<PAGE>
PATRIOT VARIABLE ANNUITY
SUPPLEMENT DATED DECEMBER 5, 2000
TO PROSPECTUS DATED NOVEMBER 1, 2000
If your contract was issued in the state of New York, the following changes
in the attached prospectus apply to your contract.
On page 18 of the prospectus, the table of withdrawal charges is replaced
with the following table:
-------------------------------------------------------------
Years from Date of Premium Payment to Withdrawal
Date of Surrender or Withdrawal Charge*
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7 or more 0%
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6 but less than 7 1%
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5 but less than 6 2%
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4 but less than 5 3%
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3 but less than 4 4%
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2 but less than 3 5%
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less than 2 6%
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* 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withdrawn (including the withdrawal charge), as explained in the text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.
On page 28 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.
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Also on page 28 of the prospectus, under the caption "Calculation of Market
Value Adjustment ("MVA")," the formula in the box is replaced with the following
formula:
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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.
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On page 22 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.
Also on page 23 of the prospectus, under the sub-caption " `Stepped-up'
death benefit rider," the parenthetical "(adjusted by any market value
adjustment)" is deleted from the second bullet.
Appendix A and Appendix B are replaced by the following two appendices:
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APPENDIX A - DETAILS ABOUT OUR GUARANTEED PERIODS
for contracts issued in New York
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.
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:
n
------
1 + g 12
(----------------------------------) - 1
1 + c + 0.0025
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where,
. g is the guaranteed rate in effect for the current guarantee period.
. c is the guaranteed rate then in effect for a new guarantee period with a
duration equal to the time remaining in the current guarantee period. If
the time remaining in the current guarantee period is not a whole number of
years, then the rate will be interpolated between the guaranteed rates then
in effect for the two new guarantee periods then being offered with
durations closest to the time remaining in the current guarantee period.
. 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>
<S> <C>
--------------------------------------------------------------------------------------------------------
Premium payment $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) 7%
--------------------------------------------------------------------------------------------------------
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)
Market value adjustment:
60
----
1 + 0.08 12
11,664 x [(---------------------) - 1] = 413.58
1 + 0.07 + 0.0025
Amount withdrawn or transferred (adjusted for market value adjustment): $11,664
+ $413.58 = $12,077.58
4
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Sample Calculation 2: Negative Adjustment
<TABLE>
<S> <C>
--------------------------------------------------------------------------------------------------------
Premium payment $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) 9%
--------------------------------------------------------------------------------------------------------
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:
60
------
1 + 0.08 12
11,664 x [(----------------------------------------) - 1] = -652.18
1 + 0.09 + 0.0025
Amount withdrawn or transferred (adjusted for money market adjustment): $11,664
- $652.18 = $11,011.82
Sample Calculation 3: Positive Adjustment Limited by Amount of Excess Interest
<TABLE>
<S> <C>
--------------------------------------------------------------------------------------------------------
Premium payment $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)
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Market value adjustment:
60
----
1 + 0.08 12
11,664 x [(----------------------------) - 1] = 1,605.54
1 + 0.05 + 0.0025
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>
<S> <C>
-------------------------------------------------------------------------------------------------------
Premium payment $ 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>
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:
60
------
1 + 0.08 12
11,664 x [(-------------------------------) - 1] = -1,142.61
1 + 0.10 + 0.0025
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.
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<PAGE>
APPENDIX B - EXAMPLE OF WITHDRAWAL CHARGE
CALCULATION
for contracts issued in New York
Assume The Following Facts:
On January 1, 1997, you make a $5000 initial premium payment and we issue
you a contract.
On January 1, 1998, you make a $ 1000 premium payment
On January 1, 1999, you make a $ 1000 premium payment.
On January 1, 2000, the total value of your contract is $9000 because of
good investment earnings.
Now assume you make a partial withdrawal of $ 6000 (no tax withholding) on
January 2, 2000. In this case, assuming no prior withdrawals, we would deduct
a CDSL of $ 229.57. We withdraw a total of $6,229.57 from your contract.
$ 6000.00 -- withdrawal request payable to you
+ 229.57 -- withdrawal charge payable to us
---------
$ 6229.57 -- total amount withdrawn from your contract
Here Is How We Determine The Withdrawal Charge:
1. We first reduce your $5000 INITIAL PREMIUM PAYMENT by the three annual
$ 30 contract fees we assessed on January 1, 1998, 1999, and 2000. We
withdraw the remaining $4910 from your contract.
$5000
-30 -- 1998 contract fee payable to us
-30 -- 1999 contract fee payable to us
-30 -- 2000 contract fee payable to us
-------
$4910 -- amount of your initial premium payment we would consider to be
withdrawn.
Under the free withdrawal provision, we deduct 10% of the total value of your
contract at the beginning of the contract year, or $900 (.10 x $9000). We pay
the $900 to you as part of your withdrawal request, and we assess a
withdrawal charge on the remaining balance of $4010. Because you made the
initial premium payment 3 years ago, the withdrawal charge percentage is 4%.
We deduct the resulting $ 200.50 from your contract to cover the withdrawal
charge on your initial premium payment. We pay the remainder of $3809.50 to
you as a part of your withdrawal request.
$4910
-900 -- free withdrawal amount (payable to you)
-------
$4010
x .04
$160.40 -- withdrawal charge on initial premium payment (payable to us)
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$4010.00
-160.40
3849.60 -- part of withdrawal request payable to you
2. We next deem the entire amount of your 1998 PREMIUM PAYMENT to be withdrawn
and we assess a withdrawal charge on that $1000 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 1998 premium payment. We pay the remainder of $950 to you as a part of
your withdrawal request.
$ 1000
x .05
--------
$ 50 -- withdrawal charge on 1998 premium payment (payable to us)
$ 1000
- 50
--------
$ 950 -- part of withdrawal request payable to you
3. We next determine what additional amount we need to withdraw to provide you
with the total $ 6000 you requested, after the deduction of the withdrawal
charge on that additional amount. We have already allocated $900 from the
free withdrawal amount, $3849.60 from your initial premium payment, and $950
from your 1999 premium payment. Therefore, $300.40 is needed to reach $6000.
$ 6000.00 -- total withdrawal amount requested
-900.00 -- free withdrawal amount
-3849.60 -- payment deemed from initial premium payment
-950.00 -- payment deemed from 1998 premium payment
-----------
$ 300.40 -- additional payment to you needed to reach $6000
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 1999. 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]
$ 300.40 = x - [.06x]
$ 300.40 = .94x
$ 300.4
---------
0.94 = x
$ 319.57 = x
$ 319.57 -- deemed withdrawn from 1999 premium payment
- $300.40 -- part of withdrawal request payable to you
---------
$ 19.17 -- withdrawal charge on 1999 premium deemed withdrawn (payable to
us)
8
