<PAGE> 1
[LOGO]
NATIONWIDE(R) VLI
SEPARATE ACCOUNT
ANNUAL REPORT
DECEMBER 31, 1997
INVESTMENT/LIFE(R)
VAN KAMPEN AMERICAN CAPITAL/
NATIONWIDE LIFE INSURANCE COMPANY
VLO - 185 - Y (12/97)
<PAGE> 2
[LOGO]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215 - 2220
[PHOTO]
PRESIDENT'S MESSAGE
We at Nationwide Life Insurance Company are pleased to bring you the
1997 annual report of the Nationwide VLI Separate Account.
Equity markets ended a volatile season to record the third straight
year of gains topping the 20 percent mark. Additionally, returns on
fixed income investments were buoyed by declining inflation, steady
Federal Reserve policy and the positive outlook for lower budget
deficits.
The U.S. economy continues to be strong into 1998. However, there is
still much uncertainty about what effect the Southeast Asian crisis
will have on our economy during this year. The obvious result, we
believe, will be a slowing of economic growth due to reduced
exports, restrained pricing flexibility and lower corporate profits.
We expect the Federal Reserve will continue to stay on the sidelines
as the Southeast Asian economic turmoil plays out. At the same time,
low inflation and low interest rates should continue to provide a
healthy environment for financial assets.
We are committed to our customers as our most valuable asset. Our
commitment to you is to continue to add value to our products and
services to help you achieve your financial planning and retirement
goals. As always, we welcome and encourage your feedback.
/s/Joseph J. Gasper
Joseph J. Gasper, President
3
<PAGE> 3
NATIONWIDE VLI SEPARATE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investments in Van Kampen American Capital Life
Investment Trust, at market value:
Asset Allocation Fund
2,228,577 shares (cost $25,502,538) ........ $ 26,542,347
Domestic Income Fund
238,818 shares (cost $1,983,580) ........... 1,970,248
Emerging Growth Fund
124,404 shares (cost $1,926,652) ........... 2,046,452
Enterprise Fund
1,854,728 shares (cost $28,119,444) ........ 33,589,123
Global Equity Fund
110,739 shares (cost $1,364,424) ........... 1,217,018
Government Fund
5,195,955 shares (cost $45,750,900) ........ 46,347,922
Money Market Fund
6,952,567 shares (cost $6,952,567) ......... 6,952,567
Morgan Stanley Real Estate Securities Portfolio
41,789 shares (cost $636,325) .............. 662,354
------------
Total investments ....................... 119,328,031
Accounts receivable .............................. --
------------
Total assets ............................ 119,328,031
ACCOUNTS PAYABLE .................................... 73,300
------------
CONTRACT OWNERS' EQUITY ............................. $119,254,731
============
</TABLE>
4
<PAGE> 4
<TABLE>
<CAPTION>
ANNUAL
Contract owners' equity represented by: UNITS UNIT VALUE RETURN
--------- ---------------- ----------------
<S> <C> <C> <C> <C>
Single Premium contracts issued prior
to April 16, 1990 (policy years 1
through 10):
Asset Allocation Fund ............. 122,920 $ 29.287817 $ 3,600,058 21%
Domestic Income Fund .............. 15,656 20.186939 316,047 11%
Emerging Growth Fund .............. 8,741 16.064598 140,421 19%
Enterprise Fund ................... 49,821 35.993026 1,793,209 29%
Global Equity Fund ................ 4,685 13.614803 63,785 15%
Government Fund ................... 380,541 20.830122 7,926,715 9%
Money Market Fund ................. 27,312 16.972125 463,543 4%
Morgan Stanley Real Estate
Securities Portfolio ........... 2,854 18.062622 51,551 20%
Single Premium contracts issued prior
to April 16, 1990 (policy years 11 and
thereafter):
Asset Allocation Fund ............. 769,061 29.508511 22,693,845 21%
Domestic Income Fund .............. 72,875 20.339100 1,482,212 11%
Emerging Growth Fund .............. 113,239 16.185767 1,832,860 20%
Enterprise Fund ................... 867,374 36.264286 31,454,699 30%
Global Equity Fund ................ 83,414 13.717407 1,144,224 15%
Government Fund ................... 1,827,060 20.988344 38,346,964 9%
Money Market Fund ................. 375,312 17.100077 6,417,864 5%
Morgan Stanley Real Estate
Securities Portfolio ........... 33,445 18.198663 608,654 21%
Single Premium contracts issued on or
after April 16, 1990:
Asset Allocation Fund ............. 5,402 25.080225 135,483 20%
Domestic Income Fund .............. 8,589 19.887916 170,817 10%
Emerging Growth Fund .............. 4,455 15.924922 70,946 19%
Enterprise Fund ................... 5,773 33.768883 194,948 29%
Global Equity Fund ................ 601 13.496423 8,111 14%
Government Fund ................... 2,998 15.737995 47,183 8%
Money Market Fund ................. 5,402 12.508709 67,572 4%
Morgan Stanley Real Estate
Securities Portfolio ........... 97 17.905659 1,737 20%
Multiple Payment and
Flexible Premium contracts:
Asset Allocation Fund ............. 4,430 22.707666 100,595 21%
Enterprise Fund ................... 4,147 29.102562 120,688 30%
========= ================ ----------------
$ 119,254,731
================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 5
NATIONWIDE VLI SEPARATE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
------------- ------------- -------------
INVESTMENT ACTIVITY:
<S> <C> <C> <C>
Reinvested dividends ................................ $ 4,695,756 5,220,160 6,137,134
Mortality and expense charges (note 3)
Single Premium contracts issued prior to
April 16, 1990 (years 1 through 10) ........ (245,990) (905,516) (1,117,265)
Single Premium contracts issued prior to
April 16, 1990 (years 11 and after) ........ (467,486) (116,717) --
Single Premium contracts issued on or after
April 16, 1990 ............................. (4,007) (5,466) (5,489)
Multiple Payment and Flexible Premium contracts (1,712) (2,386) (2,024)
------------- ------------- -------------
Net investment activity .......................... 3,976,561 4,190,075 5,012,356
------------- ------------- -------------
Proceeds from mutual fund shares sold ............... 31,042,460 24,568,211 23,835,749
Cost of mutual funds sold ........................... (28,311,120) (22,544,406) (21,777,460)
------------- ------------- -------------
Realized gain on investments ..................... 2,731,340 2,023,805 2,058,289
Change in unrealized gain (loss) on investments ..... 3,917,689 (1,839,618) 11,069,519
------------- ------------- -------------
Net gain on investments .......................... 6,649,029 184,187 13,127,808
------------- ------------- -------------
Reinvested capital gains ............................ 7,592,712 5,806,648 4,959,015
------------- ------------- -------------
Net increase in contract owners'
equity resulting from operations ........... 18,218,302 10,180,910 23,099,179
------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from contract owners ..... 20,253 23,475 25,652
Surrenders .......................................... (15,789,351) (13,731,809) (11,745,567)
Death benefits (note 4) ............................. (2,575,326) (1,201,226) (1,552,445)
Policy loans (net of repayments) (note 5) ........... 2,317,220 3,043,009 833,405
Deductions for surrender charges (note 2d) .......... (6,591) (16,455) (193,286)
Redemptions to pay cost of insurance charges
and administration charges (notes 2b and 2c) ..... (1,430,627) (1,499,564) (1,756,639)
------------- ------------- -------------
Net decrease in equity transactions ........... (17,464,422) (13,382,570) (14,388,880)
------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .................. 753,880 (3,201,660) 8,710,299
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ............ 118,500,851 121,702,511 112,992,212
------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD .................. $ 119,254,731 118,500,851 121,702,511
============= ============= =============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 6
NATIONWIDE VLI SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide VLI Separate Account (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
Insurance Company (the Company) on August 8, 1984. The Account has been
registered as a unit investment trust under the Investment Company Act
of 1940.
The Company offers modified single premium, 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.
Contract owners may invest in the following funds:
Funds of the Van Kampen American Capital Life Investment Trust (Van
Kampen American Capital LIT);
Van Kampen American Capital LIT - Asset Allocation Fund
Van Kampen American Capital LIT - Domestic Income Fund
Van Kampen American Capital LIT - Emerging Growth Fund
Van Kampen American Capital LIT - Enterprise Fund
Van Kampen American Capital LIT - Global Equity Fund
Van Kampen American Capital LIT - Government Fund
Van Kampen American Capital LIT - Money Market Fund
Van Kampen American Capital LIT - Morgan Stanley Real Estate
Securities Portfolio
(formerly Van Kampen American Capital LIT - Real Estate
Securities Fund)
At December 31, 1997, contract owners have invested in all of the above
funds.
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, 1997. 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.
7
<PAGE> 7
(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.
(f) Reclassifications
Certain 1996 and 1995 amounts have been reclassified to conform with
the current period presentation.
(2) POLICY CHARGES
(a) Deductions from Premiums
For single premium contracts, no deduction is made from any premium at
the time of payment. 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 $12.50 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) Surrender Charges
Policy surrenders result in a redemption of the contract value from the
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.
8
<PAGE> 8
(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
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) RELATED PARTY TRANSACTIONS
The Company performs various services on behalf of the Mutual Fund
Companies in which the Account invests and may receive fees for the
services performed. These services include, among other things, shareholder
communications, preparation, postage, fund transfer agency and various
other record keeping and customer service functions. These fees are paid to
an affiliate of the Company.
(7) SCHEDULE I
Schedule I presents the components of the change in the unit values, which
are the basis for contract owners' equity. This schedule is presented in
the following format:
- Beginning unit value - Jan. 1
- Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to
capital gain and dividend 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.
9
<PAGE> 9
SCHEDULE I
NATIONWIDE VLI SEPARATE ACCOUNT
SINGLE PREMIUM CONTRACTS ISSUED PRIOR TO APRIL 16, 1990
(POLICY YEARS 1 THROUGH 10)
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(UNDERLYING MUTUAL FUNDS OF VAN KAMPEN AMERICAN CAPITAL LIT)
<TABLE>
<CAPTION>
Asset Domestic Emerging
Allocation Income Growth Enterprise
Fund Fund Fund Fund
------------ ------------ ------------ ------------
1997
<S> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $ 24.272482 18.211426 13.467256 27.810473
------------ ------------ ------------ ------------
Reinvested capital gains
and dividends 4.001033 1.610349 .000000 5.118148
------------ ------------ ------------ ------------
Unrealized gain (loss) 1.265248 .546307 2.737897 3.375233
------------ ------------ ------------ ------------
Asset charges (.250946) (.181143) (.140555) (.310828)
------------ ------------ ------------ ------------
Ending unit value - Dec. 31 $ 29.287817 20.186939 16.064598 35.993026
------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value*(a) 21% 11% 19% 29%
============ ============ ============ ============
1996
Beginning unit value - Jan. 1 $ 21.519909 17.235188 11.655608 22.498859
------------ ------------ ------------ ------------
Reinvested capital gains
and dividends 3.456144 1.551321 .000000 3.050863
------------ ------------ ------------ ------------
Unrealized gain (loss) (.488445) (.410339) 1.935098 2.501932
------------ ------------ ------------ ------------
Asset charges (.215126) (.164744) (.123450) (.241181)
------------ ------------ ------------ ------------
Ending unit value - Dec. 31 $ 24.272482 18.211426 13.467256 27.810473
------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value*(a) 13% 6% 16% 24%
============ ============ ============ ============
1995
Beginning unit value - Jan. 1 $ 16.538427 14.336077 10.000000 16.580891
------------ ------------ ------------ ------------
Reinvested capital gains
and dividends 2.418600 1.359225 .000000 3.004553
------------ ------------ ------------ ------------
Unrealized gain (loss) 2.744315 1.690878 1.707069 3.100329
------------ ------------ ------------ ------------
Asset charges (.181433) (.150992) (.051461) (.186914)
------------ ------------ ------------ ------------
Ending unit value - Dec. 31 $ 21.519909 17.235188 11.655608 22.498859
------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value*(a) 30% 20% 17%(b) 36%
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Global Money Real Estate
Equity Government Market Securities
Fund Fund Fund Portfolio
------------ ------------ ------------ ------------
1997
<S> <C> <C> <C> <C>
Beginning unit value - Jan. 1 11.864328 19.185493 16.307639 15.011508
------------ ------------ ------------ ------------
Reinvested capital gains
and dividends 2.506526 1.231903 .822488 2.041009
------------ ------------ ------------ ------------
Unrealized gain (loss) (.630887) .602372 .000000 1.163065
------------ ------------ ------------ ------------
Asset charges (.125164) (.189646) (.158002) (.152960)
------------ ------------ ------------ ------------
Ending unit value - Dec. 31 13.614803 20.830122 16.972125 18.062622
------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value*(a) 15% 9% 4% 20%
============ ============ ============ ============
1996
Beginning unit value - Jan. 1 10.262083 18.968390 15.695093 10.784280
------------ ------------ ------------ ------------
Reinvested capital gains
and dividends .358540 1.225305 .764922 .288822
------------ ------------ ------------ ------------
Unrealized gain (loss) 1.350014 (.828963) .000000 4.051625
------------ ------------ ------------ ------------
Asset charges (.106309) (.179239) (.152376) (.113219)
------------ ------------ ------------ ------------
Ending unit value - Dec. 31 11.864328 19.185493 16.307639 15.011508
------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value*(a) 16% 1% 4% 39%
============ ============ ============ ============
1995
Beginning unit value - Jan. 1 10.000000 16.344365 15.022875 10.000000
------------ ------------ ------------ ------------
Reinvested capital gains
and dividends .000000 1.217414 .817690 .092106
------------ ------------ ------------ ------------
Unrealized gain (loss) .309271 1.576618 .000000 .740132
------------ ------------ ------------ ------------
Asset charges (.047188) (.170007) (.145472) (.047958)
------------ ------------ ------------ ------------
Ending unit value - Dec. 31 10.262083 18.968390 15.695093 10.784280
------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value*(a) 3%(b) 16% 4% 8%(b)
============ ============ ============ ============
</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.
10
<PAGE> 10
SCHEDULE I, CONTINUED
NATIONWIDE VLI SEPARATE ACCOUNT
SINGLE PREMIUM CONTRACTS ISSUED PRIOR TO APRIL 16, 1990
(POLICY YEARS 11 AND THEREAFTER)
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1997 AND 1996
(UNDERLYING MUTUAL FUNDS OF VAN KAMPEN AMERICAN CAPITAL LIT)
<TABLE>
<CAPTION>
Asset Domestic Emerging Global
Allocation Income Growth Enterprise Equity
Fund Fund Fund Fund Fund
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
1997
Beginning unit value - Jan. 1 $ 24.345677 18.266338 13.507925 27.894373 11.900110
------------ ------------ ------------ ------------ ------------
Reinvested capital gains
and dividends 4.028773 1.622049 .000000 5.154574 2.524570
------------ ------------ ------------ ------------ ------------
Unrealized gain (loss) 1.266844 .546552 2.752212 3.379811 (.641040)
------------ ------------ ------------ ------------ ------------
Asset charges (.132783) (.095839) (.074370) (.164472) (.066233)
------------ ------------ ------------ ------------ ------------
Ending unit value - Dec. 31 $ 29.508511 20.339100 16.185767 36.264286 13.717407
------------ ------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value* 21% 11% 20% 30% 15%
============ ============ ============ ============ ============
1996
Beginning unit value - Jan. 1 $ 21.519909 17.235188 11.655608 22.498859 10.262083
------------ ------------ ------------ ------------ ------------
Reinvested capital gains
and dividends 3.464578 1.555582 .000000 3.057101 .359541
------------ ------------ ------------ ------------ ------------
Unrealized gain (loss) (.492537) (.411984) 1.935344 2.501147 1.350463
------------ ------------ ------------ ------------ ------------
Asset charges (.146273) (.112448) (.083027) (.162734) (.071977)
------------ ------------ ------------ ------------ ------------
Ending unit value - Dec. 31 $ 24.345677 18.266338 13.507925 27.894373 11.900110
------------ ------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value* 13% 6% 16% 24% 16%
============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Money Real Estate
Government Market Securities
Fund Fund Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
1997
Beginning unit value - Jan. 1 19.243796 16.356824 15.056707
------------ ------------ ------------
Reinvested capital gains
and dividends 1.238209 .826847 2.055828
------------ ------------ ------------
Unrealized gain (loss) .606462 .000000 1.167058
------------ ------------ ------------
Asset charges (.100123) (.083594) (.080930)
------------ ------------ ------------
Ending unit value - Dec. 31 20.988344 17.100077 18.198663
------------ ------------ ------------
Percentage increase (decrease)
in unit value* 9% 5% 21%
============ ============ ============
1996
Beginning unit value - Jan. 1 18.968390 15.695093 10.784280
------------ ------------ ------------
Reinvested capital gains
and dividends 1.226436 .765692 .289605
------------ ------------ ------------
Unrealized gain (loss) (.828621) .000000 4.058907
------------ ------------ ------------
Asset charges (.122409) (.103961) (.076085)
------------ ------------ ------------
Ending unit value - Dec. 31 19.243796 16.356824 15.056707
------------ ------------ ------------
Percentage increase (decrease)
in unit value* 1% 4% 40%
============ ============ ============
</TABLE>
* An annualized rate of return cannot be determined as asset charges do not
include the policy charges discussed in note 2.
11
<PAGE> 11
SCHEDULE I, CONTINUED
NATIONWIDE VLI SEPARATE ACCOUNT
SINGLE PREMIUM CONTRACTS ISSUED ON OR AFTER APRIL 16, 1990
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(UNDERLYING MUTUAL FUNDS OF VAN KAMPEN AMERICAN CAPITAL LIT)
<TABLE>
<CAPTION>
Asset Domestic Emerging Global
Allocation Income Growth Enterprise Equity
Fund Fund Fund Fund Fund
------------ ------------ ------------ ------------ ------------
1997
<S> <C> <C> <C> <C> <C>
Beginning unit value - Jan. 1 $ 20.858239 18.004549 13.396950 26.183349 11.802380
------------ ------------ ------------ ------------ ------------
Reinvested capital gains
and dividends 3.427827 1.586829 .000000 4.803438 2.485382
------------ ------------ ------------ ------------ ------------
Unrealized gain (loss) 1.088735 .541166 2.718959 3.181817 (.621245)
------------ ------------ ------------ ------------ ------------
Asset charges (.294576) (.244628) (.190987) (.399721) (.170094)
------------ ------------ ------------ ------------ ------------
Ending unit value - Dec. 31 $ 25.080225 19.887916 15.924922 33.768883 13.496423
------------ ------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value* 20% 10% 19% 29% 14%
============ ============ ============ ============ ============
1996
Beginning unit value - Jan. 1 $ 18.558022 17.099466 11.635640 21.257132 10.244489
------------ ------------ ------------ ------------ ------------
Reinvested capital gains
and dividends 2.971435 1.534027 .000000 2.874772 .356729
------------ ------------ ------------ ------------ ------------
Unrealized gain (loss) (.417798) (.405672) 1.929643 2.362697 1.346140
------------ ------------ ------------ ------------ ------------
Asset charges (.253420) (.223272) (.168333) (.311252) (.144978)
------------ ------------ ------------ ------------ ------------
Ending unit value - Dec. 31 $ 20.858239 18.004549 13.396950 26.183349 11.802380
------------ ------------ ------------ ------------ ------------
Percentage increase (decrease)
in unit value* 12% 5% 15% 23% 15%
============ ============ ============ ============ ============
1995
Beginning unit value - Jan. 1 $ 14.311997 14.272889 ** 15.720497 **
------------ ------------ ------------
Reinvested capital gains
and dividends 2.086061 1.348751 2.839638
------------ ------------ ------------
Unrealized gain (loss) 2.374431 1.683177 2.939071
------------ ------------ ------------
Asset charges (.214467) (.205351) (.242074)
------------ ------------ ------------
Ending unit value - Dec. 31 $ 18.558022 17.099466 21.257132
------------ ------------ ------------
Percentage increase (decrease)
in unit value* 30% 20% 35%
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
Money Real Estate
Government Market Securities
Fund Fund Portfolio
------------ ------------ ------------
1997
<S> <C> <C> <C>
Beginning unit value - Jan. 1 14.546815 12.061110 14.933196
------------ ------------ ------------
Reinvested capital gains
and dividends .932504 .607223 2.023697
------------ ------------ ------------
Unrealized gain (loss) .455416 .000000 1.156620
------------ ------------ ------------
Asset charges (.196740) (.159624) (.207854)
------------ ------------ ------------
Ending unit value - Dec. 31 15.737995 12.508709 17.905659
------------ ------------ ------------
Percentage increase (decrease)
in unit value* 8% 4% 20%
============ ============ ============
1996
Beginning unit value - Jan. 1 14.433482 11.648994 **
------------ ------------
Reinvested capital gains
and dividends .930855 .566598
------------ ------------
Unrealized gain (loss) (.630892) .000000
------------ ------------
Asset charges (.186630) (.154482)
------------ ------------
Ending unit value - Dec. 31 14.546815 12.061110
------------
Percentage increase (decrease)
in unit value* 1% 4%
============ ===========
1995
Beginning unit value - Jan. 1 12.480782 11.189053 **
------------ ------------
Reinvested capital gains
and dividends .928076 .607952
------------ ------------
Unrealized gain (loss) 1.202259 .000000
------------ ------------
Asset charges (.177635) (.148011)
------------ ------------
Ending unit value - Dec. 31 14.433482 11.648994
------------ ------------
Percentage increase (decrease)
in unit value* 16% 4%
============ ============
</TABLE>
* An annualized rate of return cannot be determined as asset charges do not
include the policy charges discussed in note 2.
** This investment option was not being utilized or was not available.
12
<PAGE> 12
SCHEDULE I, CONTINUED
NATIONWIDE VLI SEPARATE ACCOUNT
MULTIPLE PAYMENT CONTRACTS AND FLEXIBLE PREMIUM CONTRACTS
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(UNDERLYING MUTUAL FUNDS OF VAN KAMPEN AMERICAN CAPITAL LIT)
<TABLE>
<CAPTION>
ASSET
ALLOCATION ENTERPRISE
FUND FUND
------------ ------------
1997**
<S> <C> <C>
Beginning unit value - Jan 1 $ 18.790954 22.452797
------------ ------------
Reinvested capital gains
and dividends 3.101494 4.137761
------------ ------------
Unrealized gain (loss) .978939 2.723484
------------ ------------
Asset charges (.163721) (.211480)
------------ ------------
Ending unit value - Dec. 31 $ 22.707666 29.102562
------------ ------------
Percentage increase (decrease)
in unit value* 21% 30%
============ ============
1996
Beginning unit value - Jan 1 $ 16.634918 18.137100
------------ ------------
Reinvested capital gains
and dividends 2.675077 2.462233
------------ ------------
Unrealized gain (loss) (.378897) 2.017312
------------ ------------
Asset charges (.140144) (.163848)
------------ ------------
Ending unit value - Dec. 31 $ 18.790954 22.452797
------------ ------------
Percentage increase (decrease)
in unit value* 13% 24%
============ ============
1995
Beginning unit value - Jan 1 $ 12.765144 13.346462
------------ ------------
Reinvested capital gains
and dividends 1.869449 2.421740
------------ ------------
Unrealized gain (loss) 2.118344 2.495698
------------ ------------
Asset charges (.118019) (.126800)
------------ ------------
Ending unit value - Dec. 31 $ 16.634918 18.137100
------------ ------------
Percentage increase (decrease)
in unit value* 30% 36%
============ ============
</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 being utilized.
See note 7.
13
<PAGE> 13
Independent Auditors' Report
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of Nationwide VLI Separate Account:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide VLI Separate Account as of December 31,
1997, 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, 1997, by correspondence with 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, 1997, and the
results of its operations and its changes in contract owners' equity and
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, 1998
14
<PAGE> 14
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA - COLUMBUS, OHIO 43215-2220
Bulk Rate
U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
