Nationwide Financial Increases Amount of Guaranteed Income Offered Through The Nationwide Lifetime Income Rider(R) (L.inc)

Nationwide Financial Services, Inc. (NYSE: NFS), announced that The Nationwide Lifetime Income Rider^® (L.inc), an optional living benefit available with certain variable annuities, will now include a guaranteed annual roll-up of 10 percent, which will potentially offer consumers even more guaranteed retirement income from their variable annuity.

The enhancement to Nationwide L.inc, available with new contracts, increases the guaranteed roll-up from seven to 10 percent, one of the highest in the industry. This means the income benefit base -- the amount on which the lifetime income payments are calculated -- is guaranteed to increase by 10 percent simple interest annually for 10 years or until the first withdrawal, whichever comes first. When combined with Nationwide L.inc’s competitive age-based payout rates this could equate to higher income payments for the consumer.

"With today’s economic uncertainties, consumers are looking for guaranteed sources of income, whether it’s to address the rising costs of health care, increasing inflation, or living longer in retirement,” said Eric Henderson, senior vice president of Nationwide Financial’s Individual Investments Group. "Nationwide L.inc provides consumers with a stream of lifetime income they can depend on as they prepare for and enter retirement.”

If the market is flat or down, the new roll-up translates to a guaranteed 100 percent increase to the income benefit base if the consumer waits 10 years to take a withdrawal, which provides a cushion against inflation.

If the market is up and the contract value at any rider anniversary is higher than the guaranteed minimum value, the contract value will become the new benefit base. This increases the lifetime withdrawal amount. If the contract value falls to zero after the first 10 years (and before the first withdrawal), there will be no further adjustments to the income benefit base.

Nationwide L.inc is available with certain variable annuities for an additional cost (0.75 percent of income benefit base assessed annually). While the increased annual roll-up is a key benefit, Henderson noted it’s Nationwide L.inc’s package of features that help investment professionals meet their clients’ needs, including:

• Lifelong income continuation for a surviving spouse (optional at a cost of 0.20 percent in addition to the cost of Nationwide L.inc in all states except New York, where cost is 0.15 percent with original L.inc)
• Guaranteed lifetime income through withdrawals of up to seven percent of an income base that will never decrease due to market performance even if the contract value does
• Guaranteed growth with the potential to beat inflation
• No waiting – as early as age 45 (57 in New York) consumers can begin withdrawals immediately, which will lock in their lifetime withdrawal percentage, and can start and stop the withdrawals at will
• Market participation that provides upside potential without complicated choices or fixed investment restrictions

Nationwide L.inc, available across the country, including the state of New York¹, uses a "greater of” value proposition to help give consumers the potential to beat inflation and ensure that they receive the highest withdrawals available according to rider provisions. Guarantees are subject to the claims-paying ability of Nationwide.

When consumers are ready to begin taking withdrawals, the benefit base used to determine withdrawal amounts will be whichever is higher: the guaranteed minimum value that was determined by either the ten-percent annual roll-ups or the highest contract value on any rider anniversary date. The higher income benefit base is then multiplied by an age-based lifetime income percentage to determine the withdrawal amount.

Nationwide L.inc still offers spousal continuation, which allows the surviving spouse to continue to receive lifetime income for the duration of his or her life. Henderson said that’s an important consideration since there’s a 50 percent chance that – for the average 65-year-old couple² – one will live to age 92.

"Nationwide L.inc provides true spousal continuation, meaning there are no interruptions or reductions in the lifetime payments made to the surviving spouse,” said Henderson. "That’s not always the case with some spousal continuation options, which may include restrictions that consumers may not be aware of.”

Henderson said Nationwide L.inc’s flexibility allows consumers to access their lifetime income stream based on their individual needs and circumstances, whether that’s as early as age 45 or later on, when they’ll benefit from a higher withdrawal percentage.

Nationwide L.inc also allows consumers to choose from a variety of model portfolios, from passive to actively managed, that consist of various underlying investment options that correspond to the particular strategy of each model that fit their needs.

Henderson said Nationwide L.inc and Nationwide’s other variable annuity living benefit, Capital Preservation Plus Lifetime Income^® (CPPLI), provide consumers with two income withdrawal options to choose from based on their needs.

Capital Preservation Plus Lifetime Income, available at an additional cost of 0.75 percent with certain variable annuities, provides clients with a way to invest without risking their principal by providing a guaranteed return of principal (less applicable charges and withdrawals) in as few as five, seven or 10 years. After this Capital Preservation phase, individuals have the flexibility to begin taking guaranteed lifetime withdrawals, enter another Capital Preservation phase, annuitize or drop the rider and its fee.

"According to research we conducted with Yankelovich³, more than two-thirds of retirement-age individuals said making sure their money is safe is their most important investment goal, and nearly half aren’t certain their expected retirement income will be sufficient,” said Henderson. "CPPLI addresses these concerns by combining the security of principal protection with the potential for growth by staying invested in the market.”

Investment professionals can call their Nationwide Financial wholesaler or visit nationwide.com/livingbenefits to learn more.

Annuities are long-term investment vehicles designed for retirement purposes and will fluctuate in value; annuities have limitations, and investing involves market risk, including possible loss of principal.

Variable products are sold by prospectus. The product prospectus and underlying fund prospectuses from their investment professional or by writing to Nationwide Life Insurance Company, P.O. Box 182021, Columbus, Ohio 43218-2021. Carefully consider the fund's investment objectives, risks, charges and expenses. Prospectuses contain this and other important information. Read the prospectus carefully before investing.

Living benefit riders may not be available on all Nationwide variable annuities or in all states. Nationwide variable annuities are issued by Nationwide Life Insurance Company, Columbus, Ohio. The general distributor is Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation.

About Nationwide Financial

Nationwide Financial Services, Inc. (NYSE: NFS), a publicly traded company based in Columbus, Ohio, provides a variety of financial services that help consumers invest⁴ and protect their long-term assets, and offers retirement plans and services through both public- and private-sector employers.

It’s part of the Nationwide group of companies, which offers diversified insurance and financial services. The group is led by Nationwide Mutual Insurance Company, which is ranked No. 108 on the Fortune 500 based on 2007 revenue.⁵ For more information, visit www.nationwide.com.

Nationwide, the Nationwide framemark, On Your Side and The Nationwide Lifetime Income Rider are federally registered service marks of Nationwide Mutual Insurance Company. Capital Preservation Plus Lifetime Income is a federally registered service mark of Nationwide Life Insurance Company.

© 2008, Nationwide Financial Services, Inc. All rights reserved.

1 Certain restrictions in New York; please consult a prospectus for further details

2 Annuity Mortality Table, Society of Actuaries, 2000

3 Nationwide Retirement Income Confidence Survey, 2007

4 Nationwide Investment Services Corporation, member FINRA. In MI only: Nationwide Investment Svcs. Corporation.

5 Fortune Magazine, April 2008