13.57 $11.95 Accumulation units outstanding at the end of period 7,877 7,524 8,207 7,864 5,239 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Lazard Small Cap Value Division(30) Accumulation unit value: Beginning of period $10.74 $10.00 N/A N/A N/A End of period $8.75 $10.74 N/A N/A N/A Accumulation units outstanding at the end of period 8,171 43 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Mellon Capital Management (MCM) 10 x 10 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Mellon Capital Management (MCM) 10 x 10 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM 25 Division(28) Accumulation unit value: Beginning of period $14.54 $13.16 $13.78 $11.48 $8.78 End of period $13.90 $14.54 $13.16 $13.78 $11.48 Accumulation units outstanding at the end of period 3,730 2,295 2,284 2,784 83,445 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM 25 Division(28) Accumulation unit value: Beginning of period $10.11 $10.00 N/A N/A N/A End of period $8.78 $10.11 N/A N/A N/A Accumulation units outstanding at the end of period 84,761 27,930 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Bond Index Division(314) Accumulation unit value: Beginning of period $10.69 $10.48 $10.45 $10.25 $10.17 End of period $11.19 $10.69 $10.48 $10.45 $10.25 Accumulation units outstanding at the end of period 757 811 775 1,033 1,015 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Bond Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Communications Sector Division(28) Accumulation unit value: Beginning of period $9.23 $6.89 $6.93 $5.99 $4.57 End of period $9.47 $9.23 $6.89 $6.93 $5.99 Accumulation units outstanding at the end of period - 3,290 3,290 3,290 52,995 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Communications Sector Division(28) Accumulation unit value: Beginning of period $8.54 $10.00 N/A N/A N/A End of period $4.57 $8.54 N/A N/A N/A Accumulation units outstanding at the end of period 55,402 24,288 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Consumer Brands Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Consumer Brands Sector Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Dow 10 Division(28) Accumulation unit value: Beginning of period $12.40 $9.73 $10.48 $10.35 $8.36 End of period $12.33 $12.40 $9.73 $10.48 $10.35 Accumulation units outstanding at the end of period 12,148 13,166 14,482 17,197 20,410 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Dow 10 Division(28) Accumulation unit value: Beginning of period $9.43 $10.00 N/A N/A N/A End of period $8.36 $9.43 N/A N/A N/A Accumulation units outstanding at the end of period 15,579 8,008 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Dow Dividend Division(992) Accumulation unit value: Beginning of period $11.81 $10.00 N/A N/A N/A End of period $10.46 $11.81 N/A N/A N/A Accumulation units outstanding at the end of period 5,234 5,215 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Dow Dividend Division(992) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Enhanced S&P 500 Stock Index Division(444) Accumulation unit value: Beginning of period $17.45 $15.18 $14.80 $13.51 $12.62 End of period $17.82 $17.45 $15.18 $14.80 $13.51 Accumulation units outstanding at the end of period 279 3,724 3,724 2,740 4,007 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Enhanced S&P 500 Stock Index Division(444) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Financial Sector Division(28) Accumulation unit value: Beginning of period $14.03 $12.01 $11.50 $10.30 $7.85 End of period $11.41 $14.03 $12.01 $11.50 $10.30 Accumulation units outstanding at the end of period 1,556 2,676 3,036 - - Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Financial Sector Division(28) Accumulation unit value: Beginning of period $9.28 $10.00 N/A N/A N/A End of period $7.85 $9.28 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Global 15 Division(28) Accumulation unit value: Beginning of period $20.92 $15.17 $13.99 $11.10 $8.47 End of period $22.88 $20.92 $15.17 $13.99 $11.10 Accumulation units outstanding at the end of period 3,685 5,324 7,559 4,131 53,137 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Global 15 Division(28) Accumulation unit value: Beginning of period $9.99 $10.00 N/A N/A N/A End of period $8.47 $9.99 N/A N/A N/A Accumulation units outstanding at the end of period 51,859 18,973 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Healthcare Sector Division(28) Accumulation unit value: Beginning of period $9.69 $9.27 $8.75 $8.59 $6.80 End of period $10.26 $9.69 $9.27 $8.75 $8.59 Accumulation units outstanding at the end of period 55 1,299 1,299 1,299 111,784 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Healthcare Sector Division(28) Accumulation unit value: Beginning of period $9.97 $10.00 N/A N/A N/A End of period $6.80 $9.97 N/A N/A N/A Accumulation units outstanding at the end of period 110,535 59,261 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Index 5 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Index 5 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM International Index Division(314) Accumulation unit value: Beginning of period $22.57 $18.26 $16.37 $13.92 $10.20 End of period $24.51 $22.57 $18.26 $16.37 $13.92 Accumulation units outstanding at the end of period 2,989 2,834 2,848 2,045 967 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM International Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM JNL 5 Division(827) Accumulation unit value: Beginning of period $13.06 $11.17 $10.00 N/A N/A End of period $13.03 $13.06 $11.17 N/A N/A Accumulation units outstanding at the end of period 37,133 35,007 32,120 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM JNL 5 Division(827) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM JNL Optimized 5 Division(1065) Accumulation unit value: Beginning of period $10.72 $10.13 N/A N/A N/A End of period $11.98 $10.72 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM JNL Optimized 5 Division(1065) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Nasdaq 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Nasdaq 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM NYSE International 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM NYSE International 25 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Oil & Gas Sector Division(28) Accumulation unit value: Beginning of period $24.07 $20.25 $15.04 $11.46 $8.84 End of period $32.05 $24.07 $20.25 $15.04 $11.46 Accumulation units outstanding at the end of period 5,925 5,896 6,086 1,221 36,169 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Oil & Gas Sector Division(28) Accumulation unit value: Beginning of period $9.31 $10.00 N/A N/A N/A End of period $8.84 $9.31 N/A N/A N/A Accumulation units outstanding at the end of period 38,427 25,747 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 10 Division(28) Accumulation unit value: Beginning of period $12.69 $12.32 $9.12 $7.88 $6.73 End of period $13.12 $12.69 $12.32 $9.12 $7.88 Accumulation units outstanding at the end of period 3,141 3,213 3,177 3,987 103,831 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 10 Division(28) Accumulation unit value: Beginning of period $8.35 $10.00 N/A N/A N/A End of period $6.73 $8.35 N/A N/A N/A Accumulation units outstanding at the end of period 112,330 42,891 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 24 Division(1094) Accumulation unit value: Beginning of period $10.19 $9.47 N/A N/A N/A End of period $10.79 $10.19 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 24 Division(1094) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 400 MidCap Index Division(314) Accumulation unit value: Beginning of period $18.72 $17.34 $15.73 $13.81 $10.53 End of period $19.79 $18.72 $17.34 $15.73 $13.81 Accumulation units outstanding at the end of period 607 654 644 864 869 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 400 MidCap Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P 500 Index Division(314) Accumulation unit value: Beginning of period $16.82 $14.85 $14.46 $13.35 $11.06 End of period $17.36 $16.82 $14.85 $14.46 $13.35 Accumulation units outstanding at the end of period 608 655 652 867 867 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P 500 Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM S&P SMid 60 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM S&P SMid 60 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Select Small-Cap Division(28) Accumulation unit value: Beginning of period $14.65 $13.60 $12.69 $11.45 $7.86 End of period $12.91 $14.65 $13.60 $12.69 $11.45 Accumulation units outstanding at the end of period 2,340 2,772 2,761 5,040 99,821 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Select Small-Cap Division(28) Accumulation unit value: Beginning of period $9.70 $10.00 N/A N/A N/A End of period $7.86 $9.70 N/A N/A N/A Accumulation units outstanding at the end of period 104,369 45,169 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Small Cap Index Division(314) Accumulation unit value: Beginning of period $20.71 $17.91 $17.46 $15.11 $10.82 End of period $19.95 $20.71 $17.91 $17.46 $15.11 Accumulation units outstanding at the end of period 593 624 625 1,565 1,593 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Small Cap Index Division(314) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Technology Sector Division(28) Accumulation unit value: Beginning of period $8.71 $8.09 $8.02 $8.06 $5.64 End of period $9.81 $8.71 $8.09 $8.02 $8.06 Accumulation units outstanding at the end of period 121 165 165 165 97,876 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Technology Sector Division(28) Accumulation unit value: Beginning of period $9.13 $10.00 N/A N/A N/A End of period $5.64 $9.13 N/A N/A N/A Accumulation units outstanding at the end of period 98,062 51,797 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM Value Line 30 Division(965) Accumulation unit value: Beginning of period $9.70 $9.99 $10.00 N/A N/A End of period $11.40 $9.70 $9.99 N/A N/A Accumulation units outstanding at the end of period 6,114 6,797 567 N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM Value Line 30 Division(965) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/MCM VIP Division(1032) Accumulation unit value: Beginning of period $10.91 $10.00 N/A N/A N/A End of period $11.90 $10.91 N/A N/A N/A Accumulation units outstanding at the end of period 2,877 2,877 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/MCM VIP Division(1032) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Oppenheimer Global Growth Division(27) Accumulation unit value: Beginning of period $15.20 $13.20 $11.80 $10.16 $7.35 End of period $15.90 $15.20 $13.20 $11.80 $10.16 Accumulation units outstanding at the end of period 16,424 21,095 22,961 27,026 18,303 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Oppenheimer Global Growth Division(27) Accumulation unit value: Beginning of period $9.61 $10.00 N/A N/A N/A End of period $7.35 $9.61 N/A N/A N/A Accumulation units outstanding at the end of period 16,677 12,618 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Oppenheimer Growth Division(27) Accumulation unit value: Beginning of period $9.60 $9.30 $8.66 $8.44 $7.28 End of period $10.37 $9.60 $9.30 $8.66 $8.44 Accumulation units outstanding at the end of period - 7,809 8,419 9,156 17,849 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Oppenheimer Growth Division(27) Accumulation unit value: Beginning of period $9.90 $10.00 N/A N/A N/A End of period $7.28 $9.90 N/A N/A N/A Accumulation units outstanding at the end of period 14,422 9,334 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PIMCO Real Return Division Accumulation unit value: Beginning of period $10.00 N/A N/A N/A N/A End of period $10.92 N/A N/A N/A N/A Accumulation units outstanding at the end of period 134 N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PIMCO Real Return Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PIMCO Total Return Bond Division(30) Accumulation unit value: Beginning of period $11.56 $11.35 $11.27 $10.96 $10.63 End of period $12.31 $11.56 $11.35 $11.27 $10.96 Accumulation units outstanding at the end of period 29,902 13,080 13,996 8,547 11,942 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PIMCO Total Return Bond Division(30) Accumulation unit value: Beginning of period $9.93 $10.00 N/A N/A N/A End of period $10.63 $9.93 N/A N/A N/A Accumulation units outstanding at the end of period 11,568 86 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America Core Equity Division(28) Accumulation unit value: Beginning of period $11.60 $10.36 $9.68 $8.70 $6.95 End of period $10.58 $11.60 $10.36 $9.68 $8.70 Accumulation units outstanding at the end of period 9,732 10,864 13,794 14,863 19,238 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America Core Equity Division(28) Accumulation unit value: Beginning of period $9.30 $10.00 N/A N/A N/A End of period $6.95 $9.30 N/A N/A N/A Accumulation units outstanding at the end of period 19,523 22,029 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America High Yield Bond Division(28) Accumulation unit value: Beginning of period N/A N/A N/A $11.83 $10.13 End of period N/A N/A N/A $12.22 $11.83 Accumulation units outstanding at the end of period N/A N/A N/A - 20,117 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America High Yield Bond Division(28) Accumulation unit value: Beginning of period $10.09 $10.00 N/A N/A N/A End of period $10.13 $10.09 N/A N/A N/A Accumulation units outstanding at the end of period 16,254 22,115 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America High Yield Bond Division(674) Accumulation unit value: Beginning of period $11.20 $10.29 $10.29 $10.00 N/A End of period $10.89 $11.20 $10.29 $10.29 N/A Accumulation units outstanding at the end of period 15,864 20,864 22,291 22,145 N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America High Yield Bond Division(674) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/PPM America Value Equity Division(28) Accumulation unit value: Beginning of period $11.50 $10.34 $10.02 $9.27 $7.57 End of period $10.68 $11.50 $10.34 $10.02 $9.27 Accumulation units outstanding at the end of period 20,870 25,929 31,967 32,150 38,105 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/PPM America Value Equity Division(28) Accumulation unit value: Beginning of period $9.59 $10.00 N/A N/A N/A End of period $7.57 $9.59 N/A N/A N/A Accumulation units outstanding at the end of period 40,676 35,153 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Putnam Midcap Growth Division(28) Accumulation unit value: Beginning of period $11.22 $10.79 $9.78 $8.37 $6.38 End of period $10.96 $11.22 $10.79 $9.78 $8.37 Accumulation units outstanding at the end of period - 15,106 16,185 14,646 20,355 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Putnam Midcap Growth Division(28) Accumulation unit value: Beginning of period $9.17 $10.00 N/A N/A N/A End of period $6.38 $9.17 N/A N/A N/A Accumulation units outstanding at the end of period 23,246 19,121 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P 4 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P 4 Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Competitive Advantage Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Competitive Advantage Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 100 Division(444) Accumulation unit value: Beginning of period N/A N/A N/A $12.54 $11.96 End of period N/A N/A N/A $12.76 $12.54 Accumulation units outstanding at the end of period N/A N/A N/A - 2,116 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 100 Division(444) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 50 Division(944) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 50 Division(944) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Core Index 75 Division(946) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Core Index 75 Division(946) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Moderate Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Disciplined Moderate Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Disciplined Moderate Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Dividend Income & Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Dividend Income & Growth Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Equity Aggressive Growth Division I(28) Accumulation unit value: Beginning of period N/A N/A N/A $9.50 $7.43 End of period N/A N/A N/A $9.70 $9.50 Accumulation units outstanding at the end of period N/A N/A N/A - 10,697 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Equity Aggressive Growth Division I(28) Accumulation unit value: Beginning of period $9.83 $10.00 N/A N/A N/A End of period $7.43 $9.83 N/A N/A N/A Accumulation units outstanding at the end of period 18,603 9,634 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Equity Growth Division I(28) Accumulation unit value: Beginning of period N/A N/A N/A $9.44 $7.41 End of period N/A N/A N/A $9.61 $9.44 Accumulation units outstanding at the end of period N/A N/A N/A - 105,516 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Equity Growth Division I(28) Accumulation unit value: Beginning of period $9.82 $10.00 N/A N/A N/A End of period $7.41 $9.82 N/A N/A N/A Accumulation units outstanding at the end of period 77,584 69,635 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Intrinsic Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Intrinsic Value Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Aggressive Growth Division(28) Accumulation unit value: Beginning of period $13.21 $11.61 $10.88 $9.81 $7.87 End of period $14.19 $13.21 $11.61 $10.88 $9.81 Accumulation units outstanding at the end of period 110,031 122,898 125,793 133,172 40,577 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Aggressive Growth Division(28) Accumulation unit value: Beginning of period $9.78 $10.00 N/A N/A N/A End of period $7.87 $9.78 N/A N/A N/A Accumulation units outstanding at the end of period 42,553 20,176 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Conservative Division(788) Accumulation unit value: Beginning of period $10.93 $10.30 $10.00 N/A N/A End of period $11.44 $10.93 $10.30 N/A N/A Accumulation units outstanding at the end of period - - - N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Conservative Division(788) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Growth Division(28) Accumulation unit value: Beginning of period $13.17 $11.72 $11.09 $10.11 $8.44 End of period $14.09 $13.17 $11.72 $11.09 $10.11 Accumulation units outstanding at the end of period 101,899 125,859 130,161 124,357 127,007 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Growth Division(28) Accumulation unit value: Beginning of period $9.79 $10.00 N/A N/A N/A End of period $8.44 $9.79 N/A N/A N/A Accumulation units outstanding at the end of period 168,324 104,975 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Moderate Division(1111) Accumulation unit value: Beginning of period $10.80 $10.00 N/A N/A N/A End of period $11.45 $10.80 N/A N/A N/A Accumulation units outstanding at the end of period 3,024 3,027 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Moderate Division(1111) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Managed Moderate Growth Division(28) Accumulation unit value: Beginning of period $12.85 $11.64 $11.11 $10.31 $8.89 End of period $13.74 $12.85 $11.64 $11.11 $10.31 Accumulation units outstanding at the end of period 70,897 80,148 88,121 94,890 105,518 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Managed Moderate Growth Division(28) Accumulation unit value: Beginning of period $9.87 $10.00 N/A N/A N/A End of period $8.89 $9.87 N/A N/A N/A Accumulation units outstanding at the end of period 107,681 47,355 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2015 Division(1038) Accumulation unit value: Beginning of period $10.83 $10.19 N/A N/A N/A End of period $11.64 $10.83 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2015 Division(1038) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2020 Division(1079) Accumulation unit value: Beginning of period $10.96 $10.08 N/A N/A N/A End of period $11.81 $10.96 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2020 Division(1079) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement 2025 Division(1156) Accumulation unit value: Beginning of period $11.03 $10.29 N/A N/A N/A End of period $11.95 $11.03 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement 2025 Division(1156) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Retirement Income Division(1012) Accumulation unit value: Beginning of period $10.58 $9.96 N/A N/A N/A End of period $11.13 $10.58 N/A N/A N/A Accumulation units outstanding at the end of period - - N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Retirement Income Division(1012) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Total Yield Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Total Yield Division Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/S&P Very Aggressive Growth Division I(28) Accumulation unit value: Beginning of period N/A N/A N/A $9.36 $7.29 End of period N/A N/A N/A $9.57 $9.36 Accumulation units outstanding at the end of period N/A N/A N/A - 9,110 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/S&P Very Aggressive Growth Division I(28) Accumulation unit value: Beginning of period $9.64 $10.00 N/A N/A N/A End of period $7.29 $9.64 N/A N/A N/A Accumulation units outstanding at the end of period 28,545 23,903 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Balanced Division(28) Accumulation unit value: Beginning of period $14.68 $13.12 $12.66 $11.60 $9.70 End of period $15.53 $14.68 $13.12 $12.66 $11.60 Accumulation units outstanding at the end of period 22,627 26,704 29,397 32,290 37,886 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Balanced Division(28) Accumulation unit value: Beginning of period $10.05 $10.00 N/A N/A N/A End of period $9.70 $10.05 N/A N/A N/A Accumulation units outstanding at the end of period 40,644 18,492 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Money Market Division(28) Accumulation unit value: Beginning of period $10.17 $9.88 $9.78 $9.86 $9.97 End of period $10.48 $10.17 $9.88 $9.78 $9.86 Accumulation units outstanding at the end of period 4,126 5,008 6,667 11,866 48,825 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Money Market Division(28) Accumulation unit value: Beginning of period $10.02 $10.00 N/A N/A N/A End of period $9.97 $10.02 N/A N/A N/A Accumulation units outstanding at the end of period 161,304 54,046 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/Select Value Division(444) Accumulation unit value: Beginning of period $20.74 $17.43 $16.37 $14.49 $13.45 End of period $22.01 $20.74 $17.43 $16.37 $14.49 Accumulation units outstanding at the end of period 686 2,973 2,530 2,101 1,881 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/Select Value Division(444) Accumulation unit value: Beginning of period N/A N/A N/A N/A N/A End of period N/A N/A N/A N/A N/A Accumulation units outstanding at the end of period N/A N/A N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Established Growth Division(28) Accumulation unit value: Beginning of period $12.32 $11.01 $10.54 $9.75 $7.59 End of period $13.35 $12.32 $11.01 $10.54 $9.75 Accumulation units outstanding at the end of period 76,596 59,163 60,227 43,704 43,625 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Established Growth Division(28) Accumulation unit value: Beginning of period $10.06 $10.00 N/A N/A N/A End of period $7.59 $10.06 N/A N/A N/A Accumulation units outstanding at the end of period 47,606 34,543 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Mid-Cap Growth Division(28) Accumulation unit value: Beginning of period $14.80 $14.08 $12.54 $10.79 $7.91 End of period $17.07 $14.80 $14.08 $12.54 $10.79 Accumulation units outstanding at the end of period 35,567 40,208 42,099 44,134 47,031 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Mid-Cap Growth Division(28) Accumulation unit value: Beginning of period $10.30 $10.00 N/A N/A N/A End of period $7.91 $10.30 N/A N/A N/A Accumulation units outstanding at the end of period 43,069 43,250 N/A N/A N/A Investment Divisions December 31, December 31, December 31, December 31, December 31, 2007 2006 2005 2004 2003 JNL/T.Rowe Price Value Division(28) Accumulation unit value: Beginning of period $14.24 $12.06 $11.54 $10.18 $7.97 End of period $14.14 $14.24 $12.06 $11.54 $10.18 Accumulation units outstanding at the end of period 61,818 65,317 73,292 66,626 66,657 Investment Divisions December 31, December 31, December 31, December 31, December 31, 2002 2001 2000 1999 1998 JNL/T.Rowe Price Value Division(28) Accumulation unit value: Beginning of period $9.73 $10.00 N/A N/A N/A End of period $7.97 $9.73 N/A N/A N/A Accumulation units outstanding at the end of period 59,078 53,664 N/A N/A N/A
1 - September 16, 1996 66 - March 4, 2002 131 - June 7, 2002 196 - September 27, 2002 261 - January 31, 2003 2 - April 1, 1998 67 - March 5, 2002 132 - June 10, 2002 197 - September 30, 2002 262 - February 3, 2003 3 - April 8, 1998 68 - March 6, 2002 133 - June 11, 2002 198 - October 1, 2002 263 - February 4, 2003 4 - April 9, 1998 69 - March 7, 2002 134 - June 12, 2002 199 - October 2, 2002 264 - February 5, 2003 5 - April 13, 1998 70 - March 8, 2002 135 - June 14, 2002 200 - October 3, 2002 265 - February 6, 2003 6 - April 15, 1998 71 - March 11, 2002 136 - June 17, 2002 201 - October 4, 2002 266 - February 7, 2003 7 - January 21, 1999 72 - March 12, 2002 137 - June 20, 2002 202 - October 7, 2002 267 - February 12, 2003 8 - January 29, 1999 73 - March 13, 2002 138 - June 21, 2002 203 - October 8, 2002 268 - February 13, 2003 9 - February 9, 1999 74 - March 14, 2002 139 - June 24, 2002 204 - October 9, 2002 269 - February 14, 2003 10 - March 22, 1999 75 - March 15, 2002 140 - June 25, 2002 205 - October 10, 2002 270 - February 18, 2003 11 - April 1, 1999 76 - March 18, 2002 141 - June 26, 2002 206 - October 11, 2002 271 - February 19, 2003 12 - April 8, 1999 77 - March 19, 2002 142 - June 27, 2002 207 - October 14, 2002 272 - February 20, 2003 13 - April 9, 1999 78 - March 20, 2002 143 - June 28, 2002 208 - October 15, 2002 273 - February 21, 2003 14 - April 13, 1999 79 - March 21, 2002 144 - July 1, 2002 209 - October 17, 2002 274 - February 24, 2003 15 - April 15, 1999 80 - March 22, 2002 145 - July 2, 2002 210 - October 18, 2002 275 - February 25, 2003 16 - April 22, 1999 81 - March 25, 2002 146 - July 3, 2002 211 - October 21, 2002 276 - February 26, 2003 17 - July 2, 1999 82 - March 26, 2002 147 - July 5, 2002 212 - October 22, 2002 277 - February 27, 2003 18 - August 16, 1999 83 - March 27, 2002 148 - July 8, 2002 213 - October 24, 2002 278 - February 28, 2003 19 - May 1, 2000 84 - March 28, 2002 149 - July 9, 2002 214 - October 25, 2002 279 - March 3, 2003 20 - November 3, 2000 85 - April 1, 2002 150 - July 11, 2002 215 - October 28, 2002 280 - March 4, 2003 21 - November 17, 2000 86 - April 2, 2002 151 - July 12, 2002 216 - October 29, 2002 281 - March 5, 2003 22 - November 27, 2000 87 - April 3, 2002 152 - July 15, 2002 217 - October 31, 2002 282 - March 6, 2003 23 - December 14, 2000 88 - April 4, 2002 153 - July 16, 2002 218 - November 1, 2002 283 - March 7, 2003 24 - December 19, 2000 89 - April 8, 2002 154 - July 18, 2002 219 - November 4, 2002 284 - March 10, 2003 25 - February 12, 2001 90 - April 9, 2002 155 - July 22, 2002 220 - November 5, 2002 285 - March 11, 2003 26 - March 28, 2001 91 - April 10, 2002 156 - July 24, 2002 221 - November 6, 2002 286 - March 12, 2003 27 - May 1, 2001 92 - April 11, 2002 157 - July 25, 2002 222 - November 7, 2002 287 - March 13, 2003 28 - June 7, 2001 93 - April 12, 2002 158 - July 26, 2002 223 - November 8, 2002 288 - March 14, 2003 29 - August 15, 2001 94 - April 15, 2002 159 - July 29, 2002 224 - November 12, 2002 289 - March 17, 2003 30 - October 29, 2001 95 - April 16, 2002 160 - July 30, 2002 225 - November 13, 2002 290 - March 18, 2003 31 - December 14, 2001 96 - April 17, 2002 161 - July 31, 2002 226 - November 14, 2002 291 - March 19, 2003 32 - January 3, 2002 97 - April 18, 2002 162 - August 1, 2002 227 - November 15, 2002 292 - March 20, 2003 33 - January 7, 2002 98 - April 19, 2002 163 - August 5, 2002 228 - November 18, 2002 293 - March 21, 2003 34 - January 10, 2002 99 - April 22, 2002 164 - August 6, 2002 229 - November 19, 2002 294 - March 24, 2003 35 - January 11, 2002 100 - April 23, 2002 165 - August 7, 2002 230 - November 20, 2002 295 - March 26, 2003 36 - January 14, 2002 101 - April 24, 2002 166 - August 8, 2002 231 - November 22, 2002 296 - March 27, 2003 37 - January 15, 2002 102 - April 25, 2002 167 - August 12, 2002 232 - November 25, 2002 297 - March 28, 2003 38 - January 18, 2002 103 - April 26, 2002 168 - August 13, 2002 233 - November 26, 2002 298 - March 31, 2003 39 - January 22, 2002 104 - April 29, 2002 169 - August 14, 2002 234 - November 27, 2002 299 - April 1, 2003 40 - January 23, 2002 105 - April 30, 2002 170 - August 15, 2002 235 - November 29, 2002 300 - April 2, 2003 41 - January 25, 2002 106 - May 1, 2002 171 - August 16, 2002 236 - December 2, 2002 301 - April 3, 2003 42 - January 28, 2002 107 - May 2, 2002 172 - August 19, 2002 237 - December 3, 2002 302 - April 4, 2003 43 - January 29, 2002 108 - May 3, 2002 173 - August 20, 2002 238 - December 5, 2002 303 - April 7, 2003 44 - January 30, 2002 109 - May 6, 2002 174 - August 23, 2002 239 - December 6, 2002 304 - April 8, 2003 45 - January 31, 2002 110 - May 7, 2002 175 - August 26, 2002 240 - December 9, 2002 305 - April 9, 2003 46 - February 1, 2002 111 - May 8, 2002 176 - August 28, 2002 241 - December 16, 2002 306 - April 10, 2003 47 - February 4, 2002 112 - May 9, 2002 177 - August 29, 2002 242 - December 17, 2002 307 - April 11, 2003 48 - February 5, 2002 113 - May 10, 2002 178 - August 30, 2002 243 - December 18, 2002 308 - April 14, 2003 49 - February 6, 2002 114 - May 13, 2002 179 - September 3, 2002 244 - December 19, 2002 309 - April 15, 2003 50 - February 7, 2002 115 - May 14, 2002 180 - September 4, 2002 245 - December 23, 2002 310 - April 16, 2003 51 - February 8, 2002 116 - May 15, 2002 181 - September 5, 2002 246 - December 27, 2002 311 - April 17, 2003 52 - February 11, 2002 117 - May 16, 2002 182 - September 6, 2002 247 - December 30, 2002 312 - April 21, 2003 53 - February 12, 2002 118 - May 17, 2002 183 - September 10, 2002 248 - December 31, 2002 313 - April 22, 2003 54 - February 13, 2002 119 - May 20, 2002 184 - September 11, 2002 249 - January 2, 2003 314 - April 23, 2003 55 - February 14, 2002 120 - May 21, 2002 185 - September 12, 2002 250 - January 3, 2003 315 - April 24, 2003 56 - February 15, 2002 121 - May 23, 2002 186 - September 13, 2002 251 - January 6, 2003 316 - April 25, 2003 57 - February 19, 2002 122 - May 24, 2002 187 - September 16, 2002 252 - January 9, 2003 317 - April 28, 2003 58 - February 20, 2002 123 - May 28, 2002 188 - September 17, 2002 253 - January 16, 2003 318 - April 29, 2003 59 - February 21, 2002 124 - May 29, 2002 189 - September 18, 2002 254 - January 17, 2003 319 - April 30, 2003 60 - February 22, 2002 125 - May 30, 2002 190 - September 19, 2002 255 - January 21, 2003 320 - May 1, 2003 61 - February 25, 2002 126 - May 31, 2002 191 - September 20, 2002 256 - January 22, 2003 321 - May 2, 2003 62 - February 26, 2002 127 - June 3, 2002 192 - September 23, 2002 257 - January 24, 2003 322 - May 5, 2003 63 - February 27, 2002 128 - June 4, 2002 193 - September 24, 2002 258 - January 27, 2003 323 - May 6, 2003 64 - February 28, 2002 129 - June 5, 2002 194 - September 25, 2002 259 - January 28, 2003 324 - May 7, 2003 65 - March 1, 2002 130 - June 6, 2002 195 - September 26, 2002 260 - January 30, 2003 325 - May 8, 2003 326 - May 12, 2003 391 - August 15, 2003 456 - November 17, 2003 521 - February 23, 2004 586 - May 25, 2004 327 - May 13, 2003 392 - August 18, 2003 457 - November 18, 2003 522 - February 24, 2004 587 - May 26, 2004 328 - May 14, 2003 393 - August 19, 2003 458 - November 19, 2003 523 - February 25, 2004 588 - May 27, 2004 329 - May 15, 2003 394 - August 20, 2003 459 - November 20, 2003 524 - February 26, 2004 589 - May 28, 2004 330 - May 19, 2003 395 - August 21, 2003 460 - November 21, 2003 525 - February 27, 2004 590 - June 1, 2004 331 - May 20, 2003 396 - August 22, 2003 461 - November 24, 2003 526 - March 1, 2004 591 - June 2, 2004 332 - May 21, 2003 397 - August 25, 2003 462 - November 25, 2003 527 - March 2, 2004 592 - June 3, 2004 333 - May 22, 2003 398 - August 26, 2003 463 - November 26, 2003 528 - March 3, 2004 593 - June 4, 2004 334 - May 23, 2003 399 - August 27, 2003 464 - November 28, 2003 529 - March 4, 2004 594 - June 7, 2004 335 - May 27, 2003 400 - August 28, 2003 465 - December 1, 2003 530 - March 5, 2004 595 - June 8, 2004 336 - May 28, 2003 401 - August 29, 2003 466 - December 2, 2003 531 - March 8, 2004 596 - June 9, 2004 337 - May 29, 2003 402 - September 2, 2003 467 - December 3, 2003 532 - March 9, 2004 597 - June 10, 2004 338 - May 30, 2003 403 - September 3, 2003 468 - December 4, 2003 533 - March 10, 2004 598 - June 14, 2004 339 - June 2, 2003 404 - September 5, 2003 469 - December 5, 2003 534 - March 11, 2004 599 - June 15, 2004 340 - June 3, 2003 405 - September 8, 2003 470 - December 8, 2003 535 - March 12, 2004 600 - June 16, 2004 341 - June 4, 2003 406 - September 9, 2003 471 - December 9, 2003 536 - March 15, 2004 601 - June 17, 2004 342 - June 5, 2003 407 - September 10, 2003 472 - December 10, 2003 537 - March 16, 2004 602 - June 18, 2004 343 - June 6, 2003 408 - September 11, 2003 473 - December 11, 2003 538 - March 17, 2004 603 - June 21, 2004 344 - June 9, 2003 409 - September 12, 2003 474 - December 12, 2003 539 - March 18, 2004 604 - June 22, 2004 345 - June 10, 2003 410 - September 15, 2003 475 - December 15, 2003 540 - March 19, 2004 605 - June 23, 2004 346 - June 11, 2003 411 - September 16, 2003 476 - December 16, 2003 541 - March 22, 2004 606 - June 24, 2004 347 - June 12, 2003 412 - September 17, 2003 477 - December 17, 2003 542 - March 23, 2004 607 - June 25, 2004 348 - June 13, 2003 413 - September 18, 2003 478 - December 18, 2003 543 - March 24, 2004 608 - June 28, 2004 349 - June 16, 2003 414 - September 19, 2003 479 - December 19, 2003 544 - March 25, 2004 609 - June 29, 2004 350 - June 17, 2003 415 - September 22, 2003 480 - December 22, 2003 545 - March 26, 2004 610 - July 1, 2004 351 - June 18, 2003 416 - September 23, 2003 481 - December 23, 2003 546 - March 29, 2004 611 - July 2, 2004 352 - June 19, 2003 417 - September 24, 2003 482 - December 24, 2003 547 - March 30, 2004 612 - July 6, 2004 353 - June 20, 2003 418 - September 25, 2003 483 - December 26, 2003 548 - March 31, 2004 613 - July 7, 2004 354 - June 23, 2003 419 - September 26, 2003 484 - December 29, 2003 549 - April 1, 2004 614 - July 8, 2004 355 - June 24, 2003 420 - September 29, 2003 485 - December 30, 2003 550 - April 2, 2004 615 - July 9, 2004 356 - June 25, 2003 421 - September 30, 2003 486 - December 31, 2003 551 - April 5, 2004 616 - July 12, 2004 357 - June 26, 2003 422 - October 1, 2003 487 - January 2, 2004 552 - April 6, 2004 617 - July 13, 2004 358 - June 27, 2003 423 - October 2, 2003 488 - January 5, 2004 553 - April 7, 2004 618 - July 14, 2004 359 - June 30, 2003 424 - October 3, 2003 489 - January 6, 2004 554 - April 8, 2004 619 - July 15, 2004 360 - July 1, 2003 425 - October 4, 2003 490 - January 7, 2004 555 - April 12, 2004 620 - July 16, 2004 361 - July 2, 2003 426 - October 6, 2003 491 - January 8, 2004 556 - April 13, 2004 621 - July 19, 2004 362 - July 3, 2003 427 - October 7, 2003 492 - January 9, 2004 557 - April 14, 2004 622 - July 20, 2004 363 - July 7, 2003 428 - October 8, 2003 493 - January 12, 2004 558 - April 15, 2004 623 - July 21, 2004 364 - July 8, 2003 429 - October 9, 2003 494 - January 13, 2004 559 - April 16, 2004 624 - July 22, 2004 365 - July 9, 2003 430 - October 10, 2003 495 - January 14, 2004 560 - April 19, 2004 625 - July 23, 2004 366 - July 10, 2003 431 - October 13, 2003 496 - January 15, 2004 561 - April 20, 2004 626 - July 26, 2004 367 - July 11, 2003 432 - October 14, 2003 497 - January 16, 2004 562 - April 21, 2004 627 - July 27, 2004 368 - July 14, 2003 433 - October 15, 2003 498 - January 20, 2004 563 - April 22, 2004 628 - July 28, 2004 369 - July 15, 2003 434 - October 16, 2003 499 - January 21, 2004 564 - April 23, 2004 629 - July 29, 2004 370 - July 17, 2003 435 - October 17, 2003 500 - January 22, 2004 565 - April 26, 2004 630 - July 30, 2004 371 - July 18, 2003 436 - October 20, 2003 501 - January 23, 2004 566 - April 27, 2004 631 - August 2, 2004 372 - July 21, 2003 437 - October 21, 2003 502 - January 26, 2004 567 - April 28, 2004 632 - August 3, 2004 373 - July 22, 2003 438 - October 22, 2003 503 - January 27, 2004 568 - April 29, 2004 633 - August 4, 2004 374 - July 23, 2003 439 - October 23, 2003 504 - January 28, 2004 569 - April 30, 2004 634 - August 5, 2004 375 - July 24, 2003 440 - October 24, 2003 505 - January 29, 2004 570 - May 3, 2004 635 - August 6, 2004 376 - July 25, 2003 441 - October 27, 2003 506 - January 30, 2004 571 - May 4, 2004 636 - August 9, 2004 377 - July 28, 2003 442 - October 28, 2003 507 - February 2, 2004 572 - May 5, 2004 637 - August 10, 2004 378 - July 29, 2003 443 - October 29, 2003 508 - February 3, 2004 573 - May 6, 2004 638 - August 11, 2004 379 - July 30, 2003 444 - October 30, 2003 509 - February 4, 2004 574 - May 7, 2004 639 - August 12, 2004 380 - July 31, 2003 445 - October 31, 2003 510 - February 5, 2004 575 - May 10, 2004 640 - August 13, 2004 381 - August 1, 2003 446 - November 3, 2003 511 - February 6, 2004 576 - May 11, 2004 641 - August 16, 2004 382 - August 4, 2003 447 - November 4, 2003 512 - February 9, 2004 577 - May 12, 2004 642 - August 17, 2004 383 - August 5, 2003 448 - November 5, 2003 513 - February 10, 2004 578 - May 13, 2004 643 - August 18, 2004 384 - August 6, 2003 449 - November 6, 2003 514 - February 11, 2004 579 - May 14, 2004 644 - August 19, 2004 385 - August 7, 2003 450 - November 7, 2003 515 - February 12, 2004 580 - May 17, 2004 645 - August 20, 2004 386 - August 8, 2003 451 - November 10, 2003 516 - February 13, 2004 581 - May 18, 2004 646 - August 23, 2004 387 - August 11, 2003 452 - November 11, 2003 517 - February 17, 2004 582 - May 19, 2004 647 - August 24, 2004 388 - August 12, 2003 453 - November 12, 2003 518 - February 18, 2004 583 - May 20, 2004 648 - August 25, 2004 389 - August 13, 2003 454 - November 13, 2003 519 - February 19, 2004 584 - May 21, 2004 649 - August 26, 2004 390 - August 14, 2003 455 - November 14, 2003 520 - February 20, 2004 585 - May 24, 2004 650 - August 27, 2004 651 - August 30, 2004 716 - December 1, 2004 781 - March 7, 2005 846 - June 9, 2005 911 - September 13, 2005 652 - August 31, 2004 717 - December 2, 2004 782 - March 8, 2005 847 - June 10, 2005 912 - September 14, 2005 653 - September 1, 2004 718 - December 3, 2004 783 - March 9, 2005 848 - June 13, 2005 913 - September 15, 2005 654 - September 2, 2004 719 - December 6, 2004 784 - March 10, 2005 849 - June 14, 2005 914 - September 16, 2005 655 - September 3, 2004 720 - December 7, 2004 785 - March 11, 2005 850 - June 15, 2005 915 - September 19, 2005 656 - September 7, 2004 721 - December 8, 2004 786 - March 14, 2005 851 - June 16, 2005 916 - September 21, 2005 657 - September 8, 2004 722 - December 9, 2004 787 - March 15, 2005 852 - June 17, 2005 917 - September 22, 2005 658 - September 9, 2004 723 - December 10, 2004 788 - March 16, 2005 853 - June 20, 2005 918 - September 23, 2005 659 - September 10, 2004 724 - December 13, 2004 789 - March 17, 2005 854 - June 21, 2005 919 - September 26, 2005 660 - September 13, 2004 725 - December 14, 2004 790 - March 18, 2005 855 - June 22, 2005 920 - September 27, 2005 661 - September 14, 2004 726 - December 15, 2004 791 - March 21, 2005 856 - June 23, 2005 921 - September 29, 2005 662 - September 15, 2004 727 - December 16, 2004 792 - March 22, 2005 857 - June 24, 2005 922 - September 30, 2005 663 - September 16, 2004 728 - December 17, 2004 793 - March 23, 2005 858 - June 27, 2005 923 - October 3, 2005 664 - September 17, 2004 729 - December 20, 2004 794 - March 24, 2005 859 - June 28, 2005 924 - October 4, 2005 665 - September 20, 2004 730 - December 21, 2004 795 - March 28, 2005 860 - June 29, 2005 925 - October 5, 2005 666 - September 21, 2004 731 - December 22, 2004 796 - March 29, 2005 861 - June 30, 2005 926 - October 6, 2005 667 - September 22, 2004 732 - December 23, 2004 797 - March 30, 2005 862 - July 1, 2005 927 - October 7, 2005 668 - September 23, 2004 733 - December 27, 2004 798 - March 31, 2005 863 - July 5, 2005 928 - October 10, 2005 669 - September 24, 2004 734 - December 28, 2004 799 - April 1, 2005 864 - July 6, 2005 929 - October 11, 2005 670 - September 27, 2004 735 - December 29, 2004 800 - April 4, 2005 865 - July 7, 2005 930 - October 12, 2005 671 - September 28, 2004 736 - December 30, 2004 801 - April 5, 2005 866 - July 8, 2005 931 - October 13, 2005 672 - September 29, 2004 737 - December 31, 2004 802 - April 6, 2005 867 - July 11, 2005 932 - October 14, 2005 673 - September 30, 2004 738 - January 3, 2005 803 - April 7, 2005 868 - July 12, 2005 933 - October 17, 2005 674 - October 1, 2004 739 - January 4, 2005 804 - April 8, 2005 869 - July 13, 2005 934 - October 18, 2005 675 - October 4, 2004 740 - January 5, 2005 805 - April 11, 2005 870 - July 14, 2005 935 - October 19, 2005 676 - October 5, 2004 741 - January 6, 2005 806 - April 12, 2005 871 - July 15, 2005 936 - October 20, 2005 677 - October 6, 2004 742 - January 7, 2005 807 - April 13, 2005 872 - July 18, 2005 937 - October 21, 2005 678 - October 7, 2004 743 - January 10, 2005 808 - April 14, 2005 873 - July 19, 2005 938 - October 24, 2005 679 - October 8, 2004 744 - January 11, 2005 809 - April 15, 2005 874 - July 20, 2005 939 - October 25, 2005 680 - October 11, 2004 745 - January 12, 2005 810 - April 18, 2005 875 - July 21, 2005 940 - October 26, 2005 681 - October 12, 2004 746 - January 13, 2005 811 - April 19, 2005 876 - July 22, 2005 941 - October 27, 2005 682 - October 13, 2004 747 - January 14, 2005 812 - April 20, 2005 877 - July 25, 2005 942 - October 28, 2005 683 - October 14, 2004 748 - January 18, 2005 813 - April 21, 2005 878 - July 26, 2005 943 - October 31, 2005 684 - October 15, 2004 749 - January 19, 2005 814 - April 22, 2005 879 - July 27, 2005 944 - November 1, 2005 685 - October 18, 2004 750 - January 20, 2005 815 - April 25, 2005 880 - July 28, 2005 945 - November 2, 2005 686 - October 19, 2004 751 - January 21, 2005 816 - April 26, 2005 881 - July 29, 2005 946 - November 3, 2005 687 - October 20, 2004 752 - January 24, 2005 817 - April 27, 2005 882 - August 1, 2005 947 - November 4, 2005 688 - October 21, 2004 753 - January 25, 2005 818 - April 28, 2005 883 - August 2, 2005 948 - November 7, 2005 689 - October 22, 2004 754 - January 26, 2005 819 - April 29, 2005 884 - August 3, 2005 949 - November 8, 2005 690 - October 25, 2004 755 - January 27, 2005 820 - May 2, 2005 885 - August 4, 2005 950 - November 9, 2005 691 - October 26, 2004 756 - January 28, 2005 821 - May 3, 2005 886 - August 5, 2005 951 - November 10, 2005 692 - October 27, 2004 757 - January 31, 2005 822 - May 4, 2005 887 - August 8, 2005 952 - November 11, 2005 693 - October 28, 2004 758 - February 1, 2005 823 - May 5, 2005 888 - August 9, 2005 953 - November 14, 2005 694 - October 29, 2004 759 - February 2, 2005 824 - May 6, 2005 889 - August 10, 2005 954 - November 15, 2005 695 - November 1, 2004 760 - February 3, 2005 825 - May 9, 2005 890 - August 11, 2005 955 - November 16, 2005 696 - November 2, 2004 761 - February 4, 2005 826 - May 10, 2005 891 - August 12, 2005 956 - November 17, 2005 697 - November 3, 2004 762 - February 7, 2005 827 - May 11, 2005 892 - August 15, 2005 957 - November 18, 2005 698 - November 4, 2004 763 - February 8, 2005 828 - May 12, 2005 893 - August 16, 2005 958 - November 21, 2005 699 - November 5, 2004 764 - February 9, 2005 829 - May 13, 2005 894 - August 17, 2005 959 - November 22, 2005 700 - November 8, 2004 765 - February 10, 2005 830 - May 16, 2005 895 - August 18, 2005 960 - November 23, 2005 701 - November 9, 2004 766 - February 11, 2005 831 - May 17, 2005 896 - August 19, 2005 961 - November 25, 2005 702 - November 10, 2004 767 - February 14, 2005 832 - May 18, 2005 897 - August 22, 2005 962 - November 28, 2005 703 - November 11, 2004 768 - February 15, 2005 833 - May 19, 2005 898 - August 24, 2005 963 - November 29, 2005 704 - November 12, 2004 769 - February 16, 2005 834 - May 20, 2005 899 - August 25, 2005 964 - November 30, 2005 705 - November 15, 2004 770 - February 17, 2005 835 - May 23, 2005 900 - August 26, 2005 965 - December 1, 2005 706 - November 16, 2004 771 - February 18, 2005 836 - May 24, 2005 901 - August 29, 2005 966 - December 2, 2005 707 - November 17, 2004 772 - February 22, 2005 837 - May 25, 2005 902 - August 30, 2005 967 - December 5, 2005 708 - November 18, 2004 773 - February 23, 2005 838 - May 26, 2005 903 - August 31, 2005 968 - December 6, 2005 709 - November 19, 2004 774 - February 24, 2005 839 - May 27, 2005 904 - September 1, 2005 969 - December 7, 2005 710 - November 22, 2004 775 - February 25, 2005 840 - May 31, 2005 905 - September 2, 2005 970 - December 9, 2005 711 - November 23, 2004 776 - February 28, 2005 841 - June 1, 2005 906 - September 6, 2005 971 - December 12, 2005 712 - November 24, 2004 777 - March 1, 2005 842 - June 2, 2005 907 - September 7, 2005 972 - December 13, 2005 713 - November 26, 2004 778 - March 2, 2005 843 - June 3, 2005 908 - September 8, 2005 973 - December 14, 2005 714 - November 29, 2004 779 - March 3, 2005 844 - June 6, 2005 909 - September 9, 2005 974 - December 16, 2005 715 - November 30, 2004 780 - March 4, 2005 845 - June 8, 2005 910 - September 12, 2005 975 - December 19, 2005 976 - December 20, 2005 1041 - March 30, 2006 1106 - July 6, 2006 1171 - October 9, 2006 1236 - January 22, 2007 977 - December 21, 2005 1042 - March 31, 2006 1107 - July 7, 2006 1172 - October 10, 2006 1237 - January 23, 2007 978 - December 22, 2005 1043 - April 3, 2006 1108 - July 10, 2006 1173 - October 11, 2006 1238 - January 24, 2007 979 - December 23, 2005 1044 - April 4, 2006 1109 - July 11, 2006 1174 - October 12, 2006 1239 - January 25, 2007 980 - December 27, 2005 1045 - April 5, 2006 1110 - July 12, 2006 1175 - October 13, 2006 1240 - January 26, 2007 981 - December 28, 2005 1046 - April 6, 2006 1111 - July 13, 2006 1176 - October 16, 2006 1241 - January 29, 2007 982 - December 29, 2005 1047 - April 7, 2006 1112 - July 14, 2006 1177 - October 17, 2006 1242 - January 30, 2007 983 - December 30, 2005 1048 - April 10, 2006 1113 - July 17, 2006 1178 - October 18, 2006 1243 - January 31, 2007 984 - January 3, 2006 1049 - April 11, 2006 1114 - July 18, 2006 1179 - October 19, 2006 1244 - February 1, 2007 985 - January 5, 2006 1050 - April 13, 2006 1115 - July 19, 2006 1180 - October 20, 2006 1245 - February 2, 2007 986 - January 6, 2006 1051 - April 17, 2006 1116 - July 20, 2006 1181 - October 23, 2006 1246 - February 5, 2007 987 - January 9, 2006 1052 - April 18, 2006 1117 - July 21, 2006 1182 - October 24, 2006 1247 - February 6, 2007 988 - January 10, 2006 1053 - April 19, 2006 1118 - July 24, 2006 1183 - October 25, 2006 1248 - February 7, 2007 989 - January 11, 2006 1054 - April 20, 2006 1119 - July 25, 2006 1184 - October 26, 2006 1249 - February 8, 2007 990 - January 12, 2006 1055 - April 21, 2006 1120 - July 26, 2006 1185 - October 27, 2006 1250 - February 9, 2007 991 - January 13, 2006 1056 - April 24, 2006 1121 - July 27, 2006 1186 - October 31, 2006 1251 - February 12, 2007 992 - January 17, 2006 1057 - April 25, 2006 1122 - July 28, 2006 1187 - November 1, 2006 1252 - February 13, 2007 993 - January 18, 2006 1058 - April 27, 2006 1123 - July 31, 2006 1188 - November 2, 2006 1253 - February 14, 2007 994 - January 19, 2006 1059 - April 28, 2006 1124 - August 1, 2006 1189 - November 3, 2006 1254 - February 15, 2007 995 - January 20, 2006 1060 - May 1, 2006 1125 - August 2, 2006 1190 - November 6, 2006 1255 - February 16, 2007 996 - January 23, 2006 1061 - May 2, 2006 1126 - August 3, 2006 1191 - November 7, 2006 1256 - February 20, 2007 997 - January 24, 2006 1062 - May 3, 2006 1127 - August 4, 2006 1192 - November 8, 2006 1257 - February 21, 2007 998 - January 25, 2006 1063 - May 4, 2006 1128 - August 7, 2006 1193 - November 10, 2006 1258 - February 22, 2007 999 - January 26, 2006 1064 - May 5, 2006 1129 - August 8, 2006 1194 - November 13, 2006 1259 - February 23, 2007 1000 - January 27, 2006 1065 - May 8, 2006 1130 - August 9, 2006 1195 - November 14, 2006 1260 - February 26, 2007 1001 - January 30, 2006 1066 - May 9, 2006 1131 - August 10, 2006 1196 - November 15, 2006 1261 - February 27, 2007 1002 - January 31, 2006 1067 - May 10, 2006 1132 - August 11, 2006 1197 - November 16, 2006 1262 - February 28, 2007 1003 - February 1, 2006 1068 - May 11, 2006 1133 - August 14, 2006 1198 - November 17, 2006 1263 - March 1, 2007 1004 - February 2, 2006 1069 - May 12, 2006 1134 - August 15, 2006 1199 - November 20, 2006 1264 - March 2, 2007 1005 - February 3, 2006 1070 - May 15, 2006 1135 - August 16, 2006 1200 - November 21, 2006 1265 - March 5, 2007 1006 - February 6, 2006 1071 - May 16, 2006 1136 - August 17, 2006 1201 - November 22, 2006 1266 - March 6, 2007 1007 - February 7, 2006 1072 - May 17, 2006 1137 - August 18, 2006 1202 - November 24, 2006 1267 - March 7, 2007 1008 - February 8, 2006 1073 - May 18, 2006 1138 - August 21, 2006 1203 - November 27, 2006 1268 - March 8, 2007 1009 - February 9, 2006 1074 - May 19, 2006 1139 - August 22, 2006 1204 - November 28, 2006 1269 - March 9, 2007 1010 - February 10, 2006 1075 - May 22, 2006 1140 - August 23, 2006 1205 - November 29, 2006 1270 - March 12, 2007 1011 - February 13, 2006 1076 - May 23, 2006 1141 - August 24, 2006 1206 - November 30, 2006 1271 - March 13, 2007 1012 - February 14, 2006 1077 - May 24, 2006 1142 - August 25, 2006 1207 - December 1, 2006 1272 - March 14, 2007 1013 - February 15, 2006 1078 - May 25, 2006 1143 - August 28, 2006 1208 - December 4, 2006 1273 - March 15, 2007 1014 - February 16, 2006 1079 - May 26, 2006 1144 - August 29, 2006 1209 - December 5, 2006 1274 - March 16, 2007 1015 - February 17, 2006 1080 - May 30, 2006 1145 - August 30, 2006 1210 - December 6, 2006 1275 - March 19, 2007 1016 - February 21, 2006 1081 - May 31, 2006 1146 - August 31, 2006 1211 - December 7, 2006 1276 - March 20, 2007 1017 - February 22, 2006 1082 - June 1, 2006 1147 - September 1, 2006 1212 - December 11, 2006 1277 - March 21, 2007 1018 - February 23, 2006 1083 - June 2, 2006 1148 - September 5, 2006 1213 - December 12, 2006 1278 - March 22, 2007 1019 - February 24, 2006 1084 - June 5, 2006 1149 - September 6, 2006 1214 - December 13, 2006 1279 - March 23, 2007 1020 - February 27, 2006 1085 - June 6, 2006 1150 - September 7, 2006 1215 - December 14, 2006 1280 - March 26, 2007 1021 - February 28, 2006 1086 - June 7, 2006 1151 - September 11, 2006 1216 - December 18, 2006 1281 - March 27, 2007 1022 - March 1, 2006 1087 - June 8, 2006 1152 - September 12, 2006 1217 - December 20, 2006 1282 - March 28, 2007 1023 - March 2, 2006 1088 - June 9, 2006 1153 - September 13, 2006 1218 - December 21, 2006 1283 - March 29, 2007 1024 - March 3, 2006 1089 - June 12, 2006 1154 - September 14, 2006 1219 - December 22, 2006 1284 - March 30, 2007 1025 - March 6, 2006 1090 - June 13, 2006 1155 - September 15, 2006 1220 - December 26, 2006 1285 - April 2, 2007 1026 - March 7, 2006 1091 - June 14, 2006 1156 - September 18, 2006 1221 - December 27, 2006 1286 - April 3, 2007 1027 - March 8, 2006 1092 - June 15, 2006 1157 - September 19, 2006 1222 - December 28, 2006 1287 - April 4, 2007 1028 - March 9, 2006 1093 - June 16, 2006 1158 - September 20, 2006 1223 - December 29, 2006 1288 - April 5, 2007 1029 - March 10, 2006 1094 - June 19, 2006 1159 - September 21, 2006 1224 - January 3, 2007 1289 - April 9, 2007 1030 - March 13, 2006 1095 - June 20, 2006 1160 - September 22, 2006 1225 - January 4, 2007 1290 - April 10, 2007 1031 - March 16, 2006 1096 - June 21, 2006 1161 - September 25, 2006 1226 - January 5, 2007 1291 - April 11, 2007 1032 - March 17, 2006 1097 - June 22, 2006 1162 - September 26, 2006 1227 - January 8, 2007 1292 - April 12, 2007 1033 - March 20, 2006 1098 - June 23, 2006 1163 - September 27, 2006 1228 - January 9, 2007 1293 - April 13, 2007 1034 - March 21, 2006 1099 - June 26, 2006 1164 - September 28, 2006 1229 - January 10, 2007 1294 - April 16, 2007 1035 - March 22, 2006 1100 - June 27, 2006 1165 - September 29, 2006 1230 - January 11, 2007 1295 - April 17, 2007 1036 - March 23, 2006 1101 - June 28, 2006 1166 - October 2, 2006 1231 - January 12, 2007 1296 - April 18, 2007 1037 - March 24, 2006 1102 - June 29, 2006 1167 - October 3, 2006 1232 - January 16, 2007 1297 - April 19, 2007 1038 - March 27, 2006 1103 - June 30, 2006 1168 - October 4, 2006 1233 - January 17, 2007 1298 - April 20, 2007 1039 - March 28, 2006 1104 - July 3, 2006 1169 - October 5, 2006 1234 - January 18, 2007 1299 - April 23, 2007 1040 - March 29, 2006 1105 - July 5, 2006 1170 - October 6, 2006 1235 - January 19, 2007 1300 - April 24, 2007 1301 - April 25, 2007 1366 - July 27, 2007 1431 - October 31, 2007 1302 - April 26, 2007 1367 - July 30, 2007 1432 - November 1, 2007 1303 - April 27, 2007 1368 - July 31, 2007 1433 - November 2, 2007 1304 - April 30, 2007 1369 - August 1, 2007 1434 - November 5, 2007 1305 - May 1, 2007 1370 - August 2, 2007 1435 - November 6, 2007 1306 - May 2, 2007 1371 - August 3, 2007 1436 - November 8, 2007 1307 - May 3, 2007 1372 - August 6, 2007 1437 - November 9, 2007 1308 - May 4, 2007 1373 - August 7, 2007 1438 - November 12, 2007 1309 - May 7, 2007 1374 - August 8, 2007 1439 - November 13, 2007 1310 - May 8, 2007 1375 - August 9, 2007 1440 - November 14, 2007 1311 - May 9, 2007 1376 - August 10, 2007 1441 - November 15, 2007 1312 - May 10, 2007 1377 - August 13, 2007 1442 - November 16, 2007 1313 - May 11, 2007 1378 - August 14, 2007 1443 - November 19, 2007 1314 - May 14, 2007 1379 - August 15, 2007 1444 - November 20, 2007 1315 - May 15, 2007 1380 - August 16, 2007 1445 - November 21, 2007 1316 - May 16, 2007 1381 - August 17, 2007 1446 - November 23, 2007 1317 - May 17, 2007 1382 - August 20, 2007 1447 - November 26, 2007 1318 - May 18, 2007 1383 - August 21, 2007 1448 - November 27, 2007 1319 - May 21, 2007 1384 - August 23, 2007 1449 - November 28, 2007 1320 - May 22, 2007 1385 - August 24, 2007 1450 - November 30, 2007 1321 - May 23, 2007 1386 - August 27, 2007 1451 - December 3, 2007 1322 - May 24, 2007 1387 - August 28, 2007 1452 - December 4, 2007 1323 - May 25, 2007 1388 - August 29, 2007 1453 - December 5, 2007 1324 - May 29, 2007 1389 - August 30, 2007 1454 - December 6, 2007 1325 - May 30, 2007 1390 - August 31, 2007 1455 - December 7, 2007 1326 - May 31, 2007 1391 - September 4, 2007 1456 - December 10, 2007 1327 - June 1, 2007 1392 - September 5, 2007 1457 - December 11, 2007 1328 - June 4, 2007 1393 - September 6, 2007 1458 - December 12, 2007 1329 - June 5, 2007 1394 - September 7, 2007 1459 - December 13, 2007 1330 - June 6, 2007 1395 - September 10, 2007 1460 - December 14, 2007 1331 - June 7, 2007 1396 - September 11, 2007 1461 - December 17, 2007 1332 - June 8, 2007 1397 - September 12, 2007 1462 - December 18, 2007 1333 - June 11, 2007 1398 - September 13, 2007 1463 - December 19, 2007 1334 - June 12, 2007 1399 - September 14, 2007 1464 - December 20, 2007 1335 - June 13, 2007 1400 - September 17, 2007 1465 - December 21, 2007 1336 - June 14, 2007 1401 - September 18, 2007 1466 - December 24, 2007 1337 - June 15, 2007 1402 - September 19, 2007 1467 - December 26, 2007 1338 - June 18, 2007 1403 - September 20, 2007 1468 - December 27, 2007 1339 - June 19, 2007 1404 - September 21, 2007 1469 - December 28, 2007 1340 - June 20, 2007 1405 - September 24, 2007 1470 - December 31, 2007 1341 - June 21, 2007 1406 - September 25, 2007 1342 - June 22, 2007 1407 - September 26, 2007 1343 - June 25, 2007 1408 - September 28, 2007 1344 - June 26, 2007 1409 - October 1, 2007 1345 - June 27, 2007 1410 - October 2, 2007 1346 - June 28, 2007 1411 - October 3, 2007 1347 - June 29, 2007 1412 - October 4, 2007 1348 - July 2, 2007 1413 - October 5, 2007 1349 - July 3, 2007 1414 - October 8, 2007 1350 - July 5, 2007 1415 - October 9, 2007 1351 - July 6, 2007 1416 - October 10, 2007 1352 - July 9, 2007 1417 - October 11, 2007 1353 - July 10, 2007 1418 - October 12, 2007 1354 - July 11, 2007 1419 - October 15, 2007 1355 - July 12, 2007 1420 - October 16, 2007 1356 - July 13, 2007 1421 - October 17, 2007 1357 - July 16, 2007 1422 - October 18, 2007 1358 - July 17, 2007 1423 - October 19, 2007 1359 - July 18, 2007 1424 - October 22, 2007 1360 - July 19, 2007 1425 - October 23, 2007 1361 - July 20, 2007 1426 - October 24, 2007 1362 - July 23, 2007 1427 - October 25, 2007 1363 - July 24, 2007 1428 - October 26, 2007 1364 - July 25, 2007 1429 - October 29, 2007 1365 - July 26, 2007 1430 - October 30, 2007
Jackson National Separate Account I [LOGO] Financial Statements December 31, 2007 1 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
Fifth Third Fifth Third Fifth Third Fifth Third JNL/AIM Balanced Disciplined Value Mid Cap Quality Growth International VIP Portfolio VIP Portfolio VIP Portfolio VIP Portfolio Growth Portfolio ------------- ----------------- ------------- -------------- ---------------- Assets Investments, at value (a) $ - $ - $ - $ - $ 203,284,802 Receivables: Dividend receivable - - - - - Investment securities sold - - - - 473,905 Sub-account units sold - - - - 341,968 --- --- --- --- ------------- Total assets - - - - 204,100,675 --- --- --- --- ------------- Liabilities Payables: Investment securities purchased - - - - 341,968 Sub-account units redeemed - - - - 446,333 Insurance fees due to Jackson - - - - 27,572 --- --- --- --- ------------- Total liabilities - - - - 815,873 --- --- --- --- ------------- Net assets (Note 6) $ - $ - $ - $ - $ 203,284,802 ------------------------------------ === === === === ============= (a) Investment shares - - - - 12,915,172 Investments at cost $ - $ - $ - $ - $ 176,436,681 JNL/Capital JNL/AIM JNL/AIM JNL/AIM Guardian Global Large Cap Real Estate Small Cap JNL/Alger Balanced Growth Portfolio Portfolio Growth Portfolio Growth Portfolio Portfolio ---------------- ------------- ---------------- ---------------- --------------- Assets Investments, at value (a) $ 193,898,803 $ 134,185,994 $ 69,217,872 $ - $ 183,983,298 Receivables: Dividend receivable - - - - - Investment securities sold 309,103 480,676 168,137 - 194,059 Sub-account units sold 383,261 476,807 188,960 - 532,506 ------------- ------------- ------------ --- ------------- Total assets 194,591,167 135,143,477 69,574,969 - 184,709,863 ------------- ------------- ------------ --- ------------- Liabilities Payables: Investment securities purchased 383,261 476,807 188,960 - 532,506 Sub-account units redeemed 282,636 461,901 158,741 - 169,518 Insurance fees due to Jackson 26,467 18,775 9,396 - 24,541 ------------- ------------- ------------ --- ------------- Total liabilities 692,364 957,483 357,097 - 726,565 ------------- ------------- ------------ --- ------------- Net assets (Note 6) $ 193,898,803 $ 134,185,994 $ 69,217,872 $ - $ 183,983,298 ------------------------------------ ============= ============= ============ === ============= (a) Investment shares 12,987,194 10,786,655 4,670,572 - 15,396,092 Investments at cost $ 175,291,293 $ 159,782,960 $ 66,056,744 $ - $ 171,461,773
See notes to the financial statements. 2 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/Capital JNL/Capital JNL/Capital JNL/Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio Portfolio Portfolio Portfolio ------------------ ------------------- ------------- ----------------- ------------- Assets Investments, at value (a) $ 155,406,194 $ 1,985,929 $ 151,626,264 $ 294,795,539 $ 19,247,332 Receivables: Dividend receivable - - - - - Investment securities sold 232,326 1,798 257,159 438,945 24,882 Sub-account units sold 409,597 101,998 281,893 1,304,882 116,441 ------------- ----------- ------------- ------------- ------------ Total assets 156,048,117 2,089,725 152,165,316 296,539,366 19,388,655 ------------- ----------- ------------- ------------- ------------ Liabilities Payables: Investment securities purchased 409,597 101,998 281,893 1,304,882 116,441 Sub-account units redeemed 212,550 1,500 238,286 395,440 22,081 Insurance fees due to Jackson 19,776 298 18,873 43,505 2,801 ------------- ----------- ------------- ------------- ------------ Total liabilities 641,923 103,796 539,052 1,743,827 141,323 ------------- ----------- ------------- ------------- ------------ Net assets (Note 6) $ 155,406,194 $ 1,985,929 $ 151,626,264 $ 294,795,539 $ 19,247,332 ------------------------------------ ============= =========== ============= ============= ============ (a) Investment shares 5,827,004 201,209 6,403,136 21,208,312 1,773,948 Investments at cost $ 137,669,315 $ 1,970,999 $ 135,676,159 $ 273,189,660 $ 18,830,857 JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio Portfolio Income Portfolio -------------- --------------- ------------------ ------------- ---------------- Assets Investments, at value (a) $ 70,254,143 $ 159,201,448 $ 762,485,093 $ 47,195,349 $ 252,304,185 Receivables: Dividend receivable - - - - - Investment securities sold 64,155 162,598 956,330 59,262 476,755 Sub-account units sold 27,960 141,041 4,561,615 193,047 658,174 ------------ ------------- ------------- ------------ ------------- Total assets 70,346,258 159,505,087 768,003,038 47,447,658 253,439,114 ------------ ------------- ------------- ------------ ------------- Liabilities Payables: Investment securities purchased 27,960 141,041 4,561,615 193,047 658,174 Sub-account units redeemed 55,150 141,009 849,941 52,733 441,531 Insurance fees due to Jackson 9,005 21,589 106,389 6,529 35,224 ------------ ------------- ------------- ------------ ------------- Total liabilities 92,115 303,639 5,517,945 252,309 1,134,929 ------------ ------------- ------------- ------------ ------------- Net assets (Note 6) $ 70,254,143 $ 159,201,448 $ 762,485,093 $ 47,195,349 $ 252,304,185 ------------------------------------ ============ ============= ============= ============ ============= (a) Investment shares 4,835,110 7,679,761 75,568,394 4,724,259 23,960,511 Investments at cost $ 71,831,201 $ 166,931,178 $ 778,634,709 $ 48,563,904 $ 262,109,040
See notes to the financial statements. 3 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/Franklin JNL/ JNL/ JNL/ JNL/Franklin Templeton Goldman Sachs Goldman Sachs Goldman Sachs Templeton Mutual Small Cap Core Plus Mid Cap Short Duration Shares Portfolio Value Portfolio Bond Portfolio Value Portfolio Bond Portfolio ---------------- --------------- -------------- --------------- -------------- Assets Investments, at value (a) $ 71,047,329 $ 57,150,443 $ 329,797,588 $ 89,409,169 $ 65,965,619 Receivables: Dividend receivable - - - - - Investment securities sold 148,145 110,057 680,101 92,009 63,580 Sub-account units sold 465,075 266,245 388,094 173,748 149,787 ------------ ------------ ------------- ------------ ------------ Total assets 71,660,549 57,526,745 330,865,783 89,674,926 66,178,986 ------------ ------------ ------------- ------------ ------------ Liabilities Payables: Investment securities purchased 465,075 266,245 388,094 173,748 149,787 Sub-account units redeemed 138,295 102,009 635,299 79,612 54,226 Insurance fees due to Jackson 9,850 8,048 44,802 12,397 9,354 ------------ ------------ ------------- ------------ ------------ Total liabilities 613,220 376,302 1,068,195 265,757 213,367 ------------ ------------ ------------- ------------ ------------ Net assets (Note 6) $ 71,047,329 $ 57,150,443 $ 329,797,588 $ 89,409,169 $ 65,965,619 ------------------------------------ ============ ============ ============= ============ ============ (a) Investment shares 7,090,552 5,022,007 27,460,249 6,974,194 6,288,429 Investments at cost $ 72,810,012 $ 63,220,078 $ 317,304,358 $ 91,177,700 $ 66,233,259 JNL/JPMorgan JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard JNL/Lazard International MidCap Growth & Quality Bond Emerging Markets Mid Cap Value Portfolio Portfolio Portfolio Portfolio Value Portfolio --------------- ------------- ---------------- ---------------- --------------- Assets Investments, at value (a) $ 396,407,155 $ 133,042,383 $ 190,858,701 $ 243,760,002 $ 214,651,928 Receivables: Dividend receivable - - - - - Investment securities sold 951,450 148,526 2,443,757 523,506 398,477 Sub-account units sold 597,717 161,225 200,893 1,259,644 289,388 ------------- ------------- ------------- ------------- ------------- Total assets 397,956,322 133,352,134 193,503,351 245,543,152 215,339,793 ------------- ------------- ------------- ------------- ------------- Liabilities Payables: Investment securities purchased 597,717 161,225 200,893 1,259,644 289,388 Sub-account units redeemed 895,816 131,704 2,418,447 488,890 368,883 Insurance fees due to Jackson 55,634 16,822 25,310 34,616 29,594 ------------- ------------- ------------- ------------- ------------- Total liabilities 1,549,167 309,751 2,644,650 1,783,150 687,865 ------------- ------------- ------------- ------------- ------------- Net assets (Note 6) $ 396,407,155 $ 133,042,383 $ 190,858,701 $ 243,760,002 $ 214,651,928 ------------------------------------ ============= ============= ============= ============= ============= (a) Investment shares 27,624,192 6,628,918 16,257,130 16,845,888 18,714,205 Investments at cost $ 368,977,053 $ 114,687,247 $ 187,399,255 $ 222,560,389 $ 260,145,910
See notes to the financial statements. 4 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/Lazard Small Cap JNL/MCM JNL/MCM JNL/MCM Value 10 x 10 JNL/MCM Bond Index Communications Portfolio Portfolio 25 Portfolio Portfolio Sector Portfolio ------------- ------------ ------------- ------------- ---------------- Assets Investments, at value (a) $ 111,168,452 $ 50,864,159 $ 689,744,274 $ 303,351,612 $ 82,005,620 Receivables: Dividend receivable - - - - - Investment securities sold 145,281 51,205 922,492 725,714 214,307 Sub-account units sold 204,268 465,662 1,352,305 868,625 172,501 ------------- ------------ ------------- ------------- ------------ Total assets 111,518,001 51,381,026 692,019,071 304,945,951 82,392,428 ------------- ------------ ------------- ------------- ------------ Liabilities Payables: Investment securities purchased 204,268 465,662 1,352,305 868,625 172,501 Sub-account units redeemed 130,362 44,014 828,142 682,841 202,683 Insurance fees due to Jackson 14,919 7,191 94,350 42,873 11,624 ------------- ------------ ------------- ------------- ------------ Total liabilities 349,549 516,867 2,274,797 1,594,339 386,808 ------------- ------------ ------------- ------------- ------------ Net assets (Note 6) $ 111,168,452 $ 50,864,159 $ 689,744,274 $ 303,351,612 $ 82,005,620 ---------------------------------- ============= ============ ============= ============= ============ (a) Investment shares 10,782,585 5,127,435 52,056,172 27,182,044 14,187,824 Investments at cost $ 135,829,098 $ 52,301,379 $ 657,801,532 $ 297,773,608 $ 86,395,605 JNL/MCM JNL/MCM JNL/MCM JNL/MCM Enhanced JNL/MCM Consumer Brands Dow 10 Dow Dividend S&P 500 Stock Financial Sector Portfolio Portfolio Portfolio Index Portfolio Sector Portfolio ---------------- ------------- ------------- --------------- ---------------- Assets Investments, at value (a) $ 17,958,818 $ 815,546,625 $ 381,087,943 $ 79,149,314 $ 51,639,955 Receivables: Dividend receivable - - - - - Investment securities sold 18,191 897,070 2,125,187 111,648 100,098 Sub-account units sold 10,470 1,173,175 1,233,067 197,199 287,592 ------------ ------------- ------------- ------------ ------------ Total assets 17,987,479 817,616,870 384,446,197 79,458,161 52,027,645 ------------ ------------- ------------- ------------ ------------ Liabilities Payables: Investment securities purchased 10,470 1,173,175 1,233,067 197,199 287,592 Sub-account units redeemed 15,735 786,032 2,072,635 100,680 92,910 Insurance fees due to Jackson 2,456 111,038 52,552 10,968 7,188 ------------ ------------- ------------- ------------ ------------ Total liabilities 28,661 2,070,245 3,358,254 308,847 387,690 ------------ ------------- ------------- ------------ ------------ Net assets (Note 6) $ 17,958,818 $ 815,546,625 $ 381,087,943 $ 79,149,314 $ 51,639,955 ---------------------------------- ============ ============= ============= ============ ============ (a) Investment shares 1,625,232 63,516,092 35,318,623 9,045,636 4,171,240 Investments at cost $ 19,491,286 $ 699,415,994 $ 409,797,676 $ 79,303,390 $ 59,324,735
See notes to the financial statements. 5 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Global 15 Healthcare Index 5 International JNL 5 Portfolio Sector Portfolio Portfolio Index Portfolio Portfolio --------------- ---------------- ------------ --------------- --------------- Assets Investments, at value (a) $ 1,308,354,520 $ 106,518,717 $ 27,919,668 $ 554,882,623 $ 5,208,867,203 Receivables: Dividend receivable - - - - - Investment securities sold 2,417,855 166,726 30,029 774,439 7,586,932 Sub-account units sold 1,652,993 147,711 435,474 535,573 12,009,604 --------------- ---------------- ------------ --------------- --------------- Total assets 1,312,425,368 106,833,154 28,385,171 556,192,635 5,228,463,739 --------------- ---------------- ------------ --------------- --------------- Liabilities Payables: Investment securities purchased 1,652,993 147,711 435,474 535,573 12,009,604 Sub-account units redeemed 2,237,263 152,006 26,219 696,935 6,868,127 Insurance fees due to Jackson 180,592 14,720 3,810 77,504 718,805 --------------- ---------------- ------------ --------------- --------------- Total liabilities 4,070,848 314,437 465,503 1,310,012 19,596,536 --------------- ---------------- ------------ --------------- --------------- Net assets (Note 6) $ 1,308,354,520 $ 106,518,717 $ 27,919,668 $ 554,882,623 $ 5,208,867,203 ---------------------------------- =============== ================ ============ ============= =============== (a) Investment shares 59,769,508 7,984,911 2,791,967 31,617,243 366,048,293 Investments at cost $ 968,450,035 $ 103,855,014 $ 28,056,644 $ 485,429,467 $ 5,011,342,628 JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL Optimized Nasdaq 25 NYSE International Oil & Gas S&P 10 5 Portfolio Portfolio 25 Portfolio Sector Portfolio Portfolio ------------- ------------- ------------------ ---------------- ------------- Assets Investments, at value (a) $ 375,799,453 $ 106,384,536 $ 63,560,988 $ 443,808,211 $ 833,493,043 Receivables: Dividend receivable - - - - - Investment securities sold 600,816 238,953 91,931 1,051,701 1,352,090 Sub-account units sold 2,282,394 396,125 458,730 1,239,148 709,639 ------------- ------------- ------------ ------------- ------------- Total assets 378,682,663 107,019,614 64,111,649 446,099,060 835,554,772 ------------- ------------- ------------ ------------- ------------- Liabilities Payables: Investment securities purchased 2,282,394 396,125 458,730 1,239,148 709,639 Sub-account units redeemed 548,452 223,513 83,081 988,282 1,238,393 Insurance fees due to Jackson 52,364 15,440 8,850 63,419 113,697 ------------- ------------- ------------ ------------- ------------- Total liabilities 2,883,210 635,078 550,661 2,290,849 2,061,729 ------------- ------------- ------------ ------------- ------------- Net assets (Note 6) $ 375,799,453 $ 106,384,536 $ 63,560,988 $ 443,808,211 $ 833,493,043 ---------------------------------- ============= ============= ============ ============= ============= (a) Investment shares 31,342,740 7,927,313 5,629,848 12,050,182 51,197,361 Investments at cost $ 366,395,299 $ 93,752,130 $ 62,619,762 $ 375,905,702 $ 685,350,188
See notes to the financial statements. 6 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio Index Portfolio Index Portfolio 60 Portfolio Portfolio ------------ --------------- --------------- ------------ ---------------- Assets Investments, at value (a) $ 22,725,802 $ 414,090,413 $ 561,046,082 $ 32,446,860 $ 628,445,176 Receivables: Dividend receivable - - - - - Investment securities sold 32,154 492,250 729,272 90,756 787,604 Sub-account units sold 17,550 372,949 750,123 305,751 1,952,104 ------------ ------------- ------------- ------------ ------------- Total assets 22,775,506 414,955,612 562,525,477 32,843,367 631,184,884 ------------ ------------- ------------- ------------ ------------- Liabilities Payables: Investment securities purchased 17,550 372,949 750,123 305,751 1,952,104 Sub-account units redeemed 28,906 434,279 650,935 86,176 701,799 Insurance fees due to Jackson 3,248 57,971 78,337 4,580 85,805 ------------ ------------- ------------- ------------ ------------- Total liabilities 49,704 865,199 1,479,395 396,507 2,739,708 ------------ ------------- ------------- ------------ ------------- Net assets (Note 6) $ 22,725,802 $ 414,090,413 $ 561,046,082 $ 32,446,860 $ 628,445,176 ---------------------------------- ============ ============= ============= ============ ============= (a) Investment shares 2,051,065 28,016,943 45,392,078 3,746,751 32,782,743 Investments at cost $ 21,414,120 $ 402,247,547 $ 503,869,920 $ 35,450,344 $ 667,122,289 JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio VIP Portfolio Portfolio --------------- ---------------- --------------- ------------- ------------- Assets Investments, at value (a) $ 316,673,168 $ 99,763,397 $ 1,099,739,990 $ 422,290,328 $ 196,598,584 Receivables: Dividend receivable - - - - - Investment securities sold 395,712 170,681 11,558,692 7,924,448 287,100 Sub-account units sold 738,034 371,028 2,598,307 1,318,999 492,653 ------------- ------------ --------------- ------------- ------------- Total assets 317,806,914 100,305,106 1,113,896,989 431,533,775 197,378,337 ------------- ------------ --------------- ------------- ------------- Liabilities Payables: Investment securities purchased 738,034 371,028 2,598,307 1,318,999 492,653 Sub-account units redeemed 351,117 156,758 11,403,442 7,864,569 260,505 Insurance fees due to Jackson 44,595 13,923 155,250 59,879 26,595 ------------- ------------ --------------- ------------- ------------- Total liabilities 1,133,746 541,709 14,156,999 9,243,447 779,753 ------------- ------------ --------------- ------------- ------------- Net assets (Note 6) $ 316,673,168 $ 99,763,397 $ 1,099,739,990 $ 422,290,328 $ 196,598,584 ---------------------------------- ============= ============ =============== ============= ============= (a) Investment shares 23,405,260 12,990,026 58,621,535 29,043,351 13,132,838 Investments at cost $ 322,529,444 $ 94,537,027 $ 925,741,532 $ 372,416,200 $ 178,667,570
See notes to the financial statements. 7 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/ JNL/ JNL/ JNL/PIMCO JNL/PIMCO PPM America PPM America Oppenheimer Real Return Total Return Core Equity High Yield Growth Portfolio Portfolio Bond Portfolio Portfolio Bond Portfolio ---------------- ------------ -------------- ------------ --------------- Assets Investments, at value (a) $ - $ 75,389,774 $ 598,011,551 $ 75,770,750 $ 267,489,724 Receivables: Dividend receivable - - - - Investment securities sold - 145,666 1,144,468 71,789 292,585 Sub-account units sold - 375,410 2,855,433 30,740 208,631 --- ------------ ------------- ------------ ------------- Total assets - 75,910,850 602,011,452 75,873,279 267,990,940 --- ------------ ------------- ------------ ------------- Liabilities Payables: Investment securities purchased - 375,410 2,855,433 30,740 208,631 Sub-account units redeemed - 135,456 1,063,306 62,783 256,121 Insurance fees due to Jackson - 10,210 81,162 9,006 36,464 --- ------------ ------------- ------------ ------------- Total liabilities - 521,076 3,999,901 102,529 501,216 --- ------------ ------------- ------------ ------------- Net assets (Note 6) $ - $ 75,389,774 $ 598,011,551 $ 75,770,750 $ 267,489,724 -------------------------------------- === ============ ============= ============ ============= (a) Investment shares - 6,797,996 49,668,734 3,608,131 36,001,309 Investments at cost $ - $ 72,889,416 $ 592,324,688 $ 71,650,230 $ 296,997,039 JNL/ JNL/S&P PPM America JNL/Putnam Competitive JNL/S&P Value Equity Midcap JNL/S&P 4 Advantage Disciplined Portfolio Growth Portfolio Portfolio Portfolio Growth Portfolio ------------- ---------------- ------------ ----------- ---------------- Assets Investments, at value (a) $ 119,368,593 $ - $ 22,021,782 $ 6,230,889 $ 15,682,735 Receivables: Dividend receivable - - - - - Investment securities sold 185,022 - 21,947 5,474 18,778 Sub-account units sold 65,402 - 1,043,532 2,828,995 20,592 ------------- --- ------------ ----------- ------------ Total assets 119,619,017 - 23,087,261 9,065,358 15,722,105 ------------- --- ------------ ----------- ------------ Liabilities Payables: Investment securities purchased 65,402 - 1,043,532 2,828,995 20,592 Sub-account units redeemed 170,622 - 18,771 4,931 16,640 Insurance fees due to Jackson 14,400 - 3,176 543 2,138 ------------- --- ------------ ----------- ------------ Total liabilities 250,424 - 1,065,479 2,834,469 39,370 ------------- --- ------------ ----------- ------------ Net assets (Note 6) $ 119,368,593 $ - $ 22,021,782 $ 6,230,889 $ 15,682,735 -------------------------------------- ============= === ============ =========== ============ (a) Investment shares 6,233,347 - 2,217,702 628,114 1,472,557 Investments at cost $ 105,468,734 $ - $ 22,236,493 $ 6,274,868 $ 15,662,757
See notes to the financial statements. 8 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/S&P JNL/S&P JNL/S&P JNL/S&P Disciplined Dividend Income Growth JNL/S&P Disciplined Moderate & Growth Retirement Intrinsic Value Moderate Portfolio Growth Portfolio Portfolio Strategy Portfolio Portfolio ------------------ ---------------- --------------- ------------------ --------------- Assets Investments, at value (a) $ 33,590,592 $ 38,399,737 $ 737,713 $ 815,294 $ 11,822,442 Receivables: Dividend receivable - - - - - Investment securities sold 37,287 134,140 608 926 8,525 Sub-account units sold 164,812 630,034 90,581 - 8,129,904 ------------ ------------ --------- --------- ------------ Total assets 33,792,691 39,163,911 828,902 816,220 19,960,871 ------------ ------------ --------- --------- ------------ Liabilities Payables: Investment securities purchased 164,812 630,034 90,581 - 8,129,904 Sub-account units redeemed 32,709 128,786 513 873 7,935 Insurance fees due to Jackson 4,578 5,354 95 53 590 ------------ ------------ --------- --------- ------------ Total liabilities 202,099 764,174 91,189 926 8,138,429 ------------ ------------ --------- --------- ------------ Net assets (Note 6) $ 33,590,592 $ 38,399,737 $ 737,713 $ 815,294 $ 11,822,442 ----------------------------------- ============ ============ ========= ========= ============ (a) Investment shares 3,139,308 3,598,851 75,508 77,352 1,191,778 Investments at cost $ 33,179,711 $ 38,264,980 $ 742,045 $ 811,899 $ 11,886,864 JNL/ JNL/ JNL/ JNL/ S&P Managed S&P Managed JNL/ S&P Managed S&P Managed Aggressive Conservative S&P Managed Moderate Moderate Growth Portfolio Portfolio Growth Portfolio Portfolio Growth Portfolio ---------------- ------------- ---------------- ------------- ---------------- Assets Investments, at value (a) $ 606,719,072 $ 240,837,191 $ 1,201,072,916 $ 475,927,883 $ 1,251,889,393 Receivables: Dividend receivable - - - - - Investment securities sold 527,760 234,164 1,270,771 462,778 2,096,779 Sub-account units sold 507,526 934,387 1,616,620 1,240,233 2,727,078 ------------- ------------- --------------- ------------- --------------- Total assets 607,754,358 242,005,742 1,203,960,307 477,630,894 1,256,713,250 ------------- ------------- --------------- ------------- --------------- Liabilities Payables: Investment securities purchased 507,526 934,387 1,616,620 1,240,233 2,727,078 Sub-account units redeemed 448,111 198,406 1,108,086 394,096 1,922,803 Insurance fees due to Jackson 79,649 35,758 162,685 68,682 173,976 ------------- ------------- --------------- ------------- --------------- Total liabilities 1,035,286 1,168,551 2,887,391 1,703,011 4,823,857 ------------- ------------- --------------- ------------- --------------- Net assets (Note 6) $ 606,719,072 $ 240,837,191 $ 1,201,072,916 $ 475,927,883 $ 1,251,889,393 ----------------------------------- ============= ============= =============== ============= =============== (a) Investment shares 40,746,748 20,997,140 86,782,725 38,978,533 94,840,106 Investments at cost $ 499,028,675 $ 239,087,234 $ 1,078,391,103 $ 461,606,537 $ 1,177,799,839
See notes to the financial statements. 9 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/S&P JNL/S&P Moderate Growth Moderate JNL/S&P JNL/S&P JNL/S&P Retirement Strategy Retirement Retirement 2015 Retirement 2020 Retirement 2025 Portfolio Strategy Portfolio Portfolio Portfolio Portfolio ------------------- ------------------ --------------- --------------- --------------- Assets Investments, at value (a) $ 673,315 $ 294,953 $ 15,823,765 $ 8,360,905 $ 4,776,579 Receivables: Dividend receivable - - - - - Investment securities sold 747 157 58,572 9,559 5,292 Sub-account units sold - - 69,687 14,340 11,656 --------- --------- ------------ ----------- ----------- Total assets 674,062 295,110 15,952,024 8,384,804 4,793,527 --------- --------- ------------ ----------- ----------- Liabilities Payables: Investment securities purchased - - 69,687 14,340 11,656 Sub-account units redeemed 705 141 56,503 8,345 4,635 Insurance fees due to Jackson 42 16 2,069 1,214 657 --------- --------- ------------ ----------- ----------- Total liabilities 747 157 128,259 23,899 16,948 --------- --------- ------------ ----------- ----------- Net assets (Note 6) $ 673,315 $ 294,953 $ 15,823,765 $ 8,360,905 $ 4,776,579 ------------------------------------ ========= ========= ============ =========== =========== (a) Investment shares 64,556 28,860 1,327,497 690,984 389,925 Investments at cost $ 683,041 $ 301,122 $ 15,153,028 $ 8,067,266 $ 4,646,639 JNL/ S&P Retirement JNL/S&P JNL/Select JNL/Select JNL/ Income Total Yield Balanced Money Market Select Value Portfolio Portfolio Portfolio Portfolio Portfolio -------------- ----------- ------------- ------------- ------------- Assets Investments, at value (a) $ 29,043,838 $ 3,265,347 $ 497,883,854 $ 617,933,515 $ 217,134,887 Receivables: Dividend receivable - - - 72,612 - Investment securities sold 49,468 3,573 740,831 2,614,123 467,176 Sub-account units sold 19,998 97,580 377,994 2,813,373 337,428 ------------ ----------- ------------- ------------- ------------- Total assets 29,113,304 3,366,500 499,002,679 623,433,623 217,939,491 ------------ ----------- ------------- ------------- ------------- Liabilities Payables: Investment securities purchased 19,998 97,580 377,994 2,813,373 337,428 Sub-account units redeemed 45,389 3,064 676,281 2,527,049 437,577 Insurance fees due to Jackson 4,079 509 64,550 87,074 29,599 ------------ ----------- ------------- ------------- ------------- Total liabilities 69,466 101,153 1,118,825 5,427,496 804,604 ------------ ----------- ------------- ------------- ------------- Net assets (Note 6) $ 29,043,838 $ 3,265,347 $ 497,883,854 $ 618,006,127 $ 217,134,887 ------------------------------------ ============ =========== ============= ============= ============= (a) Investment shares 2,552,183 324,265 28,353,295 617,933,515 11,233,052 Investments at cost $ 28,003,733 $ 3,293,574 $ 464,732,186 $ 617,933,505 $ 215,113,229
See notes to the financial statements. 10 Jackson National Separate Account I Statements of Assets and Liabilities December 31, 2007
JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ---------------- ------------- Assets Investments, at value (a) $ 558,542,995 $ 510,648,261 $ 367,321,448 Receivables: Dividend receivable - - - Investment securities sold 779,981 924,455 473,505 Sub-account units sold 633,532 846,707 643,378 ------------- ------------- ------------- Total assets 559,956,508 512,419,423 368,438,331 ------------- ------------- ------------- Liabilities Payables: Investment securities purchased 633,532 846,707 643,378 Sub-account units redeemed 708,636 857,566 424,166 Insurance fees due to Jackson 71,345 66,889 49,339 ------------- ------------- ------------- Total liabilities 1,413,513 1,771,162 1,116,883 ------------- ------------- ------------- Net assets (Note 6) $ 558,542,995 $ 510,648,261 $ 367,321,448 ------------------------------------ ============= ============= ============= (a) Investment shares 24,835,171 16,814,233 25,073,136 Investments at cost $ 498,732,095 $ 477,529,401 $ 360,750,843
See notes to the financial statements. 11 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
Fifth Third Fifth Third Fifth Third Fifth Third JNL/AIM Balanced Disciplined Value Mid Cap Quality Growth International VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) Growth Portfolio ---------------- ----------------- ---------------- ---------------- ---------------- Investment income Dividends $ 2,865 $ 261,570 $ 33,833 $ 230,158 $ 2,701,614 --------- ------------- ------------ ----------- ------------ Expenses Insurance charges (Note 3) 2,603 100,974 41,062 79,471 2,673,624 --------- ------------- ------------ ----------- ------------ Total expenses 2,603 100,974 41,062 79,471 2,673,624 --------- ------------- ------------ ----------- ------------ Net investment income (loss) 262 160,596 (7,229) 150,687 27,990 --------- ------------- ------------ ----------- ------------ Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 16,825 2,073,131 1,241,281 1,505,289 - Investments (1,676) (332,117) (297,688) (52,321) 10,857,758 Net change in unrealized appreciation (depreciation) on investments (6,503) (1,377,439) (563,207) (676,053) 627,133 --------- ------------- ------------ ----------- ------------ Net realized and unrealized gain (loss) 8,646 363,575 380,386 776,915 11,484,891 --------- ------------- ------------ ----------- ------------ Net increase (decrease) in net assets from operations $ 8,908 $ 524,171 $ 373,157 $ 927,602 $ 11,512,881 --------------------------------------- ========= ============= ============ =========== ============ JNL/Capital JNL/AIM JNL/AIM JNL/AIM Guardian Global Large Cap Real Estate Small Cap JNL/Alger Balanced Growth Portfolio Portfolio Growth Portfolio Growth Portfolio(a) Portfolio ---------------- -------------- ---------------- ------------------- ---------------- Investment income Dividends $ 726,491 $ 4,988,018 $ 202,716 $ 255,511 $ 4,211,043 ------------- -------------- ------------- ------------- -------------- Expenses Insurance charges (Note 3) 2,120,171 3,101,030 991,217 635,582 2,661,849 ------------- -------------- ------------- ------------- -------------- Total expenses 2,120,171 3,101,030 991,217 635,582 2,661,849 ------------- -------------- ------------- ------------- -------------- Net investment income (loss) (1,393,680) 1,886,988 (788,501) (380,071) 1,549,194 ------------- -------------- ------------- ------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 7,378,186 4,812,463 4,372,504 - 8,588,120 Investments 7,511,344 3,822,811 3,202,864 27,307,517 8,871,718 Net change in unrealized appreciation (depreciation) on investments 5,953,536 (45,025,484) (2,104,846) (16,163,940) (10,071,629) ------------- -------------- ------------- ------------- -------------- Net realized and unrealized gain (loss) 20,843,066 (36,390,210) 5,470,522 11,143,577 7,388,209 ------------- -------------- ------------- ------------- -------------- Net increase (decrease) in net assets from operations $ 19,449,386 $ (34,503,222) $ 4,682,021 $ 10,763,506 $ 8,937,403 --------------------------------------- ============= ============== ============= ============= ==============
(a) The period is from January 1, 2007 through acquisition April 27, 2007. (b) The period is from January 1, 2007 through liquidation October 12, 2007. See notes to the financial statements. 12 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/Capital JNL/Capital JNL/Capital JNL/Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio(b) Portfolio Portfolio(a) Portfolio(a) ------------------ ------------------- ------------- ----------------- ------------- Investment income Dividends $ 831,410 $ - $ - $ - $ - ------------ --------- ------------- ------------- ----------- Expenses Insurance charges (Note 3) 1,719,317 1,734 2,072,396 1,988,608 123,919 ------------ --------- ------------- ------------- ----------- Total expenses 1,719,317 1,734 2,072,396 1,988,608 123,919 ------------ --------- ------------- ------------- ----------- Net investment income (loss) (887,907) (1,734) (2,072,396) (1,988,608) (123,919) ------------ --------- ------------- ------------- ----------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies - - - - - Investments 3,881,639 (33) 4,975,265 2,604,318 179,675 Net change in unrealized appreciation (depreciation) on investments 15,772,849 14,930 6,828,210 21,605,879 416,474 ------------ --------- ------------- ------------- ----------- Net realized and unrealized gain (loss) 19,654,488 14,897 11,803,475 24,210,197 596,149 ------------ --------- ------------- ------------- ----------- Net increase (decrease) in net assets from operations $ 18,766,581 $ 13,163 $ 9,731,079 $ 22,221,589 $ 472,230 --------------------------------------- ============ ========= ============= ============= =========== JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio(a) Portfolio(a) Income Portfolio -------------- --------------- --------------------- -------------- ---------------- Investment income Dividends $ 1,443,810 $ 3,281,678 $ - $ 328,367 $ 7,948,490 -------------- -------------- -------------- ------------- -------------- Expenses Insurance charges (Note 3) 1,206,341 2,236,600 6,674,479 414,681 2,813,754 -------------- -------------- -------------- ------------- -------------- Total expenses 1,206,341 2,236,600 6,674,479 414,681 2,813,754 -------------- -------------- -------------- ------------- -------------- Net investment income (loss) 237,469 1,045,078 (6,674,479) (86,314) 5,134,736 -------------- -------------- -------------- ------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 9,852,766 21,434,917 - - 225,034 Investments 4,206,867 9,596,909 (1,459,472) 35,521 1,074,704 Net change in unrealized appreciation (depreciation) on investments (14,825,281) (21,772,102) (16,149,617) (1,368,554) (11,192,563) -------------- -------------- -------------- ------------- -------------- Net realized and unrealized gain (loss) (765,648) 9,259,724 (17,609,089) (1,333,033) (9,892,825) -------------- -------------- -------------- ------------- -------------- Net increase (decrease) in net assets from operations $ (528,179) $ 10,304,802 $ (24,283,568) $ (1,419,347) $ (4,758,089) --------------------------------------- ============== ============== ============== ============= ==============
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. 13 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/Franklin JNL/ JNL/ JNL/ JNL/Franklin Templeton Goldman Sachs Goldman Sachs Goldman Sachs Templeton Mutual Small Cap Core Plus Mid Cap Short Duration Shares Portfolio(a) Value Portfolio Bond Portfolio Value Portfolio Bond Portfolio ------------------- --------------- -------------- --------------- -------------- Investment income Dividends $ - $ 1,595,344 $ 10,104,769 $ 1,948,690 $ 1,907,528 ------------ ------------ ------------ ------------ ----------- Expenses Insurance charges (Note 3) 658,119 975,558 4,732,202 1,364,120 834,902 ------------ ------------ ------------ ------------ ----------- Total expenses 658,119 975,558 4,732,202 1,364,120 834,902 ------------ ------------ ------------ ------------ ----------- Net investment income (loss) (658,119) 619,786 5,372,567 584,570 1,072,626 ------------ ------------ ------------ ------------ ----------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies - 1,476,510 - 1,183,224 - Investments (123,619) 1,718,158 3,488,590 2,907,440 1,129,388 Net change in unrealized appreciation (depreciation) on investments (1,762,683) (9,076,938) 6,469,545 (6,143,027) (743,213) ------------ ------------ ------------ ------------ ----------- Net realized and unrealized gain (loss) (1,886,302) (5,882,270) 9,958,135 (2,052,363) 386,175 ------------ ------------ ------------ ------------ ----------- Net increase (decrease) in net assets from operations $ (2,544,421) $ (5,262,484) $ 15,330,702 $ (1,467,793) $ 1,458,801 --------------------------------------- ============ ============ ============ ============ =========== JNL/JPMorgan JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard JNL/Lazard International MidCap Growth & Quality Bond Emerging Markets Mid Cap Value Portfolio Portfolio Portfolio Portfolio Value Portfolio --------------- ------------- --------------- ---------------- --------------- Investment income Dividends $ 20,539,417 $ - $ 6,672,414 $ 274,817 $ 12,221,840 ------------- ------------ ----------- ------------ ------------- Expenses Insurance charges (Note 3) 6,207,594 1,773,738 2,791,720 1,791,901 3,710,649 ------------- ------------ ----------- ------------ ------------- Total expenses 6,207,594 1,773,738 2,791,720 1,791,901 3,710,649 ------------- ------------ ----------- ------------ ------------- Net investment income (loss) 14,331,823 (1,773,738) 3,880,694 (1,517,084) 8,511,191 ------------- ------------ ----------- ------------ ------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 12,313,300 - - - 22,096,101 Investments 31,160,640 9,645,674 1,622,094 5,736,070 2,843,959 Net change in unrealized appreciation (depreciation) on investments (27,308,047) (1,042,161) 2,848,679 17,674,225 (45,994,972) ------------- ------------ ----------- ------------ ------------- Net realized and unrealized gain (loss) 16,165,893 8,603,513 4,470,773 23,410,295 (21,054,912) ------------- ------------ ----------- ------------ ------------- Net increase (decrease) in net assets from operations $ 30,497,716 $ 6,829,775 $ 8,351,467 $ 21,893,211 $ (12,543,721) --------------------------------------- ============= ============ =========== ============ =============
(a) Commencement of operations January 16, 2007. See notes to the financial statements. 14 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/Lazard JNL/MCM JNL/MCM JNL/MCM Small Cap 10 x 10 JNL/MCM Bond Index Communications Value Portfolio Portfolio(a) 25 Portfolio Portfolio Sector Portfolio --------------- ------------ ------------- ------------ ---------------- Investment income Dividends $ 4,760,038 $ - $ 12,211,614 $ 11,997,655 $ 3,559,362 ------------- ----------- ------------- ------------ ------------- Expenses Insurance charges (Note 3) 2,067,738 340,918 12,492,837 4,742,412 1,451,169 ------------- ----------- ------------- ------------ ------------- Total expenses 2,067,738 340,918 12,492,837 4,742,412 1,451,169 ------------- ----------- ------------- ------------ ------------- Net investment income (loss) 2,692,300 (340,918) (281,223) 7,255,243 2,108,193 ------------- ----------- ------------- ------------ ------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 6,072,781 - 12,706,401 - 1,103,422 Investments (2,000,658) (1,098,329) 30,941,322 2,710,855 4,484,924 Net change in unrealized appreciation (depreciation) on investments (16,788,108) (1,437,220) (76,007,512) 2,999,704 (9,049,141) ------------- ----------- ------------- ------------ ------------- Net realized and unrealized gain (loss) (12,715,985) (2,535,549) (32,359,789) 5,710,559 (3,460,795) ------------- ----------- ------------- ------------ ------------- Net increase (decrease) in net assets from operations $ (10,023,685) $(2,876,467) $ (32,641,012) $ 12,965,802 $ (1,352,602) --------------------------------------- ============= =========== ============= ============ ============ JNL/MCM JNL/MCM JNL/MCM JNL/MCM Enhanced JNL/MCM Consumer Brands Dow 10 Dow Dividend S&P 500 Stock Financial Sector Portfolio Portfolio Portfolio Index Portfolio Sector Portfolio ---------------- ------------- ------------- --------------- ---------------- Investment income Dividends $ 109,946 $ - $ - $ 1,202,241 $ 933,215 ------------ ------------- ------------- ------------ ------------- Expenses Insurance charges (Note 3) 377,331 14,690,144 6,225,566 1,276,226 1,015,261 ------------ ------------- ------------- ------------ ------------- Total expenses 377,331 14,690,144 6,225,566 1,276,226 1,015,261 ------------ ------------- ------------- ------------ ------------- Net investment income (loss) (267,385) (14,690,144) (6,225,566) (73,985) (82,046) ------------ ------------- ------------- ------------ ------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 669,027 - - 1,913,350 2,340,831 Investments 1,840,828 63,033,465 6,821,710 2,260,162 2,399,245 Net change in unrealized appreciation (depreciation) on investments (4,009,383) (53,962,671) (51,702,747) (2,806,274) (16,031,535) ------------ ------------- ------------- ------------ ------------- Net realized and unrealized gain (loss) (1,499,528) 9,070,794 (44,881,037) 1,367,238 (11,291,459) ------------ ------------- ------------- ------------ ------------- Net increase (decrease) in net assets from operations $ (1,766,913) $ (5,619,350) $ (51,106,603) $ 1,293,253 $ (11,373,505) --------------------------------------- ============ ============= ============= ============ =============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. 15 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Global 15 Healthcare Index 5 International JNL 5 Portfolio Sector Portfolio Portfolio(a) Index Portfolio Portfolio ------------- ---------------- -------------- --------------- -------------- Investment income Dividends $ - $ 763,430 $ - $ 14,716,706 $ 98,471,946 ------------- ------------ ---------- ------------ -------------- Expenses Insurance charges (Note 3) 21,447,314 1,619,188 142,403 8,892,555 78,665,129 ------------- ------------ ---------- ------------ -------------- Total expenses 21,447,314 1,619,188 142,403 8,892,555 78,665,129 ------------- ------------ ---------- ------------ -------------- Net investment income (loss) (21,447,314) (855,758) (142,403) 5,824,151 19,806,817 ------------- ------------ ---------- ------------ -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies - 3,126,424 - 5,941,868 3,897,866 Investments 135,389,159 4,178,999 6,713 32,873,098 123,396,733 Net change in unrealized appreciation (depreciation) on investments (14,977,777) (1,473,505) (136,977) (4,802,609) (220,621,793) ------------- ------------ ---------- ------------ -------------- Net realized and unrealized gain (loss) 120,411,382 5,831,918 (130,264) 34,012,357 (93,327,194) ------------- ------------ ---------- ------------ -------------- Net increase (decrease) in net assets from operations $ 98,964,068 $ 4,976,160 $ (272,667) $ 39,836,508 $ (73,520,377) ------------------------------------------ ============= ============ ========== ============ ============== JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL Optimized Nasdaq 25 NYSE International Oil & Gas S&P 10 5 Portfolio Portfolio 25 Portfolio(a) Sector Portfolio Portfolio -------------- ------------ ------------------ ---------------- ------------- Investment income Dividends $ 6,434,823 $ - $ 1,950,140 $ 3,730,040 $ - ------------ ------------ ----------- ------------ ------------- Expenses Insurance charges (Note 3) 2,876,553 1,437,827 320,870 6,018,024 14,368,540 ------------ ------------ ----------- ------------ ------------- Total expenses 2,876,553 1,437,827 320,870 6,018,024 14,368,540 ------------ ------------ ----------- ------------ ------------- Net investment income (loss) 3,558,270 (1,437,827) 1,629,270 (2,287,984) (14,368,540) ------------ ------------ ----------- ------------ ------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 811,530 - - 21,813,660 - Investments 3,718,056 4,733,275 292,811 29,376,981 53,400,033 Net change in unrealized appreciation (depreciation) on investments 4,170,852 8,480,076 941,226 45,989,319 (12,413,179) ------------ ------------ ----------- ------------ ------------- Net realized and unrealized gain (loss) 8,700,438 13,213,351 1,234,037 97,179,960 40,986,854 ------------ ------------ ----------- ------------ ------------- Net increase (decrease) in net assets from operations $ 12,258,708 $ 11,775,524 $ 2,863,307 $ 94,891,976 $ 26,618,314 ------------------------------------------ ============ ============ =========== ============ =============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. 16 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio Index Portfolio Index Portfolio 60 Portfolio(a) Portfolio ----------- ---------------- --------------- --------------- ----------------- Investment income Dividends $ - $ 4,969,344 $ 7,773,438 $ 943,080 $ 55,918,471 ----------- ------------- ------------ ------------ -------------- Expenses Insurance charges (Note 3) 317,030 7,106,626 9,425,881 219,335 11,856,046 ----------- ------------- ------------ ------------ -------------- Total expenses 317,030 7,106,626 9,425,881 219,335 11,856,046 ----------- ------------- ------------ ------------ -------------- Net investment income (loss) (317,030) (2,137,282) (1,652,443) 723,745 44,062,425 ----------- ------------- ------------ ------------ -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies - 27,923,685 5,021,983 - 9,095,808 Investments 359,492 18,278,463 21,163,651 (547,966) 31,152,232 Net change in unrealized appreciation (depreciation) on investments 877,747 (25,638,814) (8,770,935) (3,003,484) (168,414,527) ----------- ------------- ------------ ------------ -------------- Net realized and unrealized gain (loss) 1,237,239 20,563,334 17,414,699 (3,551,450) (128,166,487) ----------- ------------- ------------ ------------ -------------- Net increase (decrease) in net assets from operations $ 920,209 $ 18,426,052 $ 15,762,256 $ (2,827,705) $ (84,104,062) ------------------------------------------ =========== ============= ============ ============ ============== JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio VIP Portfolio Portfolio ---------------- ---------------- ------------- -------------- ---------------- Investment income Dividends $ 4,525,957 $ 60,600 $ - $ 13,062,824 $ 2,083,504 ------------- ------------ ------------- ------------ ------------- Expenses Insurance charges (Note 3) 5,736,605 1,176,176 15,953,667 7,402,003 3,242,499 ------------- ------------ ------------- ------------ ------------- Total expenses 5,736,605 1,176,176 15,953,667 7,402,003 3,242,499 ------------- ------------ ------------- ------------ ------------- Net investment income (loss) (1,210,648) (1,115,576) (15,953,667) 5,660,821 (1,158,995) ------------- ------------ ------------- ------------ ------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 16,025,523 1,790,812 - 630,977 12,740,328 Investments 10,489,483 3,242,673 36,043,205 29,007,379 13,034,665 Net change in unrealized appreciation (depreciation) on investments (39,012,383) 2,684,411 124,250,063 959,296 (16,612,209) ------------- ------------ ------------- ------------ ------------- Net realized and unrealized gain (loss) (12,497,377) 7,717,896 160,293,268 30,597,652 9,162,784 ------------- ------------ ------------- ------------ ------------- Net increase (decrease) in net assets from operations $ (13,708,025) $ 6,602,320 $ 144,339,601 $ 36,258,473 $ 8,003,789 ------------------------------------------ ============= ============ ============= ============ =============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. 17 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/ JNL/ JNL/ JNL/PIMCO JNL/PIMCO PPM America PPM America Oppenheimer Real Return Total Return Core Equity High Yield Growth Portfolio(b) Portfolio(a) Bond Portfolio Portfolio Bond Portfolio ------------------- -------------- --------------- ------------ --------------- Investment income Dividends $ 2,422,985 $ - $ 26,164,485 $ 296,896 $ 23,046,876 ------------ ----------- ------------- ------------ ------------- Expenses Insurance charges (Note 3) 174,358 354,022 8,252,396 1,340,401 5,021,855 ------------ ----------- ------------- ------------ ------------- Total expenses 174,358 354,022 8,252,396 1,340,401 5,021,855 ------------ ----------- ------------- ------------ ------------- Net investment income (loss) 2,248,627 (354,022) 17,912,089 (1,043,505) 18,025,021 ------------ ----------- ------------- ------------ ------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 3,472,052 - 732,525 - - Investments (295,435) 426,528 668,622 3,921,675 (2,619,642) Net change in unrealized appreciation (depreciation) on investments (3,028,256) 2,500,358 14,001,736 (9,909,969) (24,910,400) ------------ ----------- ------------- ------------ ------------- Net realized and unrealized gain (loss) 148,361 2,926,886 15,402,883 (5,988,294) (27,530,042) ------------ ----------- ------------- ------------ ------------- Net increase (decrease) in net assets from operations $ 2,396,988 $ 2,572,864 $ 33,314,972 $ (7,031,799) $ (9,505,021) ------------------------------------------ ============ =========== ============= ============ ============= JNL/ JNL/S&P PPM America JNL/Putnam Competitive JNL/S&P Value Equity Midcap JNL/S&P 4 Advantage Disciplined Portfolio Growth Portfolio(d) Portfolio(c) Portfolio(c) Growth Portfolio(a) ------------- ------------------- ------------ ------------ ------------------- Investment income Dividends $ 864,875 $ - $ - $ 1,869 $ - ------------- ------------ ---------- --------- --------- Expenses Insurance charges (Note 3) 2,116,143 471,602 8,855 3,921 92,012 ------------- ------------ ---------- --------- --------- Total expenses 2,116,143 471,602 8,855 3,921 92,012 ------------- ------------ ---------- --------- --------- Net investment income (loss) (1,251,268) (471,602) (8,855) (2,052) (92,012) ------------- ------------ ---------- --------- --------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies - - - - - Investments 10,428,461 5,012,375 (371) (445) 13,540 Net change in unrealized appreciation (depreciation) on investments (17,385,292) (4,798,547) (214,710) (43,979) 19,977 ------------- ------------ ---------- --------- --------- Net realized and unrealized gain (loss) (6,956,831) 213,828 (215,081) (44,424) 33,517 ------------- ------------ ---------- --------- --------- Net increase (decrease) in net assets from operations $ (8,208,099) $ (257,774) $ (223,936) $ (46,476) $ (58,495) ------------------------------------------ ============= ============ ========== ========= =========
(a) Commencement of operations January 16, 2007. (b) The period is from January 1, 2007 through acquisition April 27, 2007. (c) Commencement of operations December 3, 2007. (d) The period is from January 1, 2007 through acquisition November 30, 2007. See notes to the financial statements. 18 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/S&P JNL/S&P JNL/S&P Disciplined JNL/S&P Growth Disciplined Moderate Dividend Income Retirement JNL/S&P Moderate Growth & Growth Strategy Intrinsic Value Portfolio(a) Portfolio(a) Portfolio(b) Portfolio(a) Portfolio(b) ---------------- ------------- --------------- ------------- --------------- Investment income Dividends $ - $ - $ 396 $ 17,801 $ 2,956 ---------- ---------- -------- ---------- --------- Expenses Insurance charges (Note 3) 186,515 257,160 347 3,445 4,552 ---------- ---------- -------- ---------- --------- Total expenses 186,515 257,160 347 3,445 4,552 ---------- ---------- -------- ---------- --------- Net investment income (loss) (186,515) (257,160) 49 14,356 (1,596) ---------- ---------- -------- ---------- --------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies - - - - - Investments 49,958 84,569 (1) 1,356 (672) Net change in unrealized appreciation (depreciation) on investments 410,881 134,757 (4,333) 3,395 (64,422) ---------- ---------- -------- ---------- --------- Net realized and unrealized gain (loss) 460,839 219,326 (4,334) 4,751 (65,094) ---------- ---------- -------- ---------- --------- Net increase (decrease) in net assets from operations $ 274,324 $ (37,834) $ (4,285) $ 19,107 $ (66,690) ------------------------------------------ ========== ========== ======== ========== ========= JNL/ JNL/ JNL/ JNL/ JNL/ S&P Managed S&P Managed S&P Managed S&P Managed S&P Managed Moderate Aggressive Conservative Growth Moderate Growth Growth Portfolio Portfolio Portfolio Portfolio Portfolio ---------------- ------------- ---------------- ------------- ---------------- Investment income Dividends $ 11,484,905 $ 5,760,484 $ 19,666,851 $ 11,930,407 $ 25,282,642 ------------- ------------ ------------- ------------- -------------- Expenses Insurance charges (Note 3) 9,597,593 3,297,057 19,084,656 6,743,372 19,197,423 ------------- ------------ ------------- ------------- -------------- Total expenses 9,597,593 3,297,057 19,084,656 6,743,372 19,197,423 ------------- ------------ ------------- ------------- -------------- Net investment income (loss) 1,887,312 2,463,427 582,195 5,187,035 6,085,219 ------------- ------------ ------------- ------------- -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies - 4,721,026 56,819,546 10,316,265 61,910,665 Investments 31,797,530 5,002,927 41,000,173 7,890,875 33,379,096 Net change in unrealized appreciation (depreciation) on investments 8,450,433 (3,893,071) (24,453,338) (3,465,622) (30,290,631) ------------- ------------ ------------- ------------- -------------- Net realized and unrealized gain (loss) 40,247,963 5,830,882 73,366,381 14,741,518 64,999,130 ------------- ------------ ------------- ------------- -------------- Net increase (decrease) in net assets from operations $ 42,135,275 $ 8,294,309 $ 73,948,576 $ 19,928,553 $ 71,084,349 ------------------------------------------ ============= ============ ============= ============= ==============
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. 19 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/S&P JNL/S&P Moderate Growth Moderate Retirement Retirement JNL/S&P JNL/S&P JNL/S&P Strategy Strategy Retirement 2015 Retirement 2020 Retirement 2025 Portfolio(a) Portfolio(a) Portfolio Portfolio Portfolio --------------- ------------ --------------- --------------- --------------- Investment income Dividends $ 16,474 $ 9,681 $ 55,031 $ 21,431 $ 13,463 ----------- ----------- ----------- ---------- ---------- Expenses Insurance charges (Note 3) 2,168 447 157,594 83,978 37,807 ----------- ----------- ----------- ---------- ---------- Total expenses 2,168 447 157,594 83,978 37,807 ----------- ----------- ----------- ---------- ---------- Net investment income (loss) 14,306 9,234 (102,563) (62,547) (24,344) ----------- ----------- ----------- ---------- ---------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies - - 62,771 34,455 17,758 Investments 820 407 133,946 65,637 55,256 Net change in unrealized appreciation (depreciation) on investments (9,726) (6,168) 373,090 174,386 83,161 ----------- ----------- ----------- ---------- ---------- Net realized and unrealized gain (loss) (8,906) (5,761) 569,807 274,478 156,175 ----------- ----------- ----------- ---------- ---------- Net increase (decrease) in net assets from operations $ 5,400 $ 3,473 $ 467,244 $ 211,931 $ 131,831 ------------------------------------------ =========== =========== =========== ========== ========== JNL/ S&P Retirement JNL/S&P JNL/Select JNL/Select JNL/ Income Total Yield Balanced Money Market Select Value Portfolio Portfolio(b) Portfolio Portfolio Portfolio -------------- ------------ ------------- ------------ -------------- Investment income Dividends $ 193,684 $ 1,257 $ 11,669,144 $ 19,771,359 $ 6,943,447 -------------- ------------ ------------- ------------ -------------- Expenses Insurance charges (Note 3) 295,301 3,954 7,107,178 7,367,423 3,264,083 -------------- ------------ ------------- ------------ -------------- Total expenses 295,301 3,954 7,107,178 7,367,423 3,264,083 -------------- ------------ ------------- ------------ -------------- Net investment income (loss) (101,617) (2,697) 4,561,966 12,403,936 3,679,364 -------------- ------------ ------------- ------------ -------------- Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 59,133 - 16,627,366 - 9,383,243 Investments 211,823 (325) 17,142,857 69 9,152,761 Net change in unrealized appreciation (depreciation) on investments 674,943 (28,227) (13,593,377) (70) (12,409,774) -------------- ------------ ------------- ------------ -------------- Net realized and unrealized gain (loss) 945,899 (28,552) 20,176,846 (1) 6,126,230 -------------- ------------ ------------- ------------ -------------- Net increase (decrease) in net assets from operations $ 844,282 $ (31,249) $ 24,738,812 $ 12,403,935 $ 9,805,594 ------------------------------------------ ============== ============ ============= ============ ==============
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. 20 Jackson National Separate Account I Statements of Operations For the Year Ended December 31, 2007
JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ---------------- ------------ Investment income Dividends $ 5,282,888 $ 7,656,766 $ 8,259,753 ------------ ------------ ------------ Expenses Insurance charges (Note 3) 7,693,259 7,083,432 5,904,432 ------------ ------------ ------------ Total expenses 7,693,259 7,083,432 5,904,432 ------------ ------------ ------------ Net investment income (loss) (2,410,371) 573,334 2,355,321 ------------ ------------ ------------ Realized and unrealized gain (loss) Net realized gain (loss) on: Distributions from investment companies 30,019,160 46,198,249 17,196,638 Investments 27,862,438 24,291,003 18,930,688 Net change in unrealized appreciation (depreciation) on investments (22,585,572) (11,557,100) (44,486,679) ------------ ------------ ------------ Net realized and unrealized gain (loss) 35,296,026 58,932,152 (8,359,353) ------------ ------------ ------------ Net increase (decrease) in net assets from operations $ 32,885,655 $ 59,505,486 $ (6,004,032) ------------------------------------------ ============ ============ ============
See notes to the financial statements. 21 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
Fifth Third Fifth Third Fifth Third Fifth Third JNL/AIM Balanced Disciplined Value Mid Cap Quality Growth International VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) Growth Portfolio ---------------- ----------------- ---------------- ---------------- ---------------- Operations Net investment income (loss) $ 262 $ 160,596 $ (7,229) $ 150,687 $ 27,990 Net realized gain (loss) on investments 15,149 1,741,014 943,593 1,452,968 10,857,758 Net change in unrealized appreciation (depreciation) on investments (6,503) (1,377,439) (563,207) (676,053) 627,133 ---------- ------------ ------------ ------------- ------------- Net increase (decrease) in net assets from operations 8,908 524,171 373,157 927,602 11,512,881 ---------- ------------ ------------ ------------- ------------- Contract transactions (1) Purchase payments (Note 4) - 112,552 44,905 108,170 37,276,165 Surrenders and terminations (8,694) (264,329) (116,684) (219,111) (17,344,153) Transfers between portfolios (145,748) (8,388,952) (3,419,076) (6,837,085) 39,474,859 Net annuitization transactions - - - - 70,784 Policyholder charges (Note 3) (77) (6,223) (2,700) (5,039) (163,422) ---------- ------------ ------------ ------------- ------------- Net increase (decrease) in net assets from contract transactions (154,519) (8,546,952) (3,493,555) (6,953,065) 59,314,233 ---------- ------------ ------------ ------------- ------------- Net increase (decrease) in net assets (145,611) (8,022,781) (3,120,398) (6,025,463) 70,827,114 Net assets beginning of period 145,611 8,022,781 3,120,398 6,025,463 132,457,688 ---------- ------------ ------------ ------------- ------------- Net assets end of period $ - $ - $ - $ - $ 203,284,802 ---------------------------------------- ========== ============ ============ ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 11,321 434,095 178,550 788,606 7,661,510 Units Issued 9,911 19,139 8,183 45,765 5,486,693 Units Redeemed (21,232) (453,234) (186,733) (834,371) (2,211,782) ---------- ------------ ------------ ------------- ------------- Units Outstanding at December 31, 2007 - - - - 10,936,421 ========== ============ ============ ============= ============= JNL/Capital JNL/AIM JNL/AIM JNL/AIM Guardian Global Large Cap Real Estate Small Cap JNL/Alger Balanced Growth Portfolio Portfolio Growth Portfolio Growth Portfolio(a) Portfolio ---------------- -------------- ---------------- ------------------- --------------- Operations Net investment income (loss) $ (1,393,680) $ 1,886,988 $ (788,501) $ (380,071) $ 1,549,194 Net realized gain (loss) on investments 14,889,530 8,635,274 7,575,368 27,307,517 17,459,838 Net change in unrealized appreciation (depreciation) on investments 5,953,536 (45,025,484) (2,104,846) (16,163,940) (10,071,629) ------------- ------------- ------------ -------------- ------------- Net increase (decrease) in net assets from operations 19,449,386 (34,503,222) 4,682,021 10,763,506 8,937,403 ------------- ------------- ------------ -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 19,676,560 81,675,947 11,579,533 2,525,848 23,991,944 Surrenders and terminations (12,271,938) (10,409,521) (6,158,905) (7,522,618) (20,109,781) Transfers between portfolios 77,848,911 (54,146,991) 11,391,869 (137,550,481) 19,962,396 Net annuitization transactions (52,565) (13,641) (4,475) (43,001) (78,806) Policyholder charges (Note 3) (235,251) (237,225) (135,502) (84,073) (240,794) ------------- ------------- ------------ -------------- ------------- Net increase (decrease) in net assets from contract transactions 84,965,717 16,868,569 16,672,520 (142,674,325) 23,524,959 ------------- ------------- ------------ -------------- ------------- Net increase (decrease) in net assets 104,415,103 (17,634,653) 21,354,541 (131,910,819) 32,462,362 Net assets beginning of period 89,483,700 151,820,647 47,863,331 131,910,819 151,520,936 ------------- ------------- ------------ -------------- ------------- Net assets end of period $ 193,898,803 $ 134,185,994 $ 69,217,872 $ - $ 183,983,298 ----------------------------------------- ============= ============= ============ ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 7,209,939 9,795,414 3,368,327 6,620,731 12,673,661 Units Issued 9,418,929 9,961,160 2,159,234 259,892 5,031,893 Units Redeemed (2,900,110) (9,401,590) (1,079,715) (6,880,623) (3,177,685) ------------- ------------- ------------ -------------- ------------- Units Outstanding at December 31, 2007 13,728,758 10,354,984 4,447,846 - 14,527,869 ============= ============= ============ ============== =============
(a) The period is from January 1, 2007 through acquisition April 27, 2007. (b) The period is from January 1, 2007 through liquidation October 12, 2007. See notes to the financial statements. 22 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/Capital JNL/Capital JNL/Capital JNL/Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio(b) Portfolio Portfolio(a) Portfolio(a) ------------------ ------------------- ------------- ----------------- ------------- Operations Net investment income (loss) $ (887,907) $ (1,734) $ (2,072,396) $ (1,988,608) $ (123,919) Net realized gain (loss) on investments 3,881,639 (33) 4,975,265 2,604,318 179,675 Net change in unrealized appreciation (depreciation) on investments 15,772,849 14,930 6,828,210 21,605,879 416,474 ------------- ----------- ------------- ------------- ----------- Net increase (decrease) in net assets from operations 18,766,581 13,163 9,731,079 22,221,589 472,230 ------------- ----------- ------------- ------------- ----------- Contract transactions (1) Purchase payments (Note 4) 9,782,346 481,706 15,049,163 64,666,650 6,249,336 Surrenders and terminations (20,623,392) (2,510) (21,942,116) (7,364,921) (280,998) Transfers between portfolios 38,358,508 1,493,642 9,977,442 215,419,342 12,807,814 Net annuitization transactions 29,027 - (81,709) 5,554 - Policyholder charges (Note 3) (130,303) (72) (181,914) (152,675) (1,050) ------------- ----------- ------------- ------------- ----------- Net increase (decrease) in net assets from contract transactions 27,416,186 1,972,766 2,820,866 272,573,950 18,775,102 ------------- ----------- ------------- ------------- ----------- Net increase (decrease) in net assets 46,182,767 1,985,929 12,551,945 294,795,539 19,247,332 Net assets beginning of period 109,223,427 - 139,074,319 - - ------------- ----------- ------------- ------------- ----------- Net assets end of period $ 155,406,194 $ 1,985,929 $ 151,626,264 $ 294,795,539 $ 19,247,332 ----------------------------------------- ============= =========== ============= ============= =========== (1) Contract unit transactions Units Outstanding at December 31, 2006 5,042,099 - 5,847,479 - - Units Issued 2,083,180 201,767 1,377,658 23,059,218 2,275,599 Units Redeemed (1,354,945) (265) (1,469,057) (1,482,450) (471,176) ------------- ----------- ------------- ------------- ----------- Units Outstanding at December 31, 2007 5,770,334 201,502 5,756,080 21,576,768 1,804,423 ============= =========== ============= ============= =========== JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio(a) Portfolio(a) Income Portfolio -------------- --------------- --------------------- ------------- ---------------- Operations Net investment income (loss) $ 237,469 $ 1,045,078 $ (6,674,479) $ (86,314) $ 5,134,736 Net realized gain (loss) on investments 14,059,633 31,031,826 (1,459,472) 35,521 1,299,738 Net change in unrealized appreciation (depreciation) on investments (14,825,281) (21,772,102) (16,149,617) (1,368,554) (11,192,563) ------------- ------------- ------------- ------------ ------------- Net increase (decrease) in net assets from operations (528,179) 10,304,802 (24,283,568) (1,419,347) (4,758,089) ------------- ------------- ------------- ------------ ------------- Contract transactions (1) Purchase payments (Note 4) 5,135,626 32,737,643 545,121,808 33,340,999 123,191,819 Surrenders and terminations (8,621,231) (13,560,306) (15,808,624) (1,030,828) (7,845,390) Transfers between portfolios (3,667,843) 25,753,109 257,484,841 16,317,700 83,397,544 Net annuitization transactions (55,489) 22,259 173,765 1,226 - Policyholder charges (Note 3) (76,607) (125,780) (203,129) (14,401) (109,220) ------------- ------------- ------------- ------------ ------------- Net increase (decrease) in net assets from contract transactions (7,285,544) 44,826,925 786,768,661 48,614,696 198,634,753 ------------- ------------- ------------- ------------ ------------- Net increase (decrease) in net assets (7,813,723) 55,131,727 762,485,093 47,195,349 193,876,664 Net assets beginning of period 78,067,866 104,069,721 - - 58,427,521 ------------- ------------- ------------- ------------ ------------- Net assets end of period $ 70,254,143 $ 159,201,448 $ 762,485,093 $ 47,195,349 $ 252,304,185 ------------------------------------------ ============= ============= ============= ============ ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 4,108,529 4,595,183 - - 5,381,483 Units Issued 690,240 3,860,595 85,987,508 6,111,587 21,086,391 Units Redeemed (1,064,113) (2,078,130) (9,175,836) (1,345,152) (3,253,268) ------------- ------------- ------------- ------------ ------------- Units Outstanding at December 31, 2007 3,734,656 6,377,648 76,811,672 4,766,435 23,214,606 ============= ============= ============= ============ =============
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. 23 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/Franklin JNL/ JNL/ JNL/ JNL/Franklin Templeton Goldman Sachs Goldman Sachs Goldman Sachs Templeton Mutual Small Cap Core Plus Mid Cap Short Duration Shares Portfolio(a) Value Portfolio Bond Portfolio Value Portfolio Bond Portfolio ------------------- --------------- --------------- --------------- -------------- Operations Net investment income (loss) $ (658,119) $ 619,786 $ 5,372,567 $ 584,570 $ 1,072,626 Net realized gain (loss) on investments (123,619) 3,194,668 3,488,590 4,090,664 1,129,388 Net change in unrealized appreciation (depreciation) on investments (1,762,683) (9,076,938) 6,469,545 (6,143,027) (743,213) ------------ ------------ ------------- ------------ ------------ Net increase (decrease) in net assets from operations (2,544,421) (5,262,484) 15,330,702 (1,467,793) 1,458,801 ------------ ------------ ------------- ------------ ------------ Contract transactions (1) Purchase payments (Note 4) 47,985,009 22,466,941 58,392,394 31,299,203 18,724,419 Surrenders and terminations (1,671,410) (3,021,911) (27,078,418) (4,963,172) (4,181,497) Transfers between portfolios 27,302,183 (2,296,555) 32,443,998 9,984,571 24,220,215 Net annuitization transactions - (6,670) 70,808 (19,519) (45,067) Policyholder charges (Note 3) (24,032) (55,828) (414,408) (75,916) (47,825) ------------ ------------ ------------- ------------ ------------ Net increase (decrease) in net assets from contract transactions 73,591,750 17,085,977 63,414,374 36,225,167 38,670,245 ------------ ------------ ------------- ------------ ------------ Net increase (decrease) in net assets 71,047,329 11,823,493 78,745,076 34,757,374 40,129,046 Net assets beginning of period - 45,326,950 251,052,512 54,651,795 25,836,573 ------------ ------------ ------------- ------------ ------------ Net assets end of period $ 71,047,329 $ 57,150,443 $ 329,797,588 $ 89,409,169 $ 65,965,619 ------------------------------------------- ============ ============ ============= ============ ============ (1) Contract unit transactions Units Outstanding at December 31, 2006 - 3,594,731 13,343,006 4,263,977 2,533,872 Units Issued 8,439,205 3,368,958 6,386,022 5,413,661 8,683,154 Units Redeemed (1,232,807) (2,051,730) (3,084,906) (2,775,165) (4,934,402) ------------ ------------ ------------- ------------ ------------ Units Outstanding at December 31, 2007 7,206,398 4,911,959 16,644,122 6,902,473 6,282,624 ============ ============ ============= ============ ============ JNL/JPMorgan JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard JNL/Lazard International MidCap Growth & Quality Bond Emerging Markets Mid Cap Value Portfolio Portfolio Portfolio Portfolio Value Portfolio --------------- -------------- --------------- ---------------- --------------- Operations Net investment income (loss) $ 14,331,823 $ (1,773,738) $ 3,880,694 $ (1,517,084) $ 8,511,191 Net realized gain (loss) on investments 43,473,940 9,645,674 1,622,094 5,736,070 24,940,060 Net change in unrealized appreciation (depreciation) on investments (27,308,047) (1,042,161) 2,848,679 17,674,225 (45,994,972) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from operations 30,497,716 6,829,775 8,351,467 21,893,211 (12,543,721) ------------- ------------- ------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 105,791,282 9,118,623 21,080,713 56,906,048 46,216,694 Surrenders and terminations (27,051,059) (19,187,153) (21,976,374) (7,400,892) (18,868,192) Transfers between portfolios (5,521,597) 23,686,418 16,157,464 142,450,471 14,431,628 Net annuitization transactions (44,867) (12,498) (100,242) 18,714 (24,632) Policyholder charges (Note 3) (454,572) (143,057) (175,669) (172,692) (222,068) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions 72,719,187 13,462,333 14,985,892 191,801,649 41,533,430 ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets 103,216,903 20,292,108 23,337,359 213,694,860 28,989,709 Net assets beginning of period 293,190,252 112,750,275 167,521,342 30,065,142 185,662,219 ------------- ------------- ------------- ------------- ------------- Net assets end of period $ 396,407,155 $ 133,042,383 $ 190,858,701 $ 243,760,002 $ 214,651,928 ---------------------------------------------- ============= ============= ============= ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 18,029,849 5,728,690 10,828,158 2,766,326 9,360,512 Units Issued 12,299,038 2,183,448 4,877,637 17,576,391 5,044,257 Units Redeemed (7,770,854) (1,789,990) (3,926,428) (3,021,824) (3,198,657) ------------- ------------- ------------- ------------- ------------- Units Outstanding at December 31, 2007 22,558,033 6,122,148 11,779,367 17,320,893 11,206,112 ============= ============= ============= ============= =============
(a) Commencement of operations January 16, 2007. See notes to the financial statements. 24 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/Lazard JNL/MCM JNL/MCM JNL/MCM Small Cap 10 x 10 JNL/MCM Bond Index Communications Value Portfolio Portfolio(a) 25 Portfolio Portfolio Sector Portfolio --------------- ------------ ------------- ------------- ---------------- Operations Net investment income (loss) $ 2,692,300 $ (340,918) $ (281,223) $ 7,255,243 $ 2,108,193 Net realized gain (loss) on investments 4,072,123 (1,098,329) 43,647,723 2,710,855 5,588,346 Net change in unrealized appreciation (depreciation) on investments (16,788,108) (1,437,220) (76,007,512) 2,999,704 (9,049,141) ------------- ------------ ------------- ------------- ------------ Net increase (decrease) in net assets from operations (10,023,685) (2,876,467) (32,641,012) 12,965,802 (1,352,602) ------------- ------------ ------------- ------------- ------------ Contract transactions (1) Purchase payments (Note 4) 16,906,270 37,090,579 126,106,694 58,704,746 25,537,646 Surrenders and terminations (12,575,988) (1,324,951) (45,067,442) (17,786,346) (8,223,650) Transfers between portfolios (10,224,322) 18,024,902 (64,962,251) 18,797,532 13,145,068 Net annuitization transactions (63,220) - (360,188) (84,167) (23,679) Policyholder charges (Note 3) (211,841) (49,904) (780,284) (304,544) (142,843) ------------- ------------ ------------- ------------- ------------ Net increase (decrease) in net assets from contract transactions (6,169,101) 53,740,626 14,936,529 59,327,221 30,292,542 ------------- ------------ ------------- ------------- ------------ Net increase (decrease) in net assets (16,192,786) 50,864,159 (17,704,483) 72,293,023 28,939,940 Net assets beginning of period 127,361,238 - 707,448,757 231,058,589 53,065,680 ------------- ------------ ------------- ------------- ------------ Net assets end of period $ 111,168,452 $ 50,864,159 $ 689,744,274 $ 303,351,612 $ 82,005,620 ------------------------------------- ============= ============ ============= ============= ============ (1) Contract unit transactions Units Outstanding at December 31, 2006 7,492,738 - 56,751,709 20,618,779 8,875,777 Units Issued 1,791,576 7,573,223 14,374,885 10,496,712 11,752,776 Units Redeemed (2,154,315) (2,385,667) (13,246,013) (5,249,643) (7,203,769) ------------- ------------ ------------- ------------- ------------ Units Outstanding at December 31, 2007 7,129,999 5,187,556 57,880,581 25,865,848 13,424,784 ============= ============ ============= ============= ============ JNL/MCM JNL/MCM JNL/MCM JNL/MCM Enhanced JNL/MCM Consumer Brands Dow 10 Dow Dividend S&P 500 Stock Financial Sector Portfolio Portfolio Portfolio Index Portfolio Sector Portfolio ---------------- -------------- ------------- --------------- ---------------- Operations Net investment income (loss) $ (267,385) $ (14,690,144) $ (6,225,566) $ (73,985) $ (82,046) Net realized gain (loss) on investments 2,509,855 63,033,465 6,821,710 4,173,512 4,740,076 Net change in unrealized appreciation (depreciation) on investments (4,009,383) (53,962,671) (51,702,747) (2,806,274) (16,031,535) ------------ -------------- ------------- ------------ ------------- Net increase (decrease) in net assets from operations (1,766,913) (5,619,350) (51,106,603) 1,293,253 (11,373,505) ------------ -------------- ------------- ------------ ------------- Contract transactions (1) Purchase payments (Note 4) 3,867,335 152,040,211 182,446,523 7,977,654 14,426,324 Surrenders and terminations (2,013,712) (54,586,307) (15,495,198) (6,434,515) (5,333,108) Transfers between portfolios (4,813,257) (123,111,741) (12,985,057) 9,956,682 (12,013,548) Net annuitization transactions (5,063) (434,823) - (163,857) (12,677) Policyholder charges (Note 3) (31,497) (882,473) (247,130) (102,161) (73,094) ------------ -------------- ------------- ------------ ------------- Net increase (decrease) in net assets from contract transactions (2,996,194) (26,975,133) 153,719,138 11,233,803 (3,006,103) ------------ -------------- ------------- ------------ ------------- Net increase (decrease) in net assets (4,763,107) (32,594,483) 102,612,535 12,527,056 (14,379,608) Net assets beginning of period 22,721,925 848,141,108 278,475,408 66,622,258 66,019,563 ------------ -------------- ------------- ------------ ------------- Net assets end of period $ 17,958,818 $ 815,546,625 $ 381,087,943 $ 79,149,314 $ 51,639,955 -------------------------------------- ============ ============== ============= ============ ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 1,966,887 75,603,513 23,592,929 6,530,982 4,510,969 Units Issued 1,698,687 18,045,288 22,984,684 3,919,761 2,866,146 Units Redeemed (1,946,942) (20,510,165) (10,085,387) (2,658,055) (3,006,596) ------------ -------------- ------------- ------------ ------------- Units Outstanding at December 31, 2007 1,718,632 73,138,636 36,492,226 7,792,688 4,370,519 ============ ============== ============= ============ =============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. 25 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Global 15 Healthcare Index 5 International JNL 5 Portfolio Sector Portfolio Portfolio(a) Index Portfolio Portfolio --------------- ---------------- ------------ --------------- --------------- Operations Net investment income (loss) $ (21,447,314) $ (855,758) $ (142,403) $ 5,824,151 $ 19,806,817 Net realized gain (loss) on investments 135,389,159 7,305,423 6,713 38,814,966 127,294,599 Net change in unrealized appreciation (depreciation) on investments (14,977,777) (1,473,505) (136,977) (4,802,609) (220,621,793) --------------- ------------- ------------ ------------- --------------- Net increase (decrease) in net assets from operations 98,964,068 4,976,160 (272,667) 39,836,508 (73,520,377) --------------- ------------- ------------ ------------- --------------- Contract transactions (1) Purchase payments (Note 4) 264,328,520 19,143,145 23,902,158 110,365,581 2,075,357,087 Surrenders and terminations (81,481,715) (7,832,507) (286,347) (39,264,474) (202,388,500) Transfers between portfolios (92,333,996) 9,662,910 4,582,787 (12,464,537) (96,638,194) Net annuitization transactions (476,309) (34,835) - (182,869) (402,314) Policyholder charges (Note 3) (1,467,074) (115,333) (6,263) (808,241) (3,942,550) --------------- ------------- ------------ ------------- --------------- Net increase (decrease) in net assets from contract transactions 88,569,426 20,823,380 28,192,335 57,645,460 1,771,985,529 --------------- ------------- ------------ ------------- --------------- Net increase (decrease) in net assets 187,533,494 25,799,540 27,919,668 97,481,968 1,698,465,152 Net assets beginning of period 1,120,821,026 80,719,177 - 457,400,655 3,510,402,051 --------------- ------------- ------------ ------------- --------------- Net assets end of period $ 1,308,354,520 $ 106,518,717 $ 27,919,668 $ 554,882,623 $ 5,208,867,203 -------------------------------------- =============== ============= ============ ============= =============== (1) Contract unit transactions Units Outstanding at December 31, 2006 64,546,540 6,873,027 - 24,460,537 253,347,477 Units Issued 21,177,267 5,429,153 3,515,370 9,300,771 179,431,588 Units Redeemed (16,778,415) (3,724,742) (691,700) (6,360,144) (56,020,681) --------------- ------------- ------------ ------------- --------------- Units Outstanding at December 31, 2007 68,945,392 8,577,438 2,823,670 27,401,164 376,758,384 =============== ============= ============ ============= =============== JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL Optimized Nasdaq 25 NYSE International Oil & Gas S&P 10 5 Portfolio Portfolio 25 Portfolio(a) Sector Portfolio Portfolio ------------- ------------- ------------------ ---------------- -------------- Operations Net investment income (loss) $ 3,558,270 $ (1,437,827) $ 1,629,270 $ (2,287,984) $ (14,368,540) Net realized gain (loss) on investments 4,529,586 4,733,275 292,811 51,190,641 53,400,033 Net change in unrealized appreciation (depreciation) on investments 4,170,852 8,480,076 941,226 45,989,319 (12,413,179) ------------- ------------- ------------ ------------- -------------- Net increase (decrease) in net assets from operations 12,258,708 11,775,524 2,863,307 94,891,976 26,618,314 ------------- ------------- ------------ ------------- -------------- Contract transactions (1) Purchase payments (Note 4) 150,212,680 23,055,701 25,481,852 94,618,388 141,474,610 Surrenders and terminations (5,916,621) (4,696,561) (716,593) (28,044,161) (54,985,186) Transfers between portfolios 135,473,862 10,961,802 35,943,513 898,800 (81,478,092) Net annuitization transactions (76,749) (1,047) - (117,201) (433,900) Policyholder charges (Note 3) (94,735) (106,667) (11,091) (475,525) (950,022) ------------- ------------- ------------ ------------- -------------- Net increase (decrease) in net assets from contract transactions 279,598,437 29,213,228 60,697,681 66,880,301 3,627,410 ------------- ------------- ------------ ------------- -------------- Net increase (decrease) in net assets 291,857,145 40,988,752 63,560,988 161,772,277 30,245,724 Net assets beginning of period 83,942,308 65,395,784 - 282,035,934 803,247,319 ------------- ------------- ------------ ------------- -------------- Net assets end of period $ 375,799,453 $ 106,384,536 $ 63,560,988 $ 443,808,211 $ 833,493,043 -------------------------------------- ============= ============= ============ ============= ============== (1) Contract unit transactions Units Outstanding at December 31, 2006 7,833,912 6,035,415 - 10,353,209 58,733,169 Units Issued 25,903,906 5,871,233 6,158,768 7,491,179 14,986,975 Units Redeemed (2,318,078) (3,513,487) (654,483) (5,615,195) (14,747,608) ------------- ------------- ------------ ------------- -------------- Units Outstanding at December 31, 2007 31,419,740 8,393,161 5,504,285 12,229,193 58,972,536 ============= ============= ============ ============= ==============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. 26 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small Cap Portfolio Index Portfolio Index Portfolio 60 Portfolio(a) Portfolio ------------ --------------- --------------- --------------- ---------------- Operations Net investment income (loss) $ (317,030) $ (2,137,282) $ (1,652,443) $ 723,745 $ 44,062,425 Net realized gain (loss) on investments 359,492 46,202,148 26,185,634 (547,966) 40,248,040 Net change in unrealized appreciation (depreciation) on investments 877,747 (25,638,814) (8,770,935) (3,003,484) (168,414,527) ------------ ------------- ------------- ------------ -------------- Net increase (decrease) in net assets from operations 920,209 18,426,052 15,762,256 (2,827,705) (84,104,062) ------------ ------------- ------------- ------------ -------------- Contract transactions (1) Purchase payments (Note 4) 8,220,561 69,233,832 94,942,711 18,253,236 121,869,827 Surrenders and terminations (874,477) (27,748,642) (37,340,529) (433,012) (41,846,110) Transfers between portfolios (3,231,591) 5,192,626 (17,249,831) 17,460,910 (66,531,018) Net annuitization transactions - (91,489) (519,583) - (309,429) Policyholder charges (Note 3) (12,435) (516,325) (612,711) (6,569) (726,552) ------------ ------------- ------------- ------------ -------------- Net increase (decrease) in net assets from contract transactions 4,102,058 46,070,002 39,220,057 35,274,565 12,456,718 ------------ ------------- ------------- ------------ -------------- Net increase (decrease) in net assets 5,022,267 64,496,054 54,982,313 32,446,860 (71,647,344) Net assets beginning of period 17,703,535 349,594,359 506,063,769 - 700,092,520 ------------ ------------- ------------- ------------ -------------- Net assets end of period $ 22,725,802 $ 414,090,413 $ 561,046,082 $ 32,446,860 $ 628,445,176 -------------------------------------- ============ ============= ============= ============ ============== (1) Contract unit transactions Units Outstanding at December 31, 2006 1,737,156 22,952,423 41,376,318 - 33,388,482 Units Issued 1,428,408 8,562,276 11,297,796 4,363,229 9,707,004 Units Redeemed (1,054,102) (5,734,918) (8,084,332) (686,942) (9,083,022) ------------ ------------- ------------- ------------ -------------- Units Outstanding at December 31, 2007 2,111,462 25,779,781 44,589,782 3,676,287 34,012,464 ============ ============= ============= ============ ============== JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio VIP Portfolio Portfolio --------------- ---------------- --------------- -------------- ------------- Operations Net investment income (loss) $ (1,210,648) $ (1,115,576) $ (15,953,667) $ 5,660,821 $ (1,158,995) Net realized gain (loss) on investments 26,515,006 5,033,485 36,043,205 29,638,356 25,774,993 Net change in unrealized appreciation (depreciation) on investments (39,012,383) 2,684,411 124,250,063 959,296 (16,612,209) ------------- ------------ --------------- -------------- ------------- Net increase (decrease) in net assets from operations (13,708,025) 6,602,320 144,339,601 36,258,473 8,003,789 ------------- ------------ --------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 59,272,887 18,860,684 276,153,514 93,088,503 34,407,604 Surrenders and terminations (21,227,672) (6,881,879) (46,780,661) (19,226,556) (15,280,005) Transfers between portfolios (17,678,136) 21,626,354 (95,650,675) (100,627,786) (11,226,738) Net annuitization transactions (88,826) (16,579) (104,020) (28,695) (76,272) Policyholder charges (Note 3) (391,241) (113,713) (1,017,806) (392,844) (171,737) ------------- ------------ --------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions 19,887,012 33,474,867 132,600,352 (27,187,378) 7,652,852 ------------- ------------ --------------- -------------- ------------- Net increase (decrease) in net assets 6,178,987 40,077,187 276,939,953 9,071,095 15,656,641 Net assets beginning of period 310,494,181 59,686,210 822,800,037 413,219,233 180,941,943 ------------- ------------ --------------- -------------- ------------- Net assets end of period $ 316,673,168 $ 99,763,397 $ 1,099,739,990 $ 422,290,328 $ 196,598,584 -------------------------------------- ============= ============ =============== ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 19,902,842 9,646,385 54,436,545 31,350,619 12,505,159 Units Issued 6,351,425 10,809,867 26,646,716 10,270,211 3,884,356 Units Redeemed (5,108,696) (5,984,256) (19,152,489) (12,201,413) (3,388,014) ------------- ------------ --------------- -------------- ------------- Units Outstanding at December 31, 2007 21,145,571 14,471,996 61,930,772 29,419,417 13,001,501 ============= ============ =============== ============== =============
(a) Commencement of operations April 30, 2007. See notes to the financial statements. 27 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/ JNL/ JNL/ JNL/PIMCO JNL/PIMCO PPM America PPM America Oppenheimer Real Return Total Return Core Equity High Yield Growth Portfolio(b) Portfolio(a) Bond Portfolio Portfolio Bond Portfolio ------------------- ------------ -------------- ------------- -------------- Operations Net investment income (loss) $ 2,248,627 $ (354,022) $ 17,912,089 $ (1,043,505) $ 18,025,021 Net realized gain (loss) on investments 3,176,617 426,528 1,401,147 3,921,675 (2,619,642) Net change in unrealized appreciation (depreciation) on investments (3,028,256) 2,500,358 14,001,736 (9,909,969) (24,910,400) -------------- ------------ ------------- ------------- ------------- Net increase (decrease) in net assets from operations 2,396,988 2,572,864 33,314,972 (7,031,799) (9,505,021) -------------- ------------ ------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 1,594,241 18,024,272 104,442,860 2,505,808 54,642,424 Surrenders and terminations (1,064,746) (920,402) (36,890,588) (16,914,810) (30,706,181) Transfers between portfolios (29,870,530) 55,727,013 62,602,771 (5,857,469) (30,611,057) Net annuitization transactions - - (100,258) (45,290) (69,497) Policyholder charges (Note 3) (16,456) (13,973) (537,021) (104,207) (385,249) -------------- ------------ ------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions (29,357,491) 72,816,910 129,517,764 (20,415,968) (7,129,560) -------------- ------------ ------------- ------------- ------------- Net increase (decrease) in net assets (26,960,503) 75,389,774 162,832,736 (27,447,767) (16,634,581) Net assets beginning of period 26,960,503 - 435,178,815 103,218,517 284,124,305 -------------- ------------ ------------- ------------- ------------- Net assets end of period $ - $ 75,389,774 $ 598,011,551 $ 75,770,750 $ 267,489,724 ------------------------------------------ ============== ============ ============= ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 2,995,289 - 31,702,356 5,014,106 21,538,502 Units Issued 1,411,124 8,645,021 14,710,661 266,870 12,083,351 Units Redeemed (4,406,413) (1,738,678) (5,809,815) (1,267,482) (12,975,991) -------------- ------------ ------------- ------------- ------------- Units Outstanding at December 31, 2007 - 6,906,343 40,603,202 4,013,494 20,645,862 ============== ============ ============= ============= ============= JNL/ JNL/S&P PPM America JNL/Putnam Competitive JNL/S&P Value Equity Midcap JNL/S&P 4 Advantage Disciplined Portfolio Growth Portfolio(d) Portfolio(c) Portfolio(c) Growth Portfolio(a) ------------- ------------------- ------------ ------------ ------------------- Operations Net investment income (loss) $ (1,251,268) $ (471,602) $ (8,855) $ (2,052) $ (92,012) Net realized gain (loss) on investments 10,428,461 5,012,375 (371) (445) 13,540 Net change in unrealized appreciation (depreciation) on investments (17,385,292) (4,798,547) (214,710) (43,979) 19,977 ------------- ------------- ------------ ------------ ------------ Net increase (decrease) in net assets from operations (8,208,099) (257,774) (223,936) (46,476) (58,495) ------------- ------------- ------------ ------------ ------------ Contract transactions (1) Purchase payments (Note 4) 6,284,840 3,244,505 1,701,635 76,290 12,225,919 Surrenders and terminations (27,032,338) (3,228,827) (21,373) (7,769) (103,343) Transfers between portfolios (6,371,186) (31,236,677) 20,565,515 6,208,968 3,618,863 Net annuitization transactions (56,891) - - - - Policyholder charges (Note 3) (244,714) (56,356) (59) (124) (209) ------------- -------------- ------------ ------------ ------------ Net increase (decrease) in net assets from contract transactions (27,420,289) (31,277,355) 22,245,718 6,277,365 15,741,230 ------------- ------------- ------------ ------------ ------------ Net increase (decrease) in net assets (35,628,388) (31,535,129) 22,021,782 6,230,889 15,682,735 Net assets beginning of period 154,996,981 31,535,129 - - - ------------- ------------- ------------ ------------ ------------ Net assets end of period $ 119,368,593 $ - $ 22,021,782 $ 6,230,889 $ 15,682,735 ------------------------------------------ ============= ============= ============ ============ ============ (1) Contract unit transactions Units Outstanding at December 31, 2006 7,581,869 3,662,997 - - - Units Issued 702,222 1,159,472 2,225,813 629,519 1,553,860 Units Redeemed (2,039,329) (4,822,469) (4,990) (805) (57,753) ------------- ------------- ------------ ------------ ------------ Units Outstanding at December 31, 2007 6,244,762 - 2,220,823 628,714 1,496,107 ============= ============= ============ ============ ============
(a) Commencement of operations January 16, 2007. (b) The period is from January 1, 2007 through acquisition April 27, 2007. (c) Commencement of operations December 3, 2007. (d) The period is from January 1, 2007 through acquisition November 30, 2007. See notes to the financial statements. 28 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/S&P JNL/S&P JNL/S&P Disciplined JNL/S&P Growth Disciplined Moderate Dividend Income Retirement JNL/S&P Moderate Growth & Growth Strategy Intrinsic Value Portfolio(a) Portfolio(a) Portfolio(b) Portfolio(a) Portfolio(b) ------------ ------------ --------------- ------------- --------------- Operations Net investment income (loss) $ (186,515) $ (257,160) $ 49 $ 14,356 $ (1,596) Net realized gain (loss) on investments 49,958 84,569 (1) 1,356 (672) Net change in unrealized appreciation (depreciation) on investments 410,881 134,757 (4,333) 3,395 (64,422) ------------ ------------ --------- --------- ------------ Net increase (decrease) in net assets from operations 274,324 (37,834) (4,285) 19,107 (66,690) ------------ ------------ --------- --------- ------------ Contract transactions (1) Purchase payments (Note 4) 22,136,769 31,118,891 241,052 676,041 141,774 Surrenders and terminations (346,990) (383,633) (806) (10,533) (11,370) Transfers between portfolios 11,527,145 7,706,114 501,753 130,679 11,758,878 Net annuitization transactions - - - - - Policyholder charges (Note 3) (656) (3,801) (1) - (150) ------------ ------------ --------- --------- ------------ Net increase (decrease) in net assets from contract transactions 33,316,268 38,437,571 741,998 796,187 11,889,132 ------------ ------------ --------- --------- ------------ Net increase (decrease) in net assets 33,590,592 38,399,737 737,713 815,294 11,822,442 Net assets beginning of period - - - - - ------------ ------------ --------- --------- ------------ Net assets end of period $ 33,590,592 $ 38,399,737 $ 737,713 $ 815,294 $ 11,822,442 ------------------------------------------ ============ ============ ========= ========= ============ (1) Contract unit transactions Units Outstanding at December 31, 2006 - - - - - Units Issued 3,468,691 4,138,063 75,650 78,848 1,193,826 Units Redeemed (279,029) (479,692) (82) (2,601) (1,169) ------------ ------------ --------- --------- ------------ Units Outstanding at December 31, 2007 3,189,662 3,658,371 75,568 76,247 1,192,657 ============ ============ ========= ========= ============ JNL/ JNL/ JNL/ JNL/ JNL/ S&P Managed S&P Managed S&P Managed S&P Managed S&P Managed Moderate Aggressive Conservative Growth Moderate Growth Growth Portfolio Portfolio Portfolio Portfolio Portfolio ---------------- ------------- --------------- ------------- --------------- Operations Net investment income (loss) $ 1,887,312 $ 2,463,427 $ 582,195 $ 5,187,035 $ 6,085,219 Net realized gain (loss) on investments 31,797,530 9,723,953 97,819,719 18,207,140 95,289,761 Net change in unrealized appreciation (depreciation) on investments 8,450,433 (3,893,071) (24,453,338) (3,465,622) (30,290,631) -------------- ------------- --------------- ------------- --------------- Net increase (decrease) in net assets from operations 42,135,275 8,294,309 73,948,576 19,928,553 71,084,349 -------------- ------------- --------------- ------------- --------------- Contract transactions (1) Purchase payments (Note 4) 73,782,275 65,721,365 174,085,833 146,253,778 263,996,233 Surrenders and terminations (62,655,490) (16,961,580) (104,021,484) (27,556,653) (95,161,497) Transfers between portfolios (23,107,186) 57,661,228 (22,769,708) 53,778,049 19,238,252 Net annuitization transactions (137,748) 9,973 (374) (289,356) (54,143) Policyholder charges (Note 3) (925,999) (251,866) (1,340,944) (427,557) (1,097,950) -------------- ------------- --------------- ------------- --------------- Net increase (decrease) in net assets from contract transactions (13,044,148) 106,179,120 45,953,323 171,758,261 186,920,895 -------------- ------------- --------------- ------------- --------------- Net increase (decrease) in net assets 29,091,127 114,473,429 119,901,899 191,686,814 258,005,244 Net assets beginning of period 577,627,945 126,363,762 1,081,171,017 284,241,069 993,884,149 -------------- ------------- --------------- ------------- --------------- Net assets end of period $ 606,719,072 $ 240,837,191 $ 1,201,072,916 $ 475,927,883 $ 1,251,889,393 ------------------------------------------ ============== ============= =============== ============= =============== (1) Contract unit transactions Units Outstanding at December 31, 2006 38,010,553 11,360,944 71,759,942 24,211,376 69,732,022 Units Issued 6,806,834 16,018,376 14,790,673 19,949,976 25,300,257 Units Redeemed (7,607,478) (6,628,022) (11,900,250) (5,881,695) (12,802,558) -------------- ------------- --------------- ------------- --------------- Units Outstanding at December 31, 2007 37,209,909 20,751,298 74,650,365 38,279,657 82,229,721 ============== ============= =============== ============= ===============
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. 29 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/S&P JNL/S&P Moderate Moderate Growth Retirement JNL/S&P JNL/S&P JNL/S&P Retirement Strategy Strategy Retirement 2015 Retirement 2020 Retirement 2025 Portfolio(a) Portfolio(a) Portfolio Portfolio Portfolio ------------------- ----------------------------- --------------- --------------- Operations Net investment income (loss) $ 14,306 $ 9,234 $ (102,563) $ (62,547) $ (24,344) Net realized gain (loss) on investments 820 407 196,717 100,092 73,014 Net change in unrealized appreciation (depreciation) on investments (9,726) (6,168) 373,090 174,386 83,161 --------- --------- ------------ ----------- ----------- Net increase (decrease) in net assets from operations 5,400 3,473 467,244 211,931 131,831 --------- --------- ------------ ----------- ----------- Contract transactions (1) Purchase payments (Note 4) 247,324 54,631 6,951,836 5,000,426 2,248,127 Surrenders and terminations (2,384) (246) (265,140) (59,179) (103,706) Transfers between portfolios 422,975 237,095 4,107,076 1,361,702 1,564,089 Net annuitization transactions - - - - - Policyholder charges (Note 3) - - (5,267) (1,105) (3,045) --------- --------- ------------ ----------- ----------- Net increase (decrease) in net assets from contract transactions 667,915 291,480 10,788,505 6,301,844 3,705,465 --------- --------- ------------ ----------- ----------- Net increase (decrease) in net assets 673,315 294,953 11,255,749 6,513,775 3,837,296 Net assets beginning of period - - 4,568,016 1,847,130 939,283 --------- --------- ------------ ----------- ----------- Net assets end of period $ 673,315 $ 294,953 $ 15,823,765 $ 8,360,905 $ 4,776,579 ------------------------------------------ ========= ========= ============ =========== =========== (1) Contract unit transactions Units Outstanding at December 31, 2006 - - 421,940 168,274 85,050 Units Issued 79,576 29,779 1,135,220 628,607 390,392 Units Redeemed (16,138) (1,685) (198,240) (86,473) (75,193) --------- --------- ------------ ----------- ----------- Units Outstanding at December 31, 2007 63,438 28,094 1,358,920 710,408 400,249 ========= ========= ============ =========== =========== JNL/ S&P Retirement JNL/S&P JNL/Select JNL/Select JNL/ Income Total Yield Balanced Money Market Select Value Portfolio Portfolio(b) Portfolio Portfolio Portfolio -------------- ------------ ------------- -------------- ------------- Operations Net investment income (loss) $ (101,617) $ (2,697) $ 4,561,966 $ 12,403,936 $ 3,679,364 Net realized gain (loss) on investments 270,956 (325) 33,770,223 69 18,536,004 Net change in unrealized appreciation (depreciation) on investments 674,943 (28,227) (13,593,377) (70) (12,409,774) ------------- ----------- ------------- -------------- ------------- Net increase (decrease) in net assets from operations 844,282 (31,249) 24,738,812 12,403,935 9,805,594 ------------- ----------- ------------- -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 11,508,905 54,987 76,979,670 337,643,558 52,206,684 Surrenders and terminations (1,239,966) (6,303) (51,075,386) (151,555,312) (15,555,787) Transfers between portfolios 9,724,890 3,248,060 34,180,698 177,248,824 5,322,514 Net annuitization transactions - - (177,212) (2,154,797) (80,727) Policyholder charges (Note 3) (14,619) (148) (392,849) (2,774,097) (217,302) ------------- ----------- ------------- -------------- ------------- Net increase (decrease) in net assets from contract transactions 19,979,210 3,296,596 59,514,921 358,408,176 41,675,382 ------------- ----------- ------------- -------------- ------------- Net increase (decrease) in net assets 20,823,492 3,265,347 84,253,733 370,812,111 51,480,976 Net assets beginning of period 8,220,346 - 413,630,121 247,194,016 165,653,911 ------------- ----------- ------------- -------------- ------------- Net assets end of period $ 29,043,838 $ 3,265,347 $ 497,883,854 $ 618,006,127 $ 217,134,887 ------------------------------------------ ============= =========== ============= ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 777,190 - 16,394,751 20,136,534 8,007,405 Units Issued 2,204,104 325,288 5,453,130 77,558,867 4,732,228 Units Redeemed (365,995) (677) (3,365,648) (48,798,180) (2,842,340) ------------- ----------- ------------- -------------- ------------- Units Outstanding at December 31, 2007 2,615,299 324,611 18,482,233 48,897,221 9,897,293 ============= =========== ============= ============== =============
(a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. See notes to the financial statements. 30 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2007
JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ---------------- ------------- Operations Net investment income (loss) $ (2,410,371) $ 573,334 $ 2,355,321 Net realized gain (loss) on investments 57,881,598 70,489,252 36,127,326 Net change in unrealized appreciation (depreciation) on investments (22,585,572) (11,557,100) (44,486,679) -------------- ------------- ------------- Net increase (decrease) in net assets from operations 32,885,655 59,505,486 (6,004,032) -------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 55,835,900 72,134,647 51,425,257 Surrenders and terminations (63,457,116) (52,346,138) (34,907,068) Transfers between portfolios 167,383,850 36,159,732 33,305,990 Net annuitization transactions (219,229) (188,861) (20,071) Policyholder charges (Note 3) (507,552) (470,166) (391,160) -------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions 159,035,853 55,289,214 49,412,948 -------------- ------------- ------------- Net increase (decrease) in net assets 191,921,508 114,794,700 43,408,916 Net assets beginning of period 366,621,487 395,853,561 323,912,532 -------------- ------------- ------------- Net assets end of period $ 558,542,995 $ 510,648,261 $ 367,321,448 ------------------------------------------ ============== ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2006 13,352,032 11,279,876 20,028,033 Units Issued 8,918,494 3,602,287 8,299,692 Units Redeemed (3,700,329) (2,606,919) (5,390,041) -------------- ------------- ------------- Units Outstanding at December 31, 2007 18,570,197 12,275,244 22,937,684 ============== ============= =============
See notes to the financial statements. 31 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2006
Fifth Fifth Third Fifth Fifth Third JNL/ Third Balanced Disciplined Value Third Mid Cap Quality Growth AIM Large Cap VIP Portfolio VIP Portfolio VIP Portfolio VIP Portfolio Growth Portfolio -------------- ----------------- ---------------- ---------------- ---------------- Operations Net investment income (loss) $ 978 $ 102,562 $ (49,352) $ (51,372) $ (1,338,94) Net realized gain (loss) on investments 1,450 202,435 73,543 72,232 4,243,407 Net change in unrealized appreciation (depreciation) on investments 7,282 917,126 207,303 158,225 2,313,435 --------- ----------- ----------- ----------- ------------ Net increase (decrease) in net assets from operations 9,710 1,222,123 231,494 179,085 5,217,902 --------- ----------- ----------- ----------- ------------ Contract transactions (1) Purchase payments (Note 4) 11,942 967,177 277,155 732,370 16,714,896 Surrenders and terminations (6,558) (436,719 (157,13) (298,243) (7,143,66) Transfers between portfolios (7,710) (57,999 51,590 167,355 (2,424,02) Net annuitization transactions - - - - 18,155 Policyholder charges (Note 3) (419) (11,148 (5,117) (10,053) (164,303) --------- ----------- ----------- ----------- ------------ Net increase (decrease) in net assets from contract transactions (2,745) 461,311 166,491 591,429 7,001,059 --------- ----------- ----------- ----------- ------------ Net increase (decrease) in net assets 6,965 1,683,434 397,985 770,514 12,218,961 Net assets beginning of period 138,646 6,339,347 2,722,413 5,254,949 77,264,739 --------- ----------- ----------- ----------- ------------ Net assets end of period $ 145,611 $ 8,022,781 $ 3,120,398 $ 6,025,463 $ 89,483,700 --------------------------------- ========= =========== =========== =========== ============ (1) Contract unit transactions Units Outstanding at December 31, 2005 11,435 406,265 168,609 708,532 6,605,162 Units Issued 2,736 84,394 30,486 158,624 2,685,350 Units Redeemed (2,850) (56,564) (20,545) (78,550) (2,080,573) --------- ----------- ----------- ----------- ------------ Units Outstanding at December 31, 2006 11,321 434,095 178,550 788,606 7,209,939 ========= =========== =========== =========== ============ JNL/AIM JNL/ JNL/Eagle Real Estate AIM Small Cap JNL/Alge JNL/Eagle Core SmallCap Portfolio Growth Portfolio Growth Portfolio Equity Portfolio Equity Portfolio -------------- ----------------- ---------------- ---------------- ---------------- Operations Net investment income (loss) $ (113,186) $ (779,075) $ (2,091,782) $ (1,169,264) $ (1,384,507) Net realized gain (loss) on investments 3,384,623 7,395,141 4,492,946 2,737,894 16,315,500 Net change in unrealized appreciation (depreciation) on investments 18,316,518 (1,279,235) 1,497,913 6,218,743 (502,174) ------------- ------------- -------------- -------------- -------------- Net increase (decrease) in net assets from operations 21,587,955 5,336,831 3,899,077 7,787,373 14,428,819 ------------- ------------- -------------- -------------- -------------- Contract transactions (1) Purchase payments (Note 4) 50,876,943 7,526,598 9,135,051 3,549,252 13,740,746 Surrenders and terminations (3,881,78) (4,189,257) (22,620,827) (9,166,170) (10,683,628) Transfers between portfolios 60,131,208 (5,811,644) (15,758,816) (4,210,444) 6,698,428 Net annuitization transactions - 53,869 (40,920) 18,462 (51,052) Policyholder charges (Note 3) (70,279) (96,339) (242,476) (104,080) (116,450) ------------- ------------- -------------- -------------- -------------- Net increase (decrease) in net assets from contract transactions 107,056,090 (2,516,773) (29,527,988) (9,912,980) 9,587,844 ------------- ------------- -------------- -------------- -------------- Net increase (decrease) in net assets 128,644,045 2,820,058 (25,628,911) (2,125,607) 24,016,663 Net assets beginning of period 23,176,602 45,043,273 157,539,730 80,193,473 80,053,058 ------------- ------------- -------------- -------------- -------------- Net assets end of period $ 151,820,647 $ 47,863,331 $ 131,910,819 $ 78,067,866 $ 104,069,721 --------------------------------- ============= ============= ============== ============== ============== (1) Contract unit transactions Units Outstanding at December 31, 2005 2,004,859 3,570,161 8,153,498 4,662,983 4,180,785 Units Issued 8,912,000 1,156,550 1,088,265 567,683 1,783,363 Units Redeemed (1,121,44) (1,358,384) (2,621,032) (1,122,137) (1,368,965) ------------- ------------- -------------- -------------- -------------- Units Outstanding at December 31, 2006 9,795,414 3,368,327 6,620,731 4,108,529 4,595,183 ============= ============= ============== ============== ==============
See notes to the financial statements. 32 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2006
JNL/FMR JNL/FMR JNL/Franklin JNL/Franklin JNL/Goldman Sachs Balanced Mid-Cap Templeton Templeton Small Cap Mid Cap Portfolio Equity Portfolio Income Portfolio (a) Value Portfolio Value Portfolio ------------- ---------------- -------------------- ------------------- ----------------- Operations Net investment income (loss) $ (814,896) $ (1,681,317) $ 1,137,455 $ (77,633) $ 292,351 Net realized gain (loss) on investments 7,062,479 4,301,392 139,927 662,497 904,704 Net change in unrealized appreciation (depreciation) on investments 5,618,648 8,594,390 1,387,708 2,807,173 3,752,999 ------------- ------------- ------------ ------------ ------------ Net increase (decrease) in net assets from operations 11,866,231 11,214,465 2,665,090 3,392,037 4,950,054 ------------- ------------- ------------ ------------ ------------ Contract transactions (1) Purchase payments (Note 4) 22,739,729 6,280,454 30,277,910 17,821,824 17,572,217 Surrenders and terminations (12,086,586) (17,646,032) (916,595) (1,797,282) (2,148,606) Transfers between portfolios 10,413,149 (7,096,222) 26,418,781 13,758,210 12,037,668 Net annuitization transactions (59,400) (7,449) - (7,295) (11,782) Policyholder charges (Note 3) (202,061) (209,385) (17,665) (33,071) (32,774) ------------- ------------- ------------ ------------ ------------ Net increase (decrease) in net assets from contract transactions 20,804,831 (18,678,634) 55,762,431 29,742,386 27,416,723 ------------- ------------- ------------ ------------ ------------ Net increase (decrease) in net assets 32,671,062 (7,464,169) 58,427,521 33,134,423 32,366,777 Net assets beginning of period 118,849,874 120,214,444 - 12,192,527 22,285,018 ------------- ------------- ------------ ------------ ------------ Net assets end of period $ 151,520,936 $ 112,750,275 $ 58,427,521 $ 45,326,950 $ 54,651,795 ------------------------------- ============= ============= ============ ============ ============ (1) Contract unit transactions Units Outstanding at December 31, 2005 10,813,065 6,833,713 - 1,119,918 1,978,342 Units Issued 3,752,004 649,733 5,581,307 3,831,977 3,153,645 Units Redeemed (1,891,408) (1,754,756) (199,824) (1,357,164) (868,010) ------------- ------------- ------------ ------------ ------------ Units Outstanding at December 31, 2006 12,673,661 5,728,690 5,381,483 3,594,731 4,263,977 ============= ============= ============ ============ ============ JNL/Goldman Sachs JNL/JPMorgan JNL/JPMorgan JNL/Lazard JNL/Lazard Short Duration International International Emerging Mid Cap Bond Portfolio (a) Equity Portfolio Value Portfolio Markets Portfolio (a) Value Portfolio ------------------ ---------------- ---------------- --------------------- --------------- Operations Net investment income (loss) $ (216,237) $ 120,440 $ 1,582,514 $ (138,545) $ 2,223,844 Net realized gain (loss) on investments 145,651 8,669,304 16,451,252 218,748 12,797,666 Net change in unrealized appreciation (depreciation) on investments 475,574 11,524,816 33,442,445 3,525,389 5,296,059 ------------ ------------- ------------- ------------ ------------- Net increase (decrease) in net assets from operations 404,988 20,314,560 51,476,211 3,605,592 20,317,569 ------------ ------------- ------------- ------------ ------------- Contract transactions (1) Purchase payments (Note 4) 7,548,658 26,834,489 66,466,852 10,647,965 27,465,385 Surrenders and terminations (698,148) (11,696,179) (13,687,240) (670,351) (13,913,864) Transfers between portfolios 18,585,910 9,053,141 72,314,878 16,499,242 (10,319,915) Net annuitization transactions - 27,609 (12,316) 91,801 Policyholder charges (Note 3) (4,835) (120,287) (195,840) (17,306) (219,850) ------------ ------------- ------------- ------------ ------------- Net increase (decrease) in net assets from contract transactions 25,431,585 24,098,773 124,886,334 26,459,550 3,103,557 ------------ ------------- ------------- ------------ ------------- Net increase (decrease) in net assets 25,836,573 44,413,333 176,362,545 30,065,142 23,421,126 Net assets beginning of period - 88,044,355 116,827,707 - 162,241,093 ------------ ------------- ------------- ------------ ------------- Net assets end of period $ 25,836,573 $ 132,457,688 $ 293,190,252 $ 30,065,142 $ 185,662,219 ---------------------------------- ============ ============= ============= ============ ============= (1) Contract unit transactions Units Outstanding at December 31, 2005 - 6,119,341 9,007,293 - 9,282,254 Units Issued 3,912,399 3,457,678 11,874,491 3,089,365 2,380,325 Units Redeemed (1,378,527) (1,915,509) (2,851,935) (323,039) (2,302,067) ------------ ------------- ------------- ------------ ------------- Units Outstanding at December 31, 2006 2,533,872 7,661,510 18,029,849 2,766,326 9,360,512 ============ ============= ============= ============ =============
(a) Commencement of operations May 1, 2006. See notes to the financial statements. 33 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2006
JNL/Lazard JNL/MCM JNL/MCM JNL/MCM Small Cap JNL/MCM Bond Index Communications Consumer Brands Value Portfolio 25 Portfolio Portfolio Sector Portfolio Sector Portfolio --------------- ------------- ------------- ---------------- ---------------- Operations Net investment income (loss) $ 10,210,544 $ (10,536,572) $ 1,187,106 $ 217,382 $ (266,349) Net realized gain (loss) on investments 12,765,605 20,037,849 234,785 2,509,283 981,479 Net change in unrealized appreciation (depreciation) on investments (6,180,211) 53,271,340 2,877,145 6,622,054 1,560,036 ------------- ------------- ------------- ------------ ------------ Net increase (decrease) in net assets from operations 16,795,938 62,772,617 4,299,036 9,348,719 2,275,166 ------------- ------------- ------------- ------------ ------------ Contract transactions (1) Purchase payments (Note 4) 20,919,558 160,398,076 63,890,311 10,366,822 2,952,768 Surrenders and terminations (11,293,597) (33,642,741) (13,185,390) (2,156,040) (1,520,203) Transfers between portfolios (20,140,824) (29,146,858) 7,107,317 22,566,745 1,111,235 Net annuitization transactions (50,328) (46,173) (26,214) (5,677) 7,152 Policyholder charges (Note 3) (194,146) (614,584) (232,211) (37,332) (34,253) ------------- ------------- ------------- ------------ ------------ Net increase (decrease) in net assets from contract transactions (10,759,337) 96,947,720 57,553,813 30,734,518 2,516,699 ------------- ------------- ------------- ------------ ------------ Net increase (decrease) in net assets 6,036,601 159,720,337 61,852,849 40,083,237 4,791,865 Net assets beginning of period 121,324,637 547,728,420 169,205,740 12,982,443 17,930,060 ------------- ------------- ------------- ------------ ------------ Net assets end of period $ 127,361,238 $ 707,448,757 $ 231,058,589 $ 53,065,680 $ 22,721,925 ------------------------------------------- ============= ============= ============= ============ ============ (1) Contract unit transactions Units Outstanding at December 31, 2005 8,217,369 48,527,015 15,410,606 2,866,394 1,727,352 Units Issued 2,495,466 18,459,221 8,686,025 14,323,375 922,748 Units Redeemed (3,220,097) (10,234,527) (3,477,852) (8,313,992) (683,213) ------------- ------------- ------------- ------------ ------------ Units Outstanding at December 31, 2006 7,492,738 56,751,709 20,618,779 8,875,777 1,966,887 ============= ============= ============= ============ ============ JNL/MCM JNL/MCM JNL/MCM Enhanced JNL/MCM JNL/MCM Dow (SM) Dow Dividend S&P 500 Stock Financial Global 10 Portfolio Portfolio (a) Index Portfolio Sector Portfolio 15 Portfolio ------------- ------------- --------------- ---------------- ---------------- Operations Net investment income (loss) $ (11,451,814) $ (1,783,552) $ 3,180,231 $ (89,823) $ (14,234,654) Net realized gain (loss) on investments 24,261,327 1,531,518 3,649,231 3,934,265 60,066,180 Net change in unrealized appreciation (depreciation) on investments 153,975,982 22,993,014 1,077,188 3,858,751 232,332,086 ------------- ------------- ------------ ------------- --------------- Net increase (decrease) in net assets from operations 166,785,495 22,740,980 7,906,650 7,703,193 278,163,612 ------------- ------------- ------------ ------------- --------------- Contract transactions (1) Purchase payments (Note 4) 165,617,748 149,839,547 7,572,550 12,824,995 239,065,024 Surrenders and terminations (37,799,827) (3,033,626) (4,124,147) (3,796,917) (44,942,346) Transfers between portfolios 7,182,628 108,954,465 3,693,040 11,963,272 9,790,457 Net annuitization transactions (73,234) - 66,604 3,428 (56,019) Policyholder charges (Note 3) (674,839) (25,958) (68,096) (66,523) (771,260) ------------- ------------- ------------ ------------- --------------- Net increase (decrease) in net assets from contract transactions 134,252,476 255,734,428 7,139,951 20,928,255 203,085,856 ------------- ------------- ------------ ------------- --------------- Net increase (decrease) in net assets 301,037,971 278,475,408 15,046,601 28,631,448 481,249,468 Net assets beginning of period 547,103,137 - 51,575,657 37,388,115 639,571,558 ------------- ------------- ------------ ------------- --------------- Net assets end of period $ 848,141,108 $ 278,475,408 $ 66,622,258 $ 66,019,563 $ 1,120,821,026 -------------------------------------------- ============= ============= ============ ============= =============== (1) Contract unit transactions Units Outstanding at December 31, 2005 62,186,853 - 5,772,672 2,986,930 50,759,145 Units Issued 26,500,414 24,716,286 2,297,354 3,111,645 24,416,980 Units Redeemed (13,083,754) (1,123,357) (1,539,044) (1,587,606) (10,629,585) ------------- ------------- ------------ ------------- --------------- Units Outstanding at December 31, 2006 75,603,513 23,592,929 6,530,982 4,510,969 64,546,540 ============= ============= ============ ============= ===============
(a) Commencement of operations January 17, 2006. See notes to the financial statements. 34 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2006
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Healthcare International JNL 5 JNL Optimized Nasdaq(R) Sector Portfolio Index Portfolio Portfolio 5 Portfolio (a) 15 Portfolio ---------------- --------------- --------------- --------------- ------------- Operations Net investment income (loss) $ (775,470) $ 5,974,685 $ (28,048,717) $ (63,677) $ (930,724) Net realized gain (loss) on investments 3,517,284 13,531,965 31,905,117 627,983 13,947 Net change in unrealized appreciation (depreciation) on investments 576,341 56,607,861 348,932,921 5,233,302 2,709,360 ------------- ------------- --------------- ------------ ------------ Net increase (decrease) in net assets from operations 3,318,155 76,114,511 352,789,321 5,797,608 1,792,583 ------------- ------------- --------------- ------------ ------------ Contract transactions (1) Purchase payments (Note 4) 19,562,876 104,594,066 1,714,317,681 59,544,024 28,204,754 Surrenders and terminations (5,074,474) (20,186,136) (80,506,835) (606,117) (2,189,588) Transfers between portfolios (10,988,299) 26,897,580 346,813,443 19,215,666 (4,509,778) Net annuitization transactions 23,690 35,295 261,367 - - Policyholder charges (Note 3) (91,708) (373,828) (1,412,359) (8,873) (30,169) ------------- ------------- --------------- ------------ ------------ Net increase (decrease) in net assets from contract transactions 3,432,085 110,966,977 1,979,473,297 78,144,700 21,475,219 ------------- ------------- --------------- ------------ ------------ Net increase (decrease) in net assets 6,750,240 187,081,488 2,332,262,618 83,942,308 23,267,802 Net assets beginning of period 73,968,937 270,319,167 1,178,139,433 - 42,127,982 ------------- ------------- --------------- ------------ ------------ Net assets end of period $ 80,719,177 $ 457,400,655 $ 3,510,402,051 $ 83,942,308 $ 65,395,784 ------------------------------------------- ============= ============= =============== ============ ============ (1) Contract unit transactions Units Outstanding at December 31, 2005 6,570,928 17,822,982 99,440,140 - 4,002,235 Units Issued 3,171,981 9,843,774 168,726,975 8,372,900 4,297,318 Units Redeemed (2,869,882) (3,206,219) (14,819,638) (538,988) (2,264,138) ------------- ------------- --------------- ------------ ------------ Units Outstanding at December 31, 2006 6,873,027 24,460,537 253,347,477 7,833,912 6,035,415 ============= ============= =============== ============ ============ (a) Commencement of operations May 1, 2006. JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Oil & Gas S&P(R) S&P 24 S&P 400 MidCap S&P 500 Sector Portfolio 10 Portfolio Portfolio (a) Index Portfolio Index Portfolio ---------------- ------------- -------------- --------------- ---------------- Operations Net investment income (loss) $ (1,121,736) $ (12,712,105) $ (88,439) $ (805,415) $ (367,036) Net realized gain (loss) on investments 29,390,122 63,456,083 16,348 20,636,372 11,463,705 Net change in unrealized appreciation (depreciation) on investments 3,612,788 (32,612,212) 433,935 3,280,795 44,465,062 ------------- ------------- ------------ ------------- ------------- Net increase (decrease) in net assets from operations 31,881,174 18,131,766 361,844 23,111,752 55,561,731 ------------- ------------- ------------ ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 79,404,747 202,525,070 6,874,904 80,372,367 94,740,442 Surrenders and terminations (17,928,004) (40,429,354) (123,467) (17,419,364) (28,386,472) Transfers between portfolios 15,008,280 (71,238,282) 10,590,579 (353,776) 4,196,073 Net annuitization transactions 4,766 1,597 - 71,014 (13,945) Policyholder charges (Note 3) (287,681) (732,105) (325) (344,086) (552,439) ------------- ------------- ------------ ------------- ------------- Net increase (decrease) in net assets from contract transactions 76,202,108 90,126,926 17,341,691 62,326,155 69,983,659 ------------- ------------- ------------ ------------- ------------- Net increase (decrease) in net assets 108,083,282 108,258,692 17,703,535 85,437,907 125,545,390 Net assets beginning of period 173,952,652 694,988,627 - 264,156,452 380,518,379 ------------- ------------- ------------ ------------- ------------- Net assets end of period $ 282,035,934 $ 803,247,319 $ 17,703,535 $ 349,594,359 $ 506,063,769 ------------------------------------------- ============= ============= ============ ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2005 7,593,123 52,331,704 - 18,676,432 35,106,576 Units Issued 8,627,593 20,825,277 1,807,011 8,069,966 12,048,102 Units Redeemed (5,867,507) (14,423,812) (69,855) (3,793,975) (5,778,360) ------------- ------------- ------------ ------------- ------------- Units Outstanding at December 31, 2006 10,353,209 58,733,169 1,737,156 22,952,423 41,376,318 ============= ============= ============ ============= =============
(a) Commencement of operations May 1, 2006. See notes to the financial statements. 35 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2006
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Select Small-Cap Small Cap Technology Value Line(R) VIP Portfolio Index Portfolio Sector Portfolio 25 Portfolio Portfolio ---------------- --------------- ---------------- -------------- -------------- Operations Net investment income (loss) $ (10,351,252) $ (58,526) $ (669,863) $ (11,239,849) $ (3,797,837) Net realized gain (loss) on investments 26,307,575 26,128,588 (544,278) 15,223,904 5,013,184 Net change in unrealized appreciation (depreciation) on investments 31,262,322 11,616,724 4,357,911 (20,175,748) 33,778,179 ------------- ------------- ------------ -------------- ------------- Net increase (decrease) in net assets from operations 47,218,645 37,686,786 3,143,770 (16,191,693) 34,993,526 ------------- ------------- ------------ -------------- ------------- Contract transactions (1) Purchase payments (Note 4) 166,083,683 69,563,587 9,161,085 432,075,389 153,152,022 Surrenders and terminations (32,920,655) (15,626,395) (3,139,957) (25,673,309) (12,069,494) Transfers between portfolios (26,361,664) 1,251,972 5,307,171 (18,846,438) 11,423,407 Net annuitization transactions (88,478) 2,834 7,592 66,057 - Policyholder charges (Note 3) (589,826) (292,522) (59,784) (502,761) (231,496) ------------- ------------- ------------ -------------- ------------- Net increase (decrease) in net assets from contract transactions 106,123,060 54,899,476 11,276,107 387,118,938 152,274,439 ------------- ------------- ------------ -------------- ------------- Net increase (decrease) in net assets 153,341,705 92,586,262 14,419,877 370,927,245 187,267,965 Net assets beginning of period 546,750,815 217,907,919 45,266,333 451,872,792 225,951,268 ------------- ------------- ------------ -------------- ------------- Net assets end of period $ 700,092,520 $ 310,494,181 $ 59,686,210 $ 822,800,037 $ 413,219,233 ------------------------------------------- ============= ============= ============ ============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2005 28,099,167 16,114,520 7,874,318 28,982,972 18,905,217 Units Issued 11,045,168 7,538,219 5,981,345 36,086,161 16,002,570 Units Redeemed (5,755,853) (3,749,897) (4,209,278) (10,632,588) (3,557,168) ------------- ------------- ------------ -------------- ------------- Units Outstanding at December 31, 2006 33,388,482 19,902,842 9,646,385 54,436,545 31,350,619 ============= ============= ============ ============== ============= JNL/Oppenheimer JNL/PIMCO JNL/Putnam Global Growth JNL/Oppenheimer Total Return JNL/Putnam Midcap Portfolio Growth Portfolio Bond Portfolio Equity Portfolio Growth Portfolio --------------- ---------------- --------------- ---------------- ---------------- Operations Net investment income (loss) $ (1,624,943) $ (429,111) $ 9,440,381 $ (1,151,262) $ (532,825) Net realized gain (loss) on investments 15,200,657 916,126 (855,124) 2,038,977 2,438,390 Net change in unrealized appreciation (depreciation) on investments 7,846,062 248,553 (1,415,611) 10,996,138 (860,069) ------------- ------------ ------------- ------------- ------------ Net increase (decrease) in net assets from operations 21,421,776 735,568 7,169,646 11,883,853 1,045,496 ------------- ------------ ------------- ------------- ------------ Contract transactions (1) Purchase payments (Note 4) 37,627,701 3,782,605 94,081,295 3,304,679 4,725,538 Surrenders and terminations (12,062,396) (2,486,345) (28,021,517) (20,787,344) (3,441,614) Transfers between portfolios 9,157,399 149,426 37,948,787 (9,703,480) (1,746,766) Net annuitization transactions 120,352 (18,700) (44,704) (11,759) 1,477 Policyholder charges (Note 3) (172,255) (71,536) (392,286) (166,704) (84,973) ------------- ------------ ------------- ------------- ------------ Net increase (decrease) in net assets from contract transactions 34,670,801 1,355,450 103,571,575 (27,364,608) (546,338) ------------- ------------ ------------- ------------- ------------ Net increase (decrease) in net assets 56,092,577 2,091,018 110,741,221 (15,480,755) 499,158 Net assets beginning of period 124,849,366 24,869,485 324,437,594 118,699,272 31,035,971 ------------- ------------ ------------- ------------- ------------ Net assets end of period $ 180,941,943 $ 26,960,503 $ 435,178,815 $ 103,218,517 $ 31,535,129 ------------------------------------------- ============= ============ ============= ============= ============ (1) Contract unit transactions Units Outstanding at December 31, 2005 9,917,994 2,846,168 24,289,445 6,487,515 3,744,190 Units Issued 4,964,222 1,095,744 11,891,034 335,460 1,459,370 Units Redeemed (2,377,057) (946,623) (4,478,123) (1,808,869) (1,540,563) ------------- ------------ ------------- ------------- ------------ Units Outstanding at December 31, 2006 12,505,159 2,995,289 31,702,356 5,014,106 3,662,997 ============= ============ ============= ============= ============
See notes to the financial statements. 36 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2006
JNL/ JNL/ JNL/ JNL/Putnam S&P Managed S&P Managed JNL/ S&P Managed Value Equity Aggressive Conservative S&P Managed Moderate Portfolio Growth Portfolio Portfolio Growth Portfolio Portfolio ------------- ---------------- ------------- ---------------- ------------- Operations Net investment income (loss) $ (2,268,493) $ (5,172,975) $ 405,384 $ (5,765,707) $ 829,391 Net realized gain (loss) on investments 6,827,770 54,367,842 1,887,404 71,909,495 4,395,462 Net change in unrealized appreciation (depreciation) on investments 12,361,341 22,196,073 3,715,975 50,034,429 12,512,578 ------------- ------------- ------------- --------------- ------------- Net increase (decrease) in net assets from operations 16,920,618 71,390,940 6,008,763 116,178,217 17,737,431 ------------- ------------- ------------- --------------- ------------- Contract transactions (1) Purchase payments (Note 4) 5,892,472 48,071,673 38,971,901 150,309,814 111,816,468 Surrenders and terminations (27,927,438) (51,595,953) (7,798,417) (87,538,202) (13,087,824) Transfers between portfolios (9,410,261) (36,981,961) 15,660,766 (32,717,369) 27,925,862 Net annuitization transactions (170,761) 66,574 (23,475) (1,845,097) - Policyholder charges (Note 3) (204,874) (913,495) (149,315) (1,518,132) (259,669) ------------- ------------- ------------- --------------- ------------- Net increase in net assets from contract transactions (31,820,862) (41,353,162) 46,661,460 26,691,014 126,394,837 ------------- ------------- ------------- --------------- ------------- Net increase (decrease) in net assets (14,900,244) 30,037,778 52,670,223 142,869,231 144,132,268 Net assets beginning of period 169,897,225 547,590,167 73,693,539 938,301,786 140,108,801 ------------- ------------- ------------- --------------- ------------- Net assets end of period $ 154,996,981 $ 577,627,945 $ 126,363,762 $ 1,081,171,017 $ 284,241,069 ------------------------------------------ ============= ============= ============= =============== ============= (1) Contract unit transactions Units Outstanding at December 31, 2005 9,314,513 40,948,202 7,023,084 69,873,370 12,957,804 Units Issued 599,885 4,802,802 6,752,938 13,039,414 13,796,812 Units Redeemed (2,332,529) (7,740,451) (2,415,078) (11,152,842) (2,543,240) ------------- ------------- ------------- --------------- ------------- Units Outstanding at December 31, 2006 7,581,869 38,010,553 11,360,944 71,759,942 24,211,376 ============= ============= ============= =============== ============= JNL/ JNL/ S&P Managed JNL/ JNL/ JNL/ S&P Retirement Moderate S&P Retirement S&P Retirement S&P Retirement Income Growth Portfolio 2015 Portfolio (a) 2020 Portfolio (a) 2025 Portfolio (a) Portfolio (a) ---------------- ------------------ ------------------ ------------------ -------------- Operations Net investment income (loss) $ (2,687,665) $ (29,773) $ (10,081) $ (3,542) $ (54,490) Net realized gain (loss) on investments 45,390,277 14,119 1,488 2,947 57,619 Net change in unrealized appreciation (depreciation) on investments 43,751,178 297,647 119,253 46,779 365,162 ------------- ----------- ----------- --------- ----------- Net increase (decrease) in net operations 86,453,790 281,993 110,660 46,184 368,291 ------------- ----------- ----------- --------- ----------- Contract transactions (1) Purchase payments (Note 4) 209,123,473 2,694,991 896,220 748,396 6,066,234 Surrenders and terminations (78,168,091) (20,320) (18,964) (30,680) (199,125) Transfers between portfolios 18,696,648 1,611,554 859,242 176,120 1,985,127 Net annuitization transactions 29,964 - - - - Policyholder charges (Note 3) (1,264,619) (202) (28) (737) (181) ------------- ----------- ----------- --------- ----------- Net increase in net assets from contract transactions 148,417,375 4,286,023 1,736,470 893,099 7,852,055 ------------- ----------- ----------- --------- ----------- Net increase (decrease) in net assets 234,871,165 4,568,016 1,847,130 939,283 8,220,346 Net assets beginning of period 759,012,984 - - - - ------------- ----------- ----------- --------- ----------- Net assets end of period $ 993,884,149 $ 4,568,016 $ 1,847,130 $ 939,283 $ 8,220,346 --------------------------------- ============= =========== =========== ========= =========== (1) Contract unit transactions Units Outstanding at December 31, 2005 58,758,309 - - - - Units Issued 20,750,137 455,460 177,680 99,990 948,624 Units Redeemed (9,776,424) (33,520) (9,406) (14,940) (171,434) ------------- ----------- ----------- --------- ----------- Units Outstanding at December 31, 2006 69,732,022 421,940 168,274 85,050 777,190 ============= =========== =========== ========= ===========
(a) Commencement of operations January 17, 2006. See notes to the financial statements. 37 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2006
JNL/ JNL/Select JNL/Select JNL/ JNL/ Select Balanced Global Large Cap Select Money Select Value Portfolio Growth Portfolio Growth Portfolio Market Portfolio Portfolio --------------- ---------------- ---------------- ---------------- -------------- Operations Net investment income (loss) $ 4,603,403 $ (1,277,537) $ (2,158,815) $ 5,749,414 $ 1,950,479 Net realized gain (loss) on investments 10,499,708 (1,676,959) 1,571,592 440 8,075,562 Net change in unrealized appreciation (depreciation) on investments 28,565,497 15,358,070 4,486,384 (439) 10,023,529 ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from operations 43,668,608 12,403,574 3,899,161 5,749,415 20,049,570 ------------- ------------- ------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 43,395,129 4,759,407 8,240,362 151,646,946 29,478,947 Surrenders and terminations (48,056,686) (20,734,361) (23,629,861) (65,705,096) (8,903,404) Transfers between portfolios 3,379,175 (4,956,796) (15,084,965) 27,279,771 45,813,020 Net annuitization transactions (140,505) (14,355) (30,408) (399,880) 68,931 Policyholder charges (Note 3) (466,940) (156,201) (280,703) (1,074,344) (141,008) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions (1,889,827) (21,102,306) (30,785,575) 111,747,397 66,316,486 ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets 41,778,781 (8,698,732) (26,886,414) 117,496,812 86,366,056 Net assets beginning of period 371,851,340 117,922,159 165,960,733 129,697,204 79,287,855 ------------- ------------- ------------- ------------- ------------- Net assets end of period $ 413,630,121 $ 109,223,427 $ 139,074,319 $ 247,194,016 $ 165,653,911 ------------------------------------------ ============= ============= ============= ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2005 16,635,149 6,149,342 7,241,214 10,932,578 4,555,238 Units Issued 2,925,183 455,468 706,373 28,652,663 4,489,771 Units Redeemed (3,165,581) (1,562,711) (2,100,108) (19,448,707) (1,037,604) ------------- ------------- ------------- ------------- ------------- Units Outstanding at December 31, 2006 16,394,751 5,042,099 5,847,479 20,136,534 8,007,405 ============= ============= ============= ============= ============= JNL/T. Rowe JNL/T. Rowe JNL/ JNL/Western JNL/Western Price Established Price Mid-Cap T. Rowe Price High Yield Strategic Growth Portfolio Growth Portfolio Value Portfolio Bond Portfolio Bond Portfolio ----------------- ---------------- --------------- -------------- -------------- Operations Net investment income (loss) $ (3,736,541) $ (2,752,081) $ (732,985) $ 14,216,016 $ (3,280,179) Net realized gain (loss) on investments 20,934,763 51,936,124 30,700,016 (1,531,901) (493,495) Net change in unrealized appreciation (depreciation) on investments 22,496,691 (29,610,098) 18,002,785 7,950,104 10,636,386 ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from operations 39,694,913 19,573,945 47,969,816 20,634,219 6,862,712 ------------- ------------- ------------- ------------- ------------- Contract transactions (1) Purchase payments (Note 4) 30,761,377 56,169,615 37,600,243 49,278,595 58,520,622 Surrenders and terminations (44,477,462) (47,065,968) (24,620,754) (27,125,374) (20,711,795) Transfers between portfolios (4,498,443) (13,039,056) 8,673,615 32,174,295 19,477,766 Net annuitization transactions (124,809) (7,214) (133,851) 16,205 (52,726) Policyholder charges (Note 3) (490,393) (537,253) (327,921) (352,214) (242,668) ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from contract transactions (18,829,730) (4,479,876) 21,191,332 53,991,507 56,991,199 ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets 20,865,183 15,094,069 69,161,148 74,625,726 63,853,911 Net assets beginning of period 345,756,304 380,759,492 254,751,384 209,498,579 187,198,601 ------------- ------------- ------------- ------------- ------------- Net assets end of period $ 366,621,487 $ 395,853,561 $ 323,912,532 $ 284,124,305 $ 251,052,512 ------------------------------------------ ============= ============= ============= ============= ============= (1) Contract unit transactions Units Outstanding at December 31, 2005 14,267,380 11,678,338 18,572,842 17,806,749 10,244,424 Units Issued 2,070,913 2,521,711 4,953,646 10,171,331 5,407,127 Units Redeemed (2,986,261) (2,920,173) (3,498,455) (6,439,578) (2,308,545) ------------- ------------- ------------- ------------- ------------- Units Outstanding at December 31, 2006 13,352,032 11,279,876 20,028,033 21,538,502 13,343,006 ============= ============= ============= ============= =============
See notes to the financial statements. 38 Jackson National Separate Account I Statements of Changes in Net Assets For the Year Ended December 31, 2006
JNL/Western U.S. Government & Quality Bond Portfolio --------------- Operations Net investment income (loss) $ (2,585,339) Net realized gain (loss) on investments (1,720,470) Net change in unrealized appreciation (depreciation) on investments 7,172,678 ------------- Net increase (decrease) in net assets from operations 2,866,869 ------------- Contract transactions (1) Purchase payments (Note 4) 21,479,658 Surrenders and terminations (23,200,659) Transfers between portfolios (1,906,950) Net annuitization transactions 32,917 Policyholder charges (Note 3) (254,850) ------------- Net increase (decrease) in net assets from contract transactions (3,849,884) ------------- Net increase (decrease) in net assets (983,015) Net assets beginning of period 168,504,357 ------------- Net assets end of period $ 167,521,342 ------------------------------------------ ============= (1) Contract unit transactions Units Outstanding at December 31, 2005 11,097,877 Units Issued 2,955,819 Units Redeemed (3,225,538) ------------- Units Outstanding at December 31, 2006 10,828,158 =============
See notes to the financial statements. 39 Jackson National Separate Account I Notes to Financial Statements Note 1 - Organization Jackson National Life Insurance Company ("Jackson") established Jackson National Separate Account I (the "Separate Account") on June 14, 1993. The Separate Account commenced operations on October 16, 1995, and is registered under the Investment Company Act of 1940 as a unit investment trust. The Separate Account assets legally belong to Jackson and the obligations under the contracts are the obligation of Jackson. However, the contract assets in the Separate Account are not chargeable with liabilities arising out of any other business Jackson may conduct. The Separate Account receives and invests, based on the directions for the contract holder, net premiums for individual flexible premium variable annuity contracts issued by Jackson. The contracts can be purchased on a non-tax qualified basis or in connection with certain plans qualifying for favorable federal income tax treatment. The Separate Account contained ninety-three (93) Portfolios during 2007, but currently contains eighty-six (86) Portfolios as of December 31, 2007, each of which invests in the following mutual funds ("Funds"): -------------------------------------------------------------------------------- JNL Series Trust -------------------------------------------------------------------------------- JNL/AIM International Growth Fund JNL/AIM Large Cap Growth Fund JNL/AIM Real Estate Fund JNL/AIM Small Cap Growth Fund JNL/Alger Growth Fund(1) JNL/Capital Guardian Global Balanced Fund JNL/Capital Guardian Global Diversified Research Fund JNL/Capital Guardian International Small Cap Fund JNL/Capital Guardian U.S. Growth Equity Fund JNL/Credit Suisse Global Natural Resources Fund JNL/Credit Suisse Long/Short Fund JNL/Eagle Core Equity Fund JNL/Eagle SmallCap Equity Fund JNL/Franklin Templeton Founding Strategy Fund JNL/Franklin Templeton Global Growth Fund JNL/Franklin Templeton Income Fund JNL/Franklin Templeton Mutual Shares Fund JNL/Franklin Templeton Small Cap Value Fund JNL/Goldman Sachs Core Plus Bond Fund JNL/Goldman Sachs Mid Cap Value Fund JNL/Goldman Sachs Short Duration Bond Fund JNL/JPMorgan International Value Fund JNL/JPMorgan MidCap Growth Fund JNL/JPMorgan U.S. Government & Quality Bond Fund JNL/Lazard Emerging Markets Fund JNL/Lazard Mid Cap Value Fund JNL/Lazard Small Cap Value Fund JNL/MCM 10 x 10 Fund* JNL/MCM Bond Index Fund* JNL/MCM Enhanced S&P 500 Stock Index Fund* JNL/MCM Index 5 Fund* JNL/MCM International Index Fund* JNL/MCM S&P 400 MidCap Index Fund* JNL/MCM S&P 500 Index Fund* JNL/MCM Small Cap Index Fund* JNL/Oppenheimer Global Growth Fund JNL/Oppenheimer Growth Fund(1) JNL/PIMCO Real Return Fund JNL/PIMCO Total Return Bond Fund JNL/PPM America Core Equity Fund JNL/PPM America High Yield Bond Fund JNL/PPM America Value Equity Fund JNL/Putnam Midcap Growth Fund(1) JNL/S&P 4 Fund JNL/S&P Competitive Advantage Fund JNL/S&P Disciplined Growth Fund JNL/S&P Disciplined Moderate Fund JNL/S&P Disciplined Moderate Growth Fund JNL/S&P Dividend Income & Growth Fund JNL/S&P Growth Retirement Strategy Fund JNL/S&P Intrinsic Value Fund JNL/S&P Managed Aggressive Growth Fund JNL/S&P Managed Conservative Fund JNL/S&P Managed Growth Fund JNL/S&P Managed Moderate Fund JNL/S&P Managed Moderate Growth Fund JNL/S&P Moderate Growth Retirement Strategy Fund JNL/S&P Moderate Retirement Strategy Fund JNL/S&P Retirement 2015 Fund JNL/S&P Retirement 2020 Fund JNL/S&P Retirement 2025 Fund JNL/S&P Retirement Income Fund JNL/S&P Total Yield Fund JNL/Select Balanced Fund JNL/Select Money Market Fund JNL/Select Value Fund JNL/T.Rowe Price Established Growth Fund JNL/T.Rowe Price Mid-Cap Growth Fund JNL/T.Rowe Price Value Fund 40 Jackson National Separate Account I Notes to Financial Statements (continued) Note 1 - Organization (continued) -------------------------------------------------------------------------------- JNL Variable Fund LLC -------------------------------------------------------------------------------- JNL/MCM 25 Fund* JNL/MCM Communications Sector Fund* JNL/MCM Consumer Brands Sector Fund* JNL/MCM Dow(SM) 10 Fund* JNL/MCM Dow(SM) Dividend Fund* JNL/MCM Financial Sector Fund* JNL/MCM Global 15 Fund* JNL/MCM Healthcare Sector Fund* JNL/MCM JNL 5 Fund* JNL/MCM JNL Optimized 5 Fund* JNL/MCM Nasdaq(R) 25 Fund* JNL/MCM NYSE International 25 Fund* JNL/MCM Oil & Gas Sector Fund* JNL/MCM S&P(R) 10 Fund* JNL/MCM S&P(R) 24 Fund* JNL/MCM S&P(R) SMid 60 Fund* JNL/MCM Select Small-Cap Fund* JNL/MCM Technology Sector Fund* JNL/MCM Value Line(R) 30 Fund* JNL/MCM VIP Fund* -------------------------------------------------------------------------------- Variable Insurance Funds -------------------------------------------------------------------------------- Fifth Third Balanced VIP Fund(3) Fifth Third Disciplined Value VIP Fund(3) Fifth Third Mid Cap VIP Fund(3) Fifth Third Quality Growth VIP Fund(3) Jackson National Asset Management, LLC, a wholly-owned subsidiary of Jackson, serves as investment adviser for all the Funds and receives a fee for its services from each of the Funds. During the year ended December 31, 2007, the following acquisitions were accomplished at no cost to the contract owners:
------------------------------------------------------------------------------------------------------------------------------------ ACQUIRED PORTFOLIO ACQUIRING PORTFOLIO EFFECTIVE DATE ------------------------------------------------------------------------------------------------------------------------------------ JNL/Alger Growth Fund JNL/T.Rowe Price Established Growth Fund April 27, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Oppenheimer Growth Fund JNL/T.Rowe Price Established Growth Fund April 27, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Putnam Midcap Growth Fund JNL/FI Mid-Cap Equity Fund November 30,2007 ------------------------------------------------------------------------------------------------------------------------------------
During the year ended December 31, 2007, the following Funds changed names:
------------------------------------------------------------------------------------------------------------------------------------ PRIOR PORTFOLIO NAME CURRENT PORTFOLIO NAME EFFECTIVE DATE ------------------------------------------------------------------------------------------------------------------------------------ JNL/Putnam Value Equity Fund JNL/PPM America Value Equity Fund(2) January 16, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/FMR Mid-Cap Equity Fund JNL/FI Mid-Cap Equity Fund April 30, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/FMR Balanced Fund JNL/FI Balanced Fund April 30, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Western High Yield Bond Fund JNL/PPM America High Yield Bond Fund(2) April 30, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Western Strategic Bond Fund JNL/Goldman Sachs Core Plus Bond Fund(2) April 30, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Western U.S. Government & Quality Bond Fund JNL/JPMorgan U.S. Government & Quality Bond Fund(2) April 30, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/MCM Nasdaq 15 Fund* JNL/MCM Nasdaq 25 Fund* December 3, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/MCM Value Line 25 Fund* JNL/MCM Value Line 30 Fund* December 3, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/FI Balanced Fund JNL/Capital Guardian Global Balanced Fund(2) December 3, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/FI Mid-Cap Equity Fund JNL/JPMorgan MidCap Growth Fund(2) December 3, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/JPMorgan International Equity Fund JNL/AIM International Growth Fund(2) December 3, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Putnam Equity Fund JNL/PPM America Core Equity Fund(2) December 3, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Select Global Growth Fund JNL/Capital Guardian Global Diversified Research Fund(2) December 3, 2007 ------------------------------------------------------------------------------------------------------------------------------------ JNL/Select Large Cap Growth Fund JNL/Capital Guardian U.S. Growth Equity Fund(2) December 3, 2007 ------------------------------------------------------------------------------------------------------------------------------------
(1) These funds are no longer available as of December 31, 2007. (2) These name changes are due to changes in sub-advisors. (3) On October 12, 2007, these funds were closed. All remaining assets were transferred to the JNL/Select Money Market Fund. * MCM denotes the sub adviser Mellon Capital Management throughout these financial statements. 41 Jackson National Separate Account I Notes to Financial Statements (continued) Note 2 - Significant Accounting Policies The following is a summary of significant accounting policies followed by the Separate Account in the preparation of its financial statements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Investments The Separate Account's investments in the corresponding series of mutual funds ("Funds") are stated at the closing net asset values of the respective Funds. The average cost method is used in determining the cost of the shares sold on withdrawals by the Separate Account. Investments in the Funds are recorded on trade date. Realized gain distributions are reinvested in the respective Funds. Dividend distributions received from the Funds are reinvested in additional shares of the Funds and are recorded as income to the Separate Account on the ex-dividend date. Federal Income Taxes The operations of the Separate Account are included in the federal income tax return of Jackson, which is taxed as a "life insurance company" under the provisions of the Internal Revenue Code. Under current law, no federal income taxes are payable with respect to the Separate Account. Therefore, no federal income tax has been provided. 42 Jackson National Separate Account I Notes to Financial Statements (continued) Note 2 - Significant Accounting Policies (continued) New Accounting Pronouncement In September 2006, the FASB issued Statement on Financial Accounting Standards ("SFAS") No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The changes to current generally accepted accounting principles from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. Management is in the process of analyzing the impact of SFAS No. 157. Management does not believe the adoption of SFAS No. 157 will impact the financial statement amounts, however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for future periods. Note 3 - Policy Charges Charges are deducted from the Separate Account and remitted to Jackson, to compensate Jackson for providing the insurance benefits set forth in the contracts, administering the contracts, distributing the contracts, and assuming certain risks in connection with the contracts. Policyholder Charges Contract Maintenance Charge An annual contract maintenance charge of $35 - $50 is charged against each contract to reimburse Jackson for expenses incurred in establishing and maintaining records relating to the contract. The contract maintenance charge is assessed on each anniversary of the contract date that occurs prior to the annuity date. This charge is only imposed if the contract value is less than $50,000 on the date when the charge is assessed. The charge is deducted by redeeming units. For the years ended December 31, 2007 and 2006, contract maintenance charges were assessed in the amount of $4,031,655 and $3,411,936, respectively. Transfer Fee Charge A transfer fee of $25 will apply to transfers made by contract holders between the portfolios in excess of 15 transfers in a contract year. Jackson may waive the transfer fee in connection with pre-authorized automatic transfer programs, or in those states where a lesser fee is required. This fee will be deducted from the amount transferred prior to the allocation to a different portfolio. For the years ended December 31, 2007 and 2006, transfer fee charges were assessed in the amount of $13,285 and $13,545, respectively. Surrender or Contingent Deferred Sales Charge During the first three to seven contract years, certain contracts include a provision for a charge upon the surrender or partial surrender of the contract. The amount assessed under the contract terms, if any, depends upon the cost associated with distributing the particular contracts. The amount, if any, is determined based on a number of factors, including the amount withdrawn, the contract year of surrender, or the number and amount of withdrawals in a calendar year. The surrender charges are assessed by Jackson and withheld from the proceeds of the withdrawals. For the years ended December 31, 2007 and 2006, surrender charges were assessed in the amount of $24,796,391 and $16,200,921, respectively. 43 Jackson National Separate Account I Notes to Financial Statements (continued) Note 3 - Policy Charges (continued) Optional Benefit Charges Guaranteed Minimum Income Benefit Charge. If this benefit has been selected, Jackson will assess an annual charge of 0.40% - 0.84%, depending on the product, of the Guaranteed Minimum Income Benefit (GMIB) base. The charge will be deducted each calendar quarter from the contract value by redeeming units. Guaranteed Minimum Accumulation Benefit Charge. If this benefit has been selected, Jackson will assess an annual charge of 1.00% - 1.02%, depending on the product, of the Guaranteed Value (GV). The charge will be deducted each calendar quarter from the contract value by redeeming units. Guaranteed Minimum Withdrawal Benefit Charge. If this benefit has been selected, Jackson will assess an annual charge of 0.51% - 1.71%, depending on the product. Jackson reserves the right to prospectively increase the charge on new issues or upon any election of any "step-up" subject to a maximum charge of 0.75%. The charge will be deducted each calendar quarter from the contract value by redeeming units. Asset-based Charges Insurance Charges Jackson deducts a daily charge for administrative expenses from the net assets of the Separate Account equivalent to an annual rate of 0.15%. In designated products, this expense is waived for initial contributions greater than $1 million, refer to the product prospectus for eligibility. The administration charge is designed to reimburse Jackson for expenses incurred in administrating the Separate Account and its contracts and is assessed through the unit value calculation. Jackson deducts a daily base contract charge from the net assets of the Separate Account equivalent to an annual rate of 0.15% to 1.50% for the assumption of mortality and expense risks. The mortality risk assumed by Jackson is that the insured may receive benefits greater than those anticipated by Jackson. The expense risk assumed by Jackson is that the actual cost of administering the contracts of the Separate Account may exceed the amount received from the Administration Charge and the Contract Maintenance Charge. Optional Benefit Charges Earnings Protection Benefit Charge. If this benefit option has been selected, Jackson will make an additional deduction of 0.20% - 0.45%, depending on the product chosen, on an annual basis of the average daily net asset value of the contract owner's allocations to the portfolios. Contract Enhancement Charge. If one of the contract enhancement benefits is selected, then for a period of five to seven contract years, Jackson will make an additional deduction based upon the average daily net asset value of the contract owner's allocations to the portfolios. The amounts of these charges depend upon the contract enhancements selected and range from 0.395% to 0.695%. Withdrawal Charge Period. If the optional three, four, or five-year withdrawal charge period feature is selected, Jackson will deduct 0.45%, 0.40%, or 0.30%, respectively, on an annual basis of the average daily net asset value of the contract owner's allocations to the portfolios. 20% Additional Free Withdrawal Charge. If a contract owner selects the optional feature that permits you to withdraw up to 20% of premiums that are still subject to a withdrawal charge minus earnings during a Contract year without withdrawal charge, Jackson will deduct 0.30% - 0.40% on an annual basis of the average daily net assets value of the contract owner's allocations to the portfolios. 44 Jackson National Separate Account I Notes to Financial Statements (continued) Note 3 - Policy Charges (continued) Asset-based Charges (continued) Optional Benefit Charges (continued) Optional Death Benefit Charges. If any of the optional death benefits are selected that are available under the Contract, Jackson will make an additional deduction of 0.15% - 0.80% on an annual basis of the average daily net asset value of the contract owner's allocations to the portfolios, based on the optional death benefit selected. Premium Taxes Some states and other governmental entities charge premium taxes or other similar taxes. Jackson is responsible for the payment of these taxes and may make a deduction from the value of the contract for them. Premium taxes generally range from 0% to 3.5% depending on the state. Note 4 - Related Party Transactions For contract enhancement benefits related to the optional benefits offered, Jackson contributed $94,185,834 and $55,633,702 to the Separate Account in the form of additional premium to contract owners' accounts for the years ended December 31, 2007 and 2006, respectively. These amounts are included in purchase payments received from contract owners. 45 Jackson National Separate Account I Notes to Financial Statements (continued) Note 5 - Purchases and Sales of Investments For the year ended December 31, 2007, purchases and proceeds from sales of investments are as follows: -------------------------------------------------------------------------------- JNL Series Trust --------------------------------------------------------------------------------
Proceeds Purchases from Sales -------------- -------------- JNL/AIM International Growth Fund $ 119,377,826 $ 60,035,604 JNL/AIM Large Cap Growth Fund 145,077,381 54,127,158 JNL/AIM Real Estate Fund 196,634,936 173,066,915 JNL/AIM Small Cap Growth Fund 42,549,013 22,292,490 JNL/Alger Growth Fund 7,085,193 150,139,589 JNL/Capital Guardian Global Balanced Fund 87,865,417 53,903,145 JNL/Capital Guardian Global Diversified Research Fund 66,957,621 40,429,342 JNL/Capital Guardian International Small Cap Fund 1,975,348 4,316 JNL/Capital Guardian U.S. Growth Equity Fund 45,717,467 44,968,998 JNL/Credit Suisse Global Natural Resources Fund 322,759,002 52,173,661 JNL/Credit Suisse Long/Short Fund 24,862,010 6,210,828 JNL/Eagle Core Equity Fund 26,999,984 24,195,294 JNL/Eagle SmallCap Equity Fund 138,770,418 71,463,498 JNL/Franklin Templeton Founding Strategy Fund 954,527,198 174,433,016 JNL/Franklin Templeton Global Growth Fund 68,312,006 19,783,624 JNL/Franklin Templeton Income Fund 274,145,447 70,150,923 JNL/Franklin Templeton Mutual Shares Fund 92,772,342 19,838,712 JNL/Franklin Templeton Small Cap Value Fund 53,876,463 34,694,191 JNL/Goldman Sachs Core Plus Bond Fund 162,738,937 93,951,998 JNL/Goldman Sachs Mid Cap Value Fund 87,636,973 49,644,010 JNL/Goldman Sachs Short Duration Bond Fund 104,815,703 65,072,832 JNL/JPMorgan International Value Fund 285,442,050 186,077,740 JNL/JPMorgan MidCap Growth Fund 57,985,823 46,297,227 JNL/JPMorgan U.S. Government & Quality Bond Fund 96,318,919 77,452,333 JNL/Lazard Emerging Markets Fund 254,283,732 63,999,166 JNL/Lazard Mid Cap Value Fund 166,140,364 93,999,643 JNL/Lazard Small Cap Value Fund 48,850,189 46,254,209 JNL/MCM 10 x 10 Fund 79,033,395 25,633,687 JNL/MCM Bond Index Fund 158,112,492 91,530,028 JNL/MCM Enhanced S&P 500 Stock Index Fund 52,292,942 39,219,775 JNL/MCM Index 5 Fund 37,524,416 9,474,485 JNL/MCM International Index Fund 255,757,666 186,346,187 JNL/MCM S&P 400 MidCap Index Fund 208,828,412 136,972,006 JNL/MCM S&P 500 Index Fund 191,226,460 148,636,862 JNL/MCM Small Cap Index Fund 146,562,372 111,860,485 JNL/Oppenheimer Global Growth Fund 89,253,299 70,019,114 JNL/Oppenheimer Growth Fund 19,505,055 43,141,869 JNL/PIMCO Real Return Fund 98,006,554 25,543,665 JNL/PIMCO Total Return Bond Fund 290,306,593 142,144,214 JNL/PPM America Core Equity Fund 7,052,857 28,512,331 JNL/PPM America High Yield Bond Fund 234,850,121 223,954,659 JNL/PPM America Value Equity Fund 19,756,252 48,427,809 JNL/Putnam Midcap Growth Fund 11,304,780 43,053,737 JNL/S&P 4 Fund 22,306,425 69,561 JNL/S&P Competitive Advantage Fund 6,302,458 27,145 JNL/S&P Disciplined Growth Fund 16,503,849 854,631 JNL/S&P Disciplined Moderate Fund 37,427,992 4,298,239 JNL/S&P Disciplined Moderate Growth Fund 44,490,113 6,309,702 JNL/S&P Dividend Income & Growth Fund 743,201 1,155 JNL/S&P Growth Retirement Strategy Fund 842,308 31,764 JNL/S&P Intrinsic Value Fund 11,926,478 38,942 JNL/S&P Managed Aggressive Growth Fund 146,266,150 157,422,986 JNL/S&P Managed Conservative Fund 222,277,522 108,913,949 JNL/S&P Managed Growth Fund 351,455,141 248,100,076 JNL/S&P Managed Moderate Fund 297,432,609 110,171,048 JNL/S&P Managed Moderate Growth Fund 518,255,326 263,338,547 JNL/S&P Moderate Growth Retirement Strategy Fund 854,346 172,126 JNL/S&P Moderate Retirement Strategy Fund 318,880 18,165 JNL/S&P Retirement 2015 Fund 13,520,604 2,771,891 JNL/S&P Retirement 2020 Fund 7,407,967 1,134,214 JNL/S&P Retirement 2025 Fund 4,676,305 977,426 JNL/S&P Retirement Income Fund 24,985,881 5,049,156 JNL/S&P Total Yield Fund 3,319,702 25,803 JNL/Select Balanced Fund 210,434,301 129,730,047 JNL/Select Money Market Fund 1,279,799,657 908,999,121 JNL/Select Value Fund 147,581,573 92,843,584 JNL/T.Rowe Price Established Growth Fund 333,497,764 146,853,122 JNL/T.Rowe Price Mid-Cap Growth Fund 243,631,149 141,570,353 JNL/T.Rowe Price Value Fund 195,835,933 126,871,024
46 Jackson National Separate Account I Notes to Financial Statements (continued) Note 5 - Purchases and Sales of Investments (continued) -------------------------------------------------------------------------------- JNL Variable Fund LLC --------------------------------------------------------------------------------
Proceeds Purchases from Sales -------------- -------------- JNL/MCM 25 Fund $ 242,818,619 $ 215,456,912 JNL/MCM Communications Sector Fund 97,067,116 63,562,958 JNL/MCM Consumer Brands Sector Fund 22,473,191 25,067,743 JNL/MCM Dow 10 Fund 275,190,178 316,855,454 JNL/MCM Dow Dividend Fund 318,432,958 170,939,387 JNL/MCM Financial Sector Fund 50,473,298 51,220,616 JNL/MCM Global 15 Fund 502,419,850 435,297,738 JNL/MCM Healthcare Sector Fund 84,493,545 61,399,499 JNL/MCM JNL 5 Fund 2,944,053,920 1,148,363,709 JNL/MCM JNL Optimized 5 Fund 335,906,994 51,938,757 JNL/MCM Nasdaq 25 Fund 81,250,461 53,475,061 JNL/MCM NYSE International 25 Fund 73,954,126 11,627,176 JNL/MCM Oil & Gas Sector Fund 317,479,256 231,073,279 JNL/MCM S&P 10 Fund 260,655,761 271,396,892 JNL/MCM S&P 24 Fund 16,092,562 12,307,534 JNL/MCM S&P SMid 60 Fund 45,578,155 9,579,845 JNL/MCM Select Small-Cap Fund 290,350,710 224,735,760 JNL/MCM Technology Sector Fund 89,589,174 55,439,071 JNL/MCM Value Line 30 Fund 512,505,733 395,859,048 JNL/MCM VIP Fund 182,215,034 203,110,613
-------------------------------------------------------------------------------- Variable Insurance Funds --------------------------------------------------------------------------------
Proceeds Purchases from Sales -------------- -------------- Fifth Third Balanced VIP Fund $ 147,946 $ 285,377 Fifth Third Disciplined Value VIP Fund 2,828,399 9,141,624 Fifth Third Mid Cap VIP Fund 1,484,025 3,743,528 Fifth Third Quality Growth VIP Fund 2,271,452 7,568,540
47 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights The following is a summary for each period in the five year period ended December 31, 2007 of unit values, total returns and expense ratios for variable annuity contracts with the highest and lowest expense ratios in addition to certain other portfolio data.
Fifth Third Fifth Third Fifth Third Fifth Third JNL/AIM Balanced Disciplined Value Mid Cap Quality Growth International VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) Growth Portfolio ---------------- ----------------- ---------------- ---------------- ---------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 12.985246 $ 18.164526 $ 18.123573 $ 8.044607 $ 14.019714 Total Return * 6.45% 6.12% 11.98% 16.44% 5.54% Ratio of Expenses ** 3.16% 3.41% 3.41% 3.41% 3.91% Period ended December 31, 2006 Unit Value $ 12.198984 $ 17.116518 $ 16.184937 $ 6.908989 $ 13.283412 Total Return * 3.93%*** 16.36% 6.36% 1.25% 17.90% Ratio of Expenses ** 3.16% 3.41% 3.41% 3.41% 3.91% Period ended December 31, 2005 Unit Value $ 11.782942 $ 14.710224 $ 15.216546 $ 6.823488 $ 11.267140 Total Return * -0.53% 2.88% 6.32% 2.53% 3.64%*** Ratio of Expenses ** 2.41% 3.41% 3.41% 3.41% 3.91% Period ended December 31, 2004 Unit Value $ 11.845398 $ 14.298550 $ 14.311708 $ 6.655426 $ 11.064433 Total Return * 3.49%*** 7.80%*** 5.24%*** 3.96%*** 9.87%*** Ratio of Expenses ** 2.41% 3.41% 3.41% 3.41% 3.45% Period ended December 31, 2003 Unit Value n/a n/a n/a n/a $ 10.270368 Total Return * n/a n/a n/a n/a 6.68%*** Ratio of Expenses ** n/a n/a n/a n/a 2.96% JNL/Capital JNL/AIM JNL/AIM JNL/AIM Guardian Global Large Cap Real Estate Small Cap JNL/Alger Balanced Growth Portfolio Portfolio(c) Growth Portfolio Growth Portfolio(a) Portfolio ---------------- ----------------- ---------------- ------------------- --------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 12.418859 $ 12.284252 $ 13.881145 $ 17.156448 $ 10.657491 Total Return * 11.47% -18.12% -2.85%*** 7.92% 3.85% Ratio of Expenses ** 3.75% 3.71% 3.51% 3.45% 3.86% Period ended December 31, 2006 Unit Value $ 11.141032 $ 15.003152 $ 12.952147 $ 15.897582 $ 10.262688 Total Return * 3.90% 31.43% 10.62% 1.41% 6.60% Ratio of Expenses ** 3.75% 3.71% 3.45% 3.45% 3.86% Period ended December 31, 2005 Unit Value $ 10.722972 $ 11.415702 $ 11.709139 $ 15.676069 $ 9.626865 Total Return * 3.30% 0.00%*** 4.75% 8.51% 5.93% Ratio of Expenses ** 3.75% 3.71% 3.45% 3.45% 3.86% Period ended December 31, 2004 Unit Value $ 10.380847 n/a $ 11.177826 $ 14.447148 $ 9.087874 Total Return * 4.65%*** n/a 2.35%*** 0.32%*** 6.75%*** Ratio of Expenses ** 3.75% n/a 3.45% 3.45% 3.86% Period ended December 31, 2003 Unit Value $ 9.979643 n/a $ 10.957129 $ 14.885250 $ 8.938991 Total Return * 2.79%*** n/a 9.40%*** 9.75%*** 5.61%*** Ratio of Expenses ** 2.91% n/a 2.91% 2.91% 2.91%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) For 2007, the period is from January 1, 2007 through acquisition April 27, 2007. Unit values disclosed are as of 4/27/07. (b) For 2007, the period is from January 1, 2007 through liquidation October 12, 2007. Unit values disclosed are as of 10/12/07. (c) Commencement of operations May 2, 2005. 48 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
Fifth Third Fifth Third Fifth Third Fifth Third JNL/AIM Balanced Disciplined Value Mid Cap Quality Growth International VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) Growth Portfolio ---------------- ----------------- ---------------- ---------------- ---------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 14.280302 $ 20.343790 $ 20.297497 $ 9.299272 $ 20.253728 Total Return * 8.06% 7.94% 13.90% 18.43% 8.68% Ratio of Expenses ** 1.25% 1.25% 1.25% 1.25% 1.00% Period ended December 31, 2006 Unit Value $ 13.215690 $ 18.847190 $ 17.821040 $ 7.852031 $ 18.636415 Total Return * 7.66% 18.89% 8.68% 3.46% 21.37% Ratio of Expenses ** 1.25% 1.25% 1.25% 1.25% 1.00% Period ended December 31, 2005 Unit Value $ 12.275947 $ 15.852385 $ 16.397673 $ 7.589596 $ 15.355109 Total Return * 0.75% 5.12% 8.64% 4.76% 9.59% Ratio of Expenses ** 1.25% 1.25% 1.25% 1.25% 1.00% Period ended December 31, 2004 Unit Value $ 12.183991 $ 15.080382 $ 15.093897 $ 7.244899 $ 14.011462 Total Return * 4.71%*** 11.92%*** 6.22%*** 3.68%*** 15.18% Ratio of Expenses ** 1.25% 1.25% 1.25% 1.25% 1.00% Period ended December 31, 2003 Unit Value n/a n/a n/a n/a $ 12.164594 Total Return * n/a n/a n/a n/a 16.60%*** Ratio of Expenses ** n/a n/a n/a n/a 1.00% JNL/Capital JNL/AIM JNL/AIM JNL/AIM Guardian Global Large Cap Real Estate Small Cap JNL/Alger Balanced Growth Portfolio Portfolio(c) Growth Portfolio Growth Portfolio(a) Portfolio ---------------- ----------------- ---------------- ------------------- --------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 14.717475 $ 13.204592 $ 16.208684 $ 22.760029 $ 13.271782 Total Return * 14.59% -15.86% 10.26% 8.78% 6.88% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 12.843047 $ 15.693623 $ 14.700524 $ 20.922199 $ 12.417826 Total Return * 6.79% 35.03% 13.35% 3.92% 9.69% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2005 Unit Value $ 12.026701 $ 11.622681 $ 12.968937 $ 20.132698 $ 11.320907 Total Return * 6.17% 8.19%*** 7.34% 11.19% 9.00% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2004 Unit Value $ 11.327999 n/a $ 12.081613 $ 18.106523 $ 10.386549 Total Return * 7.15%*** n/a 3.13%*** -2.18%*** 6.66%*** Ratio of Expenses ** 1.00% n/a 1.00% 1.00% 1.00% Period ended December 31, 2003 Unit Value $ 10.368162 n/a $ 11.382319 $ 17.200539 $ 9.535089 Total Return * 28.54% n/a 36.85% 33.74% 12.43% Ratio of Expenses ** 1.15% n/a 1.15% 1.15% 1.15%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) For 2007, the period is from January 1, 2007 through acquisition April 27, 2007. Unit values disclosed are as of 4/27/07. (b) For 2007, the period is from January 1, 2007 through liquidation October 12, 2007. Unit values disclosed are as of 10/12/07. (c) Commencement of operations May 2, 2005. 49 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
Fifth Third Fifth Third Fifth Third Fifth Third JNL/AIM Balanced Disciplined Value Mid Cap Quality Growth International VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) VIP Portfolio(b) Growth Portfolio ---------------- ----------------- ---------------- ---------------- ---------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ - $ - $ - $ - $ 203,285 Units Outstanding (in thousands) - - - - 10,936 Investment Income Ratio * 1.65% 3.44% 1.09% 3.89% 1.65% Period ended December 31, 2006 Net Assets (in thousands) $ 146 $ 8,023 $ 3,120 $ 6,025 $ 132,458 Units Outstanding (in thousands) 11 434 179 789 7,662 Investment Income Ratio * 2.52% 3.12% 0.03% 0.80% 1.62% Period ended December 31, 2005 Net Assets (in thousands) $ 139 $ 6,339 $ 2,722 $ 5,255 $ 88,044 Units Outstanding (in thousands) 11 406 169 709 6,119 Investment Income Ratio * 1.68% 1.35% 0.10% 0.03% 1.75% Period ended December 31, 2004 Net Assets (in thousands) $ 123 $ 3,841 $ 1,691 $ 3,316 $ 78,422 Units Outstanding (in thousands) 10 257 113 466 5,920 Investment Income Ratio * 0.64% 0.50% 0.00% 0.00% 1.27% Period ended December 31, 2003 Net Assets (in thousands) n/a n/a n/a n/a $ 81,746 Units Outstanding (in thousands) n/a n/a n/a n/a 7,056 Investment Income Ratio * n/a n/a n/a n/a 1.69% JNL/Capital JNL/AIM JNL/AIM JNL/AIM Guardian Global Large Cap Real Estate Small Cap JNL/Alger Balanced Growth Portfolio Portfolio(c) Growth Portfolio Growth Portfolio(a) Portfolio ---------------- ---------------- ---------------- ------------------- --------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 193,899 $ 134,186 $ 69,218 $ - $ 183,983 Units Outstanding (in thousands) 13,729 10,355 4,448 - 14,528 Investment Income Ratio * 0.57% 2.77% 0.34% 0.20% 2.54% Period ended December 31, 2006 Net Assets (in thousands) $ 89,484 $ 151,821 $ 47,863 $ 131,911 $ 151,521 Units Outstanding (in thousands) 7,210 9,795 3,368 6,621 12,674 Investment Income Ratio * 0.02% 1.51% 0.00% 0.02% 0.93% Period ended December 31, 2005 Net Assets (in thousands) $ 77,265 $ 23,177 $ 45,043 $ 157,540 $ 118,850 Units Outstanding (in thousands) 6,605 2,005 3,570 8,153 10,813 Investment Income Ratio * 0.04% 0.00% 0.00% 0.10% 0.01% Period ended December 31, 2004 Net Assets (in thousands) $ 63,173 n/a $ 39,024 $ 165,724 $ 97,768 Units Outstanding (in thousands) 5,689 n/a 3,293 9,468 9,610 Investment Income Ratio * 0.00% n/a 0.00% 0.01% 1.33% Period ended December 31, 2003 Net Assets (in thousands) $ 33,754 n/a $ 40,305 $ 191,213 $ 85,632 Units Outstanding (in thousands) 3,286 n/a 3,572 11,287 9,046 Investment Income Ratio * 0.00% n/a 0.00% 0.00% 1.59%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) For 2007, the period is from January 1, 2007 through acquisition April 27, 2007. (b) For 2007, the period is from January 1, 2007 through liquidation October 12, 2007. (c) Commencement of operations May 2, 2005. 50 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Capital JNL/Capital JNL/Capital JNL/Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio(b) Portfolio Portfolio(a) Portfolio(a) ------------------ ------------------- --------------- ----------------- --------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 22.719950 $ 9.848527 $ 23.335999 $ 13.428198 $ 10.538002 Total Return * 16.05% -1.51%*** 6.03% -3.84%*** 3.69%*** Ratio of Expenses ** 3.86% 2.845% 3.41% 3.61% 3.05% Period ended December 31, 2006 Unit Value $ 19.577115 n/a $ 22.007930 n/a n/a Total Return * 9.03% n/a 1.11% n/a n/a Ratio of Expenses ** 3.86% n/a 3.41% n/a n/a Period ended December 31, 2005 Unit Value $ 17.956055 n/a $ 21.766740 n/a n/a Total Return * -1.94% n/a 5.48%*** n/a n/a Ratio of Expenses ** 3.86% n/a 3.41% n/a n/a Period ended December 31, 2004 Unit Value $ 18.310425 n/a $ 21.933995 n/a n/a Total Return * 8.68%*** n/a 6.28%*** n/a n/a Ratio of Expenses ** 3.86% n/a 3.21% n/a n/a Period ended December 31, 2003 Unit Value $ 17.266421 n/a $ 20.815659 n/a n/a Total Return * 22.25% n/a 4.49%*** n/a n/a Ratio of Expenses ** 1.40% n/a 2.91% n/a n/a JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio(a) Portfolio(a) Income Portfolio(c) --------------- --------------- --------------------- -------------- ------------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 15.359991 $ 19.503996 $ 9.775729 $ 9.721359 $ 10.536430 Total Return * -2.79% 7.77% -6.46%*** -5.91%*** -1.73% Ratio of Expenses ** 3.40% 3.91% 3.31% 3.61% 3.56% Period ended December 31, 2006 Unit Value $ 15.801623 $ 18.097518 n/a n/a $ 10.722272 Total Return * 8.60% 15.49% n/a n/a 4.10%*** Ratio of Expenses ** 3.40% 3.91% n/a n/a 3.56% Period ended December 31, 2005 Unit Value $ 14.549938 $ 15.669951 n/a n/a n/a Total Return * -0.07% -0.24%*** n/a n/a n/a Ratio of Expenses ** 3.40% 3.91% n/a n/a n/a Period ended December 31, 2004 Unit Value $ 14.560445 $ 16.580951 n/a n/a n/a Total Return * 8.80%*** 14.09%*** n/a n/a n/a Ratio of Expenses ** 3.40% 3.40% n/a n/a n/a Period ended December 31, 2003 Unit Value $ 14.684021 $ 14.965423 n/a n/a n/a Total Return * 4.67%*** 3.95%*** n/a n/a n/a Ratio of Expenses ** 2.91% 2.91% n/a n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations May 1, 2006. 51 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Capital JNL/Capital JNL/Capital JNL/Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio(b) Portfolio Portfolio(a) Portfolio(a) ------------------ ------------------- --------------- ----------------- --------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 32.201914 $ 9.860527 $ 31.644131 $ 13.767720 $ 10.731355 Total Return * 19.32%*** -1.39%*** 8.63% 14.25%*** 6.45%*** Ratio of Expenses ** 1.10% 1.25% 1.00% 1.00% 1.15% Period ended December 31, 2006 Unit Value $ 26.987965 n/a $ 29.129267 n/a n/a Total Return * 12.65% n/a 3.57% n/a n/a Ratio of Expenses ** 1.15% n/a 1.00% n/a n/a Period ended December 31, 2005 Unit Value $ 23.956905 n/a $ 28.126118 n/a n/a Total Return * 0.75% n/a 3.63% n/a n/a Ratio of Expenses ** 1.15% n/a 1.00% n/a n/a Period ended December 31, 2004 Unit Value $ 23.778364 n/a $ 27.141128 n/a n/a Total Return * 10.40%*** n/a 10.56% n/a n/a Ratio of Expenses ** 1.15% n/a 1.00% n/a n/a Period ended December 31, 2003 Unit Value $ 17.266421 n/a $ 24.548717 n/a n/a Total Return * 22.25% n/a 12.73%*** n/a n/a Ratio of Expenses ** 1.40% n/a 1.00% n/a n/a JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio(a) Portfolio(a) Income Portfolio(c) --------------- --------------- --------------------- ------------- ------------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 20.143014 $ 27.096246 $ 9.993973 $ 9.957514 $ 10.996249 Total Return * -0.42% 10.97% -1.17%*** 2.11%** 0.83% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2006 Unit Value $ 20.228069 $ 24.417432 n/a n/a $ 10.908218 Total Return * 11.23% 18.89% n/a n/a -0.02%*** Ratio of Expenses ** 1.00% 1.00% n/a n/a 1.00% Period ended December 31, 2005 Unit Value $ 18.185242 $ 20.537083 n/a n/a n/a Total Return * 2.35% 1.50% n/a n/a n/a Ratio of Expenses ** 1.00% 1.00% n/a n/a n/a Period ended December 31, 2004 Unit Value $ 17.767948 $ 20.232962 n/a n/a n/a Total Return * 3.82%*** 17.62% n/a n/a n/a Ratio of Expenses ** 1.00% 1.00% n/a n/a n/a Period ended December 31, 2003 Unit Value $ 16.695529 $ 17.202438 n/a n/a n/a Total Return * 23.12% 13.51%*** n/a n/a n/a Ratio of Expenses ** 1.15% 1.00% n/a n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations May 1, 2006. 52 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Capital JNL/Capital JNL/Capital JNL/Credit Suisse JNL/ Guardian Global Guardian Guardian U.S. Global Natural Credit Suisse Diversified International Small Growth Equity Resources Long/Short Research Portfolio Cap Portfolio(b) Portfolio Portfolio(a) Portfolio(a) ------------------ ------------------- --------------- ----------------- --------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 155,406 $ 1,986 $ 151,626 $ 294,796 $ 19,247 Units Outstanding (in thousands) 5,770 202 5,756 21,577 1,804 Investment Income Ratio * 0.71% 0.00% 0.00% 0.00% 0.00% Period ended December 31, 2006 Net Assets (in thousands) $ 109,223 n/a $ 139,074 n/a n/a Units Outstanding (in thousands) 5,042 n/a 5,847 n/a n/a Investment Income Ratio * 0.30% n/a 0.00% n/a n/a Period ended December 31, 2005 Net Assets (in thousands) $ 117,922 n/a $ 165,961 n/a n/a Units Outstanding (in thousands) 6,149 n/a 7,241 n/a n/a Investment Income Ratio * 0.50% n/a 0.00% n/a n/a Period ended December 31, 2004 Net Assets (in thousands) $ 142,752 n/a $ 204,976 n/a n/a Units Outstanding (in thousands) 7,517 n/a 9,239 n/a n/a Investment Income Ratio * 0.00% n/a 0.00% n/a n/a Period ended December 31, 2003 Net Assets (in thousands) $ 162,665 n/a $ 201,383 n/a n/a Units Outstanding (in thousands) 9,421 n/a 10,130 n/a n/a Investment Income Ratio * 0.00% n/a 0.00% n/a n/a JNL/Franklin JNL/Eagle JNL/Eagle JNL/Franklin Templeton JNL/Franklin Core Equity SmallCap Equity Templeton Founding Global Growth Templeton Portfolio Portfolio Strategy Portfolio(a) Portfolio(a) Income Portfolio(c) --------------- --------------- --------------------- ------------- ------------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 70,254 $ 159,201 $ 762,485 $ 47,195 $ 252,304 Units Outstanding (in thousands) 3,735 6,378 76,812 4,766 23,215 Investment Income Ratio * 1.88% 2.39% 0.00% 1.28% 4.81% Period ended December 31, 2006 Net Assets (in thousands) $ 78,068 $ 104,070 n/a n/a $ 58,428 Units Outstanding (in thousands) 4,109 4,595 n/a n/a 5,381 Investment Income Ratio * 0.02% 0.00% n/a n/a 5.07% Period ended December 31, 2005 Net Assets (in thousands) $ 80,193 $ 80,053 n/a n/a n/a Units Outstanding (in thousands) 4,663 4,181 n/a n/a n/a Investment Income Ratio * 0.87% 0.00% n/a n/a n/a Period ended December 31, 2004 Net Assets (in thousands) $ 84,921 $ 92,613 n/a n/a n/a Units Outstanding (in thousands) 5,023 4,880 n/a n/a n/a Investment Income Ratio * 0.74% 0.00% n/a n/a n/a Period ended December 31, 2003 Net Assets (in thousands) $ 80,208 $ 81,155 n/a n/a n/a Units Outstanding (in thousands) 4,960 5,010 n/a n/a n/a Investment Income Ratio * 0.76% 0.00% n/a n/a n/a
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations May 1, 2006. 53 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Franklin JNL/ JNL/ JNL/ JNL/Franklin Templeton Goldman Sachs Goldman Sachs Goldman Sachs Templeton Mutual Small Cap Core Plus Mid Cap Short Duration Shares Portfolio(a) Value Portfolio(b) Bond Portfolio Value Portfolio(b) Bond Portfolio(c) ------------------- ------------------ --------------- ------------------ ----------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 9.723155 $ 10.980404 $ 14.950410 $ 12.208730 $ 10.243295 Total Return * -8.10%*** -9.76% 2.88% -1.17% 0.45%*** Ratio of Expenses ** 3.145% 3.91% 3.91% 3.91% 3.21% Period ended December 31, 2006 Unit Value n/a $ 12.167333 $ 14.532441 $ 12.353358 $ 10.109623 Total Return * n/a 13.21% 0.68% 11.30% 0.37%*** Ratio of Expenses ** n/a 3.91% 3.91% 3.91% 2.96% Period ended December 31, 2005 Unit Value n/a $ 10.747716 $ 14.434635 $ 11.098693 n/a Total Return * n/a 0.89%*** -0.25%*** -0.85%*** n/a Ratio of Expenses ** n/a 3.91% 3.91% 3.91% n/a Period ended December 31, 2004 Unit Value n/a n/a $ 14.997395 n/a n/a Total Return * n/a n/a 4.61%*** n/a n/a Ratio of Expenses ** n/a n/a 3.65% n/a n/a Period ended December 31, 2003 Unit Value n/a n/a $ 15.509757 n/a n/a Total Return * n/a n/a 1.64%*** n/a n/a Ratio of Expenses ** n/a n/a 2.91% n/a n/a JNL/JPMorgan JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard JNL/Lazard International MidCap Growth & Quality Bond Emerging Markets Mid Cap Value Portfolio Portfolio Portfolio Portfolio(c) Value Portfolio --------------- --------------- --------------- ---------------- ---------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 13.734935 $ 19.566550 $ 12.482587 $ 13.639504 $ 16.014550 Total Return * 7.66% 4.11% 2.45% -2.44%*** -6.16% Ratio of Expenses ** 3.91% 3.61% 3.75% 3.61% 3.695% Period ended December 31, 2006 Unit Value $ 12.758163 $ 18.793604 $ 12.184558 $ 10.747873 $ 17.065782 Total Return * 26.93% 8.10% -0.54% 11.69%*** 7.85%*** Ratio of Expenses ** 3.91% 3.61% 3.75% 3.36% 3.695% Period ended December 31, 2005 Unit Value $ 10.051067 $ 17.386172 $ 12.250484 n/a $ 15.559998 Total Return * 4.81%*** 2.41%*** -1.40% n/a 4.96% Ratio of Expenses ** 3.91% 3.61% 3.75% n/a 3.61% Period ended December 31, 2004 Unit Value $ 8.911939 $ 17.242370 $ 12.424813 n/a $ 14.824692 Total Return * 16.07%*** 8.76%*** 1.62%*** n/a 10.40%*** Ratio of Expenses ** 3.75% 3.45% 3.75% n/a 3.61% Period ended December 31, 2003 Unit Value $ 7.930736 $ 15.862021 $ 13.356628 n/a $ 12.837923 Total Return * 8.84%*** 14.66%*** 0.23%*** n/a 9.89%*** Ratio of Expenses ** 2.91% 2.90% 2.91% n/a 2.91%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations May 2, 2005. (c) Commencement of operations May 1, 2006. 54 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Franklin JNL/ JNL/ JNL/ JNL/Franklin Templeton Goldman Sachs Goldman Sachs Goldman Sachs Templeton Mutual Small Cap Core Plus Mid Cap Short Duration Shares Portfolio(a) Value Portfolio(b) Bond Portfolio Value Portfolio(b) Bond Portfolio(c) ------------------- ------------------ --------------- ------------------ ----------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 9.910412 $ 11.866094 $ 21.598776 $ 13.193511 $ 10.610338 Total Return * -0.79%*** -7.07% 5.94% 1.94%*** 3.67% Ratio of Expenses ** 1.15% 1.00% 1.00% 1.00% 1.10% Period ended December 31, 2006 Unit Value n/a $ 12.769450 $ 20.388598 $ 12.942905 $ 10.235082 Total Return * n/a 3.43%*** 3.65% 14.50% -0.12%*** Ratio of Expenses ** n/a 1.00% 1.00% 1.15% 1.10% Period ended December 31, 2005 Unit Value n/a $ 10.946232 $ 19.671463 $ 11.303526 n/a Total Return * n/a 7.60%*** 1.60% 10.14%*** n/a Ratio of Expenses ** n/a 1.15% 1.00% 1.15% n/a Period ended December 31, 2004 Unit Value n/a n/a $ 19.361240 n/a n/a Total Return * n/a n/a 5.85% n/a n/a Ratio of Expenses ** n/a n/a 1.00% n/a n/a Period ended December 31, 2003 Unit Value n/a n/a $ 18.291417 n/a n/a Total Return * n/a n/a 1.54%*** n/a n/a Ratio of Expenses ** n/a n/a 1.00% n/a n/a JNL/JPMorgan JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard JNL/Lazard International MidCap Growth & Quality Bond Emerging Markets Mid Cap Value Portfolio Portfolio Portfolio Portfolio(c) Value Portfolio --------------- --------------- --------------- ---------------- ---------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 18.288854 $ 27.213447 $ 17.670275 $ 14.246633 $ 20.877235 Total Return * 10.85% 6.88% 5.32% 24.60%*** -3.58% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 16.498809 $ 25.461414 $ 16.777961 $ 10.910134 $ 21.652882 Total Return * 30.67% 10.94% 2.23% 19.04%*** 13.42% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2005 Unit Value $ 12.626277 $ 22.949895 $ 16.412388 n/a $ 19.090166 Total Return * 17.39% 5.11% 1.34% n/a 10.69%*** Ratio of Expenses ** 1.00% 1.00% 1.00% n/a 1.00% Period ended December 31, 2004 Unit Value $ 10.755922 $ 21.834409 $ 16.195599 n/a $ 17.540416 Total Return * 21.32% 16.82% 3.04%*** n/a 23.29% Ratio of Expenses ** 1.00% 1.00% 1.00% n/a 1.15% Period ended December 31, 2003 Unit Value $ 8.865871 $ 18.690119 $ 15.549216 n/a $ 14.226593 Total Return * 42.58%*** 11.45%*** 0.02% n/a 27.42% Ratio of Expenses ** 1.00% 1.00% 1.15% n/a 1.15%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations May 2, 2005. (c) Commencement of operations May 1, 2006. 55 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Franklin JNL/ JNL/ JNL/ JNL/Franklin Templeton Goldman Sachs Goldman Sachs Goldman Sachs Templeton Mutual Small Cap Core Plus Mid Cap Short Duration Shares Portfolio(a) Value Portfolio(b) Bond Portfolio Value Portfolio(b) Bond Portfolio(c) ------------------- ------------------ -------------- ------------------ ----------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 71,047 $ 57,150 $ 329,798 $ 89,409 $ 65,966 Units Outstanding (in thousands) 7,206 4,912 16,644 6,902 6,283 Investment Income Ratio * 0.00% 2.81% 3.54% 2.42% 3.89% Period ended December 31, 2006 Net Assets (in thousands) n/a $ 45,327 $ 251,053 $ 54,652 $ 25,837 Units Outstanding (in thousands) n/a 3,595 13,343 4,264 2,534 Investment Income Ratio * n/a 1.38% 0.09% 2.41% 0.00% Period ended December 31, 2005 Net Assets (in thousands) n/a $ 12,193 $ 187,199 $ 22,285 n/a Units Outstanding (in thousands) n/a 1,120 10,244 1,978 n/a Investment Income Ratio * n/a 0.00% 5.94% 0.00% n/a Period ended December 31, 2004 Net Assets (in thousands) n/a n/a $ 127,610 n/a n/a Units Outstanding (in thousands) n/a n/a 7,004 n/a n/a Investment Income Ratio * n/a n/a 4.77% n/a n/a Period ended December 31, 2003 Net Assets (in thousands) n/a n/a $ 101,676 n/a n/a Units Outstanding (in thousands) n/a n/a 5,867 n/a n/a Investment Income Ratio * n/a n/a 5.09% n/a n/a JNL/JPMorgan JNL/JPMorgan JNL/JPMorgan U.S. Government JNL/Lazard JNL/Lazard International MidCap Growth & Quality Bond Emerging Markets Mid Cap Value Portfolio Portfolio Portfolio Portfolio(c) Value Portfolio --------------- ------------- --------------- ---------------- --------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 396,407 $ 133,042 $ 190,859 $ 243,760 $ 214,652 Units Outstanding (in thousands) 22,558 6,122 11,779 17,321 11,206 Investment Income Ratio * 5.66% 0.00% 3.79% 0.26% 5.52% Period ended December 31, 2006 Net Assets (in thousands) $ 293,190 $ 112,750 $ 167,521 $ 30,065 $ 185,662 Units Outstanding (in thousands) 18,030 5,729 10,828 2,766 9,361 Investment Income Ratio * 2.37% 0.00% 0.00% 0.00% 2.84% Period ended December 31, 2005 Net Assets (in thousands) $ 116,828 $ 120,214 $ 168,504 n/a $ 162,241 Units Outstanding (in thousands) 9,007 6,834 11,098 n/a 9,282 Investment Income Ratio * 0.45% 0.27% 3.73% n/a 10.23% Period ended December 31, 2004 Net Assets (in thousands) $ 72,980 $ 136,152 $ 166,536 n/a $ 133,657 Units Outstanding (in thousands) 6,276 8,176 11,036 n/a 8,272 Investment Income Ratio * 1.42% 0.00% 4.24% n/a 0.18% Period ended December 31, 2003 Net Assets (in thousands) $ 24,675 $ 141,533 $ 189,567 n/a $ 66,277 Units Outstanding (in thousands) 2,413 9,962 12,875 n/a 5,061 Investment Income Ratio * 4.47% 0.00% 2.83% n/a 0.29%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations January 16, 2007. (b) Commencement of operations May 2, 2005. (c) Commencement of operations May 1, 2006. 56 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Lazard JNL/MCM JNL/MCM JNL/MCM Small Cap 10 x 10 JNL/MCM Bond Index Communications Value Portfolio Portfolio(a) 25 Portfolio Portfolio Sector Portfolio --------------- -------------- -------------- --------------- ---------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 12.986859 $ 9.712781 $ 9.775965 $ 10.307274 $ 5.154877 Total Return * -10.04% -2.81%*** -6.66% 2.31% 0.49% Ratio of Expenses ** 3.51% 3.145% 4.00% 3.91% 3.71% Period ended December 31, 2006 Unit Value $ 14.436122 n/a $10.473370 $ 10.074061 $ 5.129986 Total Return * 6.54%*** n/a 7.84% -0.32% 15.15%*** Ratio of Expenses ** 3.51% n/a 4.00% 3.91% 3.71% Period ended December 31, 2005 Unit Value $ 12.861470 n/a $ 9.711698 $ 10.106316 $ 4.041766 Total Return * 1.11% n/a -6.73% -0.30%*** -2.22% Ratio of Expenses ** 3.45% n/a 4.00% 3.91% 3.21% Period ended December 31, 2004 Unit Value $ 12.720310 n/a $10.411974 $ 10.322773 $ 4.133508 Total Return * 8.52%*** n/a 11.69%*** 0.53%*** 11.05%*** Ratio of Expenses ** 3.45% n/a 4.00% 3.895% 3.21% Period ended December 31, 2003 Unit Value $ 11.777425 n/a $ 9.216104 $ 10.560119 $ 3.743377 Total Return * 9.01%*** n/a 34.74%*** 0.01%*** 7.05%*** Ratio of Expenses ** 2.91% n/a 3.20% 2.90% 2.51% JNL/MCM JNL/MCM JNL/MCM JNL/MCM Enhanced JNL/MCM Consumer Brands Dow 10 Dow Dividend S&P 500 Stock Financial Sector Portfolio Portfolio Portfolio(b) Index Portfolio Sector Portfolio ---------------- -------------- -------------- --------------- ------------------ Highest expense ratio Period ended December 31, 2007 Unit Value $ 8.884283 $ 9.141905 $10.068067 $ 8.200194 $ 10.052315 Total Return * -11.10% -2.96% -13.16% -0.13% -20.31% Ratio of Expenses ** 3.56% 4.00% 3.545% 3.80% 3.61% Period ended December 31, 2006 Unit Value $ 9.994079 $ 9.420741 $11.593769 $ 8.210535 $ 12.613960 Total Return * 9.48% 24.49% 2.15%*** 12.49% 14.49% Ratio of Expenses ** 3.56% 4.00% 3.545% 3.80% 3.61% Period ended December 31, 2005 Unit Value $ 9.128653 $ 7.567178 n/a $ 7.298669 $ 11.017663 Total Return * -3.04%*** -9.36% n/a 0.37% 7.04%*** Ratio of Expenses ** 3.56% 4.00% n/a 3.80% 3.61% Period ended December 31, 2004 Unit Value $ 9.884514 $ 8.348810 n/a $ 7.272051 $ 11.007919 Total Return * 6.32%*** 7.70%*** n/a 4.45%*** 7.90%*** Ratio of Expenses ** 3.21% 4.00% n/a 3.80% 3.21% Period ended December 31, 2003 Unit Value $ 9.568389 $ 8.757884 n/a $ 7.074361 $ 10.336726 Total Return * 3.87%*** 28.70%*** n/a 6.95%*** 3.01%*** Ratio of Expenses ** 2.51% 3.20% n/a 2.91% 2.51%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations April 30, 2007. (b) Commencement of operations January 17, 2006. 57 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Lazard JNL/MCM JNL/MCM JNL/MCM Small Cap 10 x 10 JNL/MCM Bond Index Communications Value Portfolio Portfolio(a) 25 Portfolio Portfolio Sector Portfolio ----------------- --------------- ---------------- ---------------- ---------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 16.625624 $ 9.843719 $ 12.612726 $ 12.261238 $ 6.491019 Total Return * -7.74% -4.92%*** -3.80% 5.36% 3.26%*** Ratio of Expenses ** 1.00% 1.15% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 18.020082 n/a $ 13.110972 $ 11.637195 $ 6.286020 Total Return * 15.64% n/a 11.12% 2.62% 35.64% Ratio of Expenses ** 1.00% n/a 1.00% 1.00% 1.10% Period ended December 31, 2005 Unit Value $ 15.583063 n/a $ 11.799121 $ 11.340550 $ 4.634201 Total Return * 3.61% n/a -3.89% 0.84% -0.14% Ratio of Expenses ** 1.00% n/a 1.00% 1.00% 1.10% Period ended December 31, 2004 Unit Value $ 15.040034 n/a $ 12.277074 $ 11.246377 $ 4.640711 Total Return * 14.23% n/a 20.69% 1.04%*** -0.23%*** Ratio of Expenses ** 1.00% n/a 1.00% 1.00% 1.10% Period ended December 31, 2003 Unit Value $ 13.166191 n/a $ 10.172779 $ 10.927761 $ 3.934696 Total Return * 16.50%*** n/a 33.64%*** 1.79% 31.17% Ratio of Expenses ** 1.00% n/a 1.00% 1.15% 1.40% JNL/MCM JNL/MCM JNL/MCM JNL/MCM Enhanced JNL/MCM Consumer Brands Dow 10 Dow Dividend S&P 500 Stock Financial Sector Portfolio Portfolio Portfolio(b) Index Portfolio Sector Portfolio ----------------- ----------------- ---------------- ---------------- ---------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 11.045267 $ 11.794827 $ 10.581265 $ 10.441324 $ 12.550628 Total Return * -8.79% 0.01% -10.83%*** 2.73% -18.19%*** Ratio of Expenses ** 1.00% 1.00% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 12.109280 $ 11.793390 $ 11.865620 $ 10.164248 $ 15.340976 Total Return * 12.31% 28.28% 18.66%*** 15.68% 18.64% Ratio of Expenses ** 1.00% 1.00% 1.10% 1.00% 1.15% Period ended December 31, 2005 Unit Value $ 10.781848 $ 9.193764 n/a $ 8.786572 $ 12.930662 Total Return * -0.10%*** 6.61% n/a 3.21% 4.90% Ratio of Expenses ** 1.00% 1.00% n/a 1.00% 1.15% Period ended December 31, 2004 Unit Value $ 11.068600 $ 9.844389 n/a $ 8.513429 $ 12.326584 Total Return * 8.83% 1.84% n/a 10.16% 12.19% Ratio of Expenses ** 1.15% 1.00% n/a 1.00% 1.15% Period ended December 31, 2003 Unit Value $ 10.170973 $ 9.666055 n/a $ 7.728089 $ 10.987648 Total Return * 1.85%*** 28.44%*** n/a 12.01%*** 1.39%*** Ratio of Expenses ** 1.15% 1.00% n/a 1.00% 1.15%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations April 30, 2007. (b) Commencement of operations January 17, 2006. 58 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/Lazard JNL/MCM JNL/MCM JNL/MCM Small Cap 10 x 10 JNL/MCM Bond Index Communications Value Portfolio Portfolio(a) 25 Portfolio Portfolio Sector Portfolio --------------- ------------ ------------ ----------- ---------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 111,168 $ 50,864 $ 689,744 $ 303,352 $ 82,006 Units Outstanding (in thousands) 7,130 5,188 57,881 25,866 13,425 Investment Income Ratio * 3.78% 0.00% 1.64% 4.40% 4.21% Period ended December 31, 2006 Net Assets (in thousands) $ 127,361 n/a $ 707,449 $ 231,059 $ 53,066 Units Outstanding (in thousands) 7,493 n/a 56,752 20,619 8,876 Investment Income Ratio * 9.21% n/a 0.00% 2.20% 2.29% Period ended December 31, 2005 Net Assets (in thousands) $ 121,325 n/a $ 547,728 $ 169,206 $ 12,982 Units Outstanding (in thousands) 8,217 n/a 48,527 15,411 2,866 Investment Income Ratio * 5.37% n/a 0.00% 2.91% 9.45% Period ended December 31, 2004 Net Assets (in thousands) $ 112,999 n/a $ 411,612 $ 111,204 $ 16,654 Units Outstanding (in thousands) 7,838 n/a 34,713 10,126 3,666 Investment Income Ratio * 0.05% n/a 0.00% 0.39% 0.01% Period ended December 31, 2003 Net Assets (in thousands) $ 77,708 n/a $ 164,718 $ 45,891 $ 8,250 Units Outstanding (in thousands) 6,102 n/a 16,593 4,248 2,070 Investment Income Ratio * 0.00% n/a 0.00% 2.90% 0.00% JNL/MCM JNL/MCM JNL/MCM JNL/MCM Enhanced JNL/MCM Consumer Brands Dow 10 Dow Dividend S&P 500 Stock Financial Sector Portfolio Portfolio Portfolio(b) Index Portfolio Sector Portfolio ---------------- ----------- ------------ --------------- ---------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 17,959 $ 815,547 $ 381,088 $ 79,149 $ 51,640 Units Outstanding (in thousands) 1,719 73,139 36,492 7,793 4,371 Investment Income Ratio * 0.49% 0.00% 0.00% 1.59% 1.53% Period ended December 31, 2006 Net Assets (in thousands) $ 22,722 $ 848,141 $ 278,475 $ 66,622 $ 66,020 Units Outstanding (in thousands) 1,967 75,604 23,593 6,531 4,511 Investment Income Ratio * 0.22% 0.00% 0.00% 6.96% 1.37% Period ended December 31, 2005 Net Assets (in thousands) $ 17,930 $ 547,103 n/a $ 51,576 $ 37,388 Units Outstanding (in thousands) 1,727 62,187 n/a 5,773 2,987 Investment Income Ratio * 1.73% 0.00% n/a 5.94% 1.82% Period ended December 31, 2004 Net Assets (in thousands) $ 14,748 $ 429,753 n/a $ 58,425 $ 28,505 Units Outstanding (in thousands) 1,356 45,137 n/a 6,653 2,369 Investment Income Ratio * 0.00% 0.00% n/a 0.36% 0.07% Period ended December 31, 2003 Net Assets (in thousands) $ 10,758 $ 229,175 n/a $ 35,786 $ 17,929 Units Outstanding (in thousands) 1,067 24,281 n/a 4,316 1,654 Investment Income Ratio * 0.00% 0.00% n/a 0.56% 0.00%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations April 30, 2007. (b) Commencement of operations January 17, 2006. 59 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Global 15 Healthcare Index 5 International JNL 5 Portfolio Sector Portfolio Portfolio(a) Index Portfolio Portfolio(b) --------------- ---------------- --------------- ---------------- --------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 15.585405 $ 10.605473 $ 9.793444 $ 17.652756 $ 12.950761 Total Return * 6.74% 3.78% -4.03%*** 6.15% -2.26% Ratio of Expenses ** 4.00% 3.56% 3.11% 3.895% 3.695% Period ended December 31, 2006 Unit Value $ 14.601799 $ 10.218724 n/a $ 16.629925 $ 13.250811 Total Return * 34.63% 2.56% n/a 20.79% 14.52% Ratio of Expenses ** 4.00% 3.56% n/a 3.895% 3.695% Period ended December 31, 2005 Unit Value $ 10.845521 $ 9.963495 n/a $ 13.767148 $ 11.570828 Total Return * 5.88% 5.18%*** n/a 8.99% 7.65%*** Ratio of Expenses ** 4.00% 3.56% n/a 3.895% 3.695% Period ended December 31, 2004 Unit Value $ 10.243321 $ 9.693345 n/a $ 12.631192 $ 10.865550 Total Return * 21.26%*** -0.43%*** n/a 12.88%*** 3.95%*** Ratio of Expenses ** 4.00% 3.41% n/a 3.895% 3.095% Period ended December 31, 2003 Unit Value $ 8.625915 $ 10.077613 n/a $ 11.194379 n/a Total Return * 36.34%*** 2.91%*** n/a 9.54%*** n/a Ratio of Expenses ** 3.20% 2.51% n/a 2.96% n/a
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL Optimized Nasdaq 25 NYSE International Oil & Gas S&P 10 5 Portfolio(c) Portfolio 25 Portfolio(a) Sector Portfolio Portfolio --------------- --------------- ------------------ ---------------- ---------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 11.569752 $ 11.938104 $ 11.419846 $ 30.200568 $ 11.591185 Total Return * 13.27%*** 14.83% 9.11%*** 30.07% 0.89% Ratio of Expenses ** 3.695% 3.61% 3.36% 3.91% 4.00% Period ended December 31, 2006 Unit Value $ 10.602318 $ 10.396119 n/a $ 23.218669 $ 11.488758 Total Return * 12.32%*** 1.04% n/a 16.17% 0.57% Ratio of Expenses ** 3.26% 3.61% n/a 3.91% 4.00% Period ended December 31, 2005 Unit Value n/a $ 10.289532 n/a $ 19.986224 $ 11.424088 Total Return * n/a 1.68%*** n/a -7.10%*** 31.89% Ratio of Expenses ** n/a 3.61% n/a 3.91% 4.00% Period ended December 31, 2004 Unit Value n/a $ 10.787801 n/a $ 15.647043 $ 8.661826 Total Return * n/a 1.94%*** n/a 15.27%*** 15.39%*** Ratio of Expenses ** n/a 3.15% n/a 3.41% 4.00% Period ended December 31, 2003 Unit Value n/a n/a n/a $ 12.795057 $ 7.942574 Total Return * n/a n/a n/a 4.35%*** 16.27%*** Ratio of Expenses ** n/a n/a n/a 2.21% 3.20%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations April 30, 2007. (b) Commencement of operations October 1, 2004. (c) Commencement of operations May 1, 2006. 60 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Global 15 Healthcare Index 5 International JNL 5 Portfolio Sector Portfolio Portfolio(a) Index Portfolio Portfolio(b) --------------- ---------------- --------------- ---------------- --------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 20.108100 $ 13.185167 $ 9.923123 $ 20.977377 $ 14.132910 Total Return * 10.01% 6.49% 1.36%*** 9.29% 0.42% Ratio of Expenses ** 1.00% 1.00% 1.15% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 18.279250 $ 12.381483 n/a $ 19.194913 $ 14.073753 Total Return * 38.72% 5.21% n/a 24.33% 17.64% Ratio of Expenses ** 1.00% 1.00% n/a 1.00% 1.00% Period ended December 31, 2005 Unit Value $ 13.176756 $ 11.767904 n/a $ 15.438331 $ 11.963532 Total Return * 9.09% 8.74%*** n/a 12.19% -0.31%*** Ratio of Expenses ** 1.00% 1.00% n/a 1.00% 1.00% Period ended December 31, 2004 Unit Value $ 12.078281 $ 10.984570 n/a $ 13.761360 $ 10.917908 Total Return * 26.84% 0.67%*** n/a 18.30% 2.51%*** Ratio of Expenses ** 1.00% 1.10% n/a 1.00% 1.10% Period ended December 31, 2003 Unit Value $ 9.522624 $ 10.712278 n/a $ 11.632574 n/a Total Return * 32.47%*** 2.97%*** n/a 31.43%*** n/a Ratio of Expenses ** 1.00% 1.15% n/a 1.00% n/a
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL Optimized Nasdaq 25 NYSE International Oil & Gas S&P 10 5 Portfolio(c) Portfolio 25 Portfolio(a) Sector Portfolio Portfolio --------------- --------------- ------------------ ---------------- ---------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 12.101901 $ 12.949952 $ 11.594407 $ 38.679651 $ 14.954809 Total Return * 2.26%*** 17.77% 12.01%*** 33.93% 3.98% Ratio of Expenses ** 1.00% 1.10% 1.10% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 10.751698 $ 10.996216 n/a $ 28.880108 $ 14.382183 Total Return * 7.09%*** 3.60% n/a 19.59% 3.62% Ratio of Expenses ** 1.15% 1.10% n/a 1.00% 1.00% Period ended December 31, 2005 Unit Value n/a $ 10.614405 n/a $ 24.148719 $ 13.879669 Total Return * n/a -2.09% n/a 35.51***% 35.89% Ratio of Expenses ** n/a 1.10% n/a 1.00% 1.00% Period ended December 31, 2004 Unit Value n/a $ 10.841214 n/a $ 17.733168 $ 10.213546 Total Return * n/a -0.85%*** n/a -0.66%*** 16.50% Ratio of Expenses ** n/a 1.10% n/a 1.10% 1.00% Period ended December 31, 2003 Unit Value n/a n/a n/a $ 13.328740 $ 8.767335 Total Return * n/a n/a n/a 2.14%*** 14.60%*** Ratio of Expenses ** n/a n/a n/a 1.30% 1.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations April 30, 2007. (b) Commencement of operations October 1, 2004. (c) Commencement of operations May 1, 2006. 61 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM Global 15 Healthcare Index 5 International JNL 5 Portfolio Sector Portfolio Portfolio(a) Index Portfolio Portfolio(b) ----------- ---------------- ------------ --------------- ------------ Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 1,308,355 $ 106,519 $ 27,920 $ 554,883 $ 5,208,867 Units Outstanding (in thousands) 68,945 8,577 2,824 27,401 376,758 Investment Income Ratio * 0.00% 0.80% 0.00% 2.83% 2.12% Period ended December 31, 2006 Net Assets (in thousands) $ 1,120,821 $ 80,719 n/a $ 457,401 $ 3,510,402 Units Outstanding (in thousands) 64,547 6,873 n/a 24,461 253,347 Investment Income Ratio * 0.00% 0.58% n/a 3.16% 0.43% Period ended December 31, 2005 Net Assets (in thousands) $ 639,572 $ 73,969 n/a $ 270,319 $ 1,178,139 Units Outstanding (in thousands) 50,759 6,571 n/a 17,823 99,440 Investment Income Ratio * 0.00% 0.84% n/a 2.95% 0.05% Period ended December 31, 2004 Net Assets (in thousands) $ 395,535 $ 39,865 n/a $ 162,270 $ 81,383 Units Outstanding (in thousands) 33,886 3,742 n/a 11,867 7,460 Investment Income Ratio * 0.00% 0.00% n/a 0.13% 0.60% Period ended December 31, 2003 Net Assets (in thousands) $ 141,341 $ 23,580 n/a $ 59,006 n/a Units Outstanding (in thousands) 15,206 2,248 n/a 5,039 n/a Investment Income Ratio * 0.00% 0.00% n/a 2.51% n/a JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL Optimized Nasdaq 25 NYSE International Oil & Gas S&P 10 5 Portfolio(c) Portfolio 25 Portfolio(a) Sector Portfolio Portfolio -------------- --------- ------------------ ---------------- --------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 375,799 $ 106,385 $ 63,561 $ 443,808 $ 833,493 Units Outstanding (in thousands) 31,420 8,393 5,504 12,229 58,973 Investment Income Ratio * 3.74% 0.00% 6.89% 1.09% 0.00% Period ended December 31, 2006 Net Assets (in thousands) $ 83,942 $ 65,396 n/a $ 282,036 $ 803,247 Units Outstanding (in thousands) 7,834 6,035 n/a 10,353 58,733 Investment Income Ratio * 0.85% 0.00% n/a 1.23% 0.00% Period ended December 31, 2005 Net Assets (in thousands) n/a $ 42,128 n/a $ 173,953 $ 694,989 Units Outstanding (in thousands) n/a 4,002 n/a 7,593 52,332 Investment Income Ratio * n/a 0.00% n/a 2.75% 0.00% Period ended December 31, 2004 Net Assets (in thousands) n/a $ 9,084 n/a $ 52,129 $ 361,642 Units Outstanding (in thousands) n/a 838 n/a 3,035 36,652 Investment Income Ratio * n/a 0.00% n/a 0.00% 0.00% Period ended December 31, 2003 Net Assets (in thousands) n/a n/a n/a $ 9,127 $ 155,153 Units Outstanding (in thousands) n/a n/a n/a 693 18,152 Investment Income Ratio * n/a n/a n/a 0.00% 0.00%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations April 30, 2007. (b) Commencement of operations October 1, 2004. (c) Commencement of operations May 1, 2006. 62 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio(c) Index Portfolio Index Portfolio 60 Portfolio(a) Portfolio ---------------- --------------- --------------- --------------- ---------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 10.513577 $ 14.029655 $ 10.945285 $ 8.742381 $ 15.168172 Total Return * -1.17%*** 3.32% 0.87% -1.08%*** -13.98% Ratio of Expenses ** 3.145% 3.895% 3.895% 3.145% 4.00% Period ended December 31, 2006 Unit Value $ 10.104177 $ 13.578314 $ 10.850789 n/a $ 17.633309 Total Return * 0.00% 5.51% 10.69% n/a 5.20% Ratio of Expenses ** 2.895% 3.895% 3.895% n/a 4.00% Period ended December 31, 2005 Unit Value n/a $ 12.869369 $ 9.802793 n/a $ 16.761938 Total Return * n/a 7.71% 0.40% n/a 4.66% Ratio of Expenses ** n/a 3.895% 3.895% n/a 4.00% Period ended December 31, 2004 Unit Value n/a $ 11.947627 $ 9.763928 n/a $ 16.015281 Total Return * n/a 8.47%*** 5.24%*** n/a 4.35%*** Ratio of Expenses ** n/a 3.895% 3.895% n/a 4.00% Period ended December 31, 2003 Unit Value n/a $ 10.927268 $ 9.394300 n/a $ 15.348024 Total Return * n/a 3.34%*** 4.74%*** n/a 37.33%*** Ratio of Expenses ** n/a 2.96% 2.96% n/a 3.20% JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio(b) VIP Portfolio(b) Portfolio --------------- ---------------- --------------- ---------------- --------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 13.058461 $ 5.803200 $ 16.642550 $ 13.529815 $ 13.268141 Total Return * -5.87% 10.37% 15.13% 6.91% 2.54% Ratio of Expenses ** 3.895% 3.71% 3.695% 3.51% 3.61% Period ended December 31, 2006 Unit Value $ 13.872382 $ 5.258183 $ 14.455154 $ 12.655538 $ 12.940106 Total Return * 13.01% 5.38% -6.36%*** 8.31% 12.82% Ratio of Expenses ** 3.895% 3.71% 3.695% 3.51% 3.61% Period ended December 31, 2005 Unit Value $ 12.275325 $ 4.989541 $ 15.224490 $ 11.684904 $ 11.469210 Total Return * 0.25% 0.00%*** 18.82%*** 8.42%*** 5.39%*** Ratio of Expenses ** 3.895% 3.71% 3.61% 3.51% 3.61% Period ended December 31, 2004 Unit Value $ 12.244585 $ 5.197926 $ 11.381625 $ 11.031481 $ 10.553022 Total Return * 9.54%*** 1.14%*** 2.50%*** 2.75%*** 13.03%*** Ratio of Expenses ** 3.895% 3.21% 3.21% 3.21% 3.41% Period ended December 31, 2003 Unit Value $ 11.042704 $ 5.476582 n/a n/a $ 9.363973 Total Return * 3.12%*** 3.62%*** n/a n/a 14.54%*** Ratio of Expenses ** 2.96% 2.51% n/a n/a 2.91%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations April 30, 2007. (b) Commencement of operations October 1, 2004. (c) Commencement of operations May 1, 2006. 63 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio(c) Index Portfolio Index Portfolio 60 Portfolio(a) Portfolio ---------------- --------------- --------------- --------------- ---------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 10.878501 $ 16.671900 $ 13.006640 $ 8.863185 $ 19.569867 Total Return * 6.39% 6.38% 3.85% -13.45%*** -11.35% Ratio of Expenses ** 1.10% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2006 Unit Value $ 10.225154 $ 15.672619 $ 12.524398 n/a $ 22.074332 Total Return * 2.25%*** 8.60% 13.93% n/a 8.39% Ratio of Expenses ** 1.10% 1.00% 1.00% n/a 1.00% Period ended December 31, 2005 Unit Value n/a $ 14.431578 $ 10.992756 n/a $ 20.364977 Total Return * n/a 10.87% 3.34% n/a 7.84% Ratio of Expenses ** n/a 1.00% 1.00% n/a 1.00% Period ended December 31, 2004 Unit Value n/a $ 13.016647 $ 10.637567 n/a $ 18.884179 Total Return * n/a 14.63% 8.97% n/a 11.46% Ratio of Expenses ** n/a 1.00% 1.00% n/a 1.00% Period ended December 31, 2003 Unit Value n/a $ 11.354967 $ 9.762010 n/a $ 16.941890 Total Return * n/a 28.13%*** 19.74%*** n/a 23.32%*** Ratio of Expenses ** n/a 1.00% 1.00% n/a 1.00% JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio(b) VIP Portfolio(b) Portfolio --------------- ---------------- --------------- ---------------- --------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 15.517913 $ 7.307406 $ 18.161781 $ 14.629951 $ 15.792289 Total Return * -3.09% 13.41% 18.29% 9.54% 5.26% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2006 Unit Value $ 16.012149 $ 6.443138 $ 15.352958 $ 13.356133 $ 15.002894 Total Return * 16.32% 8.27% -2.36% 10.94% 15.80% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2005 Unit Value $ 13.765517 $ 5.950916 $ 15.724123 $ 12.038914 $ 12.955865 Total Return * 3.19% 8.47%*** 37.42% 8.58% 12.61% Ratio of Expenses ** 1.00% 1.00% 1.00% 1.10% 1.00% Period ended December 31, 2004 Unit Value $ 13.340256 $ 5.835762 $ 11.442423 $ 11.087700 $ 11.504893 Total Return * 16.26% 0.30%*** 8.45%*** 0.16%*** 16.76% Ratio of Expenses ** 1.00% 1.10% 1.00% 1.10% 1.00% Period ended December 31, 2003 Unit Value $ 11.474890 $ 5.821507 n/a n/a $ 9.853500 Total Return * 35.07%*** -0.33%*** n/a n/a 20.20%*** Ratio of Expenses ** 1.00% 1.15% n/a n/a 1.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations April 30, 2007. (b) Commencement of operations October 1, 2004. (c) Commencement of operations May 1, 2006. 64 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/MCM JNL/MCM JNL/MCM JNL/MCM JNL/MCM S&P 24 S&P 400 MidCap S&P 500 S&P SMid Select Small-Cap Portfolio(c) Index Portfolio Index Portfolio 60 Portfolio(a) Portfolio ------------ --------------- --------------- --------------- ---------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 22,726 $ 414,090 $ 561,046 $ 32,447 $ 628,445 Units Outstanding (in thousands) 2,111 25,780 44,590 3,676 34,012 Investment Income Ratio * 0.00% 1.20% 1.41% 5.03% 7.92% Period ended December 31, 2006 Net Assets (in thousands) $ 17,704 $ 349,594 $ 506,064 n/a $ 700,093 Units Outstanding (in thousands) 1,737 22,952 41,376 n/a 33,390 Investment Income Ratio * 0.00% 1.35% 1.51% n/a 0.00% Period ended December 31, 2005 Net Assets (in thousands) n/a $ 264,156 $ 380,518 n/a $ 546,751 Units Outstanding (in thousands) n/a 18,676 35,107 n/a 28,099 Investment Income Ratio * n/a 1.58% 1.39% n/a 0.00% Period ended December 31, 2004 Net Assets (in thousands) n/a $ 185,042 $ 286,238 n/a $ 356,177 Units Outstanding (in thousands) n/a 14,331 26,949 n/a 19,549 Investment Income Ratio * n/a 0.01% 1.60% n/a 0.00% Period ended December 31, 2003 Net Assets (in thousands) n/a $ 76,144 $ 129,749 n/a $ 170,194 Units Outstanding (in thousands) n/a 6,673 13,081 n/a 10,329 Investment Income Ratio * n/a 0.61% 1.67% n/a 0.00% JNL/ JNL/MCM JNL/MCM JNL/MCM Oppenheimer Small Cap Technology Value Line 30 JNL/MCM Global Growth Index Portfolio Sector Portfolio Portfolio(b) VIP Portfolio(b) Portfolio --------------- ---------------- ------------- ---------------- ------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 316,673 $ 99,763 $ 1,099,740 $ 422,290 $ 196,599 Units Outstanding (in thousands) 21,146 14,472 61,931 29,419 13,002 Investment Income Ratio * 1.36% 0.09% 0.00% 3.04% 1.06% Period ended December 31, 2006 Net Assets (in thousands) $ 310,494 $ 59,686 $ 822,800 $ 413,219 $ 180,942 Units Outstanding (in thousands) 19,903 9,646 54,436 31,351 12,505 Investment Income Ratio * 1.59% 0.09% 0.00% 0.52% 0.52% Period ended December 31, 2005 Net Assets (in thousands) $ 217,908 $ 45,266 $ 451,873 $ 225,951 $ 124,849 Units Outstanding (in thousands) 16,115 7,874 28,983 18,905 9,918 Investment Income Ratio * 2.05% 1.60% 0.00% 0.55% 0.25% Period ended December 31, 2004 Net Assets (in thousands) $ 162,490 $ 29,545 $ 33,044 $ 21,516 $ 100,400 Units Outstanding (in thousands) 12,205 5,149 2,890 1,943 8,904 Investment Income Ratio * 0.00% 0.00% 0.00% 0.37% 0.16% Period ended December 31, 2003 Net Assets (in thousands) $ 70,041 $ 20,428 n/a n/a $ 56,554 Units Outstanding (in thousands) 6,008 3,510 n/a n/a 5,815 Investment Income Ratio * 0.80% 0.00% n/a n/a 0.00%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations April 30, 2007. (b) Commencement of operations October 1, 2004. (c) Commencement of operations May 1, 2006. 65 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/ JNL/ JNL/ JNL/PIMCO JNL/PIMCO PPM America PPM America Oppenheimer Real Return Total Return Core Equity High Yield Growth Portfolio(b) Portfolio(a) Bond Portfolio Portfolio Bond Portfolio(e) ------------------- --------------- --------------- --------------- ----------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 8.776591 $ 10.761052 $ 11.988650 $ 17.339977 $ 11.211535 Total Return * 7.36% 5.72%*** 4.07% -10.33% -4.63% Ratio of Expenses ** 3.36% 3.145% 3.91% 3.36% 3.61% Period ended December 31, 2006 Unit Value $ 8.174754 n/a $ 11.519490 $ 19.337160 $ 11.755761 Total Return * 1.43% n/a -0.48% 10.00% 5.00%*** Ratio of Expenses ** 3.36% n/a 3.91% 3.36% 3.61% Period ended December 31, 2005 Unit Value $ 8.059353 n/a $ 11.575526 $ 17.579695 $ 11.070629 Total Return * 11.54%*** n/a -0.56%*** 2.30%*** -1.13%*** Ratio of Expenses ** 3.36% n/a 3.91% 3.36% 3.56% Period ended December 31, 2004 Unit Value $ 7.677775 n/a $ 11.926497 $ 17.207404 $ 11.593620 Total Return * 2.35%*** n/a 1.88%*** 12.96%*** 0.99%*** Ratio of Expenses ** 3.21% n/a 3.71% 3.06% 3.16% Period ended December 31, 2003 Unit Value $ 7.668190 n/a $ 12.381470 $ 16.262016 n/a Total Return * -1.19%*** n/a 0.04%*** 12.32%*** n/a Ratio of Expenses ** 2.91% n/a 2.96% 2.65% n/a JNL/ JNL/S&P PPM America JNL/Putnam Competitive JNL/S&P Value Equity Midcap JNL/S&P 4 Advantage Disciplined Portfolio Growth Portfolio(d) Portfolio(c) Portfolio(c) Growth Portfolio(a) --------------- ------------------- -------------- -------------- ------------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 16.293261 $ 7.169400 $ 9.909378 $ 9.904249 $ 10.364266 Total Return * -7.99%*** -4.26% -0.63%*** -0.96%*** 0.66%*** Ratio of Expenses ** 3.51% 3.71% 2.71% 2.845% 2.845% Period ended December 31, 2006 Unit Value $ 15.286772 $ 7.488775 n/a n/a n/a Total Return * 9.27% 1.89% n/a n/a n/a Ratio of Expenses ** 3.395% 3.71% n/a n/a n/a Period ended December 31, 2005 Unit Value $ 16.589654 $ 7.349686 n/a n/a n/a Total Return * 2.22%*** 15.05%*** n/a n/a n/a Ratio of Expenses ** 3.395% 3.71% n/a n/a n/a Period ended December 31, 2004 Unit Value $ 16.757063 $ 6.963899 n/a n/a n/a Total Return * 8.02%*** 13.60%*** n/a n/a n/a Ratio of Expenses ** 3.145% 3.21% n/a n/a n/a Period ended December 31, 2003 Unit Value $ 16.162710 $ 6.129631 n/a n/a n/a Total Return * 11.15%*** 7.46%*** n/a n/a n/a Ratio of Expenses ** 2.85% 2.91% n/a n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) For 2007, the period is from January 1, 2007 through acquisition April 27, 2007. Unit values disclosed are as of April 27, 2007. (c) Commencement of operations December 3, 2007. (d) For 2007, the period is from January 1, 2007 through acquisition November 30, 2007. Units value disclosed are as of November 30, 2007. (e) Commencement of operations October 1, 2004. 66 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/ JNL/ JNL/ JNL/PIMCO JNL/PIMCO PPM America PPM America Oppenheimer Real Return Total Return Core Equity High Yield Growth Portfolio(b) Portfolio(a) Bond Portfolio Portfolio Bond Portfolio(e) ------------------- --------------- --------------- ------------ ----------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 10.110995 $ 10.973974 $ 15.963557 $ 22.922528 $ 14.502044 Total Return * 8.19% 9.72%*** 7.16% -8.31% -2.09% Ratio of Expenses ** 1.00% 1.10% 1.00% 1.15% 1.00% Period ended December 31, 2006 Unit Value $ 9.345466 n/a $ 14.896380 $ 25.000877 $ 14.812194 Total Return * 3.85% n/a 2.45% 12.45% 9.42% Ratio of Expenses ** 1.00% n/a 1.00% 1.15% 1.00% Period ended December 31, 2005 Unit Value $ 8.999214 n/a $ 14.540662 $ 22.233139 $ 13.537400 Total Return * 8.08% n/a 1.29% 7.51% 0.68% Ratio of Expenses ** 1.00% n/a 1.00% 1.15% 1.00% Period ended December 31, 2004 Unit Value $ 8.326560 n/a $ 14.354794 $ 20.680819 $ 13.446454 Total Return * 3.19% n/a 3.41% 11.75% 3.01%*** Ratio of Expenses ** 1.00% n/a 1.00% 1.15% 1.00% Period ended December 31, 2003 Unit Value $ 8.069163 n/a $ 13.881564 $ 18.506230 n/a Total Return * 4.89%*** n/a 1.19%*** 25.77% n/a Ratio of Expenses ** 1.00% n/a 1.00% 1.15% n/a JNL/ JNL/S&P PPM America JNL/Putnam Competitive JNL/S&P Value Equity Midcap JNL/S&P 4 Advantage Disciplined Portfolio Growth Portfolio(d) Portfolio(c) Portfolio(c) Growth Portfolio(a) --------------- ------------------- -------------- -------------- ------------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 22.095438 $ 8.805954 $ 9.921241 $ 9.917140 $ 10.534013 Total Return * -6.66% -1.85% -1.84%*** -1.88%*** -0.78%*** Ratio of Expenses ** 1.10% 1.00% 1.15% 1.15% 1.15% Period ended December 31, 2006 Unit Value $ 23.672826 $ 8.971582 n/a n/a n/a Total Return * 11.79% 4.68% n/a n/a n/a Ratio of Expenses ** 1.10% 1.00% n/a n/a n/a Period ended December 31, 2005 Unit Value $ 21.175540 $ 8.570161 n/a n/a n/a Total Return * 9.10%*** 11.57%*** n/a n/a n/a Ratio of Expenses ** 1.10% 1.00% n/a n/a n/a Period ended December 31, 2004 Unit Value $ 20.312647 $ 7.665919 n/a n/a n/a Total Return * 8.50% 17.27% n/a n/a n/a Ratio of Expenses ** 1.15% 1.15% n/a n/a n/a Period ended December 31, 2003 Unit Value $ 18.720938 $ 6.537242 n/a n/a n/a Total Return * 23.13% 31.94% n/a n/a n/a Ratio of Expenses ** 1.15% 1.15% n/a n/a n/a
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) For 2007, the period is from January 1, 2007 through acquisition April 27, 2007. Unit values disclosed are as of April 27, 2007. (c) Commencement of operations December 3, 2007. (d) For 2007, the period is from January 1, 2007 through acquisition November 30, 2007. Units value disclosed are as of November 30, 2007. (e) Commencement of operations October 1, 2004. 67 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/ JNL/ JNL/ JNL/PIMCO JNL/PIMCO PPM America PPM America Oppenheimer Real Return Total Return Core Equity High Yield Growth Portfolio(b) Portfolio(a) Bond Portfolio Portfolio Bond Portfolio(e) ------------------- ------------ -------------- ----------- ----------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ - $ 75,390 $ 598,012 $ 75,771 $ 267,490 Units Outstanding (in thousands) - 6,906 40,603 4,013 20,646 Investment Income Ratio * 7.74% 0.00% 5.28% 0.32% 7.54% Period ended December 31, 2006 Net Assets (in thousands) $ 26,961 n/a $ 435,179 $ 103,219 $ 284,124 Units Outstanding (in thousands) 2,995 n/a 31,702 5,014 21,538 Investment Income Ratio * 0.00% n/a 3.97% 0.36% 7.15% Period ended December 31, 2005 Net Assets (in thousands) $ 24,869 n/a $ 324,438 $ 118,699 $ 209,499 Units Outstanding (in thousands) 2,846 n/a 24,289 6,488 17,807 Investment Income Ratio * 0.13% n/a 4.46% 0.76% 7.01% Period ended December 31, 2004 Net Assets (in thousands) $ 21,413 n/a $ 233,210 $ 135,415 $ 235,740 Units Outstanding (in thousands) 2,627 n/a 17,736 7,956 20,283 Investment Income Ratio * 0.00% n/a 1.79% 0.57% 0.36% Period ended December 31, 2003 Net Assets (in thousands) $ 16,371 n/a $ 186,434 $ 149,857 n/a Units Outstanding (in thousands) 2,054 n/a 14,871 9,829 n/a Investment Income Ratio * 0.00% n/a 1.71% 0.32% n/a JNL/ JNL/S&P PPM America JNL/Putnam Competitive JNL/S&P Value Equity Midcap JNL/S&P 4 Advantage Disciplined Portfolio Growth Portfolio(d) Portfolio(c) Portfolio(c) Growth Portfolio(a) ------------ ------------------- ------------ ------------ ------------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 119,369 $ - $ 22,022 $ 6,231 $ 15,683 Units Outstanding (in thousands) 6,245 - 2,221 629 1,496 Investment Income Ratio * 0.60% 0.00% 0.00% 0.07% 0.00% Period ended December 31, 2006 Net Assets (in thousands) $ 154,997 $ 31,535 n/a n/a n/a Units Outstanding (in thousands) 7,582 3,663 n/a n/a n/a Investment Income Ratio * 0.03% 0.00% n/a n/a n/a Period ended December 31, 2005 Net Assets (in thousands) $ 169,897 $ 31,036 n/a n/a n/a Units Outstanding (in thousands) 9,315 3,744 n/a n/a n/a Investment Income Ratio * 0.96% 0.00% n/a n/a n/a Period ended December 31, 2004 Net Assets (in thousands) $ 195,303 $ 28,326 n/a n/a n/a Units Outstanding (in thousands) 11,118 3,759 n/a n/a n/a Investment Income Ratio * 1.34% 0.00% n/a n/a n/a Period ended December 31, 2003 Net Assets (in thousands) $ 207,764 $ 22,216 n/a n/a n/a Units Outstanding (in thousands) 12,884 3,431 n/a n/a n/a Investment Income Ratio * 1.17% 0.00% n/a n/a n/a
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations January 16, 2007. (b) For 2007, the period is from January 1, 2007 through acquisition April 27, 2007. (c) Commencement of operations December 3, 2007. (d) For 2007, the period is from January 1, 2007 through acquisition November 30, 2007. (e) Commencement of operations October 1, 2004. 68 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/S&P JNL/S&P JNL/S&P JNL/S&P Disciplined Dividend Income Growth JNL/S&P Disciplined Moderate & Growth Retirement Intrinsic Value Moderate Portfolio(a) Growth Portfolio(a) Portfolio(b) Strategy Portfolio(a) Portfolio(b) --------------------- ------------------- --------------- ---------------------- --------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 10.396421 $ 10.353901 $ 9.755667 $ 10.666237 $ 9.906975 Total Return * 2.35%*** -0.92%*** 0.38%*** 5.69%*** -0.93%*** Ratio of Expenses ** 3.01% 3.145% 2.71% 1.05% 2.845% Period ended December 31, 2006 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2005 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2004 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2003 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a JNL/ JNL/ JNL/ JNL/ JNL/ S&P Managed S&P Managed S&P Managed S&P Managed S&P Managed Aggressive Conservative Growth Moderate Moderate Growth Portfolio Portfolio(c) Growth Portfolio Portfolio(c) Growth Portfolio ---------------- ------------ ---------------- -------------- ---------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 13.234462 $ 10.918213 $ 13.064157 $ 11.675144 $ 12.159040 Total Return * 5.13% 2.42% 4.63% 3.81% 4.36% Ratio of Expenses ** 3.75% 3.695% 3.80% 3.695% 4.01% Period ended December 31, 2006 Unit Value $ 12.588579 $ 10.660437 $ 12.486478 $ 11.247113 $ 11.651023 Total Return * 11.32% 3.25%*** 9.90% 3.88%*** 10.48%*** Ratio of Expenses ** 3.75% 3.695% 3.80% 3.695% 4.01% Period ended December 31, 2005 Unit Value $ 11.308090 $ 10.304722 $ 11.361577 $ 10.628068 $ 11.030655 Total Return * 4.49% 1.62%*** 3.44% 4.67%*** 2.51% Ratio of Expenses ** 3.75% 3.31% 3.80% 3.26% 3.75% Period ended December 31, 2004 Unit Value $ 10.821744 $ 10.276433 $ 10.983719 $ 10.465081 $ 10.760930 Total Return * 6.71%*** -0.01%*** 4.36%*** 1.24%*** 9.35%*** Ratio of Expenses ** 3.75% 2.96% 3.80% 2.96% 3.75% Period ended December 31, 2003 Unit Value $ 10.470370 n/a $ 10.777273 n/a $ 10.699272 Total Return * 6.79%*** n/a 5.78%*** n/a 3.75%*** Ratio of Expenses ** 2.91% n/a 2.91% n/a 2.91%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations October 1, 2004. 69 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/S&P JNL/S&P JNL/S&P JNL/S&P Disciplined Dividend Income Growth JNL/S&P Disciplined Moderate & Growth Retirement Intrinsic Value Moderate Portfolio(a) Growth Portfolio(a) Portfolio(b) Strategy Portfolio(a) Portfolio(b) --------------------- ------------------- --------------- --------------------- --------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 10.582996 $ 10.553448 $ 9.766570 $ 10.722463 $ 9.919101 Total Return * 3.79%*** 4.34%*** -2.62%*** 0.17%*** -0.81%*** Ratio of Expenses ** 1.15% 1.15% 1.25% 0.50% 1.25% Period ended December 31, 2006 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2005 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2004 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2003 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a JNL/ JNL/ JNL/ JNL/ JNL/ S&P Managed S&P Managed S&P Managed S&P Managed S&P Managed Aggressive Conservative Growth Moderate Moderate Growth Portfolio Portfolio(c) Growth Portfolio Portfolio(c) Growth Portfolio ----------------- ------------ ---------------- -------------- ---------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 17.299623 $ 11.876307 $ 17.157763 $ 12.699683 $ 16.140967 Total Return * 8.08% 5.13% 4.78%*** 6.55% 7.46% Ratio of Expenses ** 1.00% 1.10% 1.00% 1.10% 1.10% Period ended December 31, 2006 Unit Value $ 16.006541 $ 11.297247 $ 15.805175 $ 11.918971 $ 15.020558 Total Return * 14.42% 6.67% 13.33% 9.19% 10.95% Ratio of Expenses ** 1.00% 1.10% 1.15% 1.10% 1.10% Period ended December 31, 2005 Unit Value $ 13.989395 $ 10.590688 $ 13.945611 $ 10.916193 $ 13.538173 Total Return * 7.40% 2.60% 6.21% 3.84% 5.25% Ratio of Expenses ** 1.00% 1.10% 1.15% 1.10% 1.10% Period ended December 31, 2004 Unit Value $ 13.025544 $ 10.322593 $ 13.130178 $ 10.512096 $ 12.862656 Total Return * 11.50% 0.07%*** 10.14% 1.11%*** 1.11%*** Ratio of Expenses ** 1.00% 1.10% 1.15% 1.10% 1.10% Period ended December 31, 2003 Unit Value $ 11.682366 n/a $ 11.921777 n/a $ 11.834861 Total Return * 10.39%*** n/a 20.34% n/a 16.40% Ratio of Expenses ** 1.00% n/a 1.15% n/a 1.15%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations October 1, 2004. 70 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/S&P JNL/S&P JNL/S&P JNL/S&P Disciplined Dividend Income Growth JNL/S&P Disciplined Moderate & Growth Retirement Intrinsic Value Moderate Portfolio(a) Growth Portfolio(a) Portfolio(b) Strategy Portfolio(a) Portfolio(b) --------------------- ------------------- --------------- --------------------- --------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 33,591 $ 38,400 $ 738 $ 815 $ 11,822 Units Outstanding (in thousands) 3,190 3,658 76 76 1,193 Investment Income Ratio * 0.00% 0.00% 0.13% 3.57% 0.09% Period ended December 31, 2006 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a Period ended December 31, 2005 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a Period ended December 31, 2004 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a Period ended December 31, 2003 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a JNL/ JNL/ JNL/ JNL/ S&P Managed S&P Managed JNL/ S&P Managed S&P Managed Aggressive Conservative S&P Managed Moderate Moderate Growth Portfolio Portfolio(c) Growth Portfolio Portfolio(c) Growth Portfolio --------------------- ------------------ ---------------- -------------------- ---------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 606,719 $ 240,837 $ 1,201,073 $ 475,928 $ 1,251,889 Units Outstanding (in thousands) 37,210 20,751 74,650 38,280 82,230 Investment Income Ratio * 1.91% 3.16% 1.70% 3.14% 2.24% Period ended December 31, 2006 Net Assets (in thousands) $ 577,628 $ 126,364 $ 1,081,171 $ 284,241 $ 993,884 Units Outstanding (in thousands) 38,011 11,361 71,760 24,211 69,732 Investment Income Ratio * 0.58% 2.06% 0.98% 2.01% 1.28% Period ended December 31, 2005 Net Assets (in thousands) $ 547,590 $ 73,694 $ 938,302 $ 140,109 $ 759,013 Units Outstanding (in thousands) 40,948 7,023 69,873 12,958 58,758 Investment Income Ratio * 0.77% 0.43% 1.19% 0.30% 1.91% Period ended December 31, 2004 Net Assets (in thousands) $ 575,961 $ 11,968 $ 548,951 $ 886,560 $ 17,714 Units Outstanding (in thousands) 45,907 1,161 44,169 69,610 1,688 Investment Income Ratio * 0.22% 0.00% 0.63% 0.00% 1.12% Period ended December 31, 2003 Net Assets (in thousands) $ 154,226 n/a $ 577,237 n/a $ 382,577 Units Outstanding (in thousands) 13,574 n/a 49,481 n/a 33,042 Investment Income Ratio * 1.60% n/a 2.30% n/a 2.96%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations October 1, 2004. 71 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/S&P JNL/S&P Moderate Growth Moderate JNL/S&P JNL/S&P JNL/S&P Retirement Strategy Retirement Retirement 2015 Retirement 2020 Retirement 2025 Portfolio(a) Strategy Portfolio(a) Portfolio(c) Portfolio(c) Portfolio(c) ------------------- --------------------- ------------------ ----------------- ------------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 10.583715 $ 10.460704 $ 11.381800 $ 11.510162 $ 11.665172 Total Return * 2.90%*** 1.22%*** 6.21% -3.78%*** 3.16%*** Ratio of Expenses ** 1.05% 1.05% 2.76% 2.91% 2.845% Period ended December 31, 2006 Unit Value n/a n/a $ 10.716011 $ 10.857985 $ 10.947109 Total Return * n/a n/a 8.03%*** 1.07%*** 11.83%*** Ratio of Expenses ** n/a n/a 2.76% 2.61% 2.41% Period ended December 31, 2005 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2004 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2003 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a JNL/ S&P Retirement JNL/S&P JNL/Select JNL/Select JNL/ Income Total Yield Balanced Money Market Select Value Portfolio(c) Portfolio(b) Portfolio Portfolio Portfolio ------------------- --------------------- ------------------ ----------------- ------------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 10.861365 $ 10.052412 $ 20.974344 $ 9.800591 $ 19.709046 Total Return * 0.64%*** 0.52%*** 3.46% 0.86% 3.91% Ratio of Expenses ** 2.845% 2.845% 3.80% 3.75% 3.70% Period ended December 31, 2006 Unit Value $ 10.467614 n/a $ 20.272182 $ 9.716797 $ 18.967476 Total Return * 2.80%*** n/a 9.43% 0.68% 16.54% Ratio of Expenses ** 2.71% n/a 3.80% 3.75% 3.70% Period ended December 31, 2005 Unit Value n/a n/a $ 18.525561 $ 9.651380 $ 16.275491 Total Return * n/a n/a 1.38% -1.06% 4.23% Ratio of Expenses ** n/a n/a 3.80% 3.75% 3.70% Period ended December 31, 2004 Unit Value n/a n/a $ 18.272679 $ 9.754873 $ 15.614300 Total Return * n/a n/a 4.59%*** -1.26%*** 8.43%*** Ratio of Expenses ** n/a n/a 3.80% 3.75% 3.70% Period ended December 31, 2003 Unit Value n/a n/a $ 18.487002 $ 10.908857 $ 14.258310 Total Return * n/a n/a 5.34%*** -0.88%*** 7.99%*** Ratio of Expenses ** n/a n/a 2.91% 2.80% 2.91%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations January 17, 2006. 72 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/S&P JNL/S&P Moderate Growth Moderate JNL/S&P JNL/S&P JNL/S&P Retirement Strategy Retirement Retirement 2015 Retirement 2020 Retirement 2025 Portfolio(a) Strategy Portfolio(a) Portfolio(c) Portfolio(c) Portfolio(c) ------------------- --------------------- --------------- --------------- --------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 10.639521 $ 10.515865 $ 11.744841 $ 11.912837 $ 12.057863 Total Return * 1.38%*** 2.24%*** 7.96%*** 8.21% 0.17%*** Ratio of Expenses ** 0.50% 0.50% 1.15% 1.15% 1.15% Period ended December 31, 2006 Unit Value n/a n/a $ 10.870432 $ 11.009327 $ 11.068092 Total Return * n/a n/a 9.46%*** 7.61%*** 9.88%*** Ratio of Expenses ** n/a n/a 1.25% 1.15% 1.25% Period ended December 31, 2005 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2004 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a Period ended December 31, 2003 Unit Value n/a n/a n/a n/a n/a Total Return * n/a n/a n/a n/a n/a Ratio of Expenses ** n/a n/a n/a n/a n/a JNL/ S&P Retirement JNL/S&P JNL/Select JNL/Select JNL/ Income Total Yield Balanced Money Market Select Value Portfolio(c) Portfolio(b) Portfolio Portfolio Portfolio --------------- --------------- --------------- --------------- --------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 11.226931 $ 10.064737 $ 29.878778 $ 13.873622 $ 22.712971 Total Return * 4.86%*** 0.65%*** 6.42% 3.69% 6.77% Ratio of Expenses ** 1.15% 1.25% 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 10.613478 n/a $ 28.076791 $ 13.379856 $ 21.272921 Total Return * 6.07%*** n/a 12.53% 3.48% 19.72% Ratio of Expenses ** 1.25% n/a 1.00% 1.00% 1.00% Period ended December 31, 2005 Unit Value n/a n/a $ 24.951112 $ 12.930219 $ 17.768770 Total Return * n/a n/a 4.26% 1.69% 7.08% Ratio of Expenses ** n/a n/a 1.00% 1.00% 1.00% Period ended December 31, 2004 Unit Value n/a n/a $ 23.932714 $ 12.715315 $ 16.594003 Total Return * n/a n/a 7.81%*** -0.02%*** 13.63% Ratio of Expenses ** n/a n/a 1.00% 1.00% 1.00% Period ended December 31, 2003 Unit Value n/a n/a $ 21.521726 $ 12.568907 $ 14.603376 Total Return * n/a n/a 20.18% -0.69% 15.25%*** Ratio of Expenses ** n/a n/a 1.15% 1.15% 1.00%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations January 17, 2006. 73 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/S&P JNL/S&P Moderate Growth Moderate JNL/S&P JNL/S&P JNL/S&P Retirement Strategy Retirement Retirement 2015 Retirement 2020 Retirement 2025 Portfolio(a) Strategy Portfolio(a) Portfolio(c) Portfolio(c) Portfolio(c) ------------------- --------------------- --------------- --------------- --------------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 673 $ 295 $ 15,824 $ 8,361 $ 4,777 Units Outstanding (in thousands) 63 28 1,359 710 400 Investment Income Ratio * 4.37% 9.07% 0.56% 0.43% 0.56% Period ended December 31, 2006 Net Assets (in thousands) n/a n/a $ 4,568 $ 1,847 $ 939 Units Outstanding (in thousands) n/a n/a 422 168 85 Investment Income Ratio * n/a n/a 0.00% 0.00% 0.00% Period ended December 31, 2005 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a Period ended December 31, 2004 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a Period ended December 31, 2003 Net Assets (in thousands) n/a n/a n/a n/a n/a Units Outstanding (in thousands) n/a n/a n/a n/a n/a Investment Income Ratio * n/a n/a n/a n/a n/a JNL/ S&P Retirement JNL/S&P JNL/Select JNL/Select JNL/ Income Total Yield Balanced Money Market Select Value Portfolio(c) Portfolio(b) Portfolio Portfolio Portfolio -------------- ------------ ---------- ------------ ------------ Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 29,044 $ 3,265 $ 497,884 $ 618,006 $ 217,135 Units Outstanding (in thousands) 2,615 325 18,482 48,897 9,897 Investment Income Ratio * 1.10% 0.05% 2.57% 4.60% 3.53% Period ended December 31, 2006 Net Assets (in thousands) $ 8,220 n/a $ 413,630 $ 247,194 $ 165,654 Units Outstanding (in thousands) 777 n/a 16,395 20,137 8,007 Investment Income Ratio * 0.00% n/a 2.69% 4.18% 3.24% Period ended December 31, 2005 Net Assets (in thousands) n/a n/a $ 371,851 $ 129,697 $ 79,288 Units Outstanding (in thousands) n/a n/a 16,635 10,933 4,555 Investment Income Ratio * n/a n/a 3.94% 2.72% 3.32% Period ended December 31, 2004 Net Assets (in thousands) n/a n/a $ 347,227 $ 95,569 $ 58,415 Units Outstanding (in thousands) n/a n/a 16,217 8,010 3,567 Investment Income Ratio * n/a n/a 0.11% 0.78% 0.48% Period ended December 31, 2003 Net Assets (in thousands) n/a n/a $ 272,427 $ 98,925 $ 23,073 Units Outstanding (in thousands) n/a n/a 14,061 8,213 1,590 Investment Income Ratio * n/a n/a 2.30% 0.47% 0.52%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. (a) Commencement of operations January 16, 2007. (b) Commencement of operations December 3, 2007. (c) Commencement of operations January 17, 2006. 74 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ---------------- --------------- Highest expense ratio Period ended December 31, 2007 Unit Value $ 23.914187 $ 33.381368 $ 13.432137 Total Return * 5.87% 12.70% -3.04% Ratio of Expenses ** 3.91% 3.91% 3.91% Period ended December 31, 2006 Unit Value $ 22.588231 $ 29.620681 $ 13.853319 Total Return * 9.35% 2.71% 15.43% Ratio of Expenses ** 3.91% 3.91% 3.91% Period ended December 31, 2005 Unit Value $ 20.657198 $ 28.839211 $ 12.001742 Total Return * 3.35%*** 2.74%*** 2.74%*** Ratio of Expenses ** 3.91% 3.91% 3.91% Period ended December 31, 2004 Unit Value $ 20.840862 $ 26.410043 $ 11.900897 Total Return * 5.44%*** 10.12%*** 11.32%*** Ratio of Expenses ** 3.61% 3.86% 3.65% Period ended December 31, 2003 Unit Value $ 20.889648 $ 25.244956 $ 11.008011 Total Return * 5.19%*** 7.37%*** 9.70%*** Ratio of Expenses ** 2.91% 2.91% 2.91%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. 75 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ---------------- --------------- Lowest expense ratio Period ended December 31, 2007 Unit Value $ 34.546285 $ 48.224532 $ 16.792708 Total Return * 9.01% 16.05% -0.16% Ratio of Expenses ** 1.00% 1.00% 1.00% Period ended December 31, 2006 Unit Value $ 31.689645 $ 41.556156 $ 16.819769 Total Return * 12.57% 5.74% 18.83% Ratio of Expenses ** 1.00% 1.00% 1.00% Period ended December 31, 2005 Unit Value $ 28.151511 $ 39.302036 $ 14.154707 Total Return * 5.04% 12.96% 5.09% Ratio of Expenses ** 1.00% 1.00% 1.00% Period ended December 31, 2004 Unit Value $ 26.801645 $ 34.792013 $ 13.468747 Total Return * 8.79% 16.86% 9.56%*** Ratio of Expenses ** 1.00% 1.00% 1.00% Period ended December 31, 2003 Unit Value $ 24.635871 $ 29.772297 $ 11.742703 Total Return * 10.21%*** 33.73%*** 28.38% Ratio of Expenses ** 1.00% 1.00% 1.15%
* Total return for period indicated, including changes in the value of the underlying fund, and reflects deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units, inclusion of these expenses in the calculation would result in a reduction in the total return presented. ** Annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds are excluded. *** Total return is calculated from the effective date through the end of the reporting period. The effective date is the date when the optional benefit in the variable account was elected by a contract owner. 76 Jackson National Separate Account I Notes to Financial Statements (continued) Note 6 - Financial Highlights (continued)
JNL/T.Rowe JNL/T.Rowe JNL/T.Rowe Price Established Price Mid-Cap Price Value Growth Portfolio Growth Portfolio Portfolio ----------------- ---------------- ----------- Portfolio data Period ended December 31, 2007 Net Assets (in thousands) $ 558,543 $ 510,648 $ 367,321 Units Outstanding (in thousands) 18,570 12,275 22,938 Investment Income Ratio * 1.07% 1.71% 2.29% Period ended December 31, 2006 Net Assets (in thousands) $ 366,621 $ 395,854 $ 323,913 Units Outstanding (in thousands) 13,352 11,280 20,028 Investment Income Ratio * 0.13% 0.80% 1.26% Period ended December 31, 2005 Net Assets (in thousands) $ 345,756 $ 380,759 $ 254,751 Units Outstanding (in thousands) 14,267 11,678 18,573 Investment Income Ratio * 0.21% 0.29% 2.00% Period ended December 31, 2004 Net Assets (in thousands) $ 323,719 $ 357,292 $ 240,614 Units Outstanding (in thousands) 14,111 12,521 18,259 Investment Income Ratio * 0.39% 0.00% 0.73% Period ended December 31, 2003 Net Assets (in thousands) $ 295,390 $ 297,243 $ 158,100 Units Outstanding (in thousands) 14,145 12,385 13,554 Investment Income Ratio * 0.03% 0.00% 0.76%
* These amounts represent the dividends, excluding distributions of capital gains, received by the portfolio from the underlying mutual fund divided by the average net assets. 77 Report of Independent Registered Public Accounting Firm The Board of Directors of Jackson National Life Insurance Company and Contract Owners of Jackson National Separate Account I: We have audited the accompanying statements of assets and liabilities of each of the sub-accounts within Jackson National Separate Account I (Separate Account) as listed in Note 1 of the financial statements as of December 31, 2007, and the related statement of operations for the year or period then ended, the statements of changes in net assets for each of the years or periods in the two-year period then ended and the financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned at December 31, 2007 by correspondence with the transfer agent of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the sub-accounts within Jackson National Separate Account I as listed in Note 1 of the financial statements as of December 31, 2007, and the results of their operations for the year or period then ended, the changes in their net assets for each of the years or periods in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles. Chicago, Illinois February 25, 2008 78 [GRAPHIC OMITTED] Jackson National Life Insurance Company and Subsidiaries Consolidated Financial Statements December 31, 2007 JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2007 ---------------------------------------------------------------------------- Report of Independent Registered Public Accounting Firm 1 Consolidated Balance Sheets 2 Consolidated Income Statements 3 Consolidated Statements of Stockholder's Equity and Comprehensive Income 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6 JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2007 -------------------------------------------------------------------------------- 1. NATURE OF OPERATIONS Jackson National Life Insurance Company (the "Company" or "Jackson") is wholly owned by Brooke Life Insurance Company ("Brooke Life" or the "Parent"), which is ultimately a wholly owned subsidiary of Prudential plc ("Prudential"), London, England. Jackson, together with its New York life insurance subsidiary, is licensed to sell group and individual annuity products (including immediate, index linked and deferred fixed annuities and variable annuities), guaranteed investment contracts ("GICs") and individual life insurance products, including variable universal life, in all 50 states and the District of Columbia. The consolidated financial statements include the accounts of the following: o Life insurers: Jackson and its wholly owned subsidiaries Jackson National Life Insurance Company of New York, Jackson National Life (Bermuda) LTD and Life Insurance Company of Georgia ("Life of Georgia") from May 31, 2005 to December 31, 2005, when it was merged with Jackson; o Wholly owned broker-dealer, investment management and investment advisor subsidiaries: Jackson National Life Distributors, LLC, Jackson National Asset Management, LLC, Curian Clearing, LLC and Curian Capital, LLC; o Wholly owned insurance agency: JNL Southeast Agency, LLC; o PGDS (US One) LLC, a wholly owned subsidiary, was created in 2006 to provide information technology services to Jackson and certain affiliates; o Tuscany CDO, Limited ("Tuscany"), a variable interest entity created in 2001 to securitize certain fixed maturities owned by Jackson. Jackson was the primary beneficiary of Tuscany until February 2007, when Tuscany was dissolved; o Other partnerships, limited liability companies and variable interest entities in which Jackson has a controlling interest or is deemed the primary beneficiary. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform with the current year presentation with no impact on stockholder's equity or net income. The preparation of the consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results may differ from those estimates. Significant estimates or assumptions, as further discussed in the notes, include: 1) valuation of investments and derivative instruments, including fair values of securities without readily ascertainable market values and the determination of when an unrealized loss is other-than-temporary; 2) assessments as to whether certain entities are variable interest entities and which party, if any, should consolidate the entity; 3) assumptions impacting future gross profits, including lapse and mortality rates, expenses, investment returns and policy crediting rates, used in the calculation of amortization of deferred acquisition costs and deferred sales inducements; 4) assumptions used in calculating policy reserves and liabilities, including lapse and mortality rates, expenses and investment returns; 5) assumptions as to future earnings levels being sufficient to realize deferred tax benefits; 6) estimates related to establishment of loan loss reserves, liabilities for lawsuits and the liability for state guaranty fund assessments; and 7) assumptions and estimates associated with the Company's tax positions which impact the amount of recognized tax benefits recorded by the Company. CHANGES IN ACCOUNTING PRINCIPLES In February 2007, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("FAS") No. 159, "Fair Value Option for Financial Assets and Financial Liabilities" ("FAS 159"). FAS 159, which is effective for fiscal years beginning after November 15, 2007, allows an entity to make an irrevocable election, on specific election dates, to measure eligible items at fair value, with changes in fair value recognized in the income statement. Adoption will not have an initial impact on the Company's consolidated financial statements. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 ("FIN 48") concurrent with Prudential's adoption of FIN 48. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company's financial statements. FIN 48 requires companies to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement and classification of income tax uncertainties, along with any related interest and penalties. Previously recorded income tax benefits that no longer meet this standard are required to be charged to earnings in the period that such determination is made. There was no change in the liability for unrecognized tax benefits resulting from the implementation of FIN 48 and, therefore, the Company did not recognize a cumulative effect adjustment to the balance of retained earnings as of January 1, 2007. The Company does not have a liability for tax exposure reserves as of December 31, 2007 and 2006, and does not anticipate any material change in the total amount of unrecognized tax benefits over the subsequent 12-month period. The adoption did not have an initial impact on the Company's consolidated financial statements. In September 2006, FASB issued FAS No. 157, "Fair Value Measurements" ("FAS 157"), which establishes a framework for measuring fair value under current accounting pronouncements that require or permit fair value measurement. FAS 157 retains the exchange price notion, but clarifies that exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the most advantageous market for that asset or liability. Fair value measurement is based on assumptions used by market participants in pricing the asset or liability, which may include inherent risk, restrictions on the sale or use of an asset, or nonperformance risk which would include the reporting entity's own credit risk. FAS 157 establishes a three-level fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value. The highest priority is given to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs in situations where there is little or no market activity for the asset or liability. In addition, FAS 157 expands the disclosure requirements for annual and interim reporting to focus on the inputs used to measure fair value, including those measurements using significant unobservable inputs, and the effects of the measurements on earnings. FAS 157 will be applied prospectively and is effective for fiscal years beginning after November 15, 2007. Retrospective application is required for certain financial instruments as a cumulative effect adjustment to the opening balance of retained earnings. Jackson has not yet quantified the impact of adoption on the Company's consolidated financial statements. In April 2006, the FASB issued FASB Staff Position ("FSP") on Interpretation 46(R)-6, "Determining the Variability to be Considered in Applying FASB Interpretation No. 46(R)" ("FIN 46(R)-6"). The FSP affects the identification of which entities are Variable Interest Entities ("VIE") through a "by design" approach in identifying and measuring the variable interests of the variable interest entity and its primary beneficiary. The requirements became effective beginning in the third quarter of 2006 and are to be applied to all new variable interest entities. The new requirements need not be applied to entities that have previously been analyzed under FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" (revised) ("FIN 46R") unless a reconsideration event occurs. The adoption of this guidance did not have an initial impact on the Company's consolidated financial statements. In February 2006, the FASB issued FAS No. 155, "Accounting for Certain Hybrid Financial Instruments" ("FAS 155"). This statement, effective for financial instruments acquired or issued after the beginning of an entity's first fiscal year after September 15, 2006, allows companies to include changes in fair value of certain hybrid financial instruments in earnings on an instrument-by-instrument basis. Further guidance issued in October 2006 provided an exemption from the provisions of FAS No. 133 for certain financial instruments that would have otherwise been required to recognize embedded derivatives arising as a result of prepayment risk in certain structured securities. As a result, adoption of FAS 155 did not have an initial impact on the Company's consolidated financial statements. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In September 2005, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 05-1, "Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts" ("SOP 05-1"). SOP 05-1 addresses the accounting for deferred acquisition costs on internal replacements other than those described in FAS No. 97, "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments." An internal replacement is defined by SOP 05-1 as a modification in product benefits, features, rights or coverages that occurs by (a) exchanging the contract for a new contract, (b) amending, endorsing or attaching a rider to the contract, or (c) electing a feature or coverage within a contract. Contract modifications resulting in a substantially changed contract should be accounted for as an extinguishment of the replaced contract, and any unamortized deferred acquisition costs, unearned revenue and deferred sales inducements must be written-off. SOP 05-1 is to be applied prospectively and is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. The adoption of SOP 05-1 did not have an initial impact on the Company's consolidated financial statements. In May 2005, the FASB issued FAS No. 154, "Accounting Changes and Error Corrections" ("FAS 154"). FAS 154 requires that, unless impracticable or absent explicit transition requirements specific to the newly adopted accounting principle, companies apply changes in accounting principles on a retrospective basis. FAS 154 is effective for accounting changes and corrections or errors made in fiscal years beginning after December 15, 2005. The adoption of FAS 154 did not have an initial impact on the Company's consolidated financial statements. COMPREHENSIVE INCOME Comprehensive income includes all changes in stockholder's equity (except those arising from transactions with owners/stockholders) and, in the Company's case, includes net income and net unrealized gains or losses on securities. INVESTMENTS Cash and short-term investments, which primarily include high quality, non-asset-backed commercial paper and money market instruments, are carried at amortized cost. These investments have original maturities of three months or less and are considered cash equivalents for reporting cash flows. Fixed maturities consist primarily of bonds, notes, redeemable preferred stocks, asset-backed securities and structured securities. Acquisition discounts and premiums on fixed maturities are amortized into investment income through call or maturity dates using the interest method. Asset-backed and structured securities are amortized over the estimated redemption period. With regard to structured securities that are considered to be other than high quality or otherwise deemed to be high-risk, meaning the Company might not recover substantially all of its recorded investment due to unanticipated prepayment events, changes in investment yields due to changes in estimated future cash flows are accounted for on a prospective basis. The carrying value of such securities was $494.2 million and $504.9 million as of December 31, 2007 and 2006, respectively. All fixed maturities are classified as available for sale and are carried at fair value. For declines in fair value considered to be other-than-temporary, the amortized cost basis of fixed maturities is reduced to fair value through an impairment charge included in net realized gains (losses) on investments. In determining whether an other- than-temporary impairment has occurred, the Company considers a security's forecasted cash flows as well as the severity and duration of depressed fair values. Equities, which include common stocks, non-redeemable preferred stocks and shares of mutual funds purchased as seed money supporting newly established variable funds are generally carried at fair value. Equities are reduced to fair value for declines in fair value considered to be other than temporary. Any impairment charges are included in net realized gains (losses) on investments. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Trading securities primarily consist of private equity securities and investments in mutual funds that support liabilities of the Company's non-qualified voluntary deferred compensation plans. Trading securities are carried at fair value with changes in value included in net investment income. During 2007, 2006 and 2005, $44.6 million, $26.3 million and $5.4 million of investment income was recognized on trading securities held at December 31, 2007, 2006 and 2005, respectively. Commercial mortgage loans are carried at aggregate unpaid principal balances, net of unamortized discounts and premiums and an allowance for loan losses. The allowance for loan losses represents the estimated risk of loss for individual mortgages in the portfolio. Policy loans are carried at the unpaid principal balances. Real estate is carried at the lower of depreciated cost or fair value. Limited partnership investments are accounted for using the equity method. Pursuant to the guidance provided by FIN 46R, the Company has concluded that it owns interests in VIEs that represent primary beneficial interests. These VIEs are included in the consolidated financial statements and include entities structured to hold and manage investments, including real estate properties and interests in commercial loans. In addition, Jackson had an investment of $81.5 million and $72.7 million as of December 31, 2007 and 2006, respectively, in debt issued by a VIE structured to hold and manage investments in commercial loans, for which it is not the primary beneficiary. Realized gains and losses on sales of investments are recognized in income at the date of sale and are determined using the specific cost identification method. The changes in unrealized gains and losses on investments classified as available for sale, net of tax and the effect of the adjustment for deferred acquisition costs and sales inducements, are excluded from net income and included as a component of other comprehensive income (loss) and stockholder's equity. DERIVATIVE INSTRUMENTS, EMBEDDED DERIVATIVES AND RISK MANAGEMENT ACTIVITY The Company enters into financial derivative transactions, including swaps, forwards, put-swaptions, futures and options to reduce and manage business risks. These transactions manage the risk of a change in the value, yield, price, cash flows, credit quality or degree of exposure with respect to assets, liabilities, or future cash flows, which the Company has acquired or incurred. The Company manages the potential credit exposure for over-the-counter derivative contracts through careful evaluation of the counterparty credit standing, collateral agreements, and master netting agreements. The Company is exposed to credit-related losses in the event of nonperformance by counterparties, however, it does not anticipate nonperformance. The Company generally uses free-standing derivative instruments for hedging purposes. Additionally, certain liabilities, primarily trust instruments supported by funding agreements, index linked annuities and guarantees offered in connection with variable annuities issued by the Company, contain embedded derivatives as defined by Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("FAS 133"). The Company generally does not account for such derivatives as either fair value or cash flow hedges as might be permitted if specific hedging documentation requirements of FAS 133 were followed. Financial derivatives, including derivatives embedded in certain host liabilities that have been separated for accounting and financial reporting purposes, are carried at fair value. The results from derivative financial instruments and embedded derivatives, including net payments, realized gains and losses and changes in value, are reported in risk management activity. Interest rate swap agreements generally involve the exchange of fixed and floating payments over the life of the agreement without an exchange of the underlying principal amount and are used for hedging purposes. Interest rate swaps are carried at fair value and included in other invested assets or other liabilities. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Spread cap options, with maturities of up to five years, are used as a macro-economic hedge against declining interest rates. Jackson receives quarterly settlements based on the spread between the 2-year and the 10-year constant maturity swap rates in excess of a specified spread. Spread cap options are carried at fair value and included in other invested assets. Forwards consist of interest rate spreadlock agreements, in which the Company locks in the forward interest rate differential between a swap and the corresponding U.S. Treasury security. The forwards are held for investment purposes and are included in other invested assets. The Company had no forwards at December 31, 2007 or 2006. Put-swaption contracts provide the purchaser with the right, but not the obligation, to require the writer to pay the present value of a long-term interest rate swap at future exercise dates. The Company purchases and writes put-swaptions for hedging purposes with original maturities of up to 10 years. On a net basis, put-swaptions hedge against significant upward movements in interest rates. Written put-swaptions are entered into in conjunction with associated put-swaptions purchased from the same counterparties ("linked put-swaptions"). Linked put-swaptions have identical notional amounts and strike prices, but have different underlying swap terms. Due to the right of offset, linked put-swaptions are presented at net fair value in either other invested assets or other liabilities. Non-linked put-swaptions are carried at fair value and included in other invested assets. Equity index futures contracts and equity index call and put options, which are used to hedge the Company's obligations associated with its index linked annuities and guarantees in variable annuity products, are included in other invested assets or other liabilities. These annuities contain embedded options whose fair value is included in deposits on investment contracts. Credit default swaps, with maturities up to five years, represent agreements under which the Company has purchased default protection on certain underlying corporate bonds held in its portfolio. These contracts allow the Company to sell the protected bonds at par value to the counterparty if a "default event" occurs in exchange for periodic payments made by the Company for the life of the agreement. Credit default swaps are carried at fair value and are included in either other invested assets or other liabilities. Total return swaps, in which the Company receives equity returns or returns based on reference pools of assets in exchange for short-term floating rate payments based on notional amounts, are held for both hedging and investment purposes, and are included at fair value in either other invested assets or other liabilities. Cross-currency swaps, which embody spot and forward currency swaps and, in some cases, interest rate and equity index swaps, are entered into for the purpose of hedging the Company's foreign currency denominated trust instruments supported by funding agreements. Cross-currency swaps serve to hedge derivatives embedded in the funding agreements and are included at fair value in other invested assets or other liabilities. The fair value of derivatives embedded in funding agreements, as well as foreign currency transaction gains and losses, are included in the carrying value of the trust instruments supported by funding agreements. Foreign currency transaction gains and losses associated with funding agreements hedging activities are included in risk management activity. DEFERRED ACQUISITION COSTS Certain costs of acquiring new business, principally commissions and certain costs associated with policy issue and underwriting, which vary with and are primarily related to the production of new business, have been capitalized as deferred acquisition costs. Deferred acquisition costs are increased by interest thereon and 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) amortized in proportion to anticipated premium revenues for traditional life policies and in proportion to estimated gross profits for annuities and interest-sensitive life products. Unamortized deferred acquisition costs are written off when a contract is internally replaced and substantially changed, as defined in SOP 05-1. As certain fixed maturities and equities available for sale are carried at fair value, an adjustment is made to deferred acquisition costs equal to the change in amortization that would have occurred if such securities had been sold at their stated fair value and the proceeds reinvested at current yields. The change in this adjustment is included with the change in fair value of fixed maturities and equities available for sale, net of tax, that is credited or charged directly to stockholder's equity and is a component of other comprehensive income (loss). Deferred acquisition costs have been increased by $98.8 million and decreased by $43.2 million at December 31, 2007 and 2006, respectively, to reflect this adjustment. DEFERRED SALES INDUCEMENTS Bonus interest on deferred fixed annuities and contract enhancements on index linked annuities and variable annuities have been capitalized as deferred sales inducements. Deferred sales inducements are increased by interest thereon and amortized in proportion to estimated gross profits. Unamortized deferred sales inducements are written off when a contract is internally replaced and substantially changed, as defined in SOP 05-1. As certain fixed maturities and equities available for sale are carried at fair value, an adjustment is made to deferred sales inducements equal to the change in amortization that would have occurred if such securities had been sold at their stated fair value and the proceeds reinvested at current yields. The change in this adjustment is included with the change in fair value of fixed maturities and equities available for sale, net of tax, that is credited or charged directly to stockholder's equity and is a component of other comprehensive income (loss). Deferred sales inducements have been increased by $13.7 million and decreased by $16.5 million at December 31, 2007 and 2006, respectively, to reflect this adjustment. VALUE OF ACQUIRED INSURANCE The value of acquired insurance in-force at acquisition date represents the present value of anticipated profits of the business in-force on November 25, 1986 (the date the Company was acquired by Prudential) net of amortization. The value of acquired insurance in-force is amortized in proportion to anticipated premium revenues for traditional life insurance contracts and estimated gross profits for annuities and interest-sensitive life products over a period of 20 years and was fully amortized as of December 31, 2006. FEDERAL INCOME TAXES The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as certain foreign jurisdictions. With few exceptions, the Company is generally no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years prior to 2004. The Company provides deferred income taxes on the temporary differences between the tax and financial statement basis of assets and liabilities. Jackson files a consolidated federal income tax return with Brooke Life, Jackson National Life Insurance Company of New York and Life Insurance Company of Georgia (for the period from May 19, 2005 through December 31, 2005). Jackson National Life (Bermuda) LTD is taxed as a controlled foreign corporation of Jackson. The other affiliated subsidiary entities are limited liability companies with all of their interests owned by Jackson. Accordingly, they are not considered separate entities for income tax purposes; and therefore, are taxed as part of the operations of Jackson. Income tax expense is calculated on a separate company basis. POLICY RESERVES AND LIABILITIES RESERVES FOR FUTURE POLICY BENEFITS AND CLAIMS PAYABLE: For traditional life insurance contracts, reserves for future policy benefits are determined using the net level premium method and assumptions as of the issue date or acquisition date as to mortality, interest, policy lapsation and expenses plus provisions for adverse deviations. Mortality assumptions range from 25% to 160% of the 1975-1980 Basic Select and Ultimate tables depending on policy duration. Interest rate assumptions range from 4.0% to 8.0%. Lapse and expense assumptions are based on Company experience. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) DEPOSITS ON INVESTMENT CONTRACTS: For the Company's interest-sensitive life contracts, liabilities approximate the policyholder's account value. For deferred annuities, the fixed option on variable annuities, guaranteed investment contracts and other investment contracts, the liability is the policyholder's account value. The liability for index linked annuities is based on two components, 1) the imputed value of the underlying guaranteed host contract, and 2) the fair value of the embedded option component of the contract. Obligations in excess of the guaranteed contract value are hedged through the use of futures contracts and call options. TRUST INSTRUMENTS SUPPORTED BY FUNDING AGREEMENTS Jackson and Jackson National Life Funding, LLC have established a European Medium Term Note program, with up to $7 billion in aggregate principal amount outstanding at any one time. Jackson National Life Funding, LLC was formed as a special purpose vehicle solely for the purpose of issuing instruments to institutional investors, the proceeds of which are deposited with Jackson and secured by the issuance of funding agreements. Carrying values totaled $1.6 billion and $1.7 billion at December 31, 2007 and 2006, respectively. Jackson and Jackson National Life Global Funding have established a $9 billion aggregate Global Medium Term Note program. Jackson National Life Global Funding was formed as a statutory business trust, solely for the purpose of issuing instruments to institutional investors, the proceeds of which are deposited with Jackson and secured by the issuance of Funding Agreements. The carrying values at December 31, 2007 and 2006 totaled $3.6 billion and $3.5 billion, respectively. Instruments issued representing obligations denominated in a foreign currency have been hedged for changes in exchange rates using cross-currency swaps. The fair value of derivatives embedded in funding agreements, as well as foreign currency transaction gains and losses, are included in the carrying value of the trust instruments supported by funding agreements. Trust instrument liabilities are adjusted to reflect the effects of foreign currency transaction gains and losses using exchange rates as of the reporting date. Foreign currency transaction gains and losses are included in risk management activity. FEDERAL HOME LOAN BANK ADVANCES Jackson is a member of the regional Federal Home Loan Bank of Indianapolis ("FHLB") primarily for the purpose of participating in its mortgage-collateralized loan advance program. Membership requires the Company to purchase and hold a minimum amount of FHLB capital stock plus additional stock based on outstanding advances. Advances are in the form of short-term notes or funding agreements issued to FHLB. At December 31, 2007 and 2006, Jackson held $82.5 million and $30.0 million, respectively, in FHLB capital stock, supporting $1,650.0 million and $600.0 million, respectively, in funding agreements and short-term borrowings. SEPARATE ACCOUNT ASSETS AND LIABILITIES The assets and liabilities resulting from individual variable life and annuity contracts, which aggregated $29,758.4 million and $22,113.5 million at December 31, 2007 and 2006, respectively, are segregated in separate accounts. The Company receives administrative fees for managing the funds and other fees for assuming mortality and certain expense risks. Such fees are recorded as earned and included in fee income in the consolidated income statements. The Company has issued a group variable annuity contract designed for use in connection with and issued to the Company's Defined Contribution Retirement Plan. These deposits are allocated to the Jackson National Separate Account - II and aggregated $153.8 million and $130.5 million at December 31, 2007 and 2006, respectively. The Company receives administrative fees for managing the funds. These fees are recorded as earned and included in fee income in the consolidated income statements. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REVENUE AND EXPENSE RECOGNITION Premiums for traditional life insurance are reported as revenues when due. Benefits, claims and expenses are associated with earned revenues in order to recognize profit over the lives of the contracts. This association is accomplished by provisions for future policy benefits and the deferral and amortization of acquisition costs. Deposits on interest-sensitive life products and investment contracts, principally deferred annuities and guaranteed investment contracts, are treated as policyholder deposits and excluded from revenue. Revenues consist primarily of the investment income and charges assessed against the policyholder's account value for mortality charges, surrenders and administrative expenses. Fee income also includes revenues related to asset management and 12b-1 service fees. Surrender benefits are treated as repayments of the policyholder account. Annuity benefit payments are treated as reductions to the policyholder account. Death benefits in excess of the policyholder account are recognized as an expense when incurred. Expenses consist primarily of the interest credited to policyholder deposits. Underwriting and other acquisition expenses are associated with gross profit in order to recognize profit over the life of the business. This is accomplished by deferral and amortization of acquisition costs and sales inducements. Expenses not related to policy acquisition are recognized as incurred. Investment income is not accrued on securities in default and otherwise where the collection is uncertain. Subsequent receipts of interest on such securities are generally used to reduce the cost basis of the securities. The Company received $16.0 million from a class action settlement against certain underwriters of WorldCom securities. This settlement was recorded in other income in 2006. 3. ACQUISITIONS On May 18, 2005, Brooke Life purchased, in exchange for $260.7 million in cash, 100% of the interest in Life of Georgia, a life insurance company domiciled in Georgia, from ING Groep, N.V. ("ING"). Direct costs of $4.4 million were capitalized in connection with the acquisition. On May 31, 2005, Brooke Life contributed 100% of its interest in Life of Georgia to Jackson. The acquisition expanded Jackson's life insurance base while taking advantage of Jackson's low cost structure. The results of Life of Georgia's operations have been included in these consolidated financial statements since acquisition. On December 31, 2005, Life of Georgia was merged into Jackson. The preliminary purchase price was subject to post-closing adjustments and was initially allocated to the assets acquired and liabilities assumed using management's best estimate of fair value as of the acquisition date. In 2006, an arbitrator ruled in Jackson's favor on certain purchase price adjustments. As a result of this determination and other previously settled amounts, the purchase price was reduced by $11.7 million within the purchase price allocation period. As of December 31, 2005, Jackson recorded in other assets the value of business acquired totaling $1.1 million. As a result of subsequent purchase price adjustments, this asset was reversed in 2006 and the remaining adjustment resulted in negative goodwill, which was recorded as an extraordinary gain of $8.9 million. 3. ACQUISITIONS (CONTINUED) The following table summarizes the fair value of the assets acquired and liabilities assumed, as adjusted (in thousands):
OPENING BALANCE SHEET ------------------- Cash and short-term investments $ 86,670 Fixed maturities 1,612,767 Other invested assets 78,129 Accrued investment income 21,516 Deferred income taxes 7,868 Other assets 12,609 ------------------- ------------------- Total assets acquired $ 1,819,559 =================== Reserves for future policy benefits and claims payable $ 881,083 Deposits on investment contracts 656,161 Other liabilities 20,820 ------------------- ------------------- Total liabilities assumed $ 1,558,064 =================== Net assets acquired $ 261,495 =================== Adjusted purchase price $ 253,459 =================== Extraordinary gain on purchase, net of tax benefit $ 8,944 ===================
The following table summarizes Jackson's unaudited pro forma results of operations for the year ended December 31, 2005, assuming the business acquisition had occurred at the beginning of 2005 (in thousands): ------------------------------------------------------------------------- UNAUDITED PRO FORMA ------------------------------------------------------------------------- Revenues $ 4,013,031 ------------------------------------------------------------------------- Total benefits and expenses 2,976,945 ------------------------------------------------------------------------- Pretax income from continuing operations 1,035,164 ------------------------------------------------------------------------- Net income 675,841 ------------------------------------------------------------------------- The 2005 pro forma amounts include the effects of certain non-recurring restructuring transactions effected by Life of Georgia prior to the acquisition. These transactions included transferring certain assets and liabilities to ING affiliates, resulting in revenue of $120.8 million, expenses of $17.0 million, pretax income from operations of $103.8 million and net income of $67.5 million. 4. FAIR VALUE OF FINANCIAL INSTRUMENTS The following summarizes the basis used by the Company in estimating fair values for financial instruments: CASH AND SHORT-TERM INVESTMENTS: Carrying value is considered to be a reasonable estimate of fair value. 4. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) FIXED MATURITIES: Estimates of fair value for fixed maturity securities are primarily based on or derived from observable valuation inputs, such as broker-dealer quotes, market interest rates, credit quality spreads and liquidity premiums. Market prices obtained from independent pricing services, if available, are used as estimates of fair value, otherwise estimates are developed internally. At December 31, 2007 and 2006, fixed maturity securities valued internally had an amortized cost of $5.8 billion and $5.7 billion, respectively, and an estimated fair value of $5.8 billion and $5.7 billion, respectively. Estimates of fair value for these fixed maturities are based on the observable valuation inputs described above, with the exception of certain very illiquid asset-backed securities, which are based on internally derived estimates of future cash flows discounted at current market rates. The amortized cost and fair value of these very illiquid asset-backed securities were $332.8 million and $339.8 million, respectively, at December 31, 2007 and $343.7 million and $344.4 million, respectively, at December 31, 2006. EQUITIES AND TRADING SECURITIES: Fair values for common and non-redeemable preferred stock are based principally on quoted market prices, if available. For securities that are not actively traded, fair values are estimated using independent pricing services or are analytically determined. Fair values of investments in mutual funds are based on quoted net asset values. Certain public stock positions are fair valued at a discount to their exchange-traded price due to lock-up trading restrictions imposed in connection with initial public offerings. A discount of 15% was applied to two positions at December 31, 2007 totaling $8.6 million and discounts of 10% and 15% were applied to two positions at December 31, 2006 totaling $3.3 million. COMMERCIAL MORTGAGE LOANS: Fair values are determined by discounting the future cash flows at current market rates. The fair value of mortgages approximated $5,755.9 million and $5,373.1 million at December 31, 2007 and 2006, respectively. POLICY LOANS: Fair value approximates carrying value since policy loan balances reduce the amount payable at death or surrender of the contract. DERIVATIVE INSTRUMENTS: Fair values for interest rate swaps, cross-currency swaps, put-swaptions, spread cap options, forwards and total return swaps are determined using estimates of future cash flows discounted at current market rates. Fair values for futures are based on exchange-traded prices. Fair values for equity index call and put options are determined using Black-Scholes option valuation methodologies. Fair values for credit default swaps are based on quoted market prices. The fair value of the Company's guaranteed minimum withdrawal benefit embedded derivative liability has been calculated based on actuarial assumptions related to the projected cash flows, including benefits and related contract charges, over the expected lives of the contracts, incorporating expectations regarding policyholder behavior in varying economic conditions. Beginning in 2007, the Company offers a guaranteed minimum accumulation benefit on some variable annuity plans. Sales have been minimal as of December 31, 2007. The Company reinsures essentially 100% of its guaranteed minimum income benefit on a net settled basis. The net settlement is considered an embedded derivative and the Company determines the fair value using actuarial assumptions related to the projected cash flows, including reinsurance premiums and related benefit reimbursements, over the expected lives of the contracts, incorporating expectations regarding policyholder behavior in varying economic conditions. 4. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) The nature of these embedded derivative cash flows can be quite varied. Therefore, stochastic techniques are used to generate a variety of market return scenarios for evaluation. The generation of these scenarios and the assumptions as to policyholder behavior involve numerous estimates and subjective judgments including those regarding expected market volatility, correlations of market returns and discount rates, utilization of the benefit by policyholders under varying conditions and policyholder lapsation. At each valuation date, the Company assumes expected returns based on risk-free rates as represented by the LIBOR forward curve rates as of that date and market volatility as determined with reference to implied volatility data and evaluations of historical volatilities for various indices. The risk-free spot rates as represented by the LIBOR spot curve as of the valuation date are used to determine the present value of expected future cash flows produced in the stochastic process. SEPARATE ACCOUNT ASSETS: Separate account assets are carried at the fair value of the underlying securities. ANNUITY RESERVES: Fair values for immediate annuities, without mortality features, are derived by discounting the future estimated cash flows using current interest rates for similar maturities. For deferred annuities, fair value is based on surrender value. The carrying value and fair value of the annuity reserves approximated $27.1 billion and $25.9 billion, respectively, at December 31, 2007 and $28.5 billion and $27.7 billion, respectively, at December 31, 2006. RESERVES FOR GUARANTEED INVESTMENT CONTRACTS: Fair value is based on the present value of future cash flows at current pricing rates. The fair value approximated $2.0 billion at both December 31, 2007 and 2006. TRUST INSTRUMENTS SUPPORTED BY FUNDING AGREEMENTS: Fair value is based on the present value of future cash flows at current pricing rates, plus the fair value of embedded derivatives. The fair value approximated $5.2 billion at both December 31, 2007 and 2006. FEDERAL HOME LOAN BANK FUNDING AGREEMENTS: Fair value of the FHLB funding agreements is based on future cash flows discounted at current interest rates. The fair value of the FHLB funding agreements approximated $1,415.2 million and $597.4 million at December 31, 2007 and 2006, respectively. BORROWINGS: Carrying value of the short-term borrowings from Parent of $32.0 million at December 31, 2007 is considered a reasonable estimate for fair value due to the short-term maturity. Carrying value of the FHLB short-term notes of $250.0 million at December 31, 2007 is considered a reasonable estimate for fair value due to the short-term maturity and monthly interest rate reset. Fair value of other borrowings is based on future cash flows discounted at current interest rates. Carrying value and fair value approximated $270.4 million and $311.3 million, respectively, at December 31, 2007, and $402.3 million and $461.5 million, respectively, at December 31, 2006. SEPARATE ACCOUNT LIABILITIES: Fair value of contracts in the accumulation phase is based on account value less surrender charges. Fair value of contracts in the payout phase is based on the present value of future cash flows at assumed investment rates. The aggregate fair value approximated $28.0 billion and $20.9 billion at December 31, 2007 and 2006, respectively. 5. INVESTMENTS Investments are comprised primarily of fixed-income securities, primarily publicly-traded industrial, utility and government bonds, asset-backed securities and mortgage loans. Asset-backed securities include mortgage-backed and other structured securities. The Company generates the majority of its general account deposits from interest-sensitive individual annuity contracts, life insurance products and guaranteed investment contracts on which it has committed to pay a declared rate of interest. The Company's strategy of investing in fixed-income securities and loans aims to ensure matching of the asset yield with the interest-sensitive liabilities and to earn a stable return on its investments. FIXED MATURITIES The following table sets forth fixed maturity investments at December 31, 2007, classified by rating categories as assigned by nationally recognized statistical rating organizations ("NRSRO"), the National Association of Insurance Commissioners ("NAIC"), or if not rated by such organizations, the Company's affiliated investment advisor. At December 31, 2007, the carrying value of investments rated by the Company's affiliated investment advisor totaled $756.0 million. For purposes of the table, if not otherwise rated higher by a nationally recognized statistical rating organization, NAIC Class 1 investments are included in the A rating; Class 2 in BBB; Class 3 in BB and Classes 4 through 6 in B and below. PERCENT OF TOTAL FIXED MATURITIES INVESTMENT RATING DECEMBER 31, 2007 ---------------------- AAA 25.2% AA 9.8% A 26.4% BBB 33.7% ---------------------- ---------------------- Investment grade 95.1% ---------------------- BB 3.8% B and below 1.1% ---------------------- Below investment grade 4.9% ---------------------- Total fixed maturities 100.0% ====================== The amortized cost and carrying value of fixed maturities in default that were anticipated to be income producing when purchased were zero and $0.1 million, respectively, at December 31, 2007. The amortized cost and carrying value of fixed maturities that have been non-income producing for the 12 months preceding December 31, 2007 were zero and $0.1 million, respectively, and for the 12 months preceding December 31, 2006 were $4.0 million and $4.1 million, respectively. 5. INVESTMENTS (CONTINUED) The cost or amortized cost, gross unrealized gains and losses and fair value of available for sale fixed maturities and equities were as follows (in thousands):
COST OR GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR DECEMBER 31, 2007 COST GAINS LOSSES VALUE --------------- --------------- ---------------- --------------- Fixed Maturities U.S. Treasury securities $ 11,664 $ 376 $ - $ 12,040 Foreign governments 1,339 343 - 1,682 Public utilities 2,066,395 50,330 17,537 2,099,188 Corporate securities 23,639,876 417,174 534,342 23,522,708 Asset-backed securities 11,600,864 131,850 317,688 11,415,026 --------------- --------------- ---------------- --------------- --------------- ---------------- --------------- Total fixed maturities $ 37,320,138 $ 600,073 $ 869,567 $ 37,050,644 =============== =============== ================ =============== Equities $ 299,050 $ 17,260 $ 580 $ 315,730 =============== =============== ================ =============== COST OR GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR DECEMBER 31, 2006 COST GAINS LOSSES VALUE --------------- --------------- ---------------- --------------- Fixed Maturities U.S. Treasury securities $ 11,693 $ - $ 281 $ 11,412 Foreign governments 1,341 314 - 1,655 Public utilities 2,753,801 62,651 26,298 2,790,154 Corporate securities 25,220,870 530,472 351,648 25,399,694 Asset-backed securities 10,035,281 122,647 120,937 10,036,991 --------------- --------------- ---------------- --------------- --------------- ---------------- --------------- Total fixed maturities $ 38,022,986 $ 716,084 $ 499,164 $ 38,239,906 =============== =============== ================ =============== Equities $ 107,750 $ 13,843 $ - $ 121,593 =============== =============== ================ ===============
The amortized cost and fair value of fixed maturities at December 31, 2007, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities where securities can be called or prepaid with or without early redemption penalties. Amortized Cost Fair Value --------------- ---------------- Due in 1 year or less $ 787,333 $ 791,467 Due after 1 year through 5 years 9,510,533 9,677,164 Due after 5 years through 10 years 11,808,524 11,583,356 Due after 10 years through 20 years 2,486,502 2,479,043 Due after 20 years 1,126,382 1,104,588 Asset-backed securities 11,600,864 11,415,026 --------------- ---------------- Total $ 37,320,138 $ 37,050,644 =============== ================ U.S. Treasury securities with a carrying value of $4.0 million and $10.7 million at December 31, 2007 and 2006, respectively, were on deposit with regulatory authorities, as required by law in various states in which business is conducted. 5. INVESTMENTS (CONTINUED) The fair value and the amount of gross unrealized losses included in accumulated other comprehensive income (loss) in stockholder's equity were as follows (in thousands):
-------------------------------------------------------------------------------------------------------------------------- LESS THAN 12 MONTHS 12 MONTHS OR LONGER TOTAL -------------------------------------------------------------------------------------------------------------------------- GROSS GROSS GROSS UNREALIZED UNREALIZED UNREALIZED DECEMBER 31, 2007 LOSSES FAIR VALUE LOSSES FAIR VALUE LOSSES FAIR VALUE -------------------------------------------------------------------------------------------------------------------------- Public utilities $ 885 $ 226,092 $ 16,652 $ 666,783 $ 17,537 $ 892,875 Corporate securities 225,670 5,771,382 308,672 7,277,319 534,342 13,048,701 Asset-backed securities 177,235 3,358,791 140,453 3,154,953 317,688 6,513,744 Subtotal - fixed maturities 403,790 9,356,265 465,777 11,099,055 869,567 20,455,320 Equities 580 68,174 - - 580 68,174 Total temporarily impaired securities $ 404,370 $ 9,424,439 $ 465,777 $11,099,055 $870,147 $ 20,523,494 -------------------------------==============-================-============-===============-============-================= -------------------------------------------------------------------------------------------------------------------------- LESS THAN 12 MONTHS 12 MONTHS OR LONGER TOTAL -------------------------------------------------------------------------------------------------------------------------- GROSS GROSS GROSS UNREALIZED UNREALIZED UNREALIZED DECEMBER 31, 2006 LOSSES FAIR VALUE LOSSES FAIR VALUE LOSSES FAIR VALUE -------------------------------------------------------------------------------------------------------------------------- U.S. Treasury securities $ 27 $ 3,063 $ 254 $ 7,280 $ 281 $ 10,343 Public utilities 2,182 513,145 24,116 964,937 26,298 1,478,082 Corporate securities 48,919 3,869,151 302,729 10,212,760 351,648 14,081,911 Asset-backed securities 8,642 2,129,328 112,295 3,740,046 120,937 5,869,374 Subtotal - fixed maturities 59,770 6,514,687 439,394 14,925,023 499,164 21,439,710 Equities - - - - - - Total temporarily impaired securities $ 59,770 $ 6,514,687 $ 439,394 $14,925,023 $499,164 $ 21,439,710 -------------------------------==============-================-============-===============-============-=================
The Company defines its exposure to subprime mortgages as investments in securities collateralized by residential mortgage loans in which the underlying borrowers have a FICO score of 659 or lower. The Company's amortized cost and fair value of mortgage-backed securities collateralized by subprime mortgages were $496.2 million and $473.1 million, respectively, at December 31, 2007. All investments in subprime related mortgage-backed securities are AAA rated by at least one NRSRO. The Company's amortized cost and fair value of mortgage-backed securities collateralized by Alt-A mortgages were $1,397.7 million and $1,314.1 million, respectively, at December 31, 2007. All investments in Alt-A related mortgage-backed securities are rated investment grade by at least one NRSRO. The Company periodically reviews its fixed maturities and equities on a case-by-case basis to determine if any decline in fair value to below amortized cost is other-than-temporary. Factors considered in determining whether a decline is other-than-temporary include the length of time a security has been in an unrealized loss position, reasons for the decline in value, expectations for the amount and timing of a recovery in fair value and the Company's intent and ability to hold a security to recovery in fair value. If it is determined that a decline in fair value of an investment is temporary, the decline is recorded as an unrealized loss in accumulated other comprehensive income (loss) in stockholder's equity. If the decline is considered to be other-than-temporary, a realized loss is recognized in the consolidated income statements. Generally, securities with fair values that are less than 80% of amortized cost and other securities the Company determines are underperforming or potential problem securities are subject to regular review. To facilitate the 5. INVESTMENTS (CONTINUED) review, securities with significant declines in value, or where other objective criteria evidencing credit deterioration have been met, are included on a watch list. Among the criteria for securities to be included on a watch list are: credit deterioration that has led to a significant decline in value of the security; a significant covenant related to the security has been breached; or an issuer has filed or indicated a possibility of filing for bankruptcy, has missed or announced it intends to miss a scheduled interest or principal payment, or has experienced a specific material adverse change that may impair its creditworthiness. In performing these reviews, the Company considers the relevant facts and circumstances relating to each investment and must exercise considerable judgment in determining whether a security is other-than-temporarily impaired. Assessment factors include judgments about an obligor's current and projected financial position, an issuer's current and projected ability to service and repay its debt obligations, the existence of, and realizable value of, any collateral backing obligations, the macro-economic and micro-economic outlooks for specific industries and issuers. Assessing the duration of asset-backed securities can also involve assumptions regarding underlying collateral such as prepayment rates, default and recovery rates, and third-party servicing capabilities. Among the specific factors considered are whether the decline in fair value results from a change in the credit quality of the security itself, or from a downward movement in the market as a whole, the likelihood of recovering the carrying value based on the near term prospects of the issuer and the Company's ability and intent to hold the security until such a recovery may occur. Unrealized losses that are considered to be primarily the result of market conditions are usually determined to be temporary, e.g., minor increases in interest rates, unusual market volatility or industry-related events, and where the Company also believes there exists a reasonable expectation for recovery in the near term and, furthermore, has the intent and ability to hold the investment until maturity or the market recovery. To the extent factors contributing to impairment losses recognized affect other investments, such investments are also reviewed for other-than-temporary impairment and losses are recorded when appropriate. The Company applies the provisions of EITF Issue No. 99-20, "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets" ("EITF 99-20") when evaluating whether impairments on other than high quality asset-backed securities are other-than-temporary. In general, the Company considers an asset-backed security as other than high quality if it is not rated investment grade by at least one NRSRO. The Company regularly updates estimates of cash flows on impaired other than high quality asset-backed securities and, in accordance with EITF 99-20, if there has been an adverse change, an impairment charge is recorded in the consolidated income statement. There are inherent uncertainties in assessing the fair values assigned to the Company's investments and in determining whether a decline in market value is other-than-temporary. The Company's review of fair value involves several criteria including economic conditions, credit loss experience, other issuer-specific developments and future cash flows. These assessments are based on the best available information at the time. Factors such as market liquidity, the widening of bid/ask spreads and a change in the cash flow assumptions can contribute to future price volatility. If actual experience differs negatively from the assumptions and other considerations used in the consolidated financial statements, unrealized losses currently in accumulated other comprehensive income (loss) may be recognized in the consolidated income statement in future periods. The Company currently intends to hold available for sale securities with unrealized losses not considered other-than-temporary until they mature or recover in value. However, if the specific facts and circumstances surrounding an individual security, or the outlook for its industry sector change, the Company may sell the security prior to its maturity and realize a loss. Based on ratings by nationally recognized statistical rating organizations, of the total carrying value for fixed maturities in an unrealized loss position at December 31, 2007, 79.7% were investment grade, 6.5% were below investment grade and 13.8% were not rated. Unrealized losses from fixed maturities that were below investment grade or not rated represented approximately 22.2% of the aggregate gross unrealized losses on available for sale fixed maturities. 5. INVESTMENTS (CONTINUED) Corporate securities in an unrealized loss position were diversified across industries. As of December 31, 2007, the industries representing the larger unrealized losses included financial services (16.6% of fixed maturities gross unrealized losses) and energy (6.7%). The largest unrealized loss related to a single corporate obligor was $21.8 million at December 31, 2007. The amount of gross unrealized losses for fixed maturities in a loss position by maturity date of the fixed maturities as of December 31, 2007 were as follows (in thousands): Less than one year $ 948 One to five years 108,441 Five to ten years 323,328 More than ten years 119,162 Asset-backed securities 317,688 ------------------ Total gross unrealized losses $ 869,567 ================== COMMERCIAL MORTGAGE LOANS Commercial mortgage loans are reported net of allowance for loan losses of $13.4 million and $13.1 million at December 31, 2007 and 2006, respectively. At December 31, 2007, mortgage loans were collateralized by properties located in 37 states. Jackson's mortgage loan portfolio does not include single-family residential mortgage loans, and is therefore not exposed to the risk of defaults associated with residential subprime mortgage loans. SECURITIZATIONS In November 2003, Jackson executed the Piedmont CDO Trust ("Piedmont") securitization transaction. In this transaction, Jackson contributed $1,159.6 million of asset-backed securities, ultimately to Piedmont, which issued several classes of debt to acquire such securities. The transaction was recorded as a sale; however, Jackson retained beneficial interests in the contributed asset-backed securities of approximately 80% by acquiring certain securities issued by Piedmont. Piedmont is a Qualified Special Purpose Entity and accordingly, is not consolidated in the accompanying financial statements. Jackson's carrying value in securities issued by Piedmont totaled $546.2 million and $636.6 million at December 31, 2007 and 2006, respectively, and was included in asset-backed securities. OTHER INVESTED ASSETS Other invested assets primarily include investments in 1) limited partnerships, 2) derivative instruments with positive fair values and 3) real estate. Investments in limited partnerships have carrying values of $651.1 million and $479.9 million at December 31, 2007 and 2006, respectively. Real estate totaling $118.9 million and $109.0 million at December 31, 2007 and 2006, respectively, includes foreclosed properties with a book value of $10.9 million and $10.5 million at December 31, 2007 and 2006, respectively. Limited partnership income recognized by the Company was $177.9 million, $120.3 million and $162.6 million in 2007, 2006 and 2005, respectively. The fair value of free-standing derivative instruments reflects the estimated amounts, net of payment accruals, that the Company would receive or pay upon sale or termination of the contracts at the reporting date. With respect to swaps, spread cap options and put-swaptions, the notional amount represents the stated principal balance used as a basis for calculating payments. With respect to futures and options, the contractual amount represents the market exposure of open positions. 5. INVESTMENTS (CONTINUED) A summary of the aggregate contractual or notional amounts and fair values of freestanding derivative instruments outstanding is as follows (in thousands):
------------------------------------------------------------------------------------------------------------------ DECEMBER 31, 2007 OTHER INVESTED ASSETS OTHER LIABILITIES ------------------------------------------------------------------------------------------------------------------ CONTRACTUAL/ CONTRACTUAL/ NET NOTIONAL FAIR NOTIONAL FAIR FAIR AMOUNT VALUE AMOUNT VALUE VALUE ------------------------------------------------------------------------------------------------------------------ Cross-currency swaps $ 1,198,115 $ 230,759 $ - $ - $ 230,759 Credit default swaps 6,000 287 40,000 (797) (510) Equity index call options 1,038,700 93,984 22,718 (17,130) 76,854 Equity index put options 7,250,000 97,973 - - 97,973 Spread cap options 10,000,000 229,887 - - 229,887 Put-swaptions 51,000,000 53,160 2,000,000 (1) 53,159 Futures - - 738,600 (10,125) (10,125) Total return swaps 450,000 11,349 - - 11,349 Interest rate swaps 3,400,000 58,877 7,140,000 (285,551) (226,674) ------------------------------------------------------------------------------------------------------------------ Total $ 74,342,815 $ 776,276 $ 9,941,318 $ (313,603) $ 462,673 --------------------------================--================--================--================--================ --------------------------================--================--================--================--================ ------------------------------------------------------------------------------------------------------------------ DECEMBER 31, 2006 OTHER INVESTED ASSETS OTHER LIABILITIES ------------------------------------------------------------------------------------------------------------------ CONTRACTUAL/ CONTRACTUAL/ NET NOTIONAL FAIR NOTIONAL FAIR FAIR AMOUNT VALUE AMOUNT VALUE VALUE ------------------------------------------------------------------------------------------------------------------ Cross-currency swaps $ 1,051,577 $ 215,382 $ 50,000 $ (1,789) $ 213,593 Credit default swaps - - 36,000 (59) (59) Equity index call options 1,140,750 108,472 22,718 (5,446) 103,026 Equity index put options 5,300,000 32,837 - - 32,837 Put-swaptions 26,500,000 9,559 23,000,000 (459) 9,100 Futures - - 535,650 (1,238) (1,238) Total return swaps 450,000 24,632 127,000 (13,470) 11,162 Interest rate swaps 4,710,105 104,899 3,890,000 (156,495) (51,596) ------------------------------------------------------------------------------------------------------------------ Total $ 39,152,432 $ 495,781 $ 27,661,368 $ (178,956) $ 316,825 --------------------------================--================--================--================--================
SECURITIES LENDING The Company has entered into securities lending agreements with an agent bank whereby blocks of securities are loaned to third parties, primarily major brokerage firms. As of December 31, 2007 and 2006, the estimated fair value of loaned securities was $215.2 million and $306.5 million, respectively. The agreements require a minimum of 102 percent of the fair value of the loaned securities to be held as collateral, calculated on a daily basis. To further minimize the credit risks related to this program, the financial condition of counterparties is monitored on a regular basis. Cash collateral received, in the amount of $225.5 million and $235.9 million at December 31, 2007 and 2006, respectively, was invested by the agent bank and included in short-term investments of the Company. Securities lending payable is included in liabilities for cash collateral received. Other collateral received, generally in the form of securities, totaled zero and $89.2 million at December 31, 2007 and 2006, respectively. Securities lending transactions are used to generate income. Income and expenses associated with these transactions are reported as net investment income. 6. INVESTMENT INCOME, RISK MANAGEMENT ACTIVITY AND REALIZED GAINS AND LOSSES The sources of net investment income by major category were as follows (in thousands): ------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 2007 2006 2005 ------------------------------------------------------------------------------ Fixed maturities $2,320,597 $2,363,953 $2,340,984 Commercial mortgage loans 328,830 329,047 317,468 Limited partnerships 177,941 120,320 162,550 Other investment income 158,062 137,363 95,229 Total investment income 2,985,430 2,950,683 2,916,231 Less investment expenses (39,914) (45,896) (36,791) ------------------------------------------------------------------------------ Net investment income $2,945,516 $2,904,787 $2,879,440 --------------------------================--================---=============== Risk management activity, including gains (losses) and change in fair value of derivative instruments and embedded derivatives, was as follows (in thousands):
----------------------------------------------------------------------------------------- YEARS ENDED DECEMBER 31, 2007 2006 2005 ----------------------------------------------------------------------------------------- Interest rate swaps $ (167,141) $ 106,907 $ 160,250 Forwards - - 6,891 Put-swaptions 33,710 (10,572) (3,093) Futures 14,382 (40,993) 4,086 Equity index call options (850) 33,460 4,548 Equity index put options 31,439 (64,046) (19,757) Total return swaps (9,180) 10,486 - Spread cap options 194,444 - - Fixed index annuity embedded derivatives (27,623) (154,696) (20,247) Credit default swaps (653) 1,447 - Variable annuity embedded derivatives (32,070) 12,780 37,149 ----------------------------------------------------------------------------------------- Risk management activity $ 36,458 $ (105,227) $ 169,827 ------------------------------------------===========--================---=============== ------------------------------------------===========--================---===============
Net realized gains (losses) on investments and capital assets were as follows (in thousands): ------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 2007 2006 2005 ------------------------------------------------------------------------------ Sales of fixed maturities Gross gains $ 128,634 $ 96,911 $ 85,648 Gross losses (163,380) (113,800) (53,395) Sales of equities Gross gains 261 7,796 25,243 Gross losses (44) (1,562) (93) Sales of real estate Gross gains - - 19 Sales of capital assets 4,350 - - Impairment losses (60,395) (47,055) (44,438) Total $ (90,574) $ (57,710) $ 12,984 ---------------------------===============--================---=============== Net realized gains (losses) on investments, net of amounts allocated to minority interest, totaled $(93.1) million, $(66.7) million and $12.0 million in 2007, 2006 and 2005, respectively. 7. VALUE OF ACQUIRED INSURANCE The value of acquired insurance in-force at acquisition date represents the present value of anticipated profits of the business in-force on November 25, 1986 (the date the Company was acquired by Prudential). The value of acquired insurance in-force was determined by using assumptions as to interest, persistency and mortality. Profits were then discounted to arrive at the value of the insurance in-force. The value of acquired insurance in-force was fully amortized as of December 31, 2006. The amortization of acquired insurance was as follows (in thousands): 2006 2005 -------------------------------------------------------------------------------- Value of acquired insurance: Balance, beginning of year $ 23,578 $ 45,768 Interest, at rates varying from 6.5% to 9.5% 1,108 3,258 Amortization (24,686) (25,448) Balance, end of year $ - $ 23,578 -----------------------------------------------================--=============== 8. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND VARIABLE ANNUITY GUARANTEES The Company issues variable contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contract holder (traditional variable annuities). The Company also issues variable annuity and life contracts through separate accounts where the Company contractually guarantees to the contract holder (variable contracts with guarantees) either a) return of no less than total deposits made to the contract adjusted for any partial withdrawals, b) total deposits made to the contract adjusted for any partial withdrawals plus a minimum return, or c) the highest contract value on a specified anniversary date adjusted for any withdrawals following the contract anniversary. These guarantees include benefits that are payable in the event of death (guaranteed minimum death benefit ("GMDB")), annuitization (guaranteed minimum income benefit ("GMIB")), at specified dates during the accumulation period (guaranteed minimum withdrawal benefit ("GMWB")) or at the end of a specified period (guaranteed minimum accumulation benefit ("GMAB")). The assets supporting the variable portion of both traditional variable annuities and variable contracts with guarantees are carried at fair value and reported as summary total separate account assets with an equivalent summary total reported for liabilities. Amounts assessed against the contract holders for mortality, administrative, and other services are included in revenue. Changes in liabilities for minimum guarantees are included in increase in reserves, net of reinsurance in the consolidated income statement, with the exception of changes in embedded derivatives, which are included in risk management activity. Separate account net investment income, net investment gains and losses, and the related liability changes are offset within the same line item in the consolidated income statements. 8. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND VARIABLE ANNUITY GUARANTEES (CONTINUED) At December 31, 2007 and 2006, the Company had variable contracts with guarantees, where net amount at risk is the amount of guaranteed benefit in excess of current account value, as follows (dollars in millions):
Average DECEMBER 31, 2007 Period Weighted until Minimum Account Net Amount Average Expected Return Value at Risk Attained Age Annuitization ------------------------------------------------------------------------------------------------------------------------------------ Return of net deposits plus a minimum return GMDB 0% - 5% $ 22,618.6 $ 1,234.5 63.6 years GMIB 0% - 6% $ 2,650.7 $ 87.2 6.7 years GMWB - Premium only $ 5,646.3 $ 12.5 GMWB - For life 0% - 5% $ 1,032.9 $ 1.2 GMAB - Premium only $ 19.1 $ 0.1 Highest specified anniversary account value minus withdrawals post-anniversary GMDB $ 4,791.8 $ 129.7 8 62.0 years GMWB - Highest anniversary only $ 3,164.6 $ 65.7 6 GMWB - For life $ 1,690.1 $ 37.5 .1 Combination net deposits plus minimum return, highest specified anniversary account value minus withdrawals post-anniversary GMDB 0% - 5% $ 2,310.0 $ 48.4 0 64.1 years GMWB - For life 0% - 5% $ 3,348.7 $ 81.7 Average DECEMBER 31, 2006 Period Weighted until Minimum Account Net Amount Average Expected Return Value at Risk Attained Age Annuitization ------------------------------------------------------------------------------------------------------------------------------------ Return of net deposits plus a minimum return GMDB 0% - 5% $ 17,035.7 $ 1,218.4 63.3 years GMIB 0% - 6% $ 2,521.8 $ 21.4 7.4 years GMWB - Premium only $ 4,927.9 $ 0.3 GMWB - For life 0% - 5% $ 996.7 $ 0.1 Highest specified anniversary account value minus withdrawals post-anniversary GMDB $ 3,265.8 $ 44.9 61.6 years GMWB - Highest anniversary only $ 1,853.6 $ 1.2 GMWB - For life $ 543.3 $ 0.2 Combination net deposits plus minimum return, highest specified anniversary account value minus withdrawals post-anniversary GMDB 0% - 5% $ 1,785.7 $ 4.8 63.8 years GMWB - For life 0% - 5% $ 961.8 $ 0.3
8. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND VARIABLE ANNUITY GUARANTEES (CONTINUED) Account balances of contracts with guarantees were invested in variable separate accounts as follows (in millions): ------------------------------------------------------------------------- DECEMBER 31, ------------------------------------------------------------------------- ------------------------------------------------------------------------- FUND TYPE: 2007 2006 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Equity $ 24,744.1 $ 18,937.5 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Bond 1,881.2 1,508.1 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Balanced 2,445.5 1,373.4 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Money market 651.2 269.1 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total $ 29,722.0 $ 22,088.1 ---------------------------------------------=============--============= ---------------------------------------------=============--============= GMDB liabilities, before reinsurance, reflected in the general account are as follows (in millions): 2007 2006 2005 ----------- ---------- ------------ Balance at January 1 $ 56.6 $ 37.0 $ 42.0 Incurred guaranteed benefits 86.7 43.6 21.2 Paid guaranteed benefits (25.3) (24.0) (26.2) ----------- ---------- ------------ Balance at December 31 $ 118.0 $ 56.6 $ 37.0 =========== ========== ============ Balance at December 31, net of reinsurance $ 4.6 $ 1.9 $ 0.8 =========== ========== ============ The GMDB liability is determined at each period end by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. In 2007, the Company lowered lapse rate assumptions for policies with deep in-the-money GMDB benefits. The following assumptions and methodology were used to determine the GMDB liability at both December 31, 2007 and 2006 (except where noted): 1) Use of a series of deterministic investment performance scenarios. 2) Mean investment performance assumption of 8.4% after investment management fees, but before investment advisory fees and mortality and expense charges. 3) Mortality equal to 80.0% of the Annuity 2000 table. 4) Lapse rates varying by contract type, duration and degree the benefit is in-the-money and ranging from 0.5% to 50.0%, with an average of 6.0% during the surrender charge period and 11.0% thereafter at December 31, 2007 and from 2.0% to 50.0%, with an average of 7.0% during the surrender charge period and 13.0% thereafter at December 31, 2006. 5) Discount rate of 8.4%. Most GMWB reserves are considered to be derivatives under FAS 133 and are recognized at fair value, with the change in fair value included in risk management activity. As the nature of the cash flows used to derive the fair value of these reserves may be quite varied, the fair value is calculated as the average of the results from 1,000 stochastic scenarios. These scenarios incorporate assumptions regarding expected market volatility, correlations of market returns and discount rates, utilization of the benefit by policyholders under varying conditions and policyholder lapsation. At each valuation date, the Company assumes expected returns based on risk-free rates as represented by the LIBOR forward curve as of that date and market volatility as determined with reference to implied volatility data and evaluations of historical volatilities for various indices. The risk-free spot rates as represented by the LIBOR spot curve as of the valuation date are used to determine the present value of expected future cash flows produced in the stochastic process. The negative GMWB reserve at December 31, 2007 and 2006 totaled $10.4 million and $56.0 million, respectively, and is included in other assets. GMAB benefits are offered on some variable annuity plans starting in 2007 and issues are minimal as of December 31, 2007. 8. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS AND VARIABLE ANNUITY GUARANTEES (CONTINUED) Jackson has also issued certain GMWB products that guarantee payments over a lifetime. Reserves for these lifetime benefits are calculated as required by SOP 03-1. At December 31, 2007 and 2006, these SOP 03-1 reserves totaled $4.8 million and $4.6 million, respectively. The direct GMIB liability is determined at each period end by estimating the expected value of the annuitization benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used for calculating the direct GMIB liability at December 31, 2007 and 2006, are consistent with those used for calculating the GMDB liability. These GMIB SOP 03-1 reserves are minimal at December 31, 2007 and 2006. OTHER LIABILITIES - INSURANCE AND ANNUITIZATION BENEFITS The Company has established additional reserves for life insurance business due to: universal life ("UL") plans with secondary guarantees, interest-sensitive life ("ISWL") plans that exhibit "profits followed by loss" patterns and account balance adjustments to tabular guaranteed cash values on one interest sensitive life plan. The Company also has a small closed block of two-tier annuities, where different crediting rates are used for annuitization and surrender benefit calculations, for which a liability was established to cover future annuitization benefits in excess of surrender values. The total liability for this block is the low tier funding using the lower credited rate associated with surrenders, plus the SOP 03-1 annuitization reserve. Liabilities for these benefits have been established according to the methodology prescribed in SOP 03-1, as follows:
------------------------------------------------------------------------------------------------------------------- DECEMBER 31, 2007 DECEMBER 31, 2006 ------------------------------------------------------------------------------------------------------------------- Benefit Type Liability Net Amount Weighted Liability Net Amount Weighted (in millions) at Risk Average (in millions) at Risk Average (in millions)* Attained Age (in millions)* Attained Age ------------------------------------------------------------------------------------------------------------------- UL insurance benefit $ 50.7 $ 5,332.3 54.4 years $ 56.9 $ 4,992.5 54.5 years Two-tier annuitization $ 6.5 $ 34.6 61.5 years $ 6.8 $ 36.5 60.7 years ISWL account balance adjustment $ 46.9 n/a n/a $ 39.7 n/a n/a -------------------------------------------------------------------------------------------------------------------
* Net amount at risk ("NAR") for the UL benefits is for the total of the plans containing any policies having projected non-zero excess benefits, and thus may include NAR for some policies with zero projected excess benefits. The following assumptions and methodology were used to determine the UL insurance benefit liability at December 31, 2007 and 2006: 1) Use of a series of deterministic premium persistency scenarios. 2) Other experience assumptions similar to those used in amortization of deferred acquisition costs. 3) Discount rates equal to the credited interest rates, approximately 4% to 5% projected. The following assumptions and methodology were used to determine the two-tier annuitization benefit liability at December 31, 2007 and 2006: 1) Use of a series of deterministic scenarios, varying by surrender rate and annuitization rate. 2) Other experience assumptions similar to those used in amortization of deferred acquisition costs. 3) Discount rates are equal to credited interest rates, approximately 3% to 4%. 9. BORROWINGS The aggregate carrying value and fair value of borrowings at December 31, 2007 and 2006 were as follows (in thousands):
--------------------------------------------------------------------------------------------------- DECEMBER 31, 2007 2006 --------------------------------------------------------------------------------------------------- CARRYING CARRYING VALUE FAIR VALUE VALUE FAIR VALUE --------------------------------------------------------------------------------------------------- Surplus notes $ 249,280 $ 290,163 $ 249,265 $ 308,550 Tuscany notes - - 114,381 114,381 Mortgage loans 17,416 17,416 34,866 34,866 VIE equity classes 3,750 3,750 3,750 3,750 FHLB short-term notes 250,000 250,000 - - Short-term borrowings from Parent 32,020 32,020 - - --------------------------------------------------------------------------------------------------- Total $ 552,466 $ 593,349 $ 402,262 $ 461,547 -----------------------------------==============================---=============================== -----------------------------------==============================---=============================== Long-term borrowings $ 270,446 $ 311,329 $ 287,881 $ 347,166 Short-term borrowings 250,000 250,000 114,381 114,381 Short-term borrowings from Parent 32,020 32,020 - - --------------------------------------------------------------------------------------------------- Total $ 552,466 $ 593,349 $ 402,262 $ 461,547 -----------------------------------==============================---=============================== Due in 2008 $ 299,436 $ 299,436 Due after 5 years 253,030 293,913 --------------------------------------------------------------------------------------------------- Total $ 552,466 $ 593,349 -----------------------------------==============================----------------------------------
SURPLUS NOTES On March 15, 1997, the Company issued 8.15% Surplus Notes (the "Notes") in the principal amount of $250.0 million due March 15, 2027. The Notes were issued pursuant to Rule 144A under the Securities Act of 1933, and are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims. Under Michigan Insurance law, for statutory reporting purposes, the Notes are not part of the legal liabilities of the Company and are considered capital and surplus. Payments of interest or principal may only be made with the prior approval of the Commissioner of Insurance of the State of Michigan and only out of surplus earnings which the Commissioner determines to be available for such payments under Michigan Insurance law. The Notes may not be redeemed at the option of the Company or any holder prior to maturity. Interest is payable semi-annually on March 15 and September 15 of each year. Interest paid on the Notes was $20.4 million in each of 2007, 2006 and 2005. TUSCANY NOTES On December 19, 2001, Tuscany CDO, Limited ("Tuscany"), a VIE in which Jackson was the primary beneficiary, issued $900.0 million of senior and subordinated notes. At issuance, the most senior notes, initially totaling $450.0 million, due February 25, 2010 were sold to unrelated parties with the remaining senior and subordinated notes retained by the Company. The most senior notes were paid in full by August 2006. In 2003, the second most senior notes, initially totaling $129.0 million, due February 25, 2015 were sold to unrelated parties. The remaining outstanding notes were paid in full by February 2007 and Tuscany was liquidated and dissolved. The most senior notes bore interest at LIBOR plus .38% and the second most senior notes bore interest at LIBOR plus .47% (collectively, "Tuscany Notes"). At December 31, 2006, the weighted average rate on the Tuscany Notes was 5.93%. Interest paid totaled $3.5 million, $11.0 million and $6.8 million in 2007, 2006 and 2005, respectively. 9. BORROWINGS (CONTINUED) MORTGAGE LOANS At December 31, 2007 and 2006, certain consolidated real estate VIEs, have outstanding mortgage loans at a weighted average interest rate of 6.77% and 6.53%, respectively, with maturities through 2008 and 2016, respectively. Interest paid totaled $1.2 million, $2.8 million and $273 thousand in 2007, 2006 and 2005, respectively. VIE EQUITY CLASSES Certain of the VIEs have "equity" classes issued in the form of non-investment grade debt maturing in November 2013. Accordingly, these equity classes are classified as notes payable rather than minority interest in the consolidated balance sheets. These notes accrue contingent interest in addition to the stated coupon. The outstanding principal amounts accrued interest at a weighted average interest rate of 6.99% and 7.12% at December 31, 2007 and 2006, respectively. Interest paid on the notes in 2007, 2006 and 2005 totaled $384 thousand, $20.0 million and $664 thousand, respectively. FHLB SHORT-TERM NOTES On December 15, 2007, Jackson entered into a short-term note program with the FHLB. The FHLB short-term notes mature on March 11, 2008. Interest rates reset monthly and are based on the FHLB Cost of Funds Index plus 19 basis points (4.45% per annum at December 31, 2007). Jackson paid $92 thousand of interest on these notes during 2007. SHORT-TERM BORROWINGS FROM PARENT On December 21, 2007, Jackson entered into an unsecured cash advance facility with Prudential. The $32 million advance is due December 26, 2008 or earlier upon demand. Interest, at 4.4% per annum, is due on the repayment date. 10. REVERSE REPURCHASE AGREEMENTS During 2007 and 2006, the Company entered into reverse repurchase and dollar roll repurchase agreements whereby the Company agreed to sell and repurchase securities. These activities have been accounted for as financing transactions, with the assets and associated liabilities included in the consolidated balance sheets. Short-term borrowings under such agreements averaged $14.2 million and $33.9 million during 2007 and 2006, respectively, at weighted average interest rates of 5.05% and 4.53%, respectively. There was no outstanding balance as of December 31, 2007 or 2006. Interest paid totaled $0.7 million, $1.5 million and $0.4 million in 2007, 2006 and 2005, respectively. The highest level of short-term borrowings at any month end was $100.0 million in 2007 and $230.0 million in 2006. 11. REINSURANCE The Company assumes and cedes reinsurance from and to other insurance companies in order to limit losses from large exposures; however, if the reinsurer is unable to meet its obligations, the originating issuer of the coverage retains the liability. The maximum amount of life insurance risk retained by the Company on any one life is generally $2.0 million. Amounts not retained are ceded to other companies on a yearly renewable-term or a coinsurance basis. In connection with the purchase of Life of Georgia, Jackson acquired certain lines of business that were wholly ceded to non-affiliates. These include both direct and assumed accident and health business, direct and assumed life insurance business, and certain institutional annuities. With the approval of the Michigan Commissioner of Insurance, Jackson cedes the guaranteed minimum death benefit coverage associated with certain variable annuities issued prior to 2002 to an affiliate, Prudential Atlantic Reinsurance Company, Dublin, Ireland ("PARC"). PARC is a wholly owned subsidiary of Prudential. 11. REINSURANCE (CONTINUED) The effect of reinsurance on premiums was as follows (in thousands):
------------------------------------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 2007 2006 2005 ------------------------------------------------------------------------------------------------------------ Direct premiums: Life $ 328,787 $ 345,020 $ 347,831 Accident and health 20,211 22,018 14,855 Plus reinsurance assumed: Life 21,834 23,444 12,629 Accident and health 1,744 2,101 1,232 Less reinsurance ceded: Life (131,537) (137,715) (134,258) Accident and health (21,955) (24,119) (16,087) Guaranteed annuity benefits (28,784) (34,548) (27,141) ------------------------------------------------------------------------------------------------------------ Total net premiums $ 190,300 $ 196,201 $ 199,061 --------------------------------------------------------================--================--================
Premiums ceded for guaranteed annuity benefits included $17.2 million, $24.5 million and $19.4 million premiums ceded to PARC during 2007, 2006 and 2005, respectively. Components of the reinsurance recoverable asset were as follows (in thousands):
-------------------------------------------------------------------------------------------- DECEMBER 31, 2007 2006 -------------------------------------------------------------------------------------------- Reserves: Life $ 785,467 $ 735,904 Accident and health 27,231 32,560 Guaranteed annuity benefits 140,473 70,675 Claims liability 57,205 37,997 Other 13,865 9,831 -------------------------------------------------------------------------------------------- Total $1,024,241 $ 886,967 --------------------------------------------------------================--================--
Reserves reinsured through Brooke Life were $54.9 million and $56.8 million at December 31, 2007 and 2006, respectively. Reserves reinsured through PARC were $113.3 million and $54.7 million at December 31, 2007 and 2006, respectively. 12. FEDERAL INCOME TAXES The components of the provision for federal income taxes were as follows (in thousands):
------------------------------------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 2007 2006 2005 ------------------------------------------------------------------------------------------------------------ Current tax expense $ 202,037 $ 240,858 $ 174,180 Deferred tax expense 50,254 22,558 141,115 ------------------------------------------------------------------------------------------------------------ Federal income tax expense $ 252,291 $ 263,416 $ 315,295 --------------------------------------------------------================--================--================
12. FEDERAL INCOME TAXES (CONTINUED) The federal income tax provisions differ from the amounts determined by multiplying pretax income by the statutory federal income tax rate of 35% for 2007, 2006 and 2005 were as follows (in thousands):
------------------------------------------------------------------------------------------------------------ YEARS ENDED DECEMBER 31, 2007 2006 2005 ------------------------------------------------------------------------------------------------------------ Income taxes at statutory rate $ 305,050 $ 278,612 $ 318,279 Dividends received deduction (48,896) (15,156) (3,437) Other (3,863) (40) 453 ------------------------------------------------------------------------------------------------------------ Provision for federal income taxes $ 252,291 $ 263,416 $ 315,295 --------------------------------------------------------================--================--================ Effective tax rate 28.9% 33.1% 34.7% --------------------------------------------------------================--================--================
Federal income taxes paid were $126.0 million, $214.0 million and $165.1 million in 2007, 2006 and 2005, respectively. The tax effects of significant temporary differences that give rise to deferred tax assets and liabilities were as follows (in thousands):
------------------------------------------------------------------------------------------------------------ December 31, 2007 2006 ------------------------------------------------------------------------------------------------------------ GROSS DEFERRED TAX ASSET Difference between financial reporting and the tax basis of: Policy reserves and other insurance items $ 917,329 $ 860,143 Investments 117,960 138,758 Deferred compensation 67,737 56,866 Net unrealized losses on available for sale securities 88,501 - Other, net 100,599 48,543 ------------------------------------------------------------------------------------------------------------ Total gross deferred tax asset 1,292,126 1,104,310 ------------------------------------------------------------------------------------------------------------ GROSS DEFERRED TAX LIABILITY Difference between financial reporting and the tax basis of: Deferred acquisition costs and sales inducements (1,152,693) (976,968) Other assets (50,607) (3,354) Net unrealized gains on available for sale securities - (80,579) Other, net (13,217) (27,249) ------------------------------------------------------------------------------------------------------------ Total gross deferred tax liability (1,216,517) (1,088,150) ------------------------------------------------------------------------------------------------------------ Net deferred tax asset $ 75,609 $ 16,160 --------------------------------------------------------------------------================--================
Management believes that it is more likely than not that the results of future operations and investment activity will generate sufficient taxable income to realize the gross deferred tax asset. At December 31, 2007, the Company had no federal tax capital loss carryforwards available for future use. In August, 2007, the IRS issued Revenue Ruling 2007-54 that would have changed accepted industry and IRS interpretations of the statutes governing the computation of the Dividends Received Deduction ("DRD") on separate account assets held in connection with variable annuity and life contracts, but that ruling was suspended by Revenue Ruling 2007-61. Revenue Ruling 2007-61 also announced the Treasury Department's and the IRS' intention to issue regulations with respect to certain computational aspects of the DRD on separate account assets held in connection with variable contracts. Any regulations that the IRS ultimately proposes for issuance in this 12. FEDERAL INCOME TAXES (CONTINUED) area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. Although regulations that represent a substantial change in an interpretation of the law are generally given a prospective effective date, there is no assurance that the change will not be retrospectively applied. As a result, depending on the ultimate timing and substance of any such regulations, which are unknown at this time, such future regulations could result in the elimination of some or all of the separate account DRD tax benefit that the Company receives. During 2007 and 2006, the Company recognized an income tax benefit of $48.9 million and $15.2 million, respectively, related to the separate account DRD. 13. COMMITMENTS AND CONTINGENCIES The Company and its subsidiaries are involved in litigation arising in the ordinary course of business. It is the opinion of management that the ultimate disposition of such litigation will not have a material adverse affect on the Company's financial condition or results of operations. Jackson has been named in civil litigation proceedings, which appear to be substantially similar to other class action litigation brought against many life insurers alleging misconduct in the sale of insurance products. The Company accrues for legal contingencies once the contingency is deemed to be probable and estimable. Accordingly, at December 31, 2007 and 2006, Jackson had recorded accruals totaling $35.0 million and $11.0 million, respectively. Additionally, in connection with the purchase of Life of Georgia, Jackson assumed a $9.4 million liability related to a class action lawsuit. This liability has been fully indemnified by ING Groep, N.V. ("ING") and an indemnification receivable equal to the liability has been included in other assets. The liability and indemnification receivable are reduced as payments are made by ING and totaled $2.0 million and $9.4 million at December 31, 2007 and 2006, respectively. The Company had unfunded commitments related to its investments in limited partnerships and limited liability companies totaling $281.4 million at December 31, 2007. Unfunded fixed-rate commercial mortgage loan commitments and available lines of credit totaled $206.8 million and $18.6 million, respectively, at December 31, 2007. The Company leases office space, land and equipment under several operating leases that expire at various dates through 2051. Certain leases include escalating lease rates, lease abatements and other incentives and, as a result, at December 31, 2007, Jackson recorded a liability of $9.9 million for future lease payments. Lease expense was $17.1 million, $23.0 million and $28.5 million in 2007, 2006 and 2005, respectively. Future minimum payments under these noncancellable operating leases are as follows (in thousands): 2008 $ 8,043 2009 6,648 2010 5,935 2011 6,100 2012 6,155 Thereafter 31,126 --------------- Total $ 64,007 =============== Jackson subleased office space under several operating leases that expire at various dates through 2008. Total future lease income to be received on the subleased property is $0.8 million. Lease income for the subleased property totaled $0.7 million per year in 2007, 2006 and 2005. 14. STOCKHOLDER'S EQUITY Under Michigan Insurance Law, dividends on capital stock can only be distributed out of earned surplus, unless the Commissioner approves the dividend prior to payment. Furthermore, without the prior approval of the Commissioner, dividends cannot be distributed if all dividends made within the preceding 12 months exceed the greater of statutory net income less realized gains or 10% of the Company's statutory surplus for the prior year. In 2008, the maximum amount of dividends that can be paid by the Company without prior approval of the Commissioner under this limitation approximates $490.0 million. The Company received capital contributions from its parent of $30.6 million, $49.7 million and $292.3 million in 2007, 2006 and 2005, respectively. The capital contributions included $30.6 million, $29.1 million and $31.6 million in 2007, 2006 and 2005, respectively, from Brooke Life's forgiveness of an intercompany tax liability. Contributions received in 2006 also included the transfer of $6.9 million in net assets of an affiliate. Contributions received in 2005 also included common stock of $260.7 million in Life of Georgia. Dividend payments were $246.0 million, $209.1 million and $410.8 million in 2007, 2006 and 2005, respectively. Dividends paid in 2005 include $260.8 million paid to Brooke Life to fund the purchase of Life of Georgia. Statutory capital and surplus of the Company, as reported in its Annual Statement, was $4.0 billion and $3.7 billion at December 31, 2007 and 2006, respectively. Statutory net income of the Company, as reported in its Annual Statement, was $490.0 million, $412.3 million and $565.1 million in 2007, 2006 and 2005, respectively. Statutory net income included pre-acquisition Life of Georgia net income of $112.1 million in 2005, in accordance with statutory guidelines. 15. OTHER RELATED PARTY TRANSACTIONS The Company's investment portfolio is managed by PPM America, Inc. ("PPMA"), a registered investment advisor, and PPM Finance, Inc. (collectively, "PPM"). PPM is ultimately a wholly owned subsidiary of Prudential. The Company paid $34.1 million, $35.9 million and $35.6 million to PPM for investment advisory services during 2007, 2006 and 2005, respectively. Jackson has entered into shared services administrative agreements with affiliates National Planning Holdings, Inc. and PPMA. Under the shared services administrative agreements, Jackson charged $5.0 million, $5.2 million and $5.0 million of certain management and corporate services expenses to affiliates in 2007, 2006 and 2005, respectively. Jackson provides a $40.0 million revolving credit facility to PPMA. The loan is unsecured, matures on September 9, 2008, accrues interest at LIBOR plus 2% per annum, and has a commitment fee of 0.25% per annum. There was no balance outstanding at December 31, 2007 or 2006. The highest outstanding loan balance during 2007 and 2006 was $26.0 million and $11.5 million, respectively. Interest and commitment fees totaled $524 thousand, $175 thousand and $306 thousand during 2007, 2006 and 2005, respectively. 16. BENEFIT PLANS The Company has a defined contribution retirement plan covering substantially all employees. To be eligible to participate in the Company's contribution, an employee must have attained the age of 21, have completed at least 1,000 hours of service in a 12-month period and passed their 12-month employment anniversary. In addition, the employee must be employed on the applicable January 1 or July 1 entry date. The Company's annual contributions, as declared by the board of directors, are based on a percentage of eligible compensation paid to participating employees during the year. In addition, the Company matches up to 6 percent of a participant's elective contribution to the plan during the year. The Company's expense related to this plan was $12.3 million, $8.9 million and $7.2 million in 2007, 2006 and 2005, respectively. 16. BENEFIT PLANS (CONTINUED) The Company maintains non-qualified voluntary deferred compensation plans for certain agents and employees. At December 31, 2007 and 2006, the liability for such plans totaled $194.0 million and $162.4 million, respectively and is included in other liabilities. Jackson invests general account assets in selected mutual funds in amounts similar to participant elections as a hedge against significant movement in the payout liability. The Company's expense related to these plans, including a match of elective deferrals for the agents' deferred compensation plan, was $18.4 million, $21.5 million and $18.6 million in 2007, 2006 and 2005, respectively. Investment income on the mutual funds totaled $15.0 million, $18.3 million and $9.7 million in 2007, 2006 and 2005, respectively. Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholder of Jackson National Life Insurance Company: We have audited the accompanying consolidated balance sheets of Jackson National Life Insurance Company and Subsidiaries as of December 31, 2007 and 2006, and the related consolidated income statements and the consolidated statements of stockholder's equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2007. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Jackson National Life Insurance Company and Subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2007 in conformity with U.S. generally accepted accounting principles. /s/ KPMG LLP Chicago, Illinois March 5, 2008 JACKSON NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE INFORMATION) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------- DECEMBER 31, ASSETS 2007 2006 -------------------------------------------------------------------------------------------------------------------------------- Investments: Cash and short-term investments $ 642,600 $ 946,386 Securities available for sale, at fair value: Fixed maturities (amortized cost: 2007, $37,320,138; 2006, $38,022,986) 37,050,644 38,239,906 Equities (cost: 2007, $299,050; 2006, $107,750) 315,730 121,593 Trading securities, at fair value 622,470 549,300 Commercial mortgage loans 5,475,604 5,290,788 Policy loans 829,493 815,725 Other invested assets 1,617,957 1,168,929 -------------------------------------------------------------------------------------------------------------------------------- Total investments 46,554,498 47,132,627 -------------------------------------------------------------------------------------------------------------------------------- Accrued investment income 455,208 533,887 Deferred acquisition costs 3,438,686 3,065,327 Deferred sales inducements 359,857 297,051 Reinsurance recoverable 1,024,241 886,967 Income taxes receivable from Parent 7,459 53,799 Deferred income taxes 75,609 16,160 Other assets 189,117 220,016 Separate account assets 29,912,139 22,243,997 -------------------------------------------------------------------------------------------------------------------------------- Total assets $ 82,016,814 $ 74,449,831 -------------------------------------------------------------------------------------====================---==================== LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES Policy reserves and liabilities: Reserves for future policy benefits and claims payable $ 2,505,096 $ 2,485,338 Deposits on investment contracts 33,323,783 34,634,715 Guaranteed investment contracts 1,950,925 1,995,013 Trust instruments supported by funding agreements 5,189,453 5,204,275 Federal Home Loan Bank funding agreements 1,403,203 601,397 Short-term borrowings from Parent 32,020 - Short-term borrowings 250,000 114,381 Long-term borrowings 270,446 287,881 Securities lending payable 225,516 235,888 Other liabilities 1,525,170 1,402,440 Separate account liabilities 29,912,139 22,243,997 -------------------------------------------------------------------------------------------------------------------------------- Total liabilities 76,587,751 69,205,325 -------------------------------------------------------------------------------------------------------------------------------- Minority interest 131,210 148,495 -------------------------------------------------------------------------------------------------------------------------------- STOCKHOLDER'S EQUITY Common stock, $1.15 par value; authorized 50,000 shares; issued and outstanding 12,000 shares 13,800 13,800 Additional paid-in capital 2,934,881 2,904,276 Accumulated other comprehensive income (loss), net of tax of $(49,127) in 2007 and $59,665 in 2006 (91,235) 110,807 Retained earnings 2,440,407 2,067,128 -------------------------------------------------------------------------------------------------------------------------------- Total stockholder's equity 5,297,853 5,096,011 -------------------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholder's equity $ 82,016,814 $ 74,449,831 -------------------------------------------------------------------------------------====================---====================
CONSOLIDATED INCOME STATEMENTS (IN THOUSANDS) --------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------- YEARS ENDED DECEMBER 31, 2007 2006 2005 --------------------------------------------------------------------------------------------------------------- REVENUES Premiums $ 190,300 $ 196,201 $ 199,061 Net investment income 2,945,516 2,904,787 2,879,440 Net realized gains (losses) on investments and capital assets (90,574) (57,710) 12,984 Risk management activity 36,458 (105,227) 169,827 Fee income 1,000,661 711,584 509,376 Other income 27,783 62,532 38,815 Total revenues 4,110,144 3,712,167 3,809,503 BENEFITS AND EXPENSES Death and other policy benefits 488,280 490,527 428,162 Interest credited on deposit liabilities 1,409,771 1,450,048 1,434,807 Interest expense on trust instruments supported by funding agreements 278,604 269,577 217,917 Interest expense on Federal Home Loan Bank advances, notes and reverse repurchase agreements 66,647 52,817 50,249 Increase (decrease) in reserves, net of reinsurance (29,437) (37,266) 19,466 Commissions 796,876 663,176 537,303 General and administrative expenses 468,582 387,011 341,793 Deferral of policy acquisition costs (777,230) (675,098) (556,564) Deferral of sales inducements (140,722) (101,525) (92,381) Amortization of acquisition costs: Attributable to operations 552,626 318,443 364,907 Attributable to risk management activity 17,182 (3,302) 64,962 Attributable to net realized gains (losses) on investments (23,142) (10,501) 2,671 Amortization of deferred sales inducements: Attributable to operations 95,102 109,043 55,639 Attributable to risk management activity 15,979 (35,058) 7,632 Attributable to net realized gains (losses) on investments (2,940) (2,576) 459 Amortization of acquired insurance - 23,578 22,190 Total benefits and expenses 3,216,178 2,898,894 2,899,212 Pretax income before minority interest 893,966 813,273 910,291 Minority interest (22,396) (17,236) (922) Pretax income 871,570 796,037 909,369 Federal income tax expense 252,291 263,416 315,295 Income before extraordinary gain 619,279 532,621 594,074 Extraordinary gain, net of tax benefit of $908 - 8,944 - NET INCOME $ 619,279 $ 541,565 $ 594,074 -------------------------------------------------------------------=============---===============---===============
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY AND COMPREHENSIVE INCOME (IN THOUSANDS) --------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------- YEARS ENDED DECEMBER 31, 2007 2006 2005 -------------------------------------------------------------------------------------------------------------- COMMON STOCK, BEGINNING AND END OF YEAR $ 13,800 $ 13,800 $ 13,800 ADDITIONAL PAID-IN-CAPITAL Beginning of year 2,904,276 2,854,533 2,562,214 Capital contributions 30,605 49,743 292,319 End of year 2,934,881 2,904,276 2,854,533 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Beginning of year 110,807 263,203 745,430 Net unrealized investment losses, net of reclassification adjustment and net of tax (202,042) (152,396) (482,227) End of year (91,235) 110,807 263,203 RETAINED EARNINGS Beginning of year 2,067,128 1,734,621 1,551,347 Net income 619,279 541,565 594,074 Dividends paid to stockholder (246,000) (209,058) (410,800) End of year 2,440,407 2,067,128 1,734,621 -------------------------------------------------------------------------------------------------------------- TOTAL STOCKHOLDER'S EQUITY $ 5,297,853 $ 5,096,011 $ 4,866,157 -------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- YEARS ENDED DECEMBER 31, 2007 2006 2005 ------------------------------------------------------------------------------------------------------------------------- Net income $ 619,279 $ 541,565 $ 594,074 Net unrealized holding losses arising during the period, net of tax of $(102,737) in 2007; $(86,061) in 2006 and $(243,143) in 2005 (190,798) (159,828) (451,661) Reclassification adjustment for losses (gains) included in net income, net of tax of $(6,055) in 2007; $4,001 in 2006 and $(16,459) in 2005 (11,244) 7,432 (30,566) ------------------------------------------------------------------------------------------------------------------------- COMPREHENSIVE INCOME $ 417,237 $ 389,169 $ 111,847 ------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) ----------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------- YEARS ENDED DECEMBER 31, 2007 2006 2005 ------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 619,279 $ 541,565 $ 594,074 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Net realized (gains) losses on investments 90,574 57,710 (12,984) Unrealized (gains) losses on trading portfolio 6,496 (10,937) (565) Risk management activity (36,458) 105,227 (169,827) Interest credited on deposit liabilities 1,409,771 1,450,048 1,434,807 Interest expense on trust instruments supported by funding agreements 278,604 269,577 217,917 Interest expense on Federal Home Loan Bank funding agreements 50,178 18,147 209 Mortality, expense and surrender charges (298,384) (282,931) (245,877) Amortization of discount and premium on investments 65,787 76,919 (72,853) Deferred income tax provision 50,254 22,558 141,115 Change in (net of effects of contribution of subsidiary in 2006): Accrued investment income 78,679 19,233 (7,630) Deferred sales inducements and acquisition costs (263,145) (401,934) (154,653) Trading portfolio activity, net (91,761) (25,082) (13,522) Value of acquired insurance - 23,578 22,190 Income taxes receivable from Parent 46,340 (3,166) (22,523) Other assets and liabilities, net (147,951) 50,624 348,543 ------------------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,858,263 1,911,136 2,058,421 ------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Sales of fixed maturities and equities available for sale 4,810,384 5,384,731 2,889,975 Principal repayments, maturities, calls and redemptions: Fixed maturities available for sale 3,074,597 2,593,502 2,956,801 Commercial mortgage loans 845,333 770,151 914,758 Purchases of: Fixed maturities and equities available for sale (7,542,552) (6,300,678) (6,676,587) Commercial mortgage loans (1,031,580) (1,067,685) (1,278,434) Other investing activities (143,207) (543,162) (419,823) ------------------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 12,975 836,859 (1,613,310) ------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Policyholders' account balances: Deposits 13,262,218 11,232,706 9,355,451 Withdrawals (8,425,907) (8,095,806) (6,598,525) Net transfers to separate accounts (6,915,504) (5,363,753) (3,564,891) Proceeds from borrowings 250,000 - - Payments on borrowings (131,831) (119,543) (3,747) Proceeds from short-term borrowings from Parent 32,000 - - Payment of cash dividends to Parent (246,000) (209,058) (410,800) Capital contribution - 24,150 86,670 ------------------------------------------------------------------------------------------------------------------------- NET CASH USED IN FINANCING ACTIVITIES (2,175,024) (2,531,304) (1,135,842) ------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS (303,786) 216,691 (690,731) ------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------- CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF YEAR 946,386 729,695 1,420,426 ------------------------------------------------------------------------------------------------------------------------- TOTAL CASH AND SHORT-TERM INVESTMENTS, END OF PERIOD $ 642,600 $ 946,386 $ 729,695 --------------------------------------------------------------------============----==================---================== --------------------------------------------------------------------============----==================---==================
See accompanying notes to consolidated financial statements.