HANCOCK JOHN VARIABLE ANNUITY ACCOUNT H, 485BPOS, 1997-12-23

HANCOCK JOHN VARIABLE ANNUITY ACCOUNT H
485BPOS, 1997-12-23

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As filed with the Securities and Exchange Commission on December __, 1997.

File No. 333-08345
811-07711
________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [_]

PRE-EFFECTIVE AMENDMENT NO. [_]
POST-EFFECTIVE AMENDMENT NO. 2 [X]

AND/OR

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [_]

POST-EFFECTIVE AMENDMENT NO. 2 [X]

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H
(EXACT NAME OF REGISTRANT)

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)

JOHN HANCOCK PLACE, BOSTON, MA 02117
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 572-9196

SANDRA M. DADALT, ESQUIRE
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE
BOSTON, MA 02117
(NAME AND ADDRESS OF AGENT FOR SERVICE)

It is proposed that this filing become effective (check appropriate box)

[_] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on January 2, 1998 pursuant to paragraph (b) of Rule 485
[_] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[_] on (date) pursuant to paragraph (a)(1) of Rule 485

If appropriate check the following box

[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment

Pursuant to Rule 24f-2, Registrant has registered an indefinite amount of
securities under the Securities Act of 1933. No Rule 24f-2 Notice of the
Registrant was filed for fiscal year 1996 as Registrant's operations did not
commence until January, 1997.
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
Form N-4 Item Prospectus Caption
- ------------- ------------------

<S> <C>
1. Cover Page................................... Cover Page

2. Definitions.................................. Special Terms; Variable Account
Valuation Procedures

3. Synopsis..................................... Synopsis of Expense Information;
Summary Information

4. Condensed Financial
Information................................. Not Applicable

5. General Description of
Registrant, Depositor and
Portfolio Companies......................... Cover Page; Summary Information; The
Company; The Separate Account; The Trust;
Voting Privileges

6. Deductions and Expenses...................... The Trust; The MVA Fixed Account;
Charges Under the Contracts;
Distribution of the Contracts

7. General Description of Variable
Annuity Contracts........................... The MVA Fixed Account; The
Contracts; The Accumulation Period;
The Annuity Period; Miscellaneous
Provisions; Changes in Applicable Law -
Funding and Otherwise

8. Annuity Period............................... The Annuity Period

9. Death Benefit................................ The Accumulation Period; The Annuity
Period

10. Purchases and Contract Values................ The Contracts; Variable Account
Valuation Procedures; Distribution of the
Contracts

11. Redemptions.................................. Charges Under the Contracts -
Contingent Deferred Sales Load; The
Accumulation Period - Surrender of
Contract, Partial Withdrawals;
Miscellaneous Provisions - Deferment of
Payment; Summary Information - 10 Day
Free-Look Provision

12. Taxes........................................ Federal Income Taxes

13. Legal Proceedings............................ Not Applicable

14. Table of Contents of Statement
of Additional Information................... Table of Contents of Statement of
Additional Information
</TABLE>
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
Statement of Additional
Form N-4 Item Information Caption
- ------------- -----------------------

<S> <C>
15. Cover Page......................... Cover Page

16. Table of Contents.................. Table of Contents

17. General Information and
History........................... Not Applicable

18. Services........................... Services Agreement

19. Purchase of Securities Being
Offered........................... Not Applicable

20. Underwriters....................... Not Applicable

21. Calculation of Performance
Data.............................. Calculation of Performance Data

22. Annuity Payments................... Calculation of Annuity Payments

23. Financial Statements............... Separate Account Financial Statements
</TABLE>

<PAGE>

JOHN HANCOCK MUTUAL
LIFE INSURANCE COMPANY

DEFERRED COMBINATION FIXED AND
VARIABLE ANNUITY CONTRACTS

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

PROSPECTUS

January 2, 1998

The deferred annuity contracts described in this prospectus may be funded by any
one or more of the fourteen subaccounts ("Subaccounts") of John Hancock Variable
Annuity Account H ("Separate Account"), and by the Market Value Adjustment Fixed
Account ("MVA Fixed Account"). The Separate Account is a separate investment
account of John Hancock Mutual Life Insurance Company ("Company"). The contracts
are issued as group or individual contracts. An individual's interest in a group
contract is evidenced by the issuance of a separate Certificate. In some states,
contracts are offered on an individual basis, with the issuance of an individual
contract. The Certificates and individual contracts are collectively referred to
herein as the "Contracts."

The Contracts are designed to provide retirement benefits under tax qualified
plans, as well as under non-qualified arrangements. All funds accumulate on a
tax-deferred basis under the Contracts. You may elect a variable return
investment option through the Separate Account or a guaranteed interest
investment option through the MVA Fixed Account, or a combination of these two
options.

Under the variable return investment option, you can choose among one or more of
the following Subaccounts of the Separate Account: V.A. International, V.A.
Financial Industries, V.A. Emerging Growth, V.A. Special Opportunities, V.A.
Growth, V.A. Growth and Income, V.A. Independence Equity, V.A. Sovereign
Investors, V.A. 500 Index, V.A. Sovereign Bond, V.A. Strategic Income, V.A. High
Yield Bond, V.A. World Bond, and V.A. Money Market. The assets of each
Subaccount will be invested in a corresponding series, or "Fund," of the John
Hancock Declaration Trust ("Trust"), a mutual fund advised by John Hancock
Advisers, Inc. ("Adviser"). The prospectus for the Trust accompanies this
prospectus, and describes the investment objectives, policies and risks of the
Trust.

Under the MVA Fixed Account guaranteed interest investment option, you can
choose among various available Guarantee Periods, each of which has its own
interest rate and expiration date. Amounts allocated to the MVA Fixed Account
are credited with interest at a fixed rate for the entire Guarantee Period. A
Market Value Adjustment, or "MVA," positive or negative, may be made upon
annuitization or any withdrawal, surrender or transfer prior to the last day of
any Guarantee Period. However, the amount of any MVA is subject to the
limitations described under "The MVA Fixed Account."
(continued on next page)

THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. IT IS NOT
VALID UNLESS ACCOMPANIED BY THE CURRENT PROSPECTUS FOR THE TRUST.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

INTERESTS IN THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED, OR GUARANTEED BY THE U.S. GOVERNMENT, ANY BANK, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, ENTITY OR
PERSON, AND INVOLVE INVESTMENT RISKS INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

(JOHN HANCOCK FUNDS LOGO) Printed on Recycled Paper.
VAMIP 1/98

<PAGE>

(continued from prior page)

Currently, the number of investment options that may be selected to fund the
Contracts is limited to 18.

This prospectus sets forth information about the Contracts that a prospective
investor ought to know before investing. A statement of additional information
("SAI") for the Separate Account, dated January 2, 1998, has been filed with the
Securities and Exchange Commission ("Commission") and is incorporated herein by
reference. The SAI, the table of contents of which appears at page 29 of this
prospectus, is available without charge upon written or oral request made to the
Company's Servicing Office at the address or telephone number below.

Servicing Office
John Hancock Servicing Center
P.O. Box 9298
Boston, Massachusetts 02205-9298

Telephone 800-824-0335

<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
----
<S> <C>

SPECIAL TERMS..................................................................................... 5
SYNOPSIS OF EXPENSE INFORMATION................................................................... 5
SUMMARY INFORMATION............................................................................... 7
SEPARATE ACCOUNT FINANCIAL INFORMATION............................................................ 9
THE COMPANY....................................................................................... 9
THE SEPARATE ACCOUNT.............................................................................. 10
THE TRUST......................................................................................... 11
THE MVA FIXED ACCOUNT............................................................................. 13
Guaranteed Rates/Guarantee Periods.............................................................. 13
Market Value Adjustment......................................................................... 13
MVA Gain and Loss Limitations................................................................... 14
Investments by the Company...................................................................... 14
CHARGES UNDER THE CONTRACTS....................................................................... 14
Charges For Mortality And Expense Risks......................................................... 14
Charges for Administrative Services............................................................. 14
Contingent Deferred Sales Load.................................................................. 15
Nursing Home Waiver of CDSL..................................................................... 16
Optional Death Benefit Charges.................................................................. 16
Variations in Charges........................................................................... 16
Premium or Similar Taxes........................................................................ 17
THE CONTRACTS..................................................................................... 17
Purchase of Contracts........................................................................... 17
Premium Payments by Wire........................................................................ 17
THE ACCUMULATION PERIOD........................................................................... 18
Allocation of Premium Payments.................................................................. 18
Value of Accumulation Units..................................................................... 18
Determination of MVA Fixed Account Value........................................................ 18
Transfers Among Subaccounts and Guarantee Periods............................................... 18
Dollar-Cost Averaging........................................................................... 19
Surrender of Contract; Partial Withdrawals...................................................... 19
Systematic Withdrawal........................................................................... 19
Standard Death Benefit.......................................................................... 20
Optional One Year Stepped-Up Death Benefit...................................................... 20
Optional Accidental Death Benefit............................................................... 20
Payment of Death Benefits....................................................................... 20
THE ANNUITY PERIOD................................................................................ 21
Variable Monthly Annuity Payments............................................................... 21
Fixed Monthly Annuity Payments.................................................................. 22
Annuity Options................................................................................. 22
Transfers....................................................................................... 22
Other Conditions................................................................................ 22
VARIABLE ACCOUNT VALUATION PROCEDURES............................................................. 23
MISCELLANEOUS PROVISIONS.......................................................................... 23
Restriction on Assignment....................................................................... 23
Deferment of Payment............................................................................ 23
Reservation of Rights........................................................................... 23
Owner and Beneficiary........................................................................... 24
FEDERAL INCOME TAXES.............................................................................. 24
The Separate Account, the MVA Fixed Account, and the Company.................................... 24
Contracts Purchased Other Than to Fund a Tax Qualified Plan..................................... 24
Diversification Requirements.................................................................... 25
Contracts Purchased to Fund a Tax Qualified Plan................................................ 25
SEPARATE ACCOUNT PERFORMANCE...................................................................... 26
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
----
<S> <C>

REPORTS........................................................................................... 27
VOTING PRIVILEGES................................................................................. 27
CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE.................................................. 27
DISTRIBUTION OF THE CONTRACTS..................................................................... 27
REGISTRATION STATEMENT............................................................................ 28
EXPERTS AND FINANCIAL STATEMENTS.................................................................. 28
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION ......................................... 29
APPENDIX A--SAMPLE MARKET VALUE ADJUSTMENT CALCULATIONS........................................... 30
APPENDIX B--VARIABLE ANNUITY INFORMATION FOR INDIVIDUAL RETIREMENT ANNUITIES...................... 32
</TABLE>

THE CONTRACTS OFFERED BY THIS PROSPECTUS MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE OR SOLICIT AN OFFER IN THAT STATE.

<PAGE>

SPECIAL TERMS

As used in this prospectus, the following terms have the indicated meanings:

ACCUMULATION PERIOD: the period referred to in the term "Accumulation Unit."

ACCUMULATION UNIT: a unit of measurement used in determining the value of an
Owner's interest in a Subaccount during the period prior to the commencement of
annuity payments or, if earlier, the surrender of the Contract. The value of an
Accumulation Unit will reflect the investment experience of the Subaccount and
vary in dollar amount.

ACCUMULATED VALUE: accumulated value of all Subaccounts and the MVA Fixed
Account Value under a Contract.

DATE OF MATURITY: the date elected by the Owner as of which annuity payments
will commence. The election is subject to certain conditions described in "The
Annuity Period." The Contract specifies a "Date of Maturity" as discussed under
"The Annuity Period."

ANNUITANT: the person designated in the Contract as such.

ANNUITY OPTION: the provisions under which a series of annuity payments is made
to the Annuitant or other payee, such as the Life Annuity with Ten Years
Certain.

ANNUITY UNIT: a unit of measurement used in determining the amount of any
variable annuity payment. The value of an Annuity Unit for each Subaccount will
depend upon the assumed investment rate and the investment experience of that
Subaccount, and will vary in dollar amount.

CONTRACT YEAR: the 12-month period following the date of issue of the Contract
and each 12-month period thereafter. In Certificates issued under group
Contracts, these periods are the "Certificate Year."

FIXED ANNUITY OPTION: an annuity option under which the Company promises to pay
the Annuitant, or any other payee designated by the Owner, fixed payments.

GENERAL ACCOUNT: comprises all assets of the Company other than those in the
Separate Account, and other than those in any other legally segregated separate
account established by the Company.

GUARANTEE PERIOD: the period for which a Guaranteed Rate is credited.

GUARANTEED RATE: the rate of interest credited during any Guarantee Period, on
an effective annual basis.

MARKET VALUE ADJUSTMENT: positive or negative adjustment, subject to limitation,
to MVA Fixed Account Value that is paid out at a time other than the last day of
a Guarantee Period.

MVA FIXED ACCOUNT VALUE: the amount of premium payments allocated or transferred
to Guarantee Periods, plus interest and any positive Market Value Adjustment,
less any withdrawals (including any contingent deferred sales load) and
deductions for fees, charges and any premium or similar taxes, and any negative
Market Value Adjustment.

OWNER: the person or entity, usually the one to whom the Contract is issued, who
has the sole right to exercise all rights and privileges under the Contract
except as otherwise provided in the Contract. As used in this prospectus, Owner
includes the "Participant" referred to in Certificates under Contracts issued on
a group basis.

SURRENDER VALUE: the amount that is payable upon a surrender of the Contract
prior to the Date of Maturity. Surrender Value is equal to the Accumulated Value
of a Contract after all applicable adjustments and deduction of all applicable
charges.

VARIABLE ANNUITY OPTION: an annuity option under which the Company makes to the
Annuitant, or any other payee designated by the Owner, payments which vary in
amount in accordance with the net investment experience of the Subaccounts
selected by the Owner. Not all of the Subaccounts are available under the
Contracts during the annuity period.

WE, US, OUR: mean the Company.

YOU, YOUR: mean the Owner.

SYNOPSIS OF EXPENSE
INFORMATION

The purpose of this synopsis is to provide an understanding of the various costs
and expenses that the Owner will bear directly or indirectly. The synopsis
includes expenses of the Separate Account and the Trust. For a more complete
description of the fees and charges applicable under the Contracts, see "Charges
Under the Contracts." The management fees charged the Funds and their annual
operating expenses are more fully described in the prospectus for the Trust.

CONTRACT OWNER TRANSACTION EXPENSES

CONTINGENT DEFERRED SALES LOAD (or "CDSL," as a percentage of premium payments
withdrawn in excess of the Free Withdrawal Value)(1)

<TABLE>
<CAPTION>
YEARS FROM DATE OF
PREMIUM PAYMENT TO CDSL
DATE OF SURRENDER OR WITHDRAWAL PERCENTAGE
- ---------------------------------------------------- ----------
<S> <C>
7 or more........................................... 0%
6 but less than 7................................... 2%
5 but less than 6................................... 3%
4 but less than 5................................... 4%
3 but less than 4................................... 5%
2 but less than 3................................... 5%
less than 2......................................... 6%
ANNUAL CONTRACT FEE(2).............................. $ 30
</TABLE>

- ---------------
(1) In any Contract Year an Owner may withdraw, without a CDSL, an amount equal
to 10% of the Accumulated Value as of the beginning of the Contract Year
less any prior withdrawals during the Contract Year. This is the "Free
Withdrawal Value."

(2) The annual Contract Fee is deducted on Contracts having an Accumulated Value
of less than $10,000. The Contract Fee is deducted at the beginning

<PAGE>

of each Contract Year after the first and at a full surrender during a
Contract Year. The Contract Fee is assessed only during the Accumulation
Period, and is referred to as the "Certificate Fee" in Certificates issued
under group Contracts. The Company reserves the right to increase the annual
Contract Fee up to $50, subject to applicable state regulations.

SEPARATE ACCOUNT ANNUAL EXPENSES

(as a percentage of Account Value)

<TABLE>
<CAPTION>
INITIAL PREMIUM
PAYMENT
----------------------
LESS THAN $250,000
$250,000 OR MORE
--------- --------
<S> <C> <C>
Mortality and Expense Risk Charge......... 0.90% 0.90%
Administration Charge..................... 0.35% 0.10%
---- ----
Total..................................... 1.25% 1.00%
==== ====
</TABLE>

TRUST ANNUAL EXPENSES

(as a percentage of average net assets)

<TABLE>
<CAPTION>
OTHER FUND
MANAGEMENT EXPENSES TOTAL FUND
FUND FEES AFTER LIMITATION(*) EXPENSES(*)
- ---------------------- ---------- ------------------- -----------
<S> <C> <C> <C>
V.A. International 0.90% 0.25% 1.15%
V.A. Financial
Industries 0.80% 0.25% 1.05%
V.A. Emerging Growth 0.75% 0.25% 1.00%
V.A. Special
Opportunities 0.75% 0.25% 1.00%
V.A. Growth 0.75% 0.25% 1.00%
V.A. Growth and Income 0.60% 0.25% 0.85%
V.A. Independence
Equity 0.70% 0.25% 0.95%
V.A. Sovereign
Investors 0.60% 0.25% 0.85%
V.A. 500 Index(*) 0.10% 0.25% 0.35%
V.A. Sovereign Bond 0.50% 0.25% 0.75%
V.A. Strategic Income 0.60% 0.25% 0.85%
V.A. High Yield Bond 0.60% 0.25% 0.85%
V.A. World Bond 0.75% 0.25% 1.00%
V.A. Money Market 0.50% 0.25% 0.75%
</TABLE>

- ---------------
(*) Other Fund expenses are based on expenses for the past fiscal year except
for V.A. Financial Industries, V.A. Special Opportunities, V.A. Growth and
Income, and V.A. High Yield Bond Fund which were not in existence during the
year. The Advisers agreed to limit temporarily other expenses of each Fund
to 0.25% of the Fund's average daily net assets, and management fee of V.A.
500 Index to 0.10% of the Fund's average daily net assets.

Without these limitations, other expenses for V.A. International, V.A.
Emerging Growth, V.A. Growth, V.A. Independence Equity, V.A. Sovereign
Investors, V.A. 500 Index, V.A. Sovereign Bond, V.A. Strategic Income, V.A.
World Bond and V.A. Money Market would be 2.23%, 4.44%, 4.01%, 3.53%, 3.18%,
0.96%, 3.65%, 1.68%, 2.44% and 26.98%, respectively, and management fee for
V.A. 500 Index Fund would be 0.35%. As a result, total fund operating
expenses without these limitations for V.A. International, V.A. Emerging
Growth, V.A. Growth, V.A. Independence Equity, V.A. Sovereign Investors,
V.A. 500 Index, V.A. Sovereign Bond, V.A. Strategic Income, V.A. World Bond
and V.A. Money Market would be 3.13%, 5.19%, 4.76%, 4.23%, 3.78%, 1.31%,
4.15%, 2.28%, 3.19% and 27.48%, respectively. Other Fund expenses and total
Fund expenses as a percentage of average net assets are expected to decrease
as the net assets of the Funds grow.

EXAMPLES

If you surrender your Contract at the end of the applicable time period, you
would pay the following current expenses on a $1,000 investment allocated to one
of the Subaccounts listed, assuming 5% annual return on assets:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
V.A. International............................ 79 121
V.A. Financial Industries..................... 78 118
V.A. Emerging Growth.......................... 77 117
V.A. Special Opportunities.................... 77 117
V.A. Growth................................... 77 117
V.A. Growth and Income........................ 76 112
V.A. Independence Equity...................... 77 115
V.A. Sovereign Investors...................... 76 112
V.A. 500 Index................................ 71 97
V.A. Sovereign Bond........................... 75 109
V.A. Strategic Income......................... 76 112
V.A. High Yield Bond.......................... 76 112
V.A. World Bond............................... 77 117
V.A. Money Market............................. 75 109
</TABLE>

If you annuitize at the end of the applicable time period, or if you do not
surrender your Contract, you would pay the following current expenses on a
$1,000 investment allocated to one of the Subaccounts listed, assuming 5% annual
return on assets:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
V.A. International............................ 25 77
V.A. Financial Industries..................... 24 74
V.A. Emerging Growth.......................... 23 72
V.A. Special Opportunities.................... 23 72
V.A. Growth................................... 23 72
V.A. Growth and Income........................ 22 68
V.A. Independence Equity...................... 23 71
V.A. Sovereign Investors...................... 22 68
V.A. 500 Index................................ 17 52
V.A. Sovereign Bond........................... 21 65
V.A. Strategic Income......................... 22 68
V.A. High Yield Bond.......................... 22 68
V.A. World Bond............................... 23 72
V.A. Money Market............................. 21 65
</TABLE>

The annual Contract Fee reflected in the examples has been expressed as an
annual percentage of assets based on the Company's experience with other
variable annuity contracts using the same contract fee provision.

The examples do not give effect to any premium taxes that may be applicable, or
to any of the charges described under "Optional Benefit Riders," below. The
examples should not be considered representations of past or future expenses;
actual expenses may be greater than or less than those shown above.

OPTIONAL BENEFIT RIDERS

The Company offers, subject to state availability, three optional benefit riders
that may be elected by the Owner. A separate monthly charge is made for each
rider selected. The charge, as applicable, is made pro rata based on relative
values through a reduction in Accumulation Units of the Subaccounts and dollar
amounts in the Guarantee Periods under a Contract.

The applicable charge is equal to the Accumulated Value at the beginning of each
month multiplied by 1/12th of the following annual percentage rates. With
respect to the Nursing Home

<PAGE>

Waiver of CDSL Rider, the applicable charge will be assessed only upon the
Accumulated Value associated with premium payments upon which a CDSL would
continue to be applicable at the time the charge is assessed.

<TABLE>
<S> <C>
ONE YEAR STEPPED-UP DEATH BENEFIT RIDER................... 0.15%
ACCIDENTAL DEATH BENEFIT RIDER (terminates at age 80)..... 0.10%
NURSING HOME WAIVER OF CDSL RIDER......................... 0.05%
</TABLE>

For a description of these riders, see "One Year Stepped-Up Death Benefit Rider"
and "Accidental Death Benefit Rider" under "The Accumulation Period," and
"Nursing Home Waiver of CDSL Rider" under "Charges Under the Contracts."

MARKET VALUE ADJUSTMENT AND CHARGES
APPLICABLE TO THE MVA FIXED ACCOUNT

Except when effected on the last day of a Guarantee Period, surrenders,
transfers or partial withdrawals from the MVA Fixed Account, including amounts
withdrawn to provide an annuity or death benefit, are subject to a Market Value
Adjustment that may increase or reduce the amount of MVA Fixed Account Value
paid out by the Company. The Market Value Adjustment is computed pursuant to a
formula that includes upward and downward limitations, as described under "The
MVA Fixed Account-Market Value Adjustment." Of the expenses summarized above,
only the "Contingent Deferred Sales Load," "Annual Contract Fee," and "Optional
Benefit Riders" charges are applicable to the MVA Fixed Account.

SUMMARY INFORMATION

The Contracts are designed for purchase by individuals doing their own
retirement planning, including plans and trusts
that do not qualify for special tax treatment under the Internal Revenue Code of
1986, as amended ("Code"), and for purchase in connection with (1) pension and
profit-sharing plans qualified under Section 401(c) of the Code, known as "H.R.
10 plans," (2) pension or profit-sharing plans qualified under Sections 401(a)
or 403(a) of the Code, known as
"corporate plans," (3) plans qualifying under Section 401(k) of the Code, (4)
annuity purchase plans adopted under the provisions of Section 403(b) of the
Code by public school systems and certain other tax-exempt organizations, and
(5) individual retirement annuity plans satisfying the requirements of Section
408 of the Code. For additional information pertaining to the purchase of a
Contract as an Individual Retirement Annuity, see "Appendix B--Variable Annuity
Information for Individual Retirement Annuities."

The John Hancock Servicing Center (the "Servicing Center") handles various
administrative, processing, servicing and similar functions related to the
Contracts. The Servicing Center may be reached at the address and telephone
number shown on the second page of this prospectus.

In order to accommodate "employer-related" plans funded by the Contracts,
Contract forms using "unisex" purchase rates, i.e., rates the same for males and
females, are available. Any questions you have as to whether you are
participating in an employer-related plan should be directed to your employer.
Any other question you or your employer may have with respect to this topic can
be directed to the Servicing Center.

THE CONTRACTS

The Contracts offered are "flexible premium" deferred annuity Contracts under
which premium payments may be made in a single sum or at intervals until the
Date of Maturity. At that time annuity payments by the Company will commence
unless the Owner elects to surrender the Contract, in which case, the Surrender
Value will be paid.

An application for a Contract is available from broker-dealers and certain
financial institutions who are participating in the distribution of the
Contracts. Applications are also available directly from the Company by
contacting the Servicing Center. Upon completion, the application is
transmitted, along with the premium payment, to the Servicing Center for
processing. See "The Contracts."

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

The Separate Account is a separate investment account of the Company. It is
operated as a unit investment trust and supports the variable benefits payable
under the Contracts. There are currently fourteen Subaccounts within the
Separate Account: V.A. International, V.A. Financial Industries, V.A. Emerging
Growth, V.A. Special Opportunities, V.A. Growth, V.A. Growth and Income, V.A.
Independence Equity, V.A. Sovereign Investors, V.A. 500 Index, V.A. Sovereign
Bond, V.A. Strategic Income, V.A. High Yield Bond, V.A. World Bond, and V.A.
Money Market. Each Subaccount invests in a corresponding Fund of the Trust. The
Trust is a "series" type mutual fund.

Each Fund has a different investment objective. The Adviser provides investment
management services to the Funds for which it receives a fee from the Trust. The
Adviser utilizes sub-advisers for three of the Funds. John Hancock Advisers
International Limited ("JHAI") provides sub-investment management services for
the V.A. International Fund; Independence Investment Associates, Inc. ("IIA")
provides sub-advisory services for the V.A. Independence Equity Fund; and
Sovereign Asset Management Corporation ("SAMCO") provides sub-advisory services
for the V.A. Sovereign Investors Fund. JHAI, IIA, and SAMCO (the "Sub-advisers")
are indirect, wholly owned subsidiaries of the Company. Each Sub-adviser
receives a fee from the Adviser for these services which in no way increases the
costs borne by the Trust, the Account, or the Owners.

For a more detailed description of the Trust, see its prospectus which
accompanies this prospectus.

MVA FIXED ACCOUNT INVESTMENT OPTIONS

Any amount allocated by the Owner to the MVA Fixed Account earns interest at a
Guaranteed Rate. The level of the Guaranteed Rate depends on the length of the
Guarantee Period selected by

<PAGE>

the Owner. We currently make available various Guarantee Periods with durations
of up to ten years.

If amounts are transferred, surrendered or otherwise paid out at any time other
than the last day of the applicable Guarantee Period, a Market Value Adjustment
will be applied that will increase or decrease the amount of MVA Fixed Account
Value paid out. Accordingly, the Market Value Adjustment can result in gains or
losses which are subject to limitations as described under the "MVA Fixed
Account."

For a more complete discussion of the MVA Fixed Account investment options and
Market Value Adjustment, see "The MVA Fixed Account."

PRINCIPAL UNDERWRITER AND DISTRIBUTOR

John Hancock Funds, Inc. ("JHFI"), a registered broker-dealer affiliate of the
Company, acts as principal underwriter of the Account and principal distributor
of the Contracts. The Contracts are offered through broker-dealers and financial
institutions.

INVESTMENT OF PREMIUM PAYMENTS

Premium payments received under Contracts, after deduction of any premium or
similar taxes, are allocated to one or more of the Subaccounts and/or one or
more of the Guarantee Periods in the MVA Fixed Account, as directed by the
Owner.

Premium payments may be mailed to John Hancock Servicing Center, P.O. Box 9298,
Boston, Massachusetts 02205-9298. All checks or other money orders should be
made payable to John Hancock. Procedures also have been established for the
receipt of premium payments by wire order. See "Payments by Wire" under "The
Contracts."

MINIMUM AND MAXIMUM PREMIUM PAYMENTS

Each premium payment must be at least $500. The total premium payments may not
exceed $1,000,000 in any Contract Year, without our prior approval. No premium
payments may be made within six months prior to the Annuitant's 95th birthday or
thereafter. These limits may be waived by the Company.

ACCOUNT CHARGES

Charges made directly to the Account include daily charges aggregating 0.90%
annually for mortality and expense risks, and daily charges at the annual rate
of 0.35% and 0.10% under Contracts with initial premium payments of less than
$250,000 and $250,000 or more, respectively. These charges are based on the
average daily net asset value of each Subaccount, and reduce the unit values of
the Subaccounts.

FUND CHARGES

Management fees at annual rates ranging from 0.10% to 0.90% of average daily net
assets are paid by the Funds to the Adviser. The Funds also incur charges for
other expenses incurred in their operations. Management fees and other expenses
are reflected in the net asset value of each Fund's shares.

WITHDRAWAL CHARGES

A withdrawal charge, or contingent deferred sales load (the CDSL), if
applicable, is deducted from the amount of any premium payment withdrawn from
the Accumulated Value under a Contract, including any partial withdrawal or any
full withdrawal upon a surrender of the Contract. The charge is 6% for
withdrawals made in the first two years from the date we receive a premium
payment, and decreases decrementally to zero in the seventh year. The charge
does not apply to any premium payments withdrawn after seven years from the date
we receive the payments. In any Contract Year, up to 10% of the Accumulated
Value as of the beginning of the Contract Year, less any prior withdrawals
during the Contract Year, may be withdrawn without a CDSL. The CDSL also does
not apply to a withdrawal made to provide an annuity or a death benefit or, if
necessary, to meet minimum distribution requirements under qualified plans, or
under the waiver described in the next paragraph.

NURSING HOME WAIVER OF CDSL CHARGE

Subject to state availability, an optional "Nursing Home Waiver of CDSL" rider
may be elected at the time the Owner applies for a Contract. Under this benefit,
the CDSL, if otherwise applicable, will be waived on any withdrawals if
beginning at least 90 days after the date of issue, the Owner becomes confined
to a long term care facility ("LTCF") for at least 90 consecutive days, subject
to certain conditions. At the beginning of each month, we make a charge for this
rider equal to 1/12th of 0.05% (annual percentage rate) of the Accumulated Value
associated with premium payments upon which a CDSL would continue to be
applicable at the time the charge is assessed. The benefit is not available for
applicants over age 75.

CONTRACT FEE AND CERTAIN OTHER CHARGES

An annual Contract Fee of $30 is deducted during the Accumulation Period under
Contracts having an Accumulated Value of less than $10,000. The Company reserves
the right to increase the Contract Fee up to $50, subject to applicable state
regulations. No Contract Fee will be deducted if the Accumulated Value is
$10,000 or more. Charges also may be made for any taxes or interest expenses
attributable to the Contracts or the Account.

Deductions are also made for any applicable premium or similar taxes based on
the amount of a premium payment. Currently, such taxes in certain states are up
to 5% of each premium payment. In addition, separate monthly charges are made
for the optional death benefit riders described under "Death Benefits" below.

A more detailed description of all fees and charges applicable under the
Contracts appears under "Charges Under the Contracts." Fees and charges of the
Trust are described in its prospectus which is attached to this prospectus.

<PAGE>

WITHDRAWAL PRIOR TO DATE OF MATURITY

At any time before annuity payments begin, if the Annuitant is living, a
Contract may be surrendered in full for its Surrender Value or a portion of the
Accumulated Value may be withdrawn, subject to applicable charges and certain
limits. See "Surrender of Contract; Partial Withdrawals" under "The Contracts."
A 10% tax penalty may be applicable to withdrawals before the Owner attains age
59 1/2. A Market Value Adjustment may also be applied. See "The MVA Fixed
Account."

SYSTEMATIC WITHDRAWAL

The Accumulated Value of a Contract may be systematically withdrawn on a
monthly, quarterly, semiannual or annual basis, as elected by the Owner.
Systematic withdrawals in any Contract Year in excess of 10% of the Accumulated
Value as of the beginning of the Contract Year may be subject to a CDSL. See
"Contingent Deferred Sales Load" under "Charges Under the Contracts." A minimum
Accumulated Value of $15,000 is required to start the program and certain other
conditions apply. See "Systematic Withdrawal" under "The Accumulation Period."

DOLLAR COST AVERAGING

The Owner may elect to have amounts automatically transferred from the Money
Market Subaccount into one or more of the other Subaccounts of the Account.
Transfers of $250 or more may be made monthly, quarterly, semiannually or
annually. A minimum Accumulated Value of $15,000 is required to start the
program. See "Dollar Cost Averaging" under "The Accumulation Period."

STANDARD DEATH BENEFIT

The Contracts include a standard death benefit payable upon the death of the
Annuitant prior to the Date of Maturity. The beneficiary will receive the
greater of (a) the Accumulated Value, adjusted by any Market Value Adjustment,
and (b) the aggregate amount of the premium payments made under the Contract,
less any prior withdrawals and CDSLs applied to such partial withdrawals.

OPTIONAL ONE YEAR STEPPED-UP DEATH BENEFIT

At the time a Contract is applied for, the Owner may elect a one year stepped-up
death benefit rider designed to enhance the death benefit payable to the
beneficiary. Under this rider the benefit payable will be the greater of (a) the
standard death benefit, and (b) the highest Accumulated Value, adjusted by a
Market Value Adjustment, of the Contract as of any Contract anniversary
preceding the date of receipt of due proof of death together with any required
settlement instructions and preceding the Contract anniversary nearest the
Annuitant's 81st birthday, plus any premium payments, less any withdrawals and
CDSLs, since such Contract anniversary. See "Optional One Year Stepped-Up Death
Benefit" under "The Accumulation Period." At the beginning of each month, we
make a charge for this rider equal to 1/12th of 0.15% (annual percentage rate)
of the Accumulated Value of the Contract at that time. This one year stepped-up
death benefit is not available for applicants over age 79.

OPTIONAL ACCIDENTAL DEATH BENEFIT

Subject to state availability, at the option of the Owner, an accidental death
benefit rider may be elected. Under this rider, upon the accidental death of the
Annuitant prior to the earlier of the Date of Maturity or the Annuitant's 80th
birthday, the beneficiary will receive, in addition to any other death benefit,
an amount equal to the Accumulated Value of the Contract, as of the date of the
accident, upon receipt of due proof of the Annuitant's death together with any
required instructions as to method of settlement, up to a maximum of $200,000.
The benefit only may be elected at the time the Contract is applied for, and is
not available to applicants over age 79. At the beginning of each month, we make
a charge for this rider equal to 1/12th of 0.10% (annual percentage rate) of the
Accumulated Value of the Contract at that time.

10 DAY FREE-LOOK PROVISION

An Owner may return an individual Contract for any reason within 10 days after
its receipt and receive in cash the Accumulated Value, adjusted by any Market
Value Adjustment, plus any deductions previously made from premium payments for
premium or similar taxes. Owners returning individual Contracts issued in Idaho,
Nebraska, North Carolina, Oklahoma, South Carolina, Washington, West Virginia,
and Utah, and all individual Contracts issued under an individual retirement
account, will receive gross premium payments made. If the individual Contract is
issued in California to an Owner 60 years of age or older, the Owner may return
the individual Contract within 30 days after its receipt, and, in that event,
the gross premium payments made will be refunded to the Owner.

In most states, the rights to return Contracts described in the preceding
paragraph apply only to Contracts issued in individual form. In some states,
however, such rights may also apply to certificates under Contracts issued in
group form.

SEPARATE ACCOUNT FINANCIAL INFORMATION

The Separate Account had not yet commenced operations as of December 31, 1996,
and therefore had no assets or liabilities as of such date. Accordingly, neither
this prospectus nor the SAI contains any financial statements for the Separate
Account.

THE COMPANY

The Company is a mutual life insurance company organized under the laws of the
Commonwealth of Massachusetts in 1862. The Company's Home Office is located at
200 Clarendon Street, Boston, Massachusetts 02117.

The Company is a major financial services company with more than $80 billion of
assets under management.

<PAGE>

THE SEPARATE ACCOUNT

The Separate Account is a separate account of the Company established under
Massachusetts law on April 8, 1996. The Separate Account, although an integral
part of the Company, meets the definition of a "separate account" under the
Federal Securities Laws and is registered as a unit investment trust under the
Investment Company Act of 1940, as amended ("1940 Act").

The Separate Account's assets are the property of the Company and the
obligations under the Contracts are the obligations of the Company. Each
Contract provides that the portion of the Separate Account's assets equal to the
reserves and other liabilities under the Contract with respect to the Separate
Account shall not be chargeable with liabilities arising out of any other
business the Company may conduct. In addition to the net assets and other
liabilities for Contracts, the Separate Account's assets include assets derived
from charges made by the Company and, possibly, funds contributed by the Company
to commence operation of the Subaccounts. From time to time these additional
assets may be transferred in cash by the Company to its general account. Before
making any such transfer, the Company will consider any possible adverse impact
the transfer might have on any Subaccount.

Income, gains and losses, whether or not realized, from assets allocated to the
Separate Account are, in accordance with the Contracts, credited to or charged
against the Separate Account without regard to other income, gains or losses of
the Company.

There currently are fourteen Subaccounts in the Separate Account: the V.A.
International, V.A. Financial Industries, V.A. Emerging Growth, V.A. Special
Opportunities, V.A. Growth, V.A. Growth and Income, V.A. Independence Equity,
V.A. Sovereign Investors, V.A. 500 Index, V.A. Sovereign Bond, V.A. Strategic
Income, V.A. High Yield Bond, V.A. World Bond and V.A. Money Market Subaccounts.
The assets in each Subaccount are invested in shares of a corresponding Fund of
the Trust. The assets of one Subaccount are not necessarily legally insulated
from liabilities associated with another Subaccount. New subaccounts may be
added and made available to Owners.

<PAGE>

THE TRUST

The Trust is a "series" type of mutual fund that is registered under the 1940
Act as an open-end diversified management investment company and organized as a
Massachusetts business trust. The Trust serves as an investment medium for the
Account and for the John Hancock Variable Annuity Account JF established by the
John Hancock Variable Life Insurance Company ("JHVLICO"). In the future, other
unit investment trust separate accounts established by the Company, JHVLICO, and
other unaffiliated life insurance companies for variable life insurance policies
and variable annuity contracts may also invest in the Trust. A full description
of the Trust, its investment objectives, policies and restrictions, its charges
and expenses, and all other aspects of its operation is contained in its
attached prospectus (which should be read carefully before investing) and the
SAI referred to therein, which should be read together with this prospectus.
Among other items, the description of the need to monitor events on the part of
the Trust's Board of Trustees for possible conflicts between separate accounts
and other consequences should be noted.

The following is a brief summary of the investment objectives of each Fund of
the Trust.

JOHN HANCOCK V.A. INTERNATIONAL FUND seeks long-term growth of capital. The Fund
invests primarily in equity securities of foreign companies and governments.

JOHN HANCOCK V.A. FINANCIAL INDUSTRIES FUND seeks capital appreciation primarily
through investments in equity securities of financial services companies
throughout the world.

JOHN HANCOCK V.A. EMERGING GROWTH FUND seeks long-term growth of capital. The
potential for growth of capital is the sole basis for selection of portfolio
securities. Current income is not a factor in this selection.

JOHN HANCOCK V.A. SPECIAL OPPORTUNITIES FUND seeks long-term capital
appreciation. The Fund invests primarily in equity securities of domestic and
foreign issuers in various economic sectors, selected according to both
macroeconomic factors and the outlook for each sector.

JOHN HANCOCK V.A. GROWTH FUND (formerly, John Hancock V.A. Discovery Fund) seeks
long-term capital appreciation. The Fund invests principally in common stocks
(and in securities convertible into or with rights to purchase common stocks) of
companies which the Fund's management believes offer outstanding growth
potential over both the intermediate and long term.

JOHN HANCOCK V.A. GROWTH AND INCOME FUND seeks the highest total return (capital
appreciation plus current income) that is consistent with reasonable safety of
capital.

JOHN HANCOCK V.A. INDEPENDENCE EQUITY FUND seeks above-average total return,
consisting of capital appreciation and income. The Fund will diversify its
investments to create a portfolio focused on stocks of companies that management
believes are undervalued and have improving fundamentals over both the
intermediate and long term.

JOHN HANCOCK V.A. SOVEREIGN INVESTORS FUND seeks long-term growth of capital and
income without assuming undue market risks. At times, however, because of market
conditions, the Fund may find it advantageous to invest primarily for current
income. The Fund invests primarily in common stocks of seasoned companies in
sound financial condition with a long record of paying increasing dividends.

JOHN HANCOCK V.A. 500 INDEX FUND seeks to provide investment results that
correspond to the total return performance of the Standard & Poor's 500 Stock
Price Index ("S&P 500 Index"). The 500 Index Fund normally invests at least 80%
of the Fund's assets in common stocks of companies that comprise the S&P 500
Index in approximately the same proportions as they are represented in the
Index. (Requisite disclosure regarding use of the Standard & Poor's name is
included in the Trust's prospectus, attached hereto.)

JOHN HANCOCK V.A. SOVEREIGN BOND FUND seeks a high level of current income
consistent with prudent investment risk. The Fund invests primarily in a
diversified portfolio of investment grade fixed income securities of U.S. and
foreign issuers, although the Fund may invest up to 25% of its total assets in
lower-rated high-yield, high-risk fixed income securities.

JOHN HANCOCK V.A. STRATEGIC INCOME FUND seeks a high level of current income.
The Fund invests primarily in foreign government and corporate fixed income
securities, U.S. Government securities and lower-rated high-yield, high-risk
fixed income securities of U.S. issuers.

JOHN HANCOCK V.A. HIGH YIELD BOND FUND seeks to maximize current income without
assuming undue risk. The Fund invests primarily in junk bonds, i.e.,
lower-rated, high-yielding debt securities. The Fund also seeks capital
appreciation, but only when consistent with its primary goal.

JOHN HANCOCK V.A. WORLD BOND FUND seeks competitive total investment return,
consisting of current income and capital appreciation. The Fund invests
primarily in a global portfolio of high-grade, fixed income securities.

<PAGE>

JOHN HANCOCK V.A. MONEY MARKET FUND seeks maximum current income consistent with
capital preservation and liquidity. The Fund invests only in high-quality money
market instruments.
------------------------

Prospective investors should carefully read the risk disclosures contained in
the Trust prospectus with regard to the investment risks of the high-yield,
high-risk fixed income securities invested in by the John Hancock V.A. Financial
Industries Fund, the John Hancock V.A. Growth and Income Fund, the John Hancock
V.A. Sovereign Investors Fund, the John Hancock V.A. World Bond Fund, the John
Hancock V.A. Sovereign Bond Fund, the John Hancock V.A. High Yield Bond Fund,
and the John Hancock V.A. Strategic Income Fund.

The Company will purchase and redeem shares of the Trust for the Separate
Account at their net asset value without any sales or redemption charges. The
shares of the Trust represent an interest in the Funds that correspond to the
Subaccounts of the Separate Account. Any dividend or capital gains distributions
received by the Separate Account will be reinvested in shares of the respective
Funds at their net asset value as of the dates paid. Any such distribution will
result in a reduction in the value of the shares of the Fund from which the
distribution was made. However, the total net asset value of the Separate
Account, or of any Fund, will not change because of such distribution.

On each Valuation Date, shares of each Fund are purchased or redeemed by the
Company for each Subaccount based on, among other things, the amount of net
premium payments allocated to the Subaccount, dividends and distributions
reinvested, transfers to, from and among Subaccounts, all to be effected as of
that date. Such purchases and redemptions are effected at the net asset value
per share for each Fund determined on that same Valuation Date. See "Valuation
Date" under "Variable Account Valuation Procedures."

<PAGE>

THE MVA FIXED ACCOUNT

The MVA Fixed Account is a "nonunitized" separate account established by the
Company. A nonunitized separate account is a separate account in which the
Contract Owner has no claim on, or participation in the performance of, the
assets held in the account. Investments purchased with amounts allocated to the
MVA Fixed Account are the property of the Company, and any favorable investment
performance on the assets held in the MVA Fixed Account accrues solely to the
Company's benefit. All benefits relating to the Accumulated Value of amounts
allocated to the MVA Fixed Account are guaranteed by the Company to the extent
provided under the Contracts.

GUARANTEED RATES/GUARANTEE PERIODS

Amounts allocated by the Owner to the MVA Fixed Account earn interest at a
Guaranteed Rate commencing with the date of allocation. The Guaranteed Rate
continues for a number of years, i.e., the Guarantee Period, selected by the
Owner. At the end of the Guarantee Period, the Accumulated Value in that
Guarantee Period, including interest accrued thereon, will be automatically
transferred to the Money Market Subaccount unless the Owner elects to: (a)
withdraw such Accumulated Value from the Contract, (b) allocate all or a portion
of the Accumulated Value to a new Guarantee Period of the same duration as the
expiring Guarantee Period, or (c) allocate all or a portion of the Accumulated
Value to a different Guarantee Period or periods or to one or more of the
Subaccounts. The Company must be notified of any election by the Owner at the
Servicing Center's office in a form satisfactory to it within 30 days prior to
the end of the expiring Guarantee Period. The first day of any new Guarantee
Period or other reallocation will be the day after the end of the prior
Guarantee Period. The Company will notify the Owner at least 30 days prior to
the end of any Guarantee Period. A Guarantee Period will not be available if it
extends beyond the Date of Maturity.

The Company currently makes available Guarantee Periods of various durations. At
any time, the Guarantee Periods may be one year and multiple year periods of up
to ten years. The Company reserves the right to add or delete Guarantee Periods
from those that are available at any time for new allocations. Each Guarantee
Period has its own Guaranteed Rate, which may differ from those for other
Guarantee Periods. We may, at our discretion, change the Guaranteed Rate for
future Guarantee Periods. These changes will not affect the Guaranteed Rates
being paid on Guarantee Periods that have already commenced. Each allocation or
transfer of an amount to a Guarantee Period commences the running of a new
Guarantee Period with respect to that amount, which will earn a Guaranteed Rate
that will continue unchanged until the end of that period. With respect to all
Contracts issued on an individual basis, and to Contracts issued on a group
basis where required under state law, the Company will not make available any
Guarantee Period offering a Guaranteed Rate below 3%.

The Company declares the Guaranteed Rates from time to time as market conditions
and other factors dictate. The Company advises an Owner of the Guaranteed Rate
for a chosen Guarantee Period at the time a premium payment is received, a
transfer is effectuated or a Guarantee Period is renewed.

The Company has no specific formula for establishing the Guaranteed Rates for
the Guarantee Periods. The rates may be influenced by, but not necessarily
correspond to, interest rates generally available on the types of investments
acquired with amounts allocated to the Guarantee Period. See "Investments by the
Company," below. The Company, in determining Guaranteed Rates, may also
consider, among other factors, the duration of a Guarantee Period, regulatory
and tax requirements, sales and administrative expenses borne by the Company,
risks assumed by the Company, the Company's profitability objectives, and
general economic trends.

THE COMPANY'S MANAGEMENT MAKES THE FINAL DETERMINATION OF THE GUARANTEED RATES
TO BE DECLARED. THE COMPANY CANNOT PREDICT OR ASSURE THE LEVEL OF ANY FUTURE
GUARANTEED RATES.

Information concerning the Guaranteed Rates applicable to the various Guarantee
Periods, and the durations of the Guarantee Periods offered, at any time may be
obtained from the Company by calling the Servicing Center at the telephone
number indicated on the cover page of this prospectus.

MARKET VALUE ADJUSTMENT

If any MVA Fixed Account Value is withdrawn, transferred or otherwise paid out
before the end of the Guarantee Period in which it is being held, a Market Value
Adjustment will be applied. This generally includes amounts that are paid out as
death benefits pursuant to the Contract, amounts applied to an annuity option,
and amounts paid as a single sum in lieu of an annuity. No Market Value
Adjustment will be applied to amounts that are paid out on the last day of a
Guarantee Period.

The Market Value Adjustment may increase or decrease the amount of MVA Fixed
Account Value being withdrawn, transferred or otherwise paid out. The comparison
of two Guaranteed Rates determines whether the Market Value Adjustment produces
an increase or a decrease. The first rate to compare is the Guaranteed Rate for
the existing Guarantee Period from which amounts are being transferred or
withdrawn. The second rate is the Guaranteed Rate then being offered for new
Guarantee Periods of the same duration as that remaining in the existing
Guarantee Period. If the first rate exceeds the second by more than 1/2%, the
Market Value Adjustment produces an increase. If the first rate does not exceed
the second by at least 1/2%, the Market Value Adjustment produces a decrease.
Sample calculations are shown in Appendix A.

The Market Value Adjustment will be determined by multiplying the amount being
withdrawn or transferred from the Guarantee

<PAGE>

Period (before deduction of any applicable CDSL) by the following factor:

where,

- - G is the Guaranteed Rate in effect for the current Guarantee Period (in
decimal form).

- - C is the current Guaranteed Rate (in decimal form) in effect for new Guarantee
Periods with durations equal to the number of years remaining in the current
Guarantee Period (rounded up to the nearest whole number of years). If not
available, the Company will declare a Guaranteed Rate solely for this purpose
that is consistent with interest rates for Guarantee Periods that are
currently available.

- - N is the number of complete months from the date of withdrawal to the end of
the current Guarantee Period. (Where less than one complete month remains, n
will equal one unless the withdrawal is made on the last day of the Guarantee
Period, in which case no adjustment will apply.)

MVA GAIN AND LOSS LIMITATIONS

In no event will the Market Value Adjustment exceed, in a positive or negative
direction, the amount of any excess interest earned during a Guarantee Period up
to the point of withdrawal or surrender. Excess interest means the dollar amount
of interest earned on the amount being withdrawn or transferred since the
beginning of the Guarantee Period in excess of the amount of interest that would
have been earned had the effective annual interest rate been 3%. See Appendix A.

INVESTMENTS BY THE COMPANY

The Company's obligations with respect to the MVA Fixed Account are supported by
its General Account assets, which also support other general obligations
incurred by the Company. Subject to applicable law, the Company has sole
discretion over the investment of assets in the MVA Fixed Account and the
General Account, and neither account is subject to registration under the 1940
Act.

Amounts in the Company's General Account and the MVA Fixed Account will be
invested in compliance with applicable state insurance laws and regulations
concerning the nature and quality of investments for the General Account.

The Company intends to consider the return available on the instruments in which
it intends to invest amounts allocated to the MVA Fixed Account when it
establishes Guaranteed Rates. Such return is only one of the factors considered
in establishing the Guaranteed Rates. See "Guaranteed Rates/Guarantee Periods,"
above.

The Company expects that amounts allocated to the MVA Fixed Account will be
invested according to its detailed investment policy and guidelines, in fixed
income obligations, including corporate bonds, mortgages, mortgage-backed and
asset-backed securities and government and agency issues having durations in the
aggregate consistent with those of the Guarantee Periods. The Company intends to
invest proceeds from the Contracts attributable to the MVA Fixed Account
primarily in domestic investment-grade securities. In addition, derivative
contracts will be used only for hedging purposes, to reduce the ordinary
business risk of the Contracts associated with changes in interest rates, and
not for speculating on future changes in the financial markets. Notwithstanding
the foregoing, the Company is not obligated to invest amounts allocated to the
MVA Fixed Account according to any particular strategy.

Because of exemptive and exclusionary provisions, interests in the MVA Fixed
Account have not been registered under the Securities Act of 1933 and the MVA
Fixed Account has not been registered under the Investment Company Act of 1940.
Accordingly, neither the MVA Fixed Account nor any interests therein are subject
to the provisions of these Acts, and the Company has been advised that the staff
of the Commission has not reviewed the disclosure in this Prospectus relating to
the MVA Fixed Account. Disclosure regarding the MVA Fixed Account may, however,
be subject to certain generally-applicable provisions of the Federal securities
laws relating to accuracy and completeness of statements made in prospectuses.

CHARGES UNDER THE
CONTRACTS

CHARGES FOR MORTALITY AND EXPENSE RISKS

While variable annuity payments to Annuitants will vary in accordance with the
investment performance of the Separate Account, the amount of such payments will
not be decreased because of adverse mortality experience of Annuitants as a
class or because of an increase in actual expenses of the Company over the
expense charges provided for in the Contracts. The Company assumes the risk that
Annuitants as a class may live longer than expected (necessitating a greater
number of annuity payments) and that its expenses may be higher than the
deductions for such expenses. The Company also provides a standard death benefit
and waives any CDSL upon the death of the Annuitant.

In return for the assumption of these mortality and expense risks, the Company
makes a daily charge to the assets of the Separate Account. The daily charge is
at the rate of 0.002466%, or 0.90% annually, of which 0.45% is for mortality
risks, and 0.45% for expense risks. The Company reserves the right to revise the
amounts of the charge as between mortality risks and expense risks, should
estimates change, but the aggregate charge will not exceed 0.90% on an annual
basis.

CHARGES FOR ADMINISTRATIVE SERVICES

The Company maintains an account for each Owner and Annuitant and makes all
disbursements of benefits. The Company also furnishes such administrative and
clerical

<PAGE>

services, including the calculation of Accumulation Unit values and the values
and interests determined thereby, as are required for each Subaccount. The
Company makes disbursements from Separate Account funds to pay obligations
chargeable to the Separate Account and maintains the accounts, records, and
other documents relating to the business of the Separate Account required by
regulatory authorities. These administrative services may be performed by the
Company or an authorized third party administrator. For these and other
administrative services, the Company makes a daily charge to the assets of the
Separate Account and assesses, during the Accumulation Period, a Contract Fee of
$30 on all Contracts having an Accumulated Value of less than $10,000. The
Contract Fee will be deducted at the beginning of each Contract Year after the
first and at a full surrender during a Contract Year. The Company reserves the
right to increase this fee up to a maximum of $50 subject to state regulations.
No Contract Fee will be deducted if the Accumulated Value is $10,000 or more.
The Contract Fee will be deducted from each Subaccount and each Guarantee Period
in the same proportion that the Accumulated Value in that Subaccount or
Guarantee Period bears to the full Accumulated Value.

The daily administrative charge is 0.000959%, or 0.35% on an annual basis, under
any Contracts with an initial premium payment of less than $250,000. The charge
is reduced to 0.000274%, or 0.10% on an annual basis, under any Contracts with
an initial premium payment of $250,000 or more. The different charges reflect
the fact that the cost of administering larger Contracts will tend to be smaller
in proportion to the Contract's Accumulated Value and that amounts realized by
the Company from expense charges made under smaller Contracts will be lower.

The administrative services charges are not designed, nor are they expected, to
exceed the Company's cost in providing these services.

CONTINGENT DEFERRED SALES LOAD

A contingent deferred sales load, or CDSL, may be assessed whenever a Contract
is surrendered for cash prior to the Date of Maturity ("total withdrawal" or
"surrender") or whenever an amount less than the total Accumulated Value is
withdrawn from a Contract prior to the Date of Maturity ("partial withdrawal").
This charge is used to help defray expenses relating to the sales of the
Contracts, including commissions paid and other distribution costs.

An Owner may withdraw in any Contract Year up to 10% of the Accumulated Value as
of the beginning of the Contract Year without the assessment of any CDSL. This
is the Free Withdrawal Value. If, in any Contract Year, the Owner withdraws an
aggregate amount in excess of 10% of the Accumulated Value as of the beginning
of the Contract Year, the amount withdrawn in excess of 10% is subject to a CDSL
to the extent that the excess is attributable to premium payments made within
seven years of the date of withdrawal or surrender.

No CDSL is assessed on amounts applied to provide an annuity or to pay a death
benefit. Also, no CDSL will apply to certain withdrawals if an Owner has elected
the nursing home waiver of CDSL rider described under "Nursing Home Waiver of
CDSL" below. Amounts withdrawn to satisfy the minimum distribution requirements
for tax qualified plans funded by a Contract are not subject to a CDSL in any
Contract Year. Amounts above the minimum distribution requirements are subject
to a CDSL.

The CDSL percentage charge depends upon the number of years that have elapsed
from the date of premium payment to the date of its withdrawal, as follows:

Whenever a CDSL is imposed, it is deducted from each Subaccount of the Separate
Account and each Guarantee Period of the MVA Fixed Account in the proportion
that the amount subject to the CDSL in each bears to the total amount subject to
the CDSL. In calculating the CDSL, all amounts withdrawn plus all Contract Fees
and CDSLs are assumed to be deducted first from the earliest purchase payment,
and then from the next earliest purchase payment, and so forth until all
payments have been exhausted, satisfying the first-in first out, or "FIFO,"
method of accounting. The CDSL only applies to premium payments, not to any
earnings or appreciation. For a discussion of the taxation of partial
withdrawals, see "Contracts Purchased Other Than to Fund a Tax Qualified Plan"
under "Federal Income Taxes."

To the extent that any CDSL is applicable, the Accumulated Value will generally
be reduced by the amount of the CDSL, as well as by the actual dollar amount of
the withdrawal request. Any positive MVA will reduce the amount deducted from
the Accumulated Value by the amount of the positive MVA. Any negative MVA will
increase the amount deducted by the amount of the negative MVA. The CDSL is
calculated based upon the full amount by which the Accumulated Value is reduced,
adjusted for any MVA, and subject to the conditions noted above.

<PAGE>

FOR EXAMPLE, ASSUME A CONTRACT IS ISSUED ON JANUARY 1, 1996, AND THAT
THE OWNER MAKES PREMIUM PAYMENTS OF $5,000 ON JANUARY 1, 1996, $1,000 ON
JANUARY 1, 1997, AND $1,000 ON JANUARY 1, 1998. ASSUME THAT THE
ACCUMULATED VALUE ON JANUARY 1, 1999, IS $9,000 AND THAT A PARTIAL
WITHDRAWAL IS MADE BY THE OWNER IN THE AMOUNT OF $6,000 (NO TAX
WITHHOLDING) ON JUNE 1, 1999. THE CDSL IN THIS CASE, ASSUMING NO PRIOR
PARTIAL WITHDRAWALS, WOULD EQUAL $272.23.

IN CALCULATING THE CDSL UNDER THE FIFO METHOD, THE JANUARY 1, 1996,
$5,000 PREMIUM PAYMENT IS FIRST REDUCED BY THE THREE $30 CONTRACT FEES
ASSESSED ON JANUARY 1, 1997, 1998, AND 1999, I.E., TO $4,910. TEN
PERCENT OF THE ACCUMULATED VALUE ON JANUARY 1, 1999, I.E., $900, THE
FREE WITHDRAWAL AMOUNT, IS THEN DEDUCTED LEAVING $4,010.

THE REMAINING BALANCE OF THE $5,000 JANUARY 1, 1996, PREMIUM PAYMENT,
I.E., $4,010, IS THEN WITHDRAWN IN ITS ENTIRETY AND IS ASSESSED A CDSL
OF $200.50 (.05 X $4,010). ALL OF THE $1,000 JANUARY 1, 1997, PREMIUM
PAYMENT IS TO BE WITHDRAWN AND IS ASSESSED A CDSL OF $50 (.05 X $1,000).
TO MAKE UP THE REMAINDER OF THE $6,000 PAID TO THE OWNER, $362.23 IS
WITHDRAWN FROM THE JANUARY 1, 1998, PREMIUM PAYMENT. THIS IS ASSESSED A
CDSL OF $21.73 (.06 X $362.23).

THEREFORE, THE TOTAL AMOUNT PAID TO THE OWNER IS $6,000 AND THE TOTAL
CDSL IS $272.23. THE ABOVE EXAMPLE ASSUMES ALL AMOUNTS WITHDRAWN ARE
AFTER THE APPLICATION OF ANY MARKET VALUE ADJUSTMENT.

Withdrawals made prior to the Owner attaining age 59 1/2 may be subject to
certain adverse tax consequences. A federal penalty of 10% is generally
applicable to the taxable portion (earnings) of a premature withdrawal from the
Contract. See "Penalty for Premature Withdrawals" under "Federal Income Taxes."

To the extent that the proceeds from the CDSLs may be insufficient to cover
distribution costs, the Company may recover them from its General Account assets
which may consist of, among other things, proceeds derived from mortality and
expense risk charges deducted from the Separate Account, and charges for the
optional benefits described in this prospectus.

NURSING HOME WAIVER OF CDSL

Subject to state availability, an optional Nursing Home Waiver of CDSL rider may
be elected when the Contract is applied for. Under this benefit, the CDSL, if
otherwise applicable, will be waived as to any withdrawals if, beginning at
least 90 days after the Contract date of issue, the Owner becomes confined to a
nursing home facility for at least 90 consecutive days and receives skilled
nursing care. The Company must receive a request for a withdrawal and adequate
proof of confinement no later than 90 days after discharge from the facility,
and the confinement must be prescribed by a physician and medically necessary.
This rider is not available to Contract applicants 75 years of age or older, or
to applicants who were confined to a nursing home within the prior two years.
Reference should be made to the rider for a complete description of its terms,
conditions and benefits. At the beginning of each month, a charge equal to
1/12th of .05% (annual percentage rate) is made against the Accumulated Value
associated with premium payments upon which a CDSL would continue to be
applicable at the time the charge is assessed. The charge is made through a pro
rata reduction in Accumulation Units of the Subaccounts and dollar amounts in
the Guarantee Periods, based on relative values.

OPTIONAL DEATH BENEFIT CHARGES

Separate monthly charges are made for the optional One Year Stepped-Up Death
Benefit and Accidental Death Benefit riders offered by the Company. In each
case, the charge for the rider is made through a pro rata reduction in
Accumulation Units of the Subaccounts and dollar amounts in the Guarantee
Periods, based on relative values. The charge, made at the beginning of each
month, is equal to the Accumulated Value at that time multiplied by 1/12th of
the following applicable annual percentage rates: One Year Stepped-Up Death
Benefit rider--0.15%; Accidental Death Benefit rider--0.10%. See "Optional One
Year Stepped-Up Death Benefit Rider" and "Optional Accidental Death Benefit
Rider" under "The Accumulation Period."

VARIATIONS IN CHARGES

In the future, the Company may allow a reduction in or the elimination of the
CDSL, the charge for the Nursing Home Waiver of CDSL rider, the charge for
expense risks, the administrative services charge, or the annual Contract Fee,
or the charge for the One Year Stepped-Up Death Benefit rider or Accidental
Death Benefit rider, under Contracts sold to groups or classes of individuals in
a manner resulting in a reduction in the expenses associated with the sale of
such Contracts and the benefits offered, or the costs associated with
administering or maintaining the Contracts.

The entitlement to such a reduction in or elimination of charges and fees will
be determined by the Company based upon factors such as the following: (1) the
size of the initial premium payment, (2) the size of the group or class, (3) the
total amount of premium payments expected to be received from the group or class
and the manner in which premium payments are remitted, (4) the nature of the
group or class for which the Contracts are being purchased and the persistency
expected from that group or class as well as the mortality risks associated

<PAGE>

with that group or class, (5) the purpose for which the Contracts are being
purchased and whether that purpose makes it likely that costs and expenses will
be reduced, or (6) the level of commissions paid to selling broker-dealers or
certain financial institutions with respect to Contracts within the same group
or class.

The Company will make any reduction in charges or fees according to its own
rules in effect at the time an application for a Contract is approved. The
Company reserves the right to change these rules from time to time. Any
variation in charges or fees will reflect differences in costs and services,
will apply uniformly to all prospective Contract purchasers in the group or
class, and will not be unfairly discriminatory to the interests of any Owner.

PREMIUM OR SIMILAR TAXES

Several states and local governments impose a premium or similar tax on
annuities. Currently, such taxes range up to 5% of the Accumulated Value applied
to an Annuity Option. Ordinarily, any state-imposed premium or similar tax will
be deducted from the Accumulated Value only at the time of annuitization.

For Contracts issued in South Dakota and Kentucky, the Company pays a tax on
each premium payment at the time it is made. The Company will deduct a charge
for these taxes from the Accumulated Value at the time of annuitization, death,
surrender, or withdrawal. Such a charge is equal to the applicable premium tax
percentage times the amount of Accumulated Value that is applied to an Annuity
Option, surrendered, withdrawn, or at death. The net economic effect of this
procedure is not significantly different than if the Company deducted the
premium tax from each premium payment when received.
------------------------

The charges described above (exclusive of taxes) and the Contracts' annuity
purchase rates will apply for the duration of each Contract and, except as noted
above, will not be increased by the Company. However, these charges do not
include all of the expenses that may be incurred for the account of Owners and
Annuitants. Additional charges will be made directly to the Separate Account for
taxes, if any, based on the income of, capital gains of, assets in, or the
existence of, the Separate Account and interest on funds borrowed. In addition,
the Company reserves the right to deduct premium taxes from premiums when paid.
Moreover, the Separate Account purchases and redeems shares of the Trust at net
asset value, a value which reflects the deduction from the assets of the Trust
of the applicable investment management fees and of certain operating expenses
listed under "Synopsis of Expense Information."

THE CONTRACTS

The descriptions herein are based on certain provisions of the Contracts.
Reference should be made to the actual Contracts and to the terms and
limitations of any tax qualified plan which is to be funded by such Contracts.
Tax qualified plans are subject to several requirements and limitations which
may affect the terms of any particular Contract or the advisability of taking
certain action permitted thereby.

PURCHASE OF CONTRACTS

Authorized representatives of the broker-dealer or financial institution
participating in the distribution of the Contracts will assist in the completion
of the application or the placing of an order for a Contract and will be
responsible for its transmittal, together with the necessary premium payment, to
the Servicing Center. If the application or order is complete and the Contract
applied for is suitable, the Contract will be issued and delivered to the Owner.
If the completed application or order is received in proper form, the initial
premium payment accompanying the completed application or order is applied
within two business days after receipt. If an initial premium payment is not
applied within five business days after receipt, it will be refunded unless the
applicant consents to the retention of the premium payment until receipt of
information necessary to allow the issuance of the Contract. Purchase payments
after the initial purchase payment will be applied at the value next determined
after receipt in good order.

The Company may employ a procedure under which the issuance of the Contract will
be triggered by an order from the broker-dealer or financial institution but the
effectiveness of the Contract will depend upon the later submission of a signed
application. If such a procedure is employed and the signed application is not
received within the required time period, the Contract will be deemed to be void
from the beginning and any premium payment will be refunded.

Each premium payment must be at least $500 in amount. The total premium payments
in any Contract Year may not exceed $1,000,000. The maximum dollar amount of
transfers and payments to any one Subaccount in a Contract Year is $1,000,000.
While the Annuitant is living and the Contract is in force, premium payments may
be made at any time before the Date of Maturity, except that no new premium
payments may be made after the Annuitant reaches age 94 1/2 under Contracts
funding non-qualified arrangements, or age 70 1/2 under tax qualified plans. A
Contract will not be issued if the proposed Annuitant is older than age 84. The
foregoing limits may be waived by the Company.

All checks or other forms of premium payment must be made payable to John
Hancock.

PREMIUM PAYMENTS BY WIRE

The initial premium payment may be transmitted by wire order from broker-dealers
and financial institutions participating in the distribution of the Contracts.
Wire orders accepted by the Company will be invested in the investment options
selected by the prospective Owner at the value next determined following receipt
in good order. Wire orders must include information necessary to allocate the
payment among the investment options selected by the prospective Owner. Wire
orders not

<PAGE>

accompanied by complete information may be held for up to five business days in
order to obtain the missing information. If that information is not obtained
within the five business day period, the Company will so advise the
broker-dealer or financial institution involved and return the premium payment
immediately to the prospective Owner, unless he or she consents to the retention
of the premium payment by the Company until the Company has received at its
Servicing Center the information not provided. A Contract will, nevertheless,
not be issued, until the Company receives and accepts a properly completed
application. Until a signed application is received and accepted, no further
premium payments or other transactions will be allowed.

If within ten days of the receipt of the initial premium payment by wire a
completed application is not received or an incomplete application received
cannot be completed, the initial premium payment will be returned to the
prospective Owner.

After a Contract has been issued, subsequent premium payments may be transmitted
by wire through the Owner's bank. Information as to the name of the Company's
bank, our account number and the ABA routing number may be obtained by calling
the Servicing Center at the telephone number on the second page of this
prospectus. The wire order must identify the Subaccounts and Guarantee Periods
to which the premium payment is to be allocated, and the dollar amount to be
allocated to each Subaccount and Guarantee Period. Banks may charge a fee for
wire services.

THE ACCUMULATION PERIOD

ALLOCATION OF PREMIUM PAYMENTS

Premium payments are allocated by the Company to one or more of the Subaccounts
or Guarantee Periods, or among the Subaccounts and Guarantee Periods, as
specified by the Owner at the time of purchasing the Contract, and as directed
by the Owner from time to time thereafter. Any change in the allocations will be
effective as to premium payments made after the receipt by John Hancock at its
Servicing Center of notice in form satisfactory to the Company.

Each premium payment allocated to a Subaccount purchases Accumulation Units of
that Subaccount at the value of such units next determined after the receipt of
such premium payment at the Servicing Center. See "Variable Account Valuation
Procedures."

Currently, premium payments may be allocated to a maximum of 18 Subaccounts and
Guarantee Periods.

VALUE OF ACCUMULATION UNITS

The number of Accumulation Units of a Subaccount purchased with a specific
premium payment will be determined by dividing the premium payment by the value
of an Accumulation Unit in that Subaccount when the premium payment is applied.
The value of the Accumulation Units so purchased will vary in amount thereafter,
depending upon the investment performance of the Subaccount and the charges and
deductions made against the Subaccount. At any date prior to the Date of
Maturity, the total value of the Accumulation Units in a Subaccount which have
been credited to a Contract can be computed by multiplying the number of such
Accumulation Units by the appropriate Accumulation Unit Value in effect for such
date.

DETERMINATION OF MVA FIXED ACCOUNT VALUE

A Contract's MVA Fixed Account Value is guaranteed by the Company. The Company
bears the investment risk with respect to amounts allocated to the MVA Fixed
Account, except that (a) the Company may vary the Guaranteed Rate for future
Guarantee Periods (subject to the 3% effective annual minimum guaranteed rate
applicable to all Contracts issued on an individual basis and to Contracts
issued on a group basis where required under state law) and (b) the Market Value
Adjustment imposes investment risks on the Owner.

The Contract's MVA Fixed Account Value is the sum of the MVA Fixed Account
Values in each Guarantee Period on any date. The MVA Fixed Account Value in a
Guarantee Period is equal to the following amounts, in each case increased by
accrued interest at the applicable Guaranteed Rate:

- - The amount of premium payments or transferred amounts allocated to the
Guarantee Period, including the amount of any positive Market Value
Adjustment; less

- - The amount of any withdrawals, including any CDSLs, or transfers out of the
Guarantee Period; less

- - The amount of any charges and fees deducted from that Guarantee Period; less

- - The amount of any negative Market Value Adjustment.

TRANSFERS AMONG SUBACCOUNTS AND GUARANTEE PERIODS

Not more than 12 times in each Contract Year the Owner may (a) transfer all or
any part of the Accumulation Units credited under a Contract from one Subaccount
to another Subaccount, or into a Guarantee Period or (b) transfer all or any
part of the dollar amount in one Guarantee Period to another Guarantee Period,
or to a Subaccount. However, transfers may not be made within 30 days of the
Date of Maturity, and transfers from one Subaccount or Guarantee Period to
another may not exceed $1,000,000 in value in any Contract Year. A transfer
pursuant to the dollar cost averaging feature discussed below does not count
toward the limitation of 12 transfers per Contract Year.

Transfers involving the Subaccounts will result in the redemption and/or
purchase of Accumulation Units on the basis of the respective unit values next
determined after receipt of notice satisfactory to the Company at the Servicing
Center. Transfers from a Guarantee Period before its expiration date are subject
to a Market Value Adjustment. The amount of any positive or negative Market
Value Adjustment will be added to or deducted from the transferred amount.

An Owner may request a transfer in writing or, if a telephone transfer
authorization is in effect, by telephoning 800-824-0335.

<PAGE>

The Owner may send a written request to the Servicing Center at P.O. Box 9298,
Boston, Massachusetts 02205-9298. Any written request should include the Owner's
name, daytime telephone number, and Contract number, and identify the
Subaccounts or Guarantee Periods from which and to which transfers are to be
made. Transfers will be effective on the date of receipt at our Servicing
Center, of a request in form satisfactory to us. The Company reserves the right
to modify, suspend, or terminate telephone transfers at any time without notice
to the Owners.

An Owner who authorizes telephone transfers will be liable for any loss, expense
or cost arising out of any unauthorized or fraudulent telephone transfer
instructions which the Company reasonably believes to be genuine, unless such
loss, expense or cost is the result of the Company's mistake or negligence. The
Company employs procedures which provide safeguards against the execution of
unauthorized transfers, and which are reasonably designed to confirm that
transfer instructions received by telephone are genuine. These procedures
include requiring personal identification, tape recording calls, and providing
written confirmation to the Owner.

DOLLAR COST AVERAGING

The Owner may elect to have automatically transferred on a monthly, quarterly,
semiannual or annual basis, at no cost, Accumulation Units credited to the Money
Market Subaccount into one or more of the other Subaccounts. The minimum amount
of each transfer is $250. To begin the program, the Accumulated Value must be at
least $15,000. The program continues until it is discontinued by the Owner, or
the full liquidation of the Money Market Subaccount. Changes in your dollar cost
averaging instructions may be made by telephone or in writing provided the
telephone authorization option has been elected by the Owner. The Company
reserves the right to terminate the dollar cost averaging program at any time.
Automatic transfers into the Guarantee Periods are not permitted.

SURRENDER OF CONTRACT; PARTIAL WITHDRAWALS

Prior to the Date of Maturity, if the Annuitant is living, a Contract may be
surrendered for a cash payment of its Surrender Value, or a partial withdrawal
of the Accumulated Value may be made. The Surrender Value of a Contract is the
Accumulated Value, after any Market Value Adjustment, less any applicable
charges, including any CDSL. Accumulation Units will be redeemed at their value
next determined after the receipt by the Servicing Center of notice of surrender
or partial withdrawal in form satisfactory to the Company. The amount of MVA
Fixed Account Value will be determined on the date of receipt by the Servicing
Center of such notice. The value of any Accumulation Units redeemed may be more
or less than the premium payments applied under the Contract, depending upon the
value of the Trust's shares held in a Subaccount at the time. Additionally, the
Surrender Value of the MVA Fixed Account, as adjusted by any applicable Market
Value Adjustment, may be more or less than the MVA Fixed Account Value. See
"Market Value Adjustment" under "The MVA Fixed Account" above. The resulting
cash payment upon a surrender will be reduced by any applicable CDSL and any
unpaid Contract Fees or other charges.

Unless directed otherwise by the Owner, that portion of the Accumulated Value of
the Contract redeemed in a partial withdrawal will be redeemed in each
Subaccount and each Guarantee Period in the same proportion as the Accumulated
Value of the Contract is then allocated among the Subaccounts and the Guarantee
Periods. The Company will redeem Accumulation Units and/or withdraw dollar
amounts from the MVA Fixed Account so that the total amount of a partial
withdrawal (after any Market Value Adjustment) equals the dollar amount of the
partial withdrawal request. Any applicable CDSL will be determined after any
Market Value Adjustment and will reduce the remaining Accumulated Value in the
Separate Account and MVA Fixed Account, as the case may be. The CDSL, if any,
will not reduce the partial withdrawal payment made to the owner so long as the
Accumulated Value is sufficient to cover the CDSL.

Payments of Surrender Value, in a single sum, and partial withdrawal payments,
ordinarily will be made within seven days after receipt of the above notice by
John Hancock at its Servicing Center. As described under "Miscellaneous
Provisions-Deferment of Payment," however, redemptions and payments may be
delayed under certain circumstances. See "Federal Income Taxes" for possible
adverse tax consequences of certain surrenders and partial withdrawals.

Any request for a surrender or partial withdrawal should be mailed to the
Servicing Center, P.O. Box 9298, Boston, Massachusetts 02205-9298.

Without our approval, a partial withdrawal is not permitted for an amount less
than $100, nor may a partial withdrawal be made if the total remaining
Accumulated Value would be less than $1,000. If the CDSL Free Withdrawal Value
is at any time less than $100, then that amount must be withdrawn in full, in a
single withdrawal, before any further partial withdrawal is made. The Contract
may be terminated by the Company if the Accumulated Value of the Contract at any
time becomes zero.

SYSTEMATIC WITHDRAWAL

An optional systematic withdrawal plan enables the Owner to preauthorize
periodic withdrawals. Owners electing the plan instruct the Company to withdraw
a percentage or a level dollar amount from the Contract on a monthly, quarterly,
semiannual, or annual basis. The amount withdrawn will result in the
cancellation of Accumulation Units from each applicable Subaccount in the
Separate Account, and the deduction of dollar amounts from each applicable
Guarantee Period in the MVA Fixed Account, in the ratio that the value of each
bears to the total Accumulated Value. Currently, systematic withdrawal is
available to Owners who have an Accumulated Value of $15,000 or more. The
Company reserves the right to modify the eligibility rules or other terms and
conditions of this program at any time, without notice. Systematic withdrawals
in any Contract Year in

<PAGE>

excess of 10% of the Accumulated Value as of the beginning of the Contract Year
may be subject to a CDSL. The minimum systematic withdrawal is $100. In the
event that the modal amount of the withdrawal drops below $100 or the
Accumulated Value becomes less than $5,000, the plan will be suspended by the
Company and the Owner will be notified. The systematic withdrawal will terminate
upon cancellation by the Owner.

Systematic withdrawals are subject to the CDSL and Market Value Adjustment
described above. There may be tax consequences associated with the systematic
withdrawal plan. See "Federal Income Taxes."

STANDARD DEATH BENEFIT

If the Annuitant dies before the Date of Maturity, a standard death benefit is
payable. The death benefit will be the greater of (a) the Accumulated Value,
adjusted by any Market Value Adjustment, next determined following receipt by
John Hancock at its Servicing Center of due proof of death together with any
required instructions as to method of settlement, and (b) the aggregate amount
of the premium payments made under the Contract, less any partial withdrawals
and CDSLs applied to such partial withdrawals.

Payment of the death benefit will be made in a single sum to the beneficiary
designated by the Owner prior to the Annuitant's death unless an optional method
of settlement has been elected by the Owner. If an optional method of settlement
has not been elected by the Owner, the beneficiary may elect an optional method
of settlement in lieu of a single sum. No deduction is made for sales or other
expenses upon such election. Payment will be made in a single sum in any event
if the death benefit is less than $5,000. See "Annuity Options" under "The
Annuity Period." If there is no surviving beneficiary, the Owner, or his or her
estate is the beneficiary.

OPTIONAL ONE YEAR STEPPED-UP DEATH BENEFIT

The Owner may elect a one year stepped-up death benefit rider that is designed
to enhance the standard death benefit payable to the beneficiary. Under this
rider, upon the death of the Annuitant before the Date of Maturity, the benefit
payable will be the greater of (a) the standard death benefit, and (b) the
highest Accumulated Value, adjusted by any Market Value Adjustment, of the
Contract as of any Contract anniversary preceding the date of receipt of due
proof of death together with any required settlement instructions and preceding
the Contract anniversary nearest the Annuitant's 81st birthday, plus any premium
payments, less any withdrawals and CDSLs, since such Contract anniversary. The
rider is elected at the time a Contract is applied for. Reference should be made
to the rider for a complete description of its terms, conditions and benefits. A
monthly charge is made for this benefit, so long as the rider is in effect. See
"Charges Under the Contracts." This one year stepped-up death benefit is not
available for applicants age 80 or older.

OPTIONAL ACCIDENTAL DEATH BENEFIT

Subject to state availability, at the option of the Owner, an accidental death
benefit may be elected at the time the Contract is applied for. Under this
rider, upon the accidental death of the Annuitant prior to the earlier of the
Date of Maturity or the Annuitant's 80th birthday, the beneficiary will receive,
in addition to any other death benefit, an amount equal to the Accumulated Value
of the Contract, as of the date of the accident, upon receipt of due proof of
the Annuitant's death together with any required instructions as to method of
settlement, up to a maximum of $200,000. This benefit is not available to
applicants age 80 or older. Reference should be made to the rider for a complete
description of its terms, conditions and benefits. A monthly charge is made for
this rider as described under "Charges Under the Contracts."

PAYMENT OF DEATH BENEFITS

The Code requires certain distribution provisions to be included in any Contract
used to fund other than a tax qualified plan. See "Federal Income Taxes."
Failure to include the required distribution provisions results in the Contract
not being treated as an annuity for Federal Tax Law purposes. The Code imposes
comparable distribution requirements for Contracts used to fund tax qualified
plans. These required provisions for tax qualified plans will be reflected by
means of separate disclosures and endorsements furnished to Owners.

The Code distribution requirements are expected to present few practical
problems when the Annuitant and Owner are the same person. Nevertheless, all
Owners of Contracts not used to fund a tax qualified plan and IRA Contract
Owners should be aware that the following distribution requirements are
applicable notwithstanding any provision to the contrary in the Contract (or in
this prospectus) relating to payment of the death benefit or death of the
Annuitant.

If the Owner dies before annuity payments have begun: (a) if the beneficiary is
the surviving spouse of the Owner, the beneficiary may continue the Contract in
force as Owner; or (b) if the beneficiary is not the surviving spouse of the
Owner, or if the beneficiary is the surviving spouse of the Owner but does not
choose to continue the Contract, the entire interest in the Contract on the date
of death of the Owner must be: (i) paid out in full within five years of the
Owner's death, or (ii) applied in full towards the purchase of a life annuity on
the beneficiary with payments commencing within one year of the Owner's death.
If the Owner dies on or after annuity payments have begun, any remaining benefit
must be paid out at least as rapidly as under the method of making annuity
payments then in effect.

The Code imposes comparable distribution requirements on tax qualified plans.

If the Owner is not the Annuitant, "the entire interest in the Contract on the
date of death of the Owner" is equal to the Surrender Value if paid out in full
within five years of the Owner's death, or is equal to the Accumulated Value if
applied in full towards the purchase of a life annuity on the beneficiary with

<PAGE>

payments commencing within one year of the Owner's death. Note that "the entire
interest in the Contract on the date of death of the Owner" which is payable if
the Owner dies before annuity payments have begun may be an amount less than the
death benefit which would have been payable if the Annuitant had died instead.

Notice should be furnished promptly to the Servicing Center upon the death of
the Owner.

THE ANNUITY PERIOD

During the annuity period, the total value of a Contract may be allocated among
no more than four "Accounts." For this purpose, all Guarantee Periods comprising
the MVA Fixed Account are counted as one Account; each of the Subaccounts is
counted as one Account. Amounts allocated to the MVA Fixed Account will provide
annuity payments on a fixed basis; amounts allocated to the Subaccounts will
provide annuity payments on a variable basis. If more than four Accounts are
being used on the Date of Maturity, the Company will divide the total
Accumulated Value proportionately among the four Accounts with the largest
Accumulated Values.

Any Accumulated Value in the MVA Fixed Account at the Date of Maturity will be
subject to any positive or negative Market Value Adjustment that is applicable
at that time, before such amount is applied to provide annuity payments.

Annuity payments will begin on the Date of Maturity if the Annuitant is then
living and the Contract has been in force for at least six months. Each Contract
will provide at the time of its issuance for a Life Annuity with Ten Years
Certain. Under this form of annuity, annuity payments are made monthly to the
Annuitant for life and, if the Annuitant dies within ten years after the Date of
Maturity, the payments remaining in the ten-year period will be made to the
contingent payee, subject to the terms of any supplementary agreement issued. A
different form of annuity may be elected by the Owner, as described in "Annuity
Options," below, prior to the Date of Maturity. However, the minimum Accumulated
Value that may be applied to an annuity form, other than a Life Annuity with Ten
Years Certain, is $5,000. Once a given form of annuity takes effect, it may not
be changed.

If the initial monthly annuity payment under a Contract would be less than $50,
the Company may make a single sum payment equal to the total Surrender Value of
the Contract on the date the initial payment would be payable, in place of all
other benefits.

Each Contract specifies a Date of Maturity at the time of its issuance, which
may be no earlier than six months after the date the first payment is applied to
the Contract. The Owner may subsequently elect a different Date of Maturity,
however. Unless otherwise permitted by the Company, such subsequent date may be
any earlier date provided it is no earlier than six months after the date the
first payment is applied to the Contract, nor later than the maximum age
specified in the Contract, generally age 95. The election is made by written
notice received by the Servicing Center before the Date of Maturity specified in
the Contract and at least 31 days prior to the new Date of Maturity. Particular
care should be taken in electing the Date of Maturity for Contracts issued under
tax qualified plans. See "Federal Income Taxes."

VARIABLE MONTHLY ANNUITY PAYMENTS

Variable monthly annuity payments under a Contract are determined by converting
each Subaccount's Accumulation Units credited to the Contract (less any
applicable premium tax) into the respective Annuity Units of each applicable
Subaccount on the Date of Maturity or some other date elected for commencement
of variable annuity payments.

The amount of each variable annuity payment after the first payment will depend
on the investment performance of the Subaccounts being used. If the actual net
investment return (after deducting all charges) of a Subaccount during the
period between the dates for determining two monthly payments based on that
Subaccount exceeds the "assumed investment rate" (explained below), the latter
monthly payment will be larger than the former. On the other hand, if the actual
net investment return is less than the assumed investment rate, the latter
monthly payment will be smaller than the former.

ASSUMED INVESTMENT RATE

The assumed investment rate for the variable annuity portion of the Contracts
will be 3 1/2% per year except as provided below. The assumed investment rate is
significant in determining the amount of the initial variable monthly annuity
payment and the amount by which subsequent variable monthly payments are more or
less than the initial variable monthly payment.

Where applicable state law so provides, an Owner may elect a Variable Annuity
Option with assumed investment rates of 5% or 6%, if such a rate is available in
the Owner's state. Election of a higher assumed investment rate produces a
larger initial annuity payment but also means that eventually the monthly
annuity payments would be smaller than if a lower assumed investment rate had
been elected.

CALCULATION OF ANNUITY UNITS

Accumulation Units are converted into Annuity Units by first multiplying the
number of each Subaccount's Accumulation Units credited to the Contract on the
date of conversion by the appropriate Accumulation Unit Value as of ten calendar
days prior to the date the initial variable monthly annuity payment is due. For
each Subaccount the resulting value (less any applicable premium tax) is then
multiplied by the applicable annuity purchase rate, which reflects the age and,
possibly, sex of the Annuitant and the assumed investment rate, specified in the
Contract. This computation determines the amount of each Subaccount's initial
monthly variable annuity payment to the Annuitant. The number of each
Subaccount's Annuity Units to be credited to the Contract is then determined by
dividing the amount of each Subaccount's initial variable monthly annuity

<PAGE>

payment by each Subaccount's Annuity Unit Value as of ten calendar days prior to
the date the initial payment is due.

FIXED MONTHLY ANNUITY PAYMENTS

The dollar amount of each fixed monthly annuity payment, specified during the
entire period of annuity payments according to the provisions of the annuity
form selected, will be determined by dividing the amount applied under the Fixed
Annuity Option (net of any applicable premium taxes) by $1,000 and multiplying
the result by the greater of: (a) the applicable factor shown in the appropriate
table in the Contract; or (b) the factor currently offered by the Company at the
time of annuitization. This current factor may be based on the sex of the payee
unless prohibited by law.

ANNUITY OPTIONS

The Owner may elect an Annuity Option during the lifetime of the Annuitant by
written notice received by the Servicing Center prior to the Date of Maturity of
the Contract. If no option is selected, Option A with Ten Years Certain will be
used. A beneficiary entitled to payment of a death benefit in a single sum may,
if no election has been made by the Owner prior to the Annuitant's death, elect
an Annuity Option by written notice received by the Servicing Center prior to
the date the proceeds become payable. No option may be elected, other than the
Life Annuity with Ten Years Certain, if the Accumulated Value to be applied is
less than $5000, in which case we will make a payment equal to the total
Surrender Value on the date the initial payment would be payable in place of all
other benefits. Among the options available are the following Annuity Options.

OPTION A: LIFE ANNUITY WITH PAYMENTS FOR A GUARANTEED PERIOD

Monthly payments will be made for a guaranteed period of 5, 10 or 20 years as
selected by the Owner or Beneficiary and thereafter for as long as the payee
lives, with the guarantee that if the payee dies prior to the end of the
guaranteed period selected, payments will continue for the remainder of the
guaranteed period to a contingent payee, subject to the terms of any
supplementary agreement issued.

OPTION B: LIFE ANNUITY WITHOUT FURTHER PAYMENT ON DEATH OF PAYEE

Monthly payments will be made to the payee as long as he or she lives. No
minimum number of payments is guaranteed.

OPTION C: JOINT AND LAST SURVIVOR

Payments will be provided monthly, quarterly, semiannually or annually for your
life and the life of your spouse/joint payee. Upon the death of one payee,
payments will continue to the surviving payee and stop upon the death of the
surviving payee.

OPTION D: JOINT AND 1/2 SURVIVOR
JOINT AND 2/3 SURVIVOR

Payments will be provided monthly, quarterly, semiannually or annually for your
life and the life of your spouse/joint payee. Upon the death of one payee,
payments (reduced to 1/2 or 2/3 the full payment amount) will continue to the
surviving payee. Payments stop upon the death of the surviving payee.

OPTION E: LIFE INCOME WITH CASH REFUND

Payments will be provided monthly, quarterly, semiannually or annually for your
life. Upon your death, your contingent payee will receive a lump-sum payment, if
the total payments to you were less than your accumulated value at the time of
annuitization. The lump-sum payment, if any, will be for the balance.

OPTION F: INCOME FOR A FIXED PERIOD

Payments will be provided monthly, quarterly, semiannually or annually for a
pre-determined period of time to a maximum of 30 years. If you die before the
end of the fixed period, payments will continue to your contingent payee until
the end of the period.

OPTION G: INCOME OF A SPECIFIC AMOUNT

Payments will be provided for a specific amount. Payments stop only when the
premium deposit applied and earnings have been completely paid out. If you die
before all payments are made, payments continue to your contingent payee until
the end of the contract.
------------------------

Fixed and variable annuity payments are available with Annuity Options A, B, C
and D. Only fixed annuity payments are available with Annuity Options E, F, and
G. With respect to Options F and G, payments must continue for 10 years unless
the Contract has been in force for 5 years or more.

The Option A life annuity with five years guaranteed and Option B life annuity
without further payment on the death of payee are not available if the Annuitant
is more than 85 years of age on the Date of Maturity.

TRANSFERS

The procedures for and terms and conditions of transfers by an Annuitant among
Subaccounts during the annuity period are the same as for transfers by Owners
among Subaccounts during the Accumulation Period. See "Accumulation
Period--Transfers Among Subaccounts and Guarantee Periods." Such transactions
involve the redemption and purchase of Annuity Units in the same manner that
transfers during the Accumulation Period involve the redemption and purchase of
Accumulation Units. No transfers to or from a Fixed Annuity Option are
permitted.

OTHER CONDITIONS

The Company reserves the right at its sole discretion to make available to
Owners and other payees optional methods of

<PAGE>

payment in addition to the Annuity Options described in this prospectus and the
applicable Contract.

Federal income tax requirements currently applicable to H.R. 10 and individual
retirement annuity plans provide that the period of years guaranteed under
Option A cannot be any greater than the joint life expectancies of the payee and
his or her designated beneficiary.

If the Owner dies on or after annuity payments have begun, any remaining benefit
must be paid out at least as rapidly as under the method of making annuity
payments then in effect. The Code imposes a comparable distribution requirement
for Contracts used to fund tax qualified plans.

VARIABLE ACCOUNT VALUATION PROCEDURES

VALUATION DATE. A Valuation Date is any date on which the New York Stock
Exchange is open for trading. On any date other than a Valuation Date, the
Accumulation Unit Value or Annuity Unit Value will be the same as that on the
next following Valuation Date.

VALUATION PERIOD. A Valuation Period is that period of time from the beginning
of the day following a Valuation Date to the end of the next following Valuation
Date.

ACCUMULATION UNIT VALUE. The Accumulation Unit Value is calculated separately
for each Subaccount. The value of one Accumulation Unit on any Valuation Date is
determined for each Subaccount by multiplying the immediately preceding
Accumulation Unit Value by the applicable Net Investment Factor for the
Valuation Period ending on such Valuation Date.

ANNUITY UNIT VALUE. The Annuity Unit Value is calculated separately for each
Subaccount. The value of one Annuity Unit on any Valuation Date is determined
for each Subaccount by first multiplying the immediately preceding Annuity Unit
Value by the applicable Net Investment Factor for the Valuation Period ending on
such date and then multiplying this product by an adjustment factor which will
neutralize the assumed investment rate used in determining the amounts of
annuity payable. The adjustment factor for a Valuation Period of one day for
Contracts with an assumed investment rate of 3 1/2% per year is 0.999905754. The
assumed investment rate is neutralized by applying the adjustment factor so that
the variable annuity payments will increase only if the actual net investment
rate of the Subaccount exceeds 3 1/2% per year and will decrease only if it is
less than 3 1/2% per year.

NET INVESTMENT FACTOR. The Net Investment Factor for each Subaccount for any
Valuation Period is equal to 1 plus the applicable net investment rate for such
Valuation Period. A Net Investment Factor may be more or less than 1. The net
investment rate for each Subaccount for any Valuation Period is equal to (a) the
accrued investment income and capital gains and losses, whether realized or
unrealized, of the Subaccount for such Valuation Period less (b) the sum of a
deduction for any applicable income taxes and, for each calendar day in the
Valuation Period, a deduction of 0.003425% or 0.002740% (depending on whether
the total asset-based charge for mortality and expense risks and for
administration is 1.25% or 1.00%, respectively, on an annual basis) of the value
of the Subaccount at the beginning of the Valuation Period, the result then
being divided by (c) the value of the total net assets of the Subaccount at the
beginning of the Valuation Period.

ADJUSTMENT OF UNITS AND VALUES. The Company reserves the right to change the
number and value of the Accumulation Units or Annuity Units or both credited to
any Contract, without the consent of the Owner or any other person, provided
strict equity is preserved and the change does not otherwise affect the
benefits, provisions or investment return of the Contract.

MISCELLANEOUS PROVISIONS

RESTRICTION ON ASSIGNMENT

In order to qualify for favorable tax treatment, certain Contracts may not be
sold, assigned, discounted or pledged as collateral for a loan or as security
for the performance of an obligation or for any other purpose, to any person,
unless the Owner is the trustee of a trust described in Section 401(a) of the
Code. Because an assignment, pledge or other transfer may be a taxable event an
Owner should consult a competent tax adviser before taking any such action.

DEFERMENT OF PAYMENT

The Company may defer for up to 15 days the payment of any amount attributable
to a premium payment made by check to allow the check reasonable time to clear.

Payment of the value of any Accumulation Units in a single sum upon a surrender
or partial withdrawal will ordinarily be made within seven days after receipt of
the written request therefor by the Servicing Center. However, redemption may be
suspended and payment may be postponed at times (a) when the New York Stock
Exchange is closed, other than customary weekend and holiday closings, (b) when
trading on that Exchange is restricted, (c) when an emergency exists as a result
of which disposal of securities in a Subaccount is not reasonably practicable or
it is not reasonably practicable to determine the value of the net assets of a
Subaccount or (d) when a governmental body having jurisdiction over the Separate
Account by order permits such suspension. Rules and regulations of the
Commission, if any are applicable, will govern as to whether conditions
described in (b) or (c) exist.

The Company may also defer payment of surrender proceeds payable out of the MVA
Fixed Account for a period of up to six months.

RESERVATION OF RIGHTS

The Company reserves the right to add or delete Subaccounts, to change the
underlying investments of any Subaccount, to operate the Separate Account in any
form permitted by law and to terminate the Separate Account's registration under
the 1940

<PAGE>

Act if such registration should no longer be legally required. Certain changes
may, under applicable laws and regulations, require notice to or approval of
Owners. Otherwise, changes do not require such notice or approval.

OWNER AND BENEFICIARY

The Owner has the sole and absolute power to exercise all rights and privileges
under the Contract, except as otherwise provided by the Contract or by written
notice of the Owner. The Owner and the beneficiary are designated in the
application and may be changed by the Owner, effective upon receipt of written
notice at the Servicing Center, subject to the rights of any assignee of record,
any action taken prior to receipt of the notice and certain other conditions.
While the Annuitant is alive, the Owner may be changed by written notice. The
beneficiary may be changed by written notice no later than receipt of due proof
of the death of the Annuitant. The change will take effect whether or not the
Owner or the Annuitant is then alive.

FEDERAL INCOME TAXES

THE SEPARATE ACCOUNT, THE MVA FIXED
ACCOUNT, AND THE COMPANY

The Company is taxed as a life insurance company under the Code. The Separate
Account is part of the Company's total operations and is not taxed separately as
a "regulated investment company" or otherwise.

The Contracts permit the Company to charge against the Separate Account and the
MVA Fixed Account any taxes, or provisions for taxes, attributable to the
operation or existence of the Contracts or the Separate Account. Currently, the
Company does not anticipate making a charge for income and other taxes because
of the level of such taxes. If the level of current tax is increased, or is
expected to increase in the future, the Company reserves the right to make a
charge in the future.

The Company assumes no responsibility for determining whether a particular
retirement plan satisfies the applicable requirements of the Code or whether a
particular employee is eligible for inclusion under a plan.

CONTRACTS PURCHASED OTHER THAN
TO FUND A TAX QUALIFIED PLAN

THE OWNER OR OTHER PAYEE

The Contracts are considered annuity contracts under Section 72 of the Code.
Currently no Federal Income Tax is payable on increases in Accumulated Value
until payments are made to the Owner or other payee under such Contract.
However, a Contract owned other than by a natural person is not generally an
annuity for tax purposes and any increase in value thereunder is taxable as
ordinary income as accrued.

When payments under a Contract are made in the form of an annuity, the amount of
each payment is taxed to the Owner or other payee as ordinary income to the
extent that such payment exceeds an allocable portion of the Owner's "investment
in the contract" (as defined in the Code). In general, an Owner's "investment in
the contract" is the aggregate amount of premium payments made by him, reduced
by any amounts previously distributed under the Contract that were not subject
to tax. The portion of each variable annuity payment to be excluded from income
is determined by dividing the "investment in the contract," adjusted by any
refund feature, by the number of periodic payments anticipated during the time
that periodic payments are to be made. In the case of a fixed annuity payment,
the amount to be excluded in each year is determined by dividing the "investment
in the contract," adjusted by any refund feature, by the amount of "expected
return" during the time that periodic payments are to be made, and then
multiplying by the amount of the payment. After the entire "investment in the
contract" has been distributed, any remaining payment is fully taxable.

When a payment under a Contract is made in a single sum, the amount of the
payment is taxed as ordinary income to the Owner or other payee to the extent it
exceeds the Owner's "investment in the contract."

For purposes of determining the amount of taxable income resulting from a
partial or complete withdrawal, all Contracts and other annuity contracts issued
by the Company or its affiliates to the Owner within the same calendar year will
be treated as if they were a single contract.

PARTIAL WITHDRAWALS BEFORE DATE OF MATURITY

When a payment under a Contract, including a payment under a systematic
withdrawal plan, is less than the amount that would be paid upon the Contract's
complete surrender and such payment is made prior to the commencement of annuity
payments under the Contract, part or all of the payment (the partial withdrawal)
may be taxed to the Owner or other payee as ordinary income.

On the date of the partial withdrawal, if the cash value of the Contract is
greater than the investment in the Contract, any part of such excess value so
withdrawn is subject to tax as ordinary income.

If an individual assigns or pledges any part of the value of a Contract, the
value so pledged or assigned is taxed as ordinary income to the same extent as a
partial withdrawal.

PENALTY FOR PREMATURE WITHDRAWALS

In addition to being included in ordinary income, the taxable portion of any
withdrawal may be subject to a ten-percent penalty tax. The penalty tax does not
apply to payments made to the Owner or other payee after the Owner attains age
59 1/2, or on account of the Owner's death or disability. If the withdrawal is
made in substantially equal periodic payments over the life of the Annuitant or
other payee or over the joint lives of the Annuitant and the Annuitant's
beneficiary the penalty will also not apply.

<PAGE>

DIVERSIFICATION REQUIREMENTS

Each of the Funds of the Trust intends to qualify as a regulated investment
company under Subchapter M of the Code and will have to meet the investment
diversification tests of Section 817(h) of the Code and the underlying
regulations. The Treasury Department and the Internal Revenue Service may, at
some future time, issue a ruling or a regulation presenting situations in which
it will deem "investor control" to be present over the assets of the Funds of
the Trust, causing the Owner to be taxed currently on income credited to the
Contracts. In such a case, the Company reserves the right to amend the Contract
or the choice of investment options to avoid current taxation to the Owners.

CONTRACTS PURCHASED TO FUND A TAX QUALIFIED PLAN

WITHHOLDING ON ELIGIBLE ROLLOVER DISTRIBUTIONS

Recent legislation requires 20% withholding on certain distributions from tax
qualified plans. An Owner wishing to roll-over his entire distribution should
have it paid directly to the successor plan. Otherwise, the Owner's distribution
will be reduced by the 20% mandatory income tax. Consult a qualified tax adviser
before taking such a distribution.

CONTRACTS PURCHASED UNDER INDIVIDUAL RETIREMENT ANNUITY PLANS (IRA)

In general, the maximum amount of premium payments deductible each year with
respect to an individual retirement annuity contract (as defined in Section 408
of the Code) issued on the life of an eligible purchaser is the lesser of $2,000
or 100% of compensation includible in gross income. A person may also purchase a
contract for the benefit of his or her spouse (including for example a homemaker
who does not work outside the home). Where an individual elects to deduct
amounts contributed on his or her own behalf and on behalf of a spouse, the
maximum amount of premium payments deductible is up to $2,000 for each spouse if
their combined compensation is at least equal to the contributed amount.
However, not more than $2,000 can be allocated to either person's account. If
you or your spouse is an active participant in an employer-sponsored retirement
plan, you are permitted to make a deductible premium payment only if your
adjusted gross incomes are below certain amounts.

No deduction is allowed for premium payments made in or after the taxable year
in which the Owner has attained the age of 70 1/2 years nor is a deduction
allowed for a "rollover contribution" as defined in the Code.

When payments under a Contract are made in the form of an annuity, or in a
single sum such as on surrender of the Contract or by partial withdrawal, the
payment is taxed as ordinary income.

IRS required minimum distributions must begin no later than April 1 of the year
following the year in which the Owner attains age 70 1/2. The Owner may incur
adverse tax consequences if a distribution on surrender of the Contract or by
partial withdrawal is made prior to his attaining age 59 1/2, except in the
event of his death or total disability or in certain other circumstances.

CONTRACTS PURCHASED UNDER SECTION 403(B) PLANS (TSA)

Premium payments made by an employer which is a public school system or a
tax-exempt organization described in Section 501(c)(3) of the Code under annuity
purchase arrangements described in Section 403(b) of the Code are not taxable
currently to the Owner, to the extent that the aggregate of such amounts does
not exceed the Owner's "exclusion allowance" (as defined in the Code). In
general, an Owner's "exclusion allowance" is determined by multiplying 20% of
his "includible compensation" (as defined in the Code) by the number of years of
his service with the employer and then subtracting from that product the
aggregate amount of premium payments previously excluded from income and certain
other employer payments to retirement plans in which the Owner is a participant.
Additional limitations applicable to premium payments are described in Section
415 of the Code. Deferrals under all plans made at the election of the Owner
generally are limited to an aggregate of $9500 annually.

When payments under a Contract are made in the form of an annuity, such payments
are taxed to the Owner or other payee under the same rules that apply to such
payments under corporate plans (discussed below) except that five-year averaging
and capital gain phase-out are not available.

When payment under a Contract is made in a single sum, such as on surrender of
the contract or by partial withdrawal, the taxable portion of the payment is
taxed as ordinary income and the penalty for premature withdrawals may be
applicable.

Ordinarily an Owner in a Section 403(b) plan does not have any "investment in
the contract" and, thus, any distribution is fully taxed as ordinary income.

Distributions are prohibited before the Owner is age 59 1/2, except on the
Owner's separation from service, death, or disability and except with respect to
distributions attributable to assets held as of December 31, 1988. This
prohibition does not (1) preclude transfers and exchanges to other products that
qualify under Section 403(b) or (2) restrict withdrawals of certain amounts
attributable to pre-January 1, 1989, premium payments.

CONTRACTS PURCHASED UNDER CORPORATE PLANS

In general, premium payments made by a corporation under a qualified pension or
profit-sharing plan described in Section 401(a) of the Code or a qualified
annuity plan described in Section 403(a) of the Code are deductible by the
corporation and are not taxable currently to the employees.

When payments under a Contract are made in the form of an annuity, the amount of
each payment is taxed to the Annuitant or other payee as ordinary income except
in those cases where the Annuitant has an "investment in the contract" (as
defined in the Code). In general, an Annuitant's "investment in the contract" is
the aggregate amount of premium payments made

<PAGE>

by him. If an Annuitant has an "investment in the contract," a portion of each
annuity payment is excluded from income until the investment in the contract is
recovered. The amount to be excluded in each year, in the case of a variable
annuity payment, is determined by dividing the "investment in the contract,"
adjusted by any refund feature, by the number of periodic payments anticipated
during the time that periodic payments are to be made. The calculation for fixed
annuity payments is somewhat different. For fixed annuity payments, in general,
prior to recovery of the "investment in the Contract," there is no tax on the
amount of each payment which bears the same ratio to that payment as the
"investment on the Contract" bears to the total expected value of the annuity
payments for the term of the payments. However, the remainder of each annuity
payment is taxable. The taxable portion of a distribution (in the form of an
annuity or a single sum payment) is taxed as ordinary income.

When payment under a Contract is made in a single sum or a total distribution is
made within one taxable year of the Annuitant or other payee, the amount of the
payment is taxed to the Annuitant or other payee to the extent it exceeds the
Annuitant's "investment in the contract." If such payment is made after the
Annuitant has attained age 59 1/2, or on account of his death, retirement or
other termination of employment or on account of his death after termination of
employment, five year averaging and a phase-out of capital gains treatment for
pre-1974 contributions may be available with respect to one distribution. Other
rules may be available to taxpayers who have attained age 50 prior to January 1,
1986.

IRS required minimum distributions must begin no later than April 1 of the year
following the year in which the Annuitant attains age 70 1/2 even if the
Annuitant has not retired.

CONTRACTS PURCHASED UNDER H.R. 10 PLANS
(SELF-EMPLOYED)

Self-employed persons, including partnerships, may establish tax qualified
pension and profit-sharing plans and annuity plans for themselves and for their
employees. Generally, the maximum amount of premium payments deductible each
year with respect to variable annuity contracts issued on the life of
self-employed persons under such plans is $30,000 or 25% of "earned income" (as
defined in the Code), whichever is less. Self-employed persons must also make
premium payments for their employees (who have met certain eligibility
requirements) at least at the same rate as they do for themselves. In general,
such premium payments are deductible in full and are not taxable currently to
such employees.

Tax qualified plans may permit self-employed persons and their employees to make
additional premium payments themselves (which are not deductible) of up to 10%
of earned income or compensation.

When payments under a Contract are made in the form of an annuity, such payments
are taxed to the Annuitant or other payee under the same rules that apply to
such payments under corporate plans (discussed earlier).

The tax treatment of single sum payments is also the same as under corporate
plans except that five-year averaging may be unavailable to a self-employed
Annuitant on termination of service for reasons other than disability.

The same rules that apply to commencement of annuity payments under corporate
plans apply to H.R. 10 plans.

CONTRACTS PURCHASED BY TOP-HEAVY PLANS

Certain corporate and H.R. 10 plans may be characterized under Section 416 of
the Code as "top-heavy plans" if a significant portion of the plan assets is
held for the benefit of the "key employees" (as defined in the Code). Care must
be taken to consider the special limitations applicable to top-heavy plans and
the potentially adverse tax consequences to key employees.

WITHHOLDING OF TAXES

The Company is obligated to withhold taxes from certain payments unless the
recipient elects otherwise. The withholding rate varies depending upon the
nature and the amount of the distribution. The Company will notify the Owner or
other payee of his or her right to elect out of withholding and furnish a form
on which the election may be made. Any election must be received by the
Servicing Center in advance of the payment in order to avoid withholding.

SEE YOUR OWN TAX ADVISER

The above description of Federal income tax consequences of owning a Contract
and of the different kinds of tax qualified plans which may be funded by the
Contracts is only a brief summary and is not intended as tax advice. The rules
governing the provisions of tax qualified plans are extremely complex and often
difficult to understand. Anything less than full compliance with the applicable
rules, all of which are subject to change from time to time, can have adverse
tax consequences. For example, premature withdrawals are generally subject to a
ten-percent penalty tax. The taxation of an Annuitant or other payee has become
so complex and confusing that great care must be taken to avoid pitfalls. For
further information a prospective purchaser should consult a qualified tax
adviser.

SEPARATE ACCOUNT
PERFORMANCE

The Subaccounts may include total return in advertisements. When a Subaccount
advertises its total return, it will usually be calculated for one year, five
years, and ten years or for the life of the applicable Fund. Total return is the
percentage change between the value of a hypothetical investment in the
Subaccount at the beginning of the relevant period to the value of the
investment at the end of the period, assuming the deduction of any CDSL which
would be payable if the Contract Owner surrendered the Contract at the end of
the period indicated. Total return at the Separate Account level will reflect
the CDSL, mortality and expense risk charges, administrative charge, and the
annual Contract Fee. The total return figures will

<PAGE>

not reflect any premium tax charge or any charges for optional benefits,
including the Nursing Home Waiver of CDSL, One Year Stepped-Up Death Benefit and
Accidental Death Benefit riders. The total return for the Separate Account will
be lower than total return at the Trust level where comparable charges are not
deducted.

The Subaccounts may also advertise total returns in a non-standard format in
conjunction with the standard format described above. The non-standard format
will be the same as the standard format except that it will not reflect any
CDSL.

The Money Market Subaccount may advertise "current yield" and "effective yield."
Current yield refers to the income earned by the Subaccount over a seven-day
period and then annualized; i.e., the income earned in the period is assumed to
be earned every seven days over a 52-week period and stated as a percentage of
the investment. Effective yield is calculated similarly but, when annualized,
the income earned by the investment is assumed to be reinvested in the
Subaccount and thus compounded in the course of a 52-week period. The effective
yield will be slightly higher than the current yield because of this compounding
effect of the assumed reinvestment.

The other Subaccounts may also advertise current yield. For these Subaccounts,
the current yield will be calculated by dividing the annualization of the income
earned by the Subaccount during a recent 30-day period by the maximum offering
price per unit at the end of such period. In all cases, current yield and
effective yield will reflect the recurring charges at the Separate Account level
including the annual Contract Fee, but will not reflect any premium tax charge,
any CDSL, or any charges for optional benefit riders.

Performance information for the Subaccounts may be compared to other variable
annuity separate accounts or other investment products surveyed by Lipper
Analytical Services, Inc., an independent service that monitors and ranks the
performance of investment companies.

Ibottson and Associates, CDA Weisenberger and F.C. Towers are also used for
comparison purposes, as well as the Russell and Wilshire Indexes. Performance
rankings and ratings reported periodically in national financial publications
such as Money Magazine, Forbes, Business Week, The Wall Street Journal,
Micropal, Inc., Morningstar, Stanger's and Barron's may also be utilized.
Performance figures are calculated in accordance with standardized methods
established by each reporting service.

REPORTS

The Company intends to deliver to Owners of outstanding Contracts annual account
statements and such other periodic reports as may be required by law.

VOTING PRIVILEGES

All of the assets in the Subaccounts of the Separate Account are invested in
shares of the corresponding Funds of the Trust. The Company will vote the shares
of each Fund which are deemed attributable to the Contracts at meetings of the
Trust's shareholders in accordance with instructions received from Owners of the
Contracts. Units of the Trust held in the Separate Account which are not
attributable to the Contracts and those for which instructions from owners are
not received will be represented by the Company at the meeting and will be voted
for and against each matter in the same proportion as the votes based upon the
instructions received from the owners of all annuity contracts funded through
the Separate Account's corresponding variable Subaccounts.

The number of shares of a Fund held in each Subaccount deemed attributable to
each Owner is determined by dividing a Contract's Accumulation Unit Value (or
for a Contract under which annuity payments have commenced, the equivalent) in
the Subaccount by the net asset value of one share in the corresponding Fund in
which the assets of that Subaccount are invested. Fractional votes will be
counted. The number of shares as to which the Owner may give instructions will
be determined as of the record date for the Trust's meeting.

Owners of Contracts may give instructions regarding the election of the Board of
Trustees of the Trust, ratification of the selection of independent auditors,
approval of the Trust investment management agreements and other matters
requiring a vote under the 1940 Act. Owners will be furnished information and
forms by the Company in order that voting instructions may be given.

CHANGES IN APPLICABLE LAW--
FUNDING AND OTHERWISE

The voting privileges described in this prospectus are afforded based on the
Company's understanding of applicable Federal Securities Law requirements. To
the extent that applicable law, regulations or interpretations change to
eliminate or restrict the need for such voting privileges, the Company reserves
the right to proceed in accordance with any such revised requirements. The
Company also reserves the right, subject to compliance with applicable law,
including approval of Owners if so required, to transfer assets determined by
the Company to be associated with the class of contracts to which the Contracts
belong from the Account to another separate account or Subaccount by withdrawing
the same percentage of each investment in the Separate Account with appropriate
adjustments to avoid odd lots and fractions.

DISTRIBUTION OF THE
CONTRACTS

JHFI is registered as a broker-dealer under the Securities Exchange Act of 1934
and is a member of the National

<PAGE>

Association of Securities Dealers, Inc. JHFI acts as principal underwriter and
principal distributor of the Contracts. The Contracts may be purchased through
broker-dealers and certain financial institutions who have entered into selling
agreements with JHFI and the Company, and whose representatives are authorized
by applicable law to sell annuity products. The compensation paid to such
broker-dealers and financial institutions is not expected to exceed 7.0% of
premium payments. The offering of the Contracts is intended to be continuous,
but neither the Company nor JHFI is obligated to sell any particular amount of
Contracts.

The Company reimburses JHFI for direct and indirect expenses actually incurred
in connection with the marketing and sale of the Contracts.

REGISTRATION STATEMENT

This Prospectus omits certain information contained in the Registration
Statement which has been filed with the Securities and Exchange Commission. More
details may be attained from the Commission upon payment of the prescribed fee.

EXPERTS AND FINANCIAL
STATEMENTS

The statutory-basis financial statements of John Hancock Mutual Life Insurance
Company at December 31, 1996 and 1995, and for each of the two years in the
period ended December 31, 1996, appearing in this prospectus and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

<PAGE>

TABLE OF CONTENTS OF STATEMENT
OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
CROSS REFERENCE TO
PAGE PAGE IN PROSPECTUS
---- ------------------
<S> <C> <C>
The Separate Account................................................................ 2 10
Services Agreement.................................................................. 2 NA
Calculation of Performance Data..................................................... 2 26
Calculation of Annuity Payments..................................................... 3 21
Separate Account Financial Statements............................................... 6 9
</TABLE>

<PAGE>

APPENDIX A -- SAMPLE MARKET VALUE ADJUSTMENT CALCULATIONS

The formula which will be used to determine the Market Value Adjustment is:

<TABLE>
<S> <C> <C> <C> <C>
n/12
1 + g
( ------------- ) -1
1 + c + .005
SAMPLE CALCULATION 1: Positive Adjustment
Premium Payment $10,000
Guarantee Period 7 years
Time of withdrawal or transfer beginning of 3rd year of Guarantee Period
Amount withdrawn or transferred $11,664
Guaranteed Rate(g) 8%
Guaranteed Rate for new 5 year guarantee(c) 7%
Remaining Guarantee Period(n) 60 months
Maximum positive adjustment:
$10,000 x (1.08(2) - 1.03(2)) = $1,055
i.e., the maximum withdrawal adjusted for Market Value Adjustment is $12,719 ($11,664 + $1,055)
</TABLE>

Market Value Adjustment:

Amount withdrawn or transferred (adjusted for Market Value Adjustment):
$11,664 + $273.79 = $11,937.79

<TABLE>
<S> <C>
SAMPLE CALCULATION 2: Negative Adjustment
Premium Payment $10,000
Guarantee Period 7 years
Time of withdrawal or transfer beginning of 3rd year of Guarantee Period
Amount withdrawn or transferred $11,664
Guaranteed Rate(g) 8%
Guaranteed Rate for new 5 year guarantee(c) 9%
Remaining Guarantee Period(n) 60 months
Maximum negative adjustment:
$10,000 X (1.08(2) - 1.03(2)) = $1,055
i.e., the maximum withdrawal adjusted for Market Value Adjustment is $10,609 ($11,664 - $1,055)
</TABLE>

Market Value Adjustment:

Amount withdrawn or transferred (adjusted for Market Value Adjustment):
$11,664 - $777.31 = $10,886.69

<TABLE>
<S> <C>
SAMPLE CALCULATION 3: Positive Adjustment Limited by Amount of Excess Interest
Premium Payment $10,000
Existing Guarantee Period 7 years
Time of withdrawal or transfer beginning of 3rd year of Guarantee Period
Amount withdrawn or transferred $11,664
Guaranteed Rate(g) 8%
Guaranteed Rate for new 5 year guarantee(c) 5%
Remaining Guarantee Period(n) 60 months
Amount of Excess Interest:
$10,000 X (1.08(2) - 1.03(2)) = $1,055
i.e., the maximum withdrawal adjusted for Market Value Adjustment is $12,719 ($11,664 + $1,055)
</TABLE>

<PAGE>

Market Value Adjustment:

Since the Market Value Adjustment exceeds the amount of excess interest of
$1,055, the actual Market Value Adjustment is $1,055.

Amount withdrawn or transferred (adjusted for Market Value Adjustment):
$11,664 + $1,055 = $12,719

<TABLE>
<S> <C>
SAMPLE CALCULATION 4: Negative Adjustment Limited by Amount of Excess Interest
Premium Payment $10,000
Existing Guarantee Period 7 years
Time of withdrawal or transfer beginning of 3rd year of Guarantee Period
Amount withdrawn or transferred $11,664
Guaranteed Rate(g) 8%
Guaranteed Rate for new 5 year guarantee(c) 10%
Remaining Guarantee Period(n) 60 months
Amount of Excess Interest:
$10,000 X (1.08(2) - 1.03(2)) = $1,055
i.e., the minimum withdrawal adjusted for Market Value Adjustment is $10,609 ($11,664 - $1,055)
</TABLE>

Market Value Adjustment:

Since the Market Value Adjustment exceeds the amount of excess interest of
$-1,055, the actual Market Value Adjustment is $-1,055.

Amount withdrawn or transferred (adjusted for Market Value Adjustment):
$11,664 - $1,055 = $10,609

<PAGE>

APPENDIX B--VARIABLE ANNUITY INFORMATION
FOR INDIVIDUAL RETIREMENT ANNUITIES

To help you understand your purchase of this Contract as an Individual
Retirement Annuity (IRA), we are providing the following summary.

I. ACCUMULATION UNITS AND THE MVA FIXED ACCOUNT. Each net premium payment you
make into your Contract is allocated to the Subaccounts and/or Guarantee Periods
you select. Accumulation Units are acquired under the Contract with amounts you
allocate to the Subaccounts. This is the unit of measurement used to determine
the value of the variable portion of your Contract. The number of units acquired
in any Subaccount is based on the unit value of that Subaccount next determined
after receipt of the payment at the Servicing Center. The values of Accumulation
Units fluctuate with the daily investment performance of the corresponding
Subaccount. The growth in the value of your Contract, to the extent invested in
the Separate Account, is neither guaranteed nor projected and varies with the
investment performance of the Fund underlying the Subaccount you have selected.
Each net premium payment allocated to a Guarantee Period in the MVA Fixed
Account will be credited interest, as determined by the Company. A minimum
guaranteed interest rate of 3% applies to Contracts where required under state
law. Amounts withdrawn or surrendered from a Guarantee Period may be increased
or decreased by a Market Value Adjustment. More details appear under
"Accumulation Period" and "The MVA Fixed Account" in this prospectus.

II. SEPARATE ACCOUNT AND TRUST CHARGES. The assets of the Separate Account are
charged for services and certain expense guarantees. The annualized charge
equals a maximum of 1.25%. Trust fees varying by Fund are charged against the
Funds for investment management and advisory services, and other expenses.
Details appear under "Charges Under the Contracts" in this prospectus and in the
accompanying prospectus of the Trust.

III. DEDUCTIONS FROM THE CONTRACT. The full amount of each premium payment,
net of any premium taxes deducted, is applied to the Contract. At or after the
payment dates, one or more of the following charges may be made, depending on
circumstances.

1. CDSL. In each Contract Year you may withdraw as much as 10% of
the Accumulated Value of your Contract as of the beginning of the Contract
Year without charge. Withdrawals in excess of this amount will be subject
to the following charges:

<TABLE>
<CAPTION>
YEARS FROM DATE OF
PREMIUM PAYMENT TO CDSL
DATE OF SURRENDER OR WITHDRAWAL PERCENTAGE
--------------------------------------------------------------------------------------- ----------
<S> <C>
7 or more.............................................................................. 0%
6 but less than 7...................................................................... 2%
5 but less than 6...................................................................... 3%
4 but less than 5...................................................................... 4%
3 but less than 4...................................................................... 5%
2 but less than 3...................................................................... 5%
less than 2............................................................................ 6%
</TABLE>

For the purpose of calculating the CDSL, deposits are considered to be withdrawn
on a "first-in first-out" basis. Earnings are considered to be withdrawn last,
and are withdrawn without charge. Under certain circumstances the CDSL is not
assessed. This is described in more detail under "Contingent Deferred Sales
Load" under "Charges Under the Contracts" in this prospectus.

2. CONTRACT FEE. The Company currently deducts $30 from the
Accumulated Value as a Contract Fee if the Accumulated Value is less than
$10,000. This occurs annually or at the time of surrender. Please refer to
"Charges for Administrative Services" under "Charges Under the Contracts"
in this prospectus.

3. STATE PREMIUM TAX. Some states and local governments impose a
premium or similar tax on annuities. The Company only deducts this tax when
required to do so. Please refer to "Premium or Similar Taxes" under
"Changes Under Contracts" in this prospectus.

4. OPTIONAL BENEFIT RIDERS. Three optional benefit riders are
available under the Contracts, including the One Year Stepped-Up Death
Benefit, Accidental Death Benefit and Nursing Home Waiver of CDSL riders.
The charges for these riders are 0.15%, 0.10% and 0.05% (annual percentage
rates), respectively, of Accumulated Value. Please refer to "Nursing Home
Waiver of CDSL" and "Optional Death Benefit Charges" under "Charges Under
the Contracts."

32
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

DEFERRED COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

STATEMENT OF ADDITIONAL INFORMATION

___________________

This statement of additional information ("SAI"), dated January 2, 1998 is
not a prospectus. It is intended that this SAI be read in conjunction with the
prospectus of John Hancock Variable Annuity Account H, dated January 2, 1998,
for the Contracts being offered. Capitalized terms used in this SAI that are not
otherwise defined herein have the same meanings given to them in the prospectus.
A copy of the prospectus may be obtained from the Servicing Center, P.O. Box
9298, Boston, Massachusetts 02205-9298, telephone number 800-824-0335.

<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Cross Reference to
Page Pages in Prospectus
---- -------------------
<S> <C> <C>

The Separate Account.................. 2 9
Services Agreement.................... 2 NA
Calculation of Performance Data....... 2 23
Calculation of Annuity Payments....... 3 18
Financial Statements.................. 6 9
</TABLE>

1
<PAGE>

THE SEPARATE ACCOUNT

John Hancock Variable Annuity Account H ("Separate Account") is a separate
account of John Hancock Mutual Life Insurance Company ("Company"), established
under the laws of the Commonwealth of Massachusetts. The Separate Account is
organized as a unit investment trust and registered with the Securities and
Exchange Commission ("Commission") under the Investment Company Act of 1940, as
amended ("1940 Act"). The Separate Account has eleven separate subaccounts
("Subaccounts") that fund the variable portion of the Company's deferred
combination fixed and variable annuity contracts ("Contracts"). The individual
Contract owner ("Owner") may choose among the V.A. International, V.A. Financial
Industries, V.A. Emerging Growth, V.A. Special Opportunities, V.A. Growth, V.A.
Growth and Income, V.A. Independence Equity, V.A. Sovereign Investors, V.A. 500
Index, V.A. Sovereign Bond, V.A. Strategic Income, V.A. High Yield Bond, V.A.
World Bond, and V.A. Money Market Subaccounts. The assets of each Subaccount
are, in turn, invested in a corresponding Fund of John Hancock Declaration Trust
("Trust"), a registered open-end management investment company advised by John
Hancock Advisers, Inc. ("Adviser") and affiliated sub-advisers. The Owner may
also choose to fund the Contracts through the MVA Fixed Account, providing
Guaranteed Rates for various Guarantee Periods.

SERVICES AGREEMENT

The Company and John Hancock Funds, Inc.("JHFI") have entered into a
Responsibility and Cost Allocation Agreement ("Agreement") for the allocation of
services and related costs with respect to various functions, duties and
responsibilities associated with the Contracts and other variable annuity
contracts that may be offered by the Company. The Agreement provides for the
allocation of such matters as regulatory compliance, insurance underwriting and
issuance, pricing and unit valuation, accounting, record maintenance,
surrenders, benefit payments, commissions payments, reports to annuity contract
owners, and distribution and marketing. The cost of performing the duties
allocated will be borne by the party responsible for discharging the function,
unless agreed upon otherwise. The Company and JHFI may delegate any of their
respective duties to their subsidiaries or affiliates.

CALCULATION OF PERFORMANCE DATA

The Separate Account may, from time to time, include in advertisements,
sales literature and reports to Owners or prospective investors information
relating to the performance of its Subaccounts. The performance information that
may be presented is not an estimate or a guarantee of future investment
performance, and does not represent the actual experience of amounts invested by
a particular Owner. Set out below is a description of the methods used in
calculating the performance information for the Subaccounts.

The Separate Account will calculate the average annual total return for
each Subaccount (other than the Money Market Subaccount), according to the
following formula prescribed by the Commission:
n
P x ( 1 + T ) = ERV

where: P =a hypothetical initial payment of $1,000
T =average annual total return
n =number of years
ERV =ending redeemable value of a hypothetical $1,000 payment,
made at the beginning of a period (or fractional portion
thereof)

Average annual total return is the annual compounded rate of return that
would have produced the cash redemption value under a Contract had the
Subaccount been invested in a specified Fund of the Trust over the stated period
and had the performance remained constant throughout. The calculation assumes a
single $1,000 payment made at the beginning of the period and full redemption at
the end of the period. It reflects adjustments for all Trust and Contract level
charges except any premium tax charge or charges for optional benefits described
in the prospectus.

The Separate Account will calculate current yield for each Subaccount
(other than the Money Market Subaccount) according to the following formula
prescribed by the Commission:

2
<PAGE>

a - b 6
Yield = 2[(------- + 1) - 1 ]
cd

where: a = net investment income earned during the period by the Fund
whose shares are owned by the Subaccount

b = expenses accrued for the period (net of any reimbursements)

c = the average daily number of Accumulation Units outstanding
during the period

d = the maximum offering price per Accumulation Unit on the last
day of the period.

According to this formula, yield is determined by dividing the net
investment income per Accumulation Unit earned during the period (minus the
deduction for mortality and expense risk charge, administration charge and
Contract Fee) by the Accumulation Unit Value on the last day of the period and
annualizing the resulting figure. The calculation is based on specified 30-day
periods identified in the advertisement. Neither the CDSL nor any charges for
premium taxes or optional benefits are reflected in the calculation.

The Separate Account may calculate current yield and effective yield
figures for the Money Market Subaccount. The current yield of the Money Market
Subaccount for a seven-day period ("base period") will be computed by
determining the "net change in value" (calculated as set forth below) of a
hypothetical Owner account having a balance of one Unit at the beginning of the
period, dividing the net change in account value by the value of the account at
the beginning of the base period to obtain the base period return, and
multiplying the base period return by 365/7 with the resulting yield figure
carried to the nearest hundredth of one percent. Net changes in value of the
hypothetical Owner account will include net investment income of that account
(accrued daily dividends as declared by the Money Market Fund, less daily
expense charges of the Separate Account) for the period, but will not include
realized gains or losses or unrealized appreciation or depreciation on the
underlying Money Market Fund shares. The mortality and expense risk charges,
administration charge and Contract Fee are reflected, but the CDSL and any
charge for premium taxes and optional benefits are not.

The effective yield reflects the effects of compounding and represents an
annualization of the current return with all dividends reinvested. The formula
for effective yield, as prescribed by the Commission, is:

(365/7)
Effective yield = (Base period return + 1) - 1

CALCULATION OF ANNUITY PAYMENTS

The variable monthly annuity payment to an Annuitant under a Contract is
equal to the sum of the products of the number of each Subaccount's Annuity
Units credited to the Contract multiplied by the applicable Annuity Unit Value,
as these terms are defined under "Special Terms" and "Variable Account Valuation
Procedures," respectively, in the Account's prospectus. The number of each
Subaccount's Annuity Units credited to the Contract is multiplied by the
applicable Annuity Unit Value as of ten calendar days prior to the date the
payment is due. The value of the Annuity Units varies from day to day, depending
on the investment performance of the Subaccount, the deductions made against the
Subaccount, and the assumed investment rate used in computing Annuity Unit
Values. Thus, the variable monthly annuity payments vary in amount from month to
month.

The amount of the initial variable monthly payment is determined on the
assumption that the actual net investment rate of each Subaccount used in
calculating the Net Investment Factor (as described under "Variable Account
Valuation Procedures" in the Account's prospectus) will be equal on an annual
basis to the assumed investment rate. If the actual net investment rate between
the dates for determining two monthly annuity

3
<PAGE>

payments is greater than the assumed investment rate, the latter monthly payment
will be larger in amount than the former. On the other hand, if the actual net
investment rate between the dates for determining two monthly annuity payments
is less than the assumed investment rate, the latter monthly payment will be
smaller in amount than the former.

The mortality tables used as a basis for both variable and fixed annuity
purchase rates are the 1983a Mortality Tables, with projections of mortality
improvements and with certain age adjustments based on the Contract Year of
annuitization. The mortality table used in a Contract purchased in connection
with certain employer-related plans and used in all Contracts issued in Montana
will be the Female Annuity Table of the 1983a Mortality Tables. The impact of
this change will be lower benefits (5% to 15%) from a male's viewpoint than
would otherwise be the case.

An illustration of the method of calculation of variable monthly annuity
payments and the number of Annuity Units under the Contracts is shown below.

GENERAL FORMULAE TO DETERMINE ACCUMULATION UNIT VALUES AND ANNUITY UNIT VALUES

Net Investment Rate =

<TABLE>
<CAPTION>
Subaccount Charges (0.003425% per
Investment Capital Capital Taxes Day of the Value of the Subaccount at
Income + Gains - Losses - (if any) - the Beginning of the Valuation Period)*
- ------------------------------------------------------------------------------------------------------------
Value of the Subaccount at the Beginning of the Valuation Period
<S> <C> <C> <C> <C>
Net Investment
Factor = 1.00000000 + Net Investment Rate

Accumulation Accumulation Unit Value on Net Investment
Unit Value = Preceding Valuation Date X Factor

Annuity Unit Net
Annuity Unit Value on Preceding Investment Factor to Neutralize
Value = Valuation Date X Factor X Assumed Investment Rate
</TABLE>

_________________________

/*/ The 0.003425% daily charge is based on charges for mortality and expense
risk and administration at the annual rate of 1.25%. A lower decimal amount
of daily charge would apply under the 1.00% annual rate. See "Charges Under
the Contracts" in the prospectus.

4
<PAGE>

HYPOTHETICAL EXAMPLE ILLUSTRATING THE CALCULATION OF ACCUMULATION UNIT VALUES
AND ANNUITY UNIT VALUES

Assume at the beginning of the Valuation Period being considered, the value
of a particular Subaccount was $4,000,000. Investment income during the
Valuation Period totaled $2000 while capital gains were $3000 and capital losses
were $1000. No taxes accrued. Charges against the beginning value of the
Subaccount amount to [$137.00] assuming a one day Valuation Period. The
[$137.00] was computed by multiplying the beginnings Subaccount value of
$4,000,000 by the factor [0.00003425]. By substituting in the first formula
above, the net investment rate is equal to [$3863.00 ($2000 + $3000 - $1000 -
$137.00)] divided by $4,000,000 or [0.0009658.] The Net Investment Factor would
then be [1.0009658].

Assume further that each Accumulation Unit had a value of $11.250000 on the
previous Valuation Date, and the value of an Annuity Unit on such date was
$1.0850000. Based upon the experience of the Subaccount during the Valuation
Period, the value of an Accumulation Unit at the end of the Valuation Period
would be [$11.260865 ($11.250000 x 1.0009658)]. The value of an Annuity Unit at
the end of the Valuation Period would be [$1.085946 ($1.0850000 x 1.0009658 x
.999905754)]. The final figure, [.999905754], neutralizes the effect of a 3 1/2%
assumed investment rate so that the Annuity Unit recognizes only the actual
investment experience.

GENERAL FORMULAE TO DETERMINE AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENTS AND
NUMBER OF ANNUITY UNITS

Amount of First Variable Annuity Payment =

<TABLE>
<CAPTION>
First
Number of Monthly
Accumulation Accumulation Unit Value Annuity
Shares Applied X 10 Days Before Maturity Date X Payment
- -----------------------------------------------------------
<S> <C> <C> <C> <C>
$1000 Factor

Number of
Annuity Units = Amount of First Variable Annuity Payment
------------------------------------------------
Annuity Unit Value 10 Days Before Maturity Date

Amount of Annuity Unit
Subsequent Variable Value 10 Days
Annuity Payment = Number of Annuity Units X Before Date
</TABLE>

HYPOTHETICAL EXAMPLE ILLUSTRATING THE CALCULATION OF THE AMOUNT OF MONTHLY
VARIABLE ANNUITY PAYMENT

Assume that 10 days before the date of maturity a Contract has credited to
it 4000.000 Accumulation Units each having a value of $12.000000. The
appropriate annuity purchase rate in the Contract for an assumed investment rate
of 3 1/2% is $5.47 per $1000 of proceeds for the Annuity Option elected. The
Annuitant's first monthly payment would then be $262.56.

5
<PAGE>

4000.000 x $12.000000 x 5.47
----------------------
$1000

If the value of an Annuity Unit 10 days before the date of maturity was
$1.4000000, the number of Annuity Units represented by the first and subsequent
payments would be 187.543 ($262.56/$1.4000000). If the Annuity Unit Value 10
days before the due date of the second monthly payment was $1.405000, the amount
of the second payment would be $263.50 (187.543 x $1.405000).

SEPARATE ACCOUNT FINANCIAL STATEMENTS

There are presently no financial statements for the Separate Account, as
the Separate Account had not yet commenced operations as of December 31, 1996
and therefore had no assets or liabilities as of such date.

6
<PAGE>

Report of Ernst & Young LLP, Independent Auditors

To the Directors and Policyholders
John Hancock Mutual Life Insurance Company

We have audited the accompanying statutory-basis statements of financial
position of John Hancock Mutual Life Insurance Company as of December 31, 1996
and 1995, and the related statutory-basis summaries of operations, changes in
policyholders' contingency reserves and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements 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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. 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.

As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the Commonwealth of Massachusetts Division of Insurance, which
practices differ from generally accepted accounting principles. The variances
between such practices and generally accepted accounting principles also are
described in Note 1. The effects on the financial statements of these variances
are not reasonably determinable but are presumed to be material.

In our report dated February 7, 1996, we expressed an opinion that the 1995
financial statements of the Company fairly present, in all material respects,
the Company's financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles for mutual life
insurance companies and with reporting practices prescribed or permitted by the
Commonwealth of Massachusetts Division of Insurance. As described in Note 1, the
accompanying statutory-basis financial statements are no longer considered to be
prepared in conformity with generally accepted accounting principles.
Accordingly, our present opinion on the 1995 financial statements, as presented
in the following paragraph, is different from that expressed in our previous
report.

In our opinion, because of the effects of the matter described in the second
preceding paragraph, the financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of John Hancock Mutual Life Insurance Company at December 31,
1996 and 1995, or the results of its operations or its cash flows for the years
then ended.

Also, in our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of John Hancock
Mutual Life Insurance Company at December 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance.

ERNST & YOUNG LLP

Boston, Massachusetts
February 14, 1997

<PAGE>

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

December 31
1996 1995
------------------------------
(In millions)

ASSETS
Bonds--Note 6 $22,467.0 $21,108.5

Stocks:
Preferred 416.2 338.8
Common 249.8 130.9
Investments in affiliates 1,268.9 1,265.3
------------------------------
1,934.9 1,735.0

Mortgage loans on real estate--Note 6 7,964.0 8,801.5

Real estate:
Company occupied 372.1 377.4
Investment properties 2,042.3 1,949.5
------------------------------
2,414.4 2,326.9

Policy loans 1,589.3 1,621.3

Cash items:
Cash in banks and offices 348.4 286.6
Temporary cash investments 1,068.3 254.1
------------------------------
1,416.7 540.7

Premiums due and deferred 278.4 234.0

Investment income due and accrued 547.8 597.5

Other general account assets 1,009.9 883.0

Assets held in separate accounts 13,969.1 12,928.2
------------------------------

TOTAL ASSETS $53,591.5 $50,776.6
==============================

<PAGE>

December 31
1996 1995
------------------------------
(In millions)

OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY
RESERVES

OBLIGATIONS
Policy reserves $18,544.0 $17,711.4

Policyholders' and beneficiaries' funds 14,679.3 14,724.8

Dividends payable to policyholders 395.5 378.6

Policy benefits in process of payment 236.3 217.1

Other policy obligations 210.5 159.6

Asset valuation reserve--Note 1 1,064.8 1,014.3

Federal income and other accrued
taxes--Note 1 125.1 250.5

Other general account obligations 1,521.7 873.2

Obligations related to separate accounts 13,958.2 12,913.6
------------------------------

TOTAL OBLIGATIONS 50,735.4 48,243.1

POLICYHOLDERS' CONTINGENCY RESERVES
Surplus notes--Note 2 450.0 450.0
Special contingency reserve for group insurance 194.8 193.1
General contingency reserve 2,211.3 1,890.4
------------------------------

TOTAL POLICYHOLDERS' CONTINGENCY RESERVES 2,856.1 2,533.5
------------------------------

TOTAL OBLIGATIONS AND POLICYHOLDERS'
CONTINGENCY RESERVES $53,591.5 $50,776.6
==============================

The accompanying notes are an integral part of the statutory-basis financial
statements.

<PAGE>

STATUTORY-BASIS SUMMARY OF OPERATIONS AND CHANGES IN
POLICYHOLDERS' CONTINGENCY RESERVES

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

Year ended December 31
1996 1995
-------------------------
(In millions)
INCOME
Premiums, annuity considerations and pension
fund contributions $ 8,003.1 $ 8,127.8
Net investment income--Note 4 2,803.1 2,678.5
Other, net 68.6 90.8
-------------------------
10,874.8 10,897.1
BENEFITS AND EXPENSES
Payments to policyholders and beneficiaries:
Death benefits 886.8 787.4
Accident and health benefits 300.9 321.3
Annuity benefits 1,539.4 1,342.7
Surrender benefits and annuity fund withdrawals 5,565.4 5,243.6
Matured endowments 20.6 19.8
-------------------------
8,313.1 7,714.8
Additions to reserves to provide for future
payments to policyholders and beneficiaries 880.5 1,497.0
Expenses of providing service to policyholders and
obtaining new insurance:
Field sales compensation and expenses 275.0 277.4
Home office and general expenses 514.8 455.8
Payroll, state premium and miscellaneous taxes 70.9 78.6
-------------------------
10,054.3 10,023.6
-------------------------
GAIN FROM OPERATIONS BEFORE DIVIDENDS
TO POLICYHOLDERS, FEDERAL INCOME TAXES
AND NET REALIZED CAPITAL GAINS (LOSSES) 820.5 873.5

Dividends to policyholders 399.4 465.9
Federal income taxes--Note 1 107.1 128.5
-------------------------
506.5 594.4
-------------------------
GAIN FROM OPERATIONS BEFORE NET
REALIZED CAPITAL GAINS (LOSSES) 314.0 279.1

Net realized capital gains (losses)--Note 5 (43.6) 21.2
-------------------------
NET INCOME 270.4 300.3

3
<PAGE>

STATUTORY-BASIS SUMMARY OF OPERATIONS AND CHANGES IN
POLICYHOLDERS' CONTINGENCY RESERVES--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

Year ended December 31
1996 1995
-------------------------
(In millions)

Other increases (decreases) in policyholders'
contingency reserves:
Net unrealized capital losses and other
adjustments--Note 5 $ 191.7 $ (85.1)
Valuation reserve changes--Note 1 (27.5) 0.0
Prior years' federal income taxes (28.9) (36.8)
Other reserves and adjustments (83.1) 25.1
-------------------------
NET INCREASE IN POLICYHOLDERS'
CONTINGENCY RESERVES 322.6 203.5

Policyholders' contingency reserves
at beginning of year 2,533.5 2,330.0
-------------------------

POLICYHOLDERS' CONTINGENCY
RESERVES AT END OF YEAR $2,856.1 $2,533.5
=========================

The accompanying notes are an integral part of the statutory-basis financial
statements.

4
<PAGE>

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

Year ended December 31
1996 1995
-------------------------
(In millions)
Cash flows from operating activities:
Insurance premiums, annuity considerations and
deposits $ 8,120.4 $ 8,280.3
Net investment income 2,965.5 2,756.9
Benefits to policyholders and beneficiaries (8,476.6) (7,917.6)
Dividends paid to policyholders ( 382.6) ( 464.9)
Insurance expenses and taxes ( 884.1) ( 795.1)
Net transfers from separate accounts 198.2 132.0
Other, net ( 602.7) ( 202.7)
-------------------------
NET CASH PROVIDED FROM OPERATIONS 938.1 1,788.9
-------------------------

Cash flows used in investing activities:
Bond purchases (7,590.7) (6,456.9)
Bond sales 2,812.4 2,874.9
Bond maturities and scheduled redemptions 2,241.0 1,600.6
Bond prepayments 1,223.2 795.9
Stock purchases ( 391.2) ( 224.3)
Proceeds from stock sales 573.2 131.4
Real estate purchases ( 447.7) ( 375.1)
Real estate sales 382.1 365.0
Other invested assets purchases ( 214.7) ( 46.5)
Proceeds from the sale of other invested assets 183.6 251.1
Mortgage loans issued (1,582.7) (2,041.6)
Mortgage loan repayments 2,247.3 1,277.9
Other, net 205.3 ( 506.6)
-------------------------
NET CASH USED IN INVESTING ACTIVITIES ( 358.9) (2,354.2)
-------------------------

Cash flows from financing activities:
Issuance of short-term note payable 90.0 0.0
Issuance of REMIC notes payable 292.0 213.1
Repayment of REMIC notes payable ( 85.2) 0.0
-------------------------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 296.8 213.1
-------------------------

INCREASE (DECREASE) IN CASH AND
TEMPORARY CASH INVESTMENTS 876.0 ( 352.2)
Cash and temporary cash investments at
beginning of year 540.7 892.9
-------------------------

CASH AND TEMPORARY CASH INVESTMENTS
AT END OF YEAR $ 1,416.7 $ 540.7
=========================

The accompanying notes are an integral part of the statutory-basis financial
statements.

5
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES

John Hancock Mutual Life Insurance Company (the Company) provides a broad range
of financial services and insurance products. The Company's insurance operations
focus principally in three segments: the Retail Sector, which encompasses the
Company's individual life, annuity, and long-term care operations; Group
Pension, which offers single premium annuity and guaranteed investment contracts
through both the general and separate accounts; and Business Insurance, its
group life, health, and long-term care operations including administrative
services provided to group customers. On October 10, 1996, the Company entered
into an agreement to sell its group health and a portion of its group life
business to WellPoint Health Networks Inc. of California during the first
quarter of 1997. In addition, through its subsidiaries and affiliates, the
Company also offers a wide range of investment management and advisory services
and other related products including life insurance products for the Canadian
market, sponsorship and distribution of mutual funds, real estate financing and
management, and various other financial services. Investments in these
subsidiaries and other affiliates are recorded on the statutory equity method.

The Company is domiciled in the Commonwealth of Massachusetts and licensed in
all fifty of the United States, the District of Columbia, Puerto Rico, Guam, the
US Virgin Islands, and Canada. The Company distributes its individual products
in North America primarily through a career agency system. The career agency
system is composed of company-owned, unionized branch offices and independent
general agencies. The Company also distributes its individual products through
several alternative distribution channels.

The Company markets pension and other investment-related products primarily to
sponsors of retirement and savings plans covering employees of private sector
companies, and plans covering public employees and collective bargaining unions
and non-profit organizations. Products are marketed and sold through a
combination of group pension field employee representatives, as well as
marketing personnel and investment professionals employed by the Company.

The Company distributes its group benefit products through group
representatives, who are John Hancock employees or through intermediaries, in
key markets nationwide.

The preparation of the financial statements requires management to make
estimates and assumptions that affect amounts reported in the financial
statements and accompanying notes. Such estimates and assumptions could change
in the future as more information becomes known, which could impact the amounts
reported and disclosed herein.

Basis of Presentation: The financial statements have been prepared using
accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance and in conformity with the practices of the
National Association of Insurance Commissioners (NAIC), which practices differ
from generally accepted accounting principles (GAAP). The 1995 financial
statements presented for comparative purposes were previously described as being
prepared in accordance with GAAP for mutual life insurance companies. Pursuant
to Financial Accounting Standards Board Interpretation 40, "Applicability of
Generally Accepted Accounting Principles to Mutual Life Insurance and Other
Enterprises" (FIN 40), as amended, which is effective for 1996 financial
statements, financial statements based on statutory accounting practices can no
longer be described as prepared in conformity with GAAP. Furthermore, financial
statements prepared in conformity with statutory accounting practices for
periods prior to the effective date of FIN 40 are not considered GAAP
presentations when presented in comparative form with financial statements for
periods subsequent to the effective date. Accordingly, the 1995 financial
statements are no longer considered to be presented in conformity with GAAP.

6
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--
CONTINUED

The significant differences from GAAP include: (1) policy acquisition costs are
charged to expense as incurred rather than deferred and amortized over the
related premium-paying period; (2) policy reserves are based on statutory
mortality, morbidity, and interest requirements without consideration of
withdrawals and Company experience; (3) certain assets designated as
"nonadmitted assets" are excluded from the balance sheet by direct charges to
surplus; (4) reinsurance recoverables are netted against reserves and claim
liabilities rather than reflected as an asset; (5) bonds held as available for
sale are recorded at amortized cost or market value as determined by the NAIC
rather than at fair value; (6) an Asset Valuation Reserve and Interest
Maintenance Reserve as prescribed by the NAIC are not calculated under GAAP.
Under GAAP, realized capital gains and losses are reported in the income
statement on a pretax basis as incurred and investment valuation allowances are
provided when there has been a decline in value deemed other than temporary; (7)
investments in affiliates are carried at their net equity value with changes in
value being recorded directly to policyholders' contingency reserves rather than
consolidated in the financial statements; (8) no provision is made for the
deferred income tax effects of temporary differences between book and tax basis
reporting; and (9) surplus notes are reported as surplus rather than as
liabilities. The effects of the foregoing variances from GAAP have not been
determined, but are presumed to be material.

The significant accounting practices of the Company are as follows:

Pending Statutory Standards: The NAIC currently is in the process of recodifying
statutory accounting practices, the result of which is expected to constitute
the only source of prescribed statutory accounting practices. Accordingly, that
project, which is expected to be completed in 1999 will likely change, to some
extent, prescribed statutory accounting practices, and may result in changes to
the accounting practices that the Company uses to prepare its statutory-basis
financial statements. The impact of any such changes on the Company's statutory
surplus cannot be determined at this time and could be material.

Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of new
business, are charged to operations as incurred and policyholder dividends are
provided as paid or accrued.

Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-term,
highly-liquid investments both readily convertible to known amounts of cash and
so near maturity that there is insignificant risk of changes in value because of
changes in interest rates.

Valuation of Assets: General account investments are carried at amounts
determined on the following bases:

Bond and stock values are carried as prescribed by the NAIC; bonds
generally at amortized amounts or cost, preferred stocks generally at cost
and common stocks at market. The discount or premium on bonds is amortized
using the interest method.

Investments in affiliates are included on the statutory equity method.

Mortgage loans are carried at outstanding principal balance or amortized
cost.

7
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--
CONTINUED

Investment and company-occupied real estate is carried at depreciated cost,
less encumbrances. Depreciation on investment and company-occupied real
estate is recorded on a straight-line basis. Accumulated depreciation
amounted to $393.5 million and $361.7 million at December 31, 1996 and
1995, respectively.

Real estate acquired in satisfaction of debt and held for sale, which is
classified with investment properties, is carried at the lower of cost or
fair value as of the date of foreclosure.

Policy loans are carried at outstanding principal balance, not in excess of
policy cash surrender value.

Other invested assets, which are classified with other general account
assets, include real estate and energy joint ventures and limited
partnerships and generally are valued based on the Company's equity in the
underlying net assets.

Asset Valuation and Interest Maintenance Reserves: The Asset Valuation Reserve
(AVR) is computed in accordance with the prescribed NAIC formula and represents
a provision for possible fluctuations in the value of bonds, equity securities,
mortgage loans, real estate and other invested assets. The Company makes
additional contributions to the AVR in excess of the required amounts to account
for potential losses and risks in the investment portfolio when the Company
believes such provisions are prudent. Changes to the AVR are charged or credited
directly to policyholders' contingency reserves.

The Company also records the NAIC prescribed Interest Maintenance Reserve (IMR)
that represents that portion of the after tax net accumulated unamortized
realized capital gains and losses on sales of fixed income securities,
principally bonds and mortgage loans, attributable to changes in the general
level of interest rates. Such gains and losses are deferred and amortized into
income over the remaining expected lives of the investments sold. At December
31, 1996, the IMR, net of 1996 amortization of $18.9 million, amounted to $121.7
million which is included in other policy obligations. The corresponding 1995
amounts were $16.4 million and $69.5 million, respectively.

Property and Equipment: Data processing equipment, which amounted to $41.6
million in 1996 and $52.9 million in 1995 and is included in other general
account assets, is reported at depreciated cost, with depreciation recorded on a
straight-line basis. Nonadmitted furniture and equipment also is depreciated on
a straight-line basis. The useful lives of these assets range from three to
twenty years. Depreciation expense was $31.0 million in 1996 and $38.0 million
in 1995.

Separate Accounts: Separate account assets and liabilities reported in the
accompanying statements of financial position represent funds that are
separately administered, principally for annuity contracts and variable life
insurance policies, and for which the contractholder, rather than the Company,
generally bears the investment risk. Separate account contractholders have no
claim against the assets of the general account of the Company. Separate account
assets are reported at market value. The operations of the separate accounts are
not included in the summary of operations; however, income earned on amounts
initially invested by the Company in the formation of new separate accounts is
included in other income.

<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--
CONTINUED

Fair Values of Financial Instruments: Statement of Financial Accounting
Standards (SFAS) No. 107, "Disclosure about Fair Value of Financial
Instruments," requires disclosure of fair value information about financial
instruments, whether or not recognized in the statement of financial position,
for which it is practicable to estimate the value. In situations where quoted
market prices are not available, fair values are based on estimates using
present value or other valuation techniques. SFAS No. 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements. Therefore, the aggregate fair value amounts presented do not
represent the underlying value of the Company.

The methods and assumptions utilized by the Company in estimating its fair value
disclosures for financial instruments are as follows:

The carrying amounts reported in the statement of financial position for
cash and temporary cash investments approximate their fair values.

Fair values for public bonds are obtained from an independent pricing
service. Fair values for private placement securities and publicly traded
bonds not provided by the independent pricing service are estimated by the
Company by discounting expected future cash flows using current market
rates applicable to the yield, credit quality and maturity of the
investments. The fair values for common and preferred stocks, other than
subsidiary investments which are carried at equity values, are based on
quoted market prices.

The fair value for mortgage loans is estimated using discounted cash flow
analyses using interest rates adjusted to reflect the credit
characteristics of the underlying loans. Mortgage loans with similar
characteristics and credit risks are aggregated into qualitative categories
for purposes of the fair value calculations.

The carrying amounts in the statement of financial position for policy
loans approximates their fair value.

The fair value of interest rate swaps and currency rate swaps is estimated
using a discounted cash flow method adjusted for the difference between the
rate of the existing swap and the current swap market rate. Discounted cash
flows in foreign currencies are converted to U.S. dollars using current
exchange rates.

The fair value for outstanding commitments to purchase long-term bonds and
issue real estate mortgages is estimated using a discounted cash flow
method incorporating adjustments for the difference in the level of
interest rates between the dates the commitments were made and December 31,
1996. The fair value for commitments to purchase real estate approximates
the amount of the initial commitment.

Fair values for the Company's guaranteed investment contracts are estimated
using discounted cash flow calculations, based on interest rates currently
being offered for similar contracts with maturities consistent with those
remaining for the contracts being valued. The fair value for fixed-rate
deferred annuities is the cash surrender value, which represents the
account value less applicable surrender charges. Fair values for immediate
annuities without life contingencies and supplementary contracts without
life contingencies are estimated based on discounted cash flow calculations
using current market rates.

<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--
CONTINUED

Capital Gains and Losses: Realized capital gains and losses are determined using
the specific identification basis. Realized capital gains and losses, net of
taxes and amounts transferred to the IMR, are included in net income. Unrealized
gains and losses, which consist of market value and book value adjustments, are
shown as adjustments to policyholders' contingency reserves.

Interest Rate and Currency Rate Swap Contracts and Financial Futures Contracts:
The net interest effect of interest rate and currency rate swap transactions is
recorded as an adjustment of interest income as incurred. Gains and losses on
financial futures contracts used as hedges against interest rate fluctuations
are deferred and recognized in income over the period being hedged.

Foreign Exchange Gains and Losses: Foreign exchange gains and losses are
reflected as direct credits or charges to policyholders' contingency reserves
through unrealized capital gains and losses.

Policy Reserves: Life, annuity, and accident and health benefit reserves are
developed by actuarial methods and are determined based on published tables
using statutorily specified interest rates and valuation methods that will
provide, in the aggregate, reserves that are greater than or equal to the
minimum or guaranteed policy cash values or the amounts required by the
Commonwealth of Massachusetts Division of Insurance. Reserves for traditional
individual life insurance policies are maintained using the 1941, 1958 and 1980
Commissioner's Standard Ordinary and American Experience Mortality Tables, with
assumed interest rates ranging from 2 1/2% to 6%, and using principally the net
level premium method for policies issued prior to 1978 and a modified
preliminary term method for policies issued in 1979 and later. Annuity and
supplementary contracts with life contingency reserves are based principally on
modifications of the 1937 Standard Annuity Table, the Group Annuity Mortality
Tables for 1951, 1971 and 1983, the 1971 Individual Annuity Mortality Table and
the a-1983 Individual Annuity Mortality Table, with interest rates ranging from
2% to 11 1/4%.

Reserves for deposit administration funds and immediate participation guarantee
funds are based on accepted actuarial methods at various interest rates.
Accident and health policy reserves generally are calculated using either the
two-year preliminary term or the net level premium method based on various
morbidity tables.

10
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--
CONTINUED

The statement value and fair value for investment-type insurance contracts are
as follows:
<TABLE>
<CAPTION>

December 31, 1996 December 31, 1995
---------------------------------------------------------
Statement Fair Statement Fair
Value Value Value Value
---------------------------------------------------------
(In millions)

<S> <C> <C> <C> <C>
Guaranteed investment contracts $11,921.6 $11,943.2 $12,014.3 $12,325.3
Fixed-rate deferred and
immediate annuities 3,909.3 3,886.1 3,494.5 3,478.6
Supplementary contracts without
life contingencies 45.6 46.0 39.6 40.7
---------------------------------------------------------

$15,876.5 $15,875.3 $15,548.4 $15,844.6
=========================================================
</TABLE>

Federal Income Taxes: Federal income taxes are reported in the financial
statements based on amounts determined to be payable as a result of operations
within the current accounting period. The operations of the Company and its
subsidiaries and affiliates are combined in filing a consolidated federal income
tax return for the group. The federal income taxes of the Company are determined
on a separate return basis with certain adjustments.

Income before taxes differs from taxable income principally due to tax-exempt
investment income, dividends-received tax deductions, the limitation placed on
the tax deductibility of mutual companies' policyholder dividends, accelerated
depreciation, differences in policy and contract liabilities for tax return and
financial statement purposes, capitalization of policy acquisition expenses for
tax purposes and other adjustments prescribed by the Internal Revenue Code.

Amounts for disputed tax issues relating to prior years are charged or credited
directly to policyholders' contingency reserves. No provision is generally
recognized for temporary differences that may exist between financial reporting
and taxable income.

When determining its consolidated federal income tax expense, the Company uses a
number of estimated amounts that may change when the actual tax return is
completed. In addition, the Company must also use an estimated differential
earnings rate (DER) to compute the equity tax portion of its federal income tax
expense. Because the DER is set by the Internal Revenue Service in the second
subsequent year, a true-up adjustment (i.e., effect of the difference between
the estimated and final DER) is necessary.

Certain subsidiaries acquired by the Company have potential tax loss
carryforwards of $114.1 million expiring through 1998. These amounts may be used
in the consolidated tax return, but only to offset future taxable income related
to those subsidiaries. The Company made federal tax payments of $309.9 million
in 1996 and $211.5 million in 1995.

11
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--
CONTINUED

Adjustments to Policy Reserves and Policyholders' and Beneficiaries' Funds: From
time to time, the Company finds it appropriate to modify certain required policy
reserves because of changes in actuarial assumptions or increased benefits.
Reserve modifications resulting from such determinations are recorded directly
to policyholders' contingency reserves. During 1996, the Company refined certain
actuarial assumptions inherent in the calculation of reserves related to
guaranteed investment contracts resulting in a $27.5 million decrease in
policyholders' contingency reserves at December 31, 1996.

Reinsurance: Premiums, commissions, expense reimbursements, benefits and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies issued and the terms of
the reinsurance contracts. Premiums ceded to other companies have been reported
as a reduction of premium income. Amounts applicable to reinsurance ceded for
future policy benefits, unearned premium reserves and claim liabilities have
been reported as reductions of these items.

Restructuring Charge: In 1994, the Company provided for restructuring charges of
$57.8 million in accordance with the Company's plan to reduce its cost structure
and consolidate operations. The restructuring charge includes severance costs
and facilities consolidation expenses. During 1996 and 1995, the Company paid
$8.6 million and $32.9 million, respectively, under its restructuring plan. The
remaining liability for restructuring charges at December 31, 1996 was $5.7
million.

Guaranty Fund Assessments: Guaranty fund assessments are accrued when the
Company receives notice that an amount is payable to a guaranty fund.

Reclassifications: Certain 1995 amounts have been reclassified to permit
comparison with the corresponding 1996 amounts.

NOTE 2--SURPLUS NOTES

On February 25, 1994, the Company issued $450 million of surplus notes that bear
interest at 7 3/8% and are scheduled to mature on February 15, 2024. The
issuance of the surplus notes was approved by the Commonwealth of Massachusetts
Division of Insurance and any payment of interest on and principal of the notes
may be made only with the prior approval of the Commissioner of the Commonwealth
of Massachusetts Division of Insurance. Surplus notes are reported as part of
policyholders' contingency reserves rather than liabilities. Interest of $33.2
million was paid on the notes during each of 1996 and 1995.

NOTE 3--BORROWED MONEY

At December 31, 1996, the Company had a $500 million syndicated line of credit.
There are 26 banks who are part of the syndicate which is under the leadership
of Morgan Guaranty Trust Company of New York. The banks will commit, when
requested, to loan funds at prevailing interest rates as determined in
accordance with the line of credit agreement, which terminates on June 30, 2001.
The agreement does not contain a material adverse change clause. Under the terms
of the agreement, the Company is required to maintain certain minimum levels of
net worth and comply

12
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 3--BORROWED MONEY--CONTINUED

with certain other covenants. As of December 31, 1996, these covenants were met;
however, no amounts had been borrowed under this agreement.

In 1995, the Company issued $213.1 million of debt through a Real Estate
Mortgage Investment Conduit (REMIC). As collateral to the debt, the Company
pledged $1,065.8 million of commercial mortgages to the REMIC Trust. In
addition, the Company has guaranteed the timely payment of principal and
interest on the debt. The debt was issued in two notes of equal amounts with
last scheduled payment dates on March 25, 1997 and June 25, 1998, respectively.
The interest rates on the two notes are calculated on a floating basis, based on
the monthly LIBOR rates plus 22 and 27 basis points, respectively. The LIBOR
rates were 5.50% and 5.9375%, respectively, at December 31, 1996 and 1995. The
outstanding balances of the notes totaled $127.9 million and $213.1 million at
December 31, 1996 and 1995, respectively, and are included in other general
account obligations.

In 1996, the Company issued $292.0 million of debt through a REMIC (REMIC II).
As collateral to the debt, the Company pledged $1,455.4 million of commercial
mortgages to the REMIC II Trust. The debt was issued in two notes . The class A1
notes totaled $70.0 million with a last scheduled payment date of December 26,
1997. The class A2 notes totaled $222.0 million with a last scheduled payment
date of July 26, 1999. The interest rates on the two notes are calculated on a
floating basis, based on the monthly LIBOR rate plus 5 and 19 basis points,
respectively. The outstanding balances of the notes totaled $292.0 million at
December 31, 1996 and are included in other general account obligations.

On December 31, 1996, the Company had outstanding a short-term note of $90.0
million payable to an affiliate at 5.70%. The note, which is included in other
general account obligations, was repaid in early January 1997.

NOTE 4--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

1996 1995
----------------------
(In millions)

Investment expenses $333.8 $332.9
Interest expense 48.1 38.3
Depreciation on real estate and
other invested assets 73.3 62.7
Real estate and other investment taxes 65.2 61.2
----------------------

$520.4 $495.1
======================

13
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS

Net realized capital gains (losses) consist of the following items:

1996 1995
----------------------
(In millions)

Net gains from asset sales and foreclosures $ 81.2 $118.6
Capital gains tax (53.7) (64.2)
Net capital gains transferred to the IMR (71.1) (33.2)
----------------------

Net Realized Capital Gains (Losses) $(43.6) $ 21.2
======================

Net unrealized capital gains (losses) and other adjustments consist of the
following items:

1996 1995
----------------------
(In millions)

Net gains from changes in security values
and book value adjustments $242.2 $ 93.4
Increase in asset valuation reserve (50.5) (178.5)
----------------------

Net Unrealized Capital Gains (Losses)
and Other Adjustments $191.7 $(85.1)
======================

14
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 6--INVESTMENTS

The statement value and fair value of bonds are shown below:

Year ended December 31, 1996
<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized
Value Gains Losses Fair Value
-------------------------------------------------------------
(In millions)
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of
U.S. government corporations and agencies
$ 430.2 $ 8.8 $ 4.2 $ 434.8

Obligations of states and political
subdivisions 175.2 8.8 3.9 180.1

Debt securities issued by foreign governments
203.5 30.1 0.0 233.6

Corporate securities 16,902.1 1,083.2 112.6 17,872.7

Mortgage-backed securities 4,756.0 116.3 54.5 4,817.8
-------------------------------------------------------------

Total bonds $22,467.0 $1,247.2 $175.2 $23,539.0
=============================================================

Year ended December 31, 1995

U.S. Treasury securities and obligations of
U.S. government corporations and agencies
$ 638.5 $ 42.5 $ 0.2 $ 680.8

Obligations of states and political
subdivisions 194.1 20.6 0.1 214.6

Debt securities issued by foreign governments
297.7 42.2 0.0 339.9

Corporate securities 18,358.6 1,818.3 73.9 20,103.0

Mortgage-backed securities 1,619.6 57.9 20.8 1,656.7
-------------------------------------------------------------

Total bonds $21,108.5 $1,981.5 $ 95.0 $22,995.0
=============================================================
</TABLE>

15
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 6--INVESTMENTS--CONTINUED

The statement value and fair value of bonds at December 31, 1996, by contractual
maturity, are shown below. Maturities will differ from contractual maturities
because eligible borrowers may exercise their right to call or prepay
obligations with or without call or prepayment penalties.

Statement Fair
Value Value
----------------------------
(In millions)

Due in one year or less $ 1,430.4 $ 1,463.8
Due after one year through five years 5,987.3 6,226.8
Due after five years through ten years 5,421.9 5,732.3
Due after ten years 4,871.4 5,298.3
----------------------------
17,711.0 18,721.2
Mortgage-backed securities 4,756.0 4,817.8
----------------------------

$22,467.0 $23,539.0
============================

Proceeds from sales of bonds during 1996 and 1995 were $2.8 billion and $2.9
billion, respectively. Gross gains of $43.8 million in 1996 and $69.7 million in
1995 and gross losses of $27.6 million in 1996 and $44.3 million in 1995 were
realized on these transactions.

The cost of common stocks was $136.1 million and $78.1 million at December 31,
1996 and 1995, respectively. At December 31, 1996, gross unrealized appreciation
on common stocks totaled $135.0 million, and gross unrealized depreciation
totaled $21.3 million. The fair value of preferred stock totaled $416.2 million
at December 31, 1996 and $338.8 million at December 31, 1995.

Mortgage loans with outstanding principal balances of $56.0 million, bonds with
amortized cost of $159.7 million and real estate with depreciated cost of $23.0
million were nonincome producing for the twelve months ended December 31, 1996.

Restructured commercial mortgage loans aggregated $385.8 million and $466.0
million as of December 31, 1996 and 1995, respectively. The expected gross
interest income that would have been recorded had the loans been current in
accordance with the original loan agreements and the actual interest income
recorded were as follows:

Year ended December 31
1996 1995
------------------------------
(In millions)
Expected $46.3 $47.0
Actual 29.1 $26.8

Generally, the terms of the restructured mortgage loans call for the Company to
receive some form or combination of an equity participation in the underlying
collateral, excess cash flows or an effective yield at the maturity of the loans
sufficient to meet the original terms of the loans.

16
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 6--INVESTMENTS--CONTINUED

At December 31, 1996, the mortgage loan portfolio was diversified by geographic
region and specific collateral property type as displayed below. The Company
controls credit risk through credit approvals, limits and monitoring procedures.
<TABLE>
<CAPTION>

Statement Statement
Property Type Value Geographic Concentration Value
- --------------------------------------------------------------------------------------------------------
(In millions) (In millions)
<S> <C> <C> <C>
Apartments $1,667.9 East North Central $ 734.6
Hotels 147.4 East South Central 158.9
Industrial 882.1 Middle Atlantic 1,543.3
Office buildings 1,707.0 Mountain 382.8
Retail 1,489.8 New England 843.9
1-4 Family 7.4 Pacific 2,015.4
Agricultural 1,608.1 South Atlantic 1,437.6
Other 454.3 West North Central 240.6
West South Central 558.3
Other 48.6
----------------- ----------------

$7,964.0 $7,964.0
================= ================
</TABLE>
At December 31, 1996, the fair values of the commercial and agricultural
mortgage loan portfolios were $6.6 billion and $1.8 billion, respectively. The
corresponding amounts as of December 31, 1995 were approximately $7.6 billion
and $1.8 billion, respectively.

The maximum and minimum lending rates for mortgage loans during 1996 were 9.92%
and 7.0% for agricultural loans, 9.25% and 6.75% for other properties, and 8.05%
and 7.0% for purchase money mortgages. Generally, the percentage of any loan to
the value of security at the time of the loan, exclusive of insured or
guaranteed or purchase money mortgages, is 75%. For city mortgages, fire
insurance is carried on all commercial and residential properties at least equal
to the excess of the loan over the maximum loan which would be permitted by law
on the land without the building, except as permitted by regulations of the
Federal Housing Commission on loans fully insured under the provisions of the
National Housing Act. For agricultural mortgage loans, fire insurance is not
normally required on land based loans except in those instances where a building
is critical to the farming operation. Fire insurance is required on all
agri-business facilities in an aggregate amount equal to the loan balance.

NOTE 7--REINSURANCE

Premiums, benefits and reserves associated with reinsurance assumed in 1996 were
$742.0 million, $317.8 million, and $14.2 million, respectively. The
corresponding amounts in 1995 were $455.2 million, $276.7 million, and $12.7
million, respectively.

The Company cedes business to reinsurers to share risks under life, health and
annuity contracts for the purpose of reducing exposure to large losses.
Premiums, benefits and reserves ceded to

17
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 7--REINSURANCE--CONTINUED

reinsurers in 1996 were $304.0 million, $217.0 million and $251.2 million,
respectively. The corresponding amounts in 1995 were $281.0 million, $217.0
million and $185.4 million, respectively.

Amounts recoverable on paid claims and funds held by reinsurers were as follows:

Year ended December 31
1996 1995
----------------------------
(In millions)

Reinsurance recoverables $26.5 $30.7
Funds held by reinsurers 23.4 2.6

The Company has a coinsurance agreement with another insurer to cede 100% of its
individual disability business. Reserves ceded under this agreement, included in
the amount shown above, were $226.4 million at December 31, 1996 and $212.7
million at December 31, 1995.

Effective January 1, 1994, John Hancock Variable Life Insurance Company
(Variable Life, a wholly-owned affiliate) entered into a modified coinsurance
agreement with the Company to reinsure 50% of Variable Life's 1996, 1995 and
1994 issues of flexible premium variable life insurance and scheduled premium
variable life insurance policies. In connection with this agreement, the Company
transferred $24.5 million and $32.7 million of cash for tax, commission, and
expense allowances to Variable Life, which decreased the Company's net gain from
operations by $15.7 million and $20.3 million in 1996 and 1995, respectively.

Effective January 1, 1996, Variable Life entered into a modified coinsurance
agreement with the Company to reinsure 50% of Variable Life's 1995 and 1996
issues of retail annuity contracts (Independence Preferred and Declaration). In
connection with this agreement, the Company transferred $23.2 million of cash
for surrender benefits, tax, reserve increase, commission, expense allowances
and premium to Variable Life, which decreased the Company's net gain from
operations by $15.1 million in 1996.

To the extent that an assuming reinsurance company is unable to meet its
obligations under a reinsurance agreement, the Company remains liable as the
direct insurer on all risks reinsured.

No policies issued by the Company have been reinsured with a foreign company
which is controlled either directly or indirectly, by a party not primarily
engaged in the business of insurance.

The Company has not entered into any reinsurance agreements in which the
reinsurer may unilaterally cancel any reinsurance for reasons other than
nonpayment of premiums or other similar credits. The Company does not have any
reinsurance agreements in effect in which the amount of losses paid or accrued
through December 31, 1996 would result in a payment to the reinsurer of amounts
which, in the aggregate and allowing for offset of mutual credits from other
reinsurance agreements with the same reinsurer, exceed the total direct premiums
collected under the reinsured policies.

18
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 8--BENEFIT PLANS

The Company provides retirement benefits to substantially all employees and
general agency personnel. These benefits are provided through both defined
benefit and defined contribution pension plans. Pension benefits under the
defined benefit plans are based on years of service and average compensation
generally during the five years prior to retirement. Benefits related to the
Company's defined pension plans paid to employees and retirees covered by
annuity contracts issued by the Company amounted to $84.4 million in 1996 and
$76.3 million in 1995. The Company's funding policy for qualified defined
benefit plans is to contribute annually an amount in excess of the minimum
annual contribution required under the Employee Retirement Income Security Act
(ERISA). This amount is limited by the maximum amount that can be deducted for
federal income tax purposes. The funding policy for nonqualified defined benefit
plans is to contribute the amount of the benefit payments made during the year.
Plan assets consist principally of listed equity securities, corporate
obligations and U.S. government securities.

Defined contribution plans include The Investment Incentive Plan (TIP) and the
Savings and Investment Plan (SIP). Employees are eligible to participate in TIP
after one year of service and may contribute up to the lesser of 15% of their
salary or $9,500 annually to the plan. The Company matches the first 2% of
pre-tax contributions and makes an additional annual profit sharing contribution
for employees who have completed at least two years of service. Through SIP,
marketing representatives, sales managers and agency managers are eligible to
contribute up to the lesser of 13% of their salary or $9,500. The Company
matches the first 3% of pretax contributions for marketing representatives and
the first 2% of pretax contributions for sales managers and agency managers. The
Company makes an annual profit sharing contribution of up to 1% for sales
managers and agency managers who have completed at least two years of service.

The Company provides additional compensation to certain employees based on
achievement of annual and long-term corporate financial objectives.

Pension expense is summarized as follows:

Year ended December 31
1996 1995
----------------------
(In millions)

Defined benefit plans:
Service cost--benefits earned during the period $ 32.4 $ 30.1
Interest cost on the projected benefit obligation 107.4 103.5
Actual return on plan assets (225.1) (369.5)
Net amortization and deferral 85.0 260.5
----------------------
( 0.3) 24.6

Defined contribution plans 21.4 19.8
----------------------

Total pension expense $ 21.1 $ 44.4
======================

19
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 8--BENEFIT PLANS--CONTINUED

Assumptions used in accounting for the defined benefit pension plans were as
follows:

1996 1995
---------------------

Discount rate 7.25% 7.50%
Weighted rate of increase in compensation levels 4.78% 5.10%
Expected long-term rate of return on assets 8.50% 7.75%

The following table sets forth the funded status and actuarially determined
amounts related to the Company's defined benefit pension plans:

Year ended December 31
1996 1995
----------------------------
(In millions)

Actuarial present value of benefit obligations:
Vested benefit obligation $(1,344.8) $(1,242.9)
============================

Accumulated benefit obligation $(1,387.7) $(1,300.3)
============================

Projected benefit obligation $(1,582.4) $(1,480.0)
Plan assets fair value 1,787.6 1,645.3
----------------------------
Excess of plan assets over projected benefit
obligation 205.2 165.3

Unrecognized net gain ( 176.1) ( 139.1)

Prior service cost not yet recognized in net
periodic pension cost 42.8 50.0

Unrecognized net asset, net of amortization ( 95.9) ( 111.2)
----------------------------

Net pension liability $( 24.0) $( 35.0)
=============================

Since 1988, the Massachusetts Division of Insurance has provided the Company
with approval to recognize the pension plan prepaid expense, if any, in
accordance with the requirements of SFAS No. 87, "Employers' Accounting for
Pensions." The Company furnishes the Division of Insurance with an actuarial
certification of the prepaid expense computation on an annual basis.

20
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS

In addition to the Company's defined benefit pension plans, the Company has
employee welfare plans for medical, dental, and life insurance covering most of
its retired employees and general agency personnel. Substantially all employees
may become eligible for these benefits if they reach retirement age while
employed by the Company. The postretirement health care and dental coverages are
contributory based on service for post January 1, 1992 non-union retirees. A
small portion of pre-January 1, 1992 non-union retirees also contribute. The
applicable contributions are based on service.

In 1993, the Company changed its method of accounting for the costs of its
retiree benefit plans to the accrual method and elected to amortize its
transition liability for retirees and fully eligible or vested employees over
twenty years.

Since 1993, the Company funded a portion of the postretirement obligation. The
Company's policy is to fund postretirement benefits for non-union employees to
the maximum amount that can be deducted for federal income tax purposes and to
fund the benefits for union employees, which are fully tax qualified, at
sufficient amounts so that the total accrued liability related to postretirement
benefits is zero. As of December 31, 1996, plan assets related to non-union
employees were comprised of an irrevocable health insurance contract to provide
future health benefits to retirees while plan assets related to union employees
were comprised of approximately 70% equity securities and 30% fixed income
investments. The following table shows the plans' combined funding status for
vested benefits reconciled with the amounts recognized in the Company's
statements of financial position.
<TABLE>
<CAPTION>
December 31
1996 1995
--------------------------------------------------------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
--------------------------------------------------------------
(In millions)
<S> <C> <C> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees $(234.2) $(100.6) $(236.5) $( 89.2)
Fully eligible active plan participants ( 46.4) ( 19.4) ( 42.9) ( 20.1)
--------------------------------------------------------------
(280.6) (120.0) (279.4) (109.3)

Plan assets at fair value 132.4 0.0 96.9 0.0
--------------------------------------------------------------
Accumulated postretirement benefit
obligation in excess of plan assets (148.2) (120.0) (182.5) (109.3)
Unrecognized prior service cost 16.7 5.3 18.2 5.8
Unrecognized prior net gain ( 93.0) 4.0 ( 84.2) ( 4.2)
Unrecognized transition obligation 256.8 78.4 272.9 83.3
--------------------------------------------------------------

Accrued postretirement benefit cost $ 32.3 $( 32.3) $ 24.4 $( 24.4)
==============================================================
</TABLE>

21
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED

Net postretirement benefits costs for the years ended December 31, 1996 and 1995
were $47.4 million and $50.2 million, respectively, and include the expected
cost of such benefits for newly eligible or vested employees, interest cost, and
amortization of the transition liability.

Net periodic postretirement benefits cost included the following components:
<TABLE>
<CAPTION>
December 31
1996 1995
--------------------------------------------------------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
--------------------------------------------------------------
(In millions)
<S> <C> <C> <C> <C>
Eligibility cost $ 7.1 $ 1.8 $ 5.3 $ 1.5
Interest cost 19.8 8.3 21.1 7.8
Actual return on plan assets (15.9) 0.0 (15.5) 0.0
Net amortization and deferral 20.9 5.4 25.0 5.0
--------------------------------------------------------------

Net periodic postretirement benefit cost $31.9 $15.5 $ 35.9 $14.3
==============================================================
</TABLE>
The discount rate used in determining the accumulated postretirement benefit
obligation at December 31, 1996 was 7.25% (7.5% for 1995). The annual assumed
rate of increase in the health care cost trend rate for the medical coverages is
8.0 % for 1997 (8.25% was assumed for 1996) and is assumed to decrease gradually
to 5.25% in 2001 and remain at that level thereafter. The health care cost trend
rate assumption has a significant effect on the amounts reported. For example,
increasing the assumed health care cost trend rates by one percentage point in
each year would increase the accumulated post retirement benefit obligation for
the medical coverages as of December 31, 1996 by $28.1 million and the aggregate
of the eligibility and interest cost components of net periodic postretirement
benefit cost by $2.9 million for 1996 and $3.6 million for 1995.

Postretirement welfare benefits for non-vested employees are not reflected in
the above expenses or accumulated postretirement benefit obligations. As of
December 31, 1996, the accumulated postretirement benefit obligations for
non-vested employees amounted to $69.4 million for medical and dental plans and
$10.7 million for life insurance plans. The corresponding amounts as of December
31, 1995 were $67.7 million and $10.8 million, respectively.

22
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 10--AFFILIATES

The Company has subsidiaries and affiliates in a variety of industries including
domestic and foreign life insurance and domestic property casualty insurance,
real estate, mutual funds, investment brokerage and various other financial
services entities.

Total assets of unconsolidated affiliates amounted to $9.6 billion at December
31, 1996 and $9.5 billion at December 31, 1995; total liabilities amounted to
$8.5 billion at December 31, 1996 and $8.3 billion at December 31, 1995; and
total net income was $193.0 million in 1996 and $89.5 million in 1995.

During 1996, the Company sold certain of its affiliates including its ongoing
property and casualty business and its broker-dealer operations to realign its
business objectives.

The Company customarily engages in transactions with its unconsolidated
affiliates, including the cession and assumption of certain insurance business
under the terms of established reinsurance agreements. Various services are
performed by the Company for certain affiliates for which the Company is
reimbursed on the basis of cost. Certain affiliates have entered into various
financial arrangements relating to borrowings and capital maintenance under
which agreements the Company would be obligated in the event of nonperformance
by an affiliate (see Note 15).

The Company received dividends of $9.4 million and $9.7 million in 1996 and
1995, respectively, from unconsolidated affiliates.

NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The Company enters into interest rate swap contracts for the purpose of
converting the interest rate characteristics (fixed or variable) of certain
investments to match those of related insurance liabilities. Maturities of
current agreements range from 1997 to 2026. These swaps involve, to varying
degrees, interest rate risk in excess of amounts recognized in the statement of
financial position.

The Company enters into currency rate swap agreements to manage exposure to
foreign exchange rate fluctuations. Maturities of current agreements range
through 2009. Should the counterparty fail to meet the terms of the contract,
the Company's market risk is limited to the currency rate differential.

The Company enters into interest rate cap and floor contracts to manage exposure
on underlying security values due to a rise in interest rates. Maturities of
current agreements range through 2003.

The Company also uses financial futures contracts to hedge risks associated with
interest rate fluctuations on sales of guaranteed investment contracts. The
Company is subject to the risks associated with changes in the value of the
underlying securities; however, such changes in value generally are offset by
opposite changes in the value of the hedged items. The contract or notional
amounts of the contracts represent the extent of the Company's involvement but
not the future cash requirements, as the Company intends to close the open
positions prior to settlement. Net deferred losses on future contracts were $0.5
million and $7.7 million at December 31, 1996 and 1995, respectively.

23
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK--CONTINUED

The contract or notional amount of the foregoing financial instruments, which
indicates the Company's involvement and, in certain instances, maximum credit
risk related to those instruments, is as follows:
December 31
1996 1995
---------------------------
(In millions)

Futures contracts to purchase securities $ 117.6 $ 62.2
===========================

Futures contracts to sell securities $ 136.4 $ 299.9
===========================

Notional amount of interest rate swaps, interest rate swaptions, currency rate
swaps, interest rate caps and interest rate floors to:

Receive variable rates $3,822.8 $1,735.0
===========================

Receive fixed rates $2,912.5 $1,756.3
===========================

The Company continually monitors its positions and the credit ratings of the
counterparties to these financial instruments. The Company believes the risk of
incurring losses due to nonperformance by its counterparties is remote and that
any such losses would be immaterial.

Based on market rates in effect at December 31, 1996, the Company's interest
rate swaps, interest rate swaptions, currency rate swaps, interest rate caps,
and interest rate floors represented (assets) liabilities to the Company with
fair values of $16.4 million, $0.0 million, $41.1 million, $(0.6) million and
$(0.1) million, respectively. The corresponding amounts as of December 31, 1995
were $37.0 million, $0.0 million, $23.3 million, $(0.3) million and $0.0
million, respectively.

24
<PAGE>

NOTE 12--LEASES

The Company leases office space and furniture and equipment under various
operating leases including furniture and equipment leased under a series of
sales-leaseback agreements with a nonaffiliated organization. Rental expense for
all operating leases totaled $32.1 million in 1996 and $32.2 million in 1995.
Future minimum rental commitments under noncancellable operating leases for
office space and furniture and equipment are as follows:

December 31, 1996
---------------------------
(In millions)

1997 $23.2
1998 18.8
1999 15.3
2000 12.3
2001 7.8
Thereafter 17.0
---------------------------

Total minimum payments $94.4
===========================

NOTE 13--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND
OBLIGATIONS RELATED TO SEPARATE ACCOUNTS

The Company's annuity reserves and deposit fund liabilities that are subject to
discretionary withdrawal (with adjustment), subject to discretionary withdrawal
(without adjustment), and not subject to discretionary withdrawal provisions are
summarized as follows:
<TABLE>
<CAPTION>

December 31, 1996 Percent
------------------------------------------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with adjustment):
With market value adjustment $ 1,748.9 4.9%
At book value less surrender charge 2,681.4 7.5
------------------------------------------
Total with adjustment 4,430.3 12.4
Subject to discretionary withdrawal (without
adjustment) at book value 815.7 2.3
Subject to discretionary withdrawal - separate
accounts 11,816.8 33.0
Not subject to discretionary withdrawal:
General account 17,422.1 48.7
Separate accounts 1,297.3 3.6
------------------------------------------
Total annuity reserves and deposit liabilities--before
reinsurance 35,782.2 100.0%
======

Less reinsurance ceded (0.2)
------------------------

Net annuity reserves and deposit fund liabilities $35,782.0
========================
</TABLE>

25
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 13--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND
OBLIGATIONS RELATED TO SEPARATE ACCOUNTS--CONTINUED

Any liquidation costs associated with the $11.8 billion of separate accounts
subject to discretionary withdrawal are sustained by the separate account
contractholders and not by the general account.

NOTE 14--UNPAID CLAIMS

Activity in the liability for accident and health unpaid claims is as follows:

1996 1995
---------------------------------
(In millions)

Balance at January 1 $207.7 $216.2
Less reinsurance recoverables 4.0 (7.3)
---------------------------------
Net balance at January 1 203.7 208.9
---------------------------------
Incurred related to:
Current year 293.8 301.0
Prior years (36.1) (25.2)
---------------------------------
Total incurred 257.7 275.8
---------------------------------
Paid related to:
Current year 183.7 192.0
Prior years 71.7 89.0
---------------------------------
Total paid 255.4 281.0
---------------------------------
Net balance at December 31 206.0 203.7
Plus reinsurance recoverable 3.0 4.0
---------------------------------

Balance at December 31 $209.0 $207.7
=================================

As a result of favorable changes in claim estimates and a decline in fully
insured business, the liability for prior year claims decreased in 1996 and
1995.

NOTE 15--COMMITMENTS AND CONTINGENCIES

The Company has extended commitments to purchase long-term bonds, preferred and
common stocks, and real estate and issue real estate mortgages totaling $619.4
million, $14.7 million, $160.2 million and $275.4 million, respectively, at
December 31, 1996. If funded, loans related to real estate mortgages would be
fully collateralized by related properties. The Company monitors the credit
worthiness of borrowers under long-term bond commitments and requires collateral
as deemed necessary. The fair value of the commitments described above is $1.1
billion at December 31, 1996. The majority of these commitments expire in 1997.

The Company has contingent liabilities, pursuant to guarantee agreements issued
in connection with real estate joint ventures, in the amount of $43.3 million.

26
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 15--COMMITMENTS AND CONTINGENCIES--CONTINUED

During 1996, the Company entered into a credit support and collateral pledge
agreement with the Federal National Mortgage Association (FNMA). Under the
agreement, the Company sold $532.8 million of commercial mortgage loans and
acquired an equivalent amount of FNMA securities. The Company completed similar
transactions with FNMA in 1991 for $1.042 billion and in 1993 for $71.9 million.
FNMA is guarantying the full face value of the bonds of the three transactions
to the bondholders. However, the Company has agreed to absorb the first 12.25%
of the principal and interest losses (less buy-backs) for the pools of loans
involved in the three transactions, based on the total outstanding principal
balance of $1.036 billion as of July 1, 1996, but is not required to commit
collateral to support this loss contingency. At December 31, 1996, the aggregate
outstanding principal balance of all the remaining pools of loans from 1991,
1993, and 1996 is $907.4 million.

Historically, the Company has experienced losses of less than one percent on its
multi-family mortgage portfolio. Mortgage loan buy-backs required by the FNMA in
1996 and 1995 amounted to $3.4 million and $0.0 million, respectively.

During 1996, the Company entered into credit support and collateral pledge
agreement with the Federal Home Loan Mortgage Corporation (FHLMC). Under the
agreement, the Company sold $535.3 million of multi-family loans and acquired
and equivalent amount of FHLMC securities. FHLMC is guarantying the full face
value of the bonds to the bondholders. However, the Company has agreed to absorb
the first 10.5% of original principal and interest losses (less buy-backs) for
the pool of loans involved but is not required to commit collateral to support
this loss contingency. Historically, the Company has experienced total losses of
less than one percent on its mult-family loan portfolio. At December 31, 1996,
the aggregate outstanding principal balance of the pools of loans was $535.3
million. There were no mortgage loans buy-backs in 1996.

The Company has a support agreement with JHVLICo under which the Company agrees
to continue directly or indirectly to own all of JHVLICo's common stock and
maintain JHVLICo's net worth at not less than $1 million.

The Company has a support agreement with John Hancock Capital Corporation (JHCC)
under which the Company agrees to continue directly or indirectly to own all of
JHCC's common stock and maintain JHCC's net worth at not less than $1 million.
JHCC's outstanding borrowings as of December 31, 1996 were $278.3 million for
short-term borrowings and $145.1 million for notes payable.

The Company is subject to insurance guaranty fund laws in the states in which it
does business. These laws assess insurance companies amounts to be used to pay
benefits to policyholders and claimants of insolvent insurance companies. Many
states allow these assessments to be credited against future premium taxes. The
Company believes such assessments in excess of amounts accrued will not
materially affect its financial position.

27
<PAGE>

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTE 15--COMMITMENTS AND CONTINGENCIES--CONTINUED

Various lawsuits arise against the Company in the course of the Company's
business. Purported class actions and individual actions have been or could be
brought against the Company in its normal course of business. While the Company
specifically denies any wrongdoing, such litigation is subject to many
uncertainties, and given the current environment and complexity of various types
of litigation, their outcome can not be predicted. Accordingly, the Company has
established a litigation reserve. As appropriate, the reserve will be used for
legal and other costs related to opposing such litigation or in the ultimate
settlement of suits. The reserve has been charged directly to policyholders'
contingency reserves of the Company. The Company believes that the ultimate
outcome of pending litigation should not have a material adverse effect on the
Company's financial position.

NOTE 16--FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and fair values of the
Company's financial instruments:
<TABLE>
<CAPTION>
Year ended December 31
1996 1995
------------------------------ -------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------------- -------------- --------------- ---------------
(In millions)
<S> <C> <C> <C> <C>
Assets
Bonds--Note 6 $22,467.0 $23,539.0 $21,108.5 $22,995.0
Preferred stocks--Note 6 416.2 416.2 338.8 338.8
Common stocks--Note 6 249.8 249.8 130.9 130.9
Mortgage loans on real estate--Note 6 7,964.0 8,400.2 8,801.5 9,381.8
Policy loans--Note 1 1,589.3 1,589.3 1,621.3 1,621.3
Cash and cash equivalents--Note 1 1,416.7 1,416.7 540.7 540.7

Liabilities
Guaranteed investment contracts--Note 1 11,921.6 11,943.2 12,014.3 12,325.3
Fixed rate deferred and immediate
annuities--Note 1 3,909.3 3,886.1 3,494.5 3,478.6
Supplementary contracts without
life contingencies--Note 1 45.6 46.0 39.6 40.7

Derivatives liabilities relating to:--Note 11
Interest rate swaps - 16.4 - 37.0
Currency rate swaps - 41.1 - 23.3
Interest rate caps - (0.6) - (0.3)
Interest rate floors - (0.1) - 0.0
-
Commitments--Note 15 - 1,095.7 - 1,070.2
</TABLE>
The carrying amounts in the table are included in the statutory-basis statements
of financial position. The methods and assumptions utilized by the Company in
estimating its fair value disclosures are described in Note 1.

28
<PAGE>
PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(A) FINANCIAL STATEMENTS

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

1. Statutory-Basis Statement of Financial Position at December 31, 1996 and
December 31, 1995. (Part B)

2. Statutory-Basis Summary of Operations and Changes in Policyholders'
Contingency Reserves for the period ended December 31, 1996, and December
31, 1995. (Part B)

4. Statutory-Basis Statements of Cash Flows for the period ended December 31,
1996, and December 31, 1995. (Part B)

5. Notes to Statutory-Basis Financial Statements. (Part B)

(B) EXHIBITS

1. John Hancock Mutual Life Insurance Company Board Resolution establishing
the John Hancock Variable Annuity Account H, dated April 8, 1996.*

2. Not Applicable.

3. (a) Form of Variable Annuity Contracts Marketing and Distribution
Agreement Between John Hancock Mutual Life Insurance Company and John
Hancock.*

(b) Form of Soliciting Dealer Agreement between John Hancock Funds, Inc.,
and soliciting broker-dealers or financial institutions participating
in distribution of Contracts.*

4. (a) Form of group deferred combination fixed and variable annuity
contract.*

(b) Form of group deferred combination fixed and variable annuity
certificate.*

(d) Form of nursing home waiver of CDSL rider.*

(e) Form of one year stepped-up death benefit rider.*

(f) Form of accidental death benefit rider.*

C-1

<PAGE>

5. Form of contract application.*

6. (a) Articles of Organization and By-Laws of John Hancock Mutual Life
Insurance Company.*

7. Not Applicable.

8. Form of Responsibility and Cost Allocation Agreement Between John Hancock
Mutual Life Insurance Company and John Hancock Funds, Inc.*

9. Opinion and consent of counsel.*

10. (a) Representation of counsel.+

(b) Consent of independent auditors.+

(c) Powers of Attorney for all directors except Robert J. Tarr, Jr.,
previously filed electronically with Form N-4EL (file nos. 333-08345
and 811-07711) on July 18, 1996, accession number
0000950109-96-004518. Power of attorney for director Robert J. Tarr,
Jr.**

11. Not Applicable.

12. Not Applicable.

13. Not Applicable.

14. Not Applicable.

27. Not Applicable.

* Previously filed electronically with Form N-4EL (file nos. 333-08345 and
811-07711) on July 18, 1996, accession number 0000950109-96-004518.

** Previously filed electronically with 485BPOS (file nos. 333-08345 and
811-07711) on April 29, 1997.

+ Filed herewith.

C-2

<PAGE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Directors Principal Occupations
--------- ---------------------
Samuel W. Bodman Chairman of the Board and Chief Execu-
tive Officer, Cabot Corporation (chemi-
cals)
Nelson S. Gifford Director, Boston Edison Company (electric utility)
William L. Boyan President, John Hancock
Kathleen F. Feldstein President, Economics Studies Inc. (economic
consulting)
Lawrence K. Fish Chairman and Chief Executive Officer,
Citizens Financial Group (banking).
E. James Morton Director, formerly Chairman of the
Board, John Hancock
John F. Magee Chairman of the Board, Arthur D. Little,
Inc. (industrial research and consulting)
John M. Connors, Jr. President and Chief Executive Officer,
Hill, Holliday, Connors, Cosmopoulos,
Inc. (advertising)
Stephen L. Brown Chairman of the Board and Chief Execu-
tive Officer, John Hancock
Thomas L. Phillips Director, formerly Chairman of the
Board, Raytheon Company (electronics)
I. MacAllister Booth Former Chairman of the Board and Chief
Executive Officer, Polaroid Corporation
(photographic products)
C. Vincent Vappi Former President and Chief Executive Officer,
Vappi & Company, Inc. (construction)
Randolph W. Bromery President, Springfield College
Robert J. Tarr, Jr. Former President, Chief Executive Officer and
Chief Operations Officer, Harcourt General, Inc.
(publishing)
David F. D'Alessandro Senior Executive Vice President, John
Hancock
Joan T. Bok Chairman of the Board, New England Elec-
tric System (electric utility)
Robert E. Fast Partner, Hale and Dorr (law firm)
Foster L. Aborn Vice Chairman of the Board, John Hancock
Richard F. Syron Chairman of the Board and Chief Execu-
tive Officer, American Stock Exchange
Michael C. Hawley President and Chief Operating Officer,
The Gillette Company (razors, etc.)

Executive Officers
------------------
Diane M. Capstaff Executive Vice President
Thomas E. Moloney Executive Vice President
Richard S. Scipione General Counsel
Bruce E. Skrine Senior Vice President, Counsel and Secretary

The business address for each of the above-named officers and directors is:
John Hancock Mutual Life Insurance Company, John Hancock Place, P.O. Box 111,
Boston, MA 02117.

C-3
<PAGE>

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

The Registrant is a separate account of John Hancock Mutual Life Insurance
Company ("Company"), operated as a unit investment trust. The Registrant
supports benefits payable under the Company's variable annuity contracts by
investing in shares of John Hancock Declaration Trust ("Trust") a "series" type
of mutual fund, registered under the Investment Company Act of 1940 ("Act") as
an open-end management investment company. The Company may purchase Trust shares
to provide initial capital for the Trust. The Registrant and other separate
accounts of the Company, John Hancock Variable Life Insurance Company
("JHVLICO"), and other unaffiliated life insurance companies will own all of the
Trust's other outstanding shares for the forseeable future. The purchasers of
variable annuity and any variable life insurance contracts, in connection with
which the Trust is used, will have the opportunity to instruct the Company and
JHVLICO with respect to the voting of the shares of the Trust held by the
Registrant as to certain matters. Subject to the voting instructions, the
Company will control the Registrant.

A diagram of the subsidiaries of the Company is incorporated by reference
from Exhibit 17 to Post- Effective Amendment No. 10 to Form N-1A Registration
Statement of John Hancock Variable Series Trust I (File No. 33-2081) filed March
2, 1995.

ITEM 27. NUMBER OF CONTRACT OWNERS

Registrant had 379 Contract Owners as of November 28, 1997.

ITEM 28. INDEMNIFICATION

Pursuant to Article 9 of the Company's Bylaws and Section 67 of the
Massachusetts Business Corporation Law, the Company indemnifies each director,
former director, officer, and former officer, and his heirs and legal
representatives from liability incurred or imposed in connection with any legal
action in which he may be involved by reason of any alleged act or omission as
an officer or a director of the Company.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 ("Securities Act") may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit, or proceeding) is asserted by
such director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by a controlling precedent, submit to a court of
appropriate jurisdiction the question of whether indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

C-4

<PAGE>

ITEM 29. PRINCIPAL UNDERWRITERS

(a) JHFI acts as principal underwriter, depositor, sponsor or investment
adviser for the following investment companies.

John Hancock Investment Trust
John Hancock Trust II
John Hancock Investment Trust III
John Hancock Cash Reserve, Inc.
John Hancock Current Interest
John Hancock Bond Trust
John Hancock California Tax-Free Income Fund
John Hancock Capital Series
John Hancock Institutional Series Trust
John Hancock Variable Series Trust I
John Hancock Sovereign Bond Fund
John Hancock Sovereign Investors Fund, Inc.
John Hancock Special Equities Fund
John Hancock Strategic Series
John Hancock Tax-Exempt Series Fund
John Hancock Tax-Free Bond Trust
John Hancock World Fund

(b) The following lists the names and positions with underwriter of the
directors and officers of JHFI.

Foster L. Aborn Director
Edward J. Boudreau, Jr. Director and Chairman
Stephen L. Brown Director
David F. D'Alessandro Director
John M. DeCiccio Director
William C. Fletcher Director
Robert G. Freedman Director
John Goldsmith Director
David A. King Director
Jeanne M. Livermore Director
Thomas E. Moloney Director
Richard S. Scipione Director
Robert H. Watts Director

<TABLE>
<S> <C>
Edward J. Boudreau, Jr., Chairman, President and Chief Executive Officer
Robert H. Watts Executive Vice President and Chief Compliance Officer
James W. McLaughlin Senior Vice President and Chief Financial Officer
John A. Morin Vice President and Secretary
Christopher M. Meyer Vice President and Treasurer
James V. Bowhers Executive Vice President
Anne C. Hodsdon Executive Vice President
Anthony P. Petrucci Executive Vice President
Richard O. Hansen Senior Vice President
Keith Harstein Senior Vice President
James B. Little Senior Vice President
Charles H. Womack Senior Vice President
Susan S. Newton Vice President
Karen F. Walsh Vice President
Griselda Lyman Vice President
J. William Benintende Vice President
Gary Cronin Vice President
Kristine Pancare Vice President
Martin Thomas Second Vice President
Arthur J. Holzman, Jr. Second Vice President and Assistant Treasurer
William H. King Assistant Treasurer
Theresa Apruzzese Assistant Secretary
John J. Cotter Assistant Secretary
Carmen M. Pelissier Assistant Secretary
</TABLE>

The business address for each of the above-named officers and directors is: John
Hancock Funds, Inc., 101 Huntington Avenue, Boston, Massachusetts 02199-7603.

C-5

<PAGE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The following entities prepare, maintain, and preserve the records required by
Section 31(a) of the Act for the Registrant through written agreements between
the parties to the effect that such services will be provided to the Registrant
for such periods prescribed by the Rules and Regulations of the Commission under
the Act and such records will be surrendered promptly on request:

The Company, John Hancock Place, P.O. Box 111, Boston, Massachusetts 02117,
prepares, maintains and preserves all other records required by Section
31(a) of the Act.

ITEM 31. MANAGEMENT SERVICES

Not applicable.

ITEM 32. UNDERTAKINGS

(a) Registrant hereby undertakes to file a post-effective amendment to this
Registration Statement as frequently as is necessary to ensure that the audited
financial statements in the Registration Statement are never more than 16 months
old for so long as payments under the variable annuity contracts may be
accepted.

(b) Registrant hereby undertakes to include as part of any application to
purchase a Contract offered by the prospectus a space that an applicant can
check to request a Statement of Additional Information, or to provide a toll-
free telephone number that applicants may call for this purpose.

(c) Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
Form N-4 promptly upon written or oral request.

(d) Registrant represents that, in connection with the sale of the Contracts
offered pursuant to this Registration Statement, it has complied with the
conditions of the SEC no-action letter regarding the purchase of variable
annuity contracts under retirement plans meeting the requirements of Section
403(b) of the Internal Revenue Code (American Council of Life Insurance (pub.
avail. Nov. 28, 1988)). Specifically, Registrant (1) has included appropriate
disclosure regarding the redemption restrictions imposed by Section 403(b)(11)
in the prospectus; (2) will include appropriate disclosure regarding the
redemption restrictions imposed by Section 403(b)(11) in any sales literature
used in connection with the offer of the Contracts; (3) will instruct sales
representatives specifically to bring the redemption restrictions imposed by
Section 403(b)(11) to the attention of potential plan participants; and (4) will
obtain from each plan participant who purchases a Section 403(b) annuity
contract, prior to or at the time of such purchase, a signed statement
acknowledging the participant's understanding of (a) the restrictions on
redemptions imposed by Section 403(b)(11) and (b) the investment alternatives
available under the employer's Section 403(b) arrangement to which the
participant may elect to transfer his Accumulated Value or Surrender Value.

(e) John Hancock Mutual Life Insurance Company represents that the fees and
charges deducted under the Contracts, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the insurance company.

C-6
<PAGE>

SIGNATURES

AS REQUIRED BY THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF
1940, REGISTRANT HAS CAUSED THIS AMENDMENT TO THE REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF, IN THE CITY OF BOSTON AND THE COMMONWEALTH OF
MASSACHUSETTS, ON THE 12TH DAY OF DECEMBER, 1997.

JOHN HANCOCK VARIABLE ANNUITY
ACCOUNT H (REGISTRANT)

By John Hancock Mutual Life
Insurance Company

By /s/ WILLIAM L. BOYAN
--------------------------
William L. Boyan
President

JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY (DEPOSITOR)

By /s/ WILLIAM L. BOYAN
--------------------------
William L. Boyan
President

C-7
<PAGE>

AS REQUIRED BY THE SECURITIES ACT OF 1933, THIS AMENDMENT TO THE
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THEIR
CAPACITIES WITH JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY AND ON THE DATES
INDICATED. REGISTRANT CERTIFIES THAT IT MEETS THE REQUIREMENTS OF RULE 485(B) OF
THE SECURITIES ACT OF 1933 FOR THE EFFECTIVENESS OF THIS REGISTRATION STATEMENT.
<TABLE>
<CAPTION>

Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ THOMAS E. MOLONEY Chief Financial Officer December 12, 1997
- ---------------------- (Principal Financial Officer
Thomas E. Moloney and Principal Accounting
Officer)

/s/ WILLIAM L. BOYAN President (Acting Principal December 12, 1997
- ---------------------- Executive Officer)
William L. Boyan
for himself and as
Attorney-in-Fact

FOR: Stephen L. Brown Chairman of the Board
Samuel W. Bodman Director
Nelson S. Gifford Director
William L. Boyan Director
Kathleen F. Feldstein Director
Lawrence K. Fish Director
E. James Morton Director
John F. Magee Director
John M. Conners, Jr. Director
Thomas L. Phillips Director
I. MacAllister Booth Director
C. Vincent Vappi Director
Randolph W. Bromery Director
Robert J. Tarr, Jr. Director
David F. D'Alessandro Director
Joan T. Bok Director
Robert F. Fast Director
Foster L. Aborn Director
Richard F. Syron Director
Michael C. Hawley Director
</TABLE>

C-8

EXHIBIT 10(a)

[John Hancock Mutual Life Insurance Company Letterhead]

December 5, 1997

SECURITIES & EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549

RE: John Hancock Variable Annuity Account H
File Nos. 333-08345 and 811-07711
---------------------------------

Dear Commissioners:

This opinion is being furnished with respect to the filing of
Post-Effective Amendment No. 2 under the Securities Act of 1933 (Post-Effective
Amendment No. 2 under the Investment Company Act of 1940) of the Form N-4
Registration Statement of John Hancock Variable Annuity Account H as required by
Rule 485 under the 1933 Act.

I have acted as counsel to Registrant for the purpose of preparing this
Post-Effective Amendment which is being filed pursuant to paragraph (b) of Rule
485 and hereby represent to the Commission that in my opinion this
Post-Effective Amendment does not contain disclosures which would render it
ineligible to become effective pursuant to paragraph (b).

We hereby consent to the filing of this opinion with and as a part of this
Post-Effective Amendment to Registrant's Registration Statement with the
Commission.

Very truly yours,

/s/ Sandra M. DaDalt

Sandra M. DaDalt
Associate Counsel

EXHIBIT 10(b)

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts and Financial
Statements" in the Prospectus in Post-Effective Amendment No. 2 to the
Registration Statement (Form N-4, No. 333-08345) of John Hancock Variable
Annuity Account H.

We also consent to the incorporation of our report dated February 14, 1997, with
respect to the financial statements included in the Annual Report of John
Hancock Mutual Life Insurance company for the year ended December 31, 1996.

Ernst & Young LLP
/s/ Ernst & Young LLP
Boston, Massachusetts
December 12, 1997