<PAGE> 1
SUPPLEMENT DATED AUGUST 18, 2000 TO
PROSPECTUS DATED MAY 1, 2000 FOR
CORPORATE FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICIES
ISSUED BY
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
THROUGH ITS
NATIONWIDE VL SEPARATE ACCOUNT-D
THIS SUPPLEMENT SPECIFICALLY UPDATES INFORMATION CONTAINED IN YOUR PROSPECTUS.
IN SUMMARY, BEGINNING ON AUGUST 18, 2000 THE MORTALITY AND EXPENSE RISK CHARGE
WILL BE REDUCED FOR ALL CONTRACT OWNERS. IN ADDITION, IN ORDER TO PROVIDE
FURTHER CLARIFICATION OF THE NATURE OF CHARGES THE PREMIUM EXPENSE CHARGE HAS
BEEN RENAMED THE TAX EXPENSE CHARGE. PLEASE READ THIS SUPPLEMENT AND KEEP IT
WITH YOUR PROSPECTUS FOR FUTURE REFERENCE.
1. THE LAST SENTENCE OF THE THIRD PARAGRAPH OF THE "SUMMARY OF POLICY
EXPENSES" ON PAGE 6 IS DELETED AND REPLACED WITH THE FOLLOWING:
Currently, this annual effective rate will be 0.40% in policy years 1-4,
0.25% in policy years 5-20, and 0.10% thereafter.
2. THE "PREMIUM EXPENSE CHARGE" ON PAGE 12 IS DELETED IN ITS ENTIRETY AND
REPLACED WITH FOLLOWING:
TAX EXPENSE CHARGE
A charge equal to 3.5% is deducted from all premium payments when the
premium payments are received in order to compensate Nationwide for certain
administrative expenses which are incurred by Nationwide for taxes which
include premium or other taxes imposed by various state and local
jurisdictions, as well as federal taxes imposed under Section 848 of the
Internal Revenue Code. These tax expenses consist of two components:
(1) a tax rate of 2.25% for state and local or other taxes; and
(2) a tax rate of 1.25% for federal taxes.
The amount charged may be more or less than the amount actually assessed by
the state in which a particular policy owner lives.
Nationwide does not expect to make a profit form these charges.
3. THE LAST SENTENCE OF THE SECOND PARAGRAPH OF THE "MORTALITY AND EXPENSE
RISK CHARGE" ON PAGE 13 IS DELETED AND REPLACED WITH THE FOLLOWING:
On a current basis, this rate will be 0.40% in policy years 1-4, 0.25% in
policy years 5-20, and 0.10% thereafter.
4. THE LAST SENTENCE OF SECTION (c) OF THE "NET INVESTMENT FACTOR" ON PAGE 17
IS DELETED AND REPLACED WITH THE FOLLOWING:
On a current basis, this rate will be 0.40% in policy years 1-4, 0.25% in
policy years 5-20, and 0.10% thereafter.
<PAGE> 2
5. UNDER SECTION "POLICY LOANS" THE FIRST PARAGRAPH UNDER THE HEADING
"INTEREST" ON PAGE 19 IS DELETED AND REPLACED WITH THE FOLLOWING:
The loan interest rate is guaranteed not to exceed 3.75% per year for all
policy loans. On a current basis, the loan interest rate is 3.4% in policy
years 1 - 4, 3.25% in policy years 5 - 20, and 3.10% thereafter.
6. ALL REFERENCES TO "PREMIUM EXPENSE CHARGE" IN YOUR PROSPECTUS ARE CHANGED
TO "TAX EXPENSE CHARGE."
7. "APPENDIX B: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES, AND DEATH
BENEFITS" IS DELETED IN ITS ENTIRETY AND REPLACED WITH THE FOLLOWING:
APPENDIX B: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES,
AND DEATH BENEFITS FOR FIDELITY INVESTMENTS CORPORATE VARIABLE UNIVERSAL LIFE
INSURANCE POLICIES
The illustrations in this prospectus have been prepared to help show how values
under the policies change with investment performance. The illustrations
illustrate how cash values, cash surrender values and death benefits under a
policy would vary over time if the hypothetical gross investment rates of return
were a uniform annual effective rate of either 0%, 6% or 12%. If the
hypothetical gross investment rate of return averages 0%, 6% or 12% over a
period of years, but fluctuates above or below those averages for individual
years, the cash values, cash surrender values and death benefits may be
different. For hypothetical returns of 0% and 6%, the illustrations also
illustrate when the policies would go into default, at which time additional
premium payments would be required to continue the policy in force. The
illustrations also assume there is no policy indebtedness, no additional premium
payments are made, no cash values are allocated to the fixed account, and there
are no changes in the specified amount or death benefit option.
The amounts shown for the cash value, cash surrender value and death benefit as
of each policy anniversary reflect the fact that the net investment return on
the assets held in the sub-accounts is lower than the gross return. This is due
to the daily charges made against the assets of the sub-accounts for assuming
mortality and expense risks. Beginning in the fourth policy year, cash surrender
value equals cash value less indebtedness, or other deductions. In policy years
one, two, and three only, cash surrender value = (cash value - indebtedness or
other deductions) + either 3.5%, 5.5%, or 4.0% of the current premium for either
years one, two, or three, respectively. The guaranteed mortality and expense
risk charges for policy years one through four are equivalent to an annual
effective rate of 0.75% of the daily net assets value of the variable account.
The current mortality and expense risk charges for policy years one through four
are equivalent to an annual effective rate of 0.40% of the daily net assets of
the variable account. The current mortality and expense risk charges for policy
years five through twenty are equivalent to an annual effective rate of 0.25% of
the daily net assets of the variable account. The current mortality and expense
risk charges for policy years twenty-one and beyond are equivalent to an annual
effective rate of 0.10% of the daily net assets of the variable account. In
addition, the net investment returns also reflect the deduction of underlying
mutual fund investment advisory fees and other expenses which are equivalent to
an annual effective rate of 0.80% of the daily net assets of the variable
account. This effective rate is based on the average of the fund expenses, after
expense reimbursement, for all underlying mutual fund options available under
the policy as of April 13,1999. Some underlying mutual funds are subject to fee
waivers and expense reimbursements. Absent fee waivers and expense
reimbursements, the annual effective rate would have been 0.85%. Nationwide
anticipates that the expense
<PAGE> 3
reimbursement and fee waiver arrangements will continue past the current year.
Should there be an increase or decrease in the expense reimbursements and fee
waivers of these underlying mutual funds, such change will be reflected in the
net asset value of the corresponding underlying mutual fund.
Considering current charges for mortality and expense risks and underlying
mutual fund expenses, gross annual rates of return of 0%, 6% and 12% correspond
to net investment experience at constant annual rates of -1.20%, 4.80% and
10.80% for policy years one through four, and rates of -1.05%, 4.95% and 10.95%,
for policy years five through twenty, and rates of -0.90%, 5.10% and 11.10%, for
policy years twenty-one and beyond. Considering guaranteed charges for mortality
and expense risks and underlying mutual fund expenses, gross annual rates of
return of 0%, 6% and 12% correspond to net investment experience at constant
annual rates of -1.55%, 4.45% and 10.45%, for all policy years.
The illustrations also reflect the fact that Nationwide makes monthly charges
for providing insurance protection. Current values reflect current cost of
insurance charges and guaranteed values reflect the maximum cost of insurance
charges guaranteed in the policy. The values shown are for policies which are
issued as standard. Policies issued on a substandard basis would result in lower
cash values and death benefits than those illustrated.
The illustrations also reflect the fact that Nationwide deducts a sales load
from each premium payment received guaranteed not to exceed 5.5% of each premium
payment for the first seven policy years and 2% thereafter. On a current basis,
the sales load is 3.0% of premium payments plus 2.5% of premiums up to the
target premium during the first seven policy years, and 0% of all premiums
thereafter. Nationwide also deducts a tax expense charge of 3.5%, both current
and guaranteed, from all premium payments. The illustrations also reflect the
fact that Nationwide deducts a tax expense charge for state premium taxes at a
rate of 2.25% and for federal tax at a rate of 1.25% (imposed under Section 848
of the Internal Revenue Code) of all premium payments.
In addition, the illustrations reflect the fact that Nationwide deducts a
monthly administrative charge at the beginning of each policy month. This
monthly administrative expense charge is currently $5 per month and guaranteed
not to exceed $10. The illustrations also reflect the fact that no charges for
federal or state income taxes are currently made against the variable account.
If such a charge is made in the future, it will require a higher gross
investment return than illustrated in order to produce the net after-tax returns
shown in the illustrations.
Upon request, Nationwide will furnish a comparable illustration based on the
proposed insured's age, smoking classification, rating classification and
premium payment requested.
<PAGE> 4
$100,000 ANNUAL PREMIUM FOR FIRST 7 YEARS
$1,703,050 SPECIFIED AMOUNT
CASH VALUE ACCUMULATION TEST
UNISEX: REGULAR ISSUE/NONTOBACCO PREFERRED, AGE 45
DEATH BENEFIT OPTION 1
CURRENT VALUES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS INVESTMENT 6% HYPOTHETICAL GROSS INVESTMENT 12% HYPOTHETICAL GROSS INVESTMENT
RETURN RETURN RETURN
PREMIUMS
PAID PLUS CASH CASH CASH
POLICY INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 105,000 88,056 91,556 1,703,050 93,491 96,991 1,703,050 98,928 102,428 1,703,050
2 215,250 174,786 180,286 1,703,050 191,193 196,693 1,703,050 208,256 213,756 1,703,050
3 331,013 260,543 264,543 1,703,050 293,671 297,671 1,703,050 329,498 333,498 1,703,050
4 452,563 345,290 345,290 1,703,050 401,125 401,125 1,703,050 463,934 463,934 1,703,050
5 580,191 429,619 429,619 1,703,050 514,525 514,525 1,703,050 613,897 613,897 1,703,050
6 714,201 513,015 513,015 1,703,050 633,600 633,600 1,703,050 780,147 780,147 1,900,753
7 854,911 595,542 595,542 1,703,050 758,545 758,545 1,794,617 963,598 963,598 2,279,743
8 897,656 585,049 585,049 1,703,050 792,036 792,036 1,820,255 1,063,558 1,063,558 2,444,265
9 942,539 574,277 574,277 1,703,050 826,893 826,893 1,846,719 1,173,730 1,173,730 2,621,318
10 989,666 563,175 563,175 1,703,050 863,150 863,150 1,874,101 1,295,116 1,295,116 2,812,003
11 1,039,150 551,735 551,735 1,703,050 900,881 900,881 1,902,515 1,428,875 1,428,875 3,017,554
12 1,091,107 539,909 539,909 1,703,050 940,133 940,133 1,931,976 1,576,236 1,576,236 3,239,169
13 1,145,662 527,679 527,679 1,703,050 980,983 980,983 1,962,526 1,738,598 1,738,598 3,478,187
14 1,202,945 515,002 515,002 1,703,050 1,023,492 1,023,492 1,994,156 1,917,465 1,917,465 3,735,961
15 1,263,093 501,687 501,687 1,703,050 1,067,609 1,067,609 2,026,656 2,114,274 2,114,274 4,013,555
16 1,326,247 487,638 487,638 1,703,050 1,113,365 1,113,365 2,060,024 2,330,735 2,330,735 4,312,486
17 1,392,560 472,737 472,737 1,703,050 1,160,787 1,160,787 2,094,306 2,568,704 2,568,704 4,634,488
18 1,462,188 456,814 456,814 1,703,050 1,209,869 1,209,869 2,129,545 2,830,130 2,830,130 4,981,440
19 1,535,297 439,689 439,689 1,703,050 1,260,611 1,260,611 2,165,807 3,117,133 3,117,133 5,355,427
20 1,612,062 421,187 421,187 1,703,050 1,313,028 1,313,028 2,203,181 3,432,059 3,432,059 5,758,784
21 1,692,665 403,294 403,294 1,703,050 1,370,242 1,370,242 2,246,825 3,786,006 3,786,006 6,208,021
22 1,777,298 385,367 385,367 1,703,050 1,430,522 1,430,522 2,293,586 4,178,128 4,178,127 6,698,877
23 1,866,163 366,288 366,288 1,703,050 1,493,309 1,493,309 2,342,387 4,610,411 4,610,411 7,231,836
24 1,959,471 345,540 345,540 1,703,050 1,558,462 1,558,462 2,392,849 5,086,146 5,086,146 7,809,225
25 2,057,445 322,912 322,912 1,703,050 1,626,055 1,626,055 2,444,984 5,609,581 5,609,581 8,434,731
26 2,160,317 298,146 298,146 1,703,050 1,696,156 1,696,156 2,498,894 6,185,336 6,185,336 9,112,665
27 2,268,333 270,996 270,996 1,703,050 1,768,860 1,768,860 2,554,812 6,818,567 6,818,567 9,848,238
28 2,381,750 241,143 241,143 1,703,050 1,844,246 1,844,246 2,613,024 7,514,852 7,514,852 10,647,431
29 2,500,837 208,189 208,189 1,703,050 1,922,376 1,922,376 2,673,859 8,280,209 8,280,209 11,517,058
30 2,625,879 171,660 171,660 1,703,050 2,003,298 2,003,298 2,737,621 9,121,159 9,121,159 12,464,580
</TABLE>
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND A MONTHLY $5
ADMINISTRATIVE EXPENSE CHARGE ALL THE TIME. CURRENT VALUES REFLECT A PREMIUM
CHARGE OF 9% OF TARGET PREMIUM AND 6.5% OF EXCESS-OF-TARGET PREMIUM FOR THE
FIRST 7 YEARS AND 3.5% OF ALL PREMIUM FROM EIGHTH YEAR AND ON.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT
RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE PROSPECTUS APPENDIX.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. WHILE THE HYPOTHETICAL INVESTMENT
RATES OF RETURN ARE CURRENTLY CALCULATED WITH EXPENSE REIMBURSEMENTS THESE
<PAGE> 5
EXPENSE REIMBURSEMENTS MAY BE LOWER OR UNAVAILABLE IN THE FUTURE. ACTUAL RATES
OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING RATES
AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 6%, AND
12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY NATIONWIDE OR THE
TRUST THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE> 6
$100,000 ANNUAL PREMIUM FOR FIRST 7 YEARS
$1,703,050 SPECIFIED AMOUNT
CASH VALUE ACCUMULATION TEST
UNISEX: NONTOBACCO, AGE 45
DEATH BENEFIT OPTION 1
GUARANTEED VALUES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS INVESTMENT 6% HYPOTHETICAL GROSS INVESTMENT 12% HYPOTHETICAL GROSS INVESTMENT
RETURN RETURN RETURN
PREMIUMS
PAID PLUS CASH CASH CASH
POLICY INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 105,000 81,883 85,383 1,703,050 87,067 90,567 1,703,050 92,256 95,756 1,703,050
2 215,250 162,290 167,790 1,703,050 177,801 183,301 1,703,050 193,944 199,444 1,703,050
3 331,013 241,271 245,271 1,703,050 272,427 276,427 1,703,050 306,149 310,149 1,703,050
4 452,563 318,863 318,863 1,703,050 371,178 371,178 1,703,050 430,083 430,083 1,703,050
5 580,191 395,082 395,082 1,703,050 474,287 474,287 1,703,050 567,096 567,096 1,703,050
6 714,201 469,954 469,954 1,703,050 582,022 582,022 1,703,050 718,687 718,687 1,751,012
7 854,911 543,466 543,466 1,703,050 694,646 694,646 1,703,050 884,296 884,296 2,092,126
8 897,656 525,296 525,296 1,703,050 716,677 716,677 1,703,050 965,408 965,408 2,218,697
9 942,539 506,303 506,303 1,703,050 739,065 739,065 1,703,050 1,053,494 1,053,494 2,352,793
10 989,666 486,364 486,364 1,703,050 761,787 761,787 1,703,050 1,149,088 1,149,088 2,494,940
11 1,039,150 465,362 465,362 1,703,050 784,834 784,834 1,703,050 1,252,778 1,252,778 2,645,666
12 1,091,107 443,185 443,185 1,703,050 808,213 808,213 1,703,050 1,365,221 1,365,221 2,805,532
13 1,145,662 419,714 419,714 1,703,050 831,936 831,936 1,703,050 1,487,129 1,487,129 2,975,106
14 1,202,945 394,807 394,807 1,703,050 856,011 856,011 1,703,050 1,619,270 1,619,270 3,154,962
15 1,263,093 368,275 368,275 1,703,050 880,428 880,428 1,703,050 1,762,432 1,762,432 3,345,648
16 1,326,247 339,858 339,858 1,703,050 905,151 905,151 1,703,050 1,917,407 1,917,407 3,547,718
17 1,392,560 309,218 309,218 1,703,050 930,120 930,120 1,703,050 2,084,987 2,084,987 3,761,761
18 1,462,188 275,962 275,962 1,703,050 955,271 955,271 1,703,050 2,265,986 2,265,986 3,988,464
19 1,535,297 239,644 239,644 1,703,050 980,542 980,542 1,703,050 2,461,258 2,461,258 4,228,593
20 1,612,062 199,772 199,772 1,703,050 1,005,887 1,005,887 1,703,050 2,671,724 2,671,724 4,482,988
21 1,692,665 155,864 155,864 1,703,050 1,031,300 1,031,300 1,703,050 2,898,452 2,898,452 4,752,673
22 1,777,298 107,393 107,393 1,703,050 1,056,797 1,056,797 1,703,050 3,142,627 3,142,627 5,038,639
23 1,866,163 53,785 53,785 1,703,050 1,082,414 1,082,414 1,703,050 3,405,574 3,405,574 5,341,943
24 1,959,471 * * * 1,108,172 1,108,172 1,703,050 3,688,653 3,688,653 5,663,526
25 2,057,445 * * * 1,134,047 1,134,047 1,705,187 3,993,162 3,993,162 6,004,236
26 2,160,317 * * * 1,159,969 1,159,969 1,708,946 4,320,308 4,320,308 6,364,977
27 2,268,333 * * * 1,185,824 1,185,824 1,712,717 4,671,185 4,671,185 6,746,717
28 2,381,750 * * * 1,211,469 1,211,469 1,716,472 5,046,764 5,046,764 7,150,517
29 2,500,837 * * * 1,236,770 1,236,770 1,720,241 5,448,014 5,448,014 7,577,718
30 2,625,879 * * * 1,261,657 1,261,657 1,724,126 5,876,184 5,876,184 8,030,138
</TABLE>
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND A MONTHLY
$10.00 ADMINISTRATIVE EXPENSE CHARGE ALL THE TIME. GUARANTEED VALUES REFLECT
A PREMIUM CHARGE OF 9% OF PREMIUM FOR THE FIRST 7 YEARS AND 5.5% OF PREMIUM
FROM EIGHTH YEAR AND ON.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT
RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL NOT STAY IN FORCE.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
<PAGE> 7
PAST OR FUTURE INVESTMENT RATES OF RETURN. WHILE THE HYPOTHETICAL INVESTMENT
RATES OF RETURN ARE CURRENTLY CALCULATED WITH EXPENSE REIMBURSEMENTS THESE
EXPENSE REIMBURSEMENTS MAY BE LOWER OR UNAVAILABLE IN THE FUTURE. ACTUAL RATES
OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING RATES
AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 6%, AND
12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY NATIONWIDE OR THE
TRUST THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
