<PAGE> 1
SUPPLEMENT DATED DECEMBER 6, 2000, TO
PROSPECTUS DATED MAY 1, 2000, FOR
MODIFIED SINGLE PREMIUM DEFERRED
VARIABLE ANNUITY CONTRACTS
ISSUED BY
NATIONWIDE LIFE INSURANCE COMPANY
THROUGH ITS
NATIONWIDE VARIABLE ACCOUNT - 9
THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN YOUR PROSPECTUS. PLEASE
READ IT AND KEEP IT WITH YOUR PROSPECTUS FOR FUTURE REFERENCE.
1. EFFECTIVE JANUARY 2, 2001, THE "DEATH BENEFIT OPTIONS" PROVISION OF THE
SECTION ENTITLED "ADDITIONAL CONTRACT OPTIONS" IS DELETED AND REPLACED WITH
THE FOLLOWING:
DEATH BENEFIT OPTIONS
Applicants may choose among the following death benefits as a replacement for
the Five-Year Reset Death Benefit that is standard to every contract if their
contract is issued on or after the later of January 2, 2001 or the date on which
state insurance authorities approve applicable contract modifications:
<TABLE>
<S> <C>
Optional One-Year Enhanced Death Benefit with Long Term Care/Nursing Home Waiver
and Spousal Protection....................................................................................0.15%
Total Variable Account Charges
(including option only).................................................................................1.10%
Optional Greater of One-Year or 5% Enhanced Death Benefit with Long Term Care/Nursing Home Waiver and
Spousal Protection........................................................................................0.20%
Total Variable Account Charges
(including option only) ................................................................................1.15%
</TABLE>
Applicants may choose among the following death benefits as a replacement for
the Five-Year Reset Death Benefit that is standard to every contract if their
contract is issued prior to January 2, 2001 or on a date prior to which state
insurance authorities approve the contract options listed above:
<TABLE>
<S> <C>
Optional One-Year Step Up Death Benefit....................................................................0.05%
Total Variable Account Charges
(including option only).................................................................................1.00%
Optional 5% Enhanced Death Benefit.........................................................................0.10%
Total Variable Account Charges
(including option only).................................................................................1.05%
</TABLE>
<PAGE> 2
2. EFFECTIVE JANUARY 2, 2001, THE "GUARANTEED MINIMUM INCOME BENEFIT OPTION"
PROVISION OF THE SECTION ENTITLED "ADDITIONAL CONTRACT OPTIONS" IS DELETED
AND REPLACED WITH THE FOLLOWING:
Applicants may elect one of two Guaranteed Minimum Income Benefit options (see
"Guaranteed Minimum Income Benefit Options"). Not all options may be available
in every state.
<TABLE>
<S> <C>
Guaranteed Minimum Income Benefit Option 1................................................................0.45%
Total Variable Account Charges
(including Guaranteed Minimum Income Benefit Option 1 only).............................................1.40%
Guaranteed Minimum Income Benefit Option 2 ...............................................................0.30%
Total Variable Account Charges
(including Guaranteed Minimum Income Benefit Option 2 only).............................................1.25%
</TABLE>
3. EFFECTIVE JANUARY 2, 2001, THE FIFTH PARAGRAPH OF THE "CHARGES AND
EXPENSES" PROVISION IS DELETED AND REPLACED WITH THE FOLLOWING:
Optional death benefits are available under the contract. For contracts issued
on or after the later of January 2, 2001 or the date on which state insurance
authorities approve applicable contract modifications, Nationwide will deduct an
additional charge at an annualized rate of 0.15% of the daily net assets of the
variable account if the One-Year Enhanced Death Benefit with Long Term
Care/Nursing Home Waiver and Spousal Protection is elected or 0.20% of the daily
net assets of the variable account if the Greater of One-Year or 5% Enhanced
Death Benefit with Long Term Care/Nursing Home Waiver and Spousal Protection is
elected. For contracts issued prior to January 2, 2001 or on a date prior to
which state insurance authorities approve the contract options listed above,
Nationwide will deduct an annualized rate of 0.05% of the daily net assets of
the variable account if the One-Year Step Up Death Benefit is elected, or 0.10%
of the daily net assets of the variable account if the 5% Enhanced Death Benefit
is elected.
4. EFFECTIVE JANUARY 2, 2001, THE SIXTH PARAGRAPH OF THE "CHARGES AND
EXPENSES" PROVISION IS DELETED AND REPLACED WITH THE FOLLOWING:
Two Guaranteed Minimum Income Benefit options are available under the contract.
If the contract owner elects one of the Guaranteed Minimum Income Benefit
options, Nationwide will deduct an additional charge at an annual rate of 0.45%
or 0.30% of the daily net assets of the variable account, depending on which
option was chosen (see "Guaranteed Minimum Income Benefits").
5. EFFECTIVE JANUARY 2, 2001, THE "DEATH BENEFIT OPTIONS" PROVISION OF THE
SECTION ENTITLED "OPTIONAL CONTRACT BENEFITS, CHARGES AND DEDUCTIONS" AND
THE "ONE-YEAR STEP UP DEATH BENEFIT" AND "5% ENHANCED DEATH BENEFIT"
PROVISIONS OF THE SECTION ENTITLED "DEATH BENEFIT PAYMENT" ARE DELETED AND
REPLACED WITH THE FOLLOWING:
The following death benefit options are available with the contracts. Not all of
the death benefit options may be available in every state.
--------------------------------------------------------------------------------
THE FOLLOWING BENEFITS ARE AVAILABLE FOR CONTRACTS ISSUED ON OR AFTER THE LATER
OF JANUARY 2, 2001 OR THE DATE ON WHICH STATE INSURANCE AUTHORITIES APPROVE
APPLICABLE CONTRACT MODIFICATIONS.
--------------------------------------------------------------------------------
If the contract owner chooses an optional death benefit, Nationwide will deduct
a charge equal to an annualized rate of either 0.15% (for the One-Year Enhanced
Death Benefit with Long Term Care/Nursing Home Waiver and Spousal Protection) or
0.20% (for the Greater of One-Year or 5% Enhanced Death Benefit with Long Term
Care/Nursing Home Waiver and Spousal Protection) of the daily net assets of the
variable account, depending upon which option was chosen. Each benefit is
described below.
2
<PAGE> 3
One-Year Enhanced Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greatest of:
(1) the contract value;
(2) the total of all purchase payments, less an adjustment for amounts
surrendered; or
(3) the highest contract value on any contract anniversary before the
annuitant's 86th birthday, less an adjustment for amounts subsequently
surrendered, plus purchase payments received after that contract
anniversary.
The adjustment for amounts surrendered will reduce items (2) and (3) above in
the same proportion that the contract value was reduced on the date(s) of the
partial surrender(s).
Greater of One-Year or 5% Enhanced Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greatest of:
(1) the contract value;
(2) the total of all purchase payments, less an adjustment for amounts
surrendered;
(3) the highest contract value on any contract anniversary before the
annuitant's 86th birthday, less an adjustment for amounts subsequently
surrendered, plus purchase payments received after that contract
anniversary; or
(4) the 5% interest anniversary value.
The adjustment for amounts surrendered will reduce items (2) and (3) above in
the same proportion that the contract value was reduced on the date(s) of the
partial surrender(s).
The 5% Interest Anniversary Value is equal to purchase payments minus amounts
surrendered, accumulated at 5% compound interest until the last contract
anniversary prior to the annuitant's 86th birthday. Such total accumulated
amount shall not exceed 200% of the net of purchase payments and amounts
surrendered. The adjustment for amounts subsequently surrendered after the most
recent contract anniversary will reduce the 5% Interest Anniversary Value in the
same proportion that the contract value was reduced on the date(s) of the
partial surrender(s).
EACH DEATH BENEFIT OPTION HAS A SPOUSAL PROTECTION FEATURE. THE SPOUSAL
PROTECTION FEATURE ALLOWS THE SURVIVING SPOUSE TO CONTINUE THE CONTRACT WHILE
RECEIVING THE ECONOMIC BENEFIT OF THE DEATH BENEFIT UPON THE DEATH OF THE OTHER
SPOUSE. THE SPOUSAL PROTECTION FEATURE IS AVAILABLE ONLY FOR CONTRACTS ISSUED AS
NON-QUALIFIED CONTRACTS, INDIVIDUAL RETIREMENT ANNUITIES (IRAS) AND ROTH IRAS,
PROVIDED THE CONDITIONS DESCRIBED BELOW ARE SATISFIED. THERE IS NO ADDITIONAL
CHARGE FOR THIS FEATURE.
(1) One or both spouses (or a revocable trust of which either or both of the
spouses is/are grantor(s)) must be named as the contract owner. For
contracts issued as IRAs and Roth IRAs, only the person for whom the IRA or
Roth IRA was established may be named as the contract owner;
(2) The spouses must be co-annuitants;
(3) Both co-annuitants must be age 85 or younger at the time of issue;
(4) The spouses must each be named as beneficiaries;
(5) No person other than a spouse may be named as contract owner, annuitant or
primary beneficiary;
(6) If both spouses are alive upon annuitization, the contract owner must
specify which spouse is the annuitant upon whose continuation of life any
annuity payments involving life contingencies depend (for IRA and Roth IRA
contracts, this person must be the contract owner);
(7) If a co-annuitant dies before the annuitization date, the surviving spouse
may continue the contract as its sole contract owner. If the chosen death
benefit is higher than the contract value at the time of
3
<PAGE> 4
death, the contract value will be adjusted to equal the applicable death
benefit amount. The surviving spouse may then name a new beneficiary but
may not name another co-annuitant; and
(8) If a co-annuitant is added at any time after the election of the optional
death benefit rider, a copy of the certificate of marriage must be provided
to the home office. In addition, the date of marriage must be after the
election of the death benefit option.
--------------------------------------------------------------------------------
THE FOLLOWING BENEFITS ARE AVAILABLE FOR CONTRACTS ISSUED PRIOR TO JANUARY 2,
2001 OR ON A DATE PRIOR TO WHICH STATE INSURANCE AUTHORITIES APPROVE THE
CONTRACT MODIFICATIONS LISTED ABOVE.
--------------------------------------------------------------------------------
If the contract owner chooses an optional death benefit, Nationwide will deduct
a charge equal to an annualized rate of either 0.05% (for the One-Year Step Up
Death Benefit) or 0.10% (for the 5% Enhanced Death Benefit) of the daily net
assets of the variable account, depending upon which option was chosen. Each
benefit is described below.
One-Year Step Up Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greatest of:
(1) the contract value;
(2) the total of all purchase payments, less an adjustment for amounts
surrendered; or
(3) the highest contract value on any contract anniversary before the
annuitant's 86th birthday, less an adjustment for amounts subsequently
surrendered, plus purchase payments received after that contract
anniversary.
The adjustment for amounts surrendered will reduce items (2) and (3) above in
the same proportion that the contract value was reduced on the date(s) or the
partial surrender(s).
5% Enhanced Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greater of:
(1) the contract value; or
(2) the total of all purchase payments, less any amounts surrendered,
accumulated at 5% simple interest from the date of each purchase payment or
surrender to the most recent contract anniversary prior to the annuitant's
86th birthday, less an adjustment for amounts subsequently surrendered,
plus purchase payments received since that contract anniversary.
The total accumulated amount will not exceed 200% of the net of purchase
payments and amounts surrendered. The adjustment for amounts subsequently
surrendered after the most recent contract anniversary will reduce the 5%
interest anniversary value in the same proportion that the contract value was
reduced on the date(s) of the partial surrender(s).
--------------------------------------------------------------------------------
IN ADDITION, ALL OPTIONAL DEATH BENEFITS HAVE A LONG TERM CARE FACILITY AND
TERMINAL ILLNESS BENEFIT AVAILABLE AT NO ADDITIONAL CHARGE PROVIDED THE
CONDITIONS DESCRIBED BELOW ARE SATISFIED.
--------------------------------------------------------------------------------
No CDSC will be charged if:
(1) the third contract anniversary has passed; and
(2) the contract owner has been confined to a long-term care facility or
hospital for a continuous 90-day period that began after the contract issue
date; or
(3) the contract owner has been diagnosed by a physician to have a terminal
illness; and
(4) Nationwide receives and records such a letter from that physician
indicating such diagnosis.
Written notice and proof of terminal illness or confinement for 90 days in a
hospital or long term care facility must be received in a form satisfactory to
Nationwide and recorded at Nationwide's home office prior to waiver of the CDSC.
4
<PAGE> 5
In the case of joint ownership, the waivers will apply if either joint owner
meets the qualifications listed above. For those contracts that have a
non-natural person as contract owner as an agent for a natural person, the
annuitant may exercise the right of the contract owner for purposes described in
this provision. If the non-natural contract owner does not own the contract as
an agent for a natural person (e.g., the contract owner is a corporation or a
trust for the benefit of an entity), the annuitant may not exercise the rights
described in this provision.
6. EFFECTIVE JANUARY 2, 2001, THE "GUARANTEED MINIMUM INCOME BENEFIT"
PROVISION OF THE SECTION ENTITLED "OPTIONAL CONTRACT BENEFITS, CHARGES AND
DEDUCTIONS" IS DELETED AND REPLACED WITH THE FOLLOWING:
The contract owner can purchase one of two Guaranteed Minimum Income Benefit
options at the time of application. If elected, Nationwide will deduct an
additional charge at an annualized rate of either 0.45% or 0.30% of the daily
net assets of the variable account, depending on which option was chosen.
Guaranteed Minimum Income Benefit options provide for a minimum guaranteed value
that may replace the contract value as the amount to be annuitized under certain
circumstances. A Guaranteed Minimum Income Benefit may afford protection against
unfavorable investment performance.
7. EFFECTIVE JANUARY 2, 2001, THE PROVISIONS "HOW IS THE GUARANTEED
ANNUITIZATION VALUE DETERMINED?" AND "SPECIAL RESTRICTIONS FOR A GMIB" IN
THE SECTION ENTITLED "GUARANTEED MINIMUM INCOME BENEFIT OPTION ("GMIB")"
ARE DELETED AND REPLACED WITH THE FOLLOWING:
How is the Guaranteed Annuitization Value Determined?
There are two options available at the time of application. The Guaranteed
Annuitization Value is determined differently based on which option the contract
owner elects.
Calculation Under GMIB Option 1
The Guaranteed Annuitization Value is equal to (a) - (b), but will never be
greater than 200% of all purchase payments, where:
(a) is the sum of all purchase payments, plus interest accumulated at a
compounded annual rate of 5% starting at the date of issue and ending on
the contract anniversary occurring immediately prior to the annuitant's
86th birthday;
(b) is the reduction to (a) due to surrenders made from the contract. All such
reductions will be proportionately the same as reductions to the contract
value caused by surrenders. For example, a surrender which reduces the
contract value by 25% will also reduce the Guaranteed Annuitization Value
by 25%.
Special Restrictions for GMIB Option 1
After the first contract year, if the value of the contract owner's fixed
account allocation becomes greater than 30% of the contract value in any
contract year due to:
(1) the application of additional purchase payments;
(2) surrenders; or
(3) transfers from the variable account,
then 0% interest will accrue in that contract year for purposes of calculating
the Guaranteed Annuitization Value.
If the contract owner's fixed account allocation becomes greater than 30% of the
contract value solely as a result of fluctuations in the value of the variable
account, then interest will continue to accrue for the purposes of the
Guaranteed Annuitization Value at 5% annually, subject to the other terms and
conditions outlined herein.
5
<PAGE> 6
Calculation Under GMIB Option 2
The Guaranteed Annuitization Value will be equal to the highest contract value
on any contract anniversary occurring prior to the annuitant's 86th birthday,
less an adjustment for amounts surrendered, plus purchase payments received
after that contract anniversary.
8. EFFECTIVE JANUARY 8, 2001, WADDELL & REED INVESTMENT MANAGEMENT COMPANY
WILL BECOME ONE OF THE SUBADVISERS OF THE NATIONWIDE SEPARATE ACCOUNT TRUST
- NATIONWIDE SMALL COMPANY FUND. THERE IS NO CHANGE IN THE FUND'S OBJECTIVE
AS IS STATED IN THE PROSPECTUS DATED MAY 1, 2000.
6
