HANCOCK JOHN VARIABLE LIFE ACCOUNT U, 485BPOS, 1996-04-19

HANCOCK JOHN VARIABLE LIFE ACCOUNT U
485BPOS, 1996-04-19

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As filed with the Securities and Exchange Commission on April 18, 1996

Registration No. 33-76660
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM S-6
Post-Effective Amendment No. 3 to
Registration Statement Under
THE SECURITIES ACT OF 1933

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

JOHN HANCOCK VARIABLE LIFE ACCOUNT U
(Exact name of trust)

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(Name of depositor)

JOHN HANCOCK PLACE
BOSTON, MASSACHUSETTS 02117
(Complete address of depositor's principal executive offices)

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

FRANCIS C. CLEARY, JR., ESQ.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, 02117
(Name and complete address of agent for service)

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

Copy to:
GARY O. COHEN, ESQ.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036

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

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

/ /immediately upon filing pursuant to paragraph (b) of Rule 485
--
/X/on May 1,1996 pursuant to paragraph (b) of Rule 485
--
/ /60 days after filing pursuant to paragraph (a)(1) of Rule 485
--
/ /on (date) pursuant to paragraph (a)(1) of Rule 485
--

If appropriate check the following box

/ /this post-effective amendment designates a new effective date for a
-
previously filed amendment

Pursuant to the provisions of Rule 24f-2, Registrant has registered an
indefinite amount of the securities being offered and filed its Notice for
fiscal year 1995 pursuant to Rule 24f-2 on February 22, 1996.

<PAGE>

CROSS-REFERENCE TABLE

Form N-8B-2 Item Caption in Prospectus
- ---------------- ---------------------

1, 2 Cover, The Account and The Series
Fund or Funds, JHVLICO and John
Hancock

3 Inapplicable

4 Cover, Distribution of Policies

5,6 The Account and The Series Fund or
Funds, State Regulation

7, 8, 9 Inapplicable

10(a),(b),(c),(d),(e) Policy Provisions and Benefits

10(f) Voting Privileges

10(g),(h) Changes that JHVLICO
Can Make

10(i) Appendix--Other Policy
Provisions, The Account and The
Series Fund or Funds

11, 12 Summary, The Account and The Series
Fund or Funds, Distribution of
Policies

13 Charges and expenses,Appendix-
Illustration of Death Benefits,
Account Values, Surrender Values and
Accumulated Premiums

14, 15 Summary, Distribution of
Policies, Premiums

16 The Account and The Series Fund or
Funds

17 Summary, Policy Provisions
and Benefits

18 The Account and The Series Fund or
Funds, Tax Considerations

19 Reports

20 Changes that JHVLICO
Can Make

21, 22 Policy Provisions and Benefits
<PAGE>

23 Distribution of Policies

24 Not Applicable

25 JHVLICO and John Hancock

26 Not Applicable

27,28,29,30 JHVLICO and John Hancock, Board
of Directors and Executive
Officers of JHVLICO

31,32,33,34 Not Applicable

35 JHVLICO and John Hancock

37 Not Applicable

38,39,40,41(a) Distribution of Policies,
JHVLICO and John Hancock,
Charges and Expenses

42, 43 Not Applicable

44 The Account and The Series Fund or
Funds,Policy Provisions,
Appendix--Illustration of Death
Benefits, Account Values,
Surrender Values and
Accumulated Premiums

45 Not Applicable

46 The Account and The Series Fund or
Funds, Policy Provisions,
Appendix--Illustration of Death
Benefits, Account Values,
Surrender Values and
Accumulated Premiums

47 Not Applicable

48,49,50 Not Applicable

51 Policy Provisions and Benefits,
Appendix--Other Policy
Provisions

52 The Account and The Series Fund or
Funds, Changes that JHVLICO Can Make

53,54,55 Not Applicable

56,57,58,59 Not Applicable

<PAGE>

John Hancock Variable Life
Insurance Company
(JHVLICO)
[ART APPEARS HERE]

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
JOHN HANCOCK VARIABLE LIFE ACCOUNT U

LIFE AND ANNUITY SERVICES
P.O. BOX 111
BOSTON, MASSACHUSETTS 02117

TELEPHONE 1-800-REAL LIFE (1-800-732-5543)
FAX 617-572-5410

PROSPECTUS MAY 1, 1996

The flexible premium variable life policy ("Policy") described in this
Prospectus can be funded, at the discretion of the Owner, by up to ten of the
variable subaccounts of John Hancock Variable Life Account U (the "Account"),
by a fixed subaccount (the "Fixed Account"), or by any combination of the
Fixed Account and up to nine of the variable subaccounts (collectively, the
"Subaccounts"). The assets of each variable Subaccount will be invested in a
corresponding investment portfolio ("Portfolio") of John Hancock Variable
Series Trust I, a mutual fund advised by John Hancock Mutual Life Insurance
Company ("John Hancock") or of M Fund, Inc., a mutual fund advised by M
Financial Investment Advisers, Inc. (collectively, the "Funds"). The assets of
the Fixed Account will be invested in the general account of John Hancock
Variable Life Insurance Company ("JHVLICO").

The prospectuses for the Funds, which are attached to this Prospectus,
describe the investment objectives, policies and risks of investing in the
Portfolios of Variable Series Trust I: Growth and Income (formerly Stock),
Large Cap Growth (formerly Select Stock), Sovereign Bond (formerly Bond),
Money Market, Managed, Real Estate Equity, International Equities (formerly
International), Short-Term U.S. Government, Special Opportunities, Small Cap
Growth, Small Cap Value, Mid Cap Growth, Mid Cap Value, International
Balanced, International Opportunities, Large Cap Value, Strategic Bond and
Equity Index and in the Portfolios of M Fund Inc.: Edinburgh Overseas Equity,
Turner Core Growth and Frontier Capital Appreciation.

Replacing existing insurance with a Policy described in this Prospectus may
not be to your advantage.

THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
IT IS NOT VALID UNLESS ATTACHED TO A CURRENT PROSPECTUS FOR THE FUND.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
SUMMARY................................................................... 1
JHVLICO and JOHN HANCOCK.................................................. 6
THE ACCOUNT AND THE SERIES FUNDS.......................................... 7
THE FIXED ACCOUNT......................................................... 10
POLICY PROVISIONS AND BENEFITS............................................ 10
Requirements for Issuance of Policy..................................... 10
Premiums................................................................ 11
Account Value and Surrender Value....................................... 13
Death Benefits.......................................................... 14
Transfers Among Subaccounts............................................. 15
Loan Provisions and Indebtedness........................................ 17
Default................................................................. 18
Exchange Privilege...................................................... 18
CHARGES AND EXPENSES...................................................... 19
Charges Deducted from Premiums.......................................... 19
Sales Charges........................................................... 19
Administrative Surrender Charge......................................... 21
Reduced Charges for Eligible Groups..................................... 21
Charges Deducted from Account Value or Assets........................... 21
Guarantee of Premiums and Certain Charges............................... 23
DISTRIBUTION OF POLICIES.................................................. 23
TAX CONSIDERATIONS........................................................ 24
Policy Proceeds......................................................... 24
Charge for JHVLICO's Taxes.............................................. 25
Corporate and H.R. 10 Plans............................................. 25
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO...................... 26
REPORTS................................................................... 26
VOTING PRIVILEGES......................................................... 27
CHANGES THAT JHVLICO CAN MAKE............................................. 27
STATE REGULATION.......................................................... 28
LEGAL MATTERS............................................................. 28
REGISTRATION STATEMENT.................................................... 28
EXPERTS................................................................... 28
FINANCIAL STATEMENTS...................................................... 28
APPENDIX--OTHER POLICY PROVISIONS......................................... 48
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES
AND ACCUMULATED PREMIUMS................................................. 50
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS.
<PAGE>

INDEX OF DEFINED WORDS AND PHRASES

Below are listed certain words and phrases used in this Prospectus, together
with identification of the page on which each is defined or explained:

<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
Account....................................................... 7
Account Value................................................. 1
Age........................................................... 49
Base Policy Target Premium.................................... 19
DAC Tax....................................................... 19
Death Benefit................................................. 14
Fixed Account................................................. 10
Fund.......................................................... Front Cover
Guaranteed Death Benefit...................................... 11
Guaranteed Death Benefit Grace Period......................... 11
Guaranteed Death Benefit Premium.............................. 11
Home Office................................................... Front Cover
Indebtedness.................................................. 17
Investment Rule............................................... 12
Loan Account.................................................. 17
Minimum First Premium......................................... 11
Modal Processing Date......................................... 12
Planned Premium............................................... 11
Policy Grace Period........................................... 11
Portfolio..................................................... Front Cover
Subaccount.................................................... Front Cover
Sum Insured................................................... 4
Surrender Value............................................... 13
Target Premium................................................ 2
Valuation Date................................................ 9
Valuation Period.............................................. 8
Variable Subaccounts.......................................... 10
7-Pay Premium Limit........................................... 12
</TABLE>
<PAGE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?

John Hancock Variable Life Insurance Company ("JHVLICO") issues variable
life insurance policies. The Policies described in this Prospectus are
flexible premium policies. JHVLICO issues other variable life insurance
policies. These other policies are offered by means of other Prospectuses.

As explained below, the death benefit and Surrender Value under the Policy
may increase or decrease daily. The Policies differ from ordinary fixed-
benefit life insurance in the way they work. However, the Policies are like
fixed-benefit life insurance in providing lifetime protection against economic
loss resulting from the death of the insured. The Policies are primarily
insurance and not investments.

The Policies work generally as follows: the Policy owner (the "Owner")
periodically gives JHVLICO a premium payment. JHVLICO takes from each premium
an amount for taxes and, from certain premiums, sales expenses. JHVLICO then
places the rest of the premium into as many as ten Subaccounts as directed by
the Owner. The assets allocated to each variable Subaccount are invested in
shares of the corresponding Portfolio of the Funds. The currently available
Portfolios are identified on the cover of this Prospectus. The assets
allocated to the Fixed Account are invested in the general account of JHVLICO.
During the year, JHVLICO takes charges from each Subaccount and credits or
charges each Subaccount with its respective investment performance. The
insurance charge, which is deducted from the invested assets attributable to
each Policy ("Account Value"), varies monthly with the then attained age of
the insured and with the amount of insurance provided at the start of each
month.

The Policy provides for payment of death benefit proceeds when the insured
dies. The death benefit proceeds will equal the death benefit, plus any
additional benefit included by rider and then due, minus any Indebtedness. The
death benefit may be either level or variable as elected by the Owner. The
level death benefit provides a death benefit that generally remains fixed in
amount and an Account Value that varies daily. Two versions of the level death
benefit are available. The variable death benefit provides for a death benefit
and Account Value that may vary daily. The Policy also increases the death
benefit if necessary to ensure that the Policy will continue to qualify as
life insurance under the Federal tax laws.

The initial Account Value is the amount of the premium that JHVLICO credits
to the Policy, after deduction of the initial charges. The Account Value
increases or decreases daily depending on the investment experience of the
Subaccounts to which the amounts are allocated at the direction of the Owner.
JHVLICO does not guarantee a minimum amount of Account Value. Therefore, the
Owner bears the investment risk for that portion of the Account Value
allocated to the variable Subaccounts. The Owner may surrender a Policy at any
time while the insured is living. The Surrender Value is the Account Value
less the sum of any Administrative Surrender Charge, any Contingent Deferred
Sales Charge and any Indebtedness. The Owner may also make partial withdrawals
from a Policy, subject to certain restrictions and an administrative charge.
If the Owner surrenders in the early Policy years, the amount of Surrender
Value would be low (as compared with other investments without sales charges)
and, consequently, the insurance protection provided prior to surrender would
be costly.

The minimum Sum Insured at issue is $100,000. All persons insured must be
between ages 20 and 75 years at issue and meet certain health and other
criteria called "underwriting standards." An insured may be eligible for the
"preferred" class, which has the lowest insurance charges. The smoking status
of the insured is generally reflected in the insurance charges made. Policies
issued in certain jurisdictions or in connection with certain employee plans
will not directly reflect the sex of the insured in either the premium rates
or the charges and values under the Policy.

1
<PAGE>

The Owner of a Policy issued on a standard or preferred underwriting basis
may be eligible for the Guaranteed Death Benefit feature if he or she
satisfies certain other underwriting standards relating to health and
occupation. This provision is applicable at no additional cost only in the
first five Policy years and cannot be extended. Under this provision, the
Policy will be guaranteed not to lapse during the first five Policy years,
regardless of adverse investment performance, if the Owner pays the Guaranteed
Death Benefit Premiums on a cumulative basis over that period.

WHAT IS THE AMOUNT OF THE PREMIUMS?

Premiums are flexible and the Owner may choose the amount and frequency of
premium payments.

The minimum amount of premium required at the time of Policy issue is three
months of Guaranteed Death Benefit Premium. One year's Guaranteed Death
Benefit Premium equals the "Target Premium" of a Policy. Unless the Guaranteed
Death Benefit is in effect, if the Policy Account Value at the beginning of
any Policy month is insufficient to pay the monthly Policy charges then due,
JHVLICO will estimate the amount of additional premiums necessary to keep the
Policy in force for three months. The Owner will have a 61 day grace period to
pay at least that amount or the Policy will lapse.

The Target Premium is equal to the annual Guaranteed Death Benefit Premium.
The Target Premium is the sum of Base Policy Target Premium, an amount set
forth in the Policy at issue, plus any rider premium.

At the time of Policy issue, the Owner may designate the amount and
frequency of Planned Premium payments. The Owner may pay premiums other than
the Planned Premium payments, subject to certain limitations.

WHAT IS JOHN HANCOCK VARIABLE LIFE ACCOUNT U?

The Account is a separate investment account of JHVLICO, operated as a unit
investment trust, which supports benefits payable under the Policies. Each
variable Subaccount within the Account is invested in a corresponding
Portfolio of John Hancock Variable Series Trust I or of M Fund, Inc., each of
which is a "series" type of mutual fund. The Portfolios of the Funds which are
currently available are Growth and Income, Large Cap Growth, Sovereign Bond,
Money Market, Managed, Real Estate Equity, International Equities, Short-Term
U.S. Government, Special Opportunities, Small Cap Growth, Small Cap Value, Mid
Cap Growth, Mid Cap Value, International Balanced, International
Opportunities, Large Cap Value, Strategic Bond, Equity Index, Edinburgh
Overseas Equity, Turner Core Growth and Frontier Capital Appreciation.

John Hancock receives a fee from John Hancock Variable Series Trust I for
providing investment management services with respect to the Growth and
Income, Sovereign, Bond and Money Market Portfolios at an annual rate of .25%
of the average daily net assets; with respect to the Large Cap Growth and
Managed Portfolios, at an annual rate of .40% of the first $500 million of the
average daily net assets and at lesser percentages for amounts above $500
million; with respect to the Short-Term U.S. Government Portfolio, at an
annual rate of .50% of the first $250 million of the average daily net assets
and, at lesser percentages for amounts above $250 million; with respect to the
Real Estate Equity Portfolio, at an annual rate of .60% of the first $300
million of the average daily net assets and at lesser percentages for amounts
above $300 million; with respect to the International Equities Portfolio, at
an annual rate of .60% of the first $250 million of the average daily net
assets and at lesser percentages for amounts above $250 million; with respect
to the Special Opportunities Portfolio, at an annual rate of .75% of the first
$250 million of the average daily net assets and at lesser percentages for
amounts above $250 million; with respect to the Equity Index Portfolio at an
annual rate of

2
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0.25% of the average daily net assets; with respect to the Large Cap Value and
Small Cap Growth Portfolios at an annual rate of 0.75% of the average daily
net assets; with respect to the Mid Cap Growth Portfolio at an annual rate of
0.85% for the first $100,000,000 of average daily net assets and at lesser
percentages for amounts above $100,000,000; with respect to the Mid Cap Value
Portfolio at an annual rate of 0.80% of the first $250,000,000 of average
daily net assets and at lesser percentages for amounts above $250,000,000;
with respect to the Small Cap Value Portfolio at an annual rate of 0.80% of
the first $100,000,000 of average daily net assets and at lesser percentages
for amounts above $100,000,000; with respect to the Strategic Bond Portfolio
at an annual rate of 0.75% of the first $25,000,000 of average daily net
assets and at lesser percentages for amounts above $25,000,000; with respect
to the International Opportunities Portfolio at an annual rate of 1% of the
first $20,000,000 of average daily net assets and at lesser percentages for
amounts above $20,000,000; and for the International Balanced Portfolio at an
annual rate of 0.85% of the first $100,000,000 of average daily net assets and
at a lesser percentage for amounts above $100,000,000.

M Financial Investment Advisers, Inc., receives a fee from M Fund, Inc. for
providing investment management services with respect to the Overseas Equity
Portfolio at an annual rate of 1.05% of the first $10 million of the average
daily net assets and at an annual rate of .90% of the next $15 million of the
average daily net assets and at lesser percentages for amounts above $25
million; with respect to the Core Growth Portfolio at an annual rate of .45%
of the average daily net assets; and with respect to the Capital Appreciation
Portfolio at an annual rate of .90% of the average daily net assets.

For a full description of the Funds, see the Prospectuses for the Funds
attached to this Prospectus.

WHAT ARE THE CHARGES MADE BY JHVLICO?

State Premium Tax Charge and Federal DAC Tax Charge. Charges deducted from
each premium payment, currently 2.35% for state premium taxes and 1.25% as a
Federal deferred acquisition cost or "DAC Tax" charge.

Sales Charge Deduction from Premium. A charge equal to no more than 4% of
the Target Premium received in any Policy year. JHVLICO currently intends to
waive this deduction from premiums received after the first 10 Policy years.

Contingent Deferred Sales Charge. A charge deducted from Account Value if
the Policy lapses or is surrendered during the first 12 Policy years. The
amount of the charge depends upon the year in which lapse or surrender occurs.
The charge will never be higher than 26% of Base Policy Target Premiums paid
to date. The total charges for sales expenses over the lesser of 20 years or
the life expectancy of the insured will not exceed 9% of the Target Premium
payments under the Policy, assuming all Target Premiums are paid.

Administrative Surrender Charge. A charge deducted from Account Value if the
Policy lapses or is surrendered in the first 9 Policy years. The amount of the
charge depends upon the year in which lapse or surrender occurs and the
Policy's Sum Insured at that time. The maximum charge is $5 per $1,000 of
current Sum Insured.

Issue Charge. A charge deducted monthly from Account Value at the rate of
$20 per month for the first 12 Policy months.

Maintenance Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $8 (currently $6) per Policy.

3
<PAGE>

Insurance Charge. A charge based upon the amount for which JHVLICO is at
risk, considering the attained age and risk classification of the insured and
JHVLICO's then current monthly insurance rates (never to exceed rates set
forth in the Policy) deducted monthly from Account Value. JHVLICO currently
intends to reduce this charge beginning the tenth Policy year.

Charge for Mortality and Expense Risks. A charge made daily at a maximum
effective annual rate of .90% (currently .60%) of the assets of the Account.

Charge for Extra Mortality Risks. An additional charge, depending upon the
age of the insured and the degree of additional mortality risk, required if
the insured does not qualify for the standard or preferred underwriting class.
This additional charge is deducted monthly from Account Value.

Charge for Optional Rider Benefits. An additional charge required if the
Owner elects to purchase optional insurance benefits by rider. This additional
charge is deducted monthly from Account Value.

Charge for Partial Withdrawal. A charge of $20 made against Account Value at
the time of withdrawal.

See "Charges and Expenses", for a fuller description of the charges under
the Policy.

IS THERE A CHARGE AGAINST THE ACCOUNT FOR FEDERAL INCOME TAX?

Currently no charge is made against any Subaccount for Federal income taxes,
but if JHVLICO incurs, or expects to incur, income taxes attributable to any
Subaccount or this class of Policies in future years, it reserves the right to
make a charge. JHVLICO expects that it will continue to be taxed as a life
insurance company. See "Charge for JHVLICO's Taxes".

WHAT IS THE RELATIONSHIP BETWEEN THE PREMIUM AND THE AMOUNT ALLOCATED TO THE
SUBACCOUNTS?

The initial net premium is allocated by JHVLICO from its general account to
one or more of its Subaccounts on the date of issue of the Policy. The initial
net premium is the gross premium less the sales charge deducted from certain
premium payments and less the charges deducted from all premiums for state
premium taxes and the Federal DAC Tax charge. These charges also apply to
subsequent premium payments. Net premiums derived from payments received after
the issue date are allocated, generally on the date of receipt, to one or more
of the Subaccounts as elected by the Owner.

HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?

At issue and subsequently thereafter, the Owner will provide us with the
rule ("Investment Rule") we will follow to invest net premiums or other
amounts in any one but not more than ten of the Subaccounts. The Owner may
change the Investment Rule under which JHVLICO will allocate amounts to
Subaccounts.

WHAT COMMISSIONS ARE PAID TO AGENTS?

The Policies are sold through agents who are licensed by state authorities
to sell JHVLICO's insurance policies. Commissions payable to agents are
described under "Distribution of Policies". Sales expenses in any year are not
equal to the deduction for sales expenses in that year. Rather, total sales
expenses under the Policies are intended to be recovered over the lifetimes of
the insureds covered by the Policies.

4
<PAGE>

WHAT IS THE DEATH BENEFIT?

Three death benefit options are available at the time of application for a
Policy.

Option 1: Level Death Benefit. A level death benefit equal to the Sum
Insured or, if greater, the Account Value multiplied by the applicable
Corridor Factor.

Option 2: Variable Death Benefit. A variable death benefit equal to the Sum
Insured plus any Account Value, or, if greater, the Account Value multiplied
by the applicable Corridor Factor.

Option 3: Level Death Benefit With Greater Funding. A level death benefit
equal to the Sum Insured, or, if greater, the Account Value multiplied by the
applicable Death Benefit Factor. It differs from the level death benefit
option described above in that a greater amount of premium payments can
generally be made by the Owner.

Under each of the Options, an alternative death benefit is computed that is
equal to the Account Value multiplied by a Corridor Factor or a Death Benefit
Factor to increase the death benefit if necessary to ensure that the Policy
will continue to qualify as life insurance under the Federal tax law. See
"Death Benefits"; "Definition of Life Insurance" and "Tax Considerations".

Under the Guaranteed Death Benefit provision, the Policy is guaranteed not
to lapse during the first 5 Policy years, provided that, on each Modal
processing date, the amount of cumulative premiums paid, minus any
withdrawals, is at least equal to the cumulative amount of Guaranteed Death
Benefit Premiums due to date. This provision applies only if the insured is in
the preferred or standard underwriting risk class and satisfies certain other
underwriting standards relating to health and occupation.

HOW DOES THE ACCOUNT VALUE OF A POLICY VARY IN RELATION TO THE SUBACCOUNTS'
INVESTMENT EXPERIENCE?

In general, the Account Value for any day equals the Account Value for the
previous day, increased by any net premium placed in the Subaccounts for the
Policy, decreased by any charges made against the Account Value, and increased
or decreased by the investment experience of the Subaccounts. No minimum
Account Value for the Policy is guaranteed.

WHAT IS THE LOAN PROVISION AND HOW DOES A LOAN AFFECT THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE?

After the first Policy year the Owner may obtain a Policy loan. Assuming no
Indebtedness (see below), the maximum amount of any loan in Policy years two
and three is 75% of that portion of the Surrender Value attributable to
variable subaccount investments, plus 100% of that portion of the Surrender
Value attributable to Fixed Account investments; thereafter the maximum is 90%
of that portion of Surrender Value attributable to variable subaccount
investments, plus 100% of that portion of the Surrender Value attributable to
Fixed Account investments. Interest charged on any loan will accrue daily at
an annual rate determined by JHVLICO at the start of each Policy year. This
interest rate will not exceed the greater of (1) the "Published Monthly
Average" (see "Loan Provision and Indebtedness") for the calendar month ending
two months before the calendar month of the Policy anniversary or (2) 5%. In
jurisdictions where a fixed loan rate is applicable, JHVLICO will charge
interest at an effective annual rate of 6% accrued daily. A loan plus accrued
interest ("Indebtedness") may be repaid at the discretion of the Owner in
whole or in part in accordance with the terms of the Policy.

5
<PAGE>

While a loan is outstanding, the rate of interest credited to the Account
Value because of the loan will usually be different than the net investment
experience of the Subaccounts. Therefore, the Account Value, the Surrender
Value and any death benefit above the current Sum Insured are permanently
affected by any loan.

IS THERE A SHORT-TERM CANCELLATION RIGHT?

The Owner may surrender a Policy by delivering or mailing it within 45 days
after the date Part A of the application has been completed or within 10 days
after receipt of the Policy by the Owner, or within 10 days after mailing by
JHVLICO of a Notice of Withdrawal Right, whichever is latest, to JHVLICO's
Home Office, or to the agent or agency office through which it was delivered.
Coverage under the Policy will be cancelled immediately as of the date of such
mailing or delivery. Any premium paid on it will be refunded. If required by
state law, the refund will equal the Account Value at the end of the Valuation
Period in which the Policy is received plus all charges or deductions made
against premiums plus an amount reflecting charges against the Subaccounts and
the investment management fee of the Funds.

WHAT INVESTMENT TRANSFERS ARE ALLOWED AN OWNER?

The Owner may transfer the Account Value among the variable Subaccounts or
into the Fixed Account at any time. Transfers out of the Fixed Account,
however, are subject to restrictions.

ARE THE BENEFITS UNDER A POLICY SUBJECT TO FEDERAL INCOME TAX?

The benefits under Policies described in this Prospectus are expected to
receive the same tax treatment under the Internal Revenue Code of 1986 as
benefits under traditional fixed-benefit life insurance policies. Thus, death
benefits payable under the Policies will not be included in the beneficiary's
gross income. Also, the Owner is not taxed on interest and gains under the
Policy unless and until values are actually received through withdrawal,
surrender, or other distributions.

Under Federal tax law, distributions from Policies on which premiums greater
than a "7-pay" premium limit (as defined in the law) have been paid, will be
subject to special taxation. See "Premiums--7-Pay Premium Limit" and "Policy
Proceeds" for a discussion of how the "7-pay" premium limit may be exceeded
under a Policy. A distribution on such a Policy (called a "modified
endowment") will be taxed to the extent there is any income (gain) to the
Owner and an additional penalty tax may be imposed on the taxable amount.

JHVLICO AND JOHN HANCOCK

JHVLICO, a stock life insurance company chartered in 1979 under
Massachusetts law, is authorized to transact a life insurance and annuity
business in Massachusetts and all states other than New York. JHVLICO began
selling variable life insurance policies in 1980.

JHVLICO is a wholly-owned subsidiary of John Hancock, a company chartered in
Massachusetts in 1862. Its Home Office is at John Hancock Place, Boston,
Massachusetts 02117. John Hancock's assets are over $45 billion and it has
invested over $380 million in JHVLICO in connection with JHVLICO's
organization and operations. It is anticipated that John Hancock will from
time to time make additional capital contributions to JHVLICO to enable it to
meet its reserve requirements and expenses in connection with its business,
and John Hancock is committed to make additional capital contributions if
necessary to ensure that JHVLICO maintains a positive net worth.

6
<PAGE>

THE ACCOUNT AND THE SERIES FUNDS

THE ACCOUNT

The Account, a separate account established under Massachusetts law, meets
the definition of "separate account" under the Federal securities laws and is
registered as a unit investment trust under the Investment Company Act of 1940
("1940 Act").

The Account's assets are the property of JHVLICO. Each Policy provides that
the portion of the Account's assets equal to the reserves and other
liabilities under the Policy shall not be chargeable with liabilities arising
out of any other business JHVLICO may conduct. In addition to the assets
attributable to variable life policies, the Account's assets include assets
derived from charges made by JHVLICO. From time to time these additional
assets may be transferred in cash by JHVLICO to its general account. Before
making any such transfer, JHVLICO will consider any possible adverse impact
the transfer might have on any Subaccount.

The Account is registered with the Securities and Exchange Commission (the
"Commission") under the 1940 Act. Such registration does not involve
supervision by the Commission of the management or policies of the Account,
JHVLICO or John Hancock.

The assets in the variable Subaccounts are invested in corresponding
Portfolios of the Funds, but the assets of one variable Subaccount are not
necessarily legally insulated from liabilities associated with another
variable Subaccount. New variable Subaccounts may be added or existing
variable Subaccounts may be deleted as new Portfolios are added to or deleted
from the Funds and made available to Owners.

THE SERIES FUNDS

Each Fund is a "series" type of mutual fund registered with the Commission
under the 1940 Act as an open-end diversified management investment company.
Each Fund serves as the investment medium for the Account and other unit
investment trust separate accounts established for other variable life
insurance policies and variable annuity contracts. (See the attached Fund
Prospectuses for a description of a need to monitor for possible conflicts and
other consequences.) A very brief summary of the investment objectives of each
Portfolio is set forth below.

Growth and Income (formerly Stock) Portfolio. The investment objective of
this Portfolio is to achieve intermediate and long-term growth of capital,
with income as a secondary consideration. This objective will be pursued by
investments principally in common stocks (and in securities convertible into
or with rights to purchase common stocks) of companies believed by management
to offer growth potential over both the intermediate and long-term.

Large Cap Growth (formerly Select Stock) Portfolio. The investment objective
of this Portfolio is to achieve above-average capital appreciation through the
ownership of common stocks of companies believed by management to offer above-
average capital appreciation opportunities. Current income is not an objective
of the Portfolio.

Sovereign Bond (formerly Bond) Portfolio. The investment objective of this
Portfolio is to provide as high a level of long-term total rate of return as
is consistent with prudent investment risk, through investment in a
diversified portfolio of freely marketable debt securities. Total rate of
return consists of current income, including interest and discount accruals,
and capital appreciation.

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Money Market Portfolio. The investment objective of this Portfolio is to
provide maximum current income consistent with capital preservation and
liquidity. It seeks to achieve this objective by investing in a managed
portfolio of high quality money market instruments.

Managed Portfolio. The investment objective of this Portfolio is to achieve
maximum long-term total return consistent with prudent investment risk.
Investments will be made in common stocks, convertibles and other fixed income
securities and in money market instruments.

Real Estate Equity Portfolio. The investment objective of this Portfolio is
to provide above-average income and long-term growth of capital by investment
principally in equity securities of companies in the real estate and related
industries.

International Equities (formerly International) Portfolio. The investment
objective of this Portfolio is to achieve long-term growth of capital by
investing primarily in foreign equity securities.

Special Opportunities Portfolio. The investment objective of this Portfolio
is to achieve long-term capital appreciation by emphasizing investments in
equity securities of issuers in various economic sectors.

Short-Term U.S. Government Portfolio. The investment objective of this
Portfolio is to provide a high level of current income consistent with the
maintenance of principal, through investment in a portfolio of short-term U.S.
Treasury securities and U.S. Government agency securities.

Equity Index Portfolio: to provide investment results that correspond to the
total return of the U.S. market as represented by the S&P 500 utilizing common
stocks that are publicly traded in the United States.

Large Cap Value Portfolio: to provide substantial dividend income, as well
as long-term capital appreciation, through investments in the common stocks of
established companies believed to offer favorable prospects for increasing
dividends and capital appreciation.

Mid Cap Growth Portfolio: to provide long-term growth of capital through a
non-diversified portfolio investing largely in common stocks of mid-sized
companies.

Mid Cap Value Portfolio: to provide long-term growth of capital primarily
through investment in the common stocks of medium capitalization companies
believed by management to sell at a discount to their intrinsic value.

Small Cap Growth Portfolio: to provide long-term growth of capital through a
diversified portfolio investing primarily in common stocks of small
capitalization emerging growth companies.

Small Cap Value Portfolio: to provide long-term growth of capital by
investing in a well diversified portfolio of equity securities of small
capitalization companies exhibiting value characteristics.

Strategic Bond Portfolio: to provide a high total return consistent with
moderate risk of capital and maintenance of liquidity, from a portfolio of
domestic and international fixed income securities.

International Opportunitites Portfolio: to provide capital appreciation
through investments in common stocks of primarily well-established, non-United
States companies.

International Balanced Portfolio: to maximize total U.S. dollar return,
consisting of capital appreciation and current income, through investment in
non-U.S. equity and fixed income securities.

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John Hancock acts as the investment manager for the Portfolios described
above, and John Hancock's indirectly owned subsidiary, Independence Investment
Associates, Inc., with its principal place of business at 53 State Street,
Boston, Massachusetts, provides sub-investment advice with respect to the
Growth and Income, Large Cap Growth, Equity Index, Managed, Real Estate Equity
and Short-Term U.S. Government Portfolios. Another indirectly owned
subsidiary, John Hancock Advisers, Inc., located at 101 Huntington Avenue,
Boston, Massachusetts, and its subsidiary, John Hancock Advisers
International, Limited, located at 34 Dover Street, London, England, provide
sub-investment advice with respect to the International Portfolio, and John
Hancock Advisers, Inc. does likewise with respect to the Sovereign Bond, Small
Cap Growth and Special Opportunities Portfolios.

T. Rowe Price Associates, Inc., located at 100 East Pratt St., Baltimore, MD
21202, provides sub-investment advice with respect to the Large Cap Value
Portfolio and, together with its subsidiary, Rowe Price-Fleming International,
Inc., also located at 100 East Pratt St., Baltimore, MD 21202, provides sub-
investment advice with respect to the International Opportunities Portfolio.

Invesco Management and Research located at 101 Federal Street, Boston, MA
02110, is the sub-investment adviser to the Small Cap Value Portfolio. Janus,
with its principal place of business at 100 Filmore Street, Denver, CO 80206,
is the sub-investment adviser to the Mid Cap Growth Portfolio. Neuberger and
Berman Investment Management of 605 Third Avenue, New York, NY 10158, provides
sub-investment advice to the Mid Cap Value Portfolio. J.P. Morgan Investment
Management Inc., located at 522 Fifth Avenue, New York, NY 10036, provides
investment advice with respect to the Strategic Bond Portfolio and Brinson
Partners, Inc., of 209 S. LaSalle Street, Chicago, IL 60604, does likewise
with respect to the International Balanced Portfolio.

Edinburgh Overseas Equity Portfolio. Its investment objective is long-term
capital appreciation with reasonable investment risk through active management
and investment in common stock and common stock equivalents of foreign
issuers. Current income, if any, is incidental.

Turner Core Growth Portfolio. The investment objective of this Portfolio is
to seek long-term capital appreciation through a diversified portfolio of
common stocks that show strong earnings potential with reasonable market
prices.

Frontier Capital Appreciation Portfolio. This Portfolio seeks maximum
capital appreciation through investment in common stock of companies of all
sizes, with emphasis on stocks of small- to medium-capitalization companies.
Importance is placed on growth and price appreciation, rather than income.

M Financial Investment Advisers, Inc., acts as the investment manager for
the three Portfolios described above. Edinburgh Fund Managers PLC, provides
sub-investment advise to the Edinburgh Overseas Equity Portfolio; Turner
Investment Partners, Inc. provides sub-investment advise to the Turner Core
Growth Portfolio; and Frontier Capital Management Company, Inc., provides sub-
investment advice to the Frontier Capital Appreciation Portfolio.

JHVLICO will purchase and redeem Fund shares for the Account at their net
asset value without any sales or redemption charges. Shares of the Fund
represent an interest in one of the Portfolios of the Fund which corresponds
to a variable Subaccount of the Account. Any dividend or capital gains
distributions received by the Account will be reinvested in Fund shares at
their net asset value as of the dates paid.

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distributions reinvested, transfers to, from and among variable Subaccounts,
all to be effected as of that date. Such purchases and redemptions are
effected at the net asset value per Fund share for each Portfolio determined
on that same Valuation Date. A Valuation Date is any date on which JHVLICO is
open for business, the New York Stock Exchange is open for trading and on
which the Fund values its shares. A Valuation Period is that period of time
from the beginning of the day following a Valuation Date to the end of the
next following Valuation Date.

A full description of each Fund, its investment objectives, policies and
restrictions, its charges, expenses and all other aspects of its operation is
contained in the attached Prospectuses and the statement of additional
information referred to therein, which should be read together with this
Prospectus.

THE FIXED ACCOUNT

An Owner may allocate premiums to the Fixed Account or transfer all or a
part of the Account Value under a Policy to the Fixed Account. The amount so
allocated or transferred will become a part of JHVLICO's general account
assets. JHVLICO's general account consists of assets owned by JHVLICO other
than those in the Account and in other separate accounts that have been or may
be established by JHVLICO. Subject to applicable law, JHVLICO has sole
discretion over the investment of assets of the general account and Owners do
not share in the investment experience of those assets. Instead, JHVLICO
guarantees that the Account Value allocated to the Fixed Account will accrue
interest daily at an effective annual rate of at least 4% without regard to
the actual investment experience of the general account. Consequently, if an
Owner pays the Required Premiums, allocates all net premiums only to the Fixed
Account, and makes no transfers, partial withdrawals, or policy loans, the
minimum amount and duration of the death benefit will be determinable and
guaranteed. Transfers from the Fixed Account are subject to certain
limitations (see "Transfers Among Subaccounts"), and charges will vary
somewhat for Account Value allocated to the Fixed Account. See "Charges
Deducted From Account Value".

The Account Value in the Fixed Account is equal to the portion of the net
premiums allocated to it, plus any amounts transferred to it and interest
credited to it, minus any charges deducted from it or partial withdrawals or
amounts transferred from it. JHVLICO guarantees that interest credited to the
Account Value in the Fixed Account will not be less than an effective annual
rate of 4%. JHVLICO may, in its sole discretion, credit higher rates although
it is not obligated to do so. The Owner assumes the risk that interest
credited will not exceed 4% per year. Upon request and in the annual
statement, JHVLICO will inform Owners of the then-applicable rates.

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

POLICY PROVISIONS AND BENEFITS

REQUIREMENTS FOR ISSUANCE OF POLICY

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"underwriting standards". The smoking status of each insured is reflected in
the insurance charges made. Policies issued in certain jurisdictions or in
connection with certain employee plans will not directly reflect the sex of
the insured in either the premium rates or the charges or values under the
Policy. Accordingly, the illustrations set forth in this Prospectus may differ
for such Policies.

PREMIUMS

Payment Flexibility. Premiums are flexible. The Owner may choose the amount
and frequency of premium payments, so long as each premium payment meets the
requirements described below.

Minimum First Premium. The amount of premium required at the time of issue
is determined by JHVLICO, and depends on the age, sex, smoking status, and
underwriting class of the insured at issue, the Policy's Sum Insured at issue,
and any additional benefits selected. The Minimum First Premium must be
received by JHVLICO at its Home Office before the Policy is in full force and
effect. See "Death Benefits". There is no grace period for the payment of the
Minimum First Premium. The minimum amount of premium required at the time of
Policy issue is three months of Guaranteed Death Benefit Premium. However, an
automatic check writing program ("premiumatic") may be available to an Owner
interested in making monthly premium payments and, if utilized by an Owner,
only one month of Guaranteed Death Benefit Premium need be paid to satisfy the
minimum amount.

Minimum Premiums. If the Policy's Surrender Value at the beginning of any
Policy month is insufficient to pay the monthly Policy charges then due,
JHVLICO will notify the Owner and the Policy will enter a Policy grace period,
unless the Guaranteed Death Benefit is in effect. If premiums sufficient to
pay at least three months' estimated charges are not paid by the end of the
grace period, the Policy will lapse. The estimated charges will equal three
times the monthly Policy charges then due. See "Default".

Planned Premium Schedule. At the time of issue, the Owner may designate a
Planned Premium schedule for the amount and frequency of premium payments.
JHVLICO will send billing statements for the amount chosen, at the frequency
chosen, whether quarterly, monthly, semi-annually or annually. The Owner may
change the Planned Premium after issue. The Owner may also pay a premium in
excess of the Planned Premium, subject to the limitations described below. At
the time of Policy issuance, JHVLICO will determine whether the Planned
Premium schedule will exceed the 7-Pay limit discussed below. If so, JHVLICO
will not issue the Policy unless the Owner signs a form acknowledging that
fact.

Other Premium Limitations. Federal tax law requires a minimum death benefit
in relation to Account Value. See "Death Benefits--Definition of Life
Insurance". The death benefit of the Policy will be increased if necessary to
ensure that the Policy will continue to satisfy this requirement. If the
payment of a given premium will cause the Policy Account Value to increase to
such an extent that an increase in death benefit is necessary to satisfy
Federal tax law requirements, JHVLICO has the right to not accept the excess
portion of that premium payment, or to require evidence of insurability before
that portion is accepted. In no event, however, will JHVLICO refuse to accept
any premium necessary to prevent the Policy from lapsing. Also, if an Owner
has elected to use the "guideline premium and cash value corridor" test for
Federal income tax purposes, JHVLICO will not accept the portion of any
premium that exceeds the maximum amount prescribed under that test.

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Owners electing a monthly premium payment mode; 1/4 of the Target Premium for
Owners electing the quarterly mode; 1/2 of the Target Premium for owners
electing the semi-annual mode; and the Target Premium for Owners electing the
annual mode. The due date for each premium is referred to as the Modal
processing date. To keep the Guaranteed Death Benefit in effect, the amount of
actual premiums paid minus any withdrawals must at each Modal processing date
be at least equal to the Guaranteed Death Benefit Premiums due to date. If
this test is not satisfied on any Modal processing date, JHVLICO will notify
the Owner of the shortfall immediately and a Guaranteed Death Benefit grace
period will commence as of that anniversary. The Guaranteed Death Benefit
grace period will end on the second monthly processing date after the
determination of the shortfall. This notice will be mailed to the Owner's
last-known address at least 31 days prior to the end of the Guaranteed Death
Benefit grace period. If JHVLICO does not receive payment for the amount of
the deficiency by the end of the Guaranteed Death Benefit grace period, the
Guaranteed Death Benefit feature will lapse. The Guaranteed Death Benefit is
only available if the insured's underwriting class is standard or preferred
and the insured meets certain other underwriting standards relating to health
and occupation.

Billing, Allocation of Premium Payments (Investment Rule). The Owner may at
any time elect to be billed by JHVLICO for a Planned Premium other than the
Guaranteed Death Benefit Premium. The Owner may also elect to be billed for
premiums on an annual, semi-annual, quarterly or monthly basis. An automatic
check-writing program ("premiumatic") may be available to an Owner interested
in making monthly premium payments. All premiums are payable at JHVLICO's Home
Office.

Any premium payment will be processed by JHVLICO as of the end of the
Valuation Period in which it is received, unless one of the three exceptions
noted below is applicable. Each premium payment will be reduced by the state
premium tax charge, any sales charge, and the Federal DAC Tax charge. See
"Charges and Expenses". The remainder is the net premium.

The Owner at the time of application must elect an Investment Rule which
will allocate net premiums and any credits to any of the ten Subaccounts. The
Owner must select allocation percentages in whole numbers, and the total
allocated must equal 100%. The Owner may thereafter change the Investment Rule
prospectively at any time. The change will be effective as to any net premiums
and credits applied after receipt at JHVLICO's Home Office of notice
satisfactory to JHVLICO.

There are three exceptions to the normal practice of processing a premium
payment as of the end of the Valuation Period in which it is received:

(1) A payment received prior to a Policy's date of issue will be
processed as if received on the Valuation Date immediately
preceding the date of issue.

(2) If the Minimum First Premium is not received prior to the date of
issue, each payment received thereafter will be processed as if
received on the Valuation Date immediately preceding the date of
issue until all of the Minimum First Premium is received.

(3) That portion of any premium that we delay accepting as described
under "Other Premium Limitations" above, or "7-Pay Premium Limit"
below, will be processed as of the end of the Valuation Period in
which we accept that amount.

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<PAGE>

pay limit is the total of net level premiums that would have been payable at
any time for the Policy to be fully paid-up after the payment of 7 level
annual premiums. If the total premiums paid exceed the 7-pay limit, the Policy
will be treated as a "modified endowment", which means that the Owner will be
subject to tax to the extent of any income (gain) on any distributions made
from the Policy. A material change in the Policy will result in a new 7-pay
limit and test period. A reduction in the Policy's benefits within the 7-year
period following issuance of, or reinstatement or other material change in,
the Policy may also result in the application of the modified endowment
treatment. See "Policy Proceeds" under "Tax Considerations". If JHVLICO
receives any premium payment that will cause a Policy to become a modified
endowment, the excess portion of that premium payment will not be accepted
unless the Owner signs an acknowledgment of that fact. When it identifies such
an excess premium, JHVLICO sends the Owner immediate notice and refunds the
excess premium if it has not received notice of the acknowledgement by the
time the premium payment check has had a reasonable time to clear the banking
system, but in no case longer than two weeks.

ACCOUNT VALUE AND SURRENDER VALUE

Amount of Account Value. The Account Value increases or decreases depending
upon a number of factors, such as the applicable Subaccount's investment
experience, the proportion of the Account Value invested in each Subaccount
and the interest credited to any Loan Account established upon the making of a
Policy loan. In general the Account Value for any day equals the Account Value
for the previous day, decreased by charges against the Account Value,
increased or decreased by the investment experience of the Subaccounts and
increased by net premiums received. No minimum amount of Account Value is
guaranteed.

A Policy loan will not affect the total amount of Account Value at the time
the loan is made but will result in a different rate of return being credited
to the Loan Account portion of the Account Value.

Amount of Surrender Value. The Surrender Value will be the Account Value
less the sum of any Administrative Surrender Charge, any Contingent Deferred
Sales Charge, and any Indebtedness.

When Policy May Be Surrendered. A Policy may be surrendered for its
Surrender Value at any time while the insured is living and the Policy is not
in a Policy grace period. Surrender takes effect and the Surrender Value is
determined as of the end of the Valuation Period in which occurs the later of
receipt at JHVLICO's Home Office of a signed request and the surrendered
Policy.

A portion of the Contingent Deferred Sales Charge, equal to 20% of premiums
paid in the second Policy year up to one Base Policy Target Premium, will be
waived in calculating the second Policy year's Surrender Value.

Partial Withdrawal of Surrender Value. The Owner may request withdrawal of
part of the Surrender Value in accordance with JHVLICO's rules then in effect.
Any withdrawal must be at least $1,000 and is subject to an administrative
charge of $20.

An Owner may request a partial withdrawal of Surrender Value at any time
provided that the Policy is not in a Policy grace period. This privilege,
which reduces the Account Value by the amount of the withdrawal and the
associated charge, may not be used to reduce the Account Value below the
amount JHVLICO estimates will be required to pay three months' charges under
the Policy as they fall due. The withdrawal will be effective as of the end of
the Valuation Period in which JHVLICO receives written notice satisfactory to
it at its Home Office.

An amount equal to the Account Value withdrawn will be removed from each
Subaccount in the same proportion as the Account Value is then allocated among
the Subaccounts. A withdrawal is not a loan and, once made, cannot be repaid.

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<PAGE>

The effect of a withdrawal, including its associated charge, upon the death
benefit depends upon the death benefit option in effect.

Option 1. Level Death Benefit. Any withdrawal will first be deducted from
Account Value until the Account Value, multiplied by the appropriate Corridor
Factor, is no higher than the Sum Insured. Thereafter, both the Sum Insured
and the Account Value will be reduced by the remaining amount of the
withdrawal. If the Account Value multiplied by the appropriate Corridor Factor
does not exceed the Sum Insured at the time of the withdrawal, the withdrawal
will reduce both the Sum Insured and the Account Value.

Option 2. Variable Death Benefit. Any withdrawal will be deducted from
Account Value and will not affect the Sum Insured. Nonetheless, because
Account Value will be reduced, the death benefit under this option also will
be reduced.

Option 3. Level Death Benefit with Greater Funding. Any withdrawal will
first be deducted from Account Value until the Account Value, multiplied by
the appropriate Death Benefit Factor, is no higher than the Sum Insured.
Thereafter, both the Sum Insured and the Account Value will be reduced by any
remaining amount of the withdrawal. If the Account Value multiplied by the
appropriate Death Benefit Factor does not exceed the Sum Insured at the time
of the withdrawal, the withdrawal will reduce both the Sum Insured and the
Account Value.

A surrender or withdrawal may have significant tax consequences. See "Tax
Considerations".

JHVLICO reserves the right to refuse any withdrawal request that would cause
the Policy's Sum Insured to fall below $100,000.

DEATH BENEFITS

The death benefit proceeds will equal the death benefit of the Policy, plus
any additional rider benefits then due, minus any Indebtedness. If the insured
dies during a Policy grace period, JHVLICO will also deduct any overdue
monthly deductions.

The death benefit payable depends on the current Sum Insured and the death
benefit option selected by the Owner. At the time of application for a Policy,
the Owner must select from among three death benefit options. After issue of
the Policy the Owner may change the selection from Option 1 to Option 2 or
vice versa, subject to such evidence of insurability as JHVLICO may require.
The three options are:

Option 1: Level Death Benefit: Under this option, the death benefit will
equal the Sum Insured, unless the Account Value multiplied by the Corridor
Factor produces a higher death benefit. The Corridor Factor depends upon the
attained age of the insured. The Corridor Factor decreases slightly (or
remains the same at older and younger ages) from year to year as the attained
age of the insured increases. A complete list of Corridor Factors is set forth
in the Policy. The Policy will be subject under this option to the "guideline
premium and cash value corridor" test as defined by Internal Revenue Code
("Code") Section 7702. This option will offer the best opportunity for the
Account Value under a Policy to increase without increasing the death benefit
as quickly as it might under the other options. When the Account Value
multiplied by the Corridor Factor exceeds the Sum Insured, the death benefit
will increase whenever there is an increase in the Policy's Account Value and
will decrease whenever there is a decrease in the Account Value, but never
below the Sum Insured.

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<PAGE>

(or remains the same at older and younger ages) from year to year as the
attained age of the insured increases. A complete list of Corridor Factors is
set forth in the Policy. Under this option the Policy will be subject to the
"guideline premium and cash value corridor" test as defined by Code Section
7702. This option will offer the best opportunity for the Owner who would like
to have an increasing death benefit as early as possible. The death benefit
will increase whenever there is an increase in the Policy's Account Value and
will decrease whenever there is a decrease in the Account Value, but never
below the Sum Insured.

Option 3: Level Death Benefit With Greater Funding: Under this option, the
death benefit will equal the Sum Insured, unless the Account Value, multiplied
by the Death Benefit Factor, gives a higher death benefit. The Death Benefit
Factor depends upon the sex, smoking status and then attained age of the
insured. The Death Benefit Factor decreases slightly from year to year as the
attained age of the insured increases. A complete list of Death Benefit
Factors is set forth in the Policy. Under this option, the death benefit will
be subject to the "cash value accumulation" test as defined by Code Section
7702. This option will offer the best opportunity for the Owner who is looking
for an increasing death benefit in later Policy years and/or would like to
fund the policy at the "7-pay" limit for the full 7 years. When the Account
Value multiplied by the Death Benefit Factor exceeds the Sum Insured, the
death benefit will increase whenever there is an increase in the Policy's
Account Value and will decrease whenever there is a decrease in the Account
Value, but never below the Sum Insured.

Definition of Life Insurance. Federal tax law requires a minimum death
benefit in relation to cash value for a Policy to qualify as life insurance.
The death benefit of a Policy will be increased if necessary to ensure that
the Policy will continue to qualify as life insurance. One of two tests under
current Federal tax law can be used to determine if a Policy complies with the
definition of life insurance in Section 7702 of the Code.

The "guideline premium and cash value corridor" test limits the amount of
premiums payable under a Policy to a certain amount for an insured of a
particular age and sex. The test also applies a prescribed "Corridor Factor"
to determine a minimum ratio of death benefit to Account Value.

The "cash value accumulation test" also limits the amount of premiums
payable under a Policy to a prescribed amount, using a minimum ratio of death
benefit to a Policy's Account Value, but employs as a standard a "net single
premium" computed in compliance with the Code. If the Account Value under a
Policy is at any time greater than the net single premium at the insured's age
and sex for the proposed death benefit, the death benefit will be increased
automatically by multiplying the Account Value by a "Death Benefit Factor"
computed in compliance with the Code.

Guaranteed Death Benefit. During the first 5 Policy years the Policy is
guaranteed not to lapse, provided that (1) the amount of premiums paid through
each Modal processing date minus any withdrawals is at least equal to the sum
of the cumulative Guaranteed Death Benefit Premiums due to date and (2) the
insured is in the standard or preferred underwriting class and satisfies
certain other underwriting standards relating to health and occupation. At any
time when this feature is not in force, the death benefit of the Policy is not
guaranteed and the Policy may lapse if the Account Value falls to a low level.

TRANSFERS AMONG SUBACCOUNTS

The Owner may reallocate the amounts held for the Policy in the Subaccounts
with no charge at any time, except as noted below. The Owner may either (1)
use percentages (in whole numbers) to be transferred among Subaccounts or (2)
designate the dollar amount of funds to be transferred among Subaccounts. The
reallocation must be such that the total in the Subaccounts after reallocation
equals 100% of Account Value. Transfers out of a variable Subaccount will be
effective at the end of the Valuation Period in which JHVLICO receives at its
Home Office notice satisfactory to JHVLICO.

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<PAGE>

Transfers out of the Fixed Account to the variable Subaccounts are permitted
only once each Policy year and only during the 31-day period beginning on the
Policy anniversary. Transfers out of the Fixed Account may be requested from
60 days before to 30 days after the Policy anniversary. If received on or
before the Policy anniversary, requests for transfer out of the Fixed Account
will be processed on the Policy anniversary (or the next Valuation Date if the
Policy anniversary does not occur on a Valuation Date); if received after the
Policy anniversary, they will be processed at the end of the Valuation Period
in which JHVLICO receives the request at its Home Office. (JHVLICO reserves
the right to defer such Fixed Account transfers for six months.) If an Owner
requests a transfer out of the Fixed Account 61 days or more prior to the
Policy anniversary, that portion of the reallocation will not be processed and
the Owner's confirmation statement will not reflect a transfer out of the
Fixed Account as to such request. Transfers among variable Subaccounts and
transfers into the Fixed Account may be requested at any time. A maximum of
20% of Fixed Account assets or, if greater, $500 may be transferred out of the
Fixed Account in any Policy year. Currently, there is no minimum amount limit
on transfers out of the Fixed Account, but JHVLICO reserves the right to
impose such a limit in the future. No transfers may be made while the Policy
is in a grace period.

If the Owner requests a reallocation which would result in amounts being
held in more than ten subaccounts, such reallocation will not be effective and
a revised reallocation may be chosen in order that amounts will be reallocated
to no more than ten subaccounts.

Dollar Cost Averaging. A scheduled monthly transfer option is available to
Owners seeking to take advantage of "dollar cost averaging". This option
provides for the automatic transfer on a monthly basis of a dollar amount
chosen by the Owner from the Money Market Subaccount to any of the other
variable Subaccounts.

Eligibility for this option is limited to an Owner who has $2,500 or more in
the Money Market Subaccount on the day the transfer is scheduled to begin.
Scheduled transfers may be made to any one or more but not more than nine of
any other variable Subaccounts but the amount to be transferred monthly to any
Subaccount must be $100 or more.

Once the election is received in form satisfactory to JHVLICO at its Home
Office, transfers will begin on the second monthly processing date following
its receipt. To make an election or if you have any questions with respect to
this provision, call 1-800-732-5543.

Once elected, the scheduled monthly transfer option will remain in effect
until the receipt of written notice from the Owner by JHVLICO at its Home
Office of cancellation of the option or receipt of notice of the death of the
insured, whichever first occurs.

Telephone Transfers and Policy Loans. Once a written authorization is
completed by the Owner, the Owner may request a transfer or policy loan by
telephoning 1-800-732-5543. During periods of heavy telephone usage,
implementing a telephone transfer or policy loan may be difficult. If an Owner
is unable to reach JHVLICO via the above number, the Owner should send a
written request via fax to 1-800-621-0448. (Any requests via fax are
considered telephone requests and are bound by the conditions in the Owner's
signed telephone authorization form.) Any fax request should include the
Owner's name, daytime telephone number, Policy number and, in the case of
transfers, the names of the subaccounts from which and to which money will be
transferred. The right to discontinue telephone transactions at any time
without notice to Owners is specifically reserved.

16
<PAGE>

such loss, expense or cost is the result of JHVLICO's mistake or negligence.
JHVLICO employs procedures which provide adequate 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 JHVLICO does not employ reasonable
procedures to confirm that instructions communicated by telephone are genuine,
it may be liable for any loss due to unauthorized or fraudulent instructions.

LOAN PROVISIONS AND INDEBTEDNESS

Loan Provision. Loans may be made at any time a Loan Value is available
after the first Policy year. The Owner may borrow money, assigning the Policy
as the only security for the loan, by completion of a form satisfactory to
JHVLICO or, if the telephone transaction authorization form has been
completed, by telephone. Assuming no outstanding Indebtedness in Policy years
two and three, the Loan Value will be 75% of that portion of the Surrender
Value attributable to the variable Subaccount investments, plus 100% of that
portion of the Surrender Value attributable to Fixed Account investments and,
in later Policy years, 90% of that portion of the Surrender Value attributable
to variable Subaccount investments, plus 100% of that portion of the Surrender
Value attributable to Fixed Account investments. Interest charged on any loan
will accrue daily at an annual rate determined by JHVLICO at the start of each
Policy Year. This interest rate will not exceed the greater of (1) the
"Published Monthly Average" (defined below) for the calendar month ending 2
months before the calendar month of the Policy anniversary or (2) 5%. In
jurisdictions where a fixed loan rate is applicable, JHVLICO will charge
interest at an effective annual rate of 6%, accrued daily. The "Published
Monthly Average" means Moody's Corporate Bond Yield Average--Monthly Average
Corporates, as published by Moody's Investors Service, Inc., or if the average
is no longer published, a substantially similar average established by the
insurance regulator where the Policy is issued.

The amount of any outstanding loan plus accrued interest is called the
"Indebtedness". A loan will not be permitted unless it is at least $300. The
Owner may repay all or a portion of any Indebtedness while the insured is
living and the Policy is not in a grace period. When a loan is made, an amount
equal to the loan proceeds will be transferred out of the Account and the
Fixed Account, as applicable. This amount is allocated to the Loan Account, a
portion of JHVLICO's general account. Each Subaccount will be reduced in the
same proportion as the Account Value is then allocated among the Subaccounts.
Upon each loan repayment, the same proportionate amount of the entire loan as
was borrowed from the Fixed Account will be repaid to the Fixed Account. The
remainder of the loan repayment will be allocated to the appropriate
Subaccounts as stipulated in the current Investment Rule. For example, if the
entire loan outstanding is $3,000 of which $1,000 was borrowed from the Fixed
Account, then upon a repayment of $1,500, $500 would be allocated to the Fixed
Account and the remaining $1,000 would be allocated to the appropriate
Subaccounts as stipulated in the current Investment Rule. If an Owner wishes
any payment to constitute a loan repayment (rather than a premium payment),
the Owner must so specify.

Effect of Loan and Indebtedness. While the Indebtedness is outstanding, that
portion of the Account Value that is in the Loan Account is credited interest
at a rate that is 1% less than the loan interest rate for the first 20 Policy
years and, thereafter, .5% less than the loan interest rate. This rate will
usually be different than the net return for the Subaccounts. Since the Loan
Account and the remaining portion of the Account Value will generally have
different rates of investment return, any death benefit above the Sum Insured,
the Account Value, and the Surrender Value are permanently affected by any
Indebtedness, whether or not repaid in whole or in part. The amount of any
Indebtedness is subtracted from the amount otherwise payable when the Policy
proceeds become payable.

17
<PAGE>

Whenever the Indebtedness equals or exceeds the Surrender Value, the Policy
terminates 31 days after notice has been mailed by JHVLICO to the Owner and
any assignee of record at their last known addresses, unless a repayment of
the excess Indebtedness is made within that period.

If a Policy is a modified endowment at the time a loan is made, that loan
may have significant tax consequences. See "Tax Considerations".

DEFAULT

Grace Period, Default and Lapse. Unless the 5 Year Guaranteed Death Benefit
is in force, at the beginning of each Policy month JHVLICO determines whether
the Account Value, net of any Indebtedness, is sufficient to pay all monthly
charges then due under the Policy. If not, the Policy is in default and
JHVLICO will notify the Owner of the amount estimated to be necessary to pay
three months' deductions, and a Policy grace period will be in effect until 61
days after the date the notice was mailed. If JHVLICO does not receive payment
of at least this amount by the end of the Policy grace period, the Policy will
lapse, and any remaining amount owed to the Owner as of the date of lapse will
be paid to the Owner.

Lapse can have significant tax consequences. See "Tax Considerations--Policy
Proceeds". If the Guaranteed Death Benefit has been in effect and lapses at
the end of a Guaranteed Death Benefit grace period (as described in
"Premiums--Guaranteed Death Benefit Premiums"), the usual default, Policy
grace period and lapse procedures described in the preceding paragraph will be
applied commencing with the first day of the Policy month in which the lapse
of the Guaranteed Death Benefit occurs.

The insurance under the Policy continues in full force during any grace
period but, if the insured dies during the Policy grace period, the amount in
default is deducted from the death benefit otherwise payable.

Written notice will be furnished to the Owner at his or her last known
address, at least 31 days prior to the end of any grace period. If in the
Policy grace period, the notice will specify the minimum amount which must be
paid to continue the Policy in force on a premium paying basis after the end
of the Policy grace period. If in the Guaranteed Death Benefit grace period,
the notice will specify the amount which must be paid to continue the
Guaranteed Death Benefit feature in force.

Reinstatement. A lapsed Policy or the Guaranteed Death Benefit may be
reinstated in accordance with the Policy's terms. Evidence of insurability
satisfactory to JHVLICO will be required and payment of the required premium
and charges. The request must be received at JHVLICO's Home Office within 1
year after the beginning of the applicable grace period. A reinstatement of
the Policy may be treated as a material change for Federal income tax
purposes. See "Premiums--7-Pay Premium Limit" and "Tax Considerations".

EXCHANGE PRIVILEGE

The Owner may transfer the entire Account Value under the Policy to the
Fixed Account at any time, creating a non-variable policy. The exchange will
be effective at the end of the Valuation Period in which JHVLICO receives at
its Home Office notice of the transfer satisfactory to JHVLICO.

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

The foregoing description of Policy provisions is qualified by reference to
the specimen Policy which has been filed as an exhibit to the Registration
Statement.

18
<PAGE>

CHARGES AND EXPENSES

CHARGES DEDUCTED FROM PREMIUMS

In addition to part of the sales charges (see "Sales Charges" below), the
following charges are deducted from premiums:

State Premium Tax Charge. A charge currently equal to 2.35% of each premium
payment will be deducted from each premium payment. Premium taxes vary from
state to state. The 2.35% rate is the average rate currently expected to be
paid on premiums received in all states over the lifetimes of the insureds
covered by the Policies. JHVLICO will not increase this charge under
outstanding Policies, but reserves the right to change this charge for
Policies not yet issued in order to correspond with changes in the state
premium tax levels.

Federal DAC Tax Charge. A charge currently equal to 1.25% of each premium
payment will be deducted from each premium payment to cover the estimated cost
to JHVLICO of the Federal income tax treatment of the Policies' deferred
acquisition costs--commonly referred to as the "DAC Tax". JHVLICO has
determined that this charge is reasonable in relation to JHVLICO's increased
Federal income tax burden under the Internal Revenue Code resulting from the
receipt of premiums. JHVLICO will not increase this charge under outstanding
Policies, but reserves the right, subject to any required regulatory approval,
to change this charge for Policies not yet issued in order to correspond with
changes in the Federal income tax treatment of the Policies' deferred
acquisition costs.

SALES CHARGES

Charges are made to compensate JHVLICO for the cost of selling the Policy.
This cost includes agents' commissions, commission overrides, advertising, and
the printing of Prospectuses and sales literature. The amount of the charge in
any Policy year cannot be specifically related to sales expenses for that
year. JHVLICO expects to recover its total sales expenses over the period the
Policies are in effect. To the extent that sales charges are insufficient to
cover total sales expenses, the sales expenses may be recovered from other
sources, including gains from the charge for mortality and expense risks and
other gains with respect to the Policies, or from JHVLICO's general assets.
See "Distribution of Policies".

From Premiums. Part of the sales charge is deducted from premiums received.
The amount is 4% of the premiums received in any Policy year that do not
exceed that year's total Target Premium. The Target Premium is established at
issue and is the sum of Base Policy Target Premium and any rider premium. The
Base Policy Target Premium is set forth in the Policy. Target Premiums will
vary based on the issue age, sex, smoking status and underwriting class of the
insured. JHVLICO currently intends to make this deduction only in the first 10
Policy years, but this is not contractually guaranteed and the right is
reserved to continue deductions over a longer period. Because the Policies
were first offered for sale in 1994, no Policies have yet been outstanding for
more than 10 years.

JHVLICO will waive a portion of the sales charge (it is currently waiving a
portion equal to 2% of all premiums from which sales charges are deducted)
otherwise to be deducted from premiums under a Policy with a current Sum
Insured of $250,000 or higher. The continuation of this waiver is not
contractually guaranteed and the waiver may be withdrawn or modified by
JHVLICO in the future.

No sales charge is deducted from a premium payment received in excess of one
Target Premium in any Policy year.

19
<PAGE>

Contingent Deferred Sales Charge. The remainder of the sales charge will be
deducted only if the Policy is surrendered or stays in default past its grace
period. This second part is the Contingent Deferred Sales Charge. The
Contingent Deferred Sales Charge, however, will not be deducted for a Policy
that lapses or is surrendered on or after the Policy's twelfth anniversary,
and it will be reduced for a Policy that lapses or is surrendered between the
end of the seventh Policy year and the end of the twelfth Policy year.

The Contingent Deferred Sales Charge is computed as a percentage of Base
Policy Target Premiums paid in accordance with the following schedule:

<TABLE>
<CAPTION>
Maximum Contingent
For Surrenders or Lapses Effective During: Deferred Sales Charge
------------------------------------------ ---------------------
<S> <C>
Policy Year 1 26% of premiums received in Policy
Year 1 up to 1 Base Policy Target
Premium*
Policy Year 2 26% of premiums received in Policy
Years 1 and 2 up to 1 Base Policy
Target Premium in each year
Policy Years 3-7 26% of premiums received in Policy
Years 1, 2 and 3 up to to 1 Base
Policy Target Premium in each year
Policy Year 8 83.33% of the Maximum Contingent
Deferred Sales Charge for Policy
Year 7
Policy Year 9 66.67% of the Maximum Contingent
Deferred Sales Charge for Policy
Year 7
Policy Year 10 50% of the Maximum Contingent
Deferred Sales Charge for Policy
Year 7
Policy Year 11 33.33% of the Maximum Contingent
Deferred Sales Charge for Policy
Year 7
Policy Year 12 16.67% of the Maximum Contingent
Deferred Sales Charge for Policy
Year 7
Policy Year 13 and later 0
</TABLE>
- --------
*The amount of the Contingent Deferred Sales Charge is calculated on the
basis of the Base Policy Target Premium for the age of the insured at the time
of issue of the Policy.

The Contingent Deferred Sales Charge reaches its maximum at the end of the
third Policy year, stays level through the seventh Policy year, and is reduced
by an equal amount at the beginning of each Policy year thereafter until it
reaches zero in Policy year 13. At issue ages higher than age 54, the maximum
is reached at an earlier Policy year, and may be reduced to zero over a
shorter number of years.

20
<PAGE>

Contingent Deferred Sales Charge if he paid $2,000 (i.e., two times the Target
Premium amount) in every other Policy year up to the tenth Policy year.
However, delaying the payment of Target Premiums to later Policy years could
increase the risk that the Account Value will be insufficient to pay monthly
Policy charges as they come due and that, as a result, the Policy will lapse
and eventually terminate. See "Default". Conversely, accelerating the payment
of Target Premiums to earlier Policy years could cause aggregate premiums paid
to exceed the Policy's 7-pay premium limit and, as a result, cause the Policy
to become a modified endowment, with adverse tax consequences to the Owner
upon receipt of Policy distributions. See "Premiums--7-Pay Premium Limit".

ADMINISTRATIVE SURRENDER CHARGE

A charge is made if the Policy is surrendered or lapses in the first nine
Policy years to recover administrative expenses relating to the Policy which
would not otherwise be recouped. The maximum charge in Policy years 1 through
7 is $5 per $1,000 of current Sum Insured, in Policy year 8 is $4 per $1,000
of current Sum Insured and in Policy year 9 is $3 per $1,000 of current Sum
Insured.

This charge is made to compensate JHVLICO for expenses incurred in
connection with the underwriting, issuance and maintenance of the Policy which
may not be recovered upon the early surrender or lapse of the Policy.

REDUCED CHARGES FOR ELIGIBLE GROUPS

The sales charges, Administrative Surrender Charge and Issue Charge
(described below) otherwise applicable may be reduced with respect to Policies
issued to a class of associated individuals or to a trustee, employer or
similar entity where JHVLICO anticipates that the sales to the members of the
class will result in lower than normal sales or administrative expenses. These
reductions will be made in accordance with JHVLICO's rules in effect at the
time of the application for a Policy. The factors considered by JHVLICO in
determining the eligibility of a particular group for reduced charges, and the
level of the reduction, are as follows: the nature of the association and its
organizational framework; the method by which sales will be made to the
members of the class; the facility with which premiums will be collected from
the associated individuals and the association's capabilities with respect to
administrative tasks; the anticipated persistency of the Policies; the size of
the class of associated individuals and the number of years it has been in
existence; and any other such circumstances which justify a reduction in sales
or administrative expenses. Any reduction will be reasonable and will apply
uniformly to all prospective Policy purchasers in the class and will not be
unfairly discriminatory to the interests of any Owner.

CHARGES DEDUCTED FROM ACCOUNT VALUE OR ASSETS

The following charges are deducted from Account Value or assets:

Issue Charge. JHVLICO will deduct from Account Value an Issue Charge equal
to $20 per month for the first 12 Policy months to compensate JHVLICO for
expenses incurred in connection with the issuance of the Policy, other than
sales expenses. Such expenses include medical examinations, insurance
underwriting costs and costs incurred in processing applications and
establishing permanent Policy records.

Maintenance charge. JHVLICO will deduct from the Account Value a monthly
charge not to exceed $8 per Policy. The current monthly charge is $6 per
Policy.

This charge is to compensate JHVLICO for administrative expenses, including
recordkeeping, processing death claims and surrenders, making Policy changes,
reporting and other communications to Owners and other similar expense and
overhead costs.

21
<PAGE>

Insurance Charge. The insurance charge deducted monthly from Account Value
is based on the attained age of the insured and the amount at risk. The amount
at risk is the difference between the current death benefit and the Account
Value. The amount of the insurance charge is determined by multiplying
JHVLICO's then current monthly rate for insurance by the amount at risk.

Current monthly rates for insurance are based on the sex, age, smoking
status and underwriting class of the insured and the length of time the Policy
has been in effect. JHVLICO will review these rates at least every 5 years,
and may change these rates from time to time based on JHVLICO's expectations
of future experience. However, these rates will never be more than the
guaranteed maximum rates based on the 1980 Commissioners' Standard Ordinary
Mortality Tables set forth in the Policy.

A reduction in the insurance charge may be made to a Policy beginning on the
first day of the first month in the tenth Policy year. This reduction is not
guaranteed but it is JHVLICO's present intention to effect this reduction in
the tenth and following Policy years as long as the Policy is in force.

The amount of the reduction will depend upon the length of time the Policy
has been in force. In the tenth Policy year the monthly insurance charge will
be reduced by an amount equal to a percentage of the then Account Value. This
percentage will begin at an annual effective rate of .20% in the tenth Policy
year and increase annually by .01% through and including the thirtieth Policy
year. Thereafter the percentage reduction each year the Policy remains in
force will be at an annual effective rate of .40%.

For example, it is expected that the reduction percentage in Policy year 11
would be at an effective annual rate of .21%, in Policy year 20 would be .30%
and in Policy year 30 would be .40%.

JHVLICO reserves the right to modify or discontinue this reduction. Because
the Policies were first offered for sale in 1994, no reductions have yet been
made.

Lower current insurance rates are offered at most ages for insureds who are
eligible for the preferred underwriting class of the Policy.

JHVLICO also charges lower current insurance rates under a Policy with a
current Sum Insured of $250,000 or higher, but these lower rates are not
contractually guaranteed and may be withdrawn at some future date.

Charge for Mortality and Expense Risks. A daily charge is made for mortality
and expense risks assumed by JHVLICO at a maximum effective annual rate of
.90% of the value of the Account's assets attributable to the Policies. The
current charge is at an effective annual rate of .60%. This charge begins when
amounts under a Policy are first allocated to the Account. The mortality risk
assumed is that insureds may live for a shorter period of time than estimated
and, therefore, a greater amount of death benefit than expected will be
payable in relation to the amount of premiums received. The expense risk
assumed is that expenses incurred in issuing and administering the Policies
will be greater than estimated. JHVLICO will realize a gain from this charge
to the extent it is not needed to provide for benefits and expenses under the
Policies.

Charges for Extra Mortality Risks. An insured who does not qualify for the
standard or preferred underwriting class must pay an additional charge because
of the extra mortality risk. The level of the charge depends upon the age of
the insured and the degree of extra mortality risk. This additional charge is
deducted monthly from Account Value. Alternatively, the charge may take the
form of an additional insurance charge as described above.

Charges for Optional Rider Benefits. An additional charge must be paid if
the Owner elects to purchase an optional insurance benefit by Policy rider.
This additional charge is deducted monthly from Account Value.

22
<PAGE>

Charges for Taxes. Currently no charge is made against Account Value for
JHVLICO's Federal income taxes but if JHVLICO incurs, or expects to incur,
income taxes attributable to the Account or this class of Policies in future
years, it reserves the right to make a charge, and any charge would affect
what the Subaccounts earn. Charges for other taxes, if any, attributable to
the Subaccounts may also be made.

Charge for Partial Withdrawal. JHVLICO will deduct a charge in the amount of
$20 on a partial withdrawal of Surrender Value, as described under "Account
Value and Surrender Value". The charge will be deducted from Account Value.
The charge is to compensate JHVLICO for the administrative expenses of
effecting the withdrawal.

Fund Investment Management Fee. The Account purchases shares of the Funds at
net asset value, a value which reflects the deduction from the assets of each
Fund of its investment management fee, which is described briefly in the
Summary of this Prospectus, and of certain non-advisory operating expenses.
For a full description of these deductions, see the attached Prospectuses for
the Funds.

The monthly deductions from Account Value described above are deducted on
the date of issue and on each monthly processing date thereafter. These
deductions are made from the Subaccounts in proportion to the amount of
Account Value in each. For each month that JHVLICO is unable to deduct any
charge because there is insufficient Account Value, the uncollected charges
will accumulate and be deducted when and if sufficient Account Value is
available.

GUARANTEE OF PREMIUMS AND CERTAIN CHARGES

The Policy's Guaranteed Death Benefit Premium is guaranteed not to increase.
The state premium tax charge, the Federal DAC Tax charge, the Administrative
Surrender Charge, the Issue Charge and the charge for partial withdrawals are
guaranteed not to increase over the life of the Policy. The maintenance
charge, the sales charges, the mortality and expense risk charge, and the
insurance charge are guaranteed not to exceed the maximums set forth in the
Policy.

DISTRIBUTION OF POLICIES

Applications are solicited by agents who are licensed by state insurance
authorities to sell JHVLICO's Policies and who are also registered
representatives ("representatives") of John Hancock or other broker-dealer
firms, as discussed below. John Hancock performs insurance underwriting,
determines whether to accept or reject the application for a Policy and each
insured's risk classification and, pursuant to a sales agreement among John
Hancock, JHVLICO, and the Account, acts as the principal underwriter of the
Policies. The sales agreement will remain in effect until terminated upon
sixty days' written notice by any party. JHVLICO will make the appropriate
refund if a Policy ultimately is not issued or is returned under the short-
term cancellation provision. Officers and employees of John Hancock and
JHVLICO are covered by a blanket bond by a commercial carrier in the amount of
$25 million.

John Hancock's representatives are compensated for sales of the Policies on
a commission and service fee basis by John Hancock, and JHVLICO reimburses
John Hancock for such compensation and for other direct and indirect expenses
(including agency expense allowances, general agent, district manager and
supervisor's compensation, agent's training allowances, deferred compensation
and insurance benefits of agents, general agents, district managers and
supervisors, agency office clerical expenses and advertising) actually
incurred in connection with the marketing and sale of the Policies.

23
<PAGE>

The maximum commission payable to a John Hancock representative for selling
a Policy is 50% of the Target Premium paid in the first Policy year, 6% of the
Target Premium paid in the second through fourth Policy years, and 3% of the
Target Premium paid in each year thereafter. The maximum commission on any
premium paid in any year in excess of the Target Premium is 3%.

Representatives with less than four years of service with John Hancock and
those compensated on salary plus bonus or level commission programs may be
paid on a different basis. Representatives who meet certain productivity and
persistency standards with respect to the sale of policies issued by JHVLICO
and John Hancock will be eligible for additional compensation.

John Hancock is registered with the Commission under the Securities Exchange
Act of 1934 as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. John Hancock is not a member of the Securities
Investor Protection Corporation because it is exempt from membership in that
organization. The Policies are also sold through other registered broker-
dealers that have entered into selling agreements with John Hancock and whose
representatives are authorized by applicable law to sell variable life
insurance policies. The commissions which will be paid by such broker-dealers
to their representatives will be in accordance with their established rules.
The commission rates may be more or less than those set forth above for John
Hancock's representatives. In addition, their qualified registered
representatives may be reimbursed by the broker-dealers under expense
reimbursement allowance programs in any year for approved voucherable expenses
incurred. John Hancock will compensate the broker-dealers as provided in the
selling agreements, and JHVLICO will reimburse John Hancock for such amounts
and for certain other direct expenses in connection with marketing the
Policies through other broker-dealers.

John Hancock serves as principal underwriter for other separate accounts
registered under the 1940 Act: John Hancock Variable Annuity Accounts U, I and
V, John Hancock Mutual Variable Life Insurance Account UV and John Hancock
Variable Life Accounts V and S. John Hancock is also the principal investment
manager and principal underwriter for John Hancock Variable Series Trust I.

TAX CONSIDERATIONS

The below description of Federal income tax consequences is only a brief
summary and is not intended as tax advice. For further information consult a
qualified tax advisor. Federal, state and local tax laws can change from time
to time and, as a result, the tax consequences to the Owner and beneficiary
may be altered.

POLICY PROCEEDS

Although the Policy contains provisions not found in fixed benefit life
insurance policies, JHVLICO believes the Policy will receive the same Federal
income and estate tax treatment. Section 7702 of the Internal Revenue Code
("Code") defines life insurance for Federal tax purposes. See "Death
Benefits--Definition of Life Insurance". If certain standards are met at issue
and over the life of the Policy, the Policy will come within that definition.
JHVLICO will monitor compliance with these standards. Furthermore, JHVLICO
reserves the right to make any changes in the Policy necessary to ensure the
Policy is within the definition of life insurance.

If the Policy complies with the definition of life insurance, JHVLICO
believes the death benefit under the Policy will be excludable from the
beneficiary's gross income under Section 101 of the Code. In addition,
increases in Account Value as a result of interest or investment experience
will not be subject to Federal income tax unless and until values are actually
received through withdrawal, surrender or other distributions.

24
<PAGE>

A surrender, lapse or partial withdrawal may have tax consequences. For
example, the Owner will be taxed on a surrender to the extent that the Account
Value exceeds the premiums paid under the Policy, ignoring premiums paid for
riders. But under certain circumstances within the first 15 Policy years, the
Owner may be taxed on a withdrawal of Policy values even if total withdrawals
do not exceed total premiums paid.

JHVLICO also believes that, except as noted below, loans received under the
Policy will be treated as indebtedness of an Owner and that no part of any
loan will constitute income to the Owner. However, the amount of any loan
outstanding will be taxed to the Owner if a Policy lapses.

Distributions under Policies on which premiums greater than the "7-pay"
limit (see "Premiums--7-Pay Premium Limit") have been paid will be treated as
distributions from a "modified endowment," which are subject to special
taxation based on Federal tax law. The Owner of such a Policy will be taxed on
distributions such as loans, surrenders and partial withdrawals to the extent
of any income (gain) to the Owner (income-first basis). The distributions
affected will be those made on or after, and within the two year period prior
to, the time the Policy becomes a modified endowment. Additionally, a 10%
penalty tax may be imposed on affected income distributed before the Owner
attains age 59 1/2.

Furthermore, any time there is a "material change" in a Policy (such as the
addition of certain other Policy benefits after issue, or reinstatement of a
lapsed Policy), the Policy will be subject to a new "7-pay" test, with the
possibility of a tax on distributions if it were subsequently to become a
modified endowment. Moreover, if benefits under a Policy are reduced (such as
a reduction in the Sum Insured or death benefit or the reduction or
cancellation of certain rider benefits, or Policy termination) during the 7
years in which the 7-pay test is being applied, the 7-pay limit will be
recalculated based on the reduced benefits. If the premiums paid to date are
greater than the recalculated 7-pay limit, the Policy will become a modified
endowment.

All modified endowments issued by the same insurer (or affiliates) to the
Owner during any calendar year generally will be treated as one contract for
the purpose of applying the modified endowment rules. Your tax advisor should
be consulted if you have questions regarding the possible impact of the 7-pay
limit on your Policy.

Federal estate and state and local estate, inheritance and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Owner or beneficiary.

CHARGE FOR JHVLICO'S TAXES

Except for the DAC Tax charge, JHVLICO currently makes no charge for Federal
income taxes that may be attributable to this class of Policies. If JHVLICO
incurs, or expects to incur, income taxes attributable to this class of
Policies or any Subaccount in the future, it reserves the right to make a
charge for those taxes.

Under current laws, JHVLICO may incur state and local taxes (in addition to
premium taxes) in several states. At present, these taxes are not significant.
If there is a material change in applicable state or local tax laws, charges
for such taxes may be made.

CORPORATE AND H.R. 10 PLANS

The Policy may be acquired in connection with the funding of retirement
plans satisfying the qualification requirements of Section 401 of the Code. If
so, the Code provisions relating to such plans and life insurance benefits
thereunder should be carefully scrutinized.

25
<PAGE>

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO

The Directors and Executive Officers of JHVLICO and their principal
occupations during the past five years are as follows:

<TABLE>
<CAPTION>
Directors Principal Occupations
--------- ---------------------
<S> <C>
David F. D'Alessandro Chairman of the Board and Chief Executive Offi-
cer of JHVLICO; Senior Executive Vice President
and Director, John Hancock Mutual Life Insurance
Company.
Henry D. Shaw Vice Chairman of the Board and President of
JHVLICO; Senior Vice President, John Hancock Mu-
tual Life Insurance Company.
Thomas J. Lee Director of JHVLICO; Vice President, John Han-
cock Mutual Life Insurance Company.
Michele G. Van Leer Director of JHVLICO; Vice President, John Han-
cock Mutual Life Insurance Company.
Francis C. Cleary, Jr. Director and Counsel, JHVLICO; Vice President
and Counsel, John Hancock Mutual Life Insurance
Company.
Joseph A. Tomlinson Director and Vice President, JHVLICO; Vice Pres-
ident, John Hancock Mutual Life Insurance Compa-
ny.
Robert R. Reitano Director of JHVLICO; Vice President, John Han-
cock Mutual Life Insurance Company.
Robert S. Paster Director and Actuary of JHVLICO; Second Vice
President, John Hancock Mutual Life Insurance
Company.
Barbara L. Luddy Director, JHVLICO; Second Vice President, John
Hancock Mutual Life Insurance Company.
Daniel L. Ouellette Vice President, Marketing, JHVLICO; Vice Presi-
dent, John Hancock Mutual Life Insurance Compa-
ny.
Patrick F. Smith Controller of JHVLICO; Assistant Controller,
John Hancock Mutual Life Insurance Company.
</TABLE>

The business address of all Directors and officers of JHVLICO is John
Hancock Place, Boston, Massachusetts 02117.

REPORTS

At least once each Policy year a statement will be sent to the Owner setting
forth the amount of the death benefit, Account Value, the portion of the
Account Value in each Subaccount, Surrender Value, premiums received and
charges deducted from premiums since the last report, and any outstanding
Policy loan (and interest charged for the preceding Policy year) as of the
last day of such year. Moreover, confirmations will be furnished to Owners of
premium payments, transfers among Subaccounts, Policy loans, partial
withdrawals and certain other Policy transactions.

Owners will be sent semiannually a report containing the financial
statements of the Funds, including a list of securities held in each
Portfolio.

26
<PAGE>

VOTING PRIVILEGES

All of the assets in the variable Subaccounts of the Account are invested in
shares of the corresponding Portfolios of the Funds. JHVLICO will vote the
shares of each of the Portfolios of the Funds which are deemed attributable to
Policies at regular and special meetings of the Funds' shareholders in
accordance with instructions received from Owners of such policies. Shares of
the Funds held in the Account which are not attributable to policies and
shares for which instructions from owners are not received will be represented
by JHVLICO at the meeting and will be voted for and against each matter in the
same proportions as the votes based upon the instructions received from the
owners of all policies funded through the Account's corresponding variable
Subaccounts.

The number of Fund shares held in each variable Subaccount deemed
attributable to each Owner is determined by dividing the amount of a Policy's
Account Value held in the variable Subaccount by the net asset value of one
share in the corresponding Fund Portfolio in which the assets of that variable
Subaccount are invested. Fractional votes will be counted. The number of
shares as to which the Owner may give instructions will be determined as of
the record date for the Funds' meetings.

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

JHVLICO may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to change the investment objectives of the Portfolios or to
approve or disapprove an investment advisory or underwriting contract for the
Funds. JHVLICO also may disregard voting instructions in favor of changes
initiated by an owner or the Fund's Board of Trustees in an investment policy,
investment adviser or principal underwriter of a Fund, if JHVLICO (i)
reasonably disapproves of such changes and (ii) in the case of a change of
investment policy or investment adviser, makes a good-faith determination that
the proposed change is contrary to state law or prohibited by state regulatory
authorities or that the change would be inconsistent with a variable
Subaccount's investment objectives or would result in the purchase of
securities which vary from the general quality and nature of investments and
investment techniques utilized by other separate accounts of JHVLICO or of an
affiliated life insurance company, which separate accounts have investment
objectives similar to those of the variable Subaccount. In the event JHVLICO
does disregard voting instructions, a summary of that action and the reasons
for such action will be included in the next semi-annual report to Owners.

CHANGES THAT JHVLICO CAN MAKE

The voting privileges described in this Prospectus are afforded based on
JHVLICO's understanding of applicable Federal securities law requirements. To
the extent that applicable law, regulations or interpretations change to
eliminate or restrict the need for such voting privileges, JHVLICO reserves
the right to proceed in accordance with any such revised requirements. JHVLICO
also reserves the right, subject to compliance with applicable law, including
approval of Owners if so required, (1) to transfer assets determined by
JHVLICO to be associated with the class of policies to which the Policies
belong from the Account to another separate account or variable Subaccount by
withdrawing the same percentage of each investment in the Account with
appropriate adjustments to avoid odd lots and fractions, (2) to operate the
Account as a "management-type investment company" under the 1940 Act, or in
any other form permitted by law, the investment adviser of which would be

27
<PAGE>

JHVLICO, an affiliate or John Hancock, (3) to deregister the Account under the
1940 Act, (4) to substitute for the Portfolio shares held by a Subaccount any
other investment permitted by law, and (5) to take any action necessary to
comply with or obtain any exemptions from the 1940 Act. JHVLICO would notify
Owners of any of the foregoing changes and, to the extent legally required,
obtain approval of Owners and any regulatory body prior thereto. Such notice
and approval, however, may not be legally required in all cases.

STATE REGULATION

JHVLICO is subject to regulation and supervision by the Massachusetts
Commissioner of Insurance who periodically examines its affairs. It also is
subject to the applicable insurance laws and regulations of all jurisdictions
in which it is authorized to do business.

JHVLICO is required to submit annual statements of its operations, including
financial statements, to the insurance departments of the various
jurisdictions in which it does business for purposes of determining solvency
and compliance with local insurance laws and regulations.

LEGAL MATTERS

Legal matters in connection with the Policies described in this Prospectus
have been passed on by Francis C. Cleary, Jr., Counsel for JHVLICO. Messrs.
Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised JHVLICO on
certain Federal securities law matters in connection with the Policies.

REGISTRATION STATEMENT

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

EXPERTS

The financial statements of JHVLICO and the Account included in this
Prospectus have been audited by Ernst & Young LLP, independent auditors, for
the periods indicated in their reports thereon which appear elsewhere herein
and have been included in reliance on their reports given on their authority
as experts in accounting and auditing.

Actuarial matters included in this Prospectus have been examined by Randi M.
Sterrn, F.S.A., an Actuary of JHVLICO.

FINANCIAL STATEMENTS

The financial statements of JHVLICO included herein should be distinguished
from the financial statements of the Account and should be considered only as
bearing upon the ability of JHVLICO to meet its obligations under the
Policies.

28
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1995

<TABLE>
<CAPTION>
Short-Term
Select Real Estate Special U.S.
Stock Bond International Money Market Equity Opportunities Stock Government
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ------------ ------------- ------------ ----------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value........... $47,448,842 $212,243,929 $10,420,030 $48,239,671 $6,243,960 $1,709,613 $539,025,912 $83,976
Policy loans and
accrued interest
receivable...... 11,435,653 51,424,278 1,971,301 13,146,014 1,626,210 -- 119,727,549 --
Receivable from
John Hancock
Variable Series
Trust I......... 45,561 148,656 3,498 38,019 8,496 44,306 584,711 43
----------- ------------ ----------- ----------- ---------- ---------- ------------ -------
TOTAL ASSETS.... $58,930,056 $263,816,863 $12,394,829 $61,423,704 $7,878,666 $1,753,919 $659,338,172 84,019
Liabilities
Payable to John
Hancock Variable
Life Insurance
Company......... $ 42,927 $ 136,780 $ 2,943 $ 35,220 $ 8,138 $ 44,225 $ 555,175 39
Asset charges
payable......... 2,634 11,876 555 2,799 358 81 29,536 4
----------- ------------ ----------- ----------- ---------- ---------- ------------ -------
TOTAL
LIABILITIES.... 45,561 148,656 3,498 38,019 8,496 44,306 584,711 43
----------- ------------ ----------- ----------- ---------- ---------- ------------ -------
$58,884,495 $263,668,207 $12,391,331 $61,385,685 $7,870,170 $1,709,613 $658,753,461 $83,976
=========== ============ =========== =========== ========== ========== ============ =======
Net Assets
Attributable to
John Hancock
Variable Life
Insurance
Company......... $ 836,919 -- -- -- -- -- -- --
Attributable to
Policyholders... 58,047,576 $263,668,207 $12,391,331 $61,385,685 $7,870,170 $1,709,613 $658,753,461 $83,976
----------- ------------ ----------- ----------- ---------- ---------- ------------ -------
$58,884,495 $263,668,207 $12,391,331 $61,385,685 $7,870,170 $1,709,613 $658,753,461 $83,976
=========== ============ =========== =========== ========== ========== ============ =======
<CAPTION>
Managed
Subaccount
------------
<S> <C>
Assets
Investments in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value........... $280,030,027
Policy loans and
accrued interest
receivable...... 57,279,737
Receivable from
John Hancock
Variable Series
Trust I......... 146,911
------------
TOTAL ASSETS.... 337,456,675
Liabilities
Payable to John
Hancock Variable
Life Insurance
Company......... 131,880
Asset charges
payable......... 15,031
------------
TOTAL
LIABILITIES.... 146,911
------------
$337,309,764
============
Net Assets
Attributable to
John Hancock
Variable Life
Insurance
Company......... --
Attributable to
Policyholders... $337,309,764
------------
$337,309,764
============
</TABLE>

See accompanying notes.

29
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Select Stock Subaccount Bond Subaccount International Subaccount
----------------------------------- ------------------------------------- ------------------------------
Year Ended December 31 Year Ended December 31 Year Ended December 31
----------------------------------- ------------------------------------- ------------------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
----------- ----------- ---------- ----------- ------------ ----------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from
the portfolios
of John Hancock
Variable Series
Trust I........ $3,899,925 $ 1,782,463 $2,011,650 $16,214,565 $ 13,598,258 $15,736,858 $114,316 $ 150,711 $ 115,331
Interest income
on policy
loans.......... 755,070 571,576 508,625 3,820,851 3,640,202 3,793,530 146,076 103,567 46,401
----------- ----------- ---------- ----------- ------------ ----------- -------- --------- ----------
4,654,995 2,354,039 2,520,275 20,035,416 17,238,460 19,530,388 260,392 254,278 161,732
Expenses:
Mortality and
expense risks
and other
charges......... 278,461 216,050 202,485 1,372,266 1,302,570 1,483,216 65,044 51,915 21,086
----------- ----------- ---------- ----------- ------------ ----------- -------- --------- ----------
NET INVESTMENT
INCOME......... 4,376,534 2,137,989 2,317,790 18,663,150 15,935,890 18,047,172 195,348 202,363 140,646
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized
gains.......... 465,096 549,396 1,663,539 331,252 301,782 2,902,773 294,206 146,459 127,602
Net unrealized
appreciation
(depreciation)
during the
year........... 6,578,435 (2,618,550) 371,106 18,687,187 (18,898,104) 4,624,737 353,155 (863,194) 760,147
----------- ----------- ---------- ----------- ------------ ----------- -------- --------- ----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS..... 7,043,531 (2,069,154) 2,034,645 19,018,439 (18,596,322) 7,527,510 647,361 (716,735) 887,749
----------- ----------- ---------- ----------- ------------ ----------- -------- --------- ----------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS...... $11,420,065 $ 68,835 $4,352,435 $37,681,589 $ (2,660,432) $25,574,682 $842,709 $(514,372) $1,028,395
=========== =========== ========== =========== ============ =========== ======== ========= ==========
<CAPTION>
Money Market Subaccount
--------------------------------
Year Ended December 31
--------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Investment
Income:
Distributions
received from
the portfolios
of John Hancock
Variable Series
Trust I........ $2,690,892 $1,862,712 $1,658,372
Interest income
on policy
loans.......... 952,455 935,777 1,025,914
---------- ---------- ----------
3,643,347 2,798,489 2,684,286
Expenses:
Mortality and
expense risks
and other
charges......... 340,195 331,873 387,453
---------- ---------- ----------
NET INVESTMENT
INCOME......... 3,303,152 2,466,616 2,296,833
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized
gains.......... -- -- --
Net unrealized
appreciation
(depreciation)
during the
year........... -- -- --
---------- ---------- ----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS..... -- -- --
---------- ---------- ----------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS...... $3,303,152 $2,466,616 $2,296,833
========== ========== ==========
</TABLE>

See accompanying notes.

30
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENTS OF OPERATIONS (CONTINUED)

<TABLE>
<CAPTION>
Special
Real Estate Opportunities
Equity Subaccount Subaccount* Stock Subaccount
----------------------------- ----------------------- --------------------------------------
Year Period
Ended Ended
Year Ended December 31 December 31 December 31 Year Ended December 31
----------------------------- ----------- ----------- --------------------------------------
1995 1994 1993 1995 1994 1995 1994 1993
-------- ---------- --------- ----------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from
the portfolios
of John Hancock
Variable Series
Trust I......... $409,525 $ 353,259 $ 195,966 $ 39,684 $ 25 $ 51,822,706 $ 28,013,646 $39,473,367
Interest income
on policy loans. 121,494 99,709 62,877 -- -- 8,594,774 7,780,984 7,953,673
-------- ---------- --------- -------- ------ ------------ ------------ -----------
531,019 452,968 258,843 39,684 25 60,417,480 35,794,630 47,427,040
Expenses:
Mortality and
expense risks and
other charges.... 41,982 40,183 27,337 3,373 12 3,246,229 2,876,205 3,110,885
-------- ---------- --------- -------- ------ ------------ ------------ -----------
NET INVESTMENT
INCOME.......... 489,037 412,785 231,506 36,311 13 57,171,251 32,918,425 44,316,155
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS
Net realized
gains (losses).. 97,602 148,913 242,160 11,582 (2) 6,161,063 5,831,652 27,049,400
Net unrealized
appreciation
(depreciation)
during the year. 184,090 (354,296) (43,664) 124,460 1,019 81,121,360 (36,174,705) (8,476,064)
-------- ---------- --------- -------- ------ ------------ ------------ -----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS...... 281,692 (205,383) 198,496 136,042 1,017 87,282,423 (30,343,053) 18,573,336
-------- ---------- --------- -------- ------ ------------ ------------ -----------
NET INCREASE
(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS.. $770,729 $ 207,402 $ 430,002 $172,353 $1,030 $144,453,674 $ 2,575,372 $62,889,491
======== ========== ========= ======== ====== ============ ============ ===========
<CAPTION>
Short-Term
U.S.
Government
Subaccount* Managed Subaccount
----------------------- --------------------------------------
Year Period
Ended Ended
December 31 December 31 Year ended December 31
----------- ----------- --------------------------------------
1995 1994 1995 1994 1993
----------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from
the portfolios
of John Hancock
Variable Series
Trust I......... $2,910 $ 25 $26,974,536 $ 10,625,950 $19,327,167
Interest income
on policy loans. -- -- 3,999,425 3,637,463 3,643,167
----------- ----------- ----------- ------------- ------------
2,910 25 30,973,961 14,263,413 22,970,334
Expenses:
Mortality and
expense risks and
other charges.... 312 1 1,677,243 1,541,565 1,667,909
----------- ----------- ----------- ------------- ------------
NET INVESTMENT
INCOME.......... 2,598 24 29,296,718 12,721,848 21,302,425
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS
Net realized
gains (losses).. 945 -- 2,658,955 2,204,918 10,110,200
Net unrealized
appreciation
(depreciation)
during the year. 1,166 (27) 30,787,175 (18,206,145) (662,337)
----------- ----------- ----------- ------------- ------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS...... 2,111 (27) 33,446,130 (16,001,227) 9,447,863
----------- ----------- ----------- ------------- ------------
NET INCREASE
(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS.. $4,709 $ (3) $62,742,848 $ (3,279,379) $30,750,288
=========== =========== =========== ============= ============
</TABLE>
* The Short-Term U.S. Government and the Special Opportunities subaccounts
commenced operations on May 1 and May 6, 1994, respectively.

See accompanying notes.

31
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
Select Stock Subaccount Bond Subaccount
-------------------------------------- ----------------------------------------
Year Ended December 31 Year Ended December 31
-------------------------------------- ----------------------------------------
1995 1994 1993 1995 1994 1993
----------- ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in
Net Assets
From operations:
Net investment
income......... $ 4,376,534 $ 2,137,989 $ 2,317,790 $ 18,663,150 $ 15,935,890 $ 18,047,172
Net realized
gains.......... 465,096 549,396 1,663,539 331,252 301,782 2,902,773
Net unrealized
appreciation
(depreciation)
during the
year........... 6,578,435 (2,618,550) 371,106 18,687,187 (18,898,104) 4,624,737
----------- ------------ ----------- ------------ ------------ ------------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS..... 11,420,065 68,835 4,352,435 37,681,589 (2,660,432) 25,574,682
From
policyholder
transactions:
Net premiums
from
policyholders.. 12,618,748 14,995,398 9,989,111 31,560,554 33,964,744 41,179,225
Net benefits to
policyholders.. (9,566,825) (13,285,350) (12,024,349) (39,010,974) (45,032,511) (88,828,069)
Net increase
(decrease) in
policy loans... 1,614,283 2,229,978 889,511 2,053,700 928,620 (3,268,196)
----------- ------------ ----------- ------------ ------------ ------------
Net increase
(decrease) in
net assets
from
policyholder
transactions.. 4,666,206 3,940,026 (1,145,727) (5,396,720) (10,139,147) (50,917,040)
----------- ------------ ----------- ------------ ------------ ------------
Net increase
(decrease) in
net assets...... 16,086,271 4,008,861 3,206,708 32,284,869 (12,799,579) (25,342,358)
Net Assets
Beginning of
year........... 42,798,224 38,789,363 35,582,655 231,383,338 244,182,917 269,525,275
----------- ------------ ----------- ------------ ------------ ------------
End of year..... $58,884,495 $ 42,798,224 $38,789,363 $263,668,207 $231,383,338 $244,182,917
=========== ============ =========== ============ ============ ============
<CAPTION>
International Subaccount Money Market Subaccount
------------------------------------- --------------------------------------
Year Ended December 31 Year Ended December 31
------------------------------------- --------------------------------------
1995 1994 1993 1995 1994 1993
------------ ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in
Net Assets
From operations:
Net investment
income......... $ 195,348 $ 202,363 $ 140,646 $ 3,303,152 $ 2,466,616 $ 2,296,833
Net realized
gains.......... 294,206 146,459 127,602 -- -- --
Net unrealized
appreciation
(depreciation)
during the
year........... 353,155 (863,194) 760,147 -- -- --
------------ ------------ ----------- ------------ ------------ ------------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS..... 842,709 (514,372) 1,028,395 3,303,152 2,466,616 2,296,833
From
policyholder
transactions:
Net premiums
from
policyholders.. 4,546,347 8,974,098 4,970,630 11,104,365 11,955,284 12,714,544
Net benefits to
policyholders.. (4,766,724) (4,180,134) (2,743,299) (12,775,695) (14,818,286) (28,494,764)
Net increase
(decrease) in
policy loans... 192,805 735,457 483,160 (323,666) 124,027 (2,661,199)
------------ ------------ ----------- ------------ ------------ ------------
Net increase
(decrease) in
net assets
from
policyholder
transactions.. (27,572) 5,529,421 2,710,491 (1,994,996) (2,738,975) (18,441,419)
------------ ------------ ----------- ------------ ------------ ------------
Net increase
(decrease) in
net assets...... 815,137 5,015,049 3,738,886 1,308,156 (272,359) (16,144,586)
Net Assets
Beginning of
year........... 11,576,194 6,561,145 2,822,259 60,077,529 60,349,888 76,494,474
------------ ------------ ----------- ------------ ------------ ------------
End of year..... $12,391,331 $11,576,194 $6,561,145 $61,385,685 $60,077,529 $60,349,888
============ ============ =========== ============ ============ ============
</TABLE>

See accompanying notes.

32
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

<TABLE>
<CAPTION>
Special
Opportunities
Real Estate Equity Subaccount Subaccount* Stock Subaccount
---------------------------------- ------------------- ----------------------------------------
Year Period
Ended Ended
Year Ended December 31 Dec. 31 Dec. 31 Year Ended December 31
---------------------------------- ---------- ------- ----------------------------------------
1995 1994 1993 1995 1994 1995 1994 1993
---------- ---------- ---------- ---------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in Net
Assets
From operations:
Net investment
income.......... $ 489,037 $ 412,785 $ 231,506 $ 36,311 $ 13 $ 57,171,251 $ 32,918,425 $ 44,316,155
Net realized
gains (losses).. 97,602 148,913 242,160 11,582 (2) 6,161,063 5,831,652 27,049,400
Net unrealized
appreciation
(depreciation)
during the year. 184,090 (354,296) (43,664) 124,460 1,019 81,121,360 (36,174,705) (8,476,064)
---------- ---------- ---------- ---------- ------- ------------ ------------ ------------
Net Increase
(Decrease) in
Net Assets
Resulting From
operations 770,729 207,402 430,002 172,353 1,030 144,453,674 2,575,372 62,889,491
From
policyholder
transactions:
Net premiums
from
policyholders... 2,176,970 3,275,364 6,451,203 1,682,424 37,133 73,672,198 72,117,431 82,418,251
Net benefits to
policyholders... (2,711,578) (2,843,516) (3,718,743) (182,908) (419) (90,829,678) (89,384,442) (174,046,513)
Net increase
(decrease) in
policy loans.... 30,224 350,970 644,477 -- -- 10,173,483 5,694,330 (5,182,231)
---------- ---------- ---------- ---------- ------- ------------ ------------ ------------
Net Increase
(Decrease) in
Net Assets from
Policyholder
Transactions.... (504,384) 782,818 3,376,937 1,499,516 36,714 (6,983,997) (11,572,681) (96,810,493)
---------- ---------- ---------- ---------- ------- ------------ ------------ ------------
Net Increase
(Decrease) in
Net Assets 266,345 990,220 3,806,939 1,671,869 37,744 137,469,677 (8,997,309) (33,921,002)
Net Assets
Beginning of
period.......... 7,603,825 6,613,605 2,806,666 37,744 -- 521,283,784 530,281,093 564,202,095
---------- ---------- ---------- ---------- ------- ------------ ------------ ------------
End of period... $7,870,170 $7,603,825 $6,613,605 $1,709,613 $37,744 $658,753,461 $521,283,784 $530,281,093
========== ========== ========== ========== ======= ============ ============ ============
<CAPTION>
Short-Term
U.S.
Government
Subaccount* Managed Subaccount
----------------- -----------------------------------------
Year Period
Ended Ended
Dec. 31 Dec. 31 Year Ended December 31
-------- -------- -----------------------------------------
1995 1994 1995 1994 1993
-------- -------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Increase
(Decrease) in Net
Assets
From operations:
Net investment
income.......... $ 2,598 $24 $ 29,296,718 $ 12,721,848 $ 21,302,425
Net realized
gains (losses).. 945 -- 2,658,955 2,204,918 10,110,200
Net unrealized
appreciation
(depreciation)
during the year. 1,166 (27) 30,787,175 (18,206,145) (662,337)
-------- -------- ------------- ------------- -------------
Net Increase
(Decrease) in
Net Assets
Resulting From
operations 4,709 (3) 62,742,848 (3,279,379) 30,750,288
From
policyholder
transactions:
Net premiums
from
policyholders... 94,623 6,405 38,619,260 39,071,265 48,859,138
Net benefits to
policyholders... (21,753) (5) (47,824,820) (51,322,737) (90,625,030)
Net increase
(decrease) in
policy loans.... -- -- 5,387,424 2,529,492 (601,964)
-------- -------- ------------- ------------- -------------
Net Increase
(Decrease) in
Net Assets from
Policyholder
Transactions.... 72,870 6,400 (3,818,136) (9,721,980) (42,367,856)
-------- -------- ------------- ------------- -------------
Net Increase
(Decrease) in
Net Assets 77,579 6,397 58,924,712 (13,001,359) (11,617,568)
Net Assets
Beginning of
period.......... 6,397 -- 278,385,052 291,386,411 303,003,979
-------- -------- ------------- ------------- -------------
End of period... $83,976 $6,397 $337,309,764 $278,385,052 $291,386,411
======== ======== ============= ============= =============
</TABLE>
* The Short-Term U.S. Government and the Special Opportunities subaccounts
commenced operations on May 1 and May 6, 1994, respectively.
See accompanying notes.

33
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995

NOTE 1--ORGANIZATION

John Hancock Variable Life Account U (the "Account") is a separate investment
account of John Hancock Variable Life Insurance Company ("JHVLICO"), a wholly-
owned subsidiary of John Hancock Mutual Life Insurance Company ("John
Hancock"). The Account was formed to fund variable life insurance policies
("policies") issued by JHVLICO. The Account is operated as a unit investment
trust registered under the Investment Company Act of 1940, as amended, and
currently consists of nine subaccounts. The assets of each subaccount are
invested exclusively in shares of a corresponding portfolio of John Hancock
Variable Series Trust I (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 policyowners. The nine portfolios of the Fund which are
currently available are Select Stock, Bond, International, Money Market, Real
Estate Equity, Special Opportunities, Stock, Short-Term U.S. Government and
Managed. 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 policy benefits. Additional assets
are held in JHVLICO'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 JHVLICO. The portion of the
Account's assets applicable to the policies may not be charged with
liabilities arising out of any other business JHVLICO may conduct.

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES

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 JHVLICO, which is taxed as a life insurance
company under the Internal Revenue Code. JHVLICO 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 policies funded in the
Account. Currently, JHVLICO 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: JHVLICO assumes mortality and expense risks of the variable life
insurance policies for which asset charges are deducted at an annual rate of
.50% of net assets (excluding policy loans) of the Account. Additionally, a
monthly charge at varying levels for the cost of extra insurance is deducted
from the net assets of the Account and an administrative charge, at an annual
rate of .75%, is charged to the Account on a daily basis for policy loans.

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

Policy Loans: Policy loans represent outstanding loans plus accrued interest.
Interest is accrued (net of a charge for policy loan administration determined
at an annual rate of .75% of the aggregate amount of policyowner indebtedness)
and compounded daily.

34
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 3--NET ASSETS

The net assets attributable to JHVLICO represent JHVLICO's funds deposited in
the Account. At its discretion, these amounts may be transferred by JHVLICO to
its general account.

NOTE 4--TRANSACTIONS WITH AFFILIATES

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

Certain officers of the Account are officers and directors of JHVLICO, the
Fund or John Hancock.

NOTE 5--DETAILS OF INVESTMENTS

The details of the shares owned and cost and value of investments in the
portfolios of the Fund at December 31, 1995 were as follows:

<TABLE>
<CAPTION>
Portfolio Shares Owned Cost Value
--------- ------------ ---- -----
<S> <C> <C> <C>
Select Stock.............................. 2,731,914 $38,494,572 $47,448,842
Bond...................................... 20,956,745 199,016,991 212,243,929
International............................. 667,538 9,999,647 10,420,030
Money Market.............................. 4,823,968 48,239,671 48,239,671
Real Estate Equity........................ 533,846 6,232,811 6,243,960
Special Opportunities..................... 129,668 1,584,134 1,709,613
Stock..................................... 38,664,185 444,829,697 539,025,912
Short-Term U.S. Government................ 8,207 82,837 83,976
Managed................................... 20,400,047 241,375,170 280,030,027
</TABLE>

Purchases, including reinvestment of dividend distributions and proceeds from
sales of shares in the portfolios of the Fund during 1995 were as follows:

<TABLE>
<CAPTION>
Portfolio Purchases Sales
--------- --------- -----
<S> <C> <C>
Select Stock............................................ $8,571,530 $ 1,211,887
Bond.................................................... 20,869,990 9,827,533
International........................................... 1,389,989 1,424,787
Money Market............................................ 5,737,045 4,109,819
Real Estate Equity...................................... 950,450 1,005,183
Special Opportunities................................... 1,600,584 64,756
Stock................................................... 60,739,486 21,299,081
Short-Term U.S. Government.............................. 104,744 29,276
Managed................................................. 32,830,913 12,965,430
</TABLE>

35
<PAGE>

REPORTS OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Policyholders
John Hancock Variable Life Account U
of John Hancock Variable Life Insurance Company

We have audited the accompanying statement of assets and liabilities of John
Hancock Variable Life Account U (the "Account") (comprising, respectively, the
Select Stock, Bond, International, Money Market, Real Estate Equity, Special
Opportunities, Stock, Short-Term U.S. Government, and Managed Subaccounts) as
of December 31, 1995, and the related statements of operations and statements
of changes in net assets for each of the three years in the period then ended
for the Select Stock, Bond, International, Money Market, Real Estate Equity,
Stock, and Managed Subaccounts; the related statements of operations and
statements of changes in net assets for the year ended December 31, 1995 and
for the period from May 6, 1994 (commencement of operations) to December 31,
1994 for the Special Opportunities Subaccount; and the related statements of
operations and statements of changes in net assets for the year ended December
31, 1995 and for the period from May 1, 1994 (commencement of operations) to
December 31, 1994 for the Short-Term U.S. Government Subaccount. 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.

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.

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 Life Account U at December 31,
1995 and the results of their operations 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 9, 1996

-------------------------
Board of Directors
John Hancock Variable Life Insurance Company

We have audited the accompanying statements of financial position of John
Hancock Variable Life Insurance Company as of December 31, 1995 and 1994, and
the related statements of operations and unassigned deficit 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.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of John Hancock Variable Life
Insurance Company at December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles for a stock life insurance company
wholly owned by a mutual life insurance company and with reporting practices
prescribed or permitted by the Commonwealth of Massachusetts Division of
Insurance.

Ernst & Young LLP
Boston, Massachusetts
February 7, 1996

36
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
December 31
------------------
1995 1994
---- ----
(In millions)
<S> <C> <C>
Assets
Bonds--Note 7.............................................. $ 552.8 $ 458.3
Preferred stocks........................................... 5.0 5.3
Common stocks.............................................. 1.7 1.9
Investment in affiliates................................... 65.3 59.9
Mortgage loans on real estate--Note 7...................... 146.7 148.5
Real estate................................................ 36.4 27.8
Policy loans............................................... 61.8 47.3
Cash items:
Cash in banks............................................ 11.6 29.3
Temporary cash investments............................... 65.0 46.7
-------- --------
76.6 76.0
Premiums due and deferred.................................. 39.6 43.9
Investment income due and accrued.......................... 18.6 14.7
Other general account assets............................... 20.8 22.3
Assets held in separate accounts........................... 2,421.0 1,721.0
-------- --------
TOTAL ASSETS............................................... $3,446.3 $2,626.9
======== ========
Obligations and Stockholder's Equity
OBLIGATIONS:
Policy reserves.......................................... $ 671.1 $ 638.6
Federal income and other taxes payable--Note 1........... 14.2 17.3
Other accrued expenses................................... 79.9 22.8
Asset valuation reserve--Note 1.......................... 15.4 12.6
Obligations related to separate accounts................. 2,417.0 1,717.7
-------- --------
TOTAL OBLIGATIONS.......................................... 3,197.6 2,409.0
Stockholder's Equity--Notes 2 and 6
Common Stock, $50 par value; authorized 50,000 shares;
issued and outstanding 50,000 shares--1995; 20,000
shares--1994............................................ 2.5 25.0
Paid-in capital.......................................... 377.5 355.0
Unassigned deficit....................................... (131.3) (162.1)
-------- --------
TOTAL STOCKHOLDER'S EQUITY................................. 248.7 217.9
-------- --------
TOTAL OBLIGATIONS AND STOCKHOLDER'S EQUITY................. $3,446.3 $2,626.9
======== ========
</TABLE>

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

37
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

<TABLE>
<CAPTION>
Year Ended December 31
------------------------
1995 1994
---- ----
(In millions)
<S> <C> <C>
Income
Premiums....................................... $ 570.9 $ 430.5
Net investment income--Note 4.................. 62.1 57.6
Other, net..................................... 85.7 95.5
----------- -----------
718.7 583.6
Benefits and Expenses
Payments to policyholders and beneficiaries.... 213.4 187.5
Additions to reserves to provide for future
payments to policyholders and beneficiaries... 282.4 185.3
Expenses of providing service to policyholders
and obtaining new insurance--Note 6........... 150.7 168.9
Cost of restructuring.......................... 0.0 3.0
State and miscellaneous taxes.................. 12.7 11.3
----------- -----------
659.2 556.0
----------- -----------
GAIN FROM OPERATIONS BEFORE FEDERAL INCOME
TAXES AND NET REALIZED CAPITAL GAINS........ 59.5 27.6
Federal income taxes--Note 1..................... 28.4 15.0
----------- -----------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL GAINS............................... 31.1 12.6
Net realized capital gains--Note 5............... 0.5 0.4
----------- -----------
NET INCOME................................... 31.6 13.0
Unassigned deficit at beginning of year.......... (162.1) (177.2)
Net unrealized capital losses and other adjust-
ments--Note 5................................... (3.0) (1.5)
Valuation reserve changes--Note 1................ 0.0 2.7
Change in separate account surplus............... 0.7 0.0
Other reserves and adjustments................... 1.5 0.9
----------- -----------
UNASSIGNED DEFICIT AT END OF YEAR............ $(131.3) $(162.1)
=========== ===========
</TABLE>

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

38
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years Ended December 31
-----------------------
1995 1994
---- ----
(In millions)
<S> <C> <C>
Cash flows from operating activities:
Insurance premiums................................. $ 574.0 $ 436.4
Net investment income.............................. 59.2 57.9
Benefits to policyholders and beneficiaries........ (198.3) (175.3)
Dividends paid to policyholders.................... (13.2) (11.9)
Insurance expenses and taxes....................... (161.5) (180.6)
Net transfers to separate accounts................. (257.4) (146.6)
Other, net......................................... 40.6 72.8
----------- -----------
NET CASH PROVIDED FROM OPERATIONS.............. 43.4 52.7
----------- -----------
Cash flows used in investing activities:
Bond purchases..................................... (172.5) (94.1)
Bond sales......................................... 18.9 23.1
Bond maturities and scheduled redemptions.......... 36.0 22.3
Bond prepayments................................... 20.6 24.7
Stock purchases.................................... (1.7) (1.5)
Proceeds from stock sales.......................... 1.4 1.2
Real estate purchases.............................. (16.2) (18.4)
Real estate sales.................................. 9.3 22.1
Other invested assets purchases.................... (0.4) (0.9)
Proceeds from the sale of other invested assets.... 0.3 1.3
Mortgage loans issued.............................. (19.8) (37.9)
Mortgage loan repayments........................... 21.1 35.2
Other, net......................................... 60.2 22.9
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES.......... (42.8) 0.0
----------- -----------
INCREASE IN CASH AND TEMPORARY CASH INVESTMENTS...... 0.6 52.7
Cash and temporary cash investments at beginning of
year................................................ 76.0 23.3
----------- -----------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR... $ 76.6 $ 76.0
=========== ===========
</TABLE>

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

39
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES

John Hancock Variable Life Insurance Company (the Company) is a wholly-owned
subsidiary of John Hancock Mutual Life Insurance Company (John Hancock). The
Company principally writes variable and universal life insurance policies.
Those policies primarily are marketed through John Hancock's sales
organization, which includes a career agency system composed of company owned,
unionized branch offices and independent general agencies. Policies also are
sold through various unaffilated securities broker-dealers and certain other
financial institutions. Currently, the Company writes business in all states
except New York.

The preparation of the financial statements of insurance companies 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.

The significant accounting practices of the Company are as follows:

Basis of Presentation: The financial statements have been prepared on the
basis of 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 which are currently
considered generally accepted accounting principles for a stock life insurance
company wholly-owned by a mutual life insurance company. However, in April
1993, the Financial Accounting Standard Board (FASB) issued Interpretation 40,
"Applicability of Generally Accepted Accounting Principles to Mutual Life
Insurance and Other Enterprises" (Interpretation). The Interpretation, as
amended, is effective for 1996 annual financial statements and thereafter, and
no longer will allow statutory-basis financial statements to be described as
being prepared in conformity with generally accepted accounting principles
(GAAP). Upon the effective date of the Interpretation, in order for their
financial statements to be described as being prepared in conformity with
GAAP, mutual life insurance companies will be required to adopt all applicable
authoritative GAAP pronouncements in any general-purpose financial statements
that they may issue. The Company has not quantified the effects of the
application of the Interpretation on its financial statements.

The Company has not yet determined whether for general purposes it will
continue to issue statutory-basis financial statements or statements adopting
all applicable authoritative GAAP pronouncements. If the Company decides that
its general-purpose financial statements will be prepared in accordance with
GAAP rather than statutory accounting practices, the financial statements
included herein would have to be restated to reflect all applicable
authoritative GAAP pronouncements, including Statement of Financial Accounting
Standards (SFAS) Nos. 60, 97, and 113.

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.

40
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO 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:

Bonds and stock values are carried as prescribed by the National
Association of Insurance Commissioners (NAIC): bonds generally at amortized
amounts or cost, preferred stocks generally at cost and common stocks at
market. The discount or premium on bonds is amortized using the interest
method.

Investments in affiliates are included on the statutory equity method.

Goodwill is amortized on a straight line basis over a ten year period.

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

Investment real estate is carried at depreciated cost, less encumbrances.
Depreciation on investment real estate is recorded on a straight line
basis.

Real estate acquired in satisfaction of debt and held for sale is carried
at the lower of cost or market as of the date of foreclosure.

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

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. Changes to
the AVR are charged or credited directly to the unassigned deficit.

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, 1995, the IMR, net of 1995 amortization of $1.2 million,
amounted to $6.9 million, which is included in policy reserves. The
corresponding 1994 amounts were $1.1 million and $7.1 million, respectively.

Separate Accounts: Separate account assets (unit investment trusts valued at
market) and separate account obligations (principally policyholder account
values) are included as separate captions in the statements of financial
position. The change in separate account surplus is recognized through direct
charges or credits to unassigned deficit.

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

41
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED

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
its 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 loans. Mortgage loans with similar characteristics
and credit risks are aggregated into qualitative categories for purposes of
the fair value calculations.

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

The fair value for outstanding commitments to purchase long-term bonds 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, 1995. The fair value for commitments
to purchase real estate approximates the amount of the initial commitment.

Capital Gains and Losses: Realized capital gains and losses, net of taxes and
amounts transferred to the IMR, are included in net gain or loss. Unrealized
gains and losses, which consist of market value and book value adjustments,
are shown as adjustments to the unassigned deficit.

Policy Reserves: Reserves for variable life insurance policies are maintained
principally on the modified preliminary term method using the 1958 and 1980
Commissioner's Standard Ordinary (CSO) mortality tables, with an assumed
interest rate of 4% for policies issued prior to May 1, 1983 and 4 1/2% for
policies issued on or thereafter. Reserves for single premium policies are
determined by the net single premium method using the 1958 CSO mortality
table, with an assumed interest rate of 4%. Reserves for universal life
policies issued prior to 1985 are equal to the gross account value which at
all times exceeds minimum statutory requirements. Reserves for universal life
policies issued from 1985 through 1988 are maintained at the greater of the
Commissioner's Reserve Valuation Method (CRVM) using the 1958 CSO mortality
table, with 4 1/2% interest or the cash surrender value. Reserves for
universal life policies issued after 1988 and for flexible variable policies
are maintained using the greater of the cash surrender value or the CRVM
method with the 1980 CSO mortality table and 5 1/2% interest for policies
issued from 1988 through 1992; 5% interest for policies issued in 1993 and
1994; and 4 1/2% interest for policies issued in 1995.

Federal Income Taxes: Federal income taxes are provided 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 are
consolidated with John Hancock, its Parent, in filing a consolidated federal
income tax return for the affiliated group. The federal income taxes of the
Company are allocated on a separate return basis with certain

42
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED

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

adjustments. The Company made payments of $32.2 million in 1995 and received
tax benefits of $7.0 million in 1994.

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

No provision is generally recognized for timing differences that may exist
between financial reporting and taxable income or loss.

Adjustments to Policy Reserves: From time to time, the Company finds it
appropriate to modify certain required policy reserves because of changes in
actuarial assumptions or increased benefits. Reserve modifications resulting
from such determinations are recorded directly to the unassigned deficit.
During 1994, the Company refined certain actuarial assumptions inherent in the
calculation of preconversion yearly renewable term and gross premium
deficiency reserves, resulting in a $2.7 million decrease in the unassigned
deficit at December 31, 1994.

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.

Reclassifications: Certain 1994 amounts have been reclassified to permit
comparison with the corresponding 1995 amounts.

NOTE 2--CAPITALIZATION

In prior years, the Company received capital contributions from John Hancock,
with a portion of the contributed capital being credited to common stock,
although no additional shares were issued. This practice, which is acceptable
to statutory authorities, has the effect of stating the carrying value of
issued shares of common stock at amounts other than $50 per share par value
with the offset reflected in paid-in capital.

At December 31, 1994, the Company had 50,000 shares authorized with 20,000
shares issued and outstanding. On February 16, 1995, the Company issued the
remaining 30,000 shares to John Hancock and transferred $22.5 million from
common stock to paid-in capital. The par value per share is $50.

NOTE 3--ACQUISITION

43
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 3--ACQUISITION--CONTINUED

of approximately $42.5 million. At the date of acquisition, assets of CPAL
were approximately $648.5 million, consisting principally of cash and
temporary cash investments and liabilities were approximately $635.2 million,
consisting principally of reserves related to a block of interest sensitive
single-premium whole life insurance business assumed by CPAL from Charter
National Life Insurance Company (Charter). The purchase price includes
contingent payments of up to approximately $7.3 million payable between 1994
and 1998 based on the actual lapse experience of the business in force on June
23, 1993. The Company made contingent payments to CPAL of $1.5 million during
1995 and 1994. Unamortized goodwill at December 31, 1995 was $17.1 million and
is being amortized over ten years on a straight-line basis.

On June 24, 1993, the Company contributed $24.6 million in additional capital
to CPAL. CPAL was renamed John Hancock Life Insurance Company of America
(JHLICOA) on July 7, 1993. JHLICOA manages the business assumed from Charter
and does not currently issue new business.

NOTE 4--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

<TABLE>
<CAPTION>
1995 1994
------ ------
(In millions)
<S> <C> <C>
Investment expenses............................................ $ 5.1 $ 3.4
Interest expense............................................... 0.0 0.2
Depreciation expense........................................... 1.0 0.6
Investment taxes............................................... 0.5 0.2
------ ------
$ 6.6 $ 4.4
====== ======

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

Net realized capital gains consist of the following items:

<CAPTION>
1995 1994
------ ------
(In millions)
<S> <C> <C>
Gains (losses) from asset sales................................ $ 4.0 $ (1.6)
Capital gains (tax) credit..................................... (2.5) 2.5
Net capital gains transferred to IMR........................... (1.0) (0.5)
------ ------
Net Realized Capital Gains................................... $ 0.5 $ 0.4
====== ======

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

<CAPTION>
1995 1994
------ ------
(In millions)
<S> <C> <C>
Gains (losses) from changes in security values and book value
adjustments................................................... $ (0.2) $ 0.7
Increase in asset valuation reserve............................ (2.8) (2.2)
------ ------
Net Unrealized Capital Losses and Other Adjustments.......... $ (3.0) $ (1.5)
====== ======
</TABLE>

44
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 6--TRANSACTIONS WITH PARENT

The Company's Parent provides the Company with personnel, property and
facilities in carrying out certain of its corporate functions. The Parent
annually determines a fee for these services and facilities based on a number
of criteria which were revised in 1995 and 1994 to reflect continuing changes
in the Company's operations. The amount of the service fee charged to the
Company was $97.9 million and $117.0 million in 1995 and 1994, respectively,
which has been included in insurance and investment expenses. The Parent has
guaranteed that, if necessary, it will make additional capital contributions
to prevent the Company's stockholder's equity from declining below $1.0
million.

The service fee charged to the Company by the Parent includes $1.8 million and
$6.0 million in 1995 and 1994, respectively, representing the portion of the
provision for retiree benefit plans determined under the accrual method,
including a provision for the 1993 transition liability which is being
amortized over twenty years, that was allocated to the Company.

Effective January 1, 1994, the Company entered into a modified coinsurance
agreement with John Hancock to reinsure 50% of 1994 issues of flexible premium
variable life insurance and scheduled premium variable life insurance
policies. In connection with this agreement, John Hancock transferred $32.7
million and $29.5 million of cash for tax, commission, and expense allowances
to the Company, which increased the Company's net gain from operations by
$20.3 million and $26.9 million in 1995 and 1994, respectively.

NOTE 7--INVESTMENTS

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

<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized Fair
Year Ended December 31, 1995 Value Gains Losses Value
---------------------------- --------- ---------- ---------- ------
(In millions)
<S> <C> <C> <C> <C>
U.S. treasury securities and obligations
of U.S. government corporations and
agencies................................. $ 89.0 $ 0.5 $ 0.0 $ 89.5
Obligations of states and political
subdivisions............................. 11.4 1.1 0.0 12.5
Debt securities issued by foreign
governments.............................. 1.3 0.2 0.0 1.5
Corporate securities...................... 445.6 44.1 1.6 488.1
Mortgage-backed securities................ 5.5 0.3 0.1 5.7
------ ----- ----- ------
Totals.................................. $552.8 $46.2 $ 1.7 $597.3
====== ===== ===== ======
<CAPTION>
Gross Gross
Statement Unrealized Unrealized Fair
Year Ended December 31, 1994 Value Gains Losses Value
---------------------------- --------- ---------- ---------- ------
(In millions)
<S> <C> <C> <C> <C>
U.S. treasury securities and obligations
of U.S. government corporations and
agencies................................. $ 10.4 $ 0.0 $ 0.5 $ 9.9
Obligations of states and political
subdivisions............................. 11.6 0.2 0.1 11.7
Debt securities issued by foreign
governments.............................. 1.3 0.0 0.0 1.3
Corporate securities...................... 431.9 10.5 9.9 432.5
Mortgage-backed securities................ 3.1 0.1 0.1 3.1
------ ----- ----- ------
Totals.................................. $458.3 $10.8 $10.6 $458.5
====== ===== ===== ======
</TABLE>

45
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 7--INVESTMENTS--CONTINUED

The statement value and fair value of bonds at December 31, 1995, 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.

<TABLE>
<CAPTION>
Statement Fair
Value Value
--------- ------
(In millions)
<S> <C> <C>
Due in one year or less....................................... $ 18.7 $ 19.8
Due after one year through five years......................... 266.8 278.6
Due after five years through ten years........................ 153.1 167.4
Due after ten years........................................... 108.7 125.8
------ ------
547.3 591.6
Mortgage-backed securities.................................... 5.5 5.7
------ ------
$552.8 $597.3
====== ======
</TABLE>

Proceeds from sales of bonds during 1995 and 1994 were $18.9 million and $23.1
million, respectively. Gross gains of $0.2 million in 1995 and $0.0 million in
1994 and gross losses of $0.1 million in 1995 and $0.1 million in 1994 were
realized on these transactions.

The cost of common stocks was $0.1 million and $1.4 million at December 31,
1995 and 1994, respectively. Gross unrealized appreciation on common stocks
totaled $1.7 million, and gross unrealized depreciation totaled $0.1 million
at December 31, 1995. The fair value of preferred stock totaled $5.2 million
at December 31, 1995 and $5.0 million at December 31, 1994.

Mortgage loans with outstanding principal balances of $1.1 million and bonds
with amortized cost of $4.0 million were nonincome producing for the twelve
months ended December 31, 1995.

At December 31, 1995, the mortgage loan portfolio was diversified by
geographic region and specific collateral property type as displayed below.
The Company controls credit risk through credit approvals, limits and
monitoring procedures.

<TABLE>
<CAPTION>
Statement
Property Type Value
------------- -------------
(In millions)
<S> <C>
Apartments.............. $ 52.1
Hotels.................. 4.5
Industrial.............. 25.4
Office buildings........ 12.6
Retail.................. 20.3
Agricultural............ 19.8
Other................... 12.0
------
$146.7
======
</TABLE>
<TABLE>
<CAPTION>
Geographic Statement
Concentration Value
------------- -------------
(In millions)
<S> <C>
East North Central...... $ 30.1
East South Central...... 1.9
Middle Atlantic......... 10.5
Mountain................ 11.8
New England............. 19.8
Pacific................. 41.6
South Atlantic.......... 31.0
------
$146.7
======
</TABLE>

46
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 7--INVESTMENTS--CONTINUED

At December 31, 1995, the fair values of the commercial and agricultural
mortgage loans portfolios were $132.1 million and $22.2 million, respectively.
The corresponding amounts as of December 31, 1994 were approximately $118.8
million and $27.3 million, respectively.

NOTE 8--REINSURANCE

The Company cedes business to reinsurers to share risks under variable life,
universal life and flexible variable life insurance policies for the purpose
of reducing exposure to large losses. Premiums, benefits and reserves ceded to
reinsurers in 1995 were $72.4 million, $8.7 million, and $12.1 million,
respectively. The corresponding amounts in 1994 were $67.5 million, $12.3
million, and $16.3 million, respectively.

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

NOTE 9--POLICYHOLDERS' RESERVES AND BENEFICIARIES' FUND

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

<TABLE>
<CAPTION>
December 31, 1995 Percent
----------------- -------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with
adjustment):
With market value adjustment....................... $ 0.0 0.0%
At book value less surrender charge................ 115.4 99.1
------ -----
Total with adjustment.............................. 115.4 99.1
Subject to discretionary withdrawal (without
adjustment) at book value......................... 1.0 0.9
Not subject to discretionary withdrawal.............. 0.0 0.0
------ -----
Total annuity reserves and deposit liabilities....... $116.4 100.0%
====== =====
</TABLE>

NOTE 10--COMMITMENTS AND CONTINGENCIES

The Company has extended commitments to purchase long-term bonds and issue
real estate mortgages totaling $16.6 million and $5.4 million, respectively,
at December 31, 1995. The Company monitors the creditworthiness of borrowers
under long-term bond commitments and requires collateral as deemed necessary.
If funded, loans related to real estate mortgages would be fully
collateralized by the related properties. The fair value of the commitments
described above is $23.8 million at December 31, 1995. The majority of these
commitments expire in 1996.

In the normal course of its business operations, the Company is involved in
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 1995. 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 of the Company.

47
<PAGE>

APPENDIX--OTHER POLICY PROVISIONS

SETTLEMENT PROVISIONS

In place of a single payment, an amount of $1,000 or more payable under the
Policy as a benefit or as the Surrender Value, if any, may be left with
JHVLICO under the terms of a supplementary agreement. The agreement will be
issued when the proceeds are applied through the election of any one of the
options below.

The following options are subject to the restrictions and limitations stated
in the Policy.

Option 1--Interest Income at the declared rate but not less than 3 1/2% a
year on proceeds held on deposit.

Option 2A--Income of a Specified Amount, with payments each year totaling
at least 1/12th of the proceeds, until the proceeds, with interest credited
at the declared rate but not less than 3 1/2% a year on unpaid balances,
are fully paid.

Option 2B--Income for a Fixed Period, with each payment as declared.

Option 3--Life Income with Payments for a Guaranteed Period.

Option 4--Life Income without Refund at the death of the Payee of any
part of the proceeds applied. Only one payment is made if the Payee dies
before the second payment is due.

Option 5--Life Income with Cash Refund at the death of the Payee of the
amount, if any, equal to the proceeds applied less the sum of all income
payments made.

No election of an option may provide for income payments of less than $50.

Other options may be arranged with JHVLICO's approval including optional
methods of settlement available from John Hancock.

ADDITIONAL INSURANCE BENEFITS

On payment of an additional charge and subject to certain age and insurance
underwriting requirements, certain additional provisions, such as an
Accidental Death Benefit, which are subject to the restrictions and
limitations set forth therein, may be included in a Policy by rider.

GENERAL PROVISIONS

BENEFICIARY. The Beneficiary will be as shown in the application for the
Policy, unless thereafter changed by the Owner in accordance with the terms of
the Policy. If the insured dies and there is no surviving Beneficiary, the
Owner will be the Beneficiary, but if the insured was the Owner, the Owner's
estate will be the Beneficiary.

OWNER AND ASSIGNMENT. The Owner's interest in the Policy may be assigned
without the consent of any revocable Beneficiary. JHVLICO will not be on
notice of any assignment unless it is in writing and until a duplicate of the
original assignment has been filed at JHVLICO's Home Office. JHVLICO assumes
no responsibility for the validity or sufficiency of any assignment.

MISSTATEMENT OF AGE OR SEX. If the age or sex of the insured has been
misstated, JHVLICO will adjust the benefits payable to reflect the correct age
or sex.

SUICIDE. If the insured commits suicide within 2 years (except where state
law requires a shorter period) from the date of issue shown in the Policy,
JHVLICO will pay in place of all other benefits an amount equal to

48
<PAGE>

the premium paid less any Indebtedness on the date of death and any
withdrawals. If the suicide is within 2 years (except where state law requires
a shorter period) from the date of any Policy change that increases the death
benefit, or the payment of any premium requiring evidence of insurability, the
death benefit will not include the increased benefit but will include the
excess premium.

AGE, POLICY ANNIVERSARIES AND MONTHLY PROCESSING DATE. For purpose of the
Policy, an insured's "age" is his or her age on his or her nearest birthday.
Policy months and Policy years are calculated from the date of issue. The
monthly processing date is on or about the first Valuation Date in each Policy
month.

AVIATION ACTIVITY EXCLUSION. If the insured dies in an aviation accident
while a crew member on other than a commercial aircraft and the Policy
provides at the request of the Owner for a limited benefit in such situation,
JHVLICO will pay in place of all other benefits an amount equal to the greater
of the premium paid or the Surrender Value, less any Indebtedness.

INCONTESTABILITY. The Policy shall be incontestable other than for
nonpayment of premiums after it has been in force during the lifetime of an
insured for 2 years from its issue date. If, however, evidence of insurability
is required with respect to any increase in death benefit, such increase shall
be incontestable after the increase has been in force for 2 years from the
increase date.

DEFERRAL OF DETERMINATIONS AND PAYMENTS. Payment of any death, surrender,
partial withdrawal or loan proceeds will ordinarily be made within seven days
after receipt at JHVLICO's Home Office of all documents required for any such
payment. Approximately two-thirds of the claims for death proceeds which are
made within two years after the date of issue of the Policy will be
investigated to determine whether the claim should be contested and payment of
these claims will therefore be delayed.

JHVLICO may defer any transaction requiring a determination of Account Value
in any variable Subaccount for any period during which: (1) the disposal or
valuation of the Account's assets is not reasonably practicable because the
New York Stock Exchange is closed or conditions are such that, under the
Commission's rules and regulations, trading is restricted or an emergency is
deemed to exist or (2) the Commission by order permits postponement of such
actions for the protection of Owners.

The foregoing description of Policy provisions is qualified by reference to
the specimen Policy which has been filed as an exhibit to the Registration
Statement.

49
<PAGE>

APPENDIX--ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES
SURRENDER VALUES AND ACCUMULATED PREMIUMS

The following tables illustrate the changes in death benefit, Account Value
and Surrender Value of the Policy, disregarding any Policy loans. Each table
separately illustrates the operation of a Policy for an identified issue age,
Planned Premium schedule and Sum Insured and shows how the death benefit,
Account Value and Surrender Value may vary over an extended period of time
assuming hypothetical rates of investment return (i.e., investment income and
capital gains and losses, realized or unrealized) equivalent to constant gross
annual rates of 0%, 6% and 12%. The tables are based on given annual Planned
Premiums paid at the beginning of each Policy year and will assist in a
comparison of the values set forth in the tables with those under other
variable life insurance policies which may be issued by JHVLICO or other
companies. Tables are provided for each of the three available death benefit
options. The values for a Policy would be different from those shown if
premiums are paid in different amounts or at different times or if the actual
gross rates of investment return average 0%, 6% or 12% over a period of years,
but nevertheless fluctuate above or below the average for individual Policy
years, or if the Policy were issued under circumstances in which no
distinctions are made based on the gender of the insureds.

The amounts shown for the death benefit, Account Value and Surrender Value
are as of the end of each Policy year. The tables headed "Using Current
Charges" assume that the current rates for insurance, sales, risk, and expense
charges (including JHVLICO's intended waiver after ten Policy years of the
sales charges deducted from certain premiums and its intended reduction in the
tenth Policy year in the insurance charge deducted monthly from Account Value)
will apply in each year illustrated. The tables headed "Using Maximum Charges"
assumes that the maximum (guaranteed) insurance, sales, risk, and expense
charges will be made in each year illustrated. The amounts shown in all tables
reflect an average asset charge for the daily investment advisory expense
charges to the Portfolios of the Fund (equivalent to an effective annual rate
of .63%) and an assumed average asset charge for the annual nonadvisory
operating expenses of each Portfolio of the Fund (equivalent to an effective
annual rate of .20%). For a description of expenses charged to the Portfolios,
including the reimbursement of any Portfolio for annual non-advisory operating
expenses in excess of an effective annual rate of .25%, a continuing
obligation of the Fund's investment adviser, see the attached Prospectus for
the Fund. The charges for the daily investment management fee and the annual
non-advisory operating expenses are based on the hypothetical assumption that
Policy values are allocated equally among the variable Subaccounts. The actual
Portfolio charges and expenses associated with any Policy will vary depending
upon the actual allocation of Policy values among Subaccounts.

The tables reflect that no charge is currently made to the Account for
Federal income taxes. However, JHVLICO reserves the right to make such a
charge in the future and any charge would require higher rates of investment
return in order to produce the same Policy values. All of the tables do,
however, reflect the imposition of a Federal DAC Tax charge in the amount of
1.25% of all premiums paid and a premium tax charge in the amount of 2.35% of
all premiums paid.

The tables assume that the Guaranteed Death Benefit feature was in effect
the first 5 Policy years.

The second column of each table shows the amount to which the total premiums
paid to the end of a Policy year during the premium paying period would
accumulate if an amount equal to those premiums were invested to earn
interest, after taxes, at 5% compounded annually.

JHVLICO will furnish upon request a comparable illustration reflecting the
proposed insureds' ages, sexes, underwriting risk classifications and the Sum
Insured at issue and Planned Premium amount requested, and assuming annual
Planned Premiums.

50
<PAGE>

DEATH BENEFIT OPTION 1: --LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
-------------------------------- -------------------------------- --------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest -------------------------------- -------------------------------- --------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- --------- --------- ---------- --------- --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 244 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 814 0 0 70
3 2,516 100,000 100,000 100,000 1,090 1,240 1,404 0 148 311
4 3,439 100,000 100,000 100,000 1,502 1,757 2,044 409 664 951
5 4,409 100,000 100,000 100,000 1,895 2,283 2,737 802 1,190 1,644
6 5,428 100,000 100,000 100,000 2,268 2,819 3,490 1,176 1,726 2,397
7 6,497 100,000 100,000 100,000 2,620 3,363 4,305 1,528 2,270 3,212
8 7,620 100,000 100,000 100,000 2,951 3,916 5,189 2,057 3,022 4,295
9 8,799 100,000 100,000 100,000 3,259 4,474 6,147 2,563 3,779 5,451
10 10,037 100,000 100,000 100,000 3,549 5,049 7,201 3,253 4,753 6,905
11 11,337 100,000 100,000 100,000 3,844 5,661 8,382 3,646 5,464 8,184
12 12,702 100,000 100,000 100,000 4,116 6,284 9,672 4,017 6,185 9,574
13 14,135 100,000 100,000 100,000 4,362 6,915 11,083 4,362 6,915 11,083
14 15,640 100,000 100,000 100,000 4,581 7,554 12,626 4,581 7,554 12,626
15 17,220 100,000 100,000 100,000 4,770 8,198 14,314 4,770 8,198 14,314
16 18,879 100,000 100,000 100,000 4,929 8,847 16,165 4,929 8,847 16,165
17 20,621 100,000 100,000 100,000 5,048 9,493 18,189 5,048 9,493 18,189
18 22,450 100,000 100,000 100,000 5,120 10,128 20,401 5,120 10,128 20,401
19 24,370 100,000 100,000 100,000 5,141 10,748 22,821 5,141 10,748 22,821
20 26,387 100,000 100,000 100,000 5,104 11,347 25,469 5,104 11,347 25,469
25 38,086 100,000 100,000 100,000 3,809 13,762 43,174 3,809 13,762 43,174
30 53,018 ** 100,000 100,000 ** 14,169 72,631 ** 14,169 72,631
35 72,076 ** 100,000 141,602 ** 9,618 123,132 ** 9,618 123,132
40 96,398 ** ** 216,535 ** ** 206,224 ** ** 206,224
45 127,441 ** ** 361,110 ** ** 343,914 ** ** 343,914
</TABLE>
- --------
(*) If premiums are paid more frequently than annually, the above values shown
would be affected.
(**) Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE
OWNER. THE DEATH BENEFIT, ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD
BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW
THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.

51
<PAGE>

DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES GUARANTEED CHARGES

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM *

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
-------------------------------- -------------------------------- --------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest -------------------------------- -------------------------------- --------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- --------- --------- ---------- --------- --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 216 242 0 0 0
2 1,636 100,000 100,000 100,000 609 679 753 0 0 10
3 2,516 100,000 100,000 100,000 1,009 1,152 1,306 0 59 213
4 3,439 100,000 100,000 100,000 1,392 1,632 1,903 299 540 810
5 4,409 100,000 100,000 100,000 1,755 2,120 2,546 663 1,027 1,453
6 5,428 100,000 100,000 100,000 2,099 2,615 3,241 1,006 1,522 2,149
7 6,497 100,000 100,000 100,000 2,420 3,114 3,990 1,327 2,021 2,397
8 7,620 100,000 100,000 100,000 2,719 3,617 4,798 1,825 2,723 3,904
9 8,799 100,000 100,000 100,000 2,994 4,122 5,669 2,298 3,426 4,974
10 10,037 100,000 100,000 100,000 3,244 4,629 6,610 2,948 4,333 6,314
11 11,337 100,000 100,000 100,000 3,468 5,135 7,624 3,270 4,937 7,427
12 12,702 100,000 100,000 100,000 3,661 5,637 8,718 3,563 5,538 8,619
13 14,135 100,000 100,000 100,000 3,825 6,135 9,898 3,825 6,135 9,898
14 15,640 100,000 100,000 100,000 3,957 6,625 11,174 3,957 6,625 11,174
15 17,220 100,000 100,000 100,000 4,055 7,105 12,551 4,055 7,105 12,551
16 18,879 100,000 100,000 100,000 4,116 7,573 14,040 4,116 7,573 14,040
17 20,621 100,000 100,000 100,000 4,134 8,021 15,648 4,134 8,021 15,648
18 22,450 100,000 100,000 100,000 4,103 8,441 17,382 4,103 8,441 17,382
19 24,370 100,000 100,000 100,000 4,019 8,830 19,253 4,019 8,830 19,253
20 26,387 100,000 100,000 100,000 3,873 9,175 21,270 3,873 9,175 21,270
25 38,086 100,000 100,000 100,000 1,980 9,952 34,081 1,980 9,952 34,081
30 53,018 ** 100,000 100,000 ** 7,831 53,563 ** 7,831 53,563
35 72,076 ** ** 100,000 ** ** 85,379 ** ** 85,379
40 96,398 ** ** 145,741 ** ** 138,801 ** ** 138,801
45 127,441 ** ** 235,380 ** ** 224,172 ** ** 224,172
</TABLE>
- --------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE
OWNER. THE DEATH BENEFIT, ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD
BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 5% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW
THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.

52
<PAGE>

DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
-------------------------------- -------------------------------- --------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest -------------------------------- -------------------------------- --------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- --------- --------- ---------- --------- --------- ---------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,217 100,243 100,269 217 243 269 0 0 0
2 1,636 100,660 100,734 100,811 660 734 811 0 0 68
3 2,516 101,086 101,236 101,398 1,086 1,236 1,398 0 143 305
4 3,439 101,494 101,748 102,033 1,494 1,748 2,033 402 655 940
5 4,409 101,883 102,268 102,720 1,883 2,268 2,720 790 1,175 1,627
6 5,428 102,251 102,797 103,462 2,251 2,797 3,462 1,159 1,704 2,369
7 6,497 102,597 103,332 104,263 2,597 3,332 4,263 1,504 2,239 3,170
8 7,620 102,920 103,872 105,128 2,920 3,872 5,128 2,026 2,978 4,234
9 8,799 103,218 104,415 106,062 3,218 4,415 6,062 2,523 3,720 5,367
10 10,037 103,498 104,972 107,085 3,498 4,972 7,085 3,201 4,675 6,789
11 11,337 103,780 105,561 108,225 3,780 5,561 8,225 3,582 5,363 8,028
12 12,702 104,037 106,156 109,464 4,037 6,156 9,464 3,938 6,057 9,366
13 14,135 104,267 106,754 110,810 4,267 6,754 10,810 4,267 6,754 10,810
14 15,640 104,467 107,354 112,272 4,467 7,354 12,272 4,467 7,354 12,272
15 17,220 104,636 107,952 113,859 4,636 7,952 13,859 4,636 7,952 13,859
16 18,879 104,773 108,547 115,585 4,773 8,547 15,585 4,773 8,547 15,585
17 20,621 104,866 109,128 117,453 4,866 9,128 17,453 4,866 9,128 17,453
18 22,450 104,911 109,688 119,471 4,911 9,688 19,471 4,911 9,688 19,471
19 24,370 104,901 110,220 121,649 4,901 10,220 21,649 4,901 10,220 21,649
20 26,387 104,829 110,714 123,998 4,829 10,714 23,998 4,829 10,714 23,998
25 38,086 103,332 112,296 138,740 3,332 12,296 38,740 3,332 12,296 38,740
30 53,018 ** 111,093 159,773 ** 11,093 59,773 ** 11,093 59,773
35 72,076 ** 103,936 188,562 ** 3,936 88,562 ** 3,936 88,562
40 96,398 ** ** 226,791 ** ** 126,791 ** ** 126,791
45 127,441 ** ** 273,508 ** ** 173,508 ** ** 173,508
</TABLE>
- --------
* If premiums are paid more frequently than annually, the above values shown
above would be affected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE
OWNER. THE DEATH BENEFIT, ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD
BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW
THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
53
<PAGE>

DEATH BENEFIT OPTION 2: VARIABLE DEATH
BENEFIT ILLUSTRATION ASSUMES GUARANTEED CHARGES

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
-------------------------------- ---------------------------------- ----------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest -------------------------------- ---------------------------------- ----------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- --------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,190 100,216 100,241 190 216 241 0 0 0
2 1,636 100,607 100,677 100,751 607 677 751 0 0 8
3 2,516 101,005 101,147 101,300 1,005 1,147 1,300 0 54 208
4 3,439 101,385 101,624 101,893 1,385 1,624 1,893 292 531 800
5 4,409 101,744 102,106 102,529 1,744 2,106 2,529 651 1,013 1,437
6 5,428 102,083 102,594 103,215 2,083 2,594 3,215 990 1,501 2,122
7 6,497 102,398 103,084 103,951 2,398 3,084 3,951 1,305 1,991 2,858
8 7,620 102,690 103,576 104,742 2,690 3,576 4,742 1,796 2,682 3,848
9 8,799 102,956 104,067 105,590 2,956 4,067 5,590 2,260 3,372 4,895
10 10,037 103,197 104,557 106,502 3,196 4,557 6,502 2,900 4,261 6,206
11 11,337 103,408 105,042 107,480 3,408 5,042 7,480 3,211 4,845 7,282
12 12,702 103,589 105,520 108,527 3,589 5,520 8,527 3,491 5,421 8,428
13 14,135 103,739 105,988 109,649 3,739 5,988 9,649 3,739 5,988 9,649
14 15,640 103,855 106,443 110,851 3,855 6,443 10,851 3,855 6,443 10,851
15 17,220 103,934 106,882 112,138 3,934 6,882 12,138 3,934 6,882 12,138
16 18,879 103,976 107,302 113,515 3,976 7,302 13,515 3,976 7,302 13,515
17 20,621 103,973 107,694 114,984 3,973 7,694 14,984 3,973 7,694 14,984
18 22,450 103,919 108,050 116,548 3,919 8,050 16,548 3,919 8,050 16,548
19 24,370 103,811 108,363 118,209 3,811 8,363 18,209 3,811 8,363 18,209
20 26,387 103,637 108,621 119,967 3,637 8,621 19,967 3,637 8,621 19,967
25 38,086 101,611 108,740 130,308 1,611 8,740 30,308 1,611 8,740 30,308
30 53,018 ** 105,523 143,166 ** 5,523 43,166 ** 5,523 43,166
35 72,076 ** ** 157,232 ** ** 57,232 ** ** 57,232
40 96,398 ** ** 168,767 ** ** 68,767 ** ** 68,767
45 127,441 ** ** 168,274 ** ** 68,274 ** ** 68,274
</TABLE>
- --------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE
OWNER. THE DEATH BENEFIT, ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD
BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW
THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.

54
<PAGE>

DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES CURRENT CHARGES

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM *

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
-------------------------------- -------------------------------- --------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest -------------------------------- -------------------------------- --------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- --------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 244 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 814 0 0 70
3 2,516 100,000 100,000 100,000 1,090 1,240 1,404 0 148 311
4 3,439 100,000 100,000 100,000 1,502 1,757 2,044 409 664 951
5 4,409 100,000 100,000 100,000 1,895 2,283 2,737 802 1,190 1,644
6 5,428 100,000 100,000 100,000 2,268 2,819 3,490 1,176 1,726 2,397
7 6,497 100,000 100,000 100,000 2,620 3,363 4,305 1,528 2,270 3,212
8 7,620 100,000 100,000 100,000 2,951 3,916 5,189 2,057 3,022 4,295
9 8,799 100,000 100,000 100,000 3,259 4,474 6,147 2,563 3,779 5,451
10 10,037 100,000 100,000 100,000 3,549 5,049 7,201 3,253 4,753 6,905
11 11,337 100,000 100,000 100,000 3,844 5,661 8,382 3,646 5,464 8,184
12 12,702 100,000 100,000 100,000 4,116 6,284 9,672 4,017 6,185 9,574
13 14,135 100,000 100,000 100,000 4,362 6,915 11,083 4,362 6,915 11,083
14 15,640 100,000 100,000 100,000 4,581 7,554 12,626 4,581 7,554 12,626
15 17,220 100,000 100,000 100,000 4,770 8,198 14,314 4,770 8,198 14,314
16 18,879 100,000 100,000 100,000 4,929 8,847 16,165 4,929 8,847 16,165
17 20,621 100,000 100,000 100,000 5,048 9,493 18,189 5,048 9,493 18,189
18 22,450 100,000 100,000 100,000 5,120 10,128 20,401 5,120 10,128 20,401
19 24,370 100,000 100,000 100,000 5,141 10,748 22,821 5,141 10,748 22,821
20 26,387 100,000 100,000 100,000 5,104 11,347 25,469 5,104 11,347 25,469
25 38,086 100,000 100,000 100,000 3,809 13,762 43,174 3,809 13,726 43,174
30 53,018 ** 100,000 122,460 ** 14,169 71,951 ** 14,169 71,951
35 72,076 ** 100,000 175,352 ** 9,618 115,851 ** 9,618 115,851
40 96,398 ** ** 248,368 ** ** 181,450 ** ** 181,450
45 127,441 ** ** 349,654 ** ** 276,932 ** ** 276,932
</TABLE>
- --------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE
OWNER. THE DEATH BENEFIT, ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD
BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW
THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
55
<PAGE>

DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES GUARANTEED CHARGES

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
-------------------------------- -------------------------------- --------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest -------------------------------- -------------------------------- --------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 216 242 0 0 0
2 1,636 100,000 100,000 100,000 609 679 753 0 0 10
3 2,516 100,000 100,000 100,000 1,009 1,152 1,306 0 59 213
4 3,439 100,000 100,000 100,000 1,392 1,632 1,903 299 540 810
5 4,409 100,000 100,000 100,000 1,755 2,120 2,546 663 1,027 1,453
6 5,428 100,000 100,000 100,000 2,099 2,615 3,241 1,006 1,522 2,149
7 6,497 100,000 100,000 100,000 2,420 3,114 3,990 1,327 2,021 2,897
8 7,620 100,000 100,000 100,000 2,719 3,617 4,798 1,825 2,723 3,904
9 8,799 100,000 100,000 100,000 2,994 4,122 5,669 2,298 3,426 4,974
10 10,037 100,000 100,000 100,000 3,244 4,629 6,610 2,948 4,333 6,314
11 11,337 100,000 100,000 100,000 3,468 5,135 7,624 3,270 4,937 7,427
12 12,702 100,000 100,000 100,000 3,661 5,637 8,718 3,563 5,538 8,619
13 14,135 100,000 100,000 100,000 3,825 6,135 9,898 3,825 6,135 9,898
14 15,640 100,000 100,000 100,000 3,957 6,625 11,174 3,957 6,625 11,174
15 17,220 100,000 100,000 100,000 4,055 7,105 12,551 4,055 7,105 12,551
16 18,879 100,000 100,000 100,000 4,116 7,573 14,040 4,116 7,573 14,040
17 20,621 100,000 100,000 100,000 4,134 8,021 15,648 4,134 8,021 15,648
18 22,450 100,000 100,000 100,000 4,103 8,441 17,382 4,103 8,441 17,382
19 24,370 100,000 100,000 100,000 4,019 8,830 19,253 4,019 8,830 19,253
20 26,387 100,000 100,000 100,000 3,873 9,175 21,270 3,873 9,175 21,270
25 38,086 100,000 100,000 100,000 1,980 9,952 34,081 1,980 9,952 34,081
30 53,018 ** 100,000 100,000 ** 7,831 53,563 ** 7,831 53,563
35 72,076 ** 100,000 126,474 ** ** 83,558 ** ** 83,558
40 96,398 ** ** 172,726 ** ** 126,188 ** ** 126,188
45 127,441 ** ** 233,353 ** ** 184,820 ** ** 184,820
</TABLE>
- --------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE
OWNER. THE DEATH BENEFIT, ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD
BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW
THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.

56
<PAGE>

[LOGO OF JOHN HANCOCK WORLDWIDE SPONSOR APPEARS HERE]

POLICIES ISSUED BY JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, MASSACHUSETTS 02117

S8148 5/95
<PAGE>

John Hancock Variable Life
Insurance Company
(JHVLICO)
[LOGO OF JOHN HANCOCK APPEARS HERE)

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
JOHN HANCOCK VARIABLE LIFE ACCOUNT U

LIFE AND ANNUITY SERVICES
P.O. BOX 111
BOSTON, MASSACHUSETTS 02117

TELEPHONE 1-800-REAL LIFE (1-800-732-5543)
FAX 617-572-5410

PROSPECTUS MAY 1, 1996

The flexible premium variable life policy ("Policy") described in this
Prospectus can be funded, at the discretion of the Owner, by up to ten of the
variable subaccounts of John Hancock Variable Life Account U (the "Account"),
by a fixed subaccount (the "Fixed Account"), or by any combination of the
Fixed Account and up to nine of the variable subaccounts (collectively, the
"Subaccounts"). The assets of each variable Subaccount will be invested in a
corresponding investment portfolio ("Portfolio") of John Hancock Variable
Series Trust I, (the "Fund") a mutual fund advised by John Hancock Mutual Life
Insurance Company ("John Hancock"). The assets of the Fixed Account will be
invested in the general account of John Hancock Variable Life Insurance
Company ("JHVLICO").

The prospectus for the Fund, which is attached to this Prospectus, describes
the investment objectives, policies and risks of investing in the Portfolios
of Variable Series Trust I: Growth and Income (formerly Stock), Large Cap
Growth (formerly Select Stock), Sovereign Bond (formerly Bond), Money Market,
Managed, Real Estate Equity, International Equities (formerly International),
Short-Term U.S. Government, Special Opportunities, Small Cap Growth, Small Cap
Value, Mid Cap Growth, Mid Cap Value, International Balanced, International
Opportunities, Large Cap Value, Strategic Bond and Equity Index.

Replacing existing insurance with a Policy described in this Prospectus may
not be to your advantage.

THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
IT IS NOT VALID UNLESS ATTACHED TO A CURRENT PROSPECTUS FOR THE FUND.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
SUMMARY................................................................... 1
JHVLICO and JOHN HANCOCK.................................................. 6
THE ACCOUNT AND THE SERIES FUND........................................... 6
THE FIXED ACCOUNT......................................................... 9
POLICY PROVISIONS AND BENEFITS............................................ 10
Requirements for Issuance of Policy..................................... 10
Premiums................................................................ 10
Account Value and Surrender Value....................................... 12
Death Benefits.......................................................... 14
Transfers Among Subaccounts............................................. 15
Loan Provisions and Indebtedness........................................ 16
Default................................................................. 17
Exchange Privilege...................................................... 18
CHARGES AND EXPENSES...................................................... 18
Charges Deducted from Premiums.......................................... 18
Sales Charges........................................................... 19
Administrative Surrender Charge......................................... 21
Reduced Charges for Eligible Groups..................................... 21
Charges Deducted from Account Value or Assets........................... 21
Guarantee of Premiums and Certain Charges............................... 23
DISTRIBUTION OF POLICIES.................................................. 23
TAX CONSIDERATIONS........................................................ 24
Policy Proceeds......................................................... 24
Charge for JHVLICO's Taxes.............................................. 25
Corporate and H.R. 10 Plans............................................. 25
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO...................... 26
REPORTS................................................................... 26
VOTING PRIVILEGES......................................................... 27
CHANGES THAT JHVLICO CAN MAKE............................................. 27
STATE REGULATION.......................................................... 28
LEGAL MATTERS............................................................. 28
REGISTRATION STATEMENT.................................................... 28
EXPERTS................................................................... 28
FINANCIAL STATEMENTS...................................................... 28
APPENDIX--OTHER POLICY PROVISIONS......................................... 48
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES
AND ACCUMULATED PREMIUMS................................................. 50
</TABLE>

INDEX OF DEFINED WORDS AND PHRASES

Below are listed certain words and phrases used in this Prospectus, together
with identification of the page on which each is defined or explained:

<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
Account....................................................... 7
Account Value................................................. 1
Age........................................................... 49
Base Policy Target Premium.................................... 19
DAC Tax....................................................... 18
Death Benefit................................................. 14
Fixed Account................................................. 19
Fund.......................................................... Front Cover
Guaranteed Death Benefit...................................... 11
Guaranteed Death Benefit Grace Period......................... 11
Guaranteed Death Benefit Premium.............................. 11
Home Office................................................... Front Cover
Indebtedness.................................................. 17
Investment Rule............................................... 11
Loan Account.................................................. 17
Minimum First Premium......................................... 10
Modal Processing Date......................................... 12
Planned Premium............................................... 11
Policy Grace Period........................................... 11
Portfolio..................................................... Front Cover
Subaccount.................................................... Front Cover
Sum Insured................................................... 4
Surrender Value............................................... 13
Target Premium................................................ 2
Valuation Date................................................ 9
Valuation Period.............................................. 9
Variable Subaccounts.......................................... 10
7-Pay Premium Limit........................................... 12
</TABLE>
<PAGE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?

The Policies work generally as follows: the Policy owner (the "Owner")
periodically gives JHVLICO a premium payment. JHVLICO takes from each premium
an amount for taxes and, from certain premiums, sales expenses. JHVLICO then
places the rest of the premium into as many as ten Subaccounts as directed by
the Owner. The assets allocated to each variable Subaccount are invested in
shares of the corresponding Portfolio of the Fund. The currently available
Portfolios are identified on the cover of this Prospectus. The assets
allocated to the Fixed Account are invested in the general account of JHVLICO.
During the year, JHVLICO takes charges from each Subaccount and credits or
charges each Subaccount with its respective investment performance. The
insurance charge, which is deducted from the invested assets attributable to
each Policy ("Account Value"), varies monthly with the then attained age of
the insured and with the amount of insurance provided at the start of each
month.

1
<PAGE>

WHAT IS THE AMOUNT OF THE PREMIUMS?

Premiums are flexible and the Owner may choose the amount and frequency of
premium payments.

WHAT IS JOHN HANCOCK VARIABLE LIFE ACCOUNT U?

The Account is a separate investment account of JHVLICO, operated as a unit
investment trust, which supports benefits payable under the Policies. Each
variable Subaccount within the Account is invested in a corresponding
Portfolio of John Hancock Variable Series Trust I which is a "series" type of
mutual fund. The Portfolios of the Funds which are currently available are
Growth and Income, Large Cap Growth, Sovereign Bond, Money Market, Managed,
Real Estate Equity, International Equities, Short-Term U.S. Government,
Special Opportunities, Small Cap Growth, Small Cap Value, Mid Cap Growth, Mid
Cap Value, International Balanced, International Opportunities, Large Cap
Value, Strategic Bond, and Equity Index.

John Hancock receives a fee from John Hancock Variable Series Trust I for
providing investment management services with respect to the Growth and
Income, Sovereign Bond and Money Market Portfolios at an annual rate of .25%
of the average daily net assets; with respect to the Large Cap Growth and
Managed Portfolios, at an annual rate of .40% of the first $500 million of the
average daily net assets and at lesser percentages for amounts above $500
million; with respect to the Short-Term U.S. Government Portfolio, at an
annual rate of .50% of the first $250 million of the average daily net assets
and, at lesser percentages for amounts above $250 million; with respect to the
Real Estate Equity Portfolio, at an annual rate of .60% of the first $300
million of the average daily net assets and at lesser percentages for amounts
above $300 million; with respect to the International Equities Portfolio, at
an annual rate of .60% of the first $250 million of the average daily net
assets and at lesser percentages for amounts above $250 million; with respect
to the Special Opportunities Portfolio, at an annual rate of .75% of the first
$250 million of the average daily net assets and at lesser percentages for
amounts above $250 million; with respect to the Equity Index Portfolio at an
annual rate of

2
<PAGE>

For a full description of the Fund, see the Prospectus for the Fund attached
to this Prospectus.

WHAT ARE THE CHARGES MADE BY JHVLICO?

Issue Charge. A charge deducted monthly from Account Value at the rate of
$20 per month for the first 12 Policy months.

Maintenance Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $8 (currently $6) per Policy.

Charge for Mortality and Expense Risks. A charge made daily at a maximum
effective annual rate of .90% (currently .60%) of the assets of the Account.

3
<PAGE>

Charge for Optional Rider Benefits. An additional charge required if the
Owner elects to purchase optional insurance benefits by rider. This additional
charge is deducted monthly from Account Value.

Charge for Partial Withdrawal. A charge of $20 made against Account Value at
the time of withdrawal.

See "Charges and Expenses", for a fuller description of the charges under
the Policy.

IS THERE A CHARGE AGAINST THE ACCOUNT FOR FEDERAL INCOME TAX?

WHAT IS THE RELATIONSHIP BETWEEN THE PREMIUM AND THE AMOUNT ALLOCATED TO THE
SUBACCOUNTS?

HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?

WHAT COMMISSIONS ARE PAID TO AGENTS?

WHAT IS THE DEATH BENEFIT?

Three death benefit options are available at the time of application for a
Policy.

Option 1: Level Death Benefit. A level death benefit equal to the Sum
Insured or, if greater, the Account Value multiplied by the applicable
Corridor Factor.

Option 2: Variable Death Benefit. A variable death benefit equal to the Sum
Insured plus any Account Value, or, if greater, the Account Value multiplied
by the applicable Corridor Factor.

4
<PAGE>

HOW DOES THE ACCOUNT VALUE OF A POLICY VARY IN RELATION TO THE SUBACCOUNTS'
INVESTMENT EXPERIENCE?

WHAT IS THE LOAN PROVISION AND HOW DOES A LOAN AFFECT THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE?

IS THERE A SHORT-TERM CANCELLATION RIGHT?

5
<PAGE>

to the agent or agency office through which it was delivered. Coverage under
the Policy will be cancelled immediately as of the date of such mailing or
delivery. Any premium paid on it will be refunded. If required by state law,
the refund will equal the Account Value at the end of the Valuation Period in
which the Policy is received plus all charges or deductions made against
premiums plus an amount reflecting charges against the Subaccounts and the
investment management fee of the Fund.

WHAT INVESTMENT TRANSFERS ARE ALLOWED AN OWNER?

The Owner may transfer the Account Value among the variable Subaccounts or
into the Fixed Account at any time. Transfers out of the Fixed Account,
however, are subject to restrictions.

ARE THE BENEFITS UNDER A POLICY SUBJECT TO FEDERAL INCOME TAX?

JHVLICO AND JOHN HANCOCK

THE ACCOUNT AND THE SERIES FUND

THE ACCOUNT

6
<PAGE>

THE SERIES FUND

The Fund is a "series" type of mutual fund registered with the Commission
under the 1940 Act as an open-end diversified management investment company.
The Fund serves as the investment medium for the Account and other unit
investment trust separate accounts established for other variable life
insurance policies and variable annuity contracts. (See the attached Fund
Prospectus for a description of a need to monitor for possible conflicts and
other consequences.) A very brief summary of the investment objectives of each
Portfolio is set forth below.

7
<PAGE>

International Equities (formerly International) Portfolio. The investment
objective of this Portfolio is to achieve long-term growth of capital by
investing primarily in foreign equity securities.

Mid Cap Growth Portfolio: to provide long-term growth of capital through a
non-diversified portfolio investing largely in common stocks of mid-sized
companies.

Small Cap Growth Portfolio: to provide long-term growth of capital through a
diversified portfolio investing primarily in common stocks of small
capitalization emerging growth companies.

Small Cap Value Portfolio: to provide long-term growth of capital by
investing in a well diversified portfolio of equity securities of small
capitalization companies exhibiting value characteristics.

Strategic Bond Portfolio: to provide a high total return consistent with
moderate risk of capital and maintenance of liquidity, from a portfolio of
domestic and international fixed income securities.

International Opportunities Portfolio: to provide capital appreciation
through investments in common stocks of primarily well-established, non-United
States companies, through investment in non-U.S. equity and fixed income
securities.

International Balanced Portfolio: to maximize total U.S. dollar return,
consisting of capital appreciation and current income.

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<PAGE>

London, England, provide sub-investment advice with respect to the
International Portfolio, and John Hancock Advisers, Inc. does likewise with
respect to the Sovereign Bond, Small Cap Growth and Special Opportunities
Portfolios.

On each Valuation Date, shares of each Portfolio are purchased or redeemed
by JHVLICO for each variable Subaccount based on, among other things, the
amount of net premiums allocated to the variable Subaccount, distributions
reinvested, transfers to, from and among variable Subaccounts, all to be
effected as of that date. Such purchases and redemptions are effected at the
net asset value per Fund share for each Portfolio determined on that same
Valuation Date. A Valuation Date is any date on which JHVLICO is open for
business, the New York Stock Exchange is open for trading and on which the
Fund values its shares. A Valuation Period is that period of time from the
beginning of the day following a Valuation Date to the end of the next
following Valuation Date.

A full description of the Fund, its investment objectives, policies and
restrictions, its charges, expenses and all other aspects of its operation is
contained in the attached Prospectuses and the statement of additional
information referred to therein, which should be read together with this
Prospectus.

THE FIXED ACCOUNT

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<PAGE>

Fixed Account are subject to certain limitations (see "Transfers Among
Subaccounts"), and charges will vary somewhat for Account Value allocated to
the Fixed Account. See "Charges Deducted From Account Value".

POLICY PROVISIONS AND BENEFITS

REQUIREMENTS FOR ISSUANCE OF POLICY

The Policy is generally available with a minimum Sum Insured at issue of
$100,000. At the time of issue, the insured must be age 20 through 75. All
persons insured must meet certain health and other criteria called
"underwriting standards". The smoking status of each insured is reflected in
the insurance charges made. Policies issued in certain jurisdictions or in
connection with certain employee plans will not directly reflect the sex of
the insured in either the premium rates or the charges or values under the
Policy. Accordingly, the illustrations set forth in this Prospectus may differ
for such Policies.

PREMIUMS

Payment Flexibility. Premiums are flexible. The Owner may choose the amount
and frequency of premium payments, so long as each premium payment meets the
requirements described below.

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<PAGE>

estimated charges are not paid by the end of the grace period, the Policy will
lapse. The estimated charges will equal three times the monthly Policy charges
then due. See "Default".

Guaranteed Death Benefit Premiums. A Guaranteed Death Benefit feature may
apply during the first five Policy years. See "Death Benefits". The Guaranteed
Death Benefit Premiums required to maintain this benefit in force depend on
the issue age, sex, smoking status, and underwriting class of the insured at
issue, the Sum Insured at issue and any additional benefits selected. This
premium will equal 1/12th of the Target Premium for Owners electing a monthly
premium payment mode; 1/4 of the Target Premium for Owners electing the
quarterly mode; 1/2 of the Target Premium for owners electing the semi-annual
mode; and the Target Premium for Owners electing the annual mode. The due date
for each premium is referred to as the Modal processing date. To keep the
Guaranteed Death Benefit in effect, the amount of actual premiums paid minus
any withdrawals must at each Modal processing date be at least equal to the
Guaranteed Death Benefit Premiums due to date. If this test is not satisfied
on any Modal processing date, JHVLICO will notify the Owner of the shortfall
immediately and a Guaranteed Death Benefit grace period will commence as of
that anniversary. The Guaranteed Death Benefit grace period will end on the
second monthly processing date after the determination of the shortfall. This
notice will be mailed to the Owner's last-known address at least 31 days prior
to the end of the Guaranteed Death Benefit grace period. If JHVLICO does not
receive payment for the amount of the deficiency by the end of the Guaranteed
Death Benefit grace period, the Guaranteed Death Benefit feature will lapse.
The Guaranteed Death Benefit is only available if the insured's underwriting
class is standard or preferred and the insured meets certain other
underwriting standards relating to health and occupation.

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<PAGE>

by the state premium tax charge, any sales charge, and the Federal DAC Tax
charge. See "Charges and Expenses". The remainder is the net premium.

There are three exceptions to the normal practice of processing a premium
payment as of the end of the Valuation Period in which it is received:

(1) A payment received prior to a Policy's date of issue will be
processed as if received on the Valuation Date immediately
preceding the date of issue.

7-Pay Premium Limit. Federal tax law modifies the tax treatment of certain
Policy distributions such as loans, surrenders, partial surrenders, and
withdrawals. The application of this modified treatment to any Owner depends
upon whether premiums have been paid at any time during the first 7 Policy
years that exceed a "7-pay" premium limit as defined in the law. The "7-pay"
premium is greater than the Guaranteed Death Benefit Premium but is generally
less than the amount an Owner may choose to pay and JHVLICO will accept. The
7-pay limit is the total of net level premiums that would have been payable at
any time for the Policy to be fully paid-up after the payment of 7 level
annual premiums. If the total premiums paid exceed the 7-pay limit, the Policy
will be treated as a "modified endowment", which means that the Owner will be
subject to tax to the extent of any income (gain) on any distributions made
from the Policy. A material change in the Policy will result in a new 7-pay
limit and test period. A reduction in the Policy's benefits within the 7-year
period following issuance of, or reinstatement or other material change in,
the Policy may also result in the application of the modified endowment
treatment. See "Policy Proceeds" under "Tax Considerations". If JHVLICO
receives any premium payment that will cause a Policy to become a modified
endowment, the excess portion of that premium payment will not be accepted
unless the Owner signs an acknowledgment of that fact. When it identifies such
an excess premium, JHVLICO sends the Owner immediate notice and refunds the
excess premium if it has not received notice of the acknowledgement by the
time the premium payment check has had a reasonable time to clear the banking
system, but in no case longer than two weeks.

ACCOUNT VALUE AND SURRENDER VALUE

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<PAGE>

Amount of Surrender Value. The Surrender Value will be the Account Value
less the sum of any Administrative Surrender Charge, any Contingent Deferred
Sales Charge, and any Indebtedness.

The effect of a withdrawal, including its associated charge, upon the death
benefit depends upon the death benefit option in effect.

A surrender or withdrawal may have significant tax consequences. See "Tax
Considerations".

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<PAGE>

JHVLICO reserves the right to refuse any withdrawal request that would cause
the Policy's Sum Insured to fall below $100,000.

DEATH BENEFITS

Option 2: Variable Death Benefit: Under this option, the death benefit will
equal the Sum Insured plus any Account Value, unless the Account Value
multiplied by the Corridor Factor produces a higher death benefit. The
Corridor Factor depends upon the then attained age of the insured. The
Corridor Factor decreases slightly (or remains the same at older and younger
ages) from year to year as the attained age of the insured increases. A
complete list of Corridor Factors is set forth in the Policy. Under this
option the Policy will be subject to the "guideline premium and cash value
corridor" test as defined by Code Section 7702. This option will offer the
best opportunity for the Owner who would like to have an increasing death
benefit as early as possible. The death benefit will increase whenever there
is an increase in the Policy's Account Value and will decrease whenever there
is a decrease in the Account Value, but never below the Sum Insured.

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<PAGE>

that the Policy will continue to qualify as life insurance. One of two tests
under current Federal tax law can be used to determine if a Policy complies
with the definition of life insurance in Section 7702 of the Code.

TRANSFERS AMONG SUBACCOUNTS

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<PAGE>

An Owner who authorizes telephone transactions will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which JHVLICO reasonably believes to be genuine, unless such
loss, expense or cost is the result of JHVLICO's mistake or negligence.
JHVLICO employs procedures which provide adequate 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 JHVLICO does not employ reasonable
procedures to confirm that instructions communicated by telephone are genuine,
it may be liable for any loss due to unauthorized or fraudulent instructions.

LOAN PROVISIONS AND INDEBTEDNESS

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<PAGE>

"Published Monthly Average" (defined below) for the calendar month ending 2
months before the calendar month of the Policy anniversary or (2) 5%. In
jurisdictions where a fixed loan rate is applicable, JHVLICO will charge
interest at an effective annual rate of 6%, accrued daily. The "Published
Monthly Average" means Moody's Corporate Bond Yield Average--Monthly Average
Corporates, as published by Moody's Investors Service, Inc., or if the average
is no longer published, a substantially similar average established by the
insurance regulator where the Policy is issued.

If a Policy is a modified endowment at the time a loan is made, that loan
may have significant tax consequences. See "Tax Considerations".

DEFAULT

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<PAGE>

(as described in "Premiums--Guaranteed Death Benefit Premiums"), the usual
default, Policy grace period and lapse procedures described in the preceding
paragraph will be applied commencing with the first day of the Policy month in
which the lapse of the Guaranteed Death Benefit occurs.

EXCHANGE PRIVILEGE

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

The foregoing description of Policy provisions is qualified by reference to
the specimen Policy which has been filed as an exhibit to the Registration
Statement.

CHARGES AND EXPENSES

CHARGES DEDUCTED FROM PREMIUMS

In addition to part of the sales charges (see "Sales Charges" below), the
following charges are deducted from premiums:

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<PAGE>

Policies, but reserves the right, subject to any required regulatory approval,
to change this charge for Policies not yet issued in order to correspond with
changes in the Federal income tax treatment of the Policies' deferred
acquisition costs.

SALES CHARGES

No sales charge is deducted from a premium payment received in excess of one
Target Premium in any Policy year.

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<PAGE>

The Contingent Deferred Sales Charge is computed as a percentage of Base
Policy Target Premiums paid in accordance with the following schedule:

Effect of Premium Payment Pattern. An Owner may structure the timing and
amount of premium payments to minimize the sales charges, although doing so
involves certain risks. Paying less than one Target Premium in the first
Policy year or paying more than one Target Premium in any Policy year could
reduce the Owner's total sales charges over time. For example, an Owner,
paying ten Target Premiums of $1,000 each would pay total premium sales
charges of $400 and be subject to a maximum Contingent Deferred Sales Charge
of $780 if he paid $1,000 in each of the first ten Policy years, but only a
$200 premium sales charge and $520 Contingent Deferred Sales Charge if he paid
$2,000 (i.e., two times the Target Premium amount) in every other Policy year
up to the tenth Policy year. However, delaying the payment of Target Premiums
to later Policy years could increase the risk that the Account Value will be
insufficient to pay monthly Policy charges as they come due and that, as a
result, the Policy will lapse and eventually terminate. See "Default".
Conversely, accelerating the payment of Target Premiums to earlier Policy
years could cause aggregate premiums paid to exceed the Policy's 7-pay premium
limit and, as a result, cause the Policy to become a modified endowment, with
adverse tax consequences to the Owner upon receipt of Policy distributions.
See "Premiums--7-Pay Premium Limit".

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<PAGE>

ADMINISTRATIVE SURRENDER CHARGE

REDUCED CHARGES FOR ELIGIBLE GROUPS

CHARGES DEDUCTED FROM ACCOUNT VALUE OR ASSETS

The following charges are deducted from Account Value or assets:

Maintenance charge. JHVLICO will deduct from the Account Value a monthly
charge not to exceed $8 per Policy. The current monthly charge is $6 per
Policy.

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<PAGE>

years, and may change these rates from time to time based on JHVLICO's
expectations of future experience. However, these rates will never be more
than the guaranteed maximum rates based on the 1980 Commissioners' Standard
Ordinary Mortality Tables set forth in the Policy.

For example, it is expected that the reduction percentage in Policy year 11
would be at an effective annual rate of .21%, in Policy year 20 would be .30%
and in Policy year 30 would be .40%.

JHVLICO reserves the right to modify or discontinue this reduction. Because
the Policies were first offered for sale in 1994, no reductions have yet been
made.

Lower current insurance rates are offered at most ages for insureds who are
eligible for the preferred underwriting class of the Policy.

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<PAGE>

Fund Investment Management Fee. The Account purchases shares of the Fund at
net asset value, a value which reflects the deduction from the assets of the
Fund of its investment management fee, which is described briefly in the
Summary of this Prospectus, and of certain non-advisory operating expenses.
For a full description of these deductions, see the attached Prospectus for
the Fund.

GUARANTEE OF PREMIUMS AND CERTAIN CHARGES

DISTRIBUTION OF POLICIES

23
<PAGE>

TAX CONSIDERATIONS

POLICY PROCEEDS

24
<PAGE>

Federal estate and state and local estate, inheritance and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Owner or beneficiary.

CHARGE FOR JHVLICO'S TAXES

CORPORATE AND H.R. 10 PLANS

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<PAGE>

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO

The Directors and Executive Officers of JHVLICO and their principal
occupations during the past five years are as follows:

The business address of all Directors and officers of JHVLICO is John
Hancock Place, Boston, Massachusetts 02117.

REPORTS

Owners will be sent semiannually a report containing the financial
statements of the Funds, including a list of securities held in each
Portfolio.

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<PAGE>

VOTING PRIVILEGES

All of the assets in the variable Subaccounts of the Account are invested in
shares of the corresponding Portfolios of the Fund. JHVLICO will vote the
shares of each of the Portfolios of the Fund which are deemed attributable to
Policies at regular and special meetings of the Fund's shareholders in
accordance with instructions received from Owners of such policies. Shares of
the Fund held in the Account which are not attributable to policies and shares
for which instructions from owners are not received will be represented by
JHVLICO at the meeting and will be voted for and against each matter in the
same proportions as the votes based upon the instructions received from the
owners of all policies funded through the Account's corresponding variable
Subaccounts.

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

JHVLICO may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to change the investment objectives of the Portfolios or to
approve or disapprove an investment advisory or underwriting contract for the
Fund. JHVLICO also may disregard voting instructions in favor of changes
initiated by an owner or the Fund's Board of Trustees in an investment policy,
investment adviser or principal underwriter of the Fund, if JHVLICO (i)
reasonably disapproves of such changes and (ii) in the case of a change of
investment policy or investment adviser, makes a good-faith determination that
the proposed change is contrary to state law or prohibited by state regulatory
authorities or that the change would be inconsistent with a variable
Subaccount's investment objectives or would result in the purchase of
securities which vary from the general quality and nature of investments and
investment techniques utilized by other separate accounts of JHVLICO or of an
affiliated life insurance company, which separate accounts have investment
objectives similar to those of the variable Subaccount. In the event JHVLICO
does disregard voting instructions, a summary of that action and the reasons
for such action will be included in the next semi-annual report to Owners.

CHANGES THAT JHVLICO CAN MAKE

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<PAGE>

STATE REGULATION

LEGAL MATTERS

REGISTRATION STATEMENT

EXPERTS

Actuarial matters included in this Prospectus have been examined by Randi M.
Sterrn, F.S.A., an Actuary of JHVLICO.

FINANCIAL STATEMENTS

28
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1995

See accompanying notes.

29
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENTS OF OPERATIONS

See accompanying notes.

30
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENTS OF OPERATIONS (CONTINUED)

See accompanying notes.

31
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENTS OF CHANGES IN NET ASSETS

See accompanying notes.

32
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

33
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT U

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995
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