HANCOCK JOHN VARIABLE ANNUITY ACCOUNT H, N-4, 1999-08-09

HANCOCK JOHN VARIABLE ANNUITY ACCOUNT H
N-4, 1999-08-09

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<PAGE>

As filed with the Securities and Exchange Commission on August 9, 1999.
File Nos. 333-_____
811-07711
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [X ]

PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. [ ]

and/or

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 9 [X ]
(Check Appropriate Box or Boxes)

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) 572-8050

RONALD J. BOCAGE, ESQUIRE
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE
BOSTON, MA 02117
(Name and Address of Agent for Service)

Approximate date of proposed public offering: as soon as practicable after the
effective date of this Registration Statement.

Title and amount of securities being registered: interests under flexible
premium deferred variable annuity contracts.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>

PROSPECTUS DATED ________, 1999

REVOLUTION EXTRA VARIABLE ANNUITY
- ---------------------------------------------------------------------------

a deferred combination fixed and variable annuity contract issued by

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY ("JOHN HANCOCK")

JOHN HANCOCK ANNUITY SERVICING OFFICE
- ------------------------------------------------
529 Main Street (X-3) Phone: 1-800-732-5543

Charlestown, MA 02129 Fax: 1-800-886-3048
- ------------------------------------------------

The contract enables you to earn (1) fixed rates of interest that we guarantee
for stated periods of time ("guarantee periods") and (2) an investment-based
return in the following variable investment options:

<TABLE>
<CAPTION>
VARIABLE INVESTMENT OPTION MANAGED BY
-------------------------- ----------
<S> <C>
V.A. Sovereign Investors . . . . . . . . . John Hancock Advisers, Inc.
V.A. Core Equity . . . . . . . . . . . . . Independence Investment Associates, Inc.
Aggressive Balanced. . . . . . . . . . . . Independence Investment Associates, Inc.
Fidelity VIP Contrafund. . . . . . . . . . Fidelity Management & Research Company
Equity Index . . . . . . . . . . . . . . . State Street Global Advisers
Large Cap Value CORE . . . . . . . . . . . Goldman Sachs Asset Management
V.A. Financial Industries. . . . . . . . . John Hancock Advisers, Inc.
Large Cap Aggressive Growth. . . . . . . . Alliance Capital Management L.P.
Fidelity VIP Growth. . . . . . . . . . . . Fidelity Management & Research Company
MFS Growth . . . . . . . . . . . . . . . . Massachusetts Financial Services Company
Large/Mid Cap Value. . . . . . . . . . . . Wellington Management Company, LLP
Mid Cap Blend. . . . . . . . . . . . . . . Independence Investment Associates, Inc.
AIM V.I. Value . . . . . . . . . . . . . . AIM Advisors, Inc.
MFS Research . . . . . . . . . . . . . . . Massachusetts Financial Services Company
AIM V.I. Growth. . . . . . . . . . . . . . AIM Advisors, Inc.
Fundamental Mid Cap Growth . . . . . . . . Oppenheimer Funds, Inc.
Small/Mid Cap CORE . . . . . . . . . . . . Goldman Sachs Asset Management
Small/Mid Cap Value. . . . . . . . . . . . The Boston Company Asset Management, LLC
Small/Mid Cap Growth . . . . . . . . . . . Wellington Management Company, LLP
Small Cap Growth . . . . . . . . . . . . . John Hancock Advisers, Inc.
MFS New Discovery. . . . . . . . . . . . . Massachusetts Financial Services Company
International Balanced . . . . . . . . . . Brinson Partners, Inc.
Templeton International. . . . . . . . . . Templeton Investment Counsel, Inc.
International Equity . . . . . . . . . . . Goldman Sachs Asset Management
Fidelity VIP Overseas. . . . . . . . . . . Fidelity Management & Research Company
Templeton Developing Markets . . . . . . . Templeton Asset Management, Ltd.
Short-Term Bond. . . . . . . . . . . . . . Independence Investment Associates, Inc.
Bond Index . . . . . . . . . . . . . . . . Mellon Bond Associates, LLP
V.A. Bond. . . . . . . . . . . . . . . . . John Hancock Advisers, Inc.
V.A. Strategic Income. . . . . . . . . . . John Hancock Advisers, Inc.
High Yield Bond. . . . . . . . . . . . . . Wellington Management Company, LLP
V.A. Money Market. . . . . . . . . . . . . John Hancock Advisers, Inc.
- -------------------------------------------------------------------------------------------------
</TABLE>

We may offer additional variable investment options in the future.
<PAGE>

For each variable investment option you select, we invest your money in a
corresponding "Fund." The currently available "Funds" include certain Funds,
Portfolios or Series of the John Hancock Declaration Trust, the John Hancock
Variable Series Trust I, the AIM Variable Insurance Funds, Inc., the Templeton
Variable Product Series Fund, Fidelity's Variable Insurance Products Fund and
Variable Insurance Products Fund II, and the MFS Variable Insurance Trust
(together, "the Trusts").

Each Trust is a so-called "series" type mutual fund registered with the
Securities and Exchange Commission ("SEC"). Each of the Trusts' "Funds" is a
separately managed investment portfolio that has its own investment objective
and strategies. Attached at the end of this prospectus is a prospectus for each
Trust and each individual Fund that contains detailed information about each
available Fund. Be sure to read the prospectuses for the Trusts and the
individual Funds before selecting any variable investment option.

For amounts you don't wish to invest in a variable investment option, you can
choose among several guarantee periods, each of which has its own guaranteed
interest rate and expiration date. If you remove money from a guarantee period
prior to its expiration, however, we may increase or decrease your contract's
value to compensate for changes in interest rates that may have occurred
subsequent to the beginning of that guarantee period. This is known as a "market
value adjustment."

************************************************************************

The SEC has not approved or disapproved the contracts, or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.

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,
other than John Hancock. They involve investment risks including the possible
loss of principal.

The contracts are not 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>

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
contract or exercise any of your rights under the contract. We have arranged
the prospectus in the following way:

. The first section contains an "INDEX OF KEY WORDS."

. Behind the index is the "FEE TABLE." This section highlights the
various fees and expenses you will pay directly or indirectly, if you
purchase a contract.

. The next section is called "BASIC INFORMATION." It contains basic
information about the contract presented in a question and answer
format. You should read the Basic Information before reading any
other section of the prospectus.

. Behind the Basic Information is "ADDITIONAL INFORMATION." This
section gives more details about the contract. It generally does not
repeat information contained in the Basic Information.

. "CONDENSED FINANCIAL INFORMATION" follows the "Additional
Information." This gives some basic information about the size and
past performance of the variable investment options.

The Trusts' prospectuses are attached at the end of this prospectus. You
should save these prospectuses for future reference.

IMPORTANT NOTICES

This is the prospectus - it is not the contract. The prospectus simplifies
many contract provisions to better communicate the contract's essential
features. Your rights and obligations under the contract will be determined by
the language of the contract itself. On request, we will provide the form of
contract for you to review. In any event, when you receive your contract, we
suggest you read it promptly.

We've also filed with the SEC a "Statement of Additional Information," dated
______, 1999. This Statement contains detailed information not included in
the prospectus. Although a separate document from this prospectus, the
Statement of Additional Information has the same legal effect as if it were a
part of this prospectus. We will provide you with a free copy of the Statement
upon your request. To give you an idea what's in the Statement, we have
included a copy of the Statement's table of contents on page __.
- -------------------------------------------------------------------------------

<PAGE>

INDEX OF KEY WORDS

We define or explain each of the following key words used in this prospectus
on the pages shown below:

KEY WORD PAGE

Accumulation units...................................
Annuitant............................................
Annuity payments.....................................
Annuity period.......................................
Contract year........................................
Date of issue........................................
Date of maturity.....................................
Free withdrawal amount...............................
Funds................................................
Guarantee periods.................................... cover
Investment options...................................
Market value adjustment..............................
Premium payments.....................................
Surrender value......................................
Surrender............................................
Variable investment options.......................... cover
Withdrawal charge....................................
Withdrawal...........................................

<PAGE>

FEE TABLE

The following fee table shows the various fees and expenses that you will pay,
either directly or indirectly, if you purchase a contract. The table does not
include charges for premium taxes (which may vary by state) or fees for any
optional benefit riders that you select.

OWNER TRANSACTION EXPENSES AND ANNUAL CONTRACT FEE

. Maximum Withdrawal Charge (as % of amount withdrawn) 7%
. Annual Contract Fee (applies only to contracts of less than $50,000) $30

ANNUAL CONTRACT EXPENSES (AS A % OF THE AVERAGE TOTAL VALUE OF THE CONTRACT)

. Mortality and Expense Risk Charge 1.25%

This charge doesn't apply to amounts held in the guarantee periods.

ANNUAL FUND EXPENSES (BASED ON % OF AVERAGE NET ASSETS)

The Funds must pay investment management fees and other operating expenses.
These fees and expenses are different for each Fund and reduce the investment
return of each Fund. Therefore, they also indirectly reduce the return you will
earn on any variable investment options you select.

The figures in the following table for the Funds of the John Hancock Variable
Series Trust I are expressed as percentages (rounded to two decimal places) of
each Fund's average daily net assets for 1998. The percentages reflect the
investment management fees currently payable and the 1998 other fund expenses
allocated to the Fund (except that the "other fund expenses absent
reimbursement" for the Aggressive Balanced, Large Cap Value CORE, Large Cap
Aggressive Growth, Large/Mid Cap Value, Mid Cap Blend, Fundamental Mid Cap
Growth, Small/Mid Cap Value, and International Equity Funds cannot be reasonably
estimated as of the date of this prospectus because those Funds were not in
operation prior to that date).

<TABLE>
<CAPTION>
OTHER FUND
EXPENSES AFTER TOTAL FUND OTHER FUND
MANAGEMENT REIMBURSEMENT EXPENSES AFTER EXPENSES ABSENT
FUND NAME FEES (1) REIMBURSEMENT REIMBURSEMENT
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggressive Balanced 0.68% 0.10% 0.78% N/A
- ------------------------------------------------------------------------------------------------
Equity Index 0.14% 0.08% 0.22% 0.08%
- ------------------------------------------------------------------------------------------------
Large Cap Value CORE 0.75% 0.10% 0.85% N/A
- ------------------------------------------------------------------------------------------------
Large Cap Aggressive 1.00% 0.10% 1.10% N/A
Growth
- ------------------------------------------------------------------------------------------------
Large/Mid Cap Value 0.95% 0.10% 1.05% N/A
- ------------------------------------------------------------------------------------------------
Mid Cap Blend 0.75% 0.10% 0.85% N/A
- ------------------------------------------------------------------------------------------------
Fundamental Mid Cap Growth 0.85% 0.10% 0.95% N/A
- ------------------------------------------------------------------------------------------------
Small/Mid Cap CORE 0.80% 0.10% 0.90% 0.23%
- ------------------------------------------------------------------------------------------------
Small/Mid Cap Value 0.95% 0.10% 1.05% N/A
- ------------------------------------------------------------------------------------------------
Small/Mid Cap Growth 0.75% 0.05% 0.80% 0.05%
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Small Cap Growth 0.75% 0.08% 0.83% 0.08%
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International Balanced 0.85% 0.10% 0.95% 0.64%
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International Equity 1.00% 0.10% 1.10% N/A
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Short-Term Bond 0.30% 0.05% 0.35% 0.05%
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Bond Index 0.15% 0.05% 0.20% 0.05%
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High Yield Bond 0.65% 0.07% 0.72% 0.07%
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</TABLE>

<PAGE>

(1) John Hancock Mutual Life Insurance Company reimburses a Fund when the
Fund's other fund expenses exceed 0.10% of the Fund's average daily net
assets.

The figures in the following table for the Funds of the John Hancock
Declaration Trust are expressed as percentages of each Fund's average daily net
assets for 1998 (rounded to two decimal places). The percentages reflect the
investment management fees currently payable and the 1998 other fund expenses
allocated to the John Hancock Declaration Trust.

<TABLE>
<CAPTION>
OTHER FUND
EXPENSES AFTER TOTAL FUND OTHER FUND
MANAGEMENT REIMBURSEMENT EXPENSES AFTER EXPENSES ABSENT
FUND NAME FEES (2) REIMBURSEMENT REIMBURSEMENT
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
V.A. Sovereign Investors 0.60% 0.14% 0.74% 0.14%
- --------------------------------------------------------------------------------------------------------------------
V.A. Core Equity 0.70% 0.25% 0.95% 0.25%
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V.A. Financial Industries 0.80% 0.12% 0.92% 0.12%
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V.A. Bond 0.50% 0.25% 0.75% 0.84%
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V.A. Strategic Income 0.60% 0.25% 0.85% 0.33%
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V.A. Money Market 0.50% 0.24% 0.74% 0.24%
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</TABLE>

(2) John Hancock Funds, Inc., has agreed to limit temporarily other expenses
of each Fund to 0.25% of the Fund's average daily assets.

The following table for the Funds of the Variable Insurance Products Fund and
the Variable Insurance Products Fund II states the total management fee and the
total annual Service Class operating expense, as a percentage (rounded to two
decimal places) of each class's average net assets, for each Fund for the fiscal
year ended December 31, 1998. The total class operating expenses do not reflect
the effect of any reduction of certain expenses during the period.

<TABLE>
<CAPTION>
OTHER CLASS TOTAL CLASS
MANAGEMENT OPERATING OPERATING
FUND NAME FEES EXPENSES EXPENSES(3)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fidelity VIP Contrafund 0.59% 0.21% 0.80%
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth 0.59% 0.21% 0.80%
- --------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas 0.74% 0.27% 1.01%
- --------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

(3) Fidelity Management & Research Company has volutarily agreed to reimburse
the Service Class of the Funds to the extent that total operating expenses
(excluding interest, taxes, securites lending fees, brokerage commissions
and extraordinary expenses), as a percentage of their respective average
net assets, exceed 1.10% for the Contrafund and 1.60% for the Growth and
Overseas Funds. If certain expense reductions resulting from the use of
brokerage commissions and uninvested cash balances were included, the
above operating expense percentages would have been reduced by 0.05% for
the Contrafund and Growth Fund and 0.04% for the Overseas Fund.

The following table for the Funds of the Templeton Variable Products Series
Fund shows the management fees and other fund expenses for each Fund for the
fiscal year ended December 31, 1998. The figures in the table are expressed as
percentages (rounded to two decimal places) of each Fund's average daily net
assets for 1998.

<TABLE>
<CAPTION>
MANAGEMENT OTHER FUND TOTAL FUND
FUND NAME FEES EXPENSES EXPENSES
<S> <C> <C> <C>
- --------------------------------------------------------------------------
Templeton International 0.69% 0.42% 1.11%
- --------------------------------------------------------------------------
Templeton Developing Markets 1.25% 0.66% 1.91%
- --------------------------------------------------------------------------
</TABLE>

The following table for the Funds of the MFS Variable Insurance Trust shows
the management fees and other fund expenses for each Fund for the fiscal year
ended December 31, 1998. The figures in the table are expressed as percentages
(rounded to two decimal places) of each Fund's average daily net assets for
1998.

<TABLE>
<CAPTION>
TOTAL FUND OTHER
OTHER FUND EXPENSES AFTER FUND
MANAGEMENT EXPENSES AFTER REIMBURSEMENT EXPENSES
FUND NAME FEES REIMBURSEMENT (4) ABSENT
REIMBURSEMENT
(5)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS Growth 0.75% 0.25% 1.00% 3.28%
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Research 0.75% 0.11% 0.86% 0.11%
- ------------------------------------------------------------------------------------------------------------------------------------
MFS New Discovery 0.90% 0.27% 1.17% 4.32%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(4) Each Fund has an expense offset arrangement which reduces the Fund's
custodian fee based upon the amount of cash maintained by the Fund with
its custodian and dividend disbursing agent. Each Fund may enter into
other such arrangements and directed brokerage arrangements, which would
also have the effect of reducing the Fund's expenses. Expenses do not take
into account these expense reductions, and are therefore higher than the
actual expenses of the Fund.

(5) Massachusetts Financial Services Company has contractually agreed to bear
expense for the Fund, subject to reimbursement by the Fund, such that each
such Fund's "other fund expenses" shall not exceed 0.25% of the average
daily net assets of the Fund during the current fiscal year.

The following table for the Funds of the AIM Variable Insurance Funds, Inc.,
shows the management fees and other fund expenses for each Fund for the fiscal
year ended December 31, 1998. The figures in the table are expressed as
percentages (rounded to two decimal places) of each Fund's average daily net
assets for 1998.

<TABLE>
<CAPTION>
MANAGEMENT OTHER FUND TOTAL FUND
FUND NAME FEES EXPENSES EXPENSES
- -------------------------------------------------------------------
<S> <C> <C> <C>
AIM V.I. Value 0.64% 0.08% 0.72%
- -------------------------------------------------------------------
AIM V.I. Growth 0.61% 0.05% 0.66%
- -------------------------------------------------------------------
</TABLE>

<PAGE>

We may receive payments from a Fund or its affiliates at an annual rate of up
to approximately .25% of the average net assets that holders of our variable
life insurance policies and variable annuity contracts have invested in that
Fund. Any such payments do not, however, result in any charge to you in
addition to what is disclosed in the above tables.

<PAGE>

EXAMPLES*

If you "surrender" (turn in) your contract at the end of the applicable time
period, you would pay the following current expenses, directly or indirectly, on
a $1,000 investment allocated to one of the variable investment options,
assuming a 5% annual return on assets:

1 YEAR 3 YEARS
<S> <C> <C>
- --------------------------------------------------------
V.A. Sovereign Investors $89 $136
- --------------------------------------------------------
V.A. Core Equity $91 $143
- --------------------------------------------------------
Aggressive Balanced $89 $137
- --------------------------------------------------------
Fidelity VIP Contrafund $90 $138
- --------------------------------------------------------
Equity Index $84 $120
- --------------------------------------------------------
Large Cap Value CORE $90 $140
- --------------------------------------------------------
V.A. Financial Industries $91 $142
- --------------------------------------------------------
Large Cap Aggressive Growth $92 $147
- --------------------------------------------------------
Fidelity VIP Growth $90 $138
- --------------------------------------------------------
MFS Growth $92 $144
- --------------------------------------------------------
Large/Mid Cap Value $92 $146
- --------------------------------------------------------
Mid Cap Blend $90 $140
- --------------------------------------------------------
AIM V.I. Value $89 $136
- --------------------------------------------------------
MFS Research $90 $140
- --------------------------------------------------------
AIM V.I. Growth $88 $134
- --------------------------------------------------------
Fundamental Mid Cap Growth $91 $143
- --------------------------------------------------------
Small/Mid Cap CORE $91 $141
- --------------------------------------------------------
Small/Mid Cap Value $92 $146
- --------------------------------------------------------
Small/Mid Cap Growth $90 $138
- --------------------------------------------------------
Small Cap Growth $90 $139
- --------------------------------------------------------
MFS New Discovery $93 $150
- --------------------------------------------------------
International Balanced $91 $143
- --------------------------------------------------------
Templeton International $93 $148
- --------------------------------------------------------
International Equity $92 $147
- --------------------------------------------------------
Fidelity VIP Overseas $92 $145
- --------------------------------------------------------
Templeton Developing Markets $100 $172
- --------------------------------------------------------
Short-Term Bond $85 $124
- --------------------------------------------------------
Bond Index $84 $119
- --------------------------------------------------------
V.A. Bond $89 $137
- --------------------------------------------------------
V.A. Strategic Income $90 $140
- --------------------------------------------------------
High Yield Bond $89 $136
- --------------------------------------------------------
V.A. Money Market $89 $136
- --------------------------------------------------------
</TABLE>

<PAGE>

If you commence receiving payments under one of our annuity payment options at
the end of the applicable time period, or if you do not surrender your contact,
you would pay the following current expenses, directly or indirectly, on a
$1,000 investment allocated to one of the variable investment options, assuming
5% annual return on assets.

<TABLE>
<CAPTION>
<S> <C> <C>
1 YEAR 3 YEARS
- ---------------------------------------------------
V.A. Sovereign Investors $21 $66
- ---------------------------------------------------
V.A. Core Equity $24 $73
- ---------------------------------------------------
Aggressive Balanced $22 $67
- ---------------------------------------------------
Fidelity VIP Contrafund $22 $68
- ---------------------------------------------------
Equity Index $16 $50
- ---------------------------------------------------
Large Cap Value CORE $23 $70
- ---------------------------------------------------
V.A. Financial Industries $23 $72
- ---------------------------------------------------
Large Cap Aggressive Growth $25 $77
- ---------------------------------------------------
Fidelity VIP Growth $22 $68
- ---------------------------------------------------
MFS Growth $24 $74
- ---------------------------------------------------
Large/Mid Cap Value $25 $76
- ---------------------------------------------------
Mid Cap Blend $23 $70
- ---------------------------------------------------
AIM V.I. Value $21 $66
- ---------------------------------------------------
MFS Research $23 $70
- ---------------------------------------------------
AIM V.I. Growth $21 $64
- ---------------------------------------------------
Fundamental Mid Cap Growth $24 $73
- ---------------------------------------------------
Small/Mid Cap CORE $23 $71
- ---------------------------------------------------
Small/Mid Cap Value $25 $76
- ---------------------------------------------------
Small/Mid Cap Growth $22 $68
- ---------------------------------------------------
Small Cap Growth $22 $69
- ---------------------------------------------------
MFS New Discovery $26 $80
- ---------------------------------------------------
International Balanced $24 $73
- ---------------------------------------------------
Templeton International $25 $78
- ---------------------------------------------------
International Equity $25 $77
- ---------------------------------------------------
Fidelity VIP Overseas $24 $75
- ---------------------------------------------------
Templeton Developing Markets $34 $102
- ---------------------------------------------------
Short-Term Bond $17 $54
- ---------------------------------------------------
Bond Index $16 $49
- ---------------------------------------------------
V.A. Bond $22 $67
- ---------------------------------------------------
V.A. Strategic Income $23 $70
- ---------------------------------------------------
High Yield Bond $21 $66
- ---------------------------------------------------
V.A. Money Market $21 $66
- ---------------------------------------------------
</TABLE>

* THESE EXAMPLES DO NOT INCLUDE ANY APPLICABLE PREMIUM TAXES OR ANY FEES
FOR OPTIONAL BENEFIT RIDERS. THE EXAMPLES SHOULD NOT BE CONSIDERED
REPRESENTATIONS OF PAST OR FUTURE EXPENSES; ACTUAL CHARGES MAY BE GREATER
OR LESS THAN THOSE SHOWN ABOVE. THE EXAMPLES ASSUME FUND EXPENSES AT
RATES SET FORTH ABOVE FOR 1998, AFTER REIMBURSEMENTS. THE ANNUAL CONTRACT
FEE HAS BEEN INCLUDED AS AN ANNUAL PERCENTAGE OF ASSETS.

<PAGE>

BASIC INFORMATION

This "Basic Information" section provides answers to commonly asked questions
about the contract. Here are the page numbers where the questions and answers
appear:

QUESTION PAGES TO SEE
-------- ------------

What is the contract?. . . . . . . . . . . . . . . .

Who owns the contract?. . . . . . . . . . . . . . .

Is the owner also the annuitant?. . . . . . . . . .

How can I invest money in a contract?. . . . . . . .

How will the value of my investment in the contract change over time?

What annuity benefits does the contract provide?. .

What are the tax consequences of owning a contract?.

Can I change my contract's investment options?. . .

What fees and charges will be deducted from my contract?

How can I withdraw money from my contract?. . . . .

What happens if the annuitant dies before my contract's date of maturity?

What other benefits can I purchase under a contract?

Can I return my contract?. . . . . . . . . . . . . .

<PAGE>

WHAT IS THE CONTRACT?

The contract is a "deferred payment variable annuity contract." An annuity
contract provides a person (known as the "annuitant" or "payee") with a series
of periodic payments. Because this contract is also a deferred payment contract,
the annuity payments will begin on a future date, called the contract's "date of
maturity." Under a variable annuity contract, the amount you have invested can
increase or decrease in value daily based upon the value of the variable
investment options chosen. If your annuity is provided under a master group
contract, the term "contract" as used in this prospectus refers to the
certificate you will be issued and not to the master group contract.

WHO OWNS THE CONTRACT?

That's up to you. Unless the contract provides otherwise, the owner of the
contract is the person who can exercise the rights under the contract, such as
the right to choose the investment options or the right to surrender the
contract. In many cases, the person buying the contract will be the owner.
However, you are free to name another person or entity (such as a trust) as
owner. In writing this prospectus, we've assumed that you, the reader, are the
person or persons entitled to exercise the rights and obligations under
discussion. If a contract has joint owners, both must join in any written
notice or request.

IS THE OWNER ALSO THE ANNUITANT?

Again, that's up to you. The annuitant is the person upon whose death the
contract's death benefit becomes payable. Also, the annuitant receives payments
from us under any annuity option that commences during the annuitant's lifetime.
In many cases, the same person is both the annuitant and the owner of a
contract. However, you are free to name another person as annuitant or joint
annuitant. You could also name as joint annuitants two persons other than
yourself.

HOW CAN I INVEST MONEY IN A CONTRACT?

PREMIUM PAYMENTS

We call the investments you make in your contract "premiums" or "premium
payments." In general, you need at least a $10,000 initial premium payment to
purchase a contract. If you purchase your contract under any of the
tax-qualified plans shown on page __ or if you purchase your contract through
the annuity direct deposit program, different minimums will apply. If you choose
to contribute more money into your contract, each subsequent premium payment
must be at least $200 ($100 for the annuity direct deposit program). If your
contract's total value ever falls to zero, we may terminate it. Therefore, you
may need to pay more premiums to keep the contract in force.

<PAGE>

APPLYING FOR A CONTRACT

An authorized representative of the broker-dealer or financial institution
through whom you purchase your contract will assist you in (1) completing an
application or placing an order for a contract and (2) transmitting it, along
with your initial premium payment, to the John Hancock Annuity Servicing Office.

Once we receive your initial premium payment and all necessary information, we
will issue your contract and invest your initial premium payment within two
business days. If the information is not in good order, we will contact you to
get the necessary information. If for some reason, we are unable to complete
this process within 5 business days, we will either send back your money or get
your permission to keep it until we get all of the necessary information.

In certain situations, we will issue a contract upon receiving the order of
your broker-dealer or financial institution but delay the effectiveness of the
contract until we receive your signed application. (What we mean by "delaying
effectiveness" is that we will not allow allocations to the variable investment
options until we receive your signed application.) In those situations, if we do
not receive your signed application within our required time period, we will
deem the contract void from the beginning and return your premium payment.

We measure the years and anniversaries of your contract from its date of
issue. We use the term "contract year" to refer to each period of time between
anniversaries of your contract's date of issue.

LIMITS ON PREMIUM PAYMENTS

You can make premium payments of up to $1,000,000 in any one contract year.
The total of all new premium payments and transfers that you allocate to any
one variable investment option in any one contract year may not exceed
$1,000,000. While the annuitant is alive and the contract is in force, you can
make premium payments at any time before the date of maturity. However,

YOU MAY NOT MAKE ANY
IF YOUR CONTRACT IS USED TO FUND PREMIUM PAYMENTS AFTER THE
ANNUITANT REACHES AGE
- -----------------------------------------------------------------------------------------------------
<S> <C>
a "tax qualified plan"* 70 1/2**
- -----------------------------------------------------------------------------------------------------
a non-tax qualified plan 8
5
- -----------------------------------------------------------------------------------------------------
</TABLE>

* as that term is used in "Tax Information," beginning on page __.
** except for a ROTH IRA, which has no age limit.

We will not issue a contract if the proposed annuitant is older than age 84.
We may waive any of these limits, however.

<PAGE>

WAYS TO MAKE PREMIUM PAYMENTS

Premium payments made by check or money order must be:

. drawn on a U.S. bank,

. drawn in U.S. dollars, and

. made payable to "John Hancock."

Premium payments after the initial premium payment should be sent to the John
Hancock Annuity Servicing Office at one of the addresses shown on page 1 of this
prospectus. We will also accept premium payments by wire. We will accept your
initial premium payment by exchange from another insurance company. You can
find information about wire payments under "Premium payments by wire," below.
You can find information about other methods of premium payment by contacting
your broker-dealer or by contacting the John Hancock Annuity Servicing Office.

Once we have issued your contract and it becomes effective, we credit you with
any additional premiums you pay as of the day we receive them at the John
Hancock Annuity Servicing Office.

PREMIUM PAYMENTS BY WIRE

If you purchase your contract through a broker-dealer firm or financial
institution, you may transmit your initial premium payment by wire order. Your
wire orders must include information necessary to allocate the premium payment
among your selected investment options.

If your wire order is complete, we will invest the premium payment in your
selected investment options as of the day we received the wire order. If the
wire order is incomplete, we may hold your initial premium payment for up to 5
business days while attempting to obtain the missing information. If we can't
obtain the information within 5 business days, we will immediately return your
premium payment, unless you tell us to hold the premium payment for 5 more days
pending completion of the application. Nevertheless, until we receive and
accept a properly completed and signed application, we will not:

. issue a contract;

. accept premium payments; or

. allow other transactions.

After we issue your contract, subsequent premium payments may be transmitted
by wire through your bank. Information about our bank, our account number, and
the ABA routing

<PAGE>

number may be obtained from the John Hancock Annuity Servicing Office. Banks
may charge a fee for wire services.

HOW WILL THE VALUE OF MY INVESTMENT IN THE CONTRACT CHANGE OVER TIME?

Prior to a contract's date of maturity, the amount you've invested in any
VARIABLE INVESTMENT OPTION will increase or decrease based upon the investment
experience of the corresponding Fund. Except for certain charges we deduct,
your investment experience will be the same as if you had invested in the Fund
directly and reinvested all Fund dividends and distributions in additional
shares.

Like a regular mutual fund, each Fund deducts investment management fees and
other operating expenses. These expenses are shown in the fee table beginning
on page __. However, unlike a mutual fund, we will also deduct charges relating
to the annuity guarantees and other features provided by the contract. These
charges reduce your investment performance and the amount we have credited to
your contract in any variable investment option. We describe these charges
under "What charges will be deducted from my contract?" beginning on page __.

The amount you've invested in a GUARANTEE PERIOD will earn interest at the
rate we have set for that period. The interest rate depends upon the length of
the guarantee period you select. We currently make available various guarantee
periods with durations of up to ten years. As long as you keep your money in a
guarantee period until its expiration date, we bear all the investment risk on
that money.

However, if you prematurely transfer, "surrender" or otherwise withdraw money
from a guarantee period we will increase or reduce the remaining value in your
contract by an amount that approximates the impact that any changes in interest
rates would have had on the market value of a debt instrument with terms
comparable to that guarantee period. This "market value adjustment" (or "MVA")
imposes investment risks on you. We describe how the market value adjustments
work in "Calculation of market value adjustment ("MVA")" beginning on page __.

At any time before the date of maturity, the "TOTAL VALUE OF YOUR CONTRACT"
equals

. the total amount you invested,

. plus the amount(s) credited to your contact under the "Extra credit
feature" described below,

. minus all charges we deduct,

. minus all withdrawals you have made,

. plus or minus any positive or negative MVAs that we have made at the
time of any premature withdrawals or transfers you have made from a
guarantee period,

<PAGE>

. plus or minus each variable investment option's positive or negative
investment return that we credit daily to any of your contract's
value while it is in that option, and

. plus the interest we credit to any of your contract's value while it
is in a guarantee period.

EXTRA CREDIT FEATURE

Each time you make a premium payment, we will credit an extra amount to the
total value of your contract in addition to the amount of the premium payment.
If your premium payment is less than $2.5 million, the extra amount will be
equal to 3.5% of the premium payment. If your premium payment is $2.5 million
or more, the extra amount will be equal to 5.0% of the premium payment. These
extra amounts are referred to as "extra credits." Each extra credit will be
credited to your contract at the same time the premium payment is credited and
will be allocated among the variable investment options and the guarantee
periods in the same way that the premium payment is allocated (see "Allocation
of premium payments" on (page __). However, each extra credit will be treated
for all purposes as "earnings" under your contract, not as a premium payment.

WHAT ANNUITY BENEFITS DOES A CONTRACT PROVIDE?

If your contract is still in effect on its date of maturity, it enters what is
called the "annuity period". During the annuity period, we make a series of
fixed or variable payments to you as provided under one of our several annuity
options. The form in which we will make the annuity payments, and the
proportion of such payments that will be on a fixed basis and on a variable
basis, depend on the elections that you have in effect on the date of maturity.
Therefore you should exercise care in selecting your date of maturity and your
choices that are in effect on that date.

You should carefully review the discussion under "The annuity period,"
beginning on page __, for information about all of these choices you can make.

WHAT ARE THE TAX CONSEQUENCES OF OWNING A CONTRACT?

In most cases, no income tax will have to be paid on amounts you earn under a
contract until these earnings are paid out. All or part of the following
distributions from a contract may constitute a taxable payout of earnings:

. partial withdrawal

. full withdrawal ("surrender")

. payment of death benefit proceeds as a single sum upon the
annuitant's death

. periodic payments under one of our annuity payment options

<PAGE>

In addition, if you elect the accumulated value enhancement rider, the
Internal Revenue Service might take the position that the annual charge for this
rider is deemed a withdrawal from the contract which is subject to income tax
and, if applicable, the special 10% penalty tax for withdrawals before the age
of 59 1/2.

How much you will be taxed on a distribution is based upon complex tax rules
and depends on matters such as

. the type of the distribution,

. when the distribution is made,

. the nature of any tax qualified retirement plan for which the
contract is being used, if any, and

. the circumstances under which the payments are made.

If your contract is issued in connection with a tax-qualified retirement plan,
all or part of your premium payments may be tax-deductible.

Special 10% tax penalties apply in many cases to the taxable portion of any
distributions from a contract before you reach age 59 1/2. Also, most
tax-qualified plans require that distributions from a contract commence and/or
be completed by a certain period of time. This effectively limits the period of
time during which you can continue to derive tax deferral benefits from any
tax-deductible premiums you paid or on any earnings under the contract.

CAN I CHANGE MY CONTRACT'S INVESTMENT OPTIONS?

ALLOCATION OF PREMIUM PAYMENTS

When you apply for your contract, you specify the variable investment options
or guarantee periods (together, your "investment options") in which your premium
payments will be allocated. You may change this investment allocation for
future premium payments at any time. Any change in allocation will be effective
as of receipt of your request at the John Hancock Annuity Servicing Office.

Currently, you may use a maximum of 18 investment options over the life of
your contract. For purposes of this limit, each contribution or transfer of
assets into a variable investment option or guarantee period that you are not
then using or have not previously used counts as one "use" of an investment
option. Renewing a guarantee period upon its expiration does not count as a new
use, however, if the new guarantee period has the same number of years as the
expiring one.

TRANSFERRING YOUR ASSETS

Up to 12 times during each year of your contract, you may transfer, free of
any charge,

<PAGE>

. all or part of the assets held in one VARIABLE INVESTMENT OPTION to
any other available variable investment option or guarantee period,
or

. all or part of the assets held in one GUARANTEE PERIOD to any other
available guarantee period or variable investment option.

Currently, we impose no charge for transfers of more than 12 per contract year.
However, we reserve the right to impose a charge of up to $25 on any transfers
in excess of the 12 free transfers or to prohibit any such transfers altogether.
Transfers under our strategic rebalancing or dollar-cost averaging programs do
not count toward the 12 you are allowed each year. However, you may not

. transfer more than $1,000,000 in a contract year from any one
variable investment option or guarantee period, without our prior
approval,

. make any transfer that would cause you to exceed the above-mentioned
maximum of 18 investment options,

. make any transfers, during the annuity period, to or from a guarantee
period, or

. make any transfer during the annuity period that would result in more
than four investment options being used at once.
We reserve the right to prohibit a transfer less than 30 days prior to the
contract's date of maturity.

The contract you are purchasing was not designed for professional market
timing organizations or other persons that use programmed, large, or frequent
transfers. The use of such transfers may be disruptive to a Fund. We reserve
the right to reject any premium payment or transfer request from any person, if
in our judgment, a Fund would be unable to invest effectively in accordance with
its investment objectives and policies, or would otherwise be potentially
adversely affected.

PROCEDURE FOR TRANSFERRING YOUR ASSETS

You may request a transfer in writing or, if you have authorized telephone
transfers, by telephone or fax. All transfer requests should be directed to the
John Hancock Annuity Servicing Office at the one of the locations shown on page
1. Your request should include

. your name,

. daytime telephone number,

. contract number,

. the names of the investment options to and from which assets are
being transferred, and

<PAGE>

. the amount of each transfer.

The request becomes effective on the day we receive your request, in proper
form, at the John Hancock Annuity Servicing Office.

TELEPHONE TRANSFERS

Once you have completed a written authorization, you may request a transfer by
telephone or by fax. If the fax request option becomes unavailable, another
means of telecommunication will be substituted.

If you authorize telephone transactions, you will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which we reasonably believe to be genuine, unless such loss,
expense or cost is the result of our mistake or negligence. We employ procedures
which provide safeguards against the execution of unauthorized transactions, and
which are reasonably designed to confirm that instructions received by telephone
are genuine. These procedures include requiring personal identification, tape
recording calls, and providing written confirmation to the owner. If we do not
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine, we may be liable for any loss due to unauthorized or
fraudulent instructions.

As noted above under "Transferring your assets", the contract you are
purchasing was not designed for professional market timing organizations or
other persons that use programmed, large, or frequent transfers. For reasons
such as that, we reserve the right to change our telephone transaction policies
or procedures at any time. We also reserve the right to suspend or terminate the
privilege altogether.

DOLLAR-COST AVERAGING PROGRAM

You may elect, at no cost, to automatically transfer assets from any variable
investment option to one or more other variable investment options on a monthly,
quarterly, semiannual, or annual basis. The following conditions apply to the
dollar-cost averaging program:

. You may elect the program only if the total value of your contract
equals $15,000 or more.

. The amount of each transfer must equal at least $250.

. You may change your dollar-cost averaging instructions at any time in
writing or, if you have authorized telephone transfers, by telephone.

. You may discontinue the program at any time.

. The program automatically terminates when the variable investment
option from which we are taking the transfers has been exhausted.

<PAGE>

. Automatic transfers to or from guarantee periods are not permitted.

. We reserve the right to terminate the program at any time.

STRATEGIC REBALANCING

This program automatically re-sets the percentage of your account value
allocated to the variable investment options. Over time, the variations in the
investment results for each variable investment option you've elected will shift
the percentage allocations among them. The strategic rebalancing program will
periodically transfer your account value among the variable investment options
to reestablish the preset percentages you have chosen. Strategic rebalancing
would usually result in transferring amounts from a variable investment option
with relatively higher investment performance since the last rebalancing to one
with relatively lower investment performance. However, rebalancing can also
result in transfering amounts from a variable investment option with relatively
lower current investment performance to one with relatively higher current
investment performance.

This program can be elected in the application or by sending the appropriate
form to our Annuity Servicing Office. You must specify the frequency for
rebalancing (monthly, quarterly, semi-annually or annually), the preset
percentage for each variable investment option, and a future beginning date.

Once elected, strategic rebalancing will continue until we receive notice of
cancellation of the option or notice of the death of the insured person.

The guarantee periods do not participate in and are not affected by strategic
rebalancing. We reserve the right to modify, terminate or suspend the strategic
rebalancing program at any time.

WHAT FEES AND CHARGES WILL BE DEDUCTED FROM MY CONTRACT?

MORTALITY AND EXPENSE RISK CHARGE

We deduct a daily charge that compensates us primarily for mortality and
expense risks that we assume under the contracts. On an annual basis, this
charge equals 1.25% of the value of the assets you have allocated to the
variable investment options. (This charge does not apply to assets you have in
our guarantee periods.)

In return for the mortality risk charge, we assume the risk that annuitants as
a class will live longer than expected, requiring us to pay a greater number of
annuity payments. In return for the expense risk charge, we assume the risk
that our expenses relating to the contracts may be higher than we expected when
we set the level of the contracts' other fees and charges, or that our revenues
from such other sources will be less than expected.

<PAGE>

ANNUAL CONTRACT FEE

Prior to the date of maturity of your contract, we will deduct $30 each year
from your contract if it has a total value on the contract anniversary of less
than $50,000. We deduct this annual contract fee at the beginning of each
contract year after the first contract year. We also deduct it if you surrender
your contract. We take the deduction proportionally from each variable
investment option and each guarantee period you are then using. We reserve the
right to increase the annual contract fee to up to $50.

PREMIUM TAXES

We make deductions for any applicable premium or similar taxes based on the
amount of a premium payment. Currently, certain states assess a tax of up to 5%
of each premium payment.

In most cases, we deduct a charge in the amount of the tax from the total
value of the contract only at the time of annuitization, death, surrender, or
withdrawal. We reserve the right, however, to deduct the charge from each
premium payment at the time it is made. We compute the amount of the charge by
multiplying the applicable premium tax percentage times the amount you are
withdrawing, surrendering, annuitizing or applying to a death benefit.

WITHDRAWAL CHARGE

If you withdraw some of your premiums from your contract prior to the date of
maturity ("partial withdrawal") or if you surrender (turn in) your contract, in
its entirety, for cash prior to the date of maturity ("total withdrawal" or
"surrender"), we may assess a withdrawal charge. Some people refer to this
charge as a "contingent deferred sales load." We use this charge to help defray
expenses relating to the sales of the contracts, including commissions paid and
other distribution costs.

Free withdrawal amounts: If you have any profit in your contract, you can
-----------------------
always withdraw that profit without any withdrawal charge. By "profit," we mean
the amount by which your contract's total value exceeds the premiums you have
paid and have not (as discussed below) already withdrawn. If your contract
doesn't have any profit (or you have withdrawn it all) you can still make
charge-free withdrawals, unless and until all of your withdrawals during the
same contract year exceed 10% of all of the premiums you have paid to date.

Here's how we determine the charge: If the amount you withdraw or surrender
----------------------------------
totals more than the free withdrawal amount during the contract year, we will
assess a withdrawal charge on any amount of the excess that we attribute to
premium payments you made within seven years of the date of the withdrawal or
surrender.

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

<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------
YEARS FROM DATE OF PREMIUM PAYMENT TO
DATE OF SURRENDER OR WITHDRAWAL WITHDRAWAL CHARGE*
- ------------------------------------- ------------------

* AS A PERCENTAGE OF THE AMOUNT OF SUCH PREMIUM THAT WE CONSIDER TO HAVE
BEEN WITHDRAWN (INCLUDING THE WITHDRAWAL CHARGE), AS EXPLAINED IN THE TEXT
IMMEDIATELY BELOW.

Solely for purposes of determining the amount of the withdrawal charge, we
assume that the amount of each withdrawal that exceeds the free withdrawal
amount (together with any associated withdrawal charge) is a withdrawal first
from the earliest premium payment, and then from the next earliest premium
payment, and so forth until all payments have been exhausted. Once a premium
payment has been considered to have been "withdrawn" under these procedures,
that premium payment will not enter into any future withdrawal charge
calculations.

Here's how we deduct the withdrawal charge: We deduct the withdrawal charge
------------------------------------------
proportionally from each variable investment option and each guarantee period
being reduced by the surrender or withdrawal. For example, if 60% of the
withdrawal amount comes from the Growth option and 40% from the V.A. Money
Market option, then we will deduct 60% of the withdrawal charge from the Growth
option and 40% from the V.A. Money Market option. If any such option has
insufficient remaining value to cover the charge, we will deduct any shortfall
from all of your other investment options, pro-rata based on the value in each.

If your contract as a whole has insufficient surrender value to pay the entire
charge, we will pay you no more than the surrender value.

You will find examples of how we compute the withdrawal charge in Appendix B
to this prospectus.

When withdrawal charges don't apply: We don't assess a withdrawal charge in
-----------------------------------
the following situations:

. on amounts applied to an annuity option at the contract's date of
maturity or to pay a death benefit;

. on certain withdrawals if you have elected the rider that waives the
withdrawal charge; and

<PAGE>

. on amounts withdrawn to satisfy the minimum distribution requirements
for tax qualified plans. (Amounts above the minimum distribution
requirements are subject to any applicable withdrawal charge,
however.)

How an MVA affects the withdrawal charge: If you make a withdrawal from a
----------------------------------------
guarantee period at a time when the related MVA results in an upward adjustment
in your remaining value, we will calculate the withdrawal charge as if you had
withdrawn that much more. Similarly, if the MVA results in a downward
adjustment, we will compute any withdrawal charge as if you had withdrawn that
much less.

OTHER CHARGES

We offer, subject to state availability, four optional benefit riders. We
charge a separate monthly charge for each rider selected. At the beginning of
each month, we charge an amount equal to 1/12/th/ of the following annual
percentages:

<TABLE>
<CAPTION>
<S> <C>
0.10% of
that portion of your contract's total
value attributable to
premiums you contributed
and extra credits credited
Waiver of withdrawal charge within 7 years prior to
the date of deduction
- ------------------------------------------------------------------------------------------------------------------------------
0.1
5
% of
Enhanced death benefit your contract's
total value
- ------------------------------------------------------------------------------------------------------------------------------
0.35% of your initial premium payment (
we
reserve the right to
increase
this percentage
on
a uniform
basis
for all
r
iders issued in t
Accumulated value enhancement* he same
state)
- ------------------------------------------------------------------------------------------------------------------------------
0.
3
0% of
Guaranteed retirement income benefit your contract
's total value
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* If you choose the accumulated value enhancement, you must also choose
the waiver of withdrawal charge.

We deduct the charge proportionally from each of your investment options,
based on your value in each.

HOW CAN I WITHDRAW MONEY FROM MY CONTRACT?

SURRENDERS AND PARTIAL WITHDRAWALS

Prior to your contract's date of maturity, if the annuitant is living, you
may:

. surrender your contract for a cash payment of its "surrender value,"
or

. make a partial withdrawal of the surrender value.

The "surrender value" of a contract is the total value of a contract, after
any market value adjustment, MINUS the annual contract fee, any applicable
premium tax, any withdrawal charges, and any applicable rider charges. We will
determine the amount surrendered or withdrawn as of the date we receive your
request at the John Hancock Annuity Servicing Office.

<PAGE>

Certain surrenders and withdrawals may result in taxable income to you or
other tax consequences as described under "Tax information," beginning on page
__. Among other things, if you make a full surrender or partial withdrawal from
your contract before you reach age 59 1/2, an additional federal penalty of 10%
generally applies to any taxable portion of the withdrawal.

We will deduct any partial withdrawal proportionally from each of your
investment options based on the value in each, unless you direct otherwise.

Without our prior approval, you may not make a partial withdrawal

. for an amount less than $100, or

. if the remaining total value of your contract would be less than
$1,000.

We reserve the right to terminate your contract if the value of your contract
becomes zero.

You generally may not make any surrenders or partial withdrawals once we begin
making payments under an annuity option.

WAIVER OF WITHDRAWAL CHARGE RIDER

If your state permits, you may purchase an optional waiver of withdrawal
charge rider at the time of application. The "covered persons" under the rider
are the owner and the owner's spouse, unless the owner is a trust. If the owner
is a trust, the "covered persons" are the annuitant and the annuitant's spouse.
Under this rider, we will waive withdrawal charge on any withdrawals, if a
"covered person" has been diagnosed with one of the critical illnesses listed in
the rider, or if all the following conditions apply:

. a covered person becomes confined to a nursing home beginning at
least 30 days after we issue your contract;

. such covered person remains in the nursing home for at least 90
consecutive days receiving nursing care; and

. the covered person's confinement is prescribed by a doctor and
medically necessary because of a covered physical or mental
impairment.

You may not purchase this rider if either of the covered persons (1) is older
than 74 years at application or (2) was confined to a nursing home within the
past two years.

There is a charge for this rider, as set forth under "Other charges" on page
__, above. This rider (and the related charges) will terminate on the
contract's date of maturity, upon your surrendering the contract, or upon your
written request that we terminate it.

<PAGE>

For a more complete description of the terms and conditions of this benefit,
you should refer directly to the rider. We will provide you with a copy on
request. In certain marketing materials, this rider may be referred to
"CareSolutions."

If you purchase this rider, you and your immediate family will also have
access to:

. a national program designed to help the elderly maintain their
independent living by providing advice about an array of elder care
services available to seniors, and

. a list of long-term care providers in your area who provide special
discounts to persons who belong to the national program.

SYSTEMATIC WITHDRAWAL PLAN

Our optional systematic withdrawal plan enables you to preauthorize periodic
withdrawals. If you elect this plan, we will withdraw a percentage or dollar
amount from your contract on a monthly, quarterly, semiannual, or annual basis,
based upon your instructions. We will deduct the requested amount from each
applicable investment option in the ratio that the value of each bears to the
total value of your contract. Each systematic withdrawal is subject to any
withdrawal charge or market value adjustment that would apply to an otherwise
comparable non-systematic withdrawal. See "How will the value of my contract
change over time?" beginning on page __, and "What fees and charges will be
deducted from my contract?" beginning on page __. The same tax consequences
also generally will apply.

The following conditions apply to systematic withdrawal plans:

. You may elect the plan only if the total value of your contract
equals $25,000 or more.

. The amount of each systematic withdrawal must equal at least $100.

. If the amount of each withdrawal drops below $100 or the total value
of your contract becomes less that $5,000, we will suspend the plan
and notify you.

. You may cancel the plan at any time.

. We reserve the right to modify the terms or conditions of the plan at
any time without prior notice.

WHAT HAPPENS IF THE ANNUITANT DIES BEFORE MY CONTRACT'S DATE OF MATURITY?

If the annuitant dies before your contract's date of maturity, we will pay a
death benefit to the contract's beneficiary. If you have named more than one
annuitant, the death benefit will be payable upon the death of the surviving
annuitant prior to the date of maturity.

<PAGE>

If your contract has joint owners, each owner will automatically be deemed to
be the beneficiary of the other. This means that any death benefit payable upon
the death of one owner who is the annuitant will be paid to the other owner. In
that case, any other beneficiary you have named would receive the death benefit
only if neither joint owner remains alive at the time the death benefit becomes
payable. (For a description of what happens upon the death of an owner who is
not the annuitant, see "Distribution requirements following death of owner,"
beginning on page __.)

We will pay a "standard" death benefit, unless you have chosen the "enhanced
death benefit rider," as discussed below.

STANDARD DEATH BENEFIT

The standard death benefit is the greater of:

. the total value of your contract, adjusted by any then-applicable
market value adjustment, or

. the total amount of premium payments made and extra credits credited,
minus any partial withdrawals and related withdrawal charges.

We calculate the death benefit value as of the day we receive, at the John
Hancock Annuity Servicing Office:

. proof of the annuitant's death, and

. any required instructions as to method of settlement.

Unless you have elected an optional method of settlement, we will pay the
death benefit in a single sum to the beneficiary you chose prior to the
annuitant's death. If you have not elected an optional method of settlement,
the beneficiary may do so. However, if the death benefit is less than $5,000,
we will pay it in a lump sum, regardless of any election. You can find more
information about optional methods of settlement under "Annuity options,"
beginning on page __.

ENHANCED DEATH BENEFIT RIDER

If you are under age 80 when you apply for your contract, you may elect to
enhance the standard death benefit by purchasing an enhanced death benefit
rider. Under this rider, if the annuitant dies before the contract's date of
maturity, we will pay the beneficiary the greatest of:

. the amount of each premium you have paid, accumulated at 5% effective
annual interest (less any partial withdrawals you have taken and not
including any interest on such amounts after they are withdrawn);

<PAGE>

. the highest total value of your contract (adjusted by any market
value adjustment) as of any anniversary of your contract to date,
PLUS any premium payments you have made since that anniversary, MINUS
any withdrawals you have taken (and any related withdrawal charges)
since that anniversary; or

. the total value of your contract (adjusted by any market value
adjustment) as of the date we receive due proof of the annuitant's
death.

For these purposes, however, we count only those contract anniversaries that
occur BEFORE (1) we receive proof of death and (2) the anniversary of the
contract nearest the annuitant's 81st birthday.

You may elect this rider ONLY when you apply for the contract and only if this
rider is available in your state. As long as the rider is in effect, you will
pay a monthly charge for this benefit. For a description of this charge, refer
to page __ under "Other charges" For a more complete description of the terms
and conditions of this benefit, you should refer directly to the rider. We will
provide you with a copy on request.

This rider (and related charges) will terminate on the contract's date of
maturity, upon your surrendering the contract, or upon your written request that
we terminate it.

WHAT OTHER BENEFITS CAN I PURCHASE UNDER A CONTRACT?

In addition to the enhanced death benefit and waiver of withdrawal charge
riders discussed above, we currently make available two other optional benefits.
These optional benefits are provided under riders that contain many terms and
conditions not set forth below. Therefore, you should refer directly to each
rider for more complete information. We will provide you with a copy on
request.

Accumulated value enhancement. Under this rider, we will make a contribution
-----------------------------
to the total value of the contract on a monthly basis if the covered person (who
must be the annuitant):

. is unable to perform at least 2 activities of daily living without
human assistance or has a cognitive impairment, and

. is receiving certain qualified services described in the rider.

The amount of the contribution (called the "Monthly Benefit") is shown in the
specifications page of the contract. However, the rider contains an inflation
protection feature that will increase the Monthly Benefit by 5% each year after
the 7th contract year. The specifications page of the contract also contains a
limit on how much the total value of the contract can be increased by this rider
(the "benefit limit"). The rider must be in effect for 7 years before any
increase will occur.

<PAGE>

You may elect this rider only when you apply for the contract. You cannot
elect this rider unless you have also elected the waiver of withdrawal charge
rider. There is a monthly charge for this rider. The charge is described under
"Other charges" on page ___.

The rider will terminate if the contract terminates, if the covered person
dies, if the benefit limit is reached, if the owner is the covered person and
the ownership of the contract changes, or if the total value of the contract
falls below an amount equal to 25% of your initial premium payment. You may
cancel the rider by written notice at any time. The rider charge will terminate
when the rider terminates.

If you choose to continue the rider after the contract's date of maturity,
charges for the rider will be deducted from annuity payments and any Monthly
Benefit for which the covered person qualifies will be added to the next annuity
payment.

In certain marketing materials, this rider may be referred to as
"CareSolutions Plus."

Guaranteed retirement income benefit. Under this rider, we will guarantee the
------------------------------------
amount of annuity payments you receive, if the following conditions are
satisfied:

. The date of maturity must be within the 30 day period following a
contract anniversary.

. If the annuitant was age 45 or older on the date of issue, the
contract must have been in effect for at least 10 contract years on
the date of maturity and the date of maturity must be on or after the
annuitant's 60th birthday and on or before the annuitant's 90th
birthday.

. If the annuitant was less than age 45 on the date of issue, the
contract must have been in effect for at least 15 contract years on
the date of maturity and the date of maturity must be on or before
the annuitant's 90th birthday.

You cannot elect this rider at any time after your contract is issued. If you
elect this rider you need not choose to receive the guaranteed income benefit
that it provides. Rather, unless and until such time as you exercise your
option to receive a guaranteed income benefit under this rider, you will
continue to have the option of exercising any other right or option that you
would have under the contract (including withdrawal and annuity payment options)
if the rider had not been added to it.

If you do decide to add this rider to your contract, and if you do ultimately
decide to take advantage of the guaranteed income it provides, we will
automatically provide that guaranteed income in the form of fixed payments under
our "Option A: life annuity with payments for guaranteed period" described
below under "Annuity options." The guaranteed period will automatically be a
number of years that the rider specifies, based on the annuitant's age at the
annuity date and whether your contract is purchased in connection with a
tax-qualified plan. (These specified periods range from 5 to 10 years.) You
will have no discretion to vary this form

<PAGE>

of payment, if you choose the guaranteed income benefit under this rider.

If you exercise your rights under this rider, we guarantee that the amount we
apply to this annuity payment option will be the same amount as if your premium
payments had earned a return prescribed by the rider, rather than the return
they earned in the subaccounts you actually chose. Under this rider, we would
apply that guaranteed amount to the fixed annuity payment option specified in
the rider in the same manner and on the same terms as if you had, in the absence
of this rider, elected to apply total contract value in the same amount to that
same annuity payment option.

There is a monthly charge for this rider, which is described at page __ under
"Other charges." The rider (and the related charges) automatically terminate if
your contract is surrendered or the annuitant dies. After you've held your
contract for 10 years, you can terminate the rider by written request.

CAN I RETURN MY CONTRACT?

In most cases, you may return your contract for any reason within 10 days
after you receive it. If you do, we will pay you the total value of your
contract minus the extra credit deduction (as defined below), adjusted by any
then-applicable market value adjustments and increased by any charges for
premium taxes that we have deducted. The "extra credit deduction" is equal to
the lesser of (1) the portion of the total value of your contract that is
attributable to any extra credits and (2) the amount of all extra credits.
Thus, you receive any gain and we bear any loss on extra credits if you return
your contract within the time period specified above. However, there are some
exceptions to the general rules stated above:

. If you return a contract issued in Georgia, Hawaii, Indiana,
Michigan, Missouri, Nebraska, North Carolina, Oklahoma, Oregon, South
Carolina, Utah, Washington, West Virginia, or Wisconsin, you will
receive the gross premiums you paid.

. If you return a contract that is an individual retirement annuity
("IRA"), you will receive the gross premiums you paid.

. If your contract was issued in California after your 60/th/ birthday,
you may return the contract within 30 days and receive the gross
premiums you paid.

. If your contract was issued in North Dakota, you may return it within
20 days and receive the gross premiums you paid.

<PAGE>

ADDITIONAL INFORMATION

This section of the prospectus provides additional information that is not
contained in the Basic Information section on pages __ through __.

CONTENTS OF THIS SECTION PAGES TO SEE

Description of John Hancock. . . . . . . . . . . .

Who should purchase a contract. . . . . . . . . .

How we support the variable investment options. .

How we support the guarantee periods. . . . . . .

How the guarantee periods work. . . . . . . . . .

The accumulation period. . . . . . . . . . . . . .

The annuity period. . . . . . . . . . . . . . . .

Variable investment option valuation procedures. .

Distribution requirements following death of owner

Miscellaneous provisions. . . . . . . . . . . . .

Tax information. . . . . . . . . . . . . . . . . .

Performance information. . . . . . . . . . . . . .

Reports. . . . . . . . . . . . . . . . . . . . . .

Voting privileges. . . . . . . . . . . . . . . . .

Certain changes. . . . . . . . . . . . . . . . . .

Distribution of contracts. . . . . . . . . . . . .

Impact of the year 2000 issue. . . . . . . . . . .

Registration statement. . . . . . . . . . . . . .

Experts. . . . . . . . . . . . . . . . . . . . . .

Appendix A - Details About Our Guarantee Periods.

Appendix B - Examples of Withdrawal Charge Calculation

<PAGE>

DESCRIPTION OF JOHN HANCOCK

We are John Hancock, a mutual life insurance company organized, in 1862, under
the laws of the Commonwealth of Massachusetts. Our home office is located at
200 Clarendon Street, Boston, Massachusetts 02117. We have authority to
transact business in all 50 states. As of December 31, 1998, we had more than
$67.1 billion of assets.

WHO SHOULD PURCHASE A CONTRACT?

We designed these contracts for individuals doing their own retirement
planning, including purchases under plans and trusts that do not qualify for
special tax treatment under the Internal Revenue Code of 1986 (the "Code"). We
also designed the contracts for purchase under:

. pension and profit-sharing plans qualified under Section 401(c) of
the Code, known as H.R. 10 Plans;

. pension or profit-sharing plans qualified under sections 401(a) or
403(a) of the Code, known as "corporate plans";

. plans qualified under Section 401(k) of the Code;

. annuity purchase plans adopted under Section 403(b) of the Code by
public school systems and certain other tax-exempt organizations;
and

. individual retirement annuity ("IRA") plans satisfying the
requirements of Section 408 of the Code.

When a contract forms part of a tax-qualified plan it becomes subject to
special tax law requirements, as well as the terms of the plan documents
themselves, if any. Also, in some cases, certain requirements under "ERISA"
(the Employee Retirement Income Security Act of 1974) may apply. Requirements
from any of these sources may, in effect, take precedence over (and in that
sense modify) the rights and privileges that an owner otherwise would have under
a contract. Some such requirements may also apply to certain retirement plans
that are not tax-qualified.

We may include certain requirements from the above sources in endorsements or
riders to the affected contracts. In other cases, we do not. In no event,
however, do we undertake to assure a contract's compliance with all plan, tax
law, and ERISA requirements applicable to a tax-qualified or non tax-qualified
retirement plan. Therefore, if you use or plan to use a contract in connection
with such a plan, you must consult with competent legal and tax advisers to
ensure that you know of (and comply with) all such requirements that apply in
your circumstances.

To accommodate "employer-related" plans, we provide "unisex" purchase rates.
That means the annuity purchase rates are the same for males and females. Any
questions you have as to whether you are participating in an "employer-related"
plan should be directed to your employer. Any question you or your employer
have about unisex rates may be directed to the John Hancock Annuity Servicing
Office.

HOW WE SUPPORT THE VARIABLE INVESTMENT OPTIONS

We hold the Fund shares that support our variable investment options in John
Hancock Variable Annuity Account H (the "Account"), a separate account
established by John Hancock under Massachusetts law. Each Account is registered
as a unit investment trust under the Investment Company Act of 1940 ("1940
Act").

The Account's assets, including the Trusts' shares, belong to John Hancock.
Each contract provides that amounts we hold in the Account

<PAGE>

pursuant to the policies cannot be reached by any other persons who may have
claims against us.

All of John Hancock's general assets also support John Hancock's obligations
under the contracts, as well as all of its other obligations and liabilities.
These general assets consist of all John Hancock's assets that are not held in
the Account (or in another separate account) under variable annuity or variable
life insurance contracts that give their owners a preferred claim on those
assets.

HOW WE SUPPORT THE GUARANTEE PERIODS

All of John Hancock's general assets (discussed above) support its obligations
under the guarantee periods (as well as all of its other obligations and
liabilities). To hold the assets that support primarily the guarantee periods,
we have established a "non-unitized" separate account. With a non-unitized
separate account, you have no interest in or preferential claim on any of the
assets held in the account. The investments we purchase with amounts you
allocated to the guarantee periods belong to us; any favorable investment
performance on the assets allocated to the guarantee periods belongs to us.
Instead, you earn interest at the guaranteed interest rate you selected,
provided that you don't surrender, transfer, or withdraw your assets prior to
the end of your selected guarantee period.

HOW THE GUARANTEE PERIODS WORK

Amounts you allocate to the guarantee periods earn interest at a guaranteed
rate commencing with the date of allocation. At the expiration of the guarantee
period, we will automatically transfer its total value to the Money Market
option under your contract, unless you elect to:

. withdraw all or a portion of any such amount from the contract,

. allocate all or a portion of such amount to a new guarantee period or
periods of the same or different duration as the expiring guarantee
period, or

. allocate all or a portion of such amount to one or more of the
variable investment options.

You must notify us of any such election, by mailing a request to us at the
John Hancock Annuity Servicing Office at least 30 days prior to the end of the
expiring guarantee period. We will notify you of the end of the guarantee
period at least 30 days prior to its expiration. The first day of the new
guarantee period or other reallocation will begin the day after the end of the
expiring guarantee period.

We currently make available guarantee periods with durations up to ten years.
If you select a guarantee period that extends beyond your contract's date of
maturity, your maturity date will automatically be changed to the annuitant's
95th birthday (or a later date, if we approve). We reserve the right to add or
delete guarantee periods for new allocations to or from those that are available
at any time.

GUARANTEED INTEREST RATES

Each guarantee period has its own guaranteed rate. 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 time you allocate or transfer money to a guarantee period, a
new guarantee period, with a new interest rate, begins to run with respect to
that amount. The amount allocated or transferred earns a guaranteed rate that
will continue unchanged until the end of that period. We will not make available
any guarantee period offering a guaranteed rate below 3%.

We make the final determination of guaranteed rates to
be declared. We cannot predict or assure the level of
any future guaranteed rates.
- ---------------------------------------------------------

<PAGE>

You may obtain information concerning the guaranteed rates applicable to the
various guarantee periods, and the durations of the guarantee periods offered,
at any time by calling the John Hancock Annuity Servicing Office at the
telephone number shown on page 1.

CALCULATION OF MARKET VALUE ADJUSTMENT ("MVA")

If you withdraw, surrender, transfer, or otherwise remove money from a
guarantee period prior to its expiration date, we will apply a market value
adjustment. A market value adjustment also generally applies to:

. death benefits pursuant to your contract,

. amounts you apply to an annuity option, and

. amounts paid in a single sum in lieu of an annuity.

The market value adjustment increases or decreases your remaining value in the
guarantee period. If the value in that guarantee period is insufficient to pay
any negative MVA, we will deduct any excess from the value in your other
investment options pro-rata based on the value in each. If there is
insufficient value in your other investment options, we will in no event pay out
more than the surrender value of the contract. Here is how the MVA works:

We compare
. the guaranteed rate of the guarantee period from which the
assets are being taken WITH
. the guaranteed rate we are currently offering for guarantee
periods of the same duration as remains on the guarantee period
from which the assets are being taken.
If the first rate exceeds the second by more than
1/2 %, the market value adjustment produces an increase in your contract's
value.
If the first rate does not exceed the second by at least 1/2 %, the
market value adjustment produces a decrease in your contract's value.
- --------------------------------------------------------------------------

For this purpose, we consider that the amount withdrawn from the guarantee
period includes the amount of any negative MVA and is reduced by the amount of
any positive MVA.

The mathematical formula and sample calculations for the market value
adjustment appear in Appendix A.

LIMITATION ON MARKET VALUE ADJUSTMENTS

In no event will the market value adjustment (positive or negative) exceed the
amount of any excess interest earned during the guarantee period up to the date
of computation. "EXCESS INTEREST" means the dollar amount of interest earned to
date on the amount being withdrawn in excess of what would have been earned if
the effective annual interest rate had been 3%.

Because of exemptive and exclusionary provisions,
interests in the guarantee periods have not been
registered under the Securities Act of 1933, and our
non-unitized separate account has not been registered
as an investment company under the Investment Company
Act of 1940. Accordingly, neither the general account
nor any of its assets are subject to the provision of
these acts. We have been advised that the SEC staff
has not reviewed the disclosure in this prospectus
relating to the guarantee periods. Disclosure
regarding the guarantee periods may, however, be
subject to certain generally-applicable provisions of
the Federal securities laws relating to accuracy and
completeness of statements made in prospectuses.
- ------------------------------------------------------

<PAGE>

THE ACCUMULATION PERIOD

YOUR VALUE IN OUR VARIABLE INVESTMENT OPTIONS

Each premium payment, extra credit or transfer that you allocate to a variable
investment option purchases "accumulation units" of that variable investment
option. Similarly, each withdrawal or transfer that you take from a variable
investment option (as well as certain charges that may be allocated to that
option) result in a cancellation of such accumulation units.

VALUATION OF ACCUMULATION UNITS

To determine the number of accumulation units that a specific transaction will
purchase or cancel, we use the following formula:

dollar amount of transaction
DIVIDED BY
value of one accumulation unit for the applicable
variable investment option at the time of such
transaction
- -------------------------------------------------

The value of each accumulation unit will change daily depending upon the
investment performance of the Fund that corresponds to that variable investment
option and certain charges we deduct from such investment option. (See below
under "Variable investment option valuation procedures.")

Therefore, at any time prior to the date of maturity, the total value of your
contract in a variable investment option can be computed according to the
following formula:

number of accumulation units in the
variable investment options
TIMES
value of one accumulation unit for the
applicable variable investment option at
that time
- -------------------------------------------

YOUR VALUE IN THE GUARANTEE PERIODS

On any date, the total value of your contract in a guarantee period equals:

. the amount of premium payments, extra credits or transferred amounts
allocated to the guarantee period, MINUS

. the amount of any withdrawals or transfers paid out of the guarantee
period, MINUS

. the amount of any negative market value adjustments resulting from
such withdrawals or transfers, PLUS

. the amount of any positive market value adjustments resulting from
such withdrawals and transfers, MINUS

. the amount of any charges and fees deducted from that guarantee
period, PLUS

. interest compounded daily on any amounts in the guarantee period from
time to time at the effective annual rate of interest we have
declared for that guarantee period.

THE ANNUITY PERIOD

Annuity payments are made to the annuitant, if still living. If more that one
annuitant is living at the date of maturity, the payments are made to the
younger of them.

DATE OF MATURITY

Your contract specifies the date of maturity, when payments from one of our
annuity options are scheduled to begin. You initially choose a date of maturity
when you complete your application for a

<PAGE>

contract. Unless we otherwise permit, the date of maturity must be

. at least 6 months after the date the first premium payment is applied
to your contract, and

. no later than the maximum age specified in your contract (normally
age 95).

Subject always to these requirements, you may subsequently change the date of
maturity. The John Hancock Annuity Servicing Office must receive your new
selection at least 31 days prior to the new date of maturity, however. Also, if
you are selecting or changing your date of maturity for a contract issued under
a tax qualified plan, special limits apply. (See "Contracts purchased for a
tax-qualified plan," beginning on page __.)

CHOOSING FIXED OR VARIABLE ANNUITY PAYMENTS

During the annuity period, the total value of your contract must be allocated
to no more than four investment options. During the annuity period, we do not
offer the guarantee periods. Instead, we offer annuity payments on a fixed
basis as one investment option, and annuity payments on a variable basis for
EACH variable investment option.

We will generally apply (1) amounts allocated to the guarantee periods as of
the date of maturity to provide annuity payments on a fixed basis and (2)
amounts allocated to variable investment options to provide annuity payments on
a variable basis. If you are using more than four investment options on the
date of maturity, we will divide your contract's value among the four investment
options with the largest values (considering all guarantee periods as a single
option), pro-rata based on the amount of the total value of your contract that
you have in each.

We will make a market value adjustment to any remaining guarantee period
amounts on the date of maturity, before we apply such amounts to an annuity
payment option. We will also deduct any premium tax charge.

Once annuity payments commence, you may not make transfers from fixed to
variable or from variable to fixed.

SELECTING AN ANNUITY OPTION

Each contract provides, at the time of its issuance, for annuity payments to
commence on the date of maturity pursuant to Option A: "life annuity with 10
years guaranteed" (discussed under "Annuity options" on page __).

Prior to the date of maturity, you may select a different annuity option.
However, if the total value of your contract on the date of maturity is not at
least $5,000, Option A: "life annuity with 10 years guaranteed" will apply,
regardless of any other election that you have made. You may not change the
form of annuity option once payments commence.

If the initial monthly payment under an annuity option would be less than $50,
we may make a single sum payment equal to the total surrender value of your
contract on the date the initial payment would be payable. Such single payment
would replace all other benefits.

Subject to that $50 minimum limitation, your beneficiary may elect an annuity
option if

. you have not made an election prior to the annuitant's death;

. the beneficiary is entitled to payment of a death benefit of at least
$5,000 in a single sum; and

. the beneficiary notifies us of the election prior to the date the
proceeds become payable.

<PAGE>

VARIABLE MONTHLY ANNUITY PAYMENTS

We determine the amount of the first variable monthly payment under any
variable investment option by using the applicable annuity purchase rate for the
annuity option under which the payment will be made. The contract sets forth
these annuity purchase rates. In most cases they vary by the age and gender of
the annuitant or other payee.

The amount of each subsequent variable annuity payment under that variable
investment option depends upon the investment performance of that variable
investment option. Here's how it works:

. we calculate the actual net investment return of the variable
investment option (after deducting all charges) during the period
between the dates for determining the current and immediately
previous monthly payments.

. if that actual net investment return exceeds the "assumed investment
rate" (explained below), the current monthly payment will be larger
than the previous one.

. if the actual net investment return is less than the assumed
investment rate, the current monthly payment will be smaller than the
previous one.

ASSUMED INVESTMENT RATE
-----------------------

The assumed investment rate for any variable portion of your annuity payments
will be 3 1/2 % per year, except as follows.

You may elect an assumed investment rate of 5% or 6%, provided such a rate is
available in your state. If you elect a higher assumed investment rate, your
initial variable annuity payment will also be higher. Eventually, however, the
monthly variable annuity payments may be smaller than if you had elected a lower
assumed investment rate.

FIXED MONTHLY ANNUITY PAYMENTS

The dollar amount of each fixed monthly annuity payment is specified during
the entire period of annuity payments, according to the provisions of the
annuity option selected. To determine such dollar amount we first, in
accordance with the procedures described above, calculate the amount to be
applied to the fixed annuity option as of the date of maturity. We then divide
the difference by $1,000 and multiply the result by the greater of

. the applicable fixed annuity purchase rate shown in the appropriate
table in the contract; or

. the rate we currently offer at the time of annuitization. (This
current rate may be based on the sex of the annuitant, unless
prohibited by law.)

ANNUITY OPTIONS

Here are some of the annuity options that are available, subject to the terms
and conditions described above. We reserve the right to make available optional
methods of payment in addition to those annuity options listed here and in your
contract.

OPTION A: LIFE ANNUITY WITH PAYMENTS FOR A GUARANTEED PERIOD - We will make
monthly payments for a guaranteed period of 5, 10, or 20 years, as selected by
you or your beneficiary, and after such period for as long as the payee lives.
If the payee dies prior to the end of such guaranteed period, we will continue
payments for the remainder of the guarantee period to a contingent payee,
subject to the terms of any supplemental agreement issued.

<PAGE>

Federal income tax requirements currently applicable to contracts used with
H.R. 10 plans and individual retirement annuities 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.

OPTION B: LIFE ANNUITY WITHOUT FURTHER PAYMENT ON DEATH OF PAYEE - We will
make monthly payments to the payee as long as he or she lives. We guarantee no
minimum number of payments.

OPTION C: JOINT AND LAST SURVIVOR - We will provide payments monthly,
quarterly, semiannually, or annually, for the payee's life and the life of the
payee's spouse/joint payee. Upon the death of one payee, we will continue
payments to the surviving payee. All payments stop at the death of the
surviving payee.

OPTION D: JOINT AND 1/2 SURVIVOR; OR JOINT AND 2/3 SURVIVOR - We will provide
payments monthly, quarterly, semiannually, and annually for the payee's life and
the life of the payee's spouse/joint payee. Upon the death of one payee, we
will continue payments (reduced to 1/2 or 2/3 the full payment amount) to the
surviving payee. All payments stop at the death of the surviving payee.

OPTION E: LIFE INCOME WITH CASH REFUND - We will provide payments monthly,
quarterly, semiannually, or annually for the payee's life. Upon the payee's
death, we will provide a contingent payee with a lump-sum payment, if the total
payments to the payee were less than the 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 - We will provide payments monthly,
quarterly, semiannually, or annually for a pre-determined period of time to a
maximum of 30 years. If the payee dies before the end of the fixed period,
payments will continue to a contingent payee until the end of the period.

OPTION G: INCOME OF A SPECIFIC AMOUNT - We will provide payments for a
specific amount. Payments will stop only when the amount applied and earnings
have been completely paid out. If the payee dies before receiving all the
payments, we will continue payments to a contingent payee until the end of the
contract.

With Options A, B, C, and D, we offer both fixed and/or variable annuity
payments. With Options E, F, and G, we offer only fixed annuity payments.
Payments under Options F and G must continue for 10 years, unless your contract
has been in force for 5 years or more.

If the payee is more than 85 years old on the date of maturity, the following
two options are not available without our consent:

. Option A: "life annuity with 5 years guaranteed" and

. Option B: "life annuity without further payment on the death of
payee."

VARIABLE INVESTMENT OPTION VALUATION PROCEDURES

We compute the net investment return and accumulation unit values for each
variable investment option as of the end of each business day. A business day
is any date on which the New York Stock Exchange is open for regular trading.
Each business day ends at the close of regular trading for the day on that
exchange. Usually this is 4:00 p.m., Eastern time. On any date other than a
business day, the accumulation unit value or annuity unit value will be the same
as the value at the close of the next following business day.

DISTRIBUTION REQUIREMENTS FOLLOWING DEATH OF OWNER

If you did not purchase your contract under a tax qualified plan (as that term
is used below), the Code

<PAGE>

requires that the following distribution provisions apply if you die. We
summarize these provisions in the box below. (If your contract has joint
owners, these provisions apply upon the death of the first to die.)

In most cases, these provisions do not cause a problem if you are also the
annuitant under your policy. If you have designated someone other than yourself
as the annuitant, however, your heirs will have less discretion than you would
have had in determining when and how the contract's value would be paid out.

IF YOU DIE BEFORE ANNUITY PAYMENTS HAVE BEGUN:
.if the contract's designated beneficiary is your surviving
spouse, your spouse may continue the contract in force as the
owner.
.if the beneficiary is not your surviving spouse OR if the
beneficiary is your surviving spouse but chooses not to continue
the contract, the entire interest (as discussed below) in the
contract on the date of your death must be:
(1) paid out in full within five years of your death or
(2)applied in full towards the purchase of a life annuity on the
beneficiary with payments commencing within one year of your
death
If you are the annuitant, as well as the owner, the entire interest in the
contract on the date of your death equals the death benefit that then
becomes payable. If you are the owner but not the annuitant, the entire
interest equals
.the surrender value if paid out in full within five years of your
death, or
.the total value of your contract applied in full towards the
purchase of a life annuity on the beneficiary with payments
commencing within one year of your death.
IF YOU DIE ON OR AFTER ANNUITY PAYMENTS HAVE BEGUN
.any remaining amount that we owe must be paid out at least as
rapidly as under the method of making annuity payments that is
then in use.
- ----------------------------------------------------------------------------

The Code imposes very similar distribution requirements on contracts used to
fund tax qualified plans. We provide the required provisions for tax qualified
plans in separate disclosures and endorsements.

Notice of the death of an owner or annuitant should be furnished promptly to
the John Hancock Annuity Servicing Office.

MISCELLANEOUS PROVISIONS

ASSIGNMENT; CHANGE OF OWNER OR BENEFICIARY

To qualify for favorable tax treatment, certain contracts can't be sold;
assigned; discounted; or pledged as collateral for a loan, as security for
the performance of an obligation, or for any other purpose, unless the owner is
a trustee under section 401(a) of the Internal Revenue Code.

Subject to these limits, while the annuitant is alive, you may designate
someone else as the owner by written notice to the John Hancock Annuity
Servicing Office. You choose the beneficiary in the application for the
contract. You may change the

<PAGE>

beneficiary by written notice no later than receipt of due proof of the death of
the annuitant. Changes of owner or beneficiary will take effect when we receive
them, whether or not you or the annuitant is then alive. However, these changes
are subject to:

. the rights of any assignees of record and

. certain other conditions referenced in the contract.

An assignment, pledge, or other transfer may be a taxable event. See "Tax
information" below. Therefore, you should consult a competent tax adviser
before taking any such action.

TAX INFORMATION

OUR INCOME TAXES

We are taxed as a life insurance company under the Internal Revenue Code (the
"Code"). The Account is taxed as part of our operations and is not taxed
separately.

The contracts permit us to deduct a charge for any taxes we incur that are
attributable to the operation or existence of the contracts or the Account.
Currently, we do not anticipate making a charge for such taxes. If the level
of the current taxes increases, however, or is expected to increase in the
future, we reserve the right to make a charge in the future.

CONTRACTS NOT PURCHASED TO FUND A TAX QUALIFIED PLAN

UNDISTRIBUTED GAINS
-------------------

We believe the contracts will be considered annuity contracts under Section 72
of the Code. This means that, ordinarily, you pay no federal income tax on any
gains in your contract until we actually distribute assets to you.

However, a contract owned other than by a natural person does not generally
qualify as an annuity for tax purposes. Any increase in value therefore would
constitute ordinary taxable income to such an owner in the year earned.

ANNUITY PAYMENTS
----------------

When we make payments under a contract in the form of an annuity, each payment
will result in taxable ordinary income to the payee, to the extent that each
such payment exceeds an allocable portion of your "investment in the contract"
(as defined in the Code). In general, your "investment in the contract" equals
the aggregate amount of premium payments you have made over the life of the
contract, reduced by any amounts previously distributed from the contract that
were not subject to tax.

The Code prescribes the allocable portion of each such annuity payment to be
excluded from income according to one formula if the payments are variable and a
somewhat different formula if the payments are fixed. In each case, speaking
generally, the formula seeks to allocate an appropriate amount of the investment
in the contract to each payment. After the entire "investment in the contract"
has been distributed, any remaining payment is fully taxable.

SURRENDERS AND WITHDRAWALS BEFORE DATE OF MATURITY
--------------------------------------------------

When we make a single sum payment from a contract, you have ordinary taxable
income, to the extent the payment exceeds your "investment in the contract"
(discussed above). Such a single sum payment can occur, for example, if you
surrender your contract or if no annuity payment option is selected for a death
benefit payment.

When you take a partial withdrawal from a contract, including a payment under
a systematic withdrawal plan, all or part of the payment may constitute taxable
ordinary income to you. If, on the

<PAGE>

date of withdrawal, the total value of your contract exceeds the investment in
the contract, the excess will be considered "gain" and the withdrawal will be
taxable as ordinary income up to the amount of such "gain". Taxable withdrawals
may also be subject to the special penalty tax for premature withdrawals as
explained below. When only the investment in the contract remains, any
subsequent withdrawal made before the date of maturity will be a tax-free return
of investment. If you assign or pledge any part of your contract's value, the
value so pledged or assigned is taxed the same way as if it were a partial
withdrawal.

For purposes of determining the amount of taxable income resulting from a
single sum payment or a partial withdrawal, all annuity contracts issued by John
Hancock or its affiliates to the owner within the same calendar year will be
treated as if they were a single contract.

PENALTY FOR PREMATURE WITHDRAWALS
---------------------------------

The taxable portion of any withdrawal or single sum payment may also trigger
an additional 10% penalty tax. The penalty tax does not apply to payments made
to you after age 59 1/2, or on account of your death or disability. Nor will it
apply to withdrawals in substantially equal periodic payments over the life of
the payee (or over the joint lives of the payee and the payee's beneficiary).

ACCUMULATED VALUE ENHANCEMENT RIDER
-----------------------------------

If you have elected the accumulated value enhancement rider, the Internal
Revenue Service might take the position that each charge associated with this
rider is deemed a withdrawal from the contract which would be subject to income
tax and, if you have not yet attained age 59 1/2, the special 10% penalty tax
for withdrawals from contracts before the age of 59 1/2. You should consult a
competent tax adviser before electing this rider.

DIVERSIFICATION REQUIREMENTS

Each of the Funds of the Trusts intends to qualify as a regulated investment
company under Subchapter M of the Code and meet the investment diversification
tests of Section 817(h) of the Code and the underlying regulations. Failure to
do so could result in current taxation to you on gains in your contract for the
year in which such failure occurred and thereafter.

The Treasury Department or the Internal Revenue Service may, at some future
time, issue a ruling or regulation presenting situations in which it will deem
contract owners to exercise "investor control" over the Fund shares that are
attributable to their contracts. The Treasury Department has said informally
that this could limit the number or frequency of transfers among variable
investment options. This could cause you to be taxed as if you were the direct
owner of your allocable portion of Fund shares. We reserve the right to amend
the contracts or the choice of investment options to avoid, if possible, current
taxation to the owners.

CONTRACTS PURCHASED FOR A TAX QUALIFIED PLAN

We have 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.

WITHHOLDING ON ROLLOVER DISTRIBUTIONS
-------------------------------------

The tax law requires us to withhold 20% from certain distributions from tax
qualified plans. We do not have to make the withholding, however, if you
rollover your entire distribution to another plan and you request us to pay it
indirectly to the successor plan. Otherwise, the 20% mandatory withholding will
reduce the amount you can rollover to the new plan, unless you add funds to the
rollover from other sources. Consult a qualified tax adviser before making such
a distribution.

<PAGE>

CONTRACTS PURCHASED AS INDIVIDUAL RETIREMENT ANNUITIES (IRAS)
-------------------------------------------------------------

An individual retirement annuity (as defined in Section 408 of the Code)
generally permits an eligible purchaser to take a federal income tax deduction
of up to $2,000 per year for contributions to the IRA. (You can never, however,
deduct more than 100% of your compensation includable in your gross income for
the year.) You may also purchase an IRA contract for the benefit of your spouse
(regardless of whether your spouse has a paying job). You can generally deduct
up to $2,000 for each of you and your spouse (or, if less, your combined
compensation).

If you or your spouse is an active participant in an employer-sponsored
retirement plan, you may make deductible premium payments only if your adjusted
gross incomes do not exceed certain amounts. You can still contribute the full
$2,000 for each of you and your spouse, however, even though they are not
deductible. Nor can you take a deduction for premium payments made in or after
the taxable year in which you attain age 70 1/2 or for a "rollover contribution"
as defined in the Code.

If you have made any non-deductible contributions to an IRA contract, all or
part of any withdrawal or surrender proceeds, single sum death benefit or any
annuity payment, may be excluded from your taxable income when you receive the
proceeds. In general, all other amounts paid out from an IRA contract (in the
form of an annuity, a single sum, or partial withdrawal), are taxable to the
payee as ordinary income. As in the case of a contract not purchased under a
tax-qualified plan, you may incur additional adverse tax consequences if you
make a surrender or withdrawal before you reach age 59 1/2 (unless certain
exceptions apply similar to those described above for such non-qualified
contracts).

The tax law requires that annuity payments under an IRA contract begin no
later than April 1 of the year following the year in which the owner attains age
70 1/2.

CONTRACTS PURCHASED UNDER CERTAIN NON-DEDUCTIBLE IRAS (ROTH IRAS)
-----------------------------------------------------------------

In general, you may make purchase payments of up to $2,000 each year for a new
type of non-deductible IRA contract, known as a ROTH IRA. Any contributions made
during the year for any other IRA you have will reduce the amount you otherwise
could contribution to a ROTH IRA. Also, the $2000 maximum for a ROTH IRA phases
out for single taxpayers with adjusted gross incomes between $95,000 and
$110,000, for married taxpayers filing jointly with adjusted gross incomes
between $150,000 and $160,000, and for a married taxpayer filing separately with
adjusted gross income between $0 and $15,000.

If you hold your ROTH IRA for at least five years the payee will not owe any
federal income taxes or early withdrawal penalties on amounts paid out from the
contract:

. after you reach age 59 1/2,

. on your death or disability, or

. to one of the following qualified first-time home purchasers, subject
to a $10,000 lifetime maximum: you or your spouse, child,
grandchild, or ancestor.

The Code treats payments you receive from a ROTH IRA that do not qualify for
the above tax free treatment as a return of the contributions you made first.
However, any amount of such non-qualifying payments or distributions that
exceed the amount of your contributions is taxable to you as ordinary income and
possibly subject to the 10% penalty tax.

You may make a tax-free rollover contribution from a non-ROTH IRA, unless

<PAGE>

. you have adjusted gross income over $100,000, or

. you are a married taxpayer filing a separate return.

The $2,000 ROTH IRA contribution limit does not apply to tax-free rollover
contributions.

You must, however, pay tax on any portion of the non-ROTH IRA being rolled
over that represents income on a previously deductible IRA contribution. No
similar limitations apply to rollovers from one ROTH IRA to another ROTH IRA.

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

Under these tax-sheltered annuity ("TSA") arrangements, public school systems
and certain tax-exempt organizations can make premium payments into contracts
owned by their employees that are not taxable currently to the employee.

The amount of such non-taxable contributions each year

. is limited by a maximum (called the "exclusion allowance") that is
computed in accordance with a formula prescribed under the Code;

. may not, together with all other deferrals the employee elects under
other tax-qualified plans, exceed $10,000; and

. is subject to certain other limits (described in Section 415 of the
Code).

When we make annuity payments from the contract, such payments are taxed to
the employee 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 we make payments from a TSA contract on surrender of the contract,
partial withdrawal, death of the annuitant, or commencement of an annuity
option, the payee ordinarily must treat the entire payment as ordinary taxable
income.

Moreover, the Code prohibits distributions from a TSA contract before the
employee reaches age 59 1/2, except

. on the employee's separation from service, death, or disability,

. with respect to distributions of assets held under a TSA contract as
of December 31, 1988, and

. transfers and exchanges to other products that qualify under Section
403(b).

CONTRACTS PURCHASED FOR "CORPORATE" PLANS
-----------------------------------------

In general, an employer may deduct from its taxable income premium payments it
makes 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.

Nor do the employees participating in the plan have to pay tax on such
contributions when made.

Annuity payments (or other payments, such as upon withdrawal, death or
surrender) generally constitute taxable income to the payee; and the payee must
pay income tax on the amount by which a payment exceeds its allocable share of
the employee's "investment in the contract" (as defined

<PAGE>

in the Code), if any. In general, an employee's "investment in the contract"
equals the aggregate amount of premium payments made by the employee.

The non-taxable portion of each annuity payment is determined, under the Code,
according to one formula if the payments are variable and a somewhat different
formula if the payments are fixed. In each case, speaking generally, the
formula seeks to allocate an appropriate amount of the investment in the
contract to each payment.

Certain special five-year income tax averaging provisions are available for
total distributions made in 1999, but not after that. Other favorable
procedures may also be available to taxpayers who had attained age 50 prior to
January 1, 1986.

IRS required minimum distributions to the employee must begin no later than
April 1 of the year following the year in which the employee reaches age 70 1/2
or, if later, retires.

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

Self-employed persons, including partnerships, purchase contracts for tax
qualified pension and profit-sharing plans that they establish for themselves
and for their employees. The Code limits the maximum amount of premium payments
that the self-employed person may deduct for federal income tax purposes each
year. With respect to variable annuity contracts issued on the life of
self-employed persons under such plans, the maximum generally is the lesser of

. $30,000, or

. 25% of "earned income" (as defined in the Code).

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.

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 we make annuity payments under an H.R. 10 contract, the payee must pay
federal income taxes under the same rules that apply to such payments under
corporate plans (discussed above).

The tax treatment of annuity payments is also the same as under corporate
plans (discussed above); as, in most respects, is the tax treatment of single
sum payments.

The same rules discussed above that determine for corporate plans (a) when
annuity payments must commence and (b) the 10% penalty tax on certain early
distributions also apply to H.R. 10 plans.

CONTRACTS PURCHASED FOR "TOP-HEAVY" PLANS
-----------------------------------------

Certain corporate and H.R. 10 plans may fall within the definition of
"top-heavy plans" under Section 416 of the Code. This can happen if the plan
holds a significant amount of its assets for the benefit of "key employees" (as
defined in the Code). You should consider whether your plan meets the
definition. If so, you should take care to consider the special limitations
applicable to top-heavy plans and the potentially adverse tax consequences to
key employees.

TAX-FREE ROLLOVERS
------------------

The discussion above covers certain fully or partially tax-free "rollovers"
from a regular IRA to a ROTH IRA. You may also make a tax-free rollover from

<PAGE>

. a regular IRA to another regular IRA,

. any tax-qualified plan to a regular IRA, and

. any tax-qualified plan to another tax-qualified plan of the same type
(i.e. TSA to TSA, corporate plan to corporate plan, etc.)

We do not have to withhold tax if you roll over your entire distribution and
you request us to pay it directly to the successor plan. Otherwise, 20%
mandatory withholding will apply and reduce the amount you can roll over to the
new plan, unless you add funds to the rollover from other sources. Consult a
qualified tax adviser before taking such a distribution.

SEE YOUR OWN TAX ADVISER
------------------------

The above description of Federal income tax consequences to owners of and
payees under contracts, 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 under the Code governing tax qualified plans are
extremely complex and often difficult to understand. Changes to the tax laws
may be enforced retroactively. 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. 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 you should consult a qualified tax adviser.

PERFORMANCE INFORMATION

We may advertise total return information about investments made in the
variable investment options. We refer to this information as "Account level"
performance. In our Account level advertisements, we usually calculate total
return for 1, 5, and 10 year periods or since the beginning of the applicable
variable investment option. Total return at the Account level is the percentage
change between

. the value of a hypothetical investment in a variable investment
option at the beginning of the relevant period, and

. the value at the end of such period.

At Account level, total return reflects adjustments for

. the mortality and expense risk charges,

. the annual contract fee, and

. any withdrawal charge payable if the owner surrenders his contract at
the end of the relevant period.

Total return at the Account level does not, however, reflect any premium tax
charges or any charges for optional benefit riders. Total return at the Account
level will be lower than that at the Trust level where comparable charges are
not deducted.

We may also advertise total return in a non-standard format in conjunction
with the standard format described above. The non-standard format is the same
as the standard format except that it will not reflect any withdrawal charge.

We may advertise "current yield" and "effective yield" for investments in the
Money Market investment option. CURRENT YIELD refers to the income earned on
your investment in the Money Market investment option over a 7-day period and
then annualized. In other words, the income earned in the period is assumed to
be earned every 7 days over a 52-week period and stated as a percentage of the
investment.

<PAGE>

EFFECTIVE YIELD is calculated in a similar manner but, when annualized, the
income earned by your investment is assumed to be reinvested and thus compounded
over the 52-week period. Effective yield will be slightly higher than current
yield because of this compounding effect of reinvestment.

We also advertise current yield for investments in the other variable
investment options. For investments in these options, we calculate current
yield by the following formula:

the annualization of the income earned by an
investment in the variable investment option
during a recent 30-day period
DIVIDED BY
the maximum offering price per unit of the
variable investment option at the end of such
30-day period
- ----------------------------------------------

In all cases, current yield and effective yield reflect all the recurring
charges at the Account level, but will not reflect any premium tax, any
withdrawal charge, or any charge for optional benefit riders.

REPORTS

At least annually, we will send you (1) a report showing the number and value
of the accumulation units in your contract and (2) the financial statements of
the Trusts.

VOTING PRIVILEGES

At meetings of the Trusts' shareholders, we will generally vote all the shares
of each Fund that we hold in the Account in accordance with instructions we
receive from the owners of contracts that participate in the corresponding
variable investment option.

CERTAIN CHANGES

We reserve the right, subject to applicable law, including any required
shareholder approval,

. to transfer assets that we determine to be your assets from the
Account to another separate account or investment option by
withdrawing the same percentage of each investment in the Account
with proper adjustments to avoid odd lots and fractions,

. to add or delete variable investment options,

. to change the underlying investment vehicles,

. to operate the Account in any form permitted by law, and

. to terminate the Account's registration under the 1940 Act, if such
registration should no longer be legally required.

Unless otherwise required under applicable laws and regulations, notice to or
approval of owners will not be necessary for us to make such changes.

DISTRIBUTION OF CONTRACTS

John Hancock Funds, Inc. ("JHFI") acts as principal distributor of the
contracts sold through this prospectus. JHFI is registered as a broker-dealer
under the Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. Its address is 101 Huntington Avenue,
Boston, Massachusetts 02199.

You can purchase a contract through broker-dealers and certain financial
institutions who have entered into selling agreements with JHFI and John Hancock
and whose representatives are authorized by applicable law to sell annuity
products. We do not expect the compensation to such broker-dealers and
financial institutions to exceed 8.0% of premium payments (on a present value
basis). For limited

<PAGE>

periods of time, we may pay additional compensation to broker-dealers as part of
special sales promotions. We offer these contracts on a continuous basis, but
neither John Hancock nor JHFI is obligated to sell any particular amount of
contracts. We reimburse JHFI for direct and indirect expenses actually incurred
in connection with the marketing and sale of these contracts. JHFI is a
subsidiary of John Hancock.

IMPACT OF THE YEAR 2000 ISSUE

The advent of the Year 2000 presents us with a technological challenge:
making our systems function properly with respect to dates in the year 2000 and
after. In response to that challenge, we have developed and are executing a
plan to modify or replace significant portions of our computer informations
systems and automated technologies. The plan involves coordination and testing
with business partners in an effort to minimize the possibility that external
factors will adversely impact our systems. We believe that, with modifications
to existing systems and conversions to new technologies, the Year 2000 will not
pose significant operational problems for our computer systems. However, if
certain modifications and conversions are not made, or are not completed on
time, the Year 2000 issue could have an adverse impact on our operations.

We have substantially completed the process of remediating and compliance
testing our computer systems for the Year 2000. The few remaining non-mission
critical systems are expected to be compliance tested and returned to production
by the third quarter of 1999. This completion target was derived utilizing
numerous assumptions of future events, including availability of certain
resources and other factors. However, there can be no guarantee that this
estimate will be achieved, that these steps will be sufficient or that actual
results may not differ materially from those anticipated. For more information
about the impact of the Year 2000 issue, refer to Note 15 to the Notes to the
Financial Statements of John Hancock Mutual Life Insurance Company included in
the Statement of Additional Information to this prospectus.

REGISTRATION STATEMENT

This prospectus omits certain information contained in the registration
statement that we filed with the SEC. You can get more details from the SEC
upon payment of prescribed fees or through the SEC's internet web site
(www.sec.gov).

Among other things, the registration statement contains a "Statement of
Additional Information" that we will send you without charge upon request. The
Table of Contents of the Statement of Additional Information lists the following
subjects that it covers:

page of SAI
<S> <C>
VARIATIONS IN CHARGES. . . . . . . . . . . . 2
DISTRIBUTION . . . . . . . . . . . . . . . . 2
CALCULATION OF ANNUITY PAYMENTS. . . . . . . 2
ADDITIONAL INFORMATION ABOUT DETERMINING
UNIT VALUES . . . . . . . . . . . . . . . . 4
PURCHASES AND REDEMPTIONS OF FUND SHARES . . 6
THE ACCOUNT. . . . . . . . . . . . . . . . . 6
DELAY OF CERTAIN PAYMENTS. . . . . . . . . . 6
LIABILITY FOR TELEPHONE TRANSFERS. . . . . . 6
VOTING PRIVILEGES. . . . . . . . . . . . . . 7
JOHN HANCOCK FINANCIAL STATEMENTS. . . . . . 8
SEPARATE ACCOUNT FINANCIAL STATEMENTS. . . . 33
</TABLE>

<PAGE>

EXPERTS

Ernst & Young LLP, independent auditors, have audited the financial statements
of John Hancock Mutual Life Insurance Company and the Account that appear in the
Statement of Additional Information, which also is a part of the registration
statement that contains this prospectus. Those financial statements are included
in the registration statement in reliance upon Ernst & Young's reports given
upon the firm's authority as experts in accounting and auditing.

<PAGE>

APPENDIX A - DETAILS ABOUT OUR GUARANTEE PERIODS

INVESTMENTS THAT SUPPORT OUR GUARANTEE PERIODS

We back our obligations under the guarantee periods with John Hancock's
general assets. Subject to applicable law, we have sole discretion over the
investment of our general assets (including those held in our "non-unitized"
separate account that primarily supports the guarantee periods). We invest
these amounts in compliance with applicable state insurance laws and regulations
concerning the nature and quality of our general investments.

We invest the non-unitized separate account assets, according to our detailed
investment policies and guidelines, in fixed income obligations, including:

. corporate bonds,

. mortgages,

. mortgage-backed and asset-backed securities, and

. government and agency issues.

We invest primarily in domestic investment-grade securities. In addition, we
use derivative contracts only for hedging purposes, to reduce ordinary business
risks associated with changes in interest rates, and not for speculating on
future changes in the financial markets. Notwithstanding the foregoing, we are
not obligated to invest according to any particular strategy.

GUARANTEED INTEREST RATES

We declare the guaranteed rates from time to time as market conditions and
other factors dictate. We advise you of the guaranteed rate for a selected
guarantee period at the time we:

. receive your premium payment,

. effectuate your transfer, or

. renew your guarantee period.

We have no specific formula for establishing the guaranteed rates for the
guarantee periods. The rates may be influenced by interest rates generally
available on the types of investments acquired with amounts allocated to the
guarantee period. In determining guarantee rates, we may also consider, among
other factors, the duration of the guarantee period, regulatory and tax
requirements, sales and administrative expenses we bear, risks we assume, our
profitability objectives, and general economic trends.

<PAGE>

COMPUTATION OF MARKET VALUE ADJUSTMENT

We determine the amount of the market value adjustment by multiplying the
amount being taken from the guarantee period (before any applicable withdrawal
charge) by a factor expressed by the following formula:
LOGO

where,

. G is the guaranteed rate in effect for the current guarantee period.

. C is the current guaranteed rate in effect for new guarantee periods
with duration equal to the number of years remaining in the current
guarantee period (rounded to the nearest whole number of years). If
we are not currently offering such a guarantee period, we will
declare a guarantee rate, solely for this purpose, consistent with
interest rates currently available.

. N is the number of complete months from the date of withdrawal to the
end of the current guarantee period. (If less than one complete
month remains, N equals one unless the withdrawal is made on the last
day of the guarantee period, in which case no adjustment applies.)

SAMPLE CALCULATION 1: POSITIVE ADJUSTMENT

<TABLE>
<CAPTION>
<S> <C>
Premium payment plus extra credit $10,000
- -------------------------------------------------------------------------------------
Guarantee period 7 years
- -------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- -------------------------------------------------------------------------------------
Amount withdrawn or transferred $11,664
- -------------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- -------------------------------------------------------------------------------------
Guaranteed rate for new 5 year 7%
guarantee (c)
- -------------------------------------------------------------------------------------
Remaining guarantee period (n) 60 months
- -------------------------------------------------------------------------------------
</TABLE>

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,
or $11,664 + $1,055)

<PAGE>

MARKET VALUE ADJUSTMENT:
LOGO

Amount withdrawn or transferred (adjusted for market value adjustment): $11,664
+ $273.79 = $11,937.79

SAMPLE CALCULATION 2: NEGATIVE ADJUSTMENT

<TABLE>
<CAPTION>
<S> <C>
Premium payment plus extra credit $10,000
- -------------------------------------------------------------------------------------
Guarantee period 7 years
- -------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- -------------------------------------------------------------------------------------
Amount withdrawn or transferred $11,664
- -------------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- -------------------------------------------------------------------------------------
Guaranteed rate for new 5 year 9%
guarantee (c)
- -------------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- -------------------------------------------------------------------------------------
</TABLE>

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,or $11,664 -$1,055)

MARKET VALUE ADJUSTMENT:
LOGO

Amount withdrawn or transferred (adjusted for market value adjustment): $11,664
- - $777.31= $10,886.69

<PAGE>

SAMPLE CALCULATION 3: POSITIVE ADJUSTMENT LIMITED BY AMOUNT OF EXCESS INTEREST

<TABLE>
<CAPTION>
<S> <C>
Premium payment plus extra credit $10,000
- --------------------------------------------------------------------------------------------------------------------------
Existing guarantee period 7 years
- --------------------------------------------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed 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
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

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,
or $11,664 + $1,055)

MARKET VALUE ADJUSTMENT:
LOGO

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

SAMPLE CALCULATION 4: NEGATIVE ADJUSTMENT LIMITED BY AMOUNT OF EXCESS INTEREST

<TABLE>
<CAPTION>
<S> <C>
Premium payment plus extra credit $10,000
- --------------------------------------------------------------------------------------------------------------------------
Guarantee period 7 years
- --------------------------------------------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed 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
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

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,
or $11,664 - $1,055)

MARKET VALUE ADJUSTMENT:
LOGO

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

________________________________________________________________________

*All interest rates shown have been arbitrarily chosen for purposes of these
examples. In most cases they will bear little or no relation to the rates we
are actually guaranteeing at any time.

<PAGE>

APPENDIX B - EXAMPLE OF WITHDRAWAL CHARGE CALCULATION

ASSUME THE FOLLOWING FACTS:

On January 1, 2001, you make a $5,000 initial premium payment and we issue you
a contract.
On January 1, 2002, you make a $1,000 premium payment
On January 1, 2003, you make a $1,000 premium payment.
On January 1, 2004, the total value of your contract is $7,500 because of the
extra credits and favorable investment earnings.

Now assume you make a partial withdrawal of $7,000 (no tax withholding) on
January 2, 2004. In this case, assuming no prior withdrawals, we would
deduct a CDSL of $289.36. We withdraw a total of $7,289.36 from your
contract.

$7,000.00 -- withdrawal request payable to you
+ 289.36 -- withdrawal charge payable to us
---------
$7,289.36 -- total amount withdrawn from your contract

HERE IS HOW WE DETERMINE THE WITHDRAWAL CHARGE:

1. We FIRST distribute to you the $500 profit you have in your contract
($7,500 total contract value less $7,000 of premiums you have paid) under
the free withdrawal provision.

2. Next we repay to you the $5,000 premium you paid in 2001. Under the free
withdrawal provision, $200 of that premium is charge free ($7,000 total
premiums paid x 10%; less the $500 free withdrawal in the same contract
year described in paragraph 1 above). We assess a withdrawal charge on the
remaining balance of $4,800 from your 2001 premium. Because you made that
premium payment 3 years ago, the withdrawal charge percentage is 4%. We
deduct the resulting $192 from your contract to cover the withdrawal charge
on your 2001 premium payment. We pay the remainder of $4,608 to you as a
part of your withdrawal request.

$ 5,000
- 200 -- free withdrawal amount (payable to you)
---------
$ 4,800
x .04
---------
$ 192 -- withdrawal charge on 2001 premium payment (payable to us)

$ 4,800
- 192
---------
$ 4,608 -- part of withdrawal request payable to you

3. We NEXT deem the entire amount of your 2002 PREMIUM PAYMENT to be withdrawn
and

<PAGE>

we assess a withdrawal charge on that $1,000 amount. Because you made this
premium payment 2 years ago, the withdrawal charge percentage is 5%. We
deduct the resulting $50 from your contract to cover the withdrawal charge
on your 2002 premium payment. We pay the remainder of $950 to you as a part
of your withdrawal request.

$1,000
x .05
------
$ 50 -- withdrawal charge on 2002 premium payment (payable to us)

$1,000
- 50
------
$ 950 -- part of withdrawal request payable to you

4.We NEXT determine what additional amount we need to withdraw to provide you
with the total $7,000 you requested, after the deduction of the withdrawal
charge on that additional amount. We have already allocated $500 from
profits under paragraph 1 above, $200 of additional free withdrawal amount
under paragraph 2, $4,608 from your 2001 premium payment under paragraph 2,
and $950 from your 2003 premium payment under paragraph 3. Therefore, $742
is needed to reach $7,000.

$7,000 -- total withdrawal amount requested
- 500 -- profit
- 200 -- free withdrawal amount
-4,608 -- payment deemed from initial premium payment
- 950 -- payment deemed from 2002 premium payment
------
$ 742 -- additional payment to you needed to reach $7,000

We know that the withdrawal charge percentage for this remaining amount is 6%,
because you are already deemed to have withdrawn all premiums you paid prior
to 2003. We use the following formula to determine how much more we need to
withdraw:

Remainder due to you = Withdrawal needed - [applicable withdrawal
charge percentage times withdrawal needed]

$742 = x - [.06x]
$742 = .94x
$742/.94 = x
$789.36 = x

$789.36 -- deemed withdrawn from 2003 premium payment
-$742.00 -- part of withdrawal request payable to you
--------
$ 47.36 -- withdrawal charge on 2003 premium deemed withdrawn (payable
to us)

54
<PAGE>

REVOLUTION VALUE VARIABLE ANNUITY

SUPPLEMENT DATE_______, 1999 TO PROSPECTUS DATED _______, 1999

If your contract is issued in the state of New York, the following changes in
the attached prospectus apply to your contract.

On page __ of the prospectus, under the caption "Calculation of Market Value
Adjustment ("MVA")," the first paragraph is replaced with the following
paragraph:

"If you withdraw, surrender, transfer, or otherwise remove money from a
guarantee period prior to its expiration date, we will apply a market value
adjustment. A market value adjustment also generally applies to:

. amounts you apply to an annuity option, and

. amounts paid in a single sum in lieu of an annuity.

A market value adjustment does not apply to the payment of a death benefit."

Also on page 29 of the prospectus, under the caption "Calculation of Market
Value Adjustment ("MVA")," the formula in the box is replaced with the following
formula:

We compare
. the guaranteed rate of the guarantee period from which the assets
are being taken WITH
.the guaranteed rate we are currently offering for guarantee periods
of the same duration as remains on guarantee period from which the
assets are being taken.
If the first rate exceeds the second by more than
1/4 %, the market value adjustment produces an increase in your contract's
value.
If the first rate does not exceed the second by at least 1/4 %, the market
value adjustment produces a decrease in your contract's value.
- --------------------------------------------------------------------------------

On page __ of the prospectus, under the caption "Standard Death Benefit," the
words "adjusted by any then-applicable market value adjustment" are deleted from
the first bullet.

<PAGE>

Also on page __ of the prospectus, under the sub-caption " Enhanced death
benefit," the parenthetical "(adjusted by any market value adjustment)" is
deleted from the second bullet.

Appendix A is replaced by the following appendix.

<PAGE>

APPENDIX A - DETAILS ABOUT OUR GUARANTEE PERIODS FOR CONTRACTS ISSUED IN NEW
YORK

INVESTMENTS THAT SUPPORT OUR GUARANTEE PERIODS

We invest the non-unitized separate account assets, according to our detailed
investment policies and guidelines, in fixed income obligations, including:

. corporate bonds,

. mortgages,

. mortgage-backed and asset-backed securities, and

. government and agency issues.

GUARANTEED INTEREST RATES

We declare the guaranteed rates from time to time as market conditions and
other factors dictate. We advise you of the guaranteed rate for a selected
guarantee period at the time we:

. receive your premium payment,

. effectuate your transfer, or

. renew your guarantee period.

<PAGE>

COMPUTATION OF MARKET VALUE ADJUSTMENT

where,

. G is the guaranteed rate in effect for the current guarantee period.

SAMPLE CALCULATION 1: POSITIVE ADJUSTMENT

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,
or $11,664 + $1,055)

<PAGE>

MARKET VALUE ADJUSTMENT:
LOGO

Amount withdrawn or transferred (adjusted for market value adjustment): $11,664
+ $413.58 = $12,077.58

SAMPLE CALCULATION 2: NEGATIVE ADJUSTMENT

<TABLE>
<CAPTION>
<S> <C>
Premium payment plus extra credit $10,000
- -------------------------------------------------------------------------------------
Guarantee period 7 years
- -------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
- -------------------------------------------------------------------------------------
Amount withdrawn or transferred $11,664
- -------------------------------------------------------------------------------------
Guaranteed rate (g) 8%
- -------------------------------------------------------------------------------------
Guaranteed rate for new 5 year 9%
guarantee (c)
- -------------------------------------------------------------------------------------
Remaining guarantee period(n) 60 months
- -------------------------------------------------------------------------------------
</TABLE>

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,or $11,664 -$1,055)

MARKET VALUE ADJUSTMENT:
LOGO

Amount withdrawn or transferred (adjusted for market value adjustment): $11,664
- - $652.18 = $11,011.82

<PAGE>

SAMPLE CALCULATION 3: POSITIVE ADJUSTMENT LIMITED BY AMOUNT OF EXCESS INTEREST

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,
or $11,664 + $1,055)

MARKET VALUE ADJUSTMENT:
LOGO

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

SAMPLE CALCULATION 4: NEGATIVE ADJUSTMENT LIMITED BY AMOUNT OF EXCESS INTEREST

<TABLE>
<CAPTION>
<S> <C>
Premium payment plus extra credit $10,000
- --------------------------------------------------------------------------------------------------------------------------
Guarantee period 7 years
- --------------------------------------------------------------------------------------------------------------------------
Time of withdrawal or transfer beginning of 3rd year of guaranteed 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
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

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,
or $11,664 - $1,055)

MARKET VALUE ADJUSTMENT:
LOGO

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

________________________________________________________________________

*All interest rates shown have been arbitrarily chosen for purposes of these
examples. In most cases they will bear little or no relation to the rates we
are actually guaranteeing at any time.

<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

DEFERRED COMBINATION FIXED AND VARIABLE ANNUITY CONTRACTS

JOHN HANCOCK VARIABLE ANNUITY ACCOUNTS H

STATEMENT OF ADDITIONAL INFORMATION

------------------

This statement of additional information ("SAI"), dated ____, 1999 is not a
prospectus. It is intended that this SAI be read in conjunction with the
prospectus of John Hancock Variable Annuity Account H (the "Account") dated
____, 1999, for the contracts being offered. Terms used in this SAI that are
not otherwise defined herein have the same meanings given to them in the
prospectus, unless the context requires otherwise. A copy of the prospectus may
be obtained from the John Hancock Annuity Servicing Office, 529 Main Street
(X-3), Charlestown, Massachusetts 02129, telephone number 1-800-732-5543.

TABLE OF CONTENTS

-----------------

PAGE OF SAI
-----------
Variations in Charges...............................
Distribution........................................ 2
Calculation of Annuity Payments..................... 2
Additional Information About Determining Unit Values 4
Purchases and Redemptions of Fund Shares............ 6
The Account.........................................
Delay of Certain Payments...........................
Liability for Telephone Transfers................... 6
Voting Privileges................................... 7
John Hancock Financial Statements................... 8
Separate Account Financial Statements...............

<PAGE>

VARIATIONS IN CHARGES

In the future, we may allow a reduction in or the elimination of the
withdrawal charge, the charge for mortality and expense risks, the
administrative services charge, the annual contract fee, or the charge for any
rider. The affected contracts would involve sales 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 John Hancock 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 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.

We will make any reduction in charges or fees according to our rules in
effect at the time an application for a contract is approved. We reserve 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.

DISTRIBUTION

The distribution of the contracts through John Hancock Funds, Inc. ("JHFI")
is continuous. Pursuant to a marketing and distribution agreement between John
Hancock and JHFI, the amounts we paid JHFI under that agreement for such
services were as follows:

YEAR AMOUNT PAID TO JHFI
---- -------------------
1998 $4,655,842
1997 $1,869,477
1996 $0

CALCULATION OF ANNUITY PAYMENTS

CALCULATION OF ANNUITY UNITS

We use a measuring device called an "annuity unit" to help us compute the
amount of each monthly payment that is based on a variable investment option.
Each variable investment option has its own annuity unit with its own annuity
unit value.

The number of the contract's annuity units for each variable investment
option normally doesn't change while the payee continues to receive payments,
unless the payee makes a transfer from one variable investment option to
another. The amount of each monthly annuity payment based on a variable
investment option equals the number of the contract's annuity units in that
option times the value of one such unit as of the tenth day preceding the
payment's due date.

To compute the amount of the first annuity payment that is based on any
variable investment option, we first determine the amount of your contract's
value that we will apply to that variable option. We do this as of 10 calendar
days prior to the date the initial monthly annuity payment is due, in the manner
described in the prospectus under "The annuity period - choosing fixed or
variable annuity payments."

For each variable investment option, we THEN divide:

2
<PAGE>

the resulting value (minus any
premium tax charge)

$1,000
- -----------------------------------

and multiply the result by

the applicable annuity purchase rate
set forth in the contract and
reflecting

(1) the age and, possibly, sex of the
payee and

(2) the assumed investment rate
(discussed below)
- ---------------------------------------

This computation determines the amount of initial monthly variable annuity
payment to the annuitant from each variable investment option.

We then determine the number of annuity units to be credited to the contract
from each of such variable investment options by dividing:

the amount of the initial monthly variable annuity
payment from that variable annuity option

the annuity unit value of that variable investment option
as of 10 calendar days prior to the date the initial
payment is due
- ----------------------------------------------------------

For example, 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. Assume, further, that 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 first monthly annuity payment would be
$262.56.
LOGO

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).

3
<PAGE>

ANNUITY UNIT VALUES

The value of the annuity units varies from day to day, depending on the
investment performance of the variable investment option, the deductions made
against the variable investment option, and the assumed investment rate used in
computing annuity unit values. Thus, the variable monthly annuity payments vary
in amount from month to month.

We calculate annuity unit value separately for each variable investment
option. As of the close of each business day, we calculate the value of one
annuity unit by

(1) multiplying the immediately preceding annuity unit value by the sum of one
plus the applicable net investment rate for the period subsequent to such
preceding value and then

(2) multiplying this product by an adjustment factor to neutralize the assumed
investment rate used in determining the amounts of annuity payable. If
your contract has an assumed investment rate of 3 1/2 % per year, the
adjustment factor for a valuation period of one day would be 0.999905754.
We neutralize the assumed investment rate by applying the adjustment
factor so that the variable annuity payments will increase only if the
actual net investment rate of the variable investment option exceeds 3 1/2
% per year and will decrease only if is less than 3 1/2 % per year.

The amount of the initial variable monthly payment is determined on the
assumption that the actual net investment rate of each variable investment
option used in calculating the "net investment factor" (described below) will be
equal on an annual basis to the "assumed investment rate" (described under "The
annuity period - variable monthly annuity payments" in the prospectus). If the
actual net investment rate between the dates for determining two monthly annuity
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.

MORTALITY TABLES

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.

ADDITIONAL INFORMATION ABOUT DETERMINING UNIT VALUES

The general manner in which we compute annuity unit values is discussed
above. Like annuity unit values, we calculate accumulation unit values
separately for each variable investment option. As of the close of each
business day, we calculate the value of one accumulation unit of a variable
investment option by multiplying the immediately preceding accumulation unit
value by the sum of one plus the applicable "net investment rate" for the period
subsequent to such preceding value. See "Net investment rate" below.

NET INVESTMENT RATE

For any period, the net investment rate for a variable investment option
equals

(1) the percentage total investment return of the corresponding Fund for that
period (assuming reinvestment of all dividends and other distributions from
the Fund), less

4
<PAGE>

(2) for each calendar day in the period, a deduction of 0.003425% or 0.003151%
(depending on the charge for mortality and expense risks) of the value of
the variable investment option at the beginning of the period, and less

(3) a further adjustment in an appropriate amount if we ever elect to impose a
charge for our income taxes.

ADJUSTMENT OF UNITS AND VALUES

We reserve the right to change the number and value of the accumulation
units and/or annuity units credited to your contract, without notice, provided
that strict equity is preserved and the change does not otherwise affect the
benefits, provisions, or investment return of your contract.

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

(1) IF THE DAILY DEDUCTION IS 0.003425% (APPLICABLE TO THE REVOLUTION ACCESS,
REVOLUTION EXTRA AND REVOLUTION VALUE VARIABLE ANNUITIES):

Assume at the beginning of the period being considered, the value of a
particular variable investment option was $4,000,000. Investment income during
the period totaled $2000, while capital gains were $3000 and capital losses were
$1000. Assume also that we are not imposing any tax charge. Charges against
the beginning value of the variable investment option amount to $137.00 assuming
a one day period. The $137.00 was computed by multiplying the beginning 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.

Assume further that each accumulation unit had a value of $11.250000 on the
previous business day, and the value of an annuity unit on such previous date
was $1.0850000. Based upon the experience of the variable investment option
during the period, the value of an accumulation unit at the end of the period
would be $11.250000 x (1 + .0009658) or $11.260865. The value of an annuity
unit at the end of the period would be $1.0850000 x (1. + .0009658) x .999905754
or $1.085946. The final figure, .999905754, neutralizes the effect of a 3 1/2%
assumed investment rate so that the annuity unit's change in value reflects only
the actual investment experience of the variable investment option.

(2) IF THE DAILY DEDUCTION IS 0.003151% (APPLICABLE TO THE REVOLUTION VARIABLE
ANNUITY):

Assume at the beginning of the period being considered, the value of a
particular variable investment option was $4,000,000. Investment income during
the period totaled $2000, while capital gains were $3000 and capital losses were
$1000. Assume also that we are not imposing any tax charge. Charges against
the beginning value of the variable investment option amount to $126.04 assuming
a one day period. The $126.04 was computed by multiplying the beginning value
of $4,000,000 by the factor 0.00003151. By substituting in the first formula
above, the net investment rate is equal to $3873.96 ($2000 + $3000 - $1000
- -$126.04) divided by $4,000,000 or 0.0009685.

Assume further that each accumulation unit had a value of $11.250000 on the
previous business day, and the value of an annuity unit on such previous date
was $1.0850000. Based upon the experience of the variable investment option
during the period, the value of an accumulation unit at the end of the period
would be $11.250000 x (1 + .0009685) or $11.260896. The value of an annuity
unit at the end of the period would be $1.0850000 x (1. + .0009685) x .999905754
or $1.085948. The final figure, .999905754, neutralizes the effect of a 3 1/2%
assumed investment rate so that the annuity unit's change in value reflects only
the actual investment experience of the variable investment option.

5
<PAGE>

PURCHASES AND REDEMPTIONS OF FUND SHARES

John Hancock purchases and redeems Fund shares for the Account at their net
asset value without any sales or redemption charges. Each available Fund issues
its own separate series of Fund shares. Each such series represents an interest
in one of the Funds of the Trusts, which corresponds to one of our variable
investment options. Any dividend or capital gains distributions received by the
Account will be reinvested in shares of that same Fund at their net asset value
as of the dates paid.

On each business day, the account purchases and redeems shares of each fund
for each variable investment option based on, among other things, the amount of
premium payments allocated to that option, dividends reinvested, and transfers
to, from and among investment options, all to be effected as of that date. Such
purchases and redemptions are effective at the net asset value per Trust share
for each fund determined on that same date.

THE ACCOUNT

In addition to the assets attributable to contracts, the Account includes
assets derived from charges made by and, possibly, funds contributed by John
Hancock to commence operations of the variable investment option. From time to
time these additional amounts may be transferred in cash by us to our general
account. Before any such transfer, we will consider any possible adverse impact
transfer might have on any variable investment option. The assets of one
variable investment option are not necessarily legally insulated from
liabilities associated with another variable investment option.

DELAY OF CERTAIN PAYMENTS

Ordinarily, upon a surrender or partial withdrawal, we will pay the value
of any accumulation units in a single sum within 7 days after receipt of a
written request at our Annuity Servicing Office. However, redemption may be
suspended and payment may be postponed under the following conditions:

(1) when the New York Stock Exchange is closed, other than customary weekend
and holiday closings;

(2) when trading on that Exchange is restricted;

(3) when an emergency exists as a result of which (a) disposal of securities in
a variable investment option is not reasonably practicable or (b) it is not
reasonably practicable to determine the value of the net assets of a
variable investment option; or

(4) when a governmental body having jurisdiction over the Account by order
permits such suspension.

Rules and regulations of the SEC, if any are applicable, will govern as to
whether conditions in (2) or (3) exist.

We 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.

We may also defer payment of surrender proceeds payable out of any
guarantee period for a period of up to 6 months.

LIABILITY FOR TELEPHONE TRANSFERS

If you authorize telephone transfers, you will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone or fax
instructions which we reasonably believe to be genuine, unless such loss,
expense or cost is the result of our mistake or negligence. We employ
procedures which provide safeguards against unauthorized transactions, and which
are reasonably designed to confirm that instructions received by telephone are
genuine. These procedures include

6
<PAGE>

. requiring personal identification,

. tape recording calls, and

. providing written confirmation to the owner.

If we do not employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, we may be liable for any loss due to
unauthorized or fraudulent instructions.

VOTING PRIVILEGES

Here's the formula we use to determine the number of Fund shares as to
which you may give instructions:

the total value of your accumulation
units value in a variable investment
option

divided by

the net asset value of 1 share of the
corresponding Fund
- --------------------------------------

At a shareholders' meeting, you may give instructions regarding:

. the election of the Board of Trustees,

. the ratification of the selection of independent auditors,

. the approval of the Trusts' investment management agreements,

. and other matters requiring a vote under the 1940 Act.

The annuitant or other payee will also be entitled to give voting
instructions with respect to the Fund shares corresponding to any variable
investment option under which variable annuity payments are then being made. We
determine the number of Fund shares for which the payee can give instructions by
dividing the actuarially determined present value of the payee's annuity units
that correspond to that Fund by the net asset value of one share of that Fund.

We will furnish you information and forms so that you may give voting
instructions.

We may own Fund shares that we do not hold in any separate account whose
participants are entitled to give voting instructions. We will vote such shares
in proportion to the instructions we receive from all variable annuity contract
and variable life insurance policy owners who give us instructions for that
Fund's shares (including owners who participate in separate accounts other than
the Account).

We have designed your voting privileges based upon our understanding of the
requirements of the federal securities laws. If the applicable laws,
regulations, or interpretations change to eliminate or restrict the need for
such voting privileges, we reserve the right to proceed in accordance with any
such revised requirements.

7
<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, 1998
and 1997, and the related statutory-basis statements of operations and 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 opinion, because of the effects of the matter described in the
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,
1998 and 1997, 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 financial position of John Hancock
Mutual Life Insurance Company at December 31, 1998 and 1997, 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 19, 1999

8
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

December 31
-------------------------
1998 1997
-------------- -----------
(In millions)
ASSETS
Bonds--Note 6 . . . . . . . . . . . . . . . . . . $ 23,353.0 $22,986.0
Stocks:
Preferred . . . . . . . . . . . . . . . . . . 844.7 640.6
Common . . . . . . . . . . . . . . . . . . . . 269.3 256.9
Investments in affiliates . . . . . . . . . . 1,520.3 1,442.0
-------------- ----------
2,634.3 2,339.5
Mortgage loans on real estate--Note 6 . . . . . . 8,223.7 7,851.2
Real estate:
Company occupied . . . . . . . . . . . . . . . 372.2 375.1
Investment properties . . . . . . . . . . . . 1,472.1 1,893.4
-------------- ----------
1,844.3 2,268.5
Policy loans . . . . . . . . . . . . . . . . . . 1,573.8 1,577.3
Cash items:
Cash in banks and offices . . . . . . . . . . 241.5 176.0
Temporary cash investments . . . . . . . . . . 1,107.4 548.8
-------------- ----------
1,348.9 724.8
Premiums due and deferred . . . . . . . . . . . . 253.4 222.3
Investment income due and accrued . . . . . . . . 527.5 505.8
Other general account assets . . . . . . . . . . 1,156.6 948.6
Assets held in separate accounts . . . . . . . . 17,447.0 16,021.7
-------------- ----------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . $ 58,362.5 $55,445.7
============== ==========
OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY
RESERVES
OBLIGATIONS
Policy reserves . . . . . . . . . . . . . . . . $ 19,804.8 $19,206.6
Policyholders' and beneficiaries' funds . . . . 14,216.9 13,985.1
Dividends payable to policyholders . . . . . . 449.1 399.7
Policy benefits in process of payment . . . . . 111.4 115.5
Other policy obligations . . . . . . . . . . . 322.6 214.8
Asset valuation reserve--Note 1 . . . . . . . . 1,289.6 1,165.7
Federal income and other accrued taxes--Note 1 211.5 96.9
Other general account obligations . . . . . . . 1,109.3 1,084.5
Obligations related to separate accounts . . . 17,458.6 16,019.1
-------------- ----------
TOTAL OBLIGATIONS . . . . . . . . . . . . . . . . 54,973.8 52,287.9
POLICYHOLDERS' CONTINGENCY RESERVES
Surplus notes--Note 2 . . . . . . . . . . . . . 450.0 450.0
Special contingency reserve for group insurance 160.0 151.8
General contingency reserve . . . . . . . . . . 2,778.7 2,556.0
-------------- ----------
TOTAL POLICYHOLDERS' CONTINGENCY RESERVES . . . 3,388.7 3,157.8
-------------- ----------
TOTAL OBLIGATIONS AND POLICYHOLDERS'CONTINGENCY
RESERVES . . . . . . . . . . . . . . . . . . . . $ 58,362.5 $55,445.7
============== ==========

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

9
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

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

Year ended December 31
-----------------------
1998 1997
----------- -------------
(In millions)
INCOME
Premiums, annuity considerations and pension fund
contributions. . . . . . . . . . . . . . . . . $ 8,844.0 $ 7,371.6
Net investment income--Note 4 . . . . . . . . . 2,956.2 2,856.1
Other, net . . . . . . . . . . . . . . . . . . . 233.8 196.4
--------- ----------
12,034.0 10,424.1
BENEFITS AND EXPENSES
Payments to policyholders and beneficiaries:
Death benefits . . . . . . . . . . . . . . . 582.9 737.4
Accident and health benefits . . . . . . . . 76.9 121.4
Annuity benefits . . . . . . . . . . . . . . 1,612.4 1,668.2
Surrender benefits and annuity fund
withdrawals. . . . . . . . . . . . . . . . . 6,712.4 6,293.1
Matured endowments . . . . . . . . . . . . . 20.7 21.0
--------- ----------
9,005.3 8,841.1
Additions to reserves to provide for future
payments to policyholders and beneficiaries . 1,106.7 (122.6)
Expenses of providing service to policyholders
and obtaining new insurance:
Field sales compensation and expenses . . . . 290.7 278.3
Home office and general expenses . . . . . . 529.0 493.0
Payroll, state premium and miscellaneous taxes . 52.0 49.9
--------- ----------
10,983.7 9,539.7
--------- ----------
GAIN FROM OPERATIONS BEFORE DIVIDENDS TO
POLICYHOLDERS, FEDERAL INCOME TAXES AND
NET REALIZED CAPITAL GAINS (LOSSES) . . . 1,050.3 884.4
Dividends to policyholders . . . . . . . . . . . . 446.0 398.2
Federal income tax (credit) expense--Note 1 . . . (2.8) 18.9
--------- ----------
448.8 417.1
--------- ----------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL GAINS (LOSSES) . . . . . . . . . 607.1 467.3
Net realized capital gains (losses)--Note 5 . . . 0.7 (89.8)
--------- ----------
NET INCOME . . . . . . . . . . . . . . . . 607.8 377.5
Other increases (decreases) in policyholders'
contingency reserves:
Net unrealized capital (losses) gains and other
adjustments--Note 5 . . . . . . . . . . . . . (214.5) 58.6
Valuation reserve changes--Note 1 . . . . . . . 0.0 1.4
Prior years' federal income taxes . . . . . . . (25.5) (35.6)
Other reserves and adjustments, net . . . . . . (136.9) (100.2)
--------- ----------
NET INCREASE IN POLICYHOLDERS' CONTINGENCY
RESERVES. . . . . . . . . . . . . . . . . 230.9 301.7
Policyholders' contingency reserves at beginning of
year. . . . . . . . . . . . . . . . . . . . . . . 3,157.8 2,856.1
--------- ----------
POLICYHOLDERS' CONTINGENCY RESERVES AT END OF YEAR $ 3,388.7 $ 3,157.8
========= ==========

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

10
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

Year ended December 31
------------------------
1998 1997
------------ -------------
(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Insurance premiums, annuity considerations and
deposits. . . . . . . . . . . . . . . . . . . $ 8,945.5 $ 7,518.8
Net investment income . . . . . . . . . . . . . 2,952.8 2,988.7
Benefits to policyholders and beneficiaries . . (9,190.4) (9,030.3)
Dividends paid to policyholders . . . . . . . . (396.6) (394.0)
Insurance expenses and taxes . . . . . . . . . (874.4) (828.6)
Net transfers from separate accounts . . . . . 131.1 832.7
Other, net . . . . . . . . . . . . . . . . . . (181.7) (720.9)
----------- -----------
NET CASH PROVIDED FROM OPERATIONS . . . . . 1,386.3 366.4
----------- -----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Bond purchases . . . . . . . . . . . . . . . . (12,403.6) (18,003.6)
Bond sales . . . . . . . . . . . . . . . . . . 8,447.8 13,541.1
Bond maturities and scheduled redemptions . . . 2,537.7 2,927.6
Bond prepayments . . . . . . . . . . . . . . . 1,202.7 1,096.3
Stock purchases . . . . . . . . . . . . . . . . (623.2) (1,125.7)
Proceeds from stock sales . . . . . . . . . . . 378.4 921.7
Real estate purchases . . . . . . . . . . . . . (147.6) (243.0)
Real estate sales . . . . . . . . . . . . . . . 630.5 444.5
Other invested assets purchases . . . . . . . . (185.3) (171.1)
Proceeds from the sale of other invested assets 120.5 109.3
Mortgage loans issued . . . . . . . . . . . . . (1,978.5) (1,165.8)
Mortgage loan repayments . . . . . . . . . . . 1,575.6 1,176.9
Other, net . . . . . . . . . . . . . . . . . . (38.6) (333.8)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES . . . (483.6) (825.6)
----------- -----------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Net decrease in short-term note payable . . . . (75.0) (16.4)
Repayment of REMIC notes payable . . . . . . . (203.6) (216.3)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES . . . (278.6) (232.7)
----------- -----------
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH
INVESTMENTS. . . . . . . . . . . . . . . . . . . 624.1 (691.9)
Cash and temporary cash investments at beginning
of year . . . . . . . . . . . . . . . . . . . . 724.8 1,416.7
----------- -----------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR 1,348.9 $ 724.8
=========== ===========

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

11
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

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 business units: 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. 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.

On February 28, 1997, the Company sold a major portion of its group insurance
business to UNICARE Life & Health Insurance Company (UNICARE), a wholly-owned
subsidiary of WellPoint Health Networks Inc. The business sold includes the
Company's group accident and health business and related group life business and
Cost Care, Inc., Hancock Association Services Group and Tri-State, Inc., all
indirect wholly-owned subsidiaries of the Company. The Company retained its
group long-term care operations. Assets equal to liabilities of approximately
$562.4 million at February 28, 1997, subject to the completion of a closing
audit, were transferred to UNICARE in connection with the sale. The gain from
operations was not significant. The insurance business sold was transferred to
UNICARE through a 100% coinsurance agreement. The Company remains liable to its
policyholders to the extent that UNICARE does not meet its contractual
obligations under the coinsurance agreement.

The Company has secured a $397.0 million letter of credit facility with a group
of banks. The banks have agreed to issue a letter of credit to the Company
pursuant to which the Company may draw up to $397.0 million for any claims not
satisfied by UNICARE under the coinsurance agreement after the Company has
incurred the first $113.0 million of losses from such claims. The amount
available pursuant to the letter of credit agreement and any letter of credit
issued thereunder will be automatically reduced on a scheduled basis consistent
with the anticipated runoff of liabilities related to the business reinsured
under the coinsurance agreement. The letter of credit and any letter of credit
issued thereunder are scheduled to expire on March 1, 2002.

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, including banks, brokers/ dealers and
direct marketing efforts.

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.

12
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

The preparation of 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 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; (9) certain items, including modifications to required policy
reserves resulting from changes in actuarial assumptions are recorded directly
to policyholders' contingency reserves rather than being reflected in income;
and (10) 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: During March 1998, the NAIC adopted the
codification of statutory accounting practices, which is effective in 2001.
Codification 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. Codification will
require adoption by the various states before it becomes the prescribed
statutory basis of accounting for insurance companies domesticated within those
states. Accordingly, before codification becomes effective for the Company, the
Massachusetts Division of Insurance must adopt codification as the prescribed
basis of accounting on which domestic insurers must report their statutory-basis
results to the Division of Insurance. The impact of any such changes on the
Company's statutory surplus is not expected to 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.

13
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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 fair value. The discount or premium on bonds is amortized using the
interest method.

Investments in affiliates are included on the statutory equity method.

Loan-backed bonds and structured securities are valued at amortized cost using
the interest method including anticipated prepayments. Prepayment assumptions
are obtained from broker dealer surveys or internal estimates and are based on
the current interest rate and economic environment. The retrospective
adjustment method is used to value all such securities except for
interest-only securities, which are valued using the prospective method.

The net interest effect of interest rate and currency rate swap transactions
is recorded as an adjustment of interest income as incurred. The initial cost
of interest rate cap and floor agreements is amortized to net investment
income over the life of the related agreement. 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. Net premiums
related to equity collar positions are amortized into income on a
straight-line basis over the term of the collars. The collars are carried at
fair value, with changes in fair value reflected directly in policyholders'
contingency reserves.

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

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. During 1998, the Company made a
strategic decision to sell the majority of its commercial real estate
portfolio. Properties with a book value of $533.8 million were sold in 1998,
and an additional $1.1 billion of real estate is expected to be sold in 1999.
Net gains on the properties sold in 1998 amounted to $64.3 million. Those
properties to be sold subsequent to December 31, 1998 are carried at the lower
of depreciated cost at the date a determination to sell was made or fair
value. Accumulated depreciation amounted to $370.0 million and $470.5 million
at December 31, 1998 and 1997, respectively.

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

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 historically
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. During 1998, in connection with
the Company's plans to dispose of certain real estate holdings, additional
contributions were recorded that resulted in the AVR exceeding the prescribed
maximum reserve level by $111.3 million. The Company received permission from
the Massachusetts Division of Insurance to record its AVR in excess of the
prescribed maximum reserve level. Changes to the AVR are charged or credited
directly to policyholders' contingency reserves.

14
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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, 1998, the IMR, net of 1998 amortization of $34.9 million, amounted to $261.6
million which is included in other policy obligations. The corresponding 1997
amounts were $25.2 million and $165.6 million, respectively.

Property and Equipment: Data processing equipment, which amounted to $31.4
million in 1998 and $30.0 million in 1997 and is included in other general
account assets, is reported at depreciated cost, with depreciation recorded on a
straight-line basis. Non-admitted 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 $20.1 million in 1998 and $21.8 million
in 1997.

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 obligations are intended
to be satisfied from separate account assets and not from assets of the general
account. Separate accounts generally are reported at fair value. The operations
of the separate accounts are not included in the statement of operations;
however, income earned on amounts initially invested by the Company in the
formation of new separate accounts is included in other income.

Fair Value Disclosure 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 certain
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. See Note 14.

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
approximate their fair values.

15
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

Fair values for futures contracts are based on quoted market prices. Fair
values for interest rate swap, cap and floor agreements, swaptions, and
currency swap agreements and equity collar agreements are based on current
settlement values. The current settlement values are based on brokerage quotes
that utilize pricing models or formulas using current assumptions.

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, 1998. The fair
value for commitments to purchase other invested assets 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.

Capital Gains and Losses: Realized capital gains and losses are determined using
the specific identification method. 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.

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 generally
ranging from 2% to 8 3/4%.

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.

16
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

The statement value and fair value for investment-type insurance contracts are
as follows:

December 31, 1998 December 31, 1997
-------------------- --------------------
Statement Fair Statement Fair
Value Value Value Value
--------- --------- --------- -----------
(In millions)
Guaranteed investment contracts $12,666.9 $12,599.7 $11,499.4 $11,516.8
Fixed-rate deferred and immediate
annuities . . . . . . . . . . . 4,375.0 4,412.2 4,289.1 4,290.4
Supplementary contracts without
life contingencies . . . . . . 42.7 44.7 40.9 42.1
--------- --------- --------- ----------
$17,084.6 $17,056.6 $15,829.4 $15,849.3
========= ========= ========= ==========

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.

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 after completion
of the financial statements, a true-up adjustment (i.e., effect of the
difference between the estimated and final DER) is necessary.

Amounts for disputed tax issues relating to prior years are charged or credited
directly to policyholders' contingency reserves.

The Company made federal tax payments of $74.9 million in 1998 and $146.4
million in 1997.

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. Reserve modifications
resulting from such determinations are recorded directly to policyholders'
contingency reserves. During 1997, the Company refined certain actuarial
assumptions inherent in the calculation of reserves related to guaranteed
investment contracts and AIDS claims under individual insurance policies
resulting in a net $1.4 million increase in policyholders' contingency reserves
at December 31, 1997. No additional refinements were made during 1998.

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.

17
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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

Reclassification: Certain 1997 amounts have been reclassified to conform to the
1998 presentation.

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 1998 and 1997.

NOTE 3--BORROWED MONEY

At December 31, 1998, the Company had a $500 million syndicated line of credit.
There are 26 banks that 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 with certain other covenants. As of December 31, 1998,
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 guaranteed the timely payment of principal and interest on
the debt. The debt was issued in two notes of equal amounts. The interest rates
on the class A1 and A2 notes are calculated on a floating basis, based on the
monthly LIBOR rates plus 22 and 27 basis points, respectively. The LIBOR rates
were 5.06% and 5.72%, respectively, at December 31, 1998 and 1997. The class A1
notes were fully repaid on March 25, 1997 and the class A2 notes were fully
repaid on June 25, 1998. The outstanding balances of the notes totaled $42.6
million at December 31, 1997 and are included in other general account
obligations.

In 1996, the Company issued $292.0 million of additional 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 interest rates on the class A1 and A2 notes are calculated on a floating
basis, based on the monthly LIBOR rate plus 5 and 19 basis points, respectively.
The class A1 notes were fully repaid on December 26, 1997 and the class A2 notes
were fully repaid on December 28, 1998. The outstanding balances of the notes
totaled $161.0 million at December 31, 1997 and are included in other general
account obligations.

At December 31, 1997, the Company had a short-term note of $75.0 million payable
to an affiliate at a variable rate of interest. The note, which is included in
other general account obligations, was repaid on January 5, 1998.

Interest paid on borrowed money was $6.6 million and $21.2 million during 1998
and 1997, respectively.

18
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 4--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

1998 1997
------ --------
(In millions)
Investment expenses . . . . . . . . . . . . . . . . . . . . $317.5 $339.6
Interest expense . . . . . . . . . . . . . . . . . . . . . . 44.3 57.9
Depreciation on real estate and other invested assets . . . 41.6 76.6
Real estate and other investment taxes . . . . . . . . . . . 60.1 61.5
------ -------
$463.5 $535.6
====== =======

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

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

1998 1997
-------- ---------
(In millions)
Net gains from asset sales and foreclosures . . . . . . . $ 303.3 $ 63.4
Capital gains tax . . . . . . . . . . . . . . . . . . . . (171.7) (84.1)
Net capital gains transferred to the IMR . . . . . . . . (130.9) (69.1)
------- -------
Net Realized Capital Gains (Losses) . . . . . . . . . . $ 0.7 $(89.8)
======= =======

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

1998 1997
-------- ----------
(In millions)
Net (losses) gains from changes in security values and
book value adjustments . . . . . . . . . . . . . . . . $ (90.6) $ 159.5
Increase in asset valuation reserve . . . . . . . . . . (123.9) (100.9)
------- -------
Net Unrealized Capital (Losses) Gains and Other
Adjustments. . . . . . . . . . . . . . . . . . . . . $(214.5) $ 58.6
======= =======

19
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS

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

Gross Gross
Statement Unrealized Unrealized
December 31, 1998 Value Gains Losses Fair Value
----------------- --------- ---------- ---------- ------------
(In millions)
U.S. Treasury securities and
obligations of U.S.
government corporations and
agencies . . . . . . . . . . $ 123.3 $ 5.9 $ 0.0 $ 129.2
Obligations of states and
political subdivisions . . . 86.4 9.9 0.0 96.3
Debt securities issued by
foreign governments . . . . 264.5 29.4 8.2 285.7
Corporate securities . . . . 18,155.4 1,567.7 294.4 19,428.7
Mortgage-backed securities . 4,723.4 181.2 5.2 4,899.4
--------- ---------- ------ ----------
Total bonds . . . . . . . . $23,353.0 $1,794.1 $307.8 $24,839.3
========= ========== ====== ==========
December 31, 1997
U.S. Treasury securities and
obligations of U.S.
government corporations and
agencies . . . . . . . . . . $ 258.9 $ 9.3 $ 0.0 $ 268.2
Obligations of states and
political subdivisions . . . 149.6 16.3 0.0 165.9
Debt securities issued by
foreign governments . . . . 259.7 53.2 0.1 312.8
Corporate securities . . . . 17,336.1 1,485.9 113.4 18,708.6
Mortgage-backed securities . 4,981.7 115.9 28.3 5,069.3
--------- ---------- ------ ----------
Total bonds . . . . . . . . $22,986.0 $1,680.6 $141.8 $24,524.8
========= ========== ====== ==========

The statement value and fair value of bonds at December 31, 1998, 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 . . . . . . . . . . . . . . . . $ 1,569.1 $ 1,622.2
Due after one year through five years . . . . . . . . . 5,597.3 5,922.5
Due after five years through ten years . . . . . . . . 5,335.6 5,666.5
Due after ten years . . . . . . . . . . . . . . . . . . 6,127.6 6,728.7
--------- ----------
18,629.6 19,939.9
Mortgage-backed securities . . . . . . . . . . . . . . 4,723.4 4,899.4
--------- ----------
$23,353.0 $24,839.3
========= ==========

Gross gains of $126.4 million in 1998 and $61.5 million in 1997 and gross losses
of $62.3 million in 1998 and $86.6 million in 1997 were realized from the sale
of bonds.

At December 31, 1998, bonds with an admitted asset value of $18.9 million were
on deposit with state insurance departments to satisfy regulatory requirements.

20
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED

The cost of common stocks was $258.4 million and $148.0 million at December 31,
1998 and 1997, respectively. At December 31, 1998, gross unrealized appreciation
on common stocks totaled $64.9 million, and gross unrealized depreciation
totaled $54.0 million. The fair value of preferred stock totaled $832.4 million
at December 31, 1998 and $695.8 million at December 31, 1997.

The Company participates in a security lending program for the purpose of
enhancing income on securities held. At December 31, 1998 and 1997, $421.5
million and $217.0 million, respectively, of the Company's bonds and stocks were
on loan to various brokers/dealers, but were fully collateralized by cash and
U.S. government securities in an account held in trust for the Company. Such
assets reflect the extent of the Company's involvement in securities lending,
not the Company's risk of loss.

Mortgage loans with outstanding principal balances of $56.4 million, bonds with
amortized cost of $105.1 million and real estate with depreciated cost of $14.6
million were non-income producing for the twelve months ended December 31, 1998.

Restructured commercial mortgage loans aggregated $230.5 million and $314.3
million as of December 31, 1998 and 1997, 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
------------------------------
1998 1997
----------------------- -------
(In millions)
Expected . . . . . . . . . . . . . . . . . $ 22.5 $33.8
Actual . . . . . . . . . . . . . . . . . . 11.6 24.9

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.

At December 31, 1998, 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.

Statement Geographic Statement
Property Type Value Concentration Value
-------------- ------------- ------------- ---------------
(In millions) (In millions)
Apartments . . . . . $1,722.7 East North Central . . $1,164.3
Hotels . . . . . . . 283.2 East South Central . . 137.1
Industrial . . . . . 894.9 Middle Atlantic . . . 1,408.5
Office buildings . . 2,094.0 Mountain . . . . . . . 345.0
Retail . . . . . . . 1,589.6 New England . . . . . 791.1
1-4 Family . . . . . 6.4 Pacific . . . . . . . 1,848.7
Agricultural . . . . 1,298.3 South Atlantic . . . . 1,531.3
Other . . . . . . . . 334.6 West North Central . . 287.5
West South Central . . 602.2
Other . . . . . . . . 108.0
------------- -------------
$8,223.7 $8,223.7
============= =============

21
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED

At December 31, 1998, the fair values of the commercial and agricultural
mortgage loan portfolios were $7.3 billion and $1.3 billion, respectively. The
corresponding amounts as of December 31, 1997 were approximately $6.7 billion
and $1.5 billion, respectively.

The maximum and minimum lending rates for mortgage loans during 1998 were 9.68%
and 6.82% for agricultural loans, 9.25% and 6.73% for other properties, and 7.5%
and 6.65% for purchase money mortgages. Generally, the percentage of any loan to
the value of security at the time of the loan, exclusive of insured, 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 1998 were
$784.0 million, $310.0 million, and $7.7 million, respectively. The
corresponding amounts in 1997 were $787.1 million, $386.6 million, and $7.5
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 reinsurers in 1998 were $873.9 million,
$772.5 million and $712.2 million, respectively. The corresponding amounts in
1997 were $801.8 million, $767.9 million and $594.9 million, respectively.

Premiums, benefits, and reserves ceded related to the group accident and health
and related group life business sold in 1997, included in the amounts above,
were $458.2 million, $481.2 million, and $238.6 million, respectively, at
December 31, 1998. The corresponding amounts in 1997 were $487.4 million, $503.3
million, and $247.9 million, respectively.

Amounts recoverable on paid claims and funds withheld from reinsurers were as
follows:

December 31
--------------
1998 1997
------ --------
(In millions)
Reinsurance recoverables . . . . . . . . . . . . . . $18.6 $12.5
Funds withheld from reinsurers . . . . . . . . . . . 49.5 35.1

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 $251.1 million at December 31, 1998 and $236.3
million at December 31, 1997.

John Hancock Variable Life Insurance Company (Variable Life, a wholly-owned
affiliate) has a modified coinsurance agreement with the Company to reinsure 50%
of Variable Life's 1994 through 1998 issues of flexible premium variable life
insurance and scheduled premium variable life insurance policies. In connection
with this agreement, the Company transferred $4.9 million and $22.0 million of
cash for tax, commission, and expense allowances to Variable Life, which
decreased the Company's net gain from operations by $22.2 million and $10.1
million in 1998 and 1997, respectively.

22
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 7--REINSURANCE--CONTINUED

Variable Life also has a modified coinsurance agreement with the Company to
reinsure 50% of Variable Life's 1995 through 1998 issues of certain retail
annuity contracts (Independence Preferred and Declaration). In connection with
this agreement, the Company made a net cash payment of $12.7 million in 1998 and
received a net cash payment of $1.1 million in 1997 of cash for surrender
benefits, tax, reserve increase, commission, expense allowances and premium.
This agreement decreased the Company's net gain from operations by $8.4 million
and $9.8 million in 1998 and 1997, respectively.

Effective January 1, 1997, Variable Life entered into a stop-loss agreement with
the Company to reinsure mortality claims in excess of 110% of expected mortality
claims in 1998 and 1997 for all policies that are not reinsured under any other
indemnity agreement. In connection with the agreement, the Company received $1.0
million and transferred $2.4 million of cash for mortality claims to Variable
Life, which increased by $0.5 million and decreased by $1.3 million the
Company's net gain from operations in 1998 and 1997, respectively.

Reinsurance ceded contracts do not relieve the Company from its obligations to
policyholders. The Company remains liable to its policyholders for the portion
reinsured to the extent that any reinsurer does not meet its obligations for
reinsurance ceded to it under the reinsurance agreements. Failure of the
reinsurers to honor their obligations could result in losses to the Company;
consequently, estimates are established for amounts deemed or estimated to be
uncollectible. To minimize its exposure to significant losses from reinsurance
insolvencies, the Company evaluates the financial condition of its reinsurers
and monitors concentration of credit risk arising from similar characteristics
of the insurer.

Neither the Company, nor any of its related parties, control, either directly or
indirectly, any external reinsurers with which the Company conducts business. 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, 1998 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.

NOTE 8--BENEFITS PLANS AND OTHER POST RETIREMENT 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 benefit pension plans paid to employees and retirees covered
by annuity contracts issued by the Company amounted to $92.6 million in 1998 and
$89.7 million in 1997.

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.

23
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFITS PLANS AND OTHER POST RETIREMENT BENEFIT PLANS--CONTINUED

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 $10,000 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 $10,000. The Company
matches the first 3% of pretax contributions for marketing representatives and
the first 2% of pre-tax 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 expense for defined contribution plans was $8.1 million and $6.2 million in
1998 and 1997, respectively.

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.

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 has 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 approximately zero. As of December 31, 1998, 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 Company provides additional compensation to employees based on achievement
of annual and long-term corporate financial objectives.

24
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFITS PLANS AND OTHER POST RETIREMENT BENEFIT PLANS--CONTINUED

The changes in benefit obligation and plan assets are summarized as follows:

Year ended December 31
-------------------------------------------
Pension Benefits Other Benefits
----------------------- -----------------
1998 1997 1998 1997
----------- ----------- -------- --------
(In millions)
Change in benefit
obligation:
Benefit obligation at
beginning of year . . . . $1,704.0 $1,582.3 $ 381.0 $ 400.5
Service cost . . . . . . . 32.8 30.7 6.8 8.5
Interest cost . . . . . . . 115.5 109.3 24.4 25.5
Actuarial loss/(gain) . . . 55.5 77.5 (16.8) (22.2)
Benefits paid . . . . . . . (99.4) (95.8) (28.5) (31.3)
-------- -------- ------- -------
Benefit obligation at end
of year . . . . . . . . . 1,808.4 1,704.0 366.9 381.0
-------- -------- ------- -------

Change in plan assets:
Fair value of plan assets .
at beginning of year . . . 1,995.5 1,787.6 172.7 132.4
Actual return of plan
assets . . . . . . . . . . 296.1 295.5 39.9 31.0
Employer contribution . . . 10.0 8.2 2.6 9.3
Benefits paid . . . . . . . (99.4) (95.8) 0.0 0.0
-------- -------- ------- -------
Fair value of plan assets
at end of year . . . . . . 2,202.2 1,995.5 215.2 172.7
-------- -------- ------- -------

Funded status . . . . . . . 393.8 291.5 (151.7) (208.3)
Unrecognized actuarial
loss . . . . . . . . . . . (292.0) (219.6) (163.0) (127.1)
Unrecognized prior service
cost . . . . . . . . . . . 23.1 29.6 17.8 19.7
Unrecognized net
transition (asset)
obligation . . . . . . . . (23.9) (35.5) 294.3 315.2
-------- -------- ------- -------
Net amount recognized . . . $ 101.0 $ 66.0 $ (2.6) $ (0.5)
======== ======== ======= =======

The assumptions used in accounting for the benefit plans were as follows:

Year ended December 31
----------------------------------------
Pension Benefits Other Benefits
----------------------- ---------------
1998 1997 1998 1997
----------- ----------- ------- -------
Discount rate . . . . . . . 6.75% 7.00% 6.75% 7.00%
Expected return on plan
assets . . . . . . . . . . 8.50% 8.50% 8.50% 8.50%
Rate of compensation
increase . . . . . . . . . 4.56% 4.77% 4.00% 4.00%

For measurement purposes, a 5.75 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1999. The rate was
assumed to decrease gradually to 5.00 percent in 2001 and remain at that level
thereafter.

25
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFITS PLANS AND OTHER POST RETIREMENT BENEFIT PLANS--CONTINUED

Net periodic benefit (credit) cost includes the following components:

Year Ended December 31
-----------------------------------------
Pension Benefits Other Benefits
------------------------ ---------------
1998 1997 1998 1997
----------- ----------- ------- ---------
(in millions)
Service cost. . . . . . . . . . . $ 32.7 $ 30.7 $ 6.8 $ 8.5
Interest cost . . . . . . . . . . 115.5 109.3 24.4 25.5
Expected return on plan assets. . (165.5) (147.9) (39.9) (31.0)
Amortization of transition
(asset) obligation . . . . . . . (11.6) (11.7) 20.9 20.9
Amortization of prior service
cost . . . . . . . . . . . . . . 6.5 6.6 1.9 1.9
Recognized actuarial (gain) loss. (2.6) (1.0) 19.0 15.0
-------- -------- ------ -------
Net periodic benefit (credit)
cost. . . . . . . . . . . . . $ (25.0) $ (14.0) $ 33.1 $ 40.8
======== ======== ====== =======

Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. A one-percentage point change in assumed
health care cost trend rates would have the following effects:

1-Percentage Point 1-Percentage Point
Increase Decrease
------------------ ------------------
(In millions)
Effect on total of service and
interest costs . . . . . . . . . $ 2.9 $ (2.5)
Effect on postretirement benefit
obligations. . . . . . . . . . . 28.7 (25.9)

NOTE 9--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 majority-owned affiliates amounted to $13.8
billion at December 31, 1998 and $12.4 billion at December 31, 1997; total
liabilities amounted to $12.5 billion at December 31, 1998 and $11.1 billion at
December 31, 1997; and total net income was $148.5 million in 1998 and $184.8
million in 1997.

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 (See Note 7). 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 13).

The Company received dividends of $62.2 million and $65.9 million in 1998 and
1997, respectively, from unconsolidated affiliates.

26
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 10--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The notional amounts, carrying values and estimated fair values of the Company's
derivative instruments are as follows at December 31:

<TABLE>
<CAPTION>
Number of Contracts/ Assets (Liabilities)
Notional Amounts 1998 1997
---------------------- ---------------------- -----------------
Carrying Fair Carrying Fair
1998 1997 Value Value Value Value
---------- ---------- ---------- ---------- -------- -------
($ In millions)
<S> <C> <C> <C> <C> <C> <C>
Futures contracts to
sell securities . . . $ 11,286 $ 3,733 $(3.1) $ (3.1) $ (2.5) $ (2.5)
Futures contracts to
acquire securities . . 1,464 1,359 (0.3) (0.3) 1.2 1.2
Interest rate swap
agreements . . . . . . 7,684.0 7,254.7 -- (159.1) -- (58.3)
Interest rate cap
agreements . . . . . . 115.0 115.0 0.4 0.4 0.6 0.6
Interest rate floor
agreements . . . . . . 125.0 125.0 0.7 0.7 0.4 0.4
Interest rate swaption
agreements . . . . . . 0.0 34.2 -- 0.0 -- 0.0
Currency rate swap
agreements . . . . . . 2,881.5 221.5 -- 16.2 -- (9.7)
Equity collar
agreements . . . . . . -- -- 28.6 28.6 (14.1) (14.1)

</TABLE>

Financial futures contracts are used principally 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 contracts 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. The futures contracts expire in 1999.

The Company uses futures contracts, interest rate swap, cap and floor
agreements, swaptions, and currency rate swap agreements for other than trading
purposes to hedge and manage its exposure to changes in interest rate levels,
foreign exchange rate fluctuations and to manage duration mismatch of assets and
liabilities.

The Company invests in common stock that is subject to fluctuations from market
value changes in stock prices. The Company sometimes seeks to reduce its market
exposure to such holdings by entering into equity collar agreements. A collar
consists of a call that limits the Company's potential for gain from
appreciation in the stock price as well as a put that limits the Company's loss
potential from a decline in the stock price.

The interest rate swap agreements expire in 1999 to 2028. The interest rate cap
and floor agreements expire in 2000 to 2007. Interest rate swaption agreements
expire in 2025. The currency rate swap agreements expire in 1999 to 2018. The
equity collar agreements expire in 2003.

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform to the terms of the contract. The Company continually
monitors its position and the credit ratings of the counterparties to these
derivative instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency swap agreements, the Company enters
into master netting agreements with its counterparties. The Company believes the
risk of incurring losses due to nonperformance by its counterparties is remote
and that such losses, if any, would be immaterial. Futures contracts trade on
organized exchanges and, therefore, have minimal credit risk.

27
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 11--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 $26.2 million in 1998 and $27.4 million in 1997.
Future minimum rental commitments under noncancellable operating leases for
office space and furniture and equipment are as follows:

December 31, 1998
-------------------
(In millions)
1999. . . . . . . . . . . . . . . . . . . . . . . . . . . $19.0
2000. . . . . . . . . . . . . . . . . . . . . . . . . . . 16.5
2001. . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5
2002. . . . . . . . . . . . . . . . . . . . . . . . . . . 10.0
2003. . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9
Thereafter. . . . . . . . . . . . . . . . . . . . . . . . 7.5
-----
Total minimum payments . . . . . . . . . . . . . . . . . $72.4
=====

NOTE 12--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND
OBLIGATIONS RELATED TO SEPARATE ACCOUNTS

The Company's annuity reserves and deposit fund liabilities and related separate
account 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:

December 31, 1998 Percent
----------------- ---------
(In millions)
Subject to discretionary withdrawal (with
adjustment):
With market value adjustment . . . . . . . . $ 792.0 2.0%
At book value less surrender charge . . . . . 2,773.8 7.1
--------- -----
Total with adjustment . . . . . . . . . . 3,565.8 9.1
Subject to discretionary withdrawal (without
adjustment) at book value . . . . . . . . . 3,782.8 9.8
Subject to discretionary withdrawal--separate
accounts . . . . . . . . . . . . . . . . . . 14,809.7 38.1
Not subject to discretionary withdrawal:
General account . . . . . . . . . . . . . . . 15,375.2 39.6
Separate accounts . . . . . . . . . . . . . . 1,301.5 3.4
--------- -----
Total annuity reserves, deposit fund liabilities
and separate accounts--before reinsurance . . . 38,835.0 100.0%
=====
Less reinsurance ceded . . . . . . . . . . . . . (0.1)
---------
Net annuity reserves, deposit fund liabilities
and separate accounts . . . . . . . . . . . . . $38,834.9
=========

Any liquidation costs associated with the $14.8 billion of separate accounts
subject to discretionary withdrawal are sustained by the separate account
contractholders and not by the general account.

28
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 13--COMMITMENTS AND CONTINGENCIES

The Company has extended commitments to purchase long-term bonds, preferred and
common stocks, and other invested assets and issue real estate mortgages
totaling $329.1 million, $72.0 million, $214.1 million and $471.4 million,
respectively, at December 31, 1998. 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 estimated fair value of the
commitments described above is $1.1 billion at December 31, 1998. The majority
of these commitments expire in 1999.

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, 1998, the aggregate
outstanding principal balance of all the remaining pools of loans from 1991,
1993, and 1996 was $602.8 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
1998 and 1997 amounted to $4.6 million and $4.1 million, respectively.

During 1996, the Company entered into a 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 an
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 multi-family loan portfolio. At December 31, 1998, the
aggregate outstanding principal balance of the pools of loans was $445.8
million. There were no mortgage loans buy-backs in 1998 and 1997.

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

The Company has a support agreement with John Hancock Capital Corporation
(JHCC), a non-consolidated wholly-owned subsidiary, 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, 1998 were $411.7 million for short-term borrowings
and $173.4 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.

In the normal course of its business operations, the Company is involved with
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 1998. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.

29
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 13--COMMITMENTS AND CONTINGENCIES--CONTINUED

During 1997, the Company entered into a court approved settlement relating to a
class action lawsuit involving certain individual life insurance policies sold
from 1979 through 1996. In entering into the settlement, the Company
specifically denied any wrongdoing. The Company has established a litigation
reserve in connection with the settlement to provide for relief to class members
and for legal and administrative costs associated with the settlement. The
reserve has been charged, net of the related tax effect, directly to
policyholders' contingency reserves of the Company. Given the uncertainties
associated with estimating the reserve, it is possible that the final cost of
the settlement could be different from the amounts presently provided for by the
Company. However, the Company does not believe that the ultimate resolution of
the settlement will have a material adverse effect on the Company's financial
position.

NOTE 14--FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and fair values of the
Company's financial instruments:

December 31
---------------------------------------------
1998 1997
--------------------- ---------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
---------- ---------- ---------- ----------
(In millions)
Assets
Bonds--Note 6. . . . . $23,353.0 $24,839.3 $22,986.0 $24,524.8
Preferred
stocks--Note 6. . . . 844.7 832.4 640.6 695.8
Common stocks--Note 6. 269.3 269.3 256.9 256.9
Mortgage loans on
real estate--Note 6 . 8,223.7 8,619.7 7,851.2 8,215.9
Policy loans--Note 1 . 1,573.8 1,573.8 1,577.3 1,577.3
Cash and cash
equivalents--Note 1 . 1,348.9 1,348.9 724.8 724.8
Liabilities
Guaranteed investment
contracts--Note 1 . . 12,666.9 12,599.7 11,499.4 11,516.8
Fixed rate deferred
and immediate
annuities--Note 1 . . 4,375.0 4,412.2 4,289.1 4,290.4
Supplementary
contracts without
life contingencies--
Note 1. . . . . . . . 42.7 44.7 40.9 42.1
Derivatives assets
(liabilities) relating
to:--Note 10
Futures contracts . . . . (3.4) (3.4) (1.3) (1.3)
Interest rate swaps . . . -- (159.1) -- (58.3)
Currency rate swaps . . . -- 16.2 -- (9.7)
Interest rate caps . . . 0.4 0.4 0.6 0.6
Interest rate floors . . 0.7 0.7 0.4 0.4
Equity collar agreements 28.6 28.6 (14.1) (14.1)
Commitments--Note 13. . . -- 1,114.2 -- 1,332.3

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.

NOTE 15--IMPACT OF YEAR 2000 (UNAUDITED)

The Company is executing its plan to address the impact of the Year 2000 issues
that result from computer programs being written using two digits to reflect the
year rather than four to define the applicable year and century. Historically,
the first two digits were hardcoded to save memory.

30
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 15--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

Many of the Company's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in an information technology (IT) system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities. In addition, non-IT systems including, but not limited to,
security alarms, elevators and telephones are subject to malfunction due to
their dependence on embedded technology such as microcontrollers for proper
operation. As described, the Year 2000 project presents a number of challenges
for financial institutions since the correction of Year 2000 issues in IT and
non-IT systems will be complex and costly for the entire industry.

The Company began to address the Year 2000 project as early as 1994. The
Company's plan to address the Year 2000 Project includes an awareness campaign,
an assessment period, a renovation stage, validation work and an implementation
of Company solutions.

The continuous awareness campaign serves several purposes: defining the problem,
gaining executive level support and sponsorship, establishing a team and overall
strategy, and assessing existing information system management resources.
Additionally, the awareness campaign establishes an education process to ensure
that all employees are aware of the Year 2000 issue and knowledgeable of their
role in securing solutions.

The assessment phase, which was completed for both IT and non-IT systems as of
April 1998, included the identification, inventory, analysis, and prioritization
of IT and non-IT systems and processes to determine their conversion or
replacement.

The renovation stage reflects the conversion, validation, replacement, or
elimination of selected platforms, applications, databases and utilities,
including the modification of applicable interfaces. Additionally, the
renovation stage includes performance, functionality, and regression testing and
implementation. As of December 31, 1998, the renovation phase was substantially
complete for computer applications, systems and desktops. For all remaining
components, the renovation phase is underway and will be complete before the end
of the second quarter of 1999.

The validation phase consists of the compliance testing of renovated systems.
The validation phase is expected to be complete by mid 1999, after renovation is
accomplished. Testing facilities will be used through the remainder of 1999 to
perform special functional testing. Special functional testing includes testing,
as required, with material third parties and industry groups and performing
reviews of "dry runs" of year-end activities. Scheduled testing of material
relationships with third parties is underway. It is anticipated that testing
with material business partners will continue through much of 1999.

Finally, the implementation phase involves the actual implementation of
converted or replaced platforms, applications, databases, utilities, interfaces,
and contingency planning. Implementation is being performed concurrently during
the renovation phase and is expected to be completed before the end of the
second quarter of 1999.

31
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 15--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

The costs of the Year 2000 project consist of internal IT personnel and external
costs such as consultants, programmers, replacement software, and hardware. The
costs of the Year 2000 project are expensed as incurred. The project is funded
partially through a reallocation of resources from discretionary projects.
Through December 31, 1998, The Company has incurred and expensed approximately
$9.8 million in related payroll costs for its internal IT personnel on the
project. The estimated range of remaining internal IT personnel costs of the
project is approximately $8 to $9 million. Through December 31, 1998, the
Company has incurred and expensed approximately $36.4 million in external costs
for the project. The estimated range of remaining external costs of the project
is approximately $35 to $36 million. The total costs of the Year 2000 project to
the Company, based on management's best estimates, include approximately $18
million in internal IT personnel, $7.4 million in the external modification of
software, $34.2 million for external solution providers, $19.4 million in
replacement costs of non-compliant IT systems and $12.6 million in oversight,
test facilities and other expenses. Accordingly, the estimated range of total
costs of the Year 2000 project internal and external, is approximately $90 to
$95 million. However, there can be no guarantee that these estimates will be
achieved and actual results could materially differ from those plans. Specific
factors that might cause such material differences include, but are not limited
to, the availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes, and similar uncertainties.

The Company's total Year 2000 project costs include the estimated impact of
external solution providers and are based on presently available information.
However, there is no guarantee that the systems of other companies that the
Company's systems rely on will be timely converted, or that a failure to convert
by another company, or a conversion that is incompatible with the Company's
systems, would not have material adverse effect on the Company. It is documented
in trade publications that companies in foreign countries are not acting as
intensively as domestic companies to remediate Year 2000 issues. Accordingly, it
is expected that Company facilities based outside the United States face higher
degrees of risks from data exchanges with material business partners. In
addition, the Company has thousands of individual and business customers that
hold insurance policies, annuities and other financial products of the company.
Nearly all products sold by the Company contain date sensitive data, examples of
which are policy expiration dates, birth dates and premium payment dates.
Finally, the regulated nature of the Company's industry exposes it to potential
supervisory or enforcement actions relating to Year 2000 issues.

The Company's contingency planning initiative related to the Year 2000 project
is underway. The plan is addressing the Company's readiness as well as that of
material business partners on whom the Company depends. The Company's
contingency plans are being designed to keep each subsidiary's operations
functioning in the event of a failure or delay due to the Year 2000 record
format and date calculation changes. Contingency plans are being constructed
based on the foundation of extensive business resumption plans that the Company
has maintained and updated periodically, which outline responses to situations
that may affect critical business functions. These plans also provide emergency
operations guidance, which defines a documented order of actions to respond to
problems. These extensive business resumption plans are being enhanced to cover
Year 2000 situations.

32
<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Contractowners John Hancock Variable Annuity Account H of John Hancock Mutual
Life Insurance Company

We have audited the accompanying statement of assets and liabilities of John
Hancock Variable Annuity Account H (the Account) (comprising, respectively, the
V.A. Special Opportunities, V.A. Sovereign Bond, V.A. Independence Equity, V.A.
Growth, V.A. Growth and Income, V.A. Financial Industries, V.A. World Bond, V.A.
High Yield Bond, V.A. International, V.A. Regional Bank, V.A. Emerging Growth,
V.A. Money Market, V.A. Strategic Income, V.A. Sovereign Investors and V.A. 500
Index Subaccounts) as of December 31, 1998, the related statement of operations
for the year then ended and the statements of changes in net assets for each of
the periods indicated therein. These financial statements are the
responsibility of the Account's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Variable Annuity Account H at December 31,
1998, the results of their operations for the year then ended and the changes in
their net assets for each of the periods indicated, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Boston, Massachusetts February 10, 1999

33
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1998

<TABLE>
<CAPTION>
V.A. V.A. V.A. V.A.
SPECIAL SOVEREIGN INDEPENDENCE V.A. GROWTH AND
OPPORTUNITIES BOND EQUITY GROWTH INCOME
SUBACCOUNT** SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT***
------------- ---------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares
of portfolios of
Declaration Trust, at
value. . . . . . . . $ 615,082 $4,505,545 $12,966,751 $ 4,597,395 $ 8,689,119
Receivable from
Declaration Trust . 32 147 1,073 2,439 280
------------- ---------- ----------- ----------- -----------
Total assets . . . . 615,114 4,505,692 12,967,824 4,599,834 8,689,399
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company . -- -- 652 2,290 --
Asset charges payable 32 147 421 149 280
------------- ---------- ----------- ----------- -----------
Total liabilities . . 32 147 1,073 2,439 280
------------- ---------- ----------- ----------- -----------
Net assets . . . . . $ 615,082 $4,505,545 $12,966,751 $ 4,597,395 $ 8,689,119
============= ========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
V.A. V.A. V.A.
FINANCIAL V.A. HIGH YIELD V.A. REGIONAL
INDUSTRIES WORLD BOND BOND INTERNATIONAL BANK
SUBACCOUNT SUBACCOUNT SUBACCOUNT*** SUBACCOUNT SUBACCOUNT**
----------- ---------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares
of portfolios of
Declaration Trust, at
value. . . . . . . . $26,197,897 $212,490 $3,661,411 $2,225,156 $9,342,948
Receivable from
Declaration Trust . 852 7 124 74 584
----------- -------- ---------- ---------- ----------
Total assets . . . . 26,198,749 212,497 3,661,535 2,225,230 9,343,532
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company . -- -- -- -- 271
Asset charges payable 852 7 124 74 313
----------- -------- ---------- ---------- ----------
Total liabilities . . 852 7 124 74 584
----------- -------- ---------- ---------- ----------
Net assets . . . . . $26,197,897 $212,490 $3,661,411 $2,225,156 $9,342,948
=========== ======== ========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
V.A. V.A. V.A. V.A. V.A.
EMERGING MONEY STRATEGIC SOVEREIGN 500
GROWTH MARKET INCOME INVESTORS INDEX
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares
of portfolios of
Declaration Trust, at
value. . . . . . . . $3,338,586 $7,706,736 $5,396,737 $13,380,908 $11,801,810
Receivable from
Declaration Trust . 108 100,065 180 437 1,447
---------- ---------- ---------- ----------- -----------
Total assets . . . . 3,338,694 7,806,801 5,396,917 13,381,345 11,803,257
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company . -- 99,821 -- -- 1,061
Asset charges payable 108 244 180 437 386
---------- ---------- ---------- ----------- -----------
Total liabilities . . 108 100,065 180 437 1,447
---------- ---------- ---------- ----------- -----------
Net assets . . . . . $3,338,586 $7,706,736 $5,396,737 $13,380,908 $11,801,810
========== ========== ========== =========== ===========
</TABLE>

** From January 5, 1998 (commencement of investment operations).
*** From May 1, 1998 (commencement of investment operations).

See accompanying notes.

34
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
V.A. V.A. V.A. V.A.
SPECIAL SOVEREIGN INDEPENDENCE V.A. GROWTH AND
OPPORTUNITIES BOND EQUITY GROWTH INCOME
SUBACCOUNT** SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT***
------------- ---------- ------------ ------------- ---------------
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from
portfolios of
Declaration Trust . $ 263 $243,784 $ 230,159 $ -- $ 37,659
Expenses:
Mortality and expense
risks . . . . . . . 2,516 34,382 84,452 27,067 41,767
-------- -------- ---------- ------------ ------------
Net investment income
(loss) . . . . . . . (2,253) 209,402 145,707 (27,067) (4,108)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . (6,497) 29,556 72,335 59,808 12,915
Net unrealized
appreciation
(depreciation)
during the period . 56,844 4,388 1,550,627 629,195 954,534
-------- -------- ---------- ------------ ------------
Net realized and
unrealized gain
(loss) on investments 50,347 33,944 1,622,962 689,003 967,449
-------- -------- ---------- ------------ ------------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ 48,094 $243,346 $1,768,669 $ 661,936 $ 963,341
======== ======== ========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
V.A. V.A. V.A.
FINANCIAL V.A. HIGH YIELD V.A. REGIONAL
INDUSTRIES WORLD BOND BOND INTERNATIONAL BANK
SUBACCOUNT SUBACCOUNT SUBACCOUNT*** SUBACCOUNT SUBACCOUNT***
---------- ---------- ------------- ------------- ---------------
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from
portfolios of
Declaration Trust . $257,134 $ 9,788 $ 200,763 $ 14,060 $ 64,890
Expenses:
Mortality and expense
risks . . . . . . . 237,626 2,277 24,178 14,939 54,378
-------- ------- --------- -------- ---------
Net investment income
(loss) . . . . . . . 19,508 7,511 176,585 (879) 10,512
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 337,276 (1,356) (70,619) (38,507) (370,654)
Net unrealized
appreciation
(depreciation)
during the period . 21,347 4,032 (466,080) 203,266 (105,324)
-------- ------- --------- -------- ---------
Net realized and
unrealized gain
(loss) on investments 358,623 2,676 (536,699) 164,759 (475,978)
-------- ------- --------- -------- ---------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $378,131 $10,187 $(360,114) $163,880 $(465,466)
======== ======= ========= ======== =========
</TABLE>
<TABLE>
<CAPTION>
V.A. V.A. V.A. V.A. V.A.
EMERGING MONEY STRATEGIC SOVEREIGN 500
GROWTH MARKET INCOME INVESTORS INDEX
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ------------
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from
portfolios of
Declaration Trust . $ -- $268,075 $ 295,873 $ 166,739 $ 605,896
Expenses:
Mortality and expense
risks . . . . . . . 24,554 64,190 42,201 99,300 80,065
-------- -------- --------- ---------- ----------
Net investment income
(loss) . . . . . . . (24,554) 203,885 253,672 67,439 525,831
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 23,566 -- (16,316) 70,799 156,071
Net unrealized
appreciation
(depreciation)
during the period . 393,076 -- (129,004) 1,118,064 1,001,035
-------- -------- --------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments 416,642 -- (145,320) 1,188,863 1,157,106
-------- -------- --------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $392,088 $203,885 $ 108,352 $1,256,302 $1,682,937
======== ======== ========= ========== ==========
</TABLE>

* From April 14, 1997 (commencement of investment operations).
** From January 5, 1998 (commencement of investment operations).
*** From May 1, 1998 (commencement of investment operations).

See accompanying notes.

35
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

STATEMENTS OF CHANGES IN NET ASSETS

YEAR AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
V.A. V.A. V.A.
SPECIAL SOVEREIGN INDEPENDENCE V.A.
OPPORTUNITIES BOND EQUITY GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ------------------------ ------------------------ ---------------------
1998** 1998 1997* 1998 1997* 1998 1997*
------------- ------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
from operations:
Net investment income (loss) . . . $ (2,253) $ 209,402 $ 22,477 $ 145,707 $ 42,765 $ (27,067) $ (3,928)
Net realized gains (losses) . . . (6,497) 29,556 1,664 72,335 30,355 59,808 12,965
Net unrealized appreciation
(depreciation) during the period 56,844 4,388 3,735 1,550,627 68,631 629,195 32,217
-------- ----------- ---------- ----------- ---------- ---------- --------
Net increase (decrease) in net
assets resulting from operations . 48,094 243,346 27,876 1,768,669 141,751 661,936 41,254
From contractowner transactions:
Net premiums from contractowners . 589,145 3,908,345 1,395,748 8,687,135 2,988,907 3,229,683 822,891
Net benefits to contractowners . . (22,157) (1,069,195) (575) (559,525) (60,186) (152,542) (5,827)
-------- ----------- ---------- ----------- ---------- ---------- --------
Net increase in net assets resulting
from contractowner transactions . 566,988 2,839,150 1,395,173 8,127,610 2,928,721 3,077,141 817,064
-------- ----------- ---------- ----------- ---------- ---------- --------
Net increase in net assets . . . . 615,082 3,082,496 1,423,049 9,896,279 3,070,472 3,739,077 858,318
Net assets at beginning of period . 0 1,423,049 0 3,070,472 0 858,318 0
-------- ----------- ---------- ----------- ---------- ---------- --------
Net assets at end of period . . . . $615,082 $ 4,505,545 $1,423,049 $12,966,751 $3,070,472 $4,597,395 $858,318
======== =========== ========== =========== ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
V.A. V.A. V.A. V.A.
GROWTH FINANCIAL WORLD HIGH YIELD
AND INCOME INDUSTRIES BOND BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ------------------------ ------------------- -------------
1998*** 1998 1997* 1998 1997* 1998***
----------- ------------ ----------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss). . . . . . . $ (4,108) $ 19,508 $ 12,508 $ 7,511 $ 3,152 $ 176,585
Net realized gains
(losses). . . . . . 12,915 337,276 52,481 (1,356) 27 (70,619)
Net unrealized
appreciation
(depreciation)
during
the period . . . . 954,534 21,347 550,449 4,032 (2,037) (466,080)
---------- ----------- ---------- -------- -------- ----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . 963,341 378,131 615,438 10,187 1,142 (360,114)
From contractowner
transactions:
Net premiums from
contractowners. . . 8,400,284 23,261,882 8,451,337 117,976 155,911 4,353,911
Net benefits to
contractowners. . . (674,506) (6,410,563) (98,328) (72,554) (172) (332,386)
---------- ----------- ---------- -------- -------- ----------
Net increase in net
assets resulting from
contractowner
transactions . . . . 7,725,778 16,851,319 8,353,009 45,422 155,739 4,021,525
---------- ----------- ---------- -------- -------- ----------
Net increase in net
assets . . . . . . . 8,689,119 17,229,450 8,968,447 55,609 156,881 3,661,411
Net assets at
beginning of period 0 8,968,447 0 156,881 0 0
---------- ----------- ---------- -------- -------- ----------
Net assets at end of
period . . . . . . . $8,689,119 $26,197,897 $8,968,447 $212,490 $156,881 $3,661,411
========== =========== ========== ======== ======== ==========
</TABLE>

* From April 14, 1997 (commencement of investment operations).
** From January 5, 1998 (commencement of investment operations)
*** From May 1, 1998 (commencement of investment operations)

See accompanying notes.

36
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

STATEMENT OF CHANGES IN NET ASSETS--(CONTINUED)

YEAR AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
V.A. V.A. V.A.
V.A. REGIONAL EMERGING MONEY
INTERNATIONAL BANK GROWTH MARKET
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
--------------------- ------------ ----------------------- -------------------------
1998 1997* 1998*** 1998 1997* 1998 1997*
----------- --------- ------------ ----------- ----------- ------------- -------------
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
from operations:
Net investment income (loss) . . . . $ (879) $ 28,783 $ 10,512 $ (24,554) $ (4,167) $ 203,885 $ 23,873
Net realized gains (losses) . . . . . (38,507) (80) (370,654) 23,566 10,298 -- --
Net unrealized appreciation
(depreciation) during the period . . 203,266 (75,770) (105,324) 393,076 (21,053) -- --
---------- -------- ----------- ---------- ---------- ------------ ----------
Net increase (decrease) in net assets
resulting
from operations . . . . . . . . . . . 163,880 (47,067) (465,466) 392,088 (14,922) 203,885 23,873
From contractowner transactions:
Net premiums from contractowners . . 1,762,369 641,822 12,264,782 2,281,262 1,027,764 19,601,702 3,182,410
Net benefits to contractowners . . . (256,871) (38,977) (2,456,368) (339,471) (8,136) (14,740,227) (564,908)
---------- -------- ----------- ---------- ---------- ------------ ----------
Net increase in net assets resulting
from contractowner transactions . . . 1,505,498 602,845 9,808,414 1,941,792 1,019,628 4,861,476 2,617,502
---------- -------- ----------- ---------- ---------- ------------ ----------
Net increase in net assets . . . . . . 1,669,378 555,778 9,342,948 2,333,880 1,004,706 5,065,361 2,641,375
Net assets at beginning of period . . 555,778 0 0 1,004,706 0 2,641,375 0
---------- -------- ----------- ---------- ---------- ------------ ----------
Net assets at end of period . . . . . $2,225,156 $555,778 $ 9,342,948 $3,338,586 $1,004,706 $ 7,706,736 $2,641,375
========== ======== =========== ========== ========== ============ ==========
</TABLE>
<TABLE>
<CAPTION>
V.A. V.A. V.A.
STRATEGIC SOVEREIGN 500
INCOME INVESTORS INDEX
SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------------------- ------------------------ ------------------------
1998 1997* 1998 1997* 1998 1997*
----------- ----------- ------------ ----------- ------------ -------------
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . . $ 253,672 $ 36,289 $ 67,439 $ 8,483 $ 525,831 $ 151,668
Net realized gains (losses) . . . . . . . . . . . (16,316) 1,779 70,799 28,518 156,071 12,229
Net unrealized appreciation (depreciation)
during the
period . . . . . . . . . . . . . . . . . . . . . (129,004) (13,385) 1,118,064 184,787 1,001,035 (41,691)
---------- ---------- ----------- ---------- ----------- ----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . . . 108,352 24,683 1,256,302 221,788 1,682,937 122,206
From contractowner transactions:
Net premiums from contractowners . . . . . . . . 4,600,427 1,266,875 9,106,163 3,349,658 7,789,626 3,463,534
Net benefits to contractowners . . . . . . . . . (599,167) (4,433) (473,249) (79,754) (1,210,749) (45,744)
---------- ---------- ----------- ---------- ----------- ----------
Net increase in net assets resulting from
contractowner transactions . . . . . . . . . . . 4,001,260 1,262,442 8,632,914 3,269,904 6,578,877 3,417,790
---------- ---------- ----------- ---------- ----------- ----------
Net increase in net assets . . . . . . . . . . . . 4,109,612 1,287,125 9,889,216 3,491,692 8,261,814 3,539,996
Net assets at beginning of period . . . . . . . . 1,287,125 0 3,491,692 0 3,539,996 0
---------- ---------- ----------- ---------- ----------- ----------
Net assets at end of period . . . . . . . . . . . $5,396,737 $1,287,125 $13,380,908 $3,491,692 $11,801,810 $3,539,996
========== ========== =========== ========== =========== ==========
</TABLE>

* From April 14, 1997 (commencement of investment operations).
** From January 5, 1998 (commencement of investment operations).
*** From May 1, 1998 (commencement of investment operations).

See accompanying notes.

37
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION

John Hancock Variable Annuity Account H (the Account) is a separate investment
account of John Hancock Mutual Life Insurance Company (JHMLICO or John Hancock).
The Account commenced investment operations on April 14, 1997. The Account was
formed to fund variable annuity contracts (Contracts) issued by JHMLICO. The
Account is operated as a unit investment trust registered under the Investment
Company Act of 1940, as amended, and currently consists of fifteen subaccounts.
The assets of each subaccount are invested exclusively in shares of a
corresponding Portfolio of John Hancock Funds' Declaration Trust (the Fund). New
subaccounts may be added as new Portfolios are added to the Fund, or as other
investment options are developed and made available to contractowners. The
fifteen Portfolios of the Fund which are currently available are V.A. Special
Opportunities, V.A. Sovereign Bond, V.A. Independence Equity, V.A. Growth, V.A.
Growth and Income, V.A. Financial Industries, V.A. World Bond, V.A. High Yield
Bond, V.A. International, V.A. Regional Bank, V.A. Emerging Growth, V.A. Money
Market, V.A. Strategic Income, V.A. Sovereign Investors and V.A. 500 Index. Each
Portfolio has a different investment objective.

The net assets of the Account may not be less than the amount required under
state insurance law to provide for death benefits (without regard to the minimum
death benefit guarantee) and other contracts benefits. Additional assets are
held in JHMLICO's general account to cover the contingency that the guaranteed
minimum death benefit might exceed the death benefit which would have been
payable in the absence of such guarantee.

The assets of the Account are the property of JHMLICO. The portion of the
Account's assets applicable to the contracts may not be charged with liabilities
arising out of any other business JHMLICO may conduct.

2. SIGNIFICANT ACCOUNTING POLICIES

Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities, at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Valuation of Investments

Investment in shares of the Fund are valued at the reported net asset values
of the respective Portfolios. Investment transactions are recorded on the trade
date. Dividend income is recognized on the ex-dividend date. Realized gains and
losses on sales of fund shares are determined on the basis of identified cost.

Federal Income Taxes

The operations of the Account are included in the federal income tax return of
JHMLICO, which is taxed as a life insurance company under the Internal Revenue
Code. JHMLICO has the right to charge the Account any federal income taxes, or
provision for federal income taxes, attributable to the operations of the
Account or to the contracts funded in the Account. Currently, JHMLICO does not
make a charge for income or other taxes. Charges for state and local taxes, if
any, attributable to the Account may also be made.

Expenses

JHMLICO assumes mortality and expense risks of the contracts for which asset
charges are deducted at various rates ranging from .50% to .625%, depending on
the type of contract, of net assets of the Account. In addition, a monthly
charge at varying levels for the cost of insurance is deducted from the net
assets of the Account.

38
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

JHMLICO makes certain deductions for administrative expenses and state premium
taxes from premium payments before amounts are transferred to the Account.

3. TRANSACTION WITH AFFILIATES

John Hancock Advisers, Inc. acts as the distributor, principal underwriter and
investment advisor for the Fund.

Certain officers of the Account are officers and directors of JHMLICO, the
Fund, John Hancock Advisers, Inc. or John Hancock.

4. DETAILS OF INVESTMENTS

The details of the shares owned and cost and value of investments in the
Portfolios of the Fund at December 31, 1998 were as follows:

SUBACCOUNT SHARES OWNED COST VALUE
---------- ------------ ----------- -------------
--------------------------------------------------------------------------
V.A. Special Opportunities . . 55,765 $ 558,239 $ 615,082
V.A. Sovereign Bond . . . . . . 427,146 4,497,423 4,505,545
V.A. Independence Equity . . . 730,933 11,347,493 12,966,751
V.A. Growth . . . . . . . . . . 343,859 3,935,982 4,597,395
V.A. Growth and Income . . . . 722,287 7,734,584 8,689,119
V.A. Financial Industries . . . 1,813,003 25,626,101 26,197,897
V.A. World Bond . . . . . . . . 21,551 8,717,875 212,490
V.A. High Yield Bond . . . . . 445,549 4,127,492 3,661,411
V.A. International . . . . . . 182,689 1,546,703 2,225,156
V.A. Regional Bank . . . . . . 1,029,482 9,448,273 9,342,948
V.A. Emerging Growth . . . . . 278,215 2,630,130 3,338,586
V.A. Money Market . . . . . . . 7,706,736 5,609,237 7,706,736
V.A. Strategic Income . . . . . 534,333 7,343,629 5,396,737
V.A. Sovereign Investors . . . 857,201 9,861,342 13,380,908
V.A. 500 Index . . . . . . . . 774,905 10,683,612 11,801,810

39
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Purchases, including reinvestment of dividend distributions, and proceeds from
sales of shares in the Portfolios of the Fund during 1998, were as follows:

SUBACCOUNT PURCHASES SALES
---------- ----------- -------------
V.A. Special Opportunities . . . . . . . $ 595,738 $ 31,002
V.A. Sovereign Bond . . . . . . . . . . . 4,223,065 1,174,512
V.A. Independence Equity . . . . . . . . 8,686,448 413,132
V.A. Growth . . . . . . . . . . . . . . . 3,301,397 251,324
V.A. Growth and Income . . . . . . . . . 8,210,918 489,249
V.A. Financial Industries . . . . . . . . 21,753,817 4,882,989
V.A. World Bond . . . . . . . . . . . . . 140,392 87,459
V.A. High Yield Bond . . . . . . . . . . 4,642,499 444,388
V.A. International . . . . . . . . . . . 1,764,940 260,322
V.A. Regional Bank . . . . . . . . . . . 12,195,908 2,376,981
V.A. Emerging Growth . . . . . . . . . . 2,330,008 412,770
V.A. Money Market . . . . . . . . . . . . 18,661,578 13,596,217
V.A. Strategic Income . . . . . . . . . . 4,936,818 681,885
V.A. Sovereign Investors . . . . . . . . 9,107,946 407,593
V.A. 500 Index . . . . . . . . . . . . . 8,364,535 1,259,827

5. NET ASSETS

Accumulation shares attributable to net assets of contractowners and
accumulation share values for each subaccount at December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
CLASS 1 (greater than 250,000) CLASS 2 (greater than 250,000)
------------------------------ ------------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
SUBACCOUNT SHARES SHARE VALUES SHARES SHARE VALUES
---------- ------------- ------------ ------------ -------------
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
V.A. Special
Opportunities. . . . 39,315 $10.90 17,070 $10.93
V.A. Sovereign Bond . 285,086 12.22 81,613 12.29
V.A. Independence
Equity . . . . . . . 535,120 18.22 175,693 18.32
V.A. Growth . . . . . 259,784 12.99 93,898 13.06
V.A. Growth
and Income . . . . . 550,009 11.99 174,240 12.02
V.A. Financial
Industries . . . . . 1,442,358 14.36 380,604 14.42
V.A. World Bond . . . 19,202 11.04 0 11.10
V.A. High Yield Bond 389,206 8.88 22,149 8.90
V.A. International . 154,121 12.72 20,726 12.79
V.A. Regional Bank . 858,858 9.28 170,508 9.29
V.A. Emerging Growth 236,058 11.68 49,540 11.75
V.A. Money Market . . 4,821,302 1.08 2,159,915 1.09
V.A. Strategic
Income . . . . . . . 389,710 12.19 51,839 12.26
V.A. Sovereign
Investors. . . . . . 651,965 15.79 194,474 15.88
V.A. 500 Index . . . 502,899 18.01 151,454 18.11
</TABLE>

40
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

6. IMPACT OF YEAR 2000 (UNAUDITED)

The John Hancock Variable Annuity Account H, along with John Hancock Mutual
Life Insurance Company, its ultimate parent (together, John Hancock), is
executing its plan to address the impact of the Year 2000 issues that result
from computer programs being written using two digits to reflect the year rather
than four to define the applicable year and century. Historically, the first two
digits were hardcoded to save memory. Many of the John Hancock's computer
programs that have date-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in an information
technology (IT) system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business activities. In
addition, non-IT systems including, but not limited to, security alarms,
elevators and telephones are subject to malfunction due to their dependence on
embedded technology such as microcontrollers for proper operation. As described,
the Year 2000 project presents a number of challenges for financial institutions
since the correction of Year 2000 issues in IT and non-IT systems will be
complex and costly for the entire industry.

John Hancock began to address the Year 2000 project as early as 1994. John
Hancock's plan to address the Year 2000 Project includes an awareness campaign,
an assessment period, a renovation stage, validation work and an implementation
of Company solutions.

The continuous awareness campaign serves several purposes: defining the
problem, gaining executive level support and sponsorship, establishing a team
and overall strategy, and assessing existing information system management
resources. Additionally, the awareness campaign establishes an education process
to ensure that all employees are aware of the Year 2000 issue and knowledgeable
of their role in securing solutions.

The renovation stage reflects the conversion, validation, replacement, or
elimination of selected platforms, applications, databases and utilities,
including the modification of applicable interfaces. Additionally, the
renovation stage includes performance, functionality, and regression testing and
implementation. As of December 31, 1998, the renovation phase was substantially
complete for computer applications, systems and desktops. For all remaining
components the renovation phase is underway and will be complete before the end
of the second quarter of 1999.

The validation phase consists of the compliance testing of renovated systems.
The validation phase is expected to be complete by mid 1999, after renovation is
accomplished. John Hancock will use its testing facilities through the remainder
of 1999 to perform special functional testing. Special functional testing
includes testing, as required, with material third parties and industry groups
and to perform reviews of "dry run" of year-end activities. Scheduled testing of
John Hancock's material relationships with third parties is underway. It is
anticipated that testing with material business partners will continue through
much of 1999.

Finally, the implementation phase involves the actual implementation of
converted or replaced platforms, applications, databases, utilities, interfaces,
and contingency planning. John Hancock is concurrently performing implementation
during the renovation phase and plans to complete this phase before the end of
the second quarter of 1999.

41
<PAGE>

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The costs of the Year 2000 project consist of internal IT personnel, and
external costs such as consultants, programmers, replacement software, and
hardware. The costs of the Year 2000 project are expensed as incurred. The
project is funded partially through a reallocation of resources from
discretionary projects. Through December 31, 1998, John Hancock has incurred and
expensed approximately $9.8 million in related payroll costs for its internal IT
personnel on the project. The estimated range of remaining internal IT personnel
costs of the project is approximately $8 to $9 million. Through December 31,
1998, John Hancock has incurred and expensed approximately $36.4 million in
external costs for the project. The estimated range of remaining external costs
of the project is approximately $35 to $36 million. The total costs of the Year
2000 project, based on management's best estimates, include approximately $18
million in internal IT personnel, $7.4 million in the external modification of
software, $34.2 million for external solution providers, $19.4 million in
replacement costs of non-compliant IT systems and $12.6 million in oversight,
test facilities and other expenses. Accordingly, the estimated range of total
costs of the Year 2000 project, internal and external, is approximately $90 to
$95 million. However, there can be no guarantee that these estimates will be
achieved and actual results could materially differ from those plans. Specific
factors that might cause such material differences include, but are not limited
to, the availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes, and similar uncertainties.

John Hancock's total Year 2000 project costs include the estimated impact of
external solution providers and are based on presently available information.
However, there is no guarantee that the systems of other companies that John
Hancock's systems rely on will be timely converted, or that a failure to convert
by another company, or a conversion that is incompatible with John Hancock's
systems, would not have material adverse effect on John Hancock. It is
documented in trade publications that companies in foreign countries are not
acting as intensively as domestic companies to remediate Year 2000 issues.
Accordingly, it is expected that Company facilities based outside the United
States face higher degrees of risks from data exchanges with material business
partners. In addition, John Hancock has thousands of individual and business
customers that hold insurance policies, annuities and other financial products
of John Hancock. Nearly all products sold by John Hancock contain date sensitive
data, examples of which are policy expiration dates, birth dates, premium
payment dates. Finally, the regulated nature of John Hancock's industry exposes
it to potential supervisory or enforcement actions relating to Year 2000 issues.

John Hancock's contingency planning initiative related to the Year 2000
project is underway. The plan is addressing John Hancock's readiness as well as
that of material business partners on whom John Hancock depends. John Hancock's
contingency plans are being designed to keep each business unit's operations
functioning in the event of a failure or delay due to the Year 2000 record
format and date calculation changes. Contingency plans are being constructed
based on the foundation of extensive business resumption plans that John Hancock
has maintained and updated periodically, which outline responses to situations
that may affect critical business functions. These plans also provide emergency
operations guidance, which defines a documented order of actions to respond to
problems. These extensive business resumption plans are being enhanced to cover
Year 2000 situations.

42
<PAGE>

PART C. OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(A) FINANCIAL STATEMENTS.

1. Statement of Assets and Liabilities, John Hancock Variable Annuity
Account H.

2. Statement of Operations, John Hancock Variable Annuity Account H.

3. Statement of Changes in Net Assets, John Hancock Variable Annuity
Account H.

4. Notes to Financial Statements, John Hancock Variable Annuity Account H.

5. Statement of Financial Position, John Hancock Mutual Life Insurance
Company.

6. Summary of Operations and Unassigned Deficit, John Hancock Mutual Life
Insurance Company.

7. Statement of Cash Flows, John Hancock Mutual Life Insurance Company.

8. Notes to Financial Statements, John Hancock Mutual Life Insurance
Company.

(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) Reserved.

(b) Reserved.
<PAGE>

(d) Form of waiver of withdrawal charge rider incorporated by
reference from Pre-Effective Amendment No. 1 to File No. 333-81103,
filed contemporaneously herewith.

(e) Form of guaranteed retirement income benefit rider, incorporated by
reference from Pre-Effective Amendment No. 1 to File No. 333-81103,
filed contemporaneously herewith.

(f) Form of death benefit enhancement rider, incorporated by reference
from Pre-Effective Amendment No. 1 to File No. 333-81103, filed
contemporaneously herewith.

(g) Form of accumulated value enhancement rider, incorporated by
reference from Pre-Effective Amendment No. 1 to File No. 333-81103,
filed contemporaneously herewith.

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 as to legality of securities.

10. (a) Representation of counsel. (None)

(b) Consent of independent auditors.

(c) Powers of Attorney for all directors except Robert J. Tarr, Jr.,*
Power of Attorney for director Robert J. Tarr, Jr.**

11. Not Applicable.

12. Not Applicable.

13. Diagram of Subsidiaries of John Hancock***

14. Not Applicable.

27. Not Applicable.

* Incorporated by reference from Form N-4EL (File nos. 333-08345 and
811-07711) on July 18, 1996, accession number 0000950109-96-004518.

** Incorporated by reference from 485BPOS (File nos. 333-08345 and
811-07711) on April 30, 1997, accession number 00001010521-97-000280.

***Incorporated by reference from 485BPOS (File Nos. 333-08345 and
811-07711) on April 29, 1999, accession number 0000950109-99-001624.
<PAGE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

<TABLE>
<CAPTION>
Directors Principal Occupations
--------- ---------------------
<S> <C>
Samuel W. Bodman Chairman of the Board and Chief Executive
Officer, Cabot Corporation (chemicals)
Nelson S. Gifford Principal, Fleetwing Capital Management
(financial services)
Kathleen F. Feldstein President, Economics Studies Inc. (economic
consulting)
E. James Morton Director, former Chairman of the Board and
former Chief Executive Officer, John
Hancock
John M. Connors, Jr Chief Executive Officer and Director, Hill,
Holliday, Connors, Cosmopoulos, Inc.
(advertising)
Stephen L. Brown Chairman of the Board and Chief Executive
Officer, John Hancock
I. MacAllister Booth Retired Chairman of the Board and Chief
Executive Officer, Polaroid Corporation
(photographic products)
Robert J. Tarr, J Former President, Chief Executive Officer
and Chief Operations Officer, Harcourt
General, Inc. (publishing)
David F. D'Alessandro President and Chief Operating Officer, John
Hancock
Joan T. Bok Chairman of the Board, New England Electric
System (electric utility)
Robert E. Fast Senior 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 Executive
Officer, American Stock Exchange
Michael C. Hawley President and Chief Operating Officer, The
Gillette Company (razors, etc.)
Wayne A. Budd Group President, Bell Atlantic - New
England (telecommunications)
Edward H. Linde President & CEO, Boston Properties, Inc.
</TABLE>

<TABLE>
<CAPTION>
Executive Officers
- ------------------
<S> <C>
Diane M. Capstaf Executive Vice President
Thomas E. Moloney Executive Vice President
Richard S. Scipione General Counsel
Barry J. Rubenstein Senior Vice President, Counsel and Secretary
</TABLE>

<PAGE>

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

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR
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 foreseeable 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 13 to Post-Effective Amendment No. 5 to Form N-4 Registration Statement
of John Hancock Variable Annuity Account H (File No. 333-08345) filed April 29,
1999, accession number 0000950109-99-001624.

ITEM 27. NUMBER OF CONTRACT OWNERS

Registrant had 2,524 Contract Owners as of June 30, 1999.

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
<PAGE>

public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.

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 Investment 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 Special Equities Fund
John Hancock Strategic Series
John Hancock Tax-Exempt Series Fund
John Hancock Tax-Free Bond Trust
John Hancock World Fund
John Hancock Declaration Trust
John Hancock Variable Annuity Account JF
John Hancock Variable Annuity Account H
John Hancock Variable Annuity Account V (with respect to certain contracts)

(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
Anne C. Hodsdon Director
David A. King Director
Jeanne M. Livermore Director
Thomas E. Moloney Director
Richard S. Scipione Director
Robert H. Watts Director
Edward J. Boudreau, Jr. Chairman, President and Chief Executive Officer
James V. Bowhers President
Robert H. Watts Executive Vice President and Chief Compliance Officer
Osbert M. Hood Senior Vice President and Chief Financial Officer
John A. Morin Vice President and Secretary
Anne C. Hodsdon Executive Vice President
Anthony P. Petrucci Executive Vice President
<PAGE>

Kathleen M. Graveline Senior Vice President
Richard O. Hansen Senior Vice President
Keith Hartstein Senior Vice President
Peter Mawn Senior Vice President
Charles H. Womack Senior Vice President
J. William Benintende Vice President
Gary Cronin Vice President
Renee Humphrey Vice President
Susan S. Newton Vice President
Kristine Pancare Vice President
Karen F. Walsh Vice President
Griselda Lyman Vice President
Mary Ellen Higgins Second Vice President
Arthur J. Holzman, Jr. Second Vice President and Assistant Treasurer
Marty Thomas Second Vice President
William H. King Assistant Treasurer
Andrew R. Lynch Assistant Treasurer
Theresa Apruzzese Assistant Secretary
Carmen M. Pelissier Assistant Secretary

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

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.

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, 188)). 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.
<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 6th day of August, 1999.

JOHN HANCOCK VARIABLE ANNUITY ACCOUNT H
(REGISTRANT)

By John Hancock Mutual Life Insurance Company

By /Stephen L. Brown/
------------------
STEPHEN L. BROWN
Chairman of the Board and Chief Executive Officer

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
(DEPOSITOR)

By /Stephen L. Brown/
------------------
STEPHEN L. BROWN
Chairman of the Board and Chief Executive Officer

As required by the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Thomas E. Moloney
- ---------------------
Thomas E. Moloney Chief Financial Officer August 6, 1999
(Principal Financial Officer
and Principal Accounting
Officer)

/s/ Stephen L. Brown
- --------------------
Stephen L. Brown Chairman of the Board, Chief August 6, 1999
Executive Officer and
Principal Executive Officer
</TABLE>

as
Attorney-in-Fact
For:
Samuel W. Bodman Director
Nelson S. Gifford Director
E. James Morton Director

<PAGE>

John M. Connors, Jr. Director
I. MacAllister Booth 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
Edward H. Linde Director
Wayne A. Budd Directors

<PAGE>

Exhibit 4(c)

[LOGO OF JOHN HANCOCK APPEARS HERE]
Mutual Life Insurance Company John Hancock Place
PO Box 111
Boston, Massachusetts 02117

OWNER [JOHN DOE] ANNUITY CONTRACT NUMBER [000000]

ANNUITANT [JOHN DOE]

John Hancock Mutual Life Insurance Company ("the Company") agrees to provide the
benefits, rights and privileges as stated in this contract.

If this contract is in force on the Date of Maturity, we will pay an annuity to
the Annuitant, unless otherwise directed by the Owner. Each annuity payment will
be determined in accordance with Section 15 of this contract. The variable
portion may increase or decrease depending upon the investment experience of the
variable investment options in which the Premiums are invested. Unless another
option offered in Section 16 is elected, annuity payments will be payable for a
guaranteed period of 10 years and as long thereafter as the Annuitant lives.

By written notice, the Owner may elect the Date of Maturity at any time,
provided the Date elected is: (i) not later than the Annuitant's 95th birthday
without our prior approval; (ii) at least 31 days after the written notice; and
(iii) at least six months after the date the first premium is applied to this
contract. If no other election is made, the Date of Maturity will be as shown on
Page 3.

We are issuing this contract in consideration of the payment of premiums.

Signed for the Company at Boston, Massachusetts.

President Secretary

Combination Variable Annuity/Modified Guarantee Annuity
Nonparticipating - not eligible for dividends
Initial Premium shown on page 3

All benefits, payments and values under this contract which are based on the
investment experience of an Account are variable and not guaranteed as to fixed
dollar amount.

Right to Cancel - The Owner may surrender this contract by delivering or mailing
it to the Company's Servicing Office (or to the Company representative through
which it was delivered) within 10 days after receipt by the Owner of this
contract. Immediately on such delivery or mailing, this contract shall be deemed
void from the beginning and a refund will be made within 10 days. The amount
refunded will be (i) plus (ii) less (iii) where: (i) is the Accumulated Value,
including any Market Value Adjustment, at the end of the Valuation Period during
which we receive the contract; (ii) is the sum of all charges made with respect
to this contract; and (iii) is any Extra Credit applied.

John Hancock Servicing Office
-----------------------------
[Annuity Servicing Center
P.O. Box 9298
Boston, Massachusetts 02205-9298
Telephone 800-225-5291
Fax 800-225-0000]

99REVEC V0199X
<PAGE>

CONTRACT PROVISIONS

Numerical Guide

Section
- -------

1. Contract Specifications
2. Definitions
3. Owner, Beneficiary
4. The Contract
5. Premiums
6. Allocation/Transfer Options
7. Accumulations
8. Valuation Procedures
9. Death Benefit
10. Contract Fee and Rider Charges
11. Partial Withdrawals
12. Withdrawal Charge
13. Market Value Adjustment
14. Surrender Provision
15. Conversion
16. Settlement Provisions
17. Proof Required for Payment
18. Misstatements
19. Assignment
20. Claims of Creditors
21. Right to Make Changes
22. Annual Statement
23. Miscellaneous

2 V0299X
<PAGE>

- --------------------------------------------------------------------------------
1. CONTRACT SPECIFICATIONS
- --------------------------------------------------------------------------------

OWNER(S) [John Doe]
ANNUITANT(S) [John Doe]
ANNUITY CONTRACT NUMBER [0000000]
AGE OF OWNER(S) AT ISSUE [35]
AGE OF ANNUITANT(S) AT ISSUE [35]
DATE OF ISSUE [January 1, 1999]
INITIAL PREMIUM PAYMENT [$100,000.00]
EXTRA CREDIT PERCENTAGE [3 1/2%]
DATE OF MATURITY [January 1, 2059]
BENEFICIARY [Jane Doe]
CONTRACT ANNIVERSARY [January 1]
MAXIMUM CHARGES [See Section 8]
CONTRACT FEE/1/ [$0.00]

RIDERS ELECTED ANNUAL RIDER CHARGE/2/
- -------------- ----------------------

Enhanced Death Benefit Rider [.15%] x Accumulated Value

Waiver of Withdrawal Charge Rider [.10%] x Accumulated Value/3/

Guaranteed Retirement Income Benefit [.30%] x Accumulated Value
Accumulation Rate for Allocations to Guarantee Periods and
Money Market [4%]
Accumulation Rate for Allocations to All Other Variable
Investment Options [5%]

Accumulated Value Enhancement Rider [.35%] x Initial Premium Payment
The Insured Person under the Accumulated Value Enhancement Rider is [John
Doe].
Deferral Period: 7 Years
Elimination Period: 100 Dates of Service
Accumulated Value Enhancement Monthly Benefit*: [$0.00] per calendar month
Benefit Limit*: [$0.00]
*Subject to increases due to inflation coverage after Deferral Period.

/1/ Not applicable if Accumulated Value exceeds $50,000.
/2/ For an explanation of rider charges, see Section 10 of this contract.
/3/ Charge applies to that portion of the Accumulated Value attributable to any
premium payments and extra credit that have been made or applied less than 7
years from the date such charge is assessed.

3 V0399X
<PAGE>

- --------------------------------------------------------------------------------
2. DEFINITIONS
- --------------------------------------------------------------------------------

The following terms are commonly used throughout this annuity contract:

The term "Account", unmodified, means a separate investment account established
by us pursuant to applicable law which includes one or more variable investment
options and in which you are eligible to invest under this contract. An Account
may be either a Management Account or a Series Account.

The term "Accumulated Value" means the value of this contract on any date prior
to the commencement of annuity payments. This value equals the sum of (i) the
Accumulated Values for all variable investment options and (ii) the Accumulated
Value of this contract in the MVA Account. The Accumulated Value for each
variable investment option as of any date will equal the number of Accumulation
Units for that variable investment option then credited to this contract
multiplied by the Accumulation Unit Value for that variable investment option on
that date. Accumulated Value for the MVA Account is defined in Section 7.

The term "Accumulation Unit" means a unit of measurement used in determining the
value of this contract prior to the commencement of annuity payments. The
Accumulation Unit Value for each variable investment option will reflect the
investment experience of that variable investment option. It will vary in dollar
amount.

The term "Annuitant" means the person(s) upon whose life this contract is
issued. The individual(s) will be designated as such on Page 3 of this contract
and defined in Section 3.

The term "Annuity Unit" means a unit of measurement used in determining the
amount of the variable portion of each annuity payment. The value of an Annuity
Unit for each variable investment option will depend on the assumed investment
rate and the investment experience of that variable investment option. It will
vary in dollar amount.

The term "Beneficiary" is defined in Section 3.

The term "Contract Year" means the 12 month period beginning on the Date of
Issue and each 12 month period thereafter.

The term "Date of Issue" means the date identified as such in Section 1.

The term "Date of Maturity" is the date annuity payments under this contract
begin, in accordance with Section 15.

The term "Earnings" means any portion of the Accumulated Value which exceeds
Premium not previously withdrawn.

The term "Extra Credit" means additional Earnings credited to the contract at
the time of deposit of all Premium payments. In any instance, it is equal to the
amount of the Premium multiplied by the Extra Credit percentage shown in Section
1.

The term "Free Withdrawal Value" is defined in Section 12.

The term "Fund" means each division of a Series Fund which has a specific
investment objective.

The term "Guarantee Period" refers to a Guarantee Period elected under the
Market Value Adjusted Account.

The term "in force" means that the Annuitant is living and the Surrender Value
of this contract has not become payable.

The term "Last Valuation Date" means the earliest of the Date of Maturity, the
Surrender Date, and the date of the Annuitant's death.

The term "Management Account" means an Account which directly invests its assets
in accordance with its specific investment objective. A Management Account may
or may not have divisions with separate investment objectives.

The term "Market Value Adjustment" is defined in Section 13.

The term "Market Value Adjustment Factor" is defined in Section 13.

The term "Market Value Adjusted Account" or "MVA Account" means, unmodified, a
separate investment account established by us pursuant to applicable law in
which you are eligible to invest under this contract.

The term "Measuring Person" means the person on whose life annuity payments will
be based.

4 V0499X
<PAGE>

The term "partial withdrawal" is defined in Section 11.

The term "payment" means, unless otherwise stated, payment at our Servicing
Office.

The term "Premium" means the premium paid less any applicable taxes based on the
amount of premium payments.

The term "Series Account" means an Account with divisions which invest in Funds
of a Series Fund. Each such division has a specific investment objective and the
assets of each division are invested solely in shares of the corresponding Funds
of a Series Fund.

The term "Series Fund" means a series type mutual fund registered under the
Investment Company Act of 1940 ("the Act") as an open-end diversified management
investment company.

The term "Subaccount" means a variable investment option or a Guarantee Period.

The term "Surrender Date" means the date of receipt of written notice of
surrender under Section 14.

The term "Surrender Value" means the Accumulated Value of your contract,
adjusted by any Market Value Adjustment, less, if applicable, any contract fees,
any income taxes withheld, any rider charges, any deduction for premium taxes or
similar taxes, and any Withdrawal Charge.

The term "Valuation Date" means any date on which the New York Stock Exchange is
open for trading.

The term "Valuation Period" means that period of time from the beginning of the
day following a Valuation Date to the end of the next following Valuation Date.

The term "variable investment option" means each Management Account without
divisions, each division of a Management Account, and each division of a Series
Account.

The terms "we", "us", "our" refer only to the Company.

The term "withdrawal" means, unless otherwise specified, the amount withdrawn
prior to any deductions but after any Market Value Adjustment.

The term "Withdrawal Charge" is defined in Section 12.

The term "written notice" means, unless otherwise stated, a notice in writing
satisfactory to us which is received at our Servicing Office.

The terms "you" and "your" refer to the Owner under this contract.

5 V0599X
<PAGE>

- --------------------------------------------------------------------------------
3. OWNER, BENEFICIARY
- --------------------------------------------------------------------------------

The Owner and the Beneficiary will be as shown on page 3 unless you change them
or they are changed by the terms of this provision. If the Annuitant dies and
there is no surviving Beneficiary or surviving Annuitant, you will be the
Beneficiary; but if you were the Annuitant, your estate will be the Beneficiary.

If the Annuitant dies and there is a surviving Annuitant, the surviving
Annuitant becomes the Annuitant.

The Owner shall have the sole and absolute power to exercise all rights and
privileges without the consent of any other person except as otherwise provided
by this contract or unless you provide otherwise by written notice.

While the Annuitant is alive, you may change the Owner by written notice. You
may change the Beneficiary by written notice no later than receipt of the
required due proof of the Annuitant's death. A change will take effect when the
notice is received and filed at our Servicing Office. The change will take
effect whether or not you or the Annuitant is then alive. A change shall be
subject to the rights of any assignee of record with us and subject to any
payment made or other action taken by us before we received and filed the
notice. If more than one Annuitant is listed on page 3, the term "Annuitant" as
used in this contract shall mean the following:

. In relation to the death of the Annuitant or the continuing life of the
Annuitant, "Annuitant" shall mean the last to die of those individuals
listed as Annuitants who have not reached age 95.

. In relation to annuitization under Section 15, "Annuitant" shall mean the
youngest of the individuals listed as Annuitants who is still alive at any
given point in time.

JOINT OWNERS

If joint Owners are named, each joint Owner will be considered the primary
Beneficiary of the other joint Owner. Should another person or entity be
designated as Beneficiary, such Beneficiary will be deemed a contingent
Beneficiary for all Owners with rights subordinate to the rights of each joint
Owner. Signatures of all joint Owners are required for any exercise of Owner
rights requiring written notification.

- --------------------------------------------------------------------------------
4. THE CONTRACT
- --------------------------------------------------------------------------------

The contract is an agreement between the Owner and the Company. The entire
contract consists of this contract, any riders, and any attachments. Contract
years, contract months, and contract anniversaries are measured from the Date of
Issue of this contract. Only the President, a Vice President, the Secretary, or
an Assistant Secretary of the Company has authority to waive or modify any of
the provisions of this contract.

- --------------------------------------------------------------------------------
5. PREMIUMS
- --------------------------------------------------------------------------------

PAYMENT OF PREMIUMS

All premium payments shall be made to us at our Servicing Office. Premium
payments are subject to the following conditions:

(a) Each premium payment must be at least $200. If payments are made through the
Direct Premium Payment Program, the minimum premium payment allowed is
$100.

(b) The maximum premium that may be deposited to this contract in any Contract
Year is $1,000,000.

(c) No premium payments may be made to this contract after the Annuitant's 85th
birthday. Upon request we will consider waiving any of the above conditions.

EXTRA CREDIT

The Initial Premium and all subsequent Premium payments will
receive an extra credit of a certain percentage of such Premium payment. The
extra credit percentage is shown on page 3. The extra credit will always be
considered Earnings, as defined in Section 2.

PREMIUM TAXES

A deduction for a premium tax, if any, or a similar tax, if any, will be made
either from premiums or from the Accumulated Value if and when such a tax is
incurred by us. However, if premium taxes or similar taxes are incurred by us at
the time premiums are paid and we defer the deduction for such taxes, then a
deduction will be made upon any withdrawal under Section 11 and either on the
Surrender Date, the Date of Maturity, or the date of payment of the Death
Benefit. Such deduction will be equal to the tax percentage multiplied by (i) in
the case of withdrawals, the withdrawal amount requested, (ii) in the case of
surrender or annuitization, the Accumulated Value as of the Surrender Date or
the Date of Maturity as the case may be, or (iii) in the case of death, the
Death Benefit as of the date of receipt of due proof of the Annuitant's death.
The "tax percentage" is equal to the percentage of premium which the premium tax
or similar tax in question constitutes.

6 V0699X
<PAGE>

- --------------------------------------------------------------------------------
6. ALLOCATION/TRANSFER OPTIONS
- --------------------------------------------------------------------------------

INVESTMENT ALLOCATION

The Premium and Extra Credit, if any, will be allocated to the Subaccounts
according to the investment allocation then in effect. The initial investment
allocation is that elected by you. You may elect to change the investment
allocation. The change will be effective as to the application of any Premium
made on or after the date of receipt at our Servicing Office of notice
satisfactory to us. The minimum percentage that may be allocated to any
Subaccount and the maximum number of Subaccounts in which amounts may be held
will be subject to our administrative rules in effect at the time of the
election. All percentages you elect must be whole numbers.

If allocation is made to the MVA Account, the Owner may select from the
Guarantee Periods then available. We reserve the right to change the duration of
Guarantee Periods offered. The period selected will determine the guaranteed
interest rate applicable, which will be payable for a Guarantee Period. A
Guarantee Period begins on the date Premium or Accumulated Value is credited to
it.

If a new Guarantee Period becomes effective that causes this contract to
continue beyond the Date of Maturity, then the Date of Maturity will become the
Annuitant's 95th birthday, or a later age with our prior approval.

SUBACCOUNT TRANSFER OPTION

You may elect to reallocate amounts among the Subaccounts up to twelve times in
a Contract Year. If additional transfers are elected, the Company reserves the
right to prohibit such transfers or impose a transfer charge, not to exceed $25,
for each transfer in excess of twelve. Transfers between the Subaccounts will be
effective on the date of receipt at our Servicing Office of notice satisfactory
to us. We reserve the right to prohibit a transfer less than 30 days prior to
the Date of Maturity.

The number of Accumulation Units or Annuity Units and the amount of Accumulated
Value of the MVA Account transferred to or from each Subaccount will reflect the
respective values in each Subaccount. The maximum number of Subaccounts in which
Accumulated Value may be held will be subject to our rules in effect at the time
of election.

The maximum amount which may be transferred or paid into a Subaccount in any
Contract Year is $1,000,000 without our prior approval. Any transfer made out of
a Guarantee Period of the MVA Account may be subject to a Market Value
Adjustment.

TRANSFER OPTION AT EXPIRATION OF GUARANTEE PERIOD

At least 30 days prior to the end of any Guarantee Period, we will provide you
with written notice of the expiry of any such Guarantee Period. We must receive
within 30 days preceding the expiry of such Guarantee Period, a written request
to transfer the amount in such Guarantee Period to any Subaccount from among
those that are then available. The transfer elected will be effective on the
last day of the expiring Guarantee Period without incurring a Market Value
Adjustment.

If we do not receive written notice within 30 days prior to the expiry of any
Guarantee Period to elect a new Guarantee Period, then amounts available under
such Guarantee Period will be transferred to the Money Market Account. The
effective date of the transfer will be the first day following the expiry of
such Guarantee Period.

ALLOCATION AT ANNUITY COMMENCEMENT AND BEFORE CONVERSION

If the Accumulated Value is invested in more than [four] Subaccounts on the Date
of Maturity or other date elected for commencement of annuity payments and
before conversion in accordance with Section 15, we will allocate the
Accumulated Value to the [four] Subaccounts then having the largest portions of
the Accumulated Value. To determine the number of Subaccounts in which the
Accumulated Value is invested, each variable investment option is counted
separately as one Subaccount while all Guarantee Periods are counted together as
one Subaccount. The Accumulated Value in Subaccounts other than such [four]
Subaccounts will be allocated to the [four] Subaccounts in proportion to the
amounts in the [four] Subaccounts. Such allocation will be made notwithstanding
any transfer restrictions specified in this subsection. Upon commencement of
annuity payments, transfers are only permitted between variable investment
options. The rules that will be applied as of any date will be those in effect
on that date.

7 V0799X
<PAGE>

- --------------------------------------------------------------------------------
7. ACCUMULATIONS
- --------------------------------------------------------------------------------

PURCHASE OF ACCUMULATION UNITS

The portion of the Premium and extra credit, if any, not allocated to the MVA
Account will be allocated to each elected variable investment option for
investment with other funds in each such variable investment option and applied
to the purchase of Accumulation Units. The number of Accumulation Units in each
variable investment option purchased by each premium payment and extra credit,
if any, will be determined by dividing the applicable portion of the Premium by
the applicable Accumulation Unit Value on the first Valuation Date which is the
same as or next follows the receipt of the premium payment at our Servicing
Office.

ACCUMULATED VALUE IN THE MVA ACCOUNT

We will accumulate (i) the portion of Premium and extra credit, if any,
allocated to the MVA Account and (ii) any amount transferred to the MVA Account
from a variable investment option, from the date the premium is received and
extra credit, if any, is applied or the date the transfer is made. The
Accumulated Value of this contract's share of the MVA Account on any date prior
to the date annuity payments commence is equal to A minus B.

A is the sum of (i), (ii), (iii), and (iv) below, accumulated with interest to
that date, where:
(i) is any premiums allocated to the MVA Account;
(ii) is any extra credit allocated to the MVA Account;
(iii) is any amounts transferred to the MVA Account; and
(iv) is the amount of any positive Market Value Adjustments.
B is the sum of (i), (ii), (iii), and (iv) below, accumulated with interest to
that date, where:
(i) is any partial withdrawals (including any Withdrawal Charge) from
the MVA Account;
(ii) is any amounts transferred from the MVA Account;
(iii) is any contract fees, rider charges, premium taxes or similar taxes;
and
(iv) is the amount of any negative Market Value Adjustments.

INTEREST ON PREMIUM ALLOCATED TO MVA ACCOUNT

Premium and extra credit, if any, earns interest for as long as it remains in
this contract beginning on the date it is credited. Interest will be credited
daily and will then earn interest from such date. During a Guarantee Period, the
interest rate credited will be based upon our declared interest rate then in
effect and will apply throughout such Guarantee Period. Such declared interest
rate will be expressed on an annual effective basis and will never be less than
the guaranteed minimum rate of 3% on an annual effective basis. The interest
credited on any given day will be at a rate which, if compounded daily for one
year, would equal the applicable declared interest rate.

- --------------------------------------------------------------------------------
8. VALUATION PROCEDURES
- --------------------------------------------------------------------------------

ACCUMULATION UNIT VALUE

The Accumulation Unit Value is calculated separately for each variable
investment option. The value of one Accumulation Unit was set at $10 on the date
assets were first allocated to each variable investment option. The value of one
Accumulation Unit on any Valuation Date thereafter will be determined for each
variable investment option by multiplying the immediately preceding Accumulation
Unit Value by the applicable Net Investment Factor for the Valuation Period
ending on that Valuation Date. On any date other than a Valuation Date, the
Accumulation Unit Value will be the same as that on the next following Valuation
Date.

ANNUITY UNIT VALUE

The Annuity Unit Value is calculated separately for each variable investment
option. The value of one Annuity Unit was set at $1 on the date assets were
first allocated to each variable investment option. The value of one Annuity
Unit on any Valuation Date thereafter will be determined for each variable
investment option by multiplying (1) the immediately preceding Annuity Unit
Value by (2) the applicable Net Investment Factor for the Valuation Period
ending on the Valuation Date reduced by no less than .000094246 times the
applicable Net Investment Factor for each calendar day in the Valuation Period.
On any date other than a Valuation Date, the Annuity Unit Value will be the same
as that on the next following Valuation Date.

8 V0899X
<PAGE>

NET INVESTMENT FACTOR

The Net Investment Factor for each variable investment option for any Valuation
Period is equal to one plus the applicable net investment rate for such period.
A Net Investment Factor may be more or less than one. The net investment rate
for each variable investment option for any Valuation Period will be determined
by: (1) taking the sum of the accrued investment income and capital gains and
losses, realized or unrealized, of the variable investment option for the
Valuation Period; (2) subtracting the sum of (i) an amount for any applicable
income taxes and (ii) an amount for mortality and expense risks and
administrative expenses computed by multiplying an amount not to exceed
[.00003425] times the number of calendar days in the Valuation Period and
multiplying the result by the value of the variable investment option at the
beginning of the Valuation Period; and (3) dividing the result by the value of
the variable investment option at the beginning of the Valuation Period.

VALUATION OF ASSETS

The values of the assets in the variable investment options shall be determined
at a fair value in accordance with applicable law. Liabilities attributable to
the variable investment option will be deducted to determine the value of the
variable investment option.

ADJUSTMENT OF UNITS AND VALUES

We reserve the right to change the number and value of the Accumulation Units or
Annuity Units or both without your
consent or the consent of any other person, provided strict equity is preserved
and the change does not otherwise affect the benefits, provisions or investment
return of this contract.

- --------------------------------------------------------------------------------
9. DEATH BENEFIT
- --------------------------------------------------------------------------------

If the Annuitant dies before the Date of Maturity, and there is no surviving
Annuitant, we will pay the Death Benefit to the Beneficiary. If there is a
surviving Annuitant, the surviving Annuitant becomes the Annuitant. The Death
Benefit will equal the greater of: (i) the Accumulated Value of this contract,
adjusted by any Market Value Adjustment, as of the date of receipt of due proof
of the Annuitant's death; and (ii) the amount of the premiums paid plus the
amount of extra credit, if any, less the amount of all partial withdrawals made.

Notwithstanding any of the above, the following will apply upon the death of the
Owner, or in the case of joint Owners, upon the death of the first to die, if
the contract value has not already been converted into an annuity:

(i) If the Beneficiary is the spouse of the Owner, the Beneficiary may continue
this contract in force as the Owner.

(ii) If the Beneficiary is not the spouse of the Owner, or if the Beneficiary is
the spouse of the Owner but does not choose to continue this contract, we will
pay the Death Benefit (or the Surrender Value if the Owner is not the Annuitant)
in full to the Beneficiary within five years of the Owner's death or apply the
Accumulated Value in full towards the purchase of a life annuity on the
Beneficiary with payments beginning within one year of the Owner's death.

- --------------------------------------------------------------------------------
10. CONTRACT FEE AND RIDER CHARGES
- --------------------------------------------------------------------------------

We will deduct a contract fee of $30 on each of the following: (i) any contract
anniversary prior to the Date of Maturity on which the Accumulated Value is then
less than $50,000; and (ii) the Surrender Date if the Accumulated Value on such
date is less than $50,000. The fee will be deducted from the Accumulated Value
of all Subaccounts according to the proportion the Accumulated Value of each
Subaccount bears to the total Accumulated Value of this contract. We reserve the
right to increase the contract fee up to $50, subject to applicable state
regulations.

Optional riders may only be elected at issue. We will deduct separate monthly
charges for each optional rider elected. The charges, made at the beginning of
each month, are equal to 1/12th of the Annual Rider Charge, as specified on Page
3 of this contract, for each rider elected. The charge for each rider elected
will be deducted from the Accumulated Value of all Subaccounts according to the
proportion the Accumulated Value of each Subaccount bears to the total
Accumulated Value of this contract.

9 V0999X
<PAGE>

- --------------------------------------------------------------------------------
11. PARTIAL WITHDRAWALS
- --------------------------------------------------------------------------------

Subject to the limits described in this Section, you may request a withdrawal of
less than the Surrender Value. The total of the requested amount and any
applicable Withdrawal Charge is called a partial withdrawal. We will pay the
requested amount on receipt of written notice before the Annuitant's death and
before the commencement of annuity payments. The amount of the partial
withdrawal will then be deducted from the Accumulated Value. Without our prior
approval, we will not permit a partial withdrawal of less than $100 nor will we
permit a partial withdrawal if the Accumulated Value after such requested
partial withdrawal would be less than $1000.

Unless specified in writing otherwise, withdrawals will be removed
proportionately from the values in all Subaccounts. Withdrawal amounts removed
from the MVA Account will be subject to a Market Value Adjustment as described
in Section 13. Prior to payment, the amount of any withdrawal will be reduced by
any applicable income taxes, premium taxes, and similar taxes, and any
applicable Withdrawal Charge.

Upon written request, at any time during each Contract Year, you may make a
withdrawal of the Free Withdrawal Value, as described in Section 12. If the Free
Withdrawal Value is less than $100, then any written request for the Free
Withdrawal Value must be for the entire Free Withdrawal Value.

Any withdrawal, other than one on the last day of a Guarantee Period, will be
effective on the date we receive your written notice. To make a withdrawal that
is to be effective on the last day of any Guarantee Period, we must receive
written notice from you at least 30 days prior to the expiry of such Guarantee
Period.

We may defer payment of a withdrawal in the same manner as we may defer payment
of the Surrender Value, described in Section 14.

- --------------------------------------------------------------------------------
12. WITHDRAWAL CHARGE
- --------------------------------------------------------------------------------

In the event of a surrender or a partial withdrawal in excess of the Free
Withdrawal Value, a Withdrawal Charge may be assessed. The Free Withdrawal Value
is the greater of:

(a) the excess of the Accumulated Value on the date of surrender or partial
withdrawal over the remaining unliquidated Premiums; or

(b) the excess of (i) over (ii), where: (i) equals 10% of the sum of all
Premiums received since the Date of Issue and (ii) equals 100% of all prior
partial withdrawals in the same Contract Year.

In the case of a surrender, all remaining unliquidated Premiums will be
liquidated. In the case of a partial withdrawal, Premiums will be liquidated
whenever and to the extent the partial withdrawal exceeds the Free Withdrawal
Value. Premiums will be liquidated in the order the Premiums were received. Any
amount of liquidated Premium will be subject to a Withdrawal Charge based on the
length of time the Premium has been in the contract. The Withdrawal Charge is
determined in accordance with the following table:

Years From Date of Premium
Payment to Date of Withdrawal
Surrender or Withdrawal Charge
------------------------------------------
7 or more No Charge
------------------------------------------
at least 6, but less than 7 4%
------------------------------------------
at least 5, but less than 6 5%
------------------------------------------
at least 4, but less than 5 6%
------------------------------------------
at least 3, but less than 4 7%
------------------------------------------
at least 2, but less than 3 7%
------------------------------------------
at least 1, but less than 2 7%
------------------------------------------
Less than 1 Year 7%
------------------------------------------

A withdrawal will be deemed to have been "made" on the date we receive written
notice.

10 V1099X
<PAGE>

- --------------------------------------------------------------------------------
13. MARKET VALUE ADJUSTMENT
- --------------------------------------------------------------------------------

Prior to the last day of any Guarantee Period, amounts withdrawn or transferred
from the MVA Account will be adjusted up or down by the application of a Market
Value Adjustment. No Market Value Adjustment will apply to withdrawals or
transfers made on the last day of any Guarantee Period.

FORMULA

The Market Value Adjustment is equal to A times (B minus 1) where:

A is the amount subject to a market value adjustment, and

B is the market value adjustment factor below:

n
1+g ---
[--------] 12
1+c+.005
Where:

g = The guaranteed rate in effect for the current Guarantee Period (in decimal
form).

c = The current rate (in decimal form) in effect for durations equal to the
number of years remaining in the current Guarantee Period (years rounded up
to the nearest whole number). If not available, we will declare a rate
solely for this purpose that is consistent with rates for durations that
are currently available.

n = 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.)

The Market Value Adjustment may be positive or negative. In addition, the Market
Value Adjustment will not exceed, in a positive or negative direction, the
amount of any excess interest earned on the amount withdrawn or transferred
during a Guarantee Period up to the point of withdrawal or surrender. Excess
interest is defined as the dollar amount of interest earned 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% and the Accumulated Value
determined in accordance with Section 7, Accumulations.

11 V1199X
<PAGE>

- --------------------------------------------------------------------------------
14. SURRENDER PROVISION
- --------------------------------------------------------------------------------

Upon receipt of written notice from you before the Annuitant's death and the
Date of Maturity, we will pay the Surrender Value. To make a surrender that is
to be effective on the last day of any Guarantee Period, we must receive written
notice from you at least 30 days prior to the expiry of such Guarantee Period.

The Surrender Value will be determined by us as of the date of receipt of
written notice. We may defer payment of a Surrender Value for the period
provided by law. With respect to the MVA Account, we will not defer payment more
than six months beyond the date we receive written notice. If we defer payment
for more than 30 days, we will pay interest on the Surrender Value at a rate
equal to the greater of (i) the rate required by law; and (ii) the rate declared
by us.

- --------------------------------------------------------------------------------
15. CONVERSION
- --------------------------------------------------------------------------------

Unless changed by you or in accordance with Section 6, the Date of Maturity will
be as shown on page 3. You may change the Date of Maturity at any time by
written notice provided that we receive the written notice prior to the Date of
Maturity then in effect and provided that the new Date of Maturity is (i) no
later than the Annuitant's 95th birthday, without our prior approval; (ii) at
least 31 days after our receipt of the written notice; and (iii) at least six
months after the date the first Premium was applied to this contract.

CONVERSION OF ACCUMULATION UNITS TO ANNUITY UNITS

On the Date of Maturity or other date elected under Section 16 for commencement
of annuity payments, the Accumulation Units credited to this contract will be
converted into Annuity Units. Annuity payments will then commence subject to the
limitations specified in Section 16 and all other applicable provisions. The
number of Annuity Units credited to each variable investment option will be
determined by: (1) multiplying the number of Accumulation Units credited to the
variable investment option on the date of conversion by the Accumulation Unit
Value for the variable investment option as of ten days prior to the date the
first annuity payment is due; (2) deducting any applicable premium tax; (3)
dividing the resulting value by 1000; (4) multiplying the value from (3) by the
applicable factor from the Table of First Variable Annuity Payment Factors for
the option elected, or if no option is elected the applicable factor for the
Option A (Variable) with a guaranteed period of ten years, to determine that
variable investment option's portion of the variable portion of the first
monthly annuity payment, and (5) dividing the value from (4) by the Annuity Unit
Value for the variable investment option as of ten days prior to the date the
first annuity payment is due.

VARIABLE ANNUITY PAYMENTS

The amount of the variable portion of the monthly annuity payment due on the
first payment date is equal to the sum of the portions for each variable
investment option determined as described in the preceding paragraph. The amount
of the variable portion of any monthly annuity payment subsequent to the first
will be determined by adding together for each variable investment option the
product of the number of Annuity Units credited to the variable investment
option and the Annuity Unit Value for the variable investment option 10 days
prior to the date the payment is due. We guarantee that the Annuity Unit Values
used in determining annuity payments will not be affected by variations in our
actual mortality experience or our actual expenses from those assumed.

CONVERSION OF ACCUMULATED VALUE IN MVA ACCOUNT

On the Date of Maturity or other date elected to begin annuity payments, we will
convert the Accumulated Value of the MVA Account adjusted by a Market Value
Adjustment, if applicable, into annuity payments.

We will determine the fixed portion of the annuity payments by: (i) dividing the
adjusted Accumulated Value by 1000; and (ii) multiplying the result by the
annuity payment rate then in effect for the option elected in Section 16.

The fixed portion of the annuity payment will never be less than that available
by applying the adjusted Accumulated Value to buy an immediate fixed annuity
offered by us. If the annuity payments are made monthly, the annuity payment
rate is guaranteed to be at least that provided in the Table of Fixed Annuity
Payment Factors in Section 16.

12 V1299X
<PAGE>

- --------------------------------------------------------------------------------
16. SETTLEMENT PROVISIONS
- --------------------------------------------------------------------------------

ANNUITY ON DATE OF MATURITY

We shall make the annuity payments provided on the first page of this contract
automatically as a Life Annuity with Payments for a Guaranteed Period of 10
Years in accordance with the provisions of Option A unless another option is
elected. We shall determine the amounts of the annuity payments in accordance
with the provisions of this Section and of Section 15. Amounts in the variable
investment options will be used to provide variable benefits. Amounts in the MVA
Account will be used to provide fixed benefits.

If the amount of the first monthly annuity payment would be less than $20, we
will make a single payment equal to the Surrender Value on the Date of Maturity.
This single payment shall be in place of all other benefits provided by this
contract. If the amount of the first monthly annuity payment would be at least
$20 but less than $50, we may make payments at quarterly, semi-annual or annual
intervals.

OPTIONAL METHODS OF SETTLEMENT

In place of (i) the Annuity provided on the first page of this contract or (ii)
a single payment in case of death prior to the date annuity payments commence or
(iii) a single payment in case of surrender which occurs at least 6 months after
the date the first premium is applied to this contract, proceeds payable under
this contract may be left with us in accordance with one of the optional methods
of payment then available for contracts of this type and the terms of a
supplementary agreement to be issued when the option becomes effective, but only
if (i) such proceeds are in an amount of $5000 or more and (ii) the amount of
the first monthly annuity payment would be $50 or more.

Option A
- --------

Option A(Variable) - Life Annuity on a Variable Basis with Payments for a
Guaranteed Period of 5, 10, or 20 years.

If the Measuring Person's death occurs within the Guaranteed Period, payments
will be made for the remainder of the Guaranteed Period in accordance with the
terms of the supplementary agreement.

Option A(Fixed) - Life Annuity with Payments for a Guaranteed Period of 5, 10,
or 20 years.

If the Measuring Person's death occurs within the Guaranteed Period, payments
will be made for the remainder of the Guaranteed Period in accordance with the
terms of the supplementary agreement.

Option A with a five year Guaranteed Period cannot be elected without our prior
approval if the Measuring Person is over age 85 at the time of annuitization.

Option B
- --------

Option B(Variable) - Life Annuity on a Variable Basis Without Further Payment on
Death of the Measuring Person.

Option B(Fixed) - Life Annuity Without Further Payment on Death of the Measuring
Person.

Option B cannot be elected without our prior approval if the Measuring Person is
over age 85 at the time of annuitization.

Other options may be available.

13 V1399X
<PAGE>

You may elect an option by written notice before the death of the Annuitant and
before the commencement of annuity payments. If you have made no election before
the death of the Annuitant, the Beneficiary may make an election by written
notice before the proceeds become payable.

ANNUITY PAYMENT AND OPTION LIMITATIONS

While the Annuitant is living (i) the Measuring Person will be the Annuitant;
(ii) the Payee will be the Annuitant unless otherwise directed by you; and (iii)
the Contingent Payee will be the Beneficiary unless otherwise provided by
written notice.

If the Annuitant dies and Death Benefit proceeds are left with us in accordance
with a settlement option election (i) the Measuring Person will be the
Beneficiary, (ii) the Payee will be the Beneficiary unless otherwise designated
in the election, and (iii) the Contingent Payee will be the person or persons so
designated in the election and in accordance with the terms of the supplementary
agreement.

Other options may be available and may require our consent if the proceeds are
payable to an executor, administrator, trustee, corporation, partnership or
association.

If the Owner of this contract dies on or after annuity payments have begun, any
remaining benefit under such annuity on the date of the Owner's death must be
paid out at least as rapidly as under the method of making annuity payments then
in effect.

FIRST VARIABLE ANNUITY PAYMENT FACTORS

The Table of First Variable Annuity Payment Factors shows the amount of the
variable portion of the first monthly annuity payment provided on the first page
of this contract and under Option A(Variable) and Option B(Variable) for each
$1,000 applied. The factors in this table are based on the 1983a Individual
Annuity Mortality Table with mortality and age adjustments and interest at the
rate of 3 1/2% a year. If permitted by state law, the Owner may choose 5% or 6%
in place of the 3 1/2% rate. The amount of the variable portion of the first
payment will depend on the sex and adjusted age of the Measuring Person on the
date the first annuity payment is due. The adjusted age is determined from the
actual age on the Measuring Person's birthday nearest the date the first annuity
payment is due, by subtracting one year for each complete 10 year period elapsed
since the Date of Issue.

FIXED ANNUITY PAYMENTS

The Table of Fixed Annuity Payment Factors shows the guaranteed amount of the
fixed portion of the monthly annuity payments for each $1,000 applied. The
factors in this table are based on the 1983a Individual Annuity Mortality Table
with interest at the rate of 2 1/2% a year. The guaranteed amount of the fixed
portion of the annuity payments will depend on the adjusted age of the Measuring
Person on the date the first annuity payment is due. The adjusted age is
determined from the actual age on the Measuring Person's birthday nearest the
date the first annuity payment is due, by subtracting one year for each complete
10 year period elapsed since the Date of Issue.

14 V1499X
<PAGE>

TABLE OF FIRST VARIABLE ANNUITY PAYMENT FACTORS

Monthly life annuity with payments on a variable basis for each $1,000 applied.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Option B (Variable)
Option A (Variable) Life Annuity Without
Life Annuity with Payments Further Payment on Death
Adjusted for a Guaranteed Period of Measuring Person
Age of Measuring --------------------------------------------------------------------- ---------------------------
Person on Birthday 5 Years 10 Years 20 Years
Nearest Date ------- -------- --------
of First Payment Male Female Male Female Male Female Male Female
---------------- ---- ------ ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
55 4.50 4.13 4.46 4.11 4.32 4.05 4.51 4.13
56 4.58 4.19 4.54 4.18 4.38 4.10 4.59 4.20
57 4.67 4.26 4.62 4.24 4.44 4.16 4.68 4.27
58 4.76 4.33 4.71 4.31 4.50 4.22 4.78 4.34
59 4.86 4.41 4.80 4.39 4.57 4.28 4.88 4.42
60 4.96 4.49 4.90 4.46 4.63 4.35 4.98 4.50
61 5.08 4.58 5.00 4.55 4.70 4.41 5.10 4.59
62 5.20 4.67 5.11 4.64 4.77 4.48 5.22 4.69
63 5.32 4.77 5.23 4.73 4.84 4.55 5.36 4.79
64 5.46 4.88 5.35 4.83 4.91 4.62 5.50 4.89
65 5.61 4.99 5.47 4.94 4.97 4.69 5.65 5.01
66 5.76 5.11 5.61 5.05 5.04 4.77 5.81 5.13
67 5.93 5.24 5.74 5.17 5.11 4.84 5.99 5.27
68 6.10 5.38 5.89 5.29 5.17 4.92 6.17 5.41
69 6.29 5.53 6.04 5.43 5.24 5.00 6.37 5.56
70 6.49 5.69 6.20 5.57 5.30 5.07 6.59 5.73
71 6.69 5.86 6.36 5.72 5.35 5.15 6.81 5.91
72 6.91 6.05 6.52 5.88 5.41 5.22 7.05 6.10
73 7.14 6.25 6.69 6.04 5.46 5.29 7.31 6.32
74 7.39 6.46 6.87 6.22 5.50 5.35 7.58 6.55
75 7.65 6.70 7.05 6.40 5.54 5.41 7.88 6.79
76 7.92 6.94 7.23 6.59 5.58 5.47 8.19 7.06
77 8.21 7.20 7.41 6.78 5.61 5.52 8.53 7.35
78 8.52 7.48 7.59 6.98 5.64 5.56 8.90 7.66
79 8.84 7.78 7.78 7.19 5.67 5.61 9.29 8.00
80 9.17 8.10 7.96 7.40 5.69 5.64 9.71 8.36
81 9.52 8.44 8.14 7.61 5.71 5.67 10.16 8.76
82 9.88 8.81 8.31 7.82 5.73 5.70 10.64 9.20
83 10.26 9.19 8.48 8.03 5.74 5.72 11.16 9.67
84 10.65 9.59 8.64 8.23 5.74 5.73 11.71 10.18
85 and over 11.05 10.02 8.79 8.42 5.75 5.74 12.30 10.74
</TABLE>

15 V1599X
<PAGE>

TABLE OF FIXED ANNUITY PAYMENT FACTORS

Monthly life annuity with payments on a fixed basis for each $1,000 applied.
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------

Option B (Fixed)
Option A (Fixed) Life Annuity Without
Life Annuity with Payments Further Payment on Death
Adjusted for a Guaranteed Period of Measuring Person
Age of Measuring --------------------------------------------------------------- ------------------------------
Person on Birthday 5 Years 10 Years 20 Years
Nearest Date ------- -------- --------
of First Payment Male Female Male Female Male Female Male Female
---------------- ---- ------ ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
55 3.92 3.55 3.89 3.54 3.76 3.48 3.93 3.55
56 4.00 3.62 3.97 3.60 3.82 3.54 4.01 3.62
57 4.09 3.69 4.05 3.67 3.89 3.60 4.10 3.69
58 4.18 3.76 4.14 3.74 3.96 3.66 4.19 3.77
59 4.28 3.84 4.23 3.82 4.02 3.73 4.30 3.85
60 4.39 3.92 4.33 3.90 4.09 3.79 4.40 3.93
61 4.50 4.01 4.44 3.99 4.16 3.86 4.52 4.02
62 4.62 4.11 4.55 4.08 4.24 3.94 4.64 4.12
63 4.75 4.21 4.67 4.17 4.31 4.01 4.78 4.22
64 4.89 4.32 4.79 4.28 4.38 4.08 4.92 4.33
65 5.04 4.43 4.92 4.38 4.45 4.16 5.07 4.45
66 5.19 4.55 5.05 4.50 4.52 4.24 5.23 4.57
67 5.36 4.68 5.20 4.62 4.59 4.32 5.41 4.70
68 5.53 4.82 5.34 4.75 4.66 4.40 5.59 4.85
69 5.72 4.97 5.50 4.88 4.73 4.48 5.79 5.00
70 5.92 5.14 5.66 5.03 4.79 4.56 6.00 5.17
71 6.12 5.31 5.82 5.18 4.85 4.64 6.23 5.35
72 6.34 5.50 5.99 5.34 4.91 4.71 6.46 5.54
73 6.57 5.70 6.16 5.51 4.96 4.78 6.72 5.75
74 6.82 5.91 6.34 5.69 5.01 4.85 6.99 5.98
75 7.08 6.14 6.53 5.87 5.05 4.92 7.29 6.23
76 7.36 6.39 6.71 6.07 5.09 4.97 7.60 6.49
77 7.65 6.65 6.90 6.27 5.13 5.03 7.94 6.78
78 7.96 6.93 7.09 6.47 5.16 5.08 8.30 7.09
79 8.28 7.23 7.28 6.68 5.19 5.12 8.69 7.42
80 8.61 7.55 7.46 6.90 5.21 5.16 9.11 7.79
81 8.97 7.90 7.65 7.11 5.23 5.19 9.55 8.18
82 9.33 8.26 7.83 7.33 5.24 5.22 10.03 8.62
83 9.71 8.65 8.00 7.54 5.25 5.23 10.55 9.08
84 10.11 9.05 8.16 7.74 5.26 5.25 11.10 9.59
85 and over 10.51 9.48 8.32 7.94 5.27 5.26 11.68 10.15
</TABLE>

16 V1699X
<PAGE>

- --------------------------------------------------------------------------------
17. PROOF REQUIRED FOR PAYMENT
- --------------------------------------------------------------------------------

Before making the first annuity payment, we shall have the right to require
proof of the correct age of the Measuring Person. We shall also have the right
to require proof that the Measuring Person is living on the date each annuity
payment is due.

- --------------------------------------------------------------------------------
18. MISSTATEMENTS
- --------------------------------------------------------------------------------

If the age or sex of the Measuring Person has been misstated, we will adjust the
amount of each annuity payment to reflect the correct age and sex. Any
overpayment will be repaid to us. If it is not repaid, we will deduct the
overpayment from future payments we make under this contract. Any underpayment
will be added to future payments we make under this contract. Interest will be
paid on any overpayment or underpayment at a rate equal to the greater of (i)
the rate required by law; and (ii) the rate declared by us.

- --------------------------------------------------------------------------------
19. ASSIGNMENT
- --------------------------------------------------------------------------------

You may assign your interest in this contract, except as otherwise provided,
without the consent of any revocable Beneficiary. Your interest, any interest of
the Annuitant, and of any revocable Beneficiary shall be subject to the terms of
the assignment.

We will not be on notice of any assignment unless it is in writing; nor will we
be on notice until a duplicate of the original assignment has been filed at our
Servicing Office. We assume no responsibility for the validity or sufficiency of
any assignment.

If this contract is issued in a tax qualified plan, this contract is subject to
assignment restrictions for Federal Income Tax purposes. In such event, this
contract shall 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 other than us.

- --------------------------------------------------------------------------------
20. CLAIMS OF CREDITORS
- --------------------------------------------------------------------------------

The proceeds and all other payments under this contract will be exempt from the
claims of creditors to the extent permitted by law. The proceeds and payments
may not be assigned or withdrawn before becoming payable without our agreement.

- --------------------------------------------------------------------------------
21. RIGHT TO MAKE CHANGES
- --------------------------------------------------------------------------------

We reserve the right to make certain changes if, in our judgment, they would
best serve the interest of the Owners of contracts such as this or would be
appropriate in carrying out the purposes of such contracts. Any changes will be
made only to the extent and in the manner permitted by applicable laws. We will
inform our domiciliary state of the changes and will make any additional filings
which may be required in your jurisdiction.

If any changes result in a material change in the underlying investment of
Subaccounts to which the reserves for this contract are allocated, we will
notify you of such change. You may then make a new election under the Allocation
/Transfer Options provision.

- --------------------------------------------------------------------------------
22. ANNUAL STATEMENT
- --------------------------------------------------------------------------------

We will furnish you with reports annually, or more frequently, as required by
applicable law. They will include: (i) a statement of the investments held in
each Fund and each Management Account; and (ii) a statement of the condition and
value of this contract which will show the number of Accumulation Units, if any,
credited to each variable investment option, the value of each Accumulation
Unit, and the Accumulated Value of this contract.

17 V1799X
<PAGE>

- --------------------------------------------------------------------------------
23. MISCELLANEOUS
- --------------------------------------------------------------------------------

If the Accumulated Value of this contract becomes zero, we reserve the right to
terminate this contract.

Under applicable law, all income, gains and losses, realized or unrealized, of
an Account shall be credited to or charged against the amounts placed in the
Account without regard to our other income, gains and losses. The assets of the
Account are owned solely by us. We are not a trustee with respect to any part or
the whole of those assets. The portion of the assets in the Account equal to the
reserves and other liabilities under this contract with respect to the Account
shall not be chargeable with liabilities arising out of any other business we
may conduct.

In place of operating an Account as a Series Account trust, we reserve the right
to make investments directly, operating the Account as a Management Account, or
in any other form permitted by law, the investment adviser of which would be us
or an affiliate. Account assets would be invested as provided with respect to
the investment objectives of the Account.

18 V1899X
<PAGE>

The OWNER, by virtue of this CONTRACT, is a member of the John Hancock Mutual
Life Insurance Company, and is entitled to vote either in person or by proxy at
any and all meetings of the Company. The annual meetings are held at the
Company's Home Office on the second Monday of April in each year, at twelve
o'clock noon.

Communications about this contract should be sent to the Company at its
Servicing Office.

Combination Variable Annuity/Modified Guarantee Annuity
Nonparticipating - not eligible for dividends
Initial Premium shown on page 3

All benefits, payments and values under this contract which are based on the
investment experience of an Account are variable and not guaranteed as to fixed
dollar amount.

99REVEC VBP99X Printed in U.S.A.

Exhibit 5

[LOGO OF JOHN HANCOCK APPEARS HERE]
John Hancock Mutual Life Insurance Company,
Which will sometimes hereinafter be referred to as "the Company"
Variable deferred annuity application
Overnight Mail: [John Hancock Annuity Service Center Regular Mail: [John Hancock Annuity Service Center
529 Main Street P.O. Box 9298
Charlestown, MA 02129] Boston, MA 02205-9298]
For Assistance Call: [1-800-824-0335]
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
1. Owner/ownership type [ ]Male [ ]Female

[ ] Individual [ ] Trust [[ ] Charitable Remainder Trust [ ] Corporation [ ] UGMA [ ] UTMA] [ ] Other ________________

- ------------------------------------------------------------------------------------------------------------------------------------
Name(First,Middle.Last) or Name of Trust/Trustee Address(Street,City,State,Zip Code)* Home Phone No

- ------------------------------------------------------------------------------------------------------------------------------------
1a. Joint Owner (if any) [ ] Male [ ] Female

- ------------------------------------------------------------------------------------------------------------------------------------
Name (First, Middle, Last) Address (Street, City, State, Zip Code)* Home Phone No.

- ------------------------------------------------------------------------------------------------------------------------------------
Date of Birth (Month/Day/Year) Social Security Number/TIN Relationship to Owner Daytime Phone No.
[*If you are not a U.S. citizen or resident alien, please specify your country of residence above and attach IRS form W-8.]
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
2. Annuitant (if other than Owner) [ ] Male [ ] Female

[ ] Check if additional Annuitant is required for 1035 exchange. If so, please provide additional Annuitant information (listed
below) in Special Request Section 12.

- ------------------------------------------------------------------------------------------------------------------------------------
Name (First, Middle, Last) Address (Street, City, State, Zip Code) Home Phone No. Daytime Phone No.

- ------------------------------------------------------------------------------------------------------------------------------------
Date of Birth (Month/Day/Year) Social Security Number/TIN Relationship to Owner
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
3. Beneficiary(ies) Total % of Proceeds of Primary Beneficiary(ies) must equal 100%.

PRIMARY:
- ------------------------------------------------------------------------------------------------------------------------------------
Name (First, Middle, Last) Address (Street, City, State, Zip Code) Relationship to Annuitant % of Proceeds

CONTINGENT:
- ------------------------------------------------------------------------------------------------------------------------------------
Name (First, Middle, Last) Address (Street, City, State, Zip Code) Relationship to Annuitant
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
4. Date of Maturity (Annuity Commencement Date)

[ ] 95th Birthday [ ] 90th Birthday [ ] Other _________(maximum age is 95)

If Date of Maturity is not elected, the Date of Maturity will be the Annuitant's 95th Birthday unless the Guarantee Retirement
Income Benefit Rider is elected, in which case Date of Maturity will be the 90th birthday.
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
5. Replacement

Will any existing life insurance or annuity be (or has been) surrendered, withdrawn from, loaned against, changed or otherwise
reduced in value or replaced in order to fund the annuity that is being applied for? [ ] Yes [ ] No
If Yes, please complete and attach transfer paperwork and any necessary state replacement forms and complete the following:
Issuing Company: _____________________, Contract No._____________________________, Contract Type:____________________________
Issuing Company: _____________________, Contract No._____________________________, Contract Type:____________________________
Issuing Company: _____________________, Contract No._____________________________, Contract Type:____________________________
Have you purchased another annuity from the Company during the previous 12 months? [ ] Yes:(Account No.:___________________) [ ] No
- ------------------------------------------------------------------------------------------------------------------------------------
156-REV-00 [use this application in all states except xx,xx,xx,
Marketing Product Name]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
6. Initial Premium ($1,000 minimum for qualified contract or $5,000 for non-qualified contract required)

Method of Payment: Total Initial Premium: $_____________
<S> <C> <C>
[ ] Check is enclosed [ ] Wire [ ] Pending transfer or exchange
- ------------------------------------------------------------------------------------------------------------------------------------
7. Plan Selection Please check the appropriate box, if applicable
- ------------------------------------------------------------------------------------------------------------------------------------
A. [ ] Non-Qualified 1035(a) [ ] Tax-Free Exchange [ ] Cost Basis $_____________ [ ] Other: ___________
- ------------------------------------------------------------------------------------------------------------------------------------
Please check the appropriate box

B. [ ] Direct Transfer [ ] Rollover [ ] Traditional IRA [ ] Roth IRA [ ] Please indicate tax year: _________________
[ ] SIMPLE IRA [ ] SEP IRA [ ] 403(b) [ ] Profit Sharing [ ] Money Purchase
Please enter the Employer Case No.:_________________________ [ ] Other _______________
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
8. Please send Statements and Notices to: [ ] Annuitant [ ] Owner [ ] Other*

*If Other, please indicate name and address:________________________________________________________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
9. Investment Allocation Each selection must be whole percentages and the total of A and, B selections must equal 100%

[A. MVA Account Guarantee Periods
-----------------------------
1 Year _____% 2 Year _____% 3 Year _____% 4 Year _____% 5 Year _____%
6 Year _____% 7 Year _____% 8 Year _____% 9 Year _____% 10 Year _____%
B. Variable Investment Options
---------------------------
___% VA Growth ___% Emerging Mkts Equity ___% Managed
___% VA Growth & Income ___% Global Equity ___% Int' Balanced
___% VA Ind Equity ___% Int'l Opp ___% Real Estate Equity
___% VA Special Opp ___% Mid Cap Value ___% Strategic Bond
___% VA Emerging Growth ___% Small/Mid Cap CORE ___% Bond Index
___% VA Financial Industries ___% Large Cap Growth ___% Short Term Bond
___% VA Strategic Income ___% Int'l Equity Index ___% High Yield Bond
___% VA Sovereign Bond ___% Equity Index ___% Money Market
___% VA Global Bond ___% Large Cap Value ___% Mid Cap Growth
___% VA High Yield Bond]
Total of above (A) plus (B) must equal 100%
TOTAL (A) _______% TOTAL (B): _______%
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
10. Riders (only available at time of issue) Age, other restrictions, and other limitations may apply.

[ ] Enhanced Death Benefit
[ ] Waiver of Withdrawal Charges due to Nursing Home Confinement/Critical Illness
[ ] Guarantee Retirement Income Benefit (Date of Maturity must not exceed 90th Birthday)
[ ] Accumulated Value Enhancement Rider
[ ] Other _________________________
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
11. Telephone Transfer Provision

By checking the Yes box below, I/We direct the Company to act upon telephone instructions from the Owner (a trustee, if the
Owner is a trust, or an authorized business official, if the Owner is a business entity) and my/our registered representative,
if applicable, to change future payment allocations and/or transfer existing funds among the investment options, subject to the
terms of the telephone transfer provision as described in the current prospectus for the annuity.

[ ] Yes If "Yes", please check one: [ ] Owner(s) and Registered Representative
[ ] Owner(s) only
[ ] No
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

156-REV-00 [use this application in all states except xx, xx, xx,
Marketing Product Name]

<PAGE>

12. Special Requests (Please record any additional details on a separate piece
of paper.)

- --------------------------------------------------------------------------------

13. Signature(s) and Taxpayer Identification Number Certification

I/We acknowledge receipt of a current prospectus. I/We have read and completed,
as appropriate, all items contained in this application and declare all
statements are true to the best of my/our knowledge and belief. I/We hereby
certify to the best of my/our knowledge and belief that the taxpayer
identification number(s), as listed on this Application, is true and complete.
I/We acknowledge that the annuity will be subject to the telephone transfer
provision, if elected in Section 11, described in the current prospectus for the
annuity and, according to the terms of that provision, I/we may be liable for
any loss, expense or cost arising out of any unauthorized or fraudulent
telephone instructions that the Company receives from me/us. I/We agree that
neither the "Trusts", as defined in the prospectus, nor the Company will be
liable for any loss in acting on any written or telephone instructions that are
reasonably believed to be authentic. If this annuity is for a corporation,
business organization, or trust, I/we represent that the individual(s) signing
below has/have the proper authority to enter into this annuity.

[ ] Check here if a Statement of Additional Information is requested.
Amounts payable under this contract may be subject to a Market Value Adjustment.

[We may deliver prospectus updates, annual reports and proxy statements to
consenting Participants electronically by one of the following options:
[ ] (1) E-mailing the document; or [ ] (2) E-mailing a notice identifying an
Internet site where the document can be viewed and downloaded.
Please indicate your consent by checking the appropriate box.

You may incur online charges to receive a document under either option described
above. If you would like to receive these documents in electronic format when
available, please check the box and fill in your e-mail address
here:______________________________________. This consent will be in effect
until you revoke it. You may revoke it at any time by calling 1-800-732-5543.
If you consent to electronic delivery, you may request that we send you paper
copy at any time.]

The contractual payments and accumulation values under the variable annuity
provisions of the contract being applied for are variable and are not guaranteed
as to fixed dollar amounts.

- --------------------------------------------------------------------------------
Owner Signature Joint Owner Signature Signed at: City & State Date

For Representatives Use Only
Agent: Do you have any reason to believe that any existing life insurance or
annuity has been surrendered, withdrawn from, loaned against, changed or
otherwise reduced in value or replaced in connection with this
transaction assuming the annuity applied for will be issued on the life
of the annuitant? [ ] Yes [ ] No

- --------------------------------------------------------------------------------
Registered Representative Signature Signed at: City and State

- --------------------------------------------------------------------------------
Firm/Agency Name and Address Firm/Agency No.

- --------------------------------------------------------------------------------
Print Name & Registered Representative (JH Rep) No./Contract Code SSN

- -----------------------
Telephone No. %

- --------------------------------------------------------------------------------
Print Name & Registered Representative (JH Rep) No./Contract Code SSN

- ------------------------
Telephone No. %

Please check one of the following Comm Options (Contact your Home Office for
more information)

[[ ] Option A [ ] Option B [ ] Option C]

156-REV-00 [use this application in all states except xx, xx, xx,
Marketing Product Name]
<PAGE>

State Disclosures

[For all states except CO, CT, KY, NJ, OH, OK, PA, TX and VA:

Any person who, with intent to defraud or knowing that he is facilitating a
fraud against an insurer, submits an application or files a claim containing a
false or deceptive statement may be guilty of insurance fraud.

For Arizona Residents Only:

On written request, we are required to provide within a reasonable time,
reasonable factual information regarding the benefits and provisions of the
annuity contract to your. If for any reason, you are not satisfied with the
annuity contract you may return it within ten days after the contract is
delivered and receive a refund of all monies paid. For variable annuity
contracts, the refund shall equal the sum of the difference between the premiums
paid, including any policy or contract fees or other charges, and the amounts
allocated to any separate accounts under the policy or contract, and the value
of the amounts allocated to any separate accounts under the policy or contract
on the date the returned contract is received by the insurer or its agent.

For Connecticut Residents only:

For Kentucky Residents only:

Any person who knowingly and with the intent to defraud any insurance company or
other persons, submits an application or files a statement of claim containing
any materially false information, or conceals for the purpose of misleading,
information concerning any facts, material thereto, commits a fraudulent act,
which is a crime.

For New Jersey Residents only:

Any person who includes any false or misleading information on an application
for an insurance policy is subject to criminal and civil penalties.

For Ohio Residents only:

Any person who knowingly and with intent to defraud any insurance company or
other persons, submits an application or files a claim containing any materially
false information, or conceals for the purpose of misleading, information
concerning any facts, material thereto, commits a fraudulent act, which is a
crime.

For Oklahoma Residents only:

WARNING: Any person who knowingly and with intent to injure, defraud, or deceive
any insurer, makes a claim for the proceeds of an annuity containing any false,
incomplete or misleading information is guilty of a felony.

For Pennsylvania Residents only:

Any person who, knowingly and with intent to defraud any insurance company or
other person, files an application for insurance or statement of claim
containing any materially false information or conceals for the purpose of
misleading, information concerning any fact material thereto commits a
fraudulent insurance act, which is a crime and subjects such person to criminal
and civil penalties.

For Texas Residents only:

All benefits, payments and values, including the Account or Cash Value, which is
based upon the investment experience of a separate investment account may
increase or decrease in accordance with the investment experience of the
separate investment account and are not guaranteed as to fixed dollar amount.
The Account Value or Cash Value may even decrease to zero.

For Virginia Residents only

Any person who, with the intent to defraud or knowing that he is facilitating a
fraud against an insurer, submits an application or files a claim containing a
false or deceptive statement may have violated state law.]

156-REV-00 [use this application in all states except xx, xx, xx,
Marketing Product Name]

<PAGE>

Exhibit 9

[JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY LETTERHEAD]

August 6, 1999

Board of Directors
John Hancock Mutual Life Insurance Company

Re: John Hancock Mutual Life Insurance
Company Registration Statement on Form N-4
------------------------------------------

Directors:

In my capacity as Counsel of John Hancock Mutual Life Insurance Company
(the "Company"), I have represented the Company in connection with its
development of certain deferred annuities of a type which contemplates both
fixed benefits and variable benefits. I have participated in the preparation of
the initial Registration Statement on Form N-4 to be filed by the Company with
the Securities and Exchange Commission under the Securities Act of 1933, which
also constitutes Amendment No. 9 to the Registration Statement on Form N-4 under
the Investment Company Act of 1940, for the registration of interests in these
deferred annuity contracts to be issued by the Company (the "Registration
Statement").

I have reviewed the Articles and Bylaws of the Company and such corporate
records and other documents and such laws as I consider necessary and
appropriate as a basis for the opinion hereinafter expressed. Based on my
review of such documents and laws, I am of the following opinion: the Company is
a corporation duly organized and validly existing under the laws of the
Commonwealth of Massachusetts and the interests in the deferred annuity
contracts, when issued as contemplated in the Registration Statement, will be
legal and binding obligations of the Company in accordance with the terms of the
deferred annuity contracts.

I hereby consent to the filing of my opinion as an exhibit to the
Registration Statement. I do not admit that I am in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933 or the
rules and regulations of the Securities and Exchange Commission thereunder.

Very truly yours,

/s/ Ronald J. Bocage, Esq.
-------------------------
Ronald J. Bocage, Esq.
Vice President and Counsel

<PAGE>

EXHIBIT 10(b)

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in the
Prospectus in the Registration Statement (Form N-4) of John Hancock Variable
Annuity Account H.

We also consent to the inclusion of our reports dated February 10, 1999 on the
financial statements included in the Annual Report of the John Hancock Variable
Annuity Account H and dated February 19, 1999 on the financial statements
included in the Annual Report of the John Hancock Mutual Life Insurance Company
for the year ended December 31, 1998.

/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP

Boston, Massachusetts
July 26, 1999