<PAGE> 1
NATIONWIDE(R) VLI
SEPARATE ACCOUNT
ANNUAL REPORT
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT/LIFE(R)
VAN KAMPEN AMERICAN CAPITAL /
NATIONWIDE LIFE INSURANCE COMPANY
<PAGE> 2
[NATIONWIDE LIFE INSURANCE LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43216
[PHOTO OF PETER F. FRENZER]
PRESIDENT'S MESSAGE
Nationwide Life Insurance Company is pleased to bring you the 1995 annual report
of the Nationwide VLI Separate Account.
Both equity and fixed income investments turned in a stellar performance during
1995. The major market indices ended the year fully one-third or more higher
than their levels at the beginning of the year. These results equate directly to
the returns enjoyed by our variable annuity participants and contract owners.
Low interest rates and modest inflation should provide a continued favorable
environment for stocks and fixed income investments during 1996. Slowing levels
of economic activity and uncertainty about corporate profits may, however,
dampen a repeat of the strong 1995 market performance. The diverse offering of
investment options within your contract should enable you to take advantage of
changing market conditions.
The year 1995 was a record-setting sales year for our variable investment
products. For this we thank you, our valued customer, for your confidence in the
Nationwide Insurance Enterprise and in our products. Please do not hesitate to
let us know how we can better serve your financial planning and retirement
needs.
/s/ Peter F. Frenzer
Peter F. Frenzer, President
2
<PAGE> 3
NATIONWIDE VLI SEPARATE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in Van Kampen American Capital Life
Investment Trust, at market value:
Common Stock Fund
1,801,420 shares (cost $23,991,656) .............. $ 26,462,863
Domestic Strategic Income Fund
427,490 shares (cost $3,589,193) .................. 3,509,695
Emerging Growth Fund
42,444 shares (cost $475,666) ..................... 497,015
Global Equity Fund
20,666 shares (cost $209,185) ..................... 213,064
Government Fund
6,265,236 shares (cost $54,992,190) ............... 56,763,039
Money Market Fund
9,782,717 shares (cost $9,782,717) ................ 9,782,717
Multiple Strategy Fund
2,098,321 shares (cost $23,600,829) ............... 24,424,455
Real Estate Securities Fund
4,679 shares (cost $48,129) ....................... 50,248
------------
Total assets ................................... 121,703,096
ACCOUNTS PAYABLE .......................................... 585
------------
CONTRACT OWNERS' EQUITY ................................... $121,702,511
============
</TABLE>
Contract owners' equity represented by:
<TABLE>
<CAPTION>
UNITS UNIT VALUE
--------- ----------
<S> <C> <C> <C>
Single Premium contracts issued prior to
April 16, 1990:
Common Stock Sub-account ............... 1,165,519 $ 22.498859 $ 26,222,848
Domestic Strategic Income Sub-account .. 193,912 17.235188 3,342,110
Emerging Growth Sub-account ............ 42,641 11.655608 497,007
Global Equity Sub-account .............. 20,762 10.262083 213,061
Government Sub-account ................. 2,990,179 18.968390 56,718,881
Money Market Sub-account ............... 611,001 15.695093 9,589,718
Multiple Strategy Sub-account .......... 1,125,079 21.519909 24,211,598
Real Estate Securities Sub-account ..... 4,659 10.784280 50,244
Single Premium contracts issued on or after
April 16, 1990:
Common Stock Sub-account ............... 5,428 21.257132 115,384
Domestic Strategic Income Sub-account .. 9,801 17.099466 167,592
Government Sub-account ................. 2,836 14.433482 40,933
Money Market Sub-account ............... 16,792 11.648994 195,610
Multiple Strategy Sub-account .......... 5,169 18.558022 95,926
Multiple Payment Contracts and Flexible
Premium Contracts:
Common Stock Sub-account ............... 6,873 18.137100 124,656
Multiple Strategy Sub-account .......... 7,030 16.634918 116,943
========= ========= ------------
$121,702,511
============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 4
NATIONWIDE VLI SEPARATE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
------------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested capital gains and dividends ................ $ 11,096,149 9,791,294 8,172,407
------------- ----------- -----------
Gain (loss) on investments:
Proceeds from redemptions of mutual
fund shares ......................................... 23,835,749 22,040,399 23,152,130
Cost of mutual fund shares sold ..................... (21,777,460) (20,667,556) (20,977,882)
------------- ----------- -----------
Realized gain (loss) on investments ................. 2,058,289 1,372,843 2,174,248
Change in unrealized gain (loss) on
investments ....................................... 11,069,519 (15,672,902) (360,705)
------------- ----------- -----------
Net gain (loss) on investments ................... 13,127,808 (14,300,059) 1,813,543
------------- ----------- -----------
Net investment activity .................... 24,223,957 (4,508,765) 9,985,950
------------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments from contract owners ................ 39,639 25,229 19,352
Surrenders (note 2d) .................................. (11,745,567) (9,547,706) (9,817,586)
Death benefits (note 4) ............................... (1,552,445) (1,196,526) (1,033,549)
Policy loans (net of repayments) (note 5) ............. 833,405 1,817,775 (226,605)
------------- ----------- -----------
Net equity transactions .................... (12,424,968) (8,901,228) (11,058,388)
------------- ----------- -----------
EXPENSES:
Deductions for surrender charges (note 2d) ........... (193,286) (377,936) (421,375)
Redemptions to pay cost of insurance charges
and administrative charges (notes 2b
and 2c) ............................................. (1,770,626) (2,043,874) (2,027,161)
Deductions for asset charges (note 3) ................. (1,124,778) (1,135,456) (1,270,553)
------------- ----------- -----------
Total expenses ............................. (3,088,690) (3,557,266) (3,719,089)
------------- ----------- -----------
NET CHANGE IN CONTRACT OWNERS' EQUITY ................... 8,710,299 (16,967,259) (4,791,527)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............. 112,992,212 129,959,471 134,750,998
------------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD ................... $ 121,702,511 112,992,212 129,959,471
============= =========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
NATIONWIDE VLI SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) ORGANIZATION AND NATURE OF OPERATIONS
The Nationwide VLI Separate Account ("Separate Account") was
established pursuant to a resolution of the Board of Directors of
Nationwide Life Insurance Company (the Company) on August 8, 1984. The
Separate Account has been registered as a unit investment trust under
the Investment Company Act of 1940 and consists of eight sub-accounts.
Assets of each sub-account are invested at net asset value in shares
of corresponding underlying mutual funds offered by Van Kampen
American Capital Life Investment Trust. The funds consist of Common
Stock, Domestic Strategic Income (formerly Corporate Bond), Emerging
Growth, Global Equity, Government, Money Market, Multiple Strategy and
Real Estate Securities Funds. At December 31, 1995, contract owners
have invested in all of the above funds.
The Company offers modified single premium, and multiple payment and
flexible premium variable life insurance contracts through the
Account. The primary distribution for the contracts is through the
brokerage community; however, other distributors may be utilized.
(b) THE CONTRACTS
Prior to December 31, 1990, only contracts without a front-end sales
charge, but with a contingent deferred sales charge and certain other
fees, were offered for purchase. Beginning December 31, 1990,
contracts with a front-end sales charge, a contingent deferred sales
charge and certain other fees, are offered for purchase. See note 2
for a discussion of policy charges and note 3 for asset charges.
The contract owners' equity is affected by the investment results of
each fund, equity transactions by contract owners and certain policy
charges (see notes 2 and 3). The accompanying financial statements
include only contract owners' purchase payments pertaining to the
variable portions of their contracts and exclude any purchase payments
for fixed dollar benefits, the latter being included in the accounts
of the Company.
(c) SECURITY VALUATION, TRANSACTIONS AND RELATED INVESTMENT INCOME
The market value of the underlying mutual funds is based on the
closing net asset value per share at December 31, 1995. Fund purchases
and sales are accounted for on the trade date (date the order to buy
or sell is executed). The cost of investments sold is determined on a
specific identification basis, and dividends (which include capital
gain distributions) are accrued as of the ex-dividend date.
(d) FEDERAL INCOME TAXES
Operations of the Account form a part of, and are taxed with,
operations of the Company, which is taxed as a life insurance company
under the provisions of the Internal Revenue Code.
The Company does not provide for income taxes within the Account.
Taxes are the responsibility of the contract owner upon termination or
withdrawal.
(e) USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities,
if any, 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.
5
<PAGE> 6
2. POLICY CHARGES
(a) DEDUCTIONS FROM PREMIUMS
On multiple payment contracts and flexible premium contracts, the
Company deducts a charge for state premium taxes equal to 2.5% of all
premiums received to cover the payment of these premium taxes. The
Company also deducts a sales load from each premium payment received
not to exceed 3.5% of each premium payment. The Company may at its
sole discretion reduce this sales loading.
(b) COST OF INSURANCE
A cost of insurance charge is assessed monthly against each contract
by liquidating units. The amount of the charge is based upon age, sex,
rate class and net amount at risk (death benefit less total contract
value).
(c) ADMINISTRATIVE CHARGES
For single premium contracts, the Company deducts an annual
administrative charge which is determined as follows:
Contracts issued prior to April 16, 1990:
Purchase payments totalling less than $25,000 - $10/month
Purchase payments totalling $25,000 or more - none
Contracts issued on or after April 16, 1990:
Purchase payments totalling less than $25,000 - $90/year ($65/year
in New York)
Purchase payments totalling $25,000 or more - $50/year
For multiple payment contracts the Company currently deducts a monthly
administrative charge of $5 (may deduct up to $7.50, maximum) to
recover policy maintenance, accounting, record keeping and other
administrative expenses.
For flexible premium contracts, the Company currently deducts a
monthly administrative charge of $25 during the first policy year and
$5 per month thereafter (may deduct up to $7.50, maximum) to recover
policy maintenance, accounting, record keeping and other
administrative expenses. Additionally, the Company deducts an increase
charge of $2.04 per year per $1,000 applied to any increase in the
specified amount during the first 12 months after the increase becomes
effective.
The above charges are assessed against each contract by liquidating
units.
(d) SURRENDERS
Policy surrenders result in a redemption of the contract value from
the Separate Account and payment of the surrender proceeds to the
contract owner or designee. The surrender proceeds consist of the
contract value, less any outstanding policy loans, and less a
surrender charge, if applicable. The charge is determined according to
contract type.
For single premium contracts, the charge is determined based upon a
specified percentage of the original purchase payment. For single
premium contracts issued prior to April 16, 1990, the charge is 8% in
the first year and declines to 0% after the ninth year. For single
premium contracts issued on or after April 16, 1990, the charge is
8.5% in the first year and declines to 0% after the ninth year.
For multiple payment contracts and flexible premium contracts, the
amount charged is based upon a specified percentage of the initial
surrender charge, which varies by issue age, sex and rate class. The
charge is 100% of the initial surrender charge in the first year, with
certain exceptions, declining to 0% after the ninth year.
The Company may waive the surrender charge for certain contracts in
which the sales expenses normally associated with the distribution of
a contract are not incurred.
6
<PAGE> 7
3. ASSET CHARGES
For single premium contracts, the Company deducts a charge from the
contract to cover mortality and expense risk charges related to
operations, and to recover policy maintenance and premium tax charges.
For contracts issued prior to April 16, 1990, the charge is equal to
an annual rate of .95% during the first ten policy years, and .50%
thereafter. A reduction of charges on these contracts is possible in
policy years six through ten for those contracts achieving certain
investment performance criteria; for contracts issued on or after
April 16, 1990, the charge is equal to an annual rate of 1.30% during
the first ten policy years, and 1.00% thereafter.
For multiple payment contracts and flexible premium contracts, the
Company deducts a charge equal to an annual rate of .80%, with certain
exceptions, to cover mortality and expense risk charges related to
operations.
The above charges are assessed through the daily unit value
calculation.
4. DEATH BENEFITS
Death benefits result in a redemption of the contract value from the
Separate Account and payment of the death benefit proceeds, less any
outstanding policy loans and policy charges, to the legal beneficiary.
The excess of the death benefit proceeds over the contract value on
the date of death is paid by the Company's general account.
5. POLICY LOANS (NET OF REPAYMENTS)
Contract provisions allow contract owners to borrow up to 90% (50%
during first year of single premium contracts) of a policy's cash
surrender value. For single premium contracts issued prior to April
16, 1990, 6.5% interest is due and payable annually in advance. For
single premium contracts issued on or after April 16, 1990, multiple
payment contracts and flexible premium contracts, 6% interest is due
and payable in advance on the policy anniversary when there is a loan
outstanding on the policy.
At the time the loan is granted, the amount of the loan is transferred
from the Account to the Company's general account as collateral for
the outstanding loan. Collateral amounts in the general account are
credited with the stated rate of interest in effect at the time the
loan is made, subject to a guaranteed minimum rate. Loan repayments
result in a transfer of collateral, including interest, back to the
Account.
6. SCHEDULE I
Schedule I presents the components of the change in unit values, which
are the basis for determining contract owners' equity. This schedule
is presented for each sub-account in the following format:
- Beginning unit value - Jan. 1
- Reinvested dividends and capital gains
(This amount reflects the increase in the unit value due to
dividend and capital gain distributions from the underlying
mutual funds.)
- Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value
resulting from the market appreciation (depreciation) of the
underlying mutual funds.)
- Asset charges
(This amount reflects the decrease in the unit value due to the
charges discussed in note 3.)
- Ending unit value - Dec. 31
- Percentage increase (decrease) in unit value.
7
<PAGE> 8
SCHEDULE I
NATIONWIDE VLI SEPARATE ACCOUNT
SINGLE PREMIUM CONTRACTS ISSUED PRIOR TO APRIL 16, 1990
SCHEDULES OF CHANGES IN UNIT VALUES
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(UNDERLYING MUTUAL FUNDS OF VAN KAMPEN AMERICAN CAPITAL)
<TABLE>
<CAPTION>
DOMESTIC
COMMON STRATEGIC EMERGING
STOCK INCOME GROWTH GLOBAL EQUITY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995
Beginning unit value - Jan. 1 $16.580891 14.336077 10.000000 10.000000
--------------------------------------------------------------------------------------------
Reinvested dividends and capital gains 3.004553 1.359225 .000000 .000000
--------------------------------------------------------------------------------------------
Unrealized gain (loss) 3.100329 1.690878 1.707069 .309271
--------------------------------------------------------------------------------------------
Asset charges (.186914) (.150992) (.051461) (.047188)
--------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $22.498859 17.235188 11.655608 10.262083
--------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 36% 20% 17%(b) 3%(b)
============================================================================================
1994
Beginning unit value - Jan. 1 $17.325425 15.127964 ** **
--------------------------------------------------------------------------------------------
Reinvested dividends and capital gains 1.976086 1.490981
--------------------------------------------------------------------------------------------
Unrealized gain (loss) (2.559308) (2.144766)
--------------------------------------------------------------------------------------------
Asset charges (.161312) (.138102)
--------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $16.580891 14.336077
--------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) (4)% (5)%
============================================================================================
1993
Beginning unit value - Jan. 1 $16.049449 13.129409 ** **
--------------------------------------------------------------------------------------------
Reinvested dividends and capital gains .988860 1.177277
--------------------------------------------------------------------------------------------
Unrealized gain (loss) .443906 .958277
--------------------------------------------------------------------------------------------
Asset charges (.156790) (.136999)
--------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $17.325425 15.127964
--------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 8% 15%
============================================================================================
<CAPTION>
MONEY MULTIPLE REAL ESTATE
GOVERNMENT MARKET STRATEGY SECURITIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995
Beginning unit value - Jan. 1 16.344365 15.022875 16.538427 10.000000
-------------------------------------------------------------------------------------------
Reinvested dividends and capital gains 1.217414 .817690 2.418600 .092106
-------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.576618 .000000 2.744315 .740132
-------------------------------------------------------------------------------------------
Asset charges (.170007) (.145472) (.181433) (.047958)
-------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 18.968390 15.695093 21.519909 10.784280
-------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 16% 4% 30% 8%(b)
===========================================================================================
1994
Beginning unit value - Jan. 1 17.301801 14.623465 17.329774 **
-------------------------------------------------------------------------------------------
Reinvested dividends and capital gains 1.062855 .539516 1.995739
-------------------------------------------------------------------------------------------
Unrealized gain (loss) (1.862740) .000000 (2.627910)
-------------------------------------------------------------------------------------------
Asset charges (.157551) (.140106) (.159176)
-------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 16.344365 15.022875 16.538427
-------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) (6)% 3% (5)%
===========================================================================================
1993
Beginning unit value - Jan. 1 16.194306 14.379569 16.243698 **
-------------------------------------------------------------------------------------------
Reinvested dividends and capital gains 1.044833 .381680 1.376516
-------------------------------------------------------------------------------------------
Unrealized gain (loss) .225301 .000000 (.130378)
-------------------------------------------------------------------------------------------
Asset charges (.162639) (.137784) (.160062)
-------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 17.301801 14.623465 17.329774
-------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value*(a) 7% 2% 7%
===========================================================================================
</TABLE>
* An annualized rate of return cannot be determined as:
(a) Asset charges do not include the policy charges discussed in note 2; and
(b) This investment option was not utilized for the entire year indicated.
** This investment option was not available or was not utilized.
8
<PAGE> 9
SCHEDULE I, CONTINUED
NATIONWIDE VLI SEPARATE ACCOUNT
SINGLE PREMIUM CONTRACTS ISSUED ON OR AFTER APRIL 16, 1990
SCHEDULES OF CHANGES IN UNIT VALUES
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(UNDERLYING MUTUAL FUNDS OF VAN KAMPEN AMERICAN CAPITAL)
<TABLE>
<CAPTION>
DOMESTIC
COMMON STRATEGIC MONEY MULTIPLE
STOCK INCOME GOVERNMENT MARKET STRATEGY
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1995**
Beginning unit value - Jan. 1 $15.720497 14.272889 12.480782 11.189053 14.311997
-----------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains 2.839638 1.348751 .928076 .607952 2.086061
-----------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 2.939071 1.683177 1.202259 .000000 2.374431
-----------------------------------------------------------------------------------------------------------
Asset charges (.242074) (.205351) (.177635) (.148011) (.214467)
-----------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $21.257132 17.099466 14.433482 11.648994 18.558022
-----------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 35% 20% 16% 4% 30%
===========================================================================================================
1994
Beginning unit value - Jan. 1 $16.483852 15.113958 13.258615 10.929642 15.049256
-----------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains 1.874048 1.484668 .813111 .402452 1.727365
-----------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (2.427739) (2.137258) (1.425714) .000000 (2.275800)
-----------------------------------------------------------------------------------------------------------
Asset charges (.209664) (.188479) (.165230) (.143041) (.188824)
-----------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $15.720497 14.272889 12.480782 11.189053 14.311997
-----------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (5)% (6)% (6)% 2% (5)%
===========================================================================================================
1993
Beginning unit value - Jan. 1 $15.324267 13.163967 12.453930 10.785653 14.156355
-----------------------------------------------------------------------------------------------------------
Reinvested dividends and capital gains .941020 1.176441 .802266 .285158 1.195810
-----------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .423067 .961164 .173553 .000000 (.112372)
-----------------------------------------------------------------------------------------------------------
Asset charges (.204502) (.187614) (.171134) (.141169) (.190537)
-----------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $16.483852 15.113958 13.258615 10.929642 15.049256
-----------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 8% 15% 6% 1% 6%
===========================================================================================================
</TABLE>
* An annualized rate of return cannot be determined as asset charges do not
include the policy charges discussed in note 2.
** No other investment options were utilized.
9
<PAGE> 10
SCHEDULE I, CONTINUED
NATIONWIDE VLI SEPARATE ACCOUNT
MULTIPLE PAYMENT CONTRACTS AND FLEXIBLE PREMIUM CONTRACTS
SCHEDULES OF CHANGES IN UNIT VALUES
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(UNDERLYING MUTUAL FUNDS OF VAN KAMPEN AMERICAN CAPITAL)
<TABLE>
<CAPTION>
COMMON MULTIPLE
STOCK STRATEGY
SUB-ACCOUNT SUB-ACCOUNT
----------- -----------
<S> <C> <C>
1995**
Beginning unit value - Jan. 1 $13.346462 12.765144
---------------------------------------------------------------------------------------
Reinvested dividends and capital gains 2.421740 1.869449
---------------------------------------------------------------------------------------
Unrealized gain (loss) 2.495698 2.118344
---------------------------------------------------------------------------------------
Asset charges (.126800) (.118019)
---------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $18.137100 16.634918
---------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 36% 30%
=======================================================================================
1994**
Beginning unit value - Jan. 1 $13.924920 13.355954
---------------------------------------------------------------------------------------
Reinvested dividends and capital gains 1.590429 1.540293
---------------------------------------------------------------------------------------
Unrealized gain (loss) (2.059623) (2.027726)
---------------------------------------------------------------------------------------
Asset charges (.109264) (.103377)
---------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $13.346462 12.765144
---------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (4)% (4)%
=======================================================================================
1993**
Beginning unit value - Jan. 1 $12.880252 12.500360
---------------------------------------------------------------------------------------
Reinvested dividends and capital gains .794704 1.060708
---------------------------------------------------------------------------------------
Unrealized gain (loss) .356007 (.101308)
---------------------------------------------------------------------------------------
Asset charges (.106043) (.103806)
---------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $13.924920 13.355954
---------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* 8% 7%
=======================================================================================
</TABLE>
** An annualized rate of return cannot be determined as asset charges do not
include the policy charges discussed in note 2.
** No other investment options were utilized.
See note 6.
10
<PAGE> 11
Independent Auditors' Report
The Board of Directors and Contract Owners of
Nationwide VLI Separate Account
Nationwide Life Insurance Company:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide VLI Separate Account as of December 31,
1995, and the related statements of operations and changes in contract owners'
equity and schedules of changes in unit value for each of the years in the three
year period then ended. These financial statements and schedules of changes in
unit value are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules of changes in unit value based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and schedules of
changes in unit value 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 securities
owned as of December 31, 1995, by correspondence with the custodian and the
transfer agents 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 schedules of changes in unit
value referred to above present fairly, in all material respects, the financial
position of Nationwide VLI Separate Account as of December 31, 1995, and the
results of its operations and its changes in contract owners' equity and the
schedules of changes in unit value for each of the years in the three year
period then ended in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
February 6, 1996
11
<PAGE> 12
NATIONWIDE LIFE INSURANCE COMPANY Bulk Rate
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220 U.S. Postage
P A I D
Columbus, Ohio
Permit No. 521
Nationwide(R) is a registered federal service mark of
Nationwide Mutual Insurance Company.
