<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 GOLDMAN SACHS 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 0.90% 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 1.05%. 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 -1.30%, 4.70% and
10.70% for policy years one through four, and rates of -1.15%, 4.85% and 10.85%,
for policy years five through twenty, and rates of -1.00%, 5.00% and 11.00%, 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 -1.65%, 4.35% and 10.35%, 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 87,965 91,465 1,703,050 93,400 96,900 1,703,050 98,838 102,338 1,703,050
2 215,250 174,518 180,018 1,703,050 190,914 196,414 1,703,050 207,967 213,467 1,703,050
3 331,013 260,013 264,013 1,703,050 293,097 297,097 1,703,050 328,878 332,878 1,703,050
4 452,563 344,415 344,415 1,703,050 400,139 400,139 1,703,050 462,826 462,826 1,703,050
5 580,191 428,316 428,316 1,703,050 512,997 512,997 1,703,050 612,112 612,112 1,703,050
6 714,201 511,203 511,203 1,703,050 631,387 631,387 1,703,050 777,476 777,476 1,894,246
7 854,911 593,141 593,141 1,703,050 755,516 755,516 1,787,449 959,785 959,785 2,270,723
8 897,656 582,074 582,074 1,703,050 788,122 788,122 1,811,260 1,058,397 1,058,397 2,432,403
9 942,539 570,741 570,741 1,703,050 822,024 822,024 1,835,846 1,166,983 1,166,983 2,606,250
10 989,666 559,093 559,093 1,703,050 857,251 857,251 1,861,295 1,286,513 1,286,513 2,793,323
11 1,039,150 547,120 547,120 1,703,050 893,873 893,873 1,887,716 1,418,106 1,418,106 2,994,812
12 1,091,107 534,774 534,774 1,703,050 931,933 931,933 1,915,125 1,562,949 1,562,949 3,211,864
13 1,145,662 522,039 522,039 1,703,050 971,502 971,502 1,943,558 1,722,391 1,722,391 3,445,763
14 1,202,945 508,868 508,868 1,703,050 1,012,635 1,012,635 1,973,004 1,897,881 1,897,881 3,697,805
15 1,263,093 495,073 495,073 1,703,050 1,055,279 1,055,279 2,003,251 2,090,797 2,090,797 3,968,989
16 1,326,247 480,555 480,555 1,703,050 1,099,460 1,099,460 2,034,296 2,302,781 2,302,781 4,260,764
17 1,392,560 465,195 465,195 1,703,050 1,145,199 1,145,199 2,066,182 2,535,612 2,535,612 4,574,784
18 1,462,188 448,825 448,825 1,703,050 1,192,486 1,192,486 2,098,949 2,791,157 2,791,157 4,912,842
19 1,535,297 431,263 431,263 1,703,050 1,241,317 1,241,317 2,132,659 3,071,442 3,071,442 5,276,926
20 1,612,062 412,332 412,332 1,703,050 1,291,702 1,291,702 2,167,396 3,378,709 3,378,709 5,669,265
21 1,692,665 394,016 394,016 1,703,050 1,346,704 1,346,704 2,208,229 3,723,801 3,723,801 6,106,020
22 1,777,298 375,683 375,683 1,703,050 1,404,611 1,404,611 2,252,042 4,105,782 4,105,782 6,582,884
23 1,866,163 356,209 356,209 1,703,050 1,464,865 1,464,865 2,297,770 4,526,505 4,526,505 7,100,222
24 1,959,471 335,073 335,073 1,703,050 1,527,323 1,527,323 2,345,038 4,989,090 4,989,090 7,660,206
25 2,057,445 312,063 312,063 1,703,050 1,592,049 1,592,049 2,393,851 5,497,586 5,497,586 8,266,332
26 2,160,317 286,923 286,923 1,703,050 1,659,104 1,659,104 2,444,307 6,056,394 6,056,393 8,922,698
27 2,268,333 259,404 259,404 1,703,050 1,728,574 1,728,574 2,496,625 6,670,418 6,670,418 9,634,263
28 2,381,750 229,189 229,189 1,703,050 1,800,528 1,800,528 2,551,082 7,344,962 7,344,962 10,406,722
29 2,500,837 195,878 195,878 1,703,050 1,875,020 1,875,020 2,607,991 8,085,736 8,085,736 11,246,562
30 2,625,879 158,997 158,997 1,703,050 1,952,090 1,952,090 2,667,642 8,898,923 8,898,923 12,160,882
</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 81,796 85,296 1,703,050 86,981 90,481 1,703,050 92,170 95,670 1,703,050
2 215,250 162,037 167,537 1,703,050 177,538 183,038 1,703,050 193,670 199,170 1,703,050
3 331,013 240,773 244,773 1,703,050 271,887 275,887 1,703,050 305,565 309,565 1,703,050
4 452,563 318,044 318,044 1,703,050 370,253 370,253 1,703,050 429,044 429,044 1,703,050
5 580,191 393,867 393,867 1,703,050 472,860 472,860 1,703,050 565,428 565,428 1,703,050
6 714,201 468,271 468,271 1,703,050 579,964 579,964 1,703,050 716,193 716,193 1,744,935
7 854,911 541,244 541,244 1,703,050 691,817 691,817 1,703,050 880,778 880,778 2,083,803
8 897,656 522,556 522,556 1,703,050 713,012 713,012 1,703,050 960,701 960,701 2,207,881
9 942,539 503,065 503,065 1,703,050 734,496 734,496 1,703,050 1,047,414 1,047,414 2,339,215
10 989,666 482,648 482,648 1,703,050 756,241 756,241 1,703,050 1,141,427 1,141,427 2,478,308
11 1,039,150 461,188 461,188 1,703,050 778,230 778,230 1,703,050 1,243,306 1,243,306 2,625,662
12 1,091,107 438,573 438,573 1,703,050 800,462 800,462 1,703,050 1,353,678 1,353,678 2,781,812
13 1,145,662 414,684 414,684 1,703,050 822,942 822,942 1,703,050 1,473,228 1,473,228 2,947,296
14 1,202,945 389,379 389,379 1,703,050 845,669 845,669 1,703,050 1,602,689 1,602,689 3,122,655
15 1,263,093 362,469 362,469 1,703,050 868,621 868,621 1,703,050 1,742,813 1,742,813 3,308,407
16 1,326,247 333,693 333,693 1,703,050 891,750 891,750 1,703,050 1,894,356 1,894,356 3,505,068
17 1,392,560 302,715 302,715 1,703,050 914,980 914,980 1,703,050 2,058,067 2,058,067 3,713,190
18 1,462,188 269,139 269,139 1,703,050 938,229 938,229 1,703,050 2,234,714 2,234,714 3,933,421
19 1,535,297 232,522 232,522 1,703,050 961,413 961,413 1,703,050 2,425,105 2,425,105 4,166,480
20 1,612,062 192,373 192,373 1,703,050 984,461 984,461 1,703,050 2,630,109 2,630,109 4,413,161
21 1,692,665 148,209 148,209 1,703,050 1,007,337 1,007,337 1,703,050 2,850,736 2,850,736 4,674,432
22 1,777,298 99,507 99,507 1,703,050 1,030,022 1,030,022 1,703,050 3,088,108 3,088,108 4,951,227
23 1,866,163 45,694 45,694 1,703,050 1,052,514 1,052,514 1,703,050 3,343,479 3,343,479 5,244,543
24 1,959,471 * * * 1,074,784 1,074,784 1,703,050 3,618,136 3,618,136 5,555,255
25 2,057,445 * * * 1,096,744 1,096,744 1,703,050 3,913,297 3,913,297 5,884,148
26 2,160,317 * * * 1,118,254 1,118,254 1,703,050 4,230,087 4,230,087 6,232,057
27 2,268,333 * * * 1,139,118 1,139,118 1,703,050 4,569,519 4,569,519 6,599,878
28 2,381,750 * * * 1,159,094 1,159,094 1,703,050 4,932,479 4,932,479 6,988,591
29 2,500,837 * * * 1,177,924 1,177,924 1,703,050 5,319,847 5,319,847 7,399,450
30 2,625,879 * * * 1,195,404 1,195,404 1,703,050 5,732,779 5,732,779 7,834,167
</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.
