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SUPPLEMENT DATED AUGUST 1, 1995 TO
PROSPECTUS DATED MAY 1, 1995 FOR
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE CONTRACTS
ISSUED BY
NATIONWIDE LIFE INSURANCE COMPANY
THROUGH ITS
NATIONWIDE VLI SEPARATE ACCOUNT-3
This Supplement updates certain information contained in your Prospectus.
Please read it and keep it with your Prospectus for future reference.
Effective August 1, 1995, the following underlying Mutual Funds will be
available in the Nationwide VLI Separate Account-3:
AMERICAN CAPITAL LIFE INVESTMENT TRUST:
-American Capital Real Estate Securities Portfolio
DREYFUS
-Dreyfus Stock Index Fund
-Dreyfus Socially Responsible Growth Fund
FIDELITY VARIABLE INSURANCE PRODUCTS FUND:
-High Income Portfolio*
-Equity-Income Portfolio
-Growth Portfolio
-Overseas Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II:
-Asset Manager Portfolio
-Contrafund Portfolio
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST:
-Growth Portfolio
-Limited Maturity Bond Portfolio
-Partners Portfolio
OPPENHEIMER VARIABLE ACCOUNT FUNDS:
-Bond Fund
-Global Securities Fund
-Multiple Strategies Fund
STRONG VARIABLE INSURANCE PRODUCTS FUND:
-Discovery Fund II, Inc.
-Special Fund II, Inc.
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TCI PORTFOLIOS, INC.:
-TCI Balanced
-TCI Growth
-TCI International
VAN ECK WORLDWIDE INSURANCE TRUST:
-Gold & Natural Resources Fund
-Worldwide Bond Fund
WARBURG PINCUS TRUST:
-International Equity Portfolio
-Small Company Portfolio
*The High Income Portfolio may invest in lower quality debt securities commonly
referred to as junk bonds.
Accordingly, the "Deductions and Charges" provision located in the Prospectus
is hereby amended to include the following expense information:
<TABLE>
<CAPTION>
Management Fees Other Expenses Total Expenses
<S> <C> <C> <C>
American Capital Real Estate Securities Portfolio 1.00% 0.00% 1.00%
Dreyfus Stock Index Fund 0.14% 0.26% 0.40%
Dreyfus Socially Responsible Growth Fund 0.00% 0.25% 0.25%
Fidelity VIP - High Income Portfolio 0.61% 0.10% 0.71%
Fidelity VIP - Equity Income Portfolio 0.52% 0.06% 0.58%
Fidelity VIP - Growth Portfolio 0.62% 0.07% 0.69%
Fidelity VIP - Overseas Portfolio 0.77% 0.15% 0.92%
Fidelity VIP Fund II - Asset Manager Portfolio 0.72% 0.07% 0.79%
Fidelity VIP Fund II - Contrafund Portfolio 0.62% 0.27% 0.89%
Neuberger & Berman Advisers Management Trust - Growth Portfolio 0.79% 0.12% 0.91%
Neuberger & Berman Advisers Management Trust - Limited Maturity Bond Portfolio 0.60% 0.13% 0.73%
Neuberger & Berman Advisers Management Trust - Partners Portfolio 0.80% 0.50% 1.30%
Oppenheimer - Bond Fund 0.75% 0.06% 0.81%
Oppenheimer - Global Securities Fund 0.75% 0.20% 0.95%
Oppenheimer - Multiple Strategies Fund 0.74% 0.05% 0.79%
Strong Discovery Fund II, Inc. 1.00% 0.21% 1.21%
Strong Special Fund II, Inc. 1.00% 0.10% 1.10%
TCI Portfolios - TCI Balanced 1.00% 0.00% 1.00%
TCI Portfolios - TCI Growth 1.00% 0.00% 1.00%
TCI Portfolios - TCI International 1.50% 0.00% 1.50%
Van Eck - Gold and Natural Resources Fund 0.75% 0.21% 0.96%
Van Eck - Worldwide Bond Fund 0.75% 0.18% 0.93%
Warburg Pincus - International Equity Portfolio 1.00% 0.44% 1.44%
Warburg Pincus - Small Company Growth Portfolio 0.90% 0.35% 1.25%
</TABLE>
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The "Investments of the Variable Account" provision is hereby amended as
follows:
1. American Capital Life Investment Trust, managed by Van Kampen American
Capital Management, Inc.;
2. Dreyfus Stock Index Fund, managed by Wells Fargo Nikko Investment
Advisors;
3. The Dreyfus Socially Responsible Growth Fund, managed by Dreyfus
Corporation;
4. Fidelity Variable Insurance Products Fund, managed by Fidelity Management
& Research Company;
5. Fidelity Variable Insurance Products Fund II, managed by Fidelity
Management & Research Company;
6. Nationwide Separate Account Trust, managed by Nationwide Financial
Services, Inc.;
7. Neuberger & Berman Advisers Management Trust, managed by Neuberger &
Berman Management Incorporated;
8. Oppenheimer Variable Account Funds, managed by Oppenheimer Management
Corp.;
9. Strong Variable Insurance Products Fund, managed by Strong/Corneliuson
Capital Management, Inc.;
10. TCI Portfolios, Inc., managed by Investors Research Corporation, an
affiliate of Twentieth Century Companies;
11. Van Eck Worldwide Insurance Trust, managed by Van Eck Associates
Corporation;
12. Warburg Pincus Trust, managed by Warburg Pincus Counsellors, Inc.
AMERICAN CAPITAL LIFE INVESTMENT TRUST
The American Capital Life Investment Trust is an open-end diversified
management investment company organized as a Massachusetts business trust on
June 3, 1985. The Trust offers shares in separate portfolios which are sold
only to insurance companies to provide funding for variable life insurance
policies and variable annuity contracts. Van Kampen American Capital Asset
Management, Inc. serves as the Portfolio's investment adviser.
-AMERICAN CAPITAL REAL ESTATE SECURITIES PORTFOLIO
Investment Objective: To seek long-term capital growth by investing in a
portfolio of securities of companies operating in the real estate industry
("Real Estate Securities"). Current income is a secondary consideration. Real
Estate Securities include equity securities, common stocks and convertible
securities, as well as non-convertible preferred stocks and debt securities of
real estate industry companies. A "real estate industry company" is a company
that derives at least 50% of its assets (marked to market), gross income or net
profits from the ownership, construction, management or sale of residential,
commercial or industrial real estate. Under normal market conditions, at least
65% of the Fund's total assets will be invested in Real Estate Securities,
primarily equity securities of real estate investment trusts. The Fund may
invest up to 25% of its total assets in securities issued by foreign issuers,
some or all of which may also be Real Estate Securities. There can be no
assurance that the Fund will achieve its investment objective.
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DREYFUS
- DREYFUS STOCK INDEX FUND
Dreyfus Stock Index Fund is an open-end, non-diversified management
investment company. It was incorporated under Maryland law on January
24, 1989, and commenced operations on September 29, 1989. Wells Fargo
Nikko Investment Advisors serves as the Fund's index fund manager. As of
May 1, 1994, Dreyfus Life and Annuity Index Fund began doing business as
Dreyfus Stock Index Fund.
Investment Objective: To provide investment results that correspond to
the price and yield performance of publicly traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock
Price Index. The Fund is neither sponsored by nor affiliated with
Standard & Poor's Corporation.
- DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
Dreyfus Socially Responsible Growth Fund, Inc. is an open-end,
diversified, management investment company. It was incorporated under
Maryland law on July 20, 1992, and commenced operations on October 7,
1993. Dreyfus Corporation serves as the Fund's investment advisor.
Tiffany Capitol Advisors, Inc. serves as the Fund's sub-investment
adviser and provides day-to-day management of the Fund's portfolio.
Investment Objective: The Fund's primary goal is to provide capital
growth through equity investment in companies that, in the opinion of the
Fund's management, not only meet traditional investment standards, but
which also show evidence that they conduct their business in a manner
that contributes to the enhancement of the quality of life in America.
Current income is secondary to the primary goal.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
The Fund is an open-end, diversified management investment company organized as
a Massachusetts business trust on November 13, 1981. The Fund's shares are
purchased by insurance companies to fund benefits under variable insurance and
annuity policies. Fidelity Management & Research Company ('FMR') is the Fund's
manager.
- HIGH INCOME PORTFOLIO
Investment Objective: Seeks to obtain a high level of current income by
investing primarily in high-risk, high-yielding, lower-rated,
fixed-income securities, while also considering growth of capital. The
portfolio's manager will seek high current income normally by investing
the Portfolio's assets as follows:
- at least 65% in income-producing debt securities and preferred
stocks, including convertible securities, zero coupon securities,
and mortgage-backed and asset-backed securities.
- up to 20% in common stocks and other equity securities when
consistent with the Portfolio's primary objective or acquired as
part of a unit combining fixed-income and quity securities.
Higher yields are usually available on securities that are lower-rated or that
are unrated. Lower-rated securities are usually defined as Ba or lower by
Moody's; BB or lower by Standard & Poor's
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and may be deemed to be of a speculative nature. The Portfolio may also
purchase lower-quality bonds such as those rated Ca3 by Moody's or C- by
Standard & Poor's which provide poor protection for payment of principal and
interest (commonly referred to as "junk bonds"). For a further discussion of
lower-rated securities, please see the "Risks of Lower-Rated Debt Securities"
section of the Portfolio's prospectus.
- EQUITY-INCOME PORTFOLIO
Investment Objective: To seek reasonable income by investing primarily
in income-producing equity securities. In choosing these securities FMR
also will consider the potential for capital appreciation. The
Portfolio's goal is to achieve a yield which exceeds the composite yield
on the securities comprising the Standard & Poor's 500 Composite Stock
Price Index.
- GROWTH PORTFOLIO
Investment Objective: Seeks to achieve capital appreciation. This
Portfolio will invest in the securities of both well-known and
established companies, and smaller, less well-known companies which may
have a narrow product line or whose securities are thinly traded. These
latter securities will often involve greater risk than may be found in
the ordinary investment security. FMR's analysis and expertise plays an
integral role in the selection of securities and, therefore, the
performance of the Portfolio. Many securities which FMR believes would
have the greatest potential may be regarded as speculative, and
investment in the Portfolio may involve greater risk than is inherent in
other mutual funds. It is also important to point out that the Portfolio
makes most sense for you if you can afford to ride out changes in the
stock market, because it invests primarily in common stocks. FMR also
can make temporary investments in securities such as investment-grade
bonds, high-quality preferred stocks and short-term notes, for defensive
purposes when it believes market conditions warrant.
- OVERSEAS PORTFOLIO
Investment Objective: To seek long term growth of capital primarily
through investments in foreign securities. The Overseas Portfolio
provides a means for investors to diversify their own portfolios by
participating in companies and economics outside of the United States.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
The Fund is an open-end, diversified management investment company organized as
a Massachusetts business trust on March 21, 1988. The Fund's shares are
purchased by insurance companies to fund benefits under variable insurance and
annuity policies. FMR is the Fund's manager.
- ASSET MANAGER PORTFOLIO
Investment Objective: To seek to obtain high total return with reduced
risk over the long-term by allocating its assets among domestic and
foreign stocks, bonds and short-term fixed income instruments.
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- CONTRAFUND PORTFOLIO
Investment Objective: To seek capital appreciation by investing
primarily in companies that the fund manager believes to be undervalued
due to an overly pessimistic appraisal by the public. This strategy can
lead to investments in domestic or foreign companies, small and large,
many of which may not be well known. The fund primarily invests in
common stock and securities convertible into common stock, but it has the
flexibility to invest in any type of security that may produce capital
appreciation.
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Neuberger & Berman Advisers Management Trust is an open-end diversified
management investment company established as a Massachusetts business trust on
December 14, 1983. Shares of the Trust are offered in connection with certain
variable annuity contracts and variable life insurance policies issued through
life insurance company separate accounts and are also offered directly to
qualified pension and retirement plans outside of the separate account context.
The investment adviser is Neuberger & Berman Management Incorporated.
- GROWTH PORTFOLIO
Investment Objective: The Portfolio seeks capital growth through
investments in common stocks of companies that the investment adviser
believes will have above average earnings or otherwise provide investors
with above average potential for capital appreciation. To maximize this
potential, the investment adviser may also utilize, from time to time,
securities convertible into common stocks, warrants and options to
purchase such stocks.
- LIMITED MATURITY BOND PORTFOLIO
Investment Objective: To provide the high level of current income,
consistent with low risk to principal and liquidity. As a secondary
objective, it also seeks to enhance its total return through capital
appreciation when market factors, such as falling interest rates and
rising bond prices, indicate that capital appreciation may be available
without significant risk to principal. It seeks to achieve its
objectives through investments in a diversified portfolio of limited
maturity debt securities.
- PARTNERS PORTFOLIO
Investment Objective: To seek capital growth. This portfolio will seek
to achieve its objective by investing primarily in the common stock of
established companies. Its investment program seeks securities believed
to be undervalued based on fundamentals such as low price-to-earnings
ratios, consistent cash flows, and support from asset values. The
objective of the Partners Portfolio is not fundamental and can be changed
by the Trustees of the Trust without shareholder approval. Shareholders
will, however, receive at least 30 days prior notice thereof. There is
no assurance the investment objective will be met.
OPPENHEIMER VARIABLE ACCOUNT FUNDS
The Oppenheimer Variable Account Funds is an open-end, diversified management
investment company organized as a Massachusetts business trust in 1984. Shares
of the Funds are sold
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only to provide benefits under variable life insurance policies and variable
annuity contracts. Oppenheimer Management Corporation is the Funds' investment
advisor.
- BOND FUND
Investment Objective: Primarily to seek a high level of current income
from investment in high yield fixed-income securities rated "Baa" or
better by Moody's or "BBB" or better by Standard & Poor's. Secondarily,
the Fund seeks capital growth when consistent with its primary objective.
- GLOBAL SECURITIES FUND
Investment Objective: To seek long-term capital appreciation by
investing a substantial portion of assets in securities of foreign
issuers, "growth-type" companies, cyclical industries and special
situations which are considered to have appreciation possibilities.
Current income is not an objective. These securities may be considered
to be speculative.
- MULTIPLE STRATEGIES FUND
Investment Objective: To seek a total investment return (which includes
current income and capital appreciation in the value of its shares) form
investments in common stocks and other equity securities, bonds and other
debt securities, and "money market" securities.
STRONG VARIABLE INSURANCE PRODUCTS FUNDS
The Strong Variable Insurance Products Funds are diversified, open-end
management investment companies, commonly called mutual funds. Strong Special
Fund II, Inc. ("Special Fund") and Strong Discovery Fund II, Inc. ("Discovery
Fund II") were separately incorporated in Wisconsin on December 28, 1990.
Shares of the Funds may only be purchased by the separate accounts of insurance
companies for the purpose of funding variable annuity and variable life
insurance contracts. Strong/Corneliuson Capital Management, Inc. is the
investment advisor for each of the Funds.
- DISCOVERY FUND II, INC.
Investment Objective: To seek maximum capital appreciation through
investments in a diversified portfolio of securities.
- SPECIAL FUND II, INC.
Investment Objective: To seek capital appreciation through investments
in a diversified portfolio of equity securities.
TCI PORTFOLIOS, INC., MEMBER OF THE TWENTIETH CENTURY FAMILY OF MUTUAL FUNDS
TCI Portfolios, Inc. was organized as a Maryland corporation in 1987. It is a
diversified, open-end management investment company, designed only to provide
investment vehicles for variable annuity and variable life insurance products
of insurance companies. A member of the Twentieth Century Family of Mutual
Funds, TCI Portfolios is managed by Investors Research Corporation.
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- TCI BALANCED
Investment Objective: Capital growth and current income. The fund will
seek to achieve its objective by maintaining approximately 60% of the
assets of the fund in common stocks (including securities convertible
into common stocks and other equity equivalents) that are considered by
mangement to have better-than-average prospects for appreciation and
approximately 40% in fixed income securities. There can be no assurance
that the Fund will achieve its investment objective.
- TCI GROWTH
Investment Objective: Capital growth. The fund will seek to achieve its
objective by investing in common stocks (including securities convertible
into common stocks and other equity equivalents) that meet certain
fundamental and technical standards of selection and have, in the opinion
of the fund's investment manager, better than average potential for
appreciation. The fund tries to stay fully invested in such securities,
regardless of the movement of stock prices generally.
The fund may invest in cash and cash equivalents temporarily or when it
is unable to find common stocks meeting its criteria of selection. It
may purchase securities only of companies that have a record of at least
three years continuous operation. There can be no assurance that the
Fund will achieve its investment objective.
- TCI INTERNATIONAL
Investment Objective: To seek capital growth. The fund will seek to
achieve its investment objective by investing primarily in securities of
foreign companies that meet certain fundamental and technical standards
of selection and, in the opinion of the investment manager, have
potential for appreciation. Under normal conditions, the fund will
invest at least 65% of its assets in common stocks or other equity
securities of issuers from at least three countries outside the United
States. Securities of United States issuers may be included in the
portfolio from time to time. Although the primary investment of the fund
will be common stocks (defined to include depository receipts for common
stocks), the fund may also invest in other types of securities consistent
with the fund's objective. When the manager believes that the total
return potential of other securities equals or exceeds the potential
return of common stocks, the fund may invest up to 35% of its assets in
such other securities. There can be no assurance that the fund will
achieve its objectives.
VAN ECK WORLDWIDE INSURANCE TRUST (FORMERLY VAN ECK INVESTMENT TRUST)
Van Eck Worldwide Insurance Trust is an open-end management investment company
organized as a "business trust" under the laws of the Commonwealth of
Massachusetts on January 7, 1987. Shares of the Trust are offered only to
separate accounts of various insurance companies to fund benefits of variable
insurance and annuity policies. The assets of the Trust are managed by Van Eck
Associates Corporation.
- GOLD AND NATURAL RESOURCES FUND
Investment Objective: To seek long-term capital appreciation by
investing in equity and debt securities of companies engaged in the
exploration, development, production and
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distribution of gold and other natural resources, such as strategic and
other metals, minerals, forest products, oil, natural gas and coal.
Current income is not an objective.
- WORLDWIDE BOND FUND (FORMERLY GLOBAL BOND FUND)
Investment Objective: To seek high total return through a flexible
policy of investing globally, primarily in debt securities.
WARBURG PINCUS TRUST
The Warburg Pincus Trust ("Trust") is an open-end management investment company
organized in March 1995 as a business trust under the laws of The Commonwealth
of Massachusetts. The Trust offers its shares to insurance companies for
allocation to separate accounts for the purpose of funding variable annuity and
variable life contracts. Trust portfolios are managed by Warburg Pincus
Counsellors, Inc. ("Counsellors.")
- INTERNATIONAL EQUITY PORTFOLIO
Investment Objective: To seek long-term capital appreciation by
investing primarily in a broadly diversified portfolio of equity
securities of companies, wherever organized, that in the judgment of
"Counsellors" have their principal business activities and interests
outside the United States. The Portfolio will ordinarily invest
substantially all of its assets, but no less than 65% of its total
assets, in common stocks, warrants and securities convertible into or
exchangeable for common stocks. The Portfolio intends to invest
principally in the securities of financially strong companies with
opportunities for growth within growing international economies and
markets through increased earning power and improved utilization or
recognition of assets.
- SMALL COMPANY GROWTH PORTFOLIO
Investment Objective: To seek capital growth by investing in a portfolio
of equity securities of small-sized domestic companies. The Portfolio
ordinarily will invest at least 65% of its total assets in common stocks
or warrants of small-sized companies (i.e., companies having stock market
capitalizations of between $25 million and $1 billion at the time of
purchase) that represent attractive opportunities for capital growth.
The Portfolio intends to invest primarily in companies whose securities
are traded on domestic stock exchanges or in the over-the-counter market.
The Portfolio's investments will be made on the basis of their equity
characteristics and securities ratings generally will not be a factor in
the selection process.
