1. Avoiding Common Annuity Mistakes NFM-8802AO.2 (5/13) For Client Use Brought to you by the Nationwide ® Advanced Consulting Group

2. 2 NFM-8802AO.2 (5/13) For Client Use Some things you need to know The following information was created to support the general promotion of life insurance, annuities, and/or other products and services from Nationwide Life Insurance Company, which are described within. Neither Nationwide nor any of its employees provide tax or legal advice. For answers to your specific questions, you should consult with your legal and tax advisors to see how the information may apply to your personal situation. This information is not intended to be used — and cannot be used — to avoid penalties under the Internal Revenue Code. As your personal situations change (i.e., marriage, birth of a child or job promotion), so will your life insurance needs. Care should be taken to ensure these strategies and products are suitable for long-term life insurance needs. You should weigh your objectives, time horizon and risk tolerance as well as any associated costs before investing. Also, be aware that market volatility can lead to the possibility of the need for additional premium in the policy. Variable life insurance has fees and charges associated with it that include costs of insurance that vary with such characteristics of the insured as gender, health and age, underlying fund charges and expenses, and additional charges for riders that customize a policy to fit your individual needs.

3. 3 NFM-8802AO.2 (5/13) For Client Use Some things you need to know This information assumes that the life insurance is not a modified endowment contract, or MEC. As long as the contract meets the non- MEC definitions of IRC Section 7702A, most distributions are taxed on a first-in/first-out basis. Surrender charges may apply to partial surrenders. Loans and partial surrenders from a MEC will generally be taxable, and if taken prior to age 59 ½, may be subject to a 10% tax penalty. Loans and partial surrenders will reduce the cash value and the death benefits payable to your beneficiaries, and withdrawals above the available free amount will incur surrender charges. If your contract were to lapse with a loan outstanding, the loan amount in excess of basis will be treated as a distribution and all or a portion will be subject to income tax. Investing involves risk, including possible loss of principal. Variable products are sold by prospectus. Both the product prospectus and underlying fund prospectuses can be obtained from your investment professional or by visiting us at www.nationwide.com or calling 1-877-669-6877. Before investing, carefully consider the fund's investment objectives, risks, charges and expenses. The product prospectus and underlying fund prospectus contain this and other important information. Read the prospectuses carefully before investing. www.nationwide.com

4. 4 NFM-8802AO.2 (5/13) For Client Use Some things you need to know All guarantees and protections are subject to the claims-paying ability of Nationwide Life Insurance Company, and do not apply to variable underlying investment options. Nationwide and its representatives do not provide tax, accounting, or legal advice. It is your responsibility as a Registered Representative of you affiliated broker/dealer to determine suitability of any product, rider, service, or strategy you introduce to a customer. Before investing, understand that annuities and/or life insurance products are not insured by the FDIC, NCUSIF, or any other Federal government agency, and are not deposits or obligations of, guaranteed by, or insured by the depository institution where offered or any of its affiliates. Annuities and/or life insurance products that involve investment risk may lose value. © 2013, Nationwide Financial Services, Inc. All rights reserved. Not a deposit Not FDIC or NCUSIF insured Not guaranteed by the institution Not insured by any federal government agency May lose value

5. 5 Agenda NFM-8802AO.2 (5/13) For Client Use Contract Structure Beneficiary Designations Annuitant Ownership

6. 6 NFM-8802AO.2 (5/13) For Client Use Annuity Contract Mistake # 1 They are all the same How to Avoid: Read and understand the annuity contract!

7. 7 NFM-8802AO.2 (5/13) For Client Use Annuity Contract – Death of Owner Mistake # 2 Not Understanding the Difference Between Annuitant and Owner Driven How to Avoid: Owner and Annuitant are the same

8. 8 NFM-8802AO.2 (5/13) For Client Use Contract Structure – Death of Annuitant Mistake # 3 Gift from Owner to Beneficiary How to Avoid Keep Owner & Annuitant Same Understand Contract

9. 9 NFM-8802AO.2 (5/13) For Client Use Sample Contract Structure Owner – Husband or Wife Annuitant - Same as the Owner Beneficiary – Spouse, Children or Trust

10. 10 NFM-8802AO.2 (5/13) For Client Use Beneficiary – The Estate Mistake # 4 No Beneficiary or Naming the Estate as Beneficiary How to Avoid: Name specific people as beneficiaries or, when appropriate, a trust Spousal Continuation Keep Beneficiaries up-to-date

11. 11 NFM-8802AO.2 (5/13) For Client Use Beneficiary - Contingent Mistake # 5 No Contingent Beneficiary How to Avoid: Name a Contingent Beneficiary

12. 12 NFM-8802AO.2 (5/13) For Client Use Sample Beneficiary Arrangement Primary Beneficiary – Spouse Contingent – Children or Trust

13. 13 NFM-8802AO.2 (5/13) For Client Use Beneficiary - Minor Mistake # 6 Naming a Minor as a Beneficiary How to Avoid: Name a Trust for the Minor’s Share If Appropriate, UTMA

14. 14 NFM-8802AO.2 (5/13) For Client Use Ownership – Joint Owners Mistake # 7 Multiple Owners – Confusion with Joint Ownership with Rights of Survivorship How to Avoid: One Owner

15. 15 NFM-8802AO.2 (5/13) For Client Use Ownership – Non-Natural Owners Mistake # 8 Loss of Tax-Deferral Because a Business is the Owner How to Avoid: Don’t Name a Business as Owner

16. 16 NFM-8802AO.2 (5/13) For Client Use Ownership – Revocable Trusts Mistake # 9 Making the Revocable Living Trust the Owner when it is Unnecessary How to Avoid: Leave Ownership in the Individual’s Name to Keep it Simple

17. 17 NFM-8802AO.2 (5/13) For Client Use Ownership – Irrevocable Trusts Mistake # 10 Not Understanding the Type of Trust Being Named as Owner How to Avoid: 1.Have Client Seek Competent Legal Counsel for Direction 2.Understand Type of Trust and Consequences

18. 18 NFM-8802AO.2 (5/13) For Client Use Ownership – Changing Owners Mistake # 11 Taxes when Changing Ownership How to Avoid: Don’t Change Ownership

19. 19 NFM-8802AO.2 (5/13) For Client Use Ownership – Assignments Mistake # 12 Taxes when Assigning Ownership How to Avoid: Don’t Assign; Use Other Collateral

20. 20 NFM-8802AO.2 (5/13) For Client Use Ownership – Charitable Gifts Mistake # 13 Unintended Tax Consequences from Gift to Charity How to Avoid: Name Charity as Beneficiary

21. 21 NFM-8802AO.2 (5/13) For Client Use Ownership – Surrender Charges Mistake # 14 Incurring CDSC or Surrender Charges How to Avoid: Consider the Costs of Surrendering

22. 22 NFM-8802AO.2 (5/13) For Client Use Ownership – Issue Date & Taxes Mistake # 15 Not Paying Attention to the Issue Date & Combining Annuities How to Avoid: Know When the Annuity is Issued

23. 23 NFM-8802AO.2 (5/13) For Client Use Ownership – Owning More Than One Mistake # 16 Selling Two Annuities to the Same Person in the Same Tax Year From the Same Insurance Company How to Avoid: Different Owners, Different Tax Years, Different Insurance Companies

24. 24 NFM-8802AO.2 (5/13) For Client Use Ownership – 10% Penalty Mistake # 17 Annuitizing a Deferred Annuity or doing a 1035 Exchange to an Immediate Annuity before age 59 1/5 How to Avoid: Remember the Exceptions to the 10% Premature Distribution Penalty

25. 25 NFM-8802AO.2 (5/13) For Client Use Ownership – Surrender or 1035 Mistake # 18 Not Knowing When to Surrender or to 1035 How to Avoid: Consider the Tax Consequences 1035 Exchange to Save Basis

26. 26 NFM-8802AO.2 (5/13) For Client Use Ownership – Surrender or 1035 Mistake # 19 Buying a New Annuity to Soon After Surrendering an Annuity How to Avoid: Consider the Tax Consequences and the “Wash Sale” Rules

27. 27 NFM-8802AO.2 (5/13) For Client Use Ownership – Partial Exchanges Mistake # 20 Unintended Tax Consequences From Partial Exchanges and Withdrawals How to Avoid: Don’t Withdrawal for a 180 Days After the Exchange

28. 28 NFM-8802AO.2 (5/13) For Client Use Ownership – Partial Exchanges Basis & Gain are Prorated Between A & B Contract A Deferred Annuity Partial Exchange to Contract B Contract B May a withdrawal be taken from contract A within 180 days of the exchange without negative tax consequences? NO!

29. 29 NFM-8802AO.2 (5/13) For Client Use Ownership – 1035 Mistake # 21 Loss of Benefits & Guarantees How to Avoid: Read the Existing Annuity Contract Compare Benefits & Guarantees

30. 30 NFM-8802AO.2 (5/13) For Client Use Ownership – 1035 Compare Features and Benefits Guaranteed Interest Rates Death Benefit Guaranteed Income Benefit CDSC or Surrender Charges Annuitization Payout Rates

31. 31 NFM-8802AO.2 (5/13) For Client Use Summary Read the Contract or Prospectus Coordinate With Client’s Other Planning Understand Tax Consequences Understand Benefits & Features of Current and Proposed Annuity Whenever Possible, Keep It Simple Ask for Help

32. 32 NFM-8802AO.2 (5/13) For Client Use Questions? Independent Dealer:1-800-321-6064 Financial Institutions:1-800-893-5399 Wirehouse/Regionals:1-800-720-1511 Nationwide Agents:1-888-333-4202 Nationwide Financial Network:1-877-223-0795 BGA:1-888-767-7373