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As filed with the Securities and Exchange Commission on March 6, 1996
Registration No. 33-76660
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-6
Post-Effective Amendment No. 2 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
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It is proposed that this filing become effective (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on March 11, 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.
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CROSS-REFERENCE TABLE
Form N-8B-2 Item Caption in Prospectus
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1, 2 Cover, The Account and The Series
Funds, JHVLICO and John Hancock
3 Inapplicable
4 Cover, Distribution of Policies
5,6 The Account and The Series Funds,
State Regulation
7, 8, 9 Inapplicable
10(a),(b),(c),(d),(e) Principal Policy Provisions
10(f) Voting Privileges
10(g),(h) Changes that JHVLICO
Can Make
10(i) Appendix--Other Policy
Provisions, The Account and The
Series Funds
11, 12 Summary, The Account and The Series
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 Funds
17 Summary, Principal Policy
Provisions
18 The Account and The Series Funds,
Tax Considerations
19 Reports
20 Changes that JHVLICO
Can Make
21 Principal Policy Provisions
22 Principal Policy Provisions
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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 Funds,
Principal Policy Provisions,
Appendix--Illustration of Death
Benefits, Account Values,
Surrender Values and
Accumulated Premiums
45 Not Applicable
46 The Account and The Series Funds,
Principal Policy Provisions,
Appendix--Illustration of Death
Benefits, Account Values,
Surrender Values and
Accumulated Premiums
47 Not Applicable
48,49,50 Not Applicable
51 Principal Policy Provisions,
Appendix--Other Policy
Provisions
52 The Account and The Series 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)
(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 MARCH 11, 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: Stock, Select Stock, Bond, Money
Market, Managed, Real Estate Equity, International, Special Opportunities and
Short-Term U.S. Government 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.
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TABLE OF CONTENTS
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Page
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SUMMARY................................................................... 1
JHVLICO and JOHN HANCOCK.................................................. 6
THE ACCOUNT AND THE SERIES FUNDS.......................................... 6
THE FIXED ACCOUNT......................................................... 9
POLICY PROVISIONS AND BENEFITS............................................ 9
Requirements for Issuance of Policy..................................... 9
Premiums................................................................ 9
Account Value and Surrender Value....................................... 11
Death Benefits.......................................................... 13
Transfers Among Subaccounts............................................. 14
Loan Provisions and Indebtedness........................................ 15
Default................................................................. 16
Exchange Privilege...................................................... 17
CHARGES AND EXPENSES...................................................... 17
Charges Deducted from Premiums.......................................... 17
Sales Charges........................................................... 18
Administrative Surrender Charge......................................... 20
Reduced Charges for Eligible Groups..................................... 20
Charges Deducted from Account Value or Assets........................... 20
Guarantee of Premiums and Certain Charges............................... 22
DISTRIBUTION OF POLICIES.................................................. 22
TAX CONSIDERATIONS........................................................ 23
Policy Proceeds......................................................... 23
Charge for JHVLICO's Taxes.............................................. 24
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO...................... 25
REPORTS................................................................... 25
VOTING PRIVILEGES......................................................... 26
CHANGES THAT JHVLICO CAN MAKE............................................. 26
STATE REGULATION.......................................................... 27
LEGAL MATTERS............................................................. 27
REGISTRATION STATEMENT.................................................... 27
EXPERTS................................................................... 27
FINANCIAL STATEMENTS...................................................... 27
APPENDIX--OTHER POLICY PROVISIONS......................................... 47
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES
AND ACCUMULATED PREMIUMS................................................. 49
</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>
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PAGE
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<S> <C>
Account....................................................... 6
Account Value................................................. 1
Age........................................................... 57
Base Policy Target Premium.................................... 18
DAC Tax....................................................... 17
Death Benefit................................................. 13
Fixed Account................................................. 8
Fund.......................................................... Front Cover
Guaranteed Death Benefit...................................... 10
Guaranteed Death Benefit Grace Period......................... 10
Guaranteed Death Benefit Premium.............................. 10
Home Office................................................... Front Cover
Indebtedness.................................................. 15
Investment Rule............................................... 11
Loan Account.................................................. 16
Minimum First Premium......................................... 9
Modal Processing Date......................................... 10
Planned Premium............................................... 10
Policy Anniversary............................................ 57
Policy Grace Period........................................... 9
Portfolio..................................................... Front Cover
Subaccount.................................................... Front Cover
Sum Insured................................................... 4
Surrender Value............................................... 11
Target Premium................................................ 2
Valuation Date................................................ 8
Valuation Period.............................................. 8
Variable Subaccounts.......................................... 2
7-Pay Premium Limit........................................... 11
</TABLE>
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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, but
use the same underlying Fund.
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
1
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employee plans will not directly reflect the sex of the insured in either the
premium rates or the charges and values under the Policy.
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 Stock, Select Stock, Bond, Money Market, Managed, Real
Estate Equity, International, Special Opportunities, Short-Term U.S.
Government, 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 Stock, Bond and
Money Market Portfolios at an annual rate of .25% of the average daily net
assets; with respect to the Select Stock 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 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 and 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.
2
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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.
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.
3
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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.
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.
4
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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.
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.
5
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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.
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.
6
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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 each variable Subaccount of the Account, 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.
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.
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.
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.
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 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.
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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.
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
Stock, Select Stock, 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 Bond and Special Opportunities Portfolios.
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.
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 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.
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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
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.
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
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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.
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.
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
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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.
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
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
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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.
If a Policy is surrendered during the second Policy year, 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.
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.
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".
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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.
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.
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
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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.
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.
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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.
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
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
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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.
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
16
<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.
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.
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
17
<PAGE>
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.
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.
18
<PAGE>
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.
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
19
<PAGE>
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.
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
20
<PAGE>
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.
21
<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.
22
<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.
23
<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.
24
<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; Second Vice President, John
Hancock 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.
25
<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
26
<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.
27
<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.
28
<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.
29
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
Short-Term
Special U.S.
Real Estate Opportunities Government
Equity Subaccount Subaccount* Stock Subaccount Subaccount*
----------------------------- -------------------- -------------------------------------- ------------------
Period Period
Year Ended Year Ended
Year Ended December 31 Ended December 31 Year Ended December 31 Ended December 31
----------------------------- -------- ----------- -------------------------------------- ------ -----------
1995 1994 1993 1995 1994 1995 1994 1993 1995 1994
-------- ---------- --------- -------- ----------- ------------ ------------ ----------- ------ -----------
<S> <C> <C> <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 $2,910 $ 25
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 2,910 25
Expenses:
Mortality and
expense risks and
other charges.... 41,982 40,183 27,337 3,373 12 3,246,229 2,876,205 3,110,885 312 1
-------- ---------- --------- -------- ------ ------------ ------------ ----------- ------ ----
NET INVESTMENT
INCOME.......... 489,037 412,785 231,506 36,311 13 57,171,251 32,918,425 44,316,155 2,598 24
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 27,049,400 945 --
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) 1,166 (27)
-------- ---------- --------- -------- ------ ------------ ------------ ----------- ------ ----
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 2,111 (27)
-------- ---------- --------- -------- ------ ------------ ------------ ----------- ------ ----
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 $4,709 $ (3)
======== ========== ========= ======== ====== ============ ============ =========== ====== ====
<CAPTION>
Managed 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......... $26,974,536 $ 10,625,950 $19,327,167
Interest income
on policy loans. 3,999,425 3,637,463 3,643,167
----------- ------------- ------------
30,973,961 14,263,413 22,970,334
Expenses:
Mortality and
expense risks and
other charges.... 1,677,243 1,541,565 1,667,909
----------- ------------- ------------
NET INVESTMENT
INCOME.......... 29,296,718 12,721,848 21,302,425
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS
Net realized
gains (losses).. 2,658,955 2,204,918 (10,110,200)
Net unrealized
appreciation
(depreciation)
during the year. 30,787,175 (18,206,145) (662,337)
----------- ------------- ------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS...... 33,446,130 (16,001,227) 9,447,863
----------- ------------- ------------
NET INCREASE
(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS.. $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.
30
<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 35,582,655 231,383,338 244,182,917 369,525,275
----------- ------------ ----------- ------------ ------------ ------------
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.
31
<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
---------------------------------- ------------------- ----------------------------------------
Period Ended
Year Ended 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>
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
year............ 7,603,825 6,613,605 2,806,666 37,744 -- 521,283,784 530,281,093 564,202,095
---------- ---------- ---------- ---------- ------- ------------ ------------ ------------
End of Year..... $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
---------------- -----------------------------------------
Period Ended
December 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
year............ 6,397 -- 278,385,052 291,386,411 303,003,979
-------- ------- ------------- ------------- -------------
End of Year..... $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.
32
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
NOTES TO FINANCIAL STATEMENTS
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.
33
<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>
34
<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,
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.
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 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
35
<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.
36
<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> <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.
37
<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.
38
<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.
39
<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.
40
<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
41
<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
On June 23, 1993, the Company acquired all of the outstanding shares of stock
of Colonial Penn Annuity and Life Insurance Company (CPAL) from Colonial Penn
Life Insurance Company for an aggregate purchase price
42
<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
====== ======
</TABLE>
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS
Net realized capital gains consist of the following items:
<TABLE>
<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
====== ======
</TABLE>
Net unrealized capital losses and other adjustments consist of the following
items:
<TABLE>
<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>
43
<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>
44
<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>
45
<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.
46
<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 premium 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.
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.
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.
47
<PAGE>
SUICIDE. If the insured commits suicide, while sane or insane, within 2
years (except where state law requires a shorter period) from the issue date
shown in the Policy, JHVLICO will pay in place of all other benefits an amount
equal to the premium paid less any Indebtedness on the date of death and any
withdrawals. If the suicide is more than 2 years from the issue date but
within 2 years of any increase in death benefit due to payment of any premium
in excess of the Required Premium, the benefits payable will not include the
increased benefit but will include the excess premium.
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, except for any provision for a disability
benefit or additional benefits provisions added after issue, shall be
incontestable other than for nonpayment of premiums after it has been in force
during the lifetime of the insured for 2 years from its issue date. If,
however, evidence of insurability is required with respect to any premium in
excess of the Required Premium, any increase in death benefit due to payment
of excess premium shall be incontestable after the increase has been in force
for 2 years from the increase date.
DEFERRAL OF DETERMINATION AND PAYMENTS. If the Policy is not on a fixed non-
forfeiture option, payment of any death, surrender, 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
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 JHVLICO Owners.
Under a Policy being continued under a fixed non-forfeiture option, payment
of the cash value or loan proceeds may be deferred by JHVLICO for up to six
months after receipt of a request therefor. Interest will be accrued at an
annual rate of 3 1/2% if such a deferment extends beyond 29 days.
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.
48
<PAGE>
APPENDIX--ILLUSTRATION OF DEATH BENEFITS,
SURRENDER VALUES AND ACCUMULATED PREMIUMS
The following tables illustrate the changes in death benefit and surrender
value of the Policy, disregarding any Policy loans. Each table separately
illustrates the operation of a Policy for an identified issue age, premium
schedule and Sum Insured at Issue and shows how the death benefit and
surrender value (reflecting the deduction of the surrender charge, if any) 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 premiums paid at the beginning of each Policy
year and will assist in a comparison of the death benefit and surrender value
figures set forth in the tables with those under other variable life insurance
policies which may be issued by JHVLICO or other companies. The death benefit
and surrender value 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 fluctuated above or below the average for individual Policy
years.
The amounts shown for the death benefit and surrender value are as of the
end of each Policy year. The tables headed "Using Current Charges" assume that
current monthly rates for insurance and current charges for expenses will be
made in each year illustrated. The tables headed "Using Maximum Charges"
assume that the maximum (guaranteed) charge will be made for insurance and for
expense charges 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 .53%) 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 .15%). 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 nine variable subaccounts. The
actual charges and expenses associated with any Policy will vary depending
upon the actual allocation of Policy values among subaccounts. During the
first 14 Policy years, the surrender values for the base Policy are the
Account Values less the Contingent Deferred Sales Charge (and, during the
first four years, less any unpaid Issue Charge). Thereafter the Account Value
will be equal to the surrender value.
The tables reflect that no charge is currently made to the Accounts 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.
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.
The amounts shown for the death benefit and surrender value reflect Excess
Value, if any, applied under the Accumulate Option.
JHVLICO will furnish upon request a comparable illustration reflecting the
proposed insured's age, sex, underwriting risk classification and the Sum
Insured at Issue or premium amount requested, and assuming annual premiums and
that the proposed insured is not in a substandard underwriting risk
classification.
49
<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
50
<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.
51
<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 in a state 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 .53%) 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 .15%). 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 nine 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.
52
<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>
1 798 100,000 100,000 100,000 218 244 271 0 0 0
2 1,636 100,000 100,000 100,000 664 738 816 0 0 73
3 2,516 100,000 100,000 100,000 1,094 1,245 1,408 1 152 315
4 3,439 100,000 100,000 100,000 1,508 1,764 2,052 415 671 959
5 4,409 100,000 100,000 100,000 1,904 2,294 2,750 811 1,201 1,658
6 5,428 100,000 100,000 100,000 2,281 2,836 3,510 1,188 1,743 2,417
7 6,497 100,000 100,000 100,000 2,637 3,386 4,333 1,544 2,293 3,240
8 7,620 100,000 100,000 100,000 2,972 3,945 5,228 2,079 3,051 4,334
9 8,799 100,000 100,000 100,000 3,285 4,513 6,199 2,590 3,818 5,504
10 10,037 100,000 100,000 100,000 3,581 5,098 7,271 3,285 4,801 6,974
11 11,337 100,000 100,000 100,000 3,882 5,721 8,471 3,684 5,524 8,274
12 12,702 100,000 100,000 100,000 4,160 6,357 9,786 4,061 6,258 9,687
13 14,135 100,000 100,000 100,000 4,413 7,003 11,226 4,413 7,003 11,226
14 15,640 100,000 100,000 100,000 4,638 7,658 12,804 4,638 7,658 12,804
15 17,220 100,000 100,000 100,000 4,835 8,321 14,533 4,835 8,321 14,533
16 18,879 100,000 100,000 100,000 5,001 8,991 16,433 5,001 8,991 16,433
17 20,621 100,000 100,000 100,000 5,128 9,659 18,514 5,128 9,659 18,514
18 22,450 100,000 100,000 100,000 5,208 10,320 20,793 5,208 10,320 20,793
19 24,370 100,000 100,000 100,000 5,237 10,968 23,292 5,237 10,968 23,292
20 26,387 100,000 100,000 100,000 5,207 11,596 26,033 5,207 11,596 26,033
25 38,086 100,000 100,000 100,000 3,951 14,210 44,489 3,951 14,210 44,489
30 53,018 ** 100,000 100,000 ** 14,919 75,568 ** 14,919 75,568
35 72,076 ** 100,000 148,344 ** 10,826 128,995 ** 10,826 128,995
40 96,398 ** ** 228,255 ** ** 217,386 ** ** 217,386
45 127,441 ** ** 383,151 ** ** 364,906 ** ** 364,906
</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.
53
<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 0 100,000 100,000 192 217 243 0 0 0
2 1,636 0 100,000 100,000 610 681 755 0 0 12
3 2,516 0 100,000 100,000 1,013 1,155 1,310 0 62 218
4 3,439 100,000 100,000 100,000 1,398 1,639 1,911 305 546 818
5 4,409 100,000 100,000 100,000 1,764 2,130 2,559 671 1,037 1,467
6 5,428 100,000 100,000 100,000 2,111 2,629 3,261 1,018 1,536 2,168
7 6,497 100,000 100,000 100,000 2,436 3,133 4,019 1,343 2,041 2,926
8 7,620 100,000 100,000 100,000 2,739 3,643 4,838 1,845 2,749 3,944
9 8,799 100,000 100,000 100,000 3,018 4,155 5,721 2,323 3,460 5,026
10 10,037 100,000 100,000 100,000 3,274 4,671 6,678 2,977 4,375 6,382
11 11,337 100,000 100,000 100,000 3,502 5,187 7,712 3,305 4,989 7,514
12 12,702 100,000 100,000 100,000 3,701 5,700 8,828 3,603 5,601 8,730
13 14,135 100,000 100,000 100,000 3,871 6,209 10,036 3,871 6,209 10,036
14 15,640 100,000 100,000 100,000 4,009 6,713 11,344 4,009 6,713 11,344
15 17,220 100,000 100,000 100,000 4,112 7,209 12,760 4,112 7,209 12,760
16 18,879 100,000 100,000 100,000 4,180 7,692 14,294 4,180 7,692 14,294
17 20,621 100,000 100,000 100,000 4,204 8,158 15,953 4,204 8,158 15,953
18 22,450 100,000 100,000 100,000 4,179 8,598 17,748 4,179 8,598 17,748
19 24,370 100,000 100,000 100,000 4,101 9,008 19,689 4,101 9,008 19,689
20 26,387 100,000 100,000 100,000 3,960 9,375 21,788 3,960 9,375 21,788
25 38,086 100,000 100,000 100,000 2,090 10,295 35,242 2,090 10,295 35,242
30 53,018 ** 100,000 100,000 ** 8,369 56,051 ** 8,369 56,051
35 72,076 ** 100,000 104,274 ** ** 90,673 ** ** 90,673
40 96,398 ** ** 155,703 ** ** 148,289 ** ** 148,289
45 127,441 ** ** 253,113 ** ** 241,060 ** ** 241,060
</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.
54
<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>
1 798 100,217 100,244 100,270 217 244 270 0 0 0
2 1,636 100,662 100,736 100,813 662 736 813 0 0 70
3 2,516 101,090 101,240 101,403 1,090 1,240 1,403 0 147 310
4 3,439 101,501 101,755 102,041 1,501 1,755 2,041 408 662 949
5 4,409 101,892 102,279 102,733 1,892 2,279 2,733 799 1,187 1,640
6 5,428 102,264 102,814 103,482 2,264 2,814 3,482 1,171 1,721 2,389
7 6,497 102,614 103,354 104,291 2,614 3,354 4,291 1,521 2,261 3,199
8 7,620 102,941 103,901 105,167 2,941 3,901 5,167 2,047 3,007 4,273
9 8,799 103,244 104,453 106,115 3,244 4,453 6,115 2,549 3,758 5,419
10 10,037 103,529 105,019 107,154 3,529 5,019 7,154 3,233 4,723 6,857
11 11,337 103,817 105,620 108,313 3,817 5,620 8,313 3,619 5,422 8,115
12 12,702 104,080 106,228 109,576 4,080 6,228 9,576 3,981 6,129 9,477
13 14,135 104,316 106,840 110,950 4,316 6,840 10,950 4,316 6,840 10,950
14 15,640 104,523 107,455 112,444 4,523 7,455 12,444 4,523 7,455 12,444
15 17,220 104,699 108,070 114,071 4,699 8,070 14,071 4,699 8,070 14,071
16 18,879 104,842 108,685 115,843 4,842 8,685 15,843 4,842 8,685 15,843
17 20,621 104,943 109,288 117,764 4,943 9,288 17,764 4,943 9,288 17,764
18 22,450 104,995 109,871 119,845 4,995 9,871 19,845 4,995 9,871 19,845
19 24,370 104,992 110,428 122,096 4,992 10,428 22,096 4,992 10,428 22,096
20 26,387 104,927 110,949 124,528 4,927 10,949 24,528 4,927 10,949 24,528
25 38,086 103,459 112,699 139,921 3,459 12,699 39,921 3,459 12,699 39,921
30 53,018 ** 111,717 162,220 ** 11,717 62,220 ** 11,717 62,220
35 72,076 ** 104,808 193,376 ** 4,808 93,376 ** 4,808 93,376
40 96,398 ** ** 235,910 ** ** 135,910 ** ** 135,910
45 127,441 ** ** 290,288 ** ** 190,288 ** ** 190,288
</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.
55
<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>
1 798 100,191 100,216 100,242 191 216 242 0 0 0
2 1,636 100,608 100,679 100,753 608 679 753 0 0 10
3 2,516 101,009 101,151 101,305 1,009 1,151 1,305 0 58 212
4 3,439 101,391 101,630 101,901 1,391 1,630 1,901 298 538 808
5 4,409 101,753 102,116 102,542 1,753 2,116 2,542 660 1,023 1,450
6 5,428 102,095 102,609 103,235 2,095 2,609 3,235 1,002 1,516 2,142
7 6,497 102,414 103,104 103,979 2,414 3,104 3,979 1,321 2,011 2,886
8 7,620 102,710 103,602 104,781 2,710 3,602 4,781 1,816 2,708 3,887
9 8,799 102,980 104,100 105,642 2,980 4,100 5,642 2,285 3,405 4,946
10 10,037 103,225 104,598 106,569 3,225 4,598 6,569 2,929 4,302 6,273
11 11,337 103,442 105,093 107,565 3,442 5,093 7,565 3,245 4,895 7,368
12 12,702 103,629 105,581 108,635 3,629 5,581 8,635 3,530 5,482 8,536
13 14,135 103,783 106,060 109,783 3,783 6,060 9,783 3,783 6,060 9,783
14 15,640 103,905 106,529 111,016 3,905 6,529 11,016 3,905 6,529 11,016
15 17,220 103,990 106,982 112,339 3,990 6,982 12,339 3,990 6,982 12,339
16 18,879 104,037 107,417 113,758 4,037 7,417 13,758 4,037 7,417 13,758
17 20,621 104,040 107,825 115,276 4,040 7,825 15,276 4,040 7,825 15,276
18 22,450 103,991 108,199 116,895 3,991 8,199 16,895 3,991 8,199 16,895
19 24,370 103,888 108,531 118,621 3,888 8,531 18,621 3,888 8,531 18,621
20 26,387 103,720 108,809 120,452 3,720 8,809 20,452 3,720 8,809 20,452
25 38,086 101,709 109,047 131,345 1,709 9,047 31,345 1,709 9,047 31,345
30 53,018 ** 105,965 145,215 ** 5,965 45,215 ** 5,965 45,215
35 72,076 ** ** 161,065 ** ** 61,065 ** ** 61,065
40 96,398 ** ** 175,636 ** ** 75,636 ** ** 75,636
45 127,441 ** ** 180,154 ** ** 80,154 ** ** 80,154
</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>
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>
1 798 100,000 100,000 100,000 218 244 271 0 0 0
2 1,636 100,000 100,000 100,000 664 738 816 0 0 73
3 2,516 100,000 100,000 100,000 1,094 1,245 1,408 1 152 315
4 3,439 100,000 100,000 100,000 1,508 1,764 2,052 415 671 959
5 4,409 100,000 100,000 100,000 1,904 2,294 2,750 811 1,201 1,658
6 5,428 100,000 100,000 100,000 2,281 2,836 3,510 1,188 1,743 2,417
7 6,497 100,000 100,000 100,000 2,637 3,386 4,333 1,544 2,293 3,240
8 7,620 100,000 100,000 100,000 2,972 3,945 5,228 2,079 3,051 4,334
9 8,799 100,000 100,000 100,000 3,285 4,513 6,199 2,590 3,818 5,504
10 10,037 100,000 100,000 100,000 3,581 5,098 7,271 3,285 4,801 6,974
11 11,337 100,000 100,000 100,000 3,882 5,721 8,471 3,684 5,524 8,274
12 12,702 100,000 100,000 100,000 4,160 6,357 9,786 4,061 6,258 9,687
13 14,135 100,000 100,000 100,000 4,413 7,003 11,226 4,413 7,003 11,226
14 15,640 100,000 100,000 100,000 4,638 7,658 12,804 4,638 7,658 12,804
15 17,220 100,000 100,000 100,000 4,835 8,321 14,533 4,835 8,321 14,533
16 18,879 100,000 100,000 100,000 5,001 8,991 16,433 5,001 8,991 16,433
17 20,621 100,000 100,000 100,000 5,128 9,659 18,514 5,128 9,659 18,514
18 22,450 100,000 100,000 100,000 5,208 10,320 20,793 5,208 10,320 20,793
19 24,370 100,000 100,000 100,000 5,237 10,968 23,292 5,237 10,968 23,292
20 26,387 100,000 100,000 100,000 5,207 11,596 26,033 5,207 11,596 26,033
25 38,086 100,000 100,000 100,000 3,951 14,210 44,489 3,951 14,210 44,489
30 53,018 ** 100,000 127,038 ** 14,919 74,640 ** 14,919 74,640
35 72,076 ** 100,000 182,964 ** 10,826 120,880 ** 10,826 120,880
40 96,398 ** ** 260,761 ** ** 190,503 ** ** 190,503
45 127,441 ** ** 369,483 ** ** 292,637 ** ** 292,637
</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.
57
<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>
1 798 100,000 100,000 100,000 192 217 243 0 0 0
2 1,636 100,000 100,000 100,000 610 681 755 0 0 12
3 2,516 100,000 100,000 100,000 1,013 1,155 1,310 0 62 218
4 3,439 100,000 100,000 100,000 1,398 1,639 1,911 305 546 818
5 4,409 100,000 100,000 100,000 1,764 2,130 2,559 671 1,037 1,467
6 5,428 100,000 100,000 100,000 2,111 2,629 3,261 1,018 1,536 2,168
7 6,497 100,000 100,000 100,000 2,436 3,133 4,019 1,343 2,041 2,926
8 7,620 100,000 100,000 100,000 2,739 3,643 4,838 1,845 2,749 3,944
9 8,799 100,000 100,000 100,000 3,018 4,155 5,721 2,323 3,460 5,026
10 10,037 100,000 100,000 100,000 3,274 4,671 6,678 2,977 4,375 6,382
11 11,337 100,000 100,000 100,000 3,502 5,187 7,712 3,305 4,989 7,514
12 12,702 100,000 100,000 100,000 3,701 5,700 8,828 3,603 5,601 8,730
13 14,135 100,000 100,000 100,000 3,871 6,209 10,036 3,871 6,209 10,036
14 15,640 100,000 100,000 100,000 4,009 6,713 11,344 4,009 6,713 11,344
15 17,220 100,000 100,000 100,000 4,112 7,209 12,760 4,112 7,209 12,760
16 18,879 100,000 100,000 100,000 4,180 7,692 14,294 4,180 7,692 14,294
17 20,621 100,000 100,000 100,000 4,204 8,158 15,953 4,204 8,158 15,953
18 22,450 100,000 100,000 100,000 4,179 8,598 17,748 4,179 8,598 17,748
19 24,370 100,000 100,000 100,000 4,101 9,008 19,689 4,101 9,008 19,689
20 26,387 100,000 100,000 100,000 3,960 9,375 21,788 3,960 9,375 21,788
25 38,086 100,000 100,000 100,000 2,090 10,295 35,242 2,090 10,295 35,242
30 53,018 ** 100,000 100,000 ** 8,369 56,051 ** 8,369 56,051
35 72,076 ** 100,000 133,254 ** ** 88,038 ** ** 88,038
40 96,398 ** ** 183,096 ** ** 133,764 ** ** 133,764
45 127,441 ** ** 248,976 ** ** 197,193 ** ** 197,193
</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.
58
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE]
POLICIES ISSUED BY JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, MASSACHUSETTS 02117
S8148 5/95
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that Section.
UNDERTAKING REGARDING INDEMNIFICATION
Pursuant to Section X of JHVLICO's Bylaws and Section 67 of the
Massachusetts Business Corporation Law, JHVLICO indemnifies each director,
former director, officer, and former officer, and his heirs and legal
representatives from liability incurred or imposed in connection with any legal
action in which he may be involved by reason of any alleged act or omission as
an officer or a director of JHVLICO.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
Cross-Reference Table.
The prospectus consisting of 58 pages.
The undertaking regarding indemnification.
The undertaking to file reports.
The signatures.
<PAGE>
The following exhibits:
1.A. (1) JHVLICO Board Resolution establishing the separate account.
(2) Not Applicable.
(3) (a) Distribution Agreement between JHVLICO and John Hancock including
Amendment.
(b) Specimen Variable Contracts Selling Agreement between John
Hancock and selling broker-dealers.
(c) Schedule of Sales Commissions included in I. A. (3) (a) above.
(4) Not Applicable.
(5) Form of flexible premium variable insurance policy included in the
initial registration statement on Form S-6 of this account for
flexible premium policies, filed March 18, 1994 (File No. 33-76660).
(6) Certificate of Incorporation and By-Laws of John Hancock Variable
Life Insurance Company.
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Form of application for Policy.
<PAGE>
2. Included as exhibit 1.A (5) above.
3. Opinion and consent of counsel as to securities being registered, included
in Pre-Effective Amendment No. 1 to this Form S-6 Registration Statement
filed August 30, 1994.
4. Not Applicable.
5. Not Applicable.
6. Opinion and consent of actuary.
7. Consent of independent auditors.
8. Memorandum describing John Hancock's issuance, transfer and redemption
procedures for flexible premium policies pursuant to Rule 6e-
3(T)(b)(12)(iii) included in the initial registration statement on Form S-6
for this account (File No. 33-76660) for flexible premium policies, filed
March 18, 1994.
9. Powers of attorney for Cleary, Tomlinson, D'Alessandro, Shaw, Luddy, Lee,
Reitano, Van Leer and Paster.
10. Representations, Description and Undertaking pursuant to Rule 6e-
3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940 included in
Pre-Effective Amendment No. 1 to this Form S-6 Registration Statement filed
August 30, 1994.
11. Representation of Counsel pursuant to Rule 485(b).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the John
Hancock Variable Life Insurance Company has duly caused this amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunder
duly authorized, and its seal to be hereunto fixed and attested, all in the City
of Boston and Commonwealth of Massachusetts on the 29th day of February, 1996.
JOHN HANCOCK VARIABLE LIFE
INSURANCE COMPANY
(SEAL)
By HENRY D. SHAW
-----------------------
Henry D. Shaw
President
Attest: FRANCIS C. CLEARY, JR.
--------------------------
Francis C. Cleary, Jr.
Counsel
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities with John Hancock Variable Life Insurance
Company and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
- -----------------------
David F. D'Alessandro Chairman of the Board February , 1996
HENRY D. SHAW Vice Chairman of the Board
- ----------------------- and President(Acting Principal
Henry D. Shaw Executive Officer) February 29,1996
ROBERT S. PASTER
- -----------------------
Robert S. Paster Director February 29,1996
ROBERT R. REITANO
- ----------------------- Director(Principal
Robert R. Reitano Financial Officer) February 29,1996
FRANCIS C. CLEARY, JR.
- -----------------------
Francis C. Cleary, Jr Director February 29,1996
- -----------------------
Thomas J. Lee Director February , 1996
MICHELE VAN LEER
- -----------------------
Michele Van Leer Director February 29,1996
JOSEPH A. TOMLINSON
- -----------------------
Joseph A. Tomlinson Director February 29,1996
BARBARA L. LUDDY
- -----------------------
Barbara L. Luddy Director February 29,1996
PATRICK F. SMITH
- ----------------------- Controller (Principal
Patrick F. Smith Accounting Officer) February 29,1996
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, John Hancock Variable Life Account U, certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, and its seal to be hereunto fixed
and attested, all in the City of Boston and Commonwealth of Massachusetts on the
29th day of February, 1996.
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
(Registrant)
By John Hancock Mutual Life Insurance Company
(Depositor)
(SEAL)
By HENRY D. SHAW
-----------------
Henry D. Shaw
President
Attest: FRANCIS C. CLEARY, JR.
--------------------------
Francis C. Cleary, Jr.
Counsel
<PAGE>
Exhibit 1.A.(3)(a)
DISTRIBUTION AGREEMENT
AGREEMENT, made as of the 26th day of August, 1993, by and between
John Hancock Mutual Life Insurance Company ("John Hancock") and, on its own
behalf and on behalf of its several existing and future separate accounts
registered under the Investment Company Act of 1940 (the "Investment Company
Act"), including without limitation John Hancock Variable Life Accounts U, V and
S, John Hancock Variable Life Insurance Company ("JHVLICO").
WHEREAS, John Hancock is the principal underwriter of John Hancock
Variable Series Trust I ("the Fund"), a series mutual fund whose shareholders
are separate accounts of insurance companies, including JHVLICO, pursuant to an
Underwriting and Administrative Services Agreement dated as of January 15, 1986
("Underwriting Agreement");
WHEREAS, insurance companies issue variable life insurance and annuity
products under which net premiums or considerations are allocated to such
separate accounts for investment in the Fund;
WHEREAS, the Fund is registered as an open-end investment company under
the Investment Company Act;
WHEREAS, John Hancock is registered as a broker-dealer under the
Securities Exchange Act of 1934 ("1934 Act") and is a member of the National
Association of Securities Dealers, Inc.;
WHEREAS, JHVLICO will issue variable life insurance policies ("Policies")
whose net premiums are or will be allocated to JHVLICO's registered separate
accounts; and
WHEREAS, John Hancock and JHVLICO wish to enter into this Agreement
defining the conditions under which John Hancock will distribute the Contracts;
NOW THEREFORE, John Hancock and JHVLICO hereby agree as follows:
1. John Hancock shall offer for sale and sell Policies on behalf of
JHVLICO in each state and other jurisdictions in which such policies may be
lawfully sold. Such offering or sale shall be on such terms and conditions and
shall provide for such lawful compensation to John Hancock as John Hancock and
JHVLICO shall determine, provided that such terms, conditions and compensation
shall be as set forth in or not inconsistent with a prospectus meeting the
requirements of Section 10(a) of the Securities Act of 1933, as amended, and
containing the required information for or forming a part of a registration
statement effective under said Act.
Applications for Policies shall be solicited by insurance agents of JHVLICO
who are duly and appropriately licensed for the sale of such Policies in each
such state or other jurisdiction. John Hancock shall have responsibility for
arranging for such licensing. John Hancock shall review completed applications
for Policies in terms of suitability (except to the extent that responsibility
for suitability determinations is assumed by other broker-dealers pursuant to
the selling agreements referred to in paragraph 10 below) and insurance
underwriting and shall determine whether to accept or reject any application in
accordance with underwriting rules established by JHVLICO. John Hancock will
determine an insured's risk classification pursuant to its own underwriting
rules. Initial and subsequent premium payments under Policies shall be made by
check payable to JHVLICO. JHVLICO will refund any premiums paid if a Policy is
not issued or is surrendered under the short-term cancellation provision.
<PAGE>
2. John Hancock shall pay its registered representatives acting as
JHVLICO's agents commissions and service fees in accordance with its then
applicable compensation rules and procedures. The maximum commission payable to
an agent for selling a policy shall be as set forth in Exhibit A appended
hereto. JHVLICO will reimburse John Hancock for commissions, any service fees
and for other direct and indirect expenses (including agency expense allowances,
general agent, district manager and supervisor compensation, agent 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
Policies.
3. The books, accounts and records of John Hancock and JHVLICO as to all
transactions hereunder shall be maintained so as to disclose clearly and
accurately the nature and details of the transactions, including particularly
such accounting information as is necessary to support the reasonableness of the
amounts to be paid by JHVLICO hereunder and to ensure compliance with applicable
regulatory and reporting requirements. To the extent that either of John Hancock
or JHVLICO maintains on behalf of the other any records required to be
maintained by the other pursuant to 1940 Act Rules 30a- or 30a-2 under the
Investment Company Act or pursuant to 1934 Act Rules 17a-3 and 17a-4, such
records are the property of the party so required to maintain them and will be
surrendered promptly to that party upon its request.
4. This Agreement shall terminate automatically if it shall be assigned or
if the Underwriting Agreement is terminated. This Agreement may be terminated at
any time on 60 days' written notice to the other party hereto, without the
payment of any penalty, by John Hancock or JHVLICO.
5. John Hancock will pay the expenses of preparing and printing
registration statements, prospectuses and sales literature, all fees and
expenses in connection with John Hancock's qualification as a broker-dealer and
all other expenses relating to the offering, sale or delivery of Policies.
JHVLICO will reimburse John Hancock for registration fees under the Securities
Act of 1933, the costs associated with the preparation and printing of
registration statements, prospectuses and sales literature and for like expenses
actually incurred in connection with the offering, sale and delivery of
Policies.
6. In offering, selling and delivering Policies, John Hancock will duly
conform in all respects with the laws of the United States and of each state in
which Policies may be offered for sale by it pursuant to this Agreement.
Applications will be solicited by registered representatives of John Hancock or
any other broker-dealer who have been duly licensed. In connection with the
offering, sale or delivery of Policies, John Hancock will not give any
information or make any representation other than information and
representations contained in or not inconsistent with a prospectus meeting the
requirement of Section 10(a) of the Securities Act of 1933 and containing the
required information for or forming a part of a registration statement which is
effective under said Act.
7. John Hancock agrees that, in the absence of a fixed account or if no
suitable fixed-dollar policy is available from JHVLICO, it will issue a policy
of fixed benefit insurance without evidence of insurability in exchange for any
Policy whenever the Owner of a Policy elects to exchange the Policy in
accordance with its provisions.
8. JHVLICO undertakes to guarantee the performance of all of John
Hancock's obligations, imposed by Section 27(f) of the Investment Company Act of
1940, as amended, and Rules 6e-2(b)(l4)(vi), 6e-3(T)(b)(l3)(vi) and 27d-2(b)
adopted by the Securities and Exchange Commission, to make refunds of charges
required of the principal underwriter of Policies issued in connection with the
registered separate account.
<PAGE>
9. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
10. John Hancock and JHVLICO may agree with one or more broker-dealers
registered under the Securities Exchange Act of 1934 for the sale of the
Policies funded by the registered separate account. Any broker-dealer offering,
selling or delivering Policies will agree with John Hancock and JHVLICO to
conform duly in all respects with the laws of the United States and of each
state in which Contracts may be offered for sale by it. No agent or
representative of any such broker-dealer shall solicit applications for Policies
until duly licensed and appointed by JHVLICO as a life insurance agent of
JHVLICO in the appropriate jurisdiction. John Hancock will compensate other
broker-dealers as provided in the selling agreements with such other broker-
dealers, and JHVLICO will reimburse John Hancock for such amounts.
11. This Agreement shall be subject to the applicable provisions of the
Federal securities laws and the rules, regulations, and rulings thereunder,
including such exemptions as the Securities and Exchange Commission may grant,
and the terms hereof shall be interpreted and construed in accordance therewith.
12. John Hancock shall, in connection with its obligations hereunder,
comply with all laws and regulations, whether Federal or state, and whether
relating to insurance or securities, including but not limited to the
recordkeeping and sales supervision requirements of such laws and regulations
and rules of the National Association of Securities Dealers, Inc.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year above written.
Date: August 26, l993
John Hancock Mutual Life Insurance Company
By: WILLIAM L. BOYAN
----------------
William L. Boyan
President
Date: August 26, 1993
John Hancock Variable Life Insurance Company
By: HENRY D. SHAW/
--------------
Henry D., Shaw
President
<PAGE>
AMENDMENT TO DISTRIBUTION AGREEMENT
BY AND BETWEEN
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
AND
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
AGREEMENT made this 1st day of August, 1994, by and between John Hancock
Mutual Life Insurance Company ("John Hancock") and John Hancock Variable Life
Insurance Company ("JHVLICO"), on its own behalf and on behalf of its several
existing and future separate accounts registered under the Investment Company
Act of 1940 (the "Investment Company Act"), including without limitation John
Hancock Variable Life Accounts U, V and S and John Hancock Variable Annuity
Account I.
WHEREAS, John Hancock and JHVLICO are parties to a distribution agreement
dated August 26, 1993 (the "Distribution Agreement") governing the terms and
conditions under which John Hancock has undertaken to offer for sale and sell on
behalf of JHVLICO, in each state and other jurisdiction where lawfully
permitted, certain variable life insurance policies, issued by JHVLICO, whose
net premiums are or will be allocated to JHVLICO's registered separate accounts;
WHEREAS, JHVLICO will continue to issue such variable life insurance
policies and will begin to issue variable annuity contracts whose net premiums
are or will be allocated to certain JHVLICO registered separate accounts;
WHEREAS, John Hancock and JHVLICO wish to enter into this Amendment
redefining the conditions and terms of the Distribution Agreement and Exhibit A
thereto;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, John Hancock and JHVLICO hereby amend the Distribution Agreement and
Exhibit A thereto and agree to the following terms:
1. Any reference to "variable life insurance policies" in the Distribution
Agreement shall be read "variable life insurance policies and variable annuity
contracts"; and
2. Except as otherwise specified in this Amendment, any reference to "Policies"
or "policies" in the Distribution Agreement shall include variable life
insurance policies, issued by JHVLICO, whose net premiums are or will be
allocated to certain JHVLICO registered separate accounts and variable annuity
contracts, issued by JHVLICO, whose net premiums are or will be allocated to
certain JHVLICO registered separate accounts; and
3. The phrase "With respect to life insurance policies only" should be added to
the beginning of provision seven in the Distribution Agreement; and
4. The commission schedule for John Hancock Variable Annuity Account I should
be included in
<PAGE>
Exhibit A, as shown in the attachment to this Amendment.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the day and year indicated.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
BY: STEPHEN L. BROWN AUGUST 2, 1994
----------------- --------------
Stephen L. Brown (date)
Chairman and Chief Executive Officer
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
on its own behalf and on behalf of its
several existing and future registered
separate accounts
BY: HENRY D. SHAW AUGUST 5, 1994
-------------- --------------
Henry D. Shaw (date)
President
EXHIBIT A
Scheduled Premium Policy (Flex V)
Maximum commission of 50% of premium paid under Modified Schedule of
premiums in Policy year 1, 10% of such premiums in Policy years 2-4, and 3% of
any other premiums.
Annual Premium Policy (VLI)
Maximum commission of 55% of premium paid in Policy year 1, 15% of
premium paid in Policy year 2, 10% of premium paid in Policy years 3-5, 5% of
premium paid in Policy years 6-10, and 3% of any other premiums.
Single Premium Policy
Maximum commission of 3%.
Flexible Premium Variable Survivorship Policy (VEP)
Maximum commission of 45% of Target Premium paid in Policy year 1, 5%
of Target Premium paid in Policy years 2-5, 3% of Target Premium paid in any
subsequent years, and 3% of any excess premium in any year.
Individual Deferred Combination Fixed/Variable Annuity Contract (Independence
Preferred)
Maximum commission of 3% of premium on contracts issued to Annuitants
issue age 0-70, maximum commission of 2% of premium on contracts issued to
Annuitants issue ages 71 and above.
<PAGE>
Revised Flexible Premium Policy (New Flex V)
Maximum Commission of 50% of premium paid up to Required Premium in
Policy year 1, 8% of such premiums in Policy years 2-4, and 3% of any other
premiums.
Universal Variable Policy (MVL)
Maximum commission of 50% of premium paid up to Required Premium paid
in Policy year 1, 6% of the Target Premium for Policy years 2-4; 3% of the
Target Premium in each year thereafter, and 3% of excess premium in any year.
Variable COLI Policy (VCOLI)
Maximum commission of 14% of Target Premium in Policy years 1-10; 3% of
Target Premium in Policy years 11 and thereafter; and 2% of any excess premium
paid.
Universal Variable Policy (MVL II)
Maximum commission of 20% of Target Premium in Policy year 1, plus 6%
of the Target Premium for the first Policy year which will be payable in each of
Policy years 2-4; 6% of the Target Premium for Policy years 2-4; 3% of the
Target Premium paid in each year thereafter; and 3% of excess premium in any
year.
(Exhibit A, as amended, December 6, 1995)
<PAGE>
EXHIBIT 1.A.(3)(b)
VARIABLE CONTRACTS
SELLING AGREEMENT
John Hancock Mutual Life Insurance Company ("JHMLICO"), as the distributor and
principal underwriter, and ("the Broker/Dealer"), enter into this agreement
effective with its execution by the Broker/Dealer for the purpose of authorizing
the Broker/Dealer to solicit applications for variable life insurance and
annuity contracts ("Contracts") distributed by JHMLICO on its own behalf and on
behalf of John Hancock Variable Life Insurance Company ("JHVLICO"), a subsidiary
of JHMLICO. The parties represent as follows:
1. JHMLICO is engaged in the issuance of variable annuity contracts and
JHVLICO is engaged in the issuance of variable life insurance contracts,
both in accordance with Federal securities laws and the applicable laws of
those states in which the Contracts have been qualified for sale. The
Contracts are considered securities under the Securities Act of 1933;
therefore, distribution of the Contracts is made through JHMLICO as a
registered broker/dealer under the Securities Act of 1934 and as a member
of the National Association of Securities Dealers, Inc. ("NASD").
2. The Broker/Dealer certifies that it is a registered Broker/Dealer under the
Securities Exchange Act of 1934 and a member of the NASD. The
Broker/Dealer agrees to abide by all rules and regulations of the NASD,
including its Rules of Fair Practice, and to comply with all applicable
state and Federal laws and the rules and regulations of authorized
regulatory agencies affecting the sale of the Contracts.
3. The Broker/Dealer will select persons to be registered and supervised by it
who will be trained and qualified to solicit applications for the Contracts
in conformance with applicable state and Federal laws and regulations.
Persons so trained and qualified will be registered representatives of the
Broker/Dealer in accordance with the rules of the NASD and they will be
properly licensed to represent JHMLICO or JHVLICO or both in accordance
with the state insurance laws of those jurisdictions in which the Contracts
may lawfully be distributed and in which they solicit applications for such
Contracts.
4. The Broker/Dealer will take reasonable steps to ensure that its registered
representatives shall not make recommendations to applicants to purchase
Contracts in the absence of reasonable grounds to believe the purchase of
each Contract is suitable for the applicant. The procedure will include
review of all proposals and applications for Contracts for suitability and
completeness and correctness as to form as well as review and endorsement
on an internal record of the Broker/Dealer of
<PAGE>
-2-
the transactions. The Broker/Dealer will promptly forward to JHMLICO all
applications found suitable, together with any payments received with the
applications, without deduction or reduction. JHMLICO reserves the right
to reject any Contract application and return any payment made in
connection with an application which is rejected. Contracts issued on
applications accepted by JHMLICO or JHVLICO will be forwarded to the
registered representative of the Broker/Dealer for delivery to the Contract
owner.
5. The Broker/Dealer will perform the selling functions required by this
agreement only in accordance with the terms and conditions of the then
current prospectus applicable to the Contracts and will make no
representations not included in the prospectus or in any authorized
supplemental material. Any material prepared or used by the Broker/Dealer
or its registered representatives, which describes or must describe the
Contracts, or uses the name of JHVLICO, JHMLICO or the logos or Service
Marks of either must be approved by JHMLICO in writing prior to any such
use.
6. JHMLICO will provide Broker/Dealer with prospectuses, and any supplements
or amendments thereto, describing the Contracts subject to this Agreement.
JHMLICO is responsible for maintaining in effect in accordance with the
requirements of the Securities and Exchange Commission each Registration
Statement of which the prospectus is part. JHMLICO will immediately notify
Broker/Dealer of the issuance of any stop order or any Federal or state
regulatory proceeding which would prevent the sale of Contracts in any
state or jurisdiction.
7. Compensation payable on sales of the Contracts solicited by the Broker/Dealer
will be paid to the Broker/Dealer by JHMLICO in accordance with the
compensation schedules defined under the John Hancock Mutual Life Insurance
Company/M Financial Group Master Agreement dated December 5, 1991 and the
Producer Agreements related thereto, as in effect at the time the contract
premiums or considerations are received by JHMLICO or JHVLICO. Compensation
to the registered representative for contracts solicited by the registered
representative will be governed by an agreement between the Broker/Dealer
and its registered representative. To the extent requested by
Broker/Dealer, registered representative compensation may be paid directly
to such registered representative by JHMLICO or JHVLICO. A portion of the
compensation otherwise payable to Broker/Dealer pursuant to the
compensation schedules applicable to the Contracts shall be payable to
Mutual Service Corporation (MSC) in accordance with the agreement in effect
between M Financial Group and MSC (currently 2% of first year commissions,
1% of renewal commissions). To the extent requested by Broker/Dealer and
its registered representative, registered representative compensation shall
be paid to JH Networking Insurance Agency ("NIA") for allocation to The
John Hancock/M Financial Group Deferred Commission Plan, as in effect at
the time the compensation becomes payable.
8. In the event of any surrender of a Contract within the 10 day "free look"
period or, in the case of a variable life insurance policy, within 10 days
after the mailing of the Notice of Withdrawal Right, any compensation
payable to Broker/Dealer or its registered representatives will not be
payable or will be refunded if priorly paid, in accordance with the terms
of the M Producer's Contract appended as Exhibit A to the Master Agreement.
<PAGE>
-3-
9. This agreement may not be assigned except by mutual consent and will
continue for an indefinite term, subject to the termination by either party
by ten days advance written notice to the other party, except that in the
event JHMLICO or the Broker/Dealer ceases to be a registered broker/dealer
or a member of the NASD, this agreement will immediately terminate. Upon
its termination, all authorizations, rights and obligations shall cease,
except the agreement in Section 11, the indemnifications in Section 12 and
the payment of any accrued but unpaid compensation to the Broker/Dealer.
10. For the purpose of compliance with any applicable Federal or state
securities laws or regulations, the Broker/Dealer acknowledges and agrees
that in performing the services covered by this agreement, it is acting in
the capacity of an independent "broker" or "dealer" as defined by the By-
Laws of the NASD and not as an agent or employee of either JHMLICO or
JHVLICO or any registered investment company. In furtherance of its
responsibilities as a broker or dealer, the Broker/Dealer acknowledges that
it is responsible for statutory and regulatory compliance in securities
transactions involving any business produced by its registered
representatives concerning the Contracts.
For the purpose of compliance with any applicable state insurance laws or
regulations, the Broker/Dealer acknowledges and agrees that only while
performing the insurance selling functions reflected by this agreement are
the Broker/Dealer's registered representatives acting as the licensed
insurance agents of JHMLICO or JHVLICO or both and in that capacity are
authorized only to solicit applications for the Contracts which will not
become effective until acceptance by JHMLICO or JHVLICO.
11. The Broker/Dealer and JHMLICO jointly agree to cooperate fully in any
insurance or securities regulatory investigation or proceeding or judicial
proceeding arising in connection with any Contract. Without limiting the
foregoing:
a. Broker/Dealer will be notified promptly of any customer complaint
or notice of any regulatory authority investigation or proceeding
or judicial proceeding received by JHMLICO with respect to any
Contract.
b. Broker/Dealer will promptly notify JHMLICO of any customer
complaint or notice of any regulatory authority investigation or
proceeding or judicial proceeding received by Broker/Dealer with
respect to any Contract.
12. (1) JHMLICO agrees to indemnify and hold harmless Broker/Dealer and each
person who controls or is associated with Broker/Dealer against any
losses, claims, damages or liabilities, joint or several, to which
Broker/Dealer or such controlling or associated person may become
subject under the 1933 Act or otherwise insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact required to be stated therein or necessary to make the
statements therein not misleading contained (i) in any Registration
Statement, any Prospectus or any document executed by JHMLICO or
JHVLICO specifically for the purpose of qualifying a Contract for sale
under the laws of any jurisdiction or (ii) in any written information
or sales material authorized for and supplied or furnished to
Broker/Dealer and its agents or representatives by
<PAGE>
-4-
JHMLICO, its employees or agents, in connection with the sale of the
Contract and JHMLICO will reimburse Broker/Dealer and each such
controlling person for legal or other expenses reasonably incurred by
Broker/Dealer or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action.
(2) Broker/Dealer agrees to indemnify and hold harmless such director or
officer may become subject under the 1933 Act and state JHMLICO and each
of its directors and officers against any insurance losses, claims,
damages or liabilities to which JHMLICO and any laws or otherwise
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(a) any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning a
Contract by Broker/Dealer or
(b) claims by agents or representatives or employees of Broker/Dealer
for commissions or other compensation or remuneration of any type
or
(c) failure by agents, representatives or employees of Broker/Dealer
to comply with all applicable state insurance laws and
regulations including but not limited to state licensing
requirements, rebate statutes and replacement regulations, and
the provisions of this Agreement; and Broker will reimburse
JHMLICO and any director or officer for any legal or other
expenses reasonably incurred by JHMLICO or such director or
officer in connection with investigating or defending any such
loss, claim, damage, liability or action.
(3) After receipt by a party entitled to indemnification of notice of the
commencement of any action, if a claim in respect thereof is to be made
against any person obligated to provide indemnification, such indemnified
party will notify the indemnifying party in writing of the commencement
thereof as soon as practicable thereafter, and the omission so to notify
the indemnifying party will not relieve it from any liability except to
the extent that the omission results in a failure of actual notice to the
indemnifying party, and such indemnifying party is damaged solely as a
result of the failure to give such notice.
13. All notices to JHMLICO should be mailed to:
Mr. Henry D. Shaw, Senior Vice President
John Hancock Mutual Life Insurance Company
John Hancock Place
P. O. Box 111
Boston, MA 02117
<PAGE>
-5-
All notices to the Broker/Dealer will be duly given if mailed to the
address shown below.
14. This agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
In reliance on the representations set forth and in consideration of the
undertakings described, the parties represented below do hereby contract
and agree.
John Hancock Mutual Life Broker-Dealer
Insurance Company
By: By:
----------------------- -----------------------
Title: Title:
-------------------- -------------------------
Date of Execution Date of Execution
--------------
FCC0120.DOC
<PAGE>
EXHIBIT 1. A. (6)(a)
NO. D-30612
THE COMMONWEALTH OF MASSACHUSETTS
DEPARTMENT OF BANKING AND INSURANCE
Division of Insurance
CERTIFICATE OF AUTHORITY DATE: March 5, 1979
- ------------------------
THIS IS TO CERTIFY THAT THE
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
BOSTON MASSACHUSETTS
is duly organized under the laws of this Commonwealth, has fully complied with
the requirements of said laws applicable to it and that it is authorized to
issue policies and transact the kinds of business authorized under the Sections
of Chapter 175 of the General Laws of Massachusetts and amendments thereto
described by the following designations: (See Reverse Side for Legend)
6B 16A
This Certificate shall remain in effect for an indefinite term unless said
authority is amended or revoked in accordance with Law.
SEAL
IN WITNESS WHEREOF, I have
hereunto set my hand and
affixed the official seal of
this Division, at the City
of Boston, the date appearing
above.
MICHAEL J. SABBAGH
------------------
Michael J. Sabbagh
Commissioner of Insurance
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
DIVISION OF INSURANCE
100 Cambridge Street, Boston 02202
MICHAEL J. SABBAGH
COMMISSIONER OF INSURANCE
F 2975
TO WHOM IT MAY CONCERN:
I, Michael J. Sabbagh, Commissioner of Insurance for the Commonwealth of
Massachusetts, hereby certify that the
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
of Boston, in the Commonwealth of Massachusetts, having no liabilities, except
reasonable organization expenses and having complied with the requirements of
the Laws of this Commonwealth relating to insurance companies, adopted a
proper system of accounting, employed a competent accountant, a competent
claim manager, a competent and experienced underwriter, and a competent and
experienced actuary, and that its officers and directors are of good repute
and competent to manage said company, is fully authorized to insure upon the
stock plan the business of health and life insurance now or hereafter
described or permitted by Clauses Sixth and Sixteenth of Section Forty-Seven,
Chapter One Hundred and Seventy-Five of the General Laws of the Commonwealth
of Massachusetts and the acts in amendment thereof and in addition thereto.
IN WITNESS WHEREOF, I have here-unto set my hand and affixed the
official seal of this Division at the City of Boston, this Fifth Day of
March, A.D. 1979.
MICHAEL J. SABBAGH
------------------
Michael J. Sabbagh
Commissioner of Insurance
SEAL
<PAGE>
EXHIBIT 1. A. (6) (b)
BY-LAWS
OF
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
ARTICLE I
OFFICES
The principal office and principal place of business of the Company in the
Commonwealth of Massachusetts shall be located in the City of Boston, Suffolk
County.
ARTICLE II
SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders shall
be held on the 2nd Wednesday following the 2nd Monday in April in each year at
the hour of 2:00 P.M., for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday, such meeting shall be
held on the next succeeding business day. If the election of directors shall not
be held on the day designated herein for any annual meeting, or at any
adjournment thereof, the board of directors shall cause the election to be held
at a meeting of the shareholders as soon thereafter as conveniently may be.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be
called by the chairman of the board, the vice chairman of the board, the
president, a majority of the board of directors or by the holders of not less
than one-fifth of all the outstanding shares of the corporation.
SECTION 3. PLACE OF MEETING. The board of directors may designate any
place, either within or without the Commonwealth of Massachusetts as the place
of meeting for any annual meeting or for any special meeting. A waiver of notice
signed by all shareholders may designate any place, either within or without the
Commonwealth of Massachusetts, as the place for the holding of such meeting. If
no designation is made, or if a special meeting be otherwise called, the place
of meeting shall be the principal office of the corporation in the Commonwealth
of Massachusetts.
SECTION 4. NOTICE OF MEETINGS. Written or printed notice stating the
place, day and hour of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten nor more than forty days before the date of the meeting, or in the case
of a merger or consolidation not less than twenty nor more than forty days
before the meeting, either personally or by mail, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the shareholder
at his address as it appears on the records of the corporation, with postage
thereon prepaid.
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SECTION 5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders, or shareholders entitled to receive payment of any
dividend, or in order to make determination of shareholders for any other proper
purpose, the board of directors of the corporation may provide that the stock
transfer books shall be closed for a stated period but not to exceed, in any
case, forty days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days, or in the case
of a merger or consolidation, at least twenty days, immediately preceding such
meeting. In lieu of closing the stock transfer books, the board of directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than forty days and, for a
meeting of shareholders, not less than ten days, or in the case of a merger or
consolidation, not less than twenty days, immediately preceding such meeting. If
the stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the board of directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
SECTION 6. VOTING LISTS. The agent having charge of the transfer books
for shares of the corporation shall make, at least ten days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting, arranged in alphabetical order, with the address of and the number of
shares held by each, which list, for a period of ten days prior to such meeting,
shall be kept on file at the principal office of the corporation and shall be
subject to inspection by any shareholder at any time during usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any shareholder during the
whole time of the meeting. The original share ledger or transfer book, or a
duplicate thereof kept in this Commonwealth, shall be prima facie evidence as to
who are the shareholders entitled to examine such list or share ledger or
transfer book or to vote at any meeting of shareholders.
SECTION 7. QUORUM. A majority of the outstanding shares of the
corporation, represented in person or by proxy, shall constitute a quorum at any
meeting of shareholders; provided, that if less than a majority of the
outstanding shares are represented at said meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. If
a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting shall be the act of the shareholders.
SECTION 8. PROXIES. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the corporation before or at
the time of the meeting. No proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy.
SECTION 9. VOTING OF SHARES. Each outstanding share shall be entitled to
one vote upon each matter submitted to vote at a meeting of shareholders.
SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as the by-laws of such corporation may prescribe, or, in the
absence of such provision, as the board of directors of such corporation may
determine.
Shares standing in the name of a deceased person, a minor ward or an
incompetent person, may be voted by his administrator, executor, court appointed
guardian or conservator,
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either in person or by proxy without a transfer of such shares into the name of
such administrator, executor, court appointed guardian or conservator. Shares
standing in the name of a trustee may be voted by him, either in person or by
proxy.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to this corporation shall not be voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares at any given time, but shares of its own
stock held by it in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares at any given time.
SECTION 11. INSPECTORS. At any meeting of shareholders, the chairman of
the meeting may, or upon the request of any shareholder shall, appoint one or
more persons as inspectors for such meeting.
Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity and
effect of proxies; count all votes and report the results; and do such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or by
majority of them if there be more than one inspector acting at such meeting. If
there is more than one inspector or, the report of a majority shall be the
report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.
SECTION 12. VOTING BY BALLOT. Voting on any question or in any election
may be viva voce unless the presiding officer shall order or any shareholder
shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the corporation
shall be managed by its board of directors. The board of directors shall
annually elect a chairman of the board, a vice chairman of the board, a
president, a secretary, a treasurer and such other officers as these by-laws may
provide. The board of directors shall at each annual meeting of the corporation
submit a full statement of the transactions of the corporation during the
previous year and of its financial condition.
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors
of the corporation shall be not less than five nor more than nine. Each director
shall hold office until the next annual meeting of shareholders or until his
successor shall have been elected and qualified.
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SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors
shall be held without other notice than this by-law, immediately after, and at
the same place as, the annual meeting of shareholders. The board of directors
may provide, by resolution, the time and place, either within or without the
Commonwealth of Massachusetts, for the holding of additional regular meetings
without other notice than such resolution.
SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors
may be called by or at the request of the chairman of the board, the vice
chairman of the board, the president or any two directors. The person or persons
authorized to call special meetings of the board of directors may fix any place,
either within or without the Commonwealth of Massachusetts, as the place for
holding any special meeting of the board of directors called by them.
SECTION 5. NOTICE. Notice of any special meeting shall be given at
least five days previous thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegram company. Any director may waive notice of any meeting. The attendance
of a director at any meeting shall constitute a waiver of notice of such
meeting, except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the board of directors need be specified
in the notice or waiver of notice of such meeting.
SECTION 6. QUORUM. A majority of the number of directors then in
office, but no less than four in number, shall constitute a quorum for
transaction of business at any meeting of the board of directors, provided, that
if less than majority of such number of directors is present at said meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
SECTION 7. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors.
SECTION 8. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the board of directors may be taken without a
meeting if written consents thereto are signed by all members of the board of
directors and such written consents are filed with the minutes of proceedings of
the board.
SECTION 9 VACANCIES. Any vacancy occurring in the board of directors
and any directorship to be filled by reason of an increase in the number of
directors, may be filled by the directors or by the shareholders at an annual
meeting or at a special meeting of shareholders called for that purpose.
SECTION 10. COMPENSATION. The board of directors, by the affirmative
vote of a majority of directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for service to the corporation as directors,
officers or otherwise. By resolution of the board of directors the directors may
be paid their expenses, if any, of attendance at each meeting of the board.
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ARTICLE IV
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
SECTION 1. HOW CONSTITUTED. By resolution adopted by the board of
directors, the board may designate one or more committees, including an
executive committee, each consisting of at least three directors. Each member of
a committee shall be a director and shall hold office during the pleasure of the
board. The chairman of the board, the vice chairman of the board and the
president shall be members of the executive committee.
SECTION 2. POWERS OF THE EXECUTIVE COMMITTEE. Unless otherwise provided
by resolution of the board of directors, the executive committee shall, during
the intervals between meetings of the board of directors, have and may exercise
all of the powers of the board of directors in the management of the business
and affairs of the corporation except the power to declare a dividend, to
authorize the issuance of stock, or to recommend to shareholders any action
requiring shareholders' approval.
SECTION 3. OTHER COMMITTEES OF THE BOARD OF DIRECTORS. To the extent
provided by resolution of the board, other committees shall have and may
exercise any of the powers that may lawfully be granted to the executive
committee.
SECTION 4. PROCEEDINGS, QUORUM AND MANNER OF ACTING. In the absence of
appropriate resolution of the board of directors, each committee may adopt such
rules and regulations governing its proceedings, quorum and manner of acting as
it shall deem proper and desirable, provided that the quorum shall not be less
than two directors. In the absence of any member of any such committee, the
members thereof present at any meeting, whether or not they constitute a quorum,
may appoint a member of the board of directors to act in the place of such
absent member.
SECTION 5. OTHER COMMITTEES. The board of directors may appoint other
committees, each consisting of one or more persons, who need not be directors.
Each such committee shall have such powers and perform such duties as may be
assigned to it from time to time by the board of directors, but shall not
exercise any power which may lawfully be exercised only by the board of
directors or a committee thereof.
ARTICLE V
OFFICERS
SECTION 1. NUMBER. The officers of the corporation shall be a chairman of
the board, a vice chairman of the board, a president, one or more vice
presidents (the number thereof to be determined by the board of directors), a
controller, a treasurer, and a secretary, and such assistant controllers,
treasurers, secretaries or other officers as may be elected or appointed by the
board of directors. Any two or more offices may be held by the same person
except that the chairman, vice chairman and president cannot also serve
simultaneously as secretary of the corporation, but no person shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument is required by law, the Articles of Organization or these by-laws to
be executed, acknowledged or verified by two or more officers. The chairman of
the board, vice chairman and the president shall be selected from among the
directors and may hold such offices only so long as they continue to be
directors. No other officer need be a director.
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SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation
shall be elected annually by the board of directors at the first meeting of the
board of directors held after each annual meeting of shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as conveniently may be. Vacancies may be filled or new
offices filled at any meeting of the board of directors. Each officer shall hold
office until his successor shall have been duly elected and shall have qualified
or until his death or until he shall resign or shall have been removed in the
manner hereinafter provided. Election or appointment of an officer or agent
shall not of itself create contract rights.
SECTION 3. REMOVAL. Any officer or agent elected or appointed by the
board of directors may be removed by the board of directors whenever in its
judgment the best interest of the corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, or the person
so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the board
of directors for the unexpired portion of the term.
SECTION 5. CHAIRMAN OF THE BOARD. The chairman of the board shall be the
chief executive officer of the corporation, shall preside at all shareholders'
meetings and at all meetings of the board of directors and shall be ex officio a
-- -------
member of all committees of the board of directors, except the audit committee,
if any. Subject to the supervision of the board of directors, he shall have
general charge of the business, affairs and property of the corporation and its
officers, employees and agents. He shall sign (unless the vice chairman of the
board, the president or a vice president shall have signed) certificates
representing the stock of the corporation authorized for issuance by the board
of directors and shall have such other powers and perform such other duties as
may be assigned to him from time to time by the board of directors.
SECTION 6. VICE CHAIRMAN OF THE BOARD. The vice chairman of the board
shall assist the chief executive officer of the corporation in his duties and,
at the request of or in the absence or disability of the chairman of the board,
he shall preside at all shareholders' meetings and at all meetings of the board
of directors and shall in general exercise the powers and perform the duties of
the chairman of the board. He shall sign (unless the chairman of the board, the
president or a vice president shall have signed) certificates representing the
stock of the corporation authorized for issuance by the board of directors and
shall have such other powers and perform such other duties as may be assigned to
him from time to time by the chairman of the board or the board of directors.
SECTION 7. PRESIDENT. The president shall be the chief operating officer
of the corporation. In the event of the absence or disability of both the
chairman of the board and the vice chairman of the board, he shall preside at
all shareholders' meetings and at all meetings of the board of directors and
shall in general exercise the powers and perform the duties of both. Subject to
the supervision of the board of directors and such direction and control as the
chairman of the board and the vice chairman of the board may exercise, he shall
have general charge of the operations of the corporation and its officers,
employees and agents. He shall sign (unless the chairman or the vice chairman of
the board or a vice president shall have signed) certificates representing the
stock of the corporation authorized the board of directors may for issuance by
the board of directors. Except as otherwise order, he may sign in the name and
on behalf of the corporation all deeds, mortgages, bonds, contracts, instruments
or agreements. He shall exercise such other powers and perform such other duties
as from time to time may be assigned to him by the board of directors.
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SECTION 8. VICE PRESIDENT. The board of directors shall, from time to
time, designate and elect one or more vice presidents who shall have such powers
and perform such duties as from time to time may be assigned to them by the
board of directors or the president. At the request or in the absence or
disability of the president, the vice president (or, if there are two or more
vice presidents, then the senior of the vice presidents present and able to act)
may perform all the duties of the president and, when so acting, shall have all
the powers of and be subject to all the restrictions upon the president. Any
vice president may sign (unless the president or another vice president shall
have signed) certificates representing stock of the corporation authorized for
issuance by the board of directors.
SECTION 9. CONTROLLER AND ASSISTANT CONTROLLERS. The controller shall be
the principal accounting officer of the corporation and shall have general
charge of the books of account of the corporation. He shall cause to be prepared
annually a full and correct statement of the affairs of the corporation,
including a balance sheet and a financial statement of operations for the
preceding fiscal year. He shall perform all the duties incident to the office of
controller and such other duties as from time to time may be assigned to him by
the chairman or by the board of directors.
Any assistant controller may perform such duties of the controller as the
controller or the board of directors may assign and, in the absence of the
controller, he may perform all of the duties of the controller.
SECTION 10. TREASURER AND ASSISTANT TREASURER. The treasurer shall be the
principal financial officer of the corporation and shall have general charge of
the finances of the corporation. Except as otherwise provided by the board of
directors, he shall have general supervision of the funds and property of the
corporation. He shall sign (unless an assistant treasurer or secretary or
assistant secretary shall have signed) all certificates of stock of the
corporation authorized for issuance by the board of directors. He shall render
to the board of directors, whenever directed by the board, a report relating to
his custody of the funds and property of the corporation and of all his
transactions as treasurer; and as soon as possible after the close of each
fiscal year he shall make and submit to the board of directors a like report for
such fiscal year. He shall perform all the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him by
the chairman or the board of directors.
Any assistant treasurer may perform such duties of the treasurer as the
treasurer or the board of directors may assign, and, in the absence of the
treasurer, he may perform all the duties of the treasurer.
SECTION 11. SECRETARY AND ASSISTANT SECRETARY. The secretary shall (a)
keep the minutes of the shareholders' and of the board of directors' meetings in
one or more books provided for that purpose; (b) see that all notices are duly
given in accordance with the provisions of these by-laws or as required by law;
(c) be custodian of the corporate records and of the seal of the corporation and
see the seal of the corporation is affixed to all certificates for shares prior
to the issue thereof and to all documents, the execution of which on behalf of
the corporation under its seal is duly authorized in accordance with the
provisions of these by-laws;(d) keep a register of the post-office address of
each shareholder which shall be furnished to the secretary by such shareholder;
(e) sign with the chairman, vice chairman, president, or a vice president,
certificates for shares of the corporation, the issue of which shall have been
authorized by resolution of the board of directors; (f) have general charge of
the stock transfer books of the corporation; (g) in general perform all duties
incident to the office of secretary and such other duties as from time to time
may be assigned to him by the chairman or by the board of directors.
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Any assistant secretary may perform such duties of the secretary as
the secretary or the board of directors may assign, and, in the absence of the
secretary, he may perform all the duties of the secretary.
SECTION 12. SUBORDINATE OFFICERS. The board of directors from time to
time may appoint such other officers or agents as it may deem advisable, each of
whom shall have such title, hold office for such period, have such authority and
perform such duties as the board of directors may determine. The board of
directors from time to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties.
SECTION 13. REMUNERATION. The salaries or other compensation of the
officers of the corporation shall be fixed from time to time by resolution of
the board of directors, except that the board of directors may by resolution
delegate to any person or group of persons the power to fix the salaries or
other compensation of any subordinate officers or agents appointed in accordance
with the provisions of Section 12 hereof. No officer shall be prevented from
receiving a salary by reason of the fact that he is also a director of the
corporation.
SECTION 14. The board of directors may require any officer or agent of
the corporation to execute a bond to the corporation in such sum and with such
surety or sureties as the board of directors may determine, conditioned upon the
faithful performance of his duties to the corporation, Any secretary, treasurer,
assistant secretary and assistant treasurer of the corporation shall, in
accordance with the applicable provisions of the Massachusetts General Laws,
give a bond, with surety, payable to the corporation conditioned upon the
faithful performance of his or her duties and that such bond be executed by such
officer before performing any duties of his or her office.
SECTION 15. COMMISSIONS. No person shall be eligible as an elective or
appointed officer who has any interest in commissions or other compensation
based on premiums or considerations paid to the corporation on any policy or
contract, or on any extension of conversion thereof, unless such policy,
contract, extension or conversion was written and effective prior to his
election or appointment.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver and
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation, shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
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SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the board of directors may
select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
the corporation shall be in such form as may be determined by the board of
directors. Such certificates shall be signed by the chairman of the board, the
vice chairman of the board, the president or a vice president and by the
secretary or an assistant secretary and shall be sealed with the seal of the
corporation. All certificates for shares shall be consecutively numbered or
otherwise identified. The name of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the books of the corporation. All certificates surrendered to the
corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and cancelled, except that in case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and indemnity to
the corporation as the board of directors may prescribe.
SECTION 2. TRANSFERS OF SHARES. Transfers of shares of the corporation
shall be made only on the books of the corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the secretary of the corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the corporation shall be deemed the
owner thereof for all purposes as regards the corporation.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of
January in each year and end on the last day of December in each year.
ARTICLE IX
WAIVER OF NOTICE
Whenever any notice whatever is required to be given under the provisions
of these by-laws or under the provisions of the Articles of Incorporation, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE X
INDEMNIFICATION
The corporation shall, except as hereinafter provided and subject to
limitations of law, indemnify each director, former director, officer and former
officer, and his heirs and legal representatives, for and against all loss,
liability and expense, whether heretofore or hereafter imposed upon or incurred
by him in connection with any pending or future action, suit, proceeding
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or claim in which he may be involved, or with which he may be threatened, by
reason of any alleged act or omission as a director or officer of the
corporation. Such loss, liability and expense shall include, but not be limited
to, judgments, fines, court costs, reasonable attorneys' fees and the cost of
reasonable settlements. Such indemnification shall not cover (a) loss, liability
or expense imposed or incurred in connection with any item or matter as to which
such director or officer shall be finally adjudicated not to have acted in good
faith in the reasonable belief that his action was in the best interest of the
corporation or (h) loss, liability or expense imposed or incurred in connection
with any item or matter which shall be settled without final adjudication unless
such settlement shall have been approved as in the best interests of the
corporation by vote of the board of directors at a meeting in which no director
participates against whom any suit, proceeding or claim on the same or similar
grounds is then pending or threatened, or in the event no such vote can be
taken, unless, in the opinion of independent counsel selected by or in a manner
determined by the board of directors, there is no reasonable ground not to
approve such settlement as being in the best interests of the corporation. As
part of such indemnification, the corporation may pay expenses incurred in
defending any such action, suit, proceeding or claim in advance of the final
disposition thereof upon receipt of an undertaking by the person indemnified to
repay such payment if he should be determined not to be entitled to
indemnification hereunder. The foregoing rights of indemnification shall be in
addition to any rights to which any director, former director, officer, or
former officer, heirs or legal representatives may otherwise be lawfully
entitled.
ARTICLE XI
AMENDMENTS
These by-laws may not be altered, amended or repealed prior to the
issuance of a certificate of authority to the company, except by written consent
of subscribers representing at least two-thirds of the shares subscribed, and
the approval of the Commissioner of Insurance of Massachusetts. After a
certificate of authority is issued, the power to make, amend or repeal these by-
laws shall be vested in the board of directors.
Adopted this 25th day of February, 1979.
Certified to be a true copy of the By-Laws of John Hancock Variable Life
Insurance Company as adopted at the Initial Meeting of Incorporators and as
amended from time to time, up to and including the date set forth below.
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EXHIBIT I.A.(10)
APPLICATION FOR LIFE INSURANCE
This application is to: [ ] John Hancock Mutual Life Insurance Company or
[ ] John Hancock Variable Life Insurance Company,
which will sometimes hereinafter be referred to as
"the Company."
INSTRUCTIONS:
1. Please print all answers legibly in black ink.
2. Please complete only one "Page 2", depending on the plan applied for.
3. Any change or deletion must be initialed by the Proposed Insured or
Applicant.
4. Part B must be completed on all people proposed for coverage unless
they are to be medically examined.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Please indicate type of case, complete the necessary section, and enter/send application where indicated
- ----------------------------------------------------------------------------------------------------------------------------
Type of Application Complete These Sections Enter/Send Application
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[ ] New Life Insurance Part A
Policy Part B (if Nonmedical application) Enter case into ELUS
Agreement and Signatures (Date entered:__/__/__)
Replacement Authorization
Page 9 Send to Underwriting, C-5
Pension Trust Pages 10-14 (if applicable)
- ----------------------------------------------------------------------------------------------------------------------------
[ ] Term Conversion Part A (except Questions 4, 6, and 8 of Box A,
(of John Hancock term policies Box M, and Questions 1, 2 ,4, and 5 of Box N) Enter case into ELUS
and riders) Part B (if excess amount/riders applied for) (Date entered:__/__/__)
Agreement and Signatures
Authorization (if excess amounts/riders applied for) Send to Underwriting, C-5
Page 9
Pages 10-14 (if applicable)
- ----------------------------------------------------------------------------------------------------------------------------
[ ] Rider Addition Part A (Boxes A, D, I, J, M, N, O, and S only)
(to existing policy) Part B
Agreement and Signatures Send to Contract
Increases in Amount Authorization Services, C-7
(FlexV, MVL, UL) Page 9
Pages 10-14 (if applicable)
Option Change 1 to 2 Use Boxes I and J on Page 2
(FlexV, MVL, UL)
- ----------------------------------------------------------------------------------------------------------------------------
[ ] Change in Rating Part A (Box A and S only)
Part B
Agreement and Signatures Send to Contract
Authorization Services, C-7
Sales Credit
- ----------------------------------------------------------------------------------------------------------------------------
[ ] Contractual Changes Part A (Box S only)
(e.g., Exchange of Existing Policy, Part B (If changing to Lower Premium Plan)
Plan Changes, Amount Reductions) Agreement and Signatures Send to Contract
Option Change 2 to 1 Authorization (if underwriting required) Services, C-7
(FlexV, MVL, UL) Sales Credit
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Any person who, with intent to defraud or knowing that he is facilitating a
fraud against an insurer, submits an application or files a claim containing a
false or deceptive statement is guilty of insurance fraud.
Form 156-Comb-95 [LOGO OF JOHN HANCOCK APPEARS HERE]
Financial Services
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE]
Financial Services
POSITIVE ID REQUIRED
Underwriting Requirements
Please indicate which underwriting requirements have been ordered
<TABLE>
<CAPTION>
---------------------------------------
Proposed Insured Spouse
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paramedical or Medical Exam [_] [_]
- --------------------------------------------------------------------------------------------------------
APS in lieu of exam [_] [_]
- --------------------------------------------------------------------------------------------------------
APS [_] [_]
- --------------------------------------------------------------------------------------------------------
Blood Studies [_] [_]
- --------------------------------------------------------------------------------------------------------
Inspection Report [_] [_]
- --------------------------------------------------------------------------------------------------------
EKG [_] [_]
- --------------------------------------------------------------------------------------------------------
Urinalysis [_] [_]
- --------------------------------------------------------------------------------------------------------
Saliva Test [_] [_]
- --------------------------------------------------------------------------------------------------------
Other: [_] [_]
- --------------------------------------------------------------------------------------------------------
Other: [_] [_]
- --------------------------------------------------------------------------------------------------------
Other: [_] [_]
- --------------------------------------------------------------------------------------------------------
Other: [_] [_]
- --------------------------------------------------------------------------------------------------------
</TABLE>
1035 Exchange Checklist
This checklist is meant to serve as a quick reference for 1035 Exchanges.
For more detail, please refer to your IRC Section 1035 Marketing
Representative's Kit
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
1035 Internal Replacement
- ----------------------------------------------------------------------------------------------------------
Are the Replacement Forms required by the applicable state attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the original policy or policies being replaced attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the completed Surrender Form (Policyowner Service Request Form) attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the Order to Pay Form (one per policy) attached? [_]
- ----------------------------------------------------------------------------------------------------------
Have application questions 3a and 3b, Page 3, Box N been completed? [_]
- ----------------------------------------------------------------------------------------------------------
Is the Section 1035 Exchanged adjusted 7-pay premium calculation worksheet attached? [_]
- ----------------------------------------------------------------------------------------------------------
If the new policy is a Modified Endowment (MEC), has page 12 of the application been signed? [_]
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
1035 External Replacement *May Not Be Prepaid
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Are the Replacement Forms required by the applicable state attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the external policy or policies being replaced attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the 1035 Exchange Form 17010 attached? (One per policy) [_]
- ----------------------------------------------------------------------------------------------------------
Have application questions 3a and 3b, Page 3, Box N been completed? [_]
- ----------------------------------------------------------------------------------------------------------
Is the Section 1035 Exchange adjusted 7-pay premium calculation worksheet attached? [_]
- ----------------------------------------------------------------------------------------------------------
If the new policy is a Modified Endowment (MEC), has page 12 of the application been signed? [_]
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
A. PROPOSED INSURED
- --------------------------------------------------------------------------------
1. Name of Proposed Insured (please print):
First _________________________________ MI ________________
Last _______________________________________________________
2. Sex [_] Male [_] Female
3. Date of Birth ___/___/___
4. Place of Birth _____________________________________________
STATE COUNTRY, IF NOT U.S.A.
5. Soc. Sec. Number ___ - __ - ____
6. Height ______ft. ______in. 7. Weight __________ lbs.
8. Occupation _________________________________________________
Military Pay Grade (if applicable) __
9. Address ____________________________________________________
STREET ADDRESS
____________________________________________________________
CITY STATE ZIP
10. Home Phone (___)___ - ____
11. Work Phone (___)___ - ____
12. Best time and place for Underwriting to call (in Proposed Insured's local
time zone)__________________________________________________
13. Has the Proposed Insured smoked cigarettes or used any other tobacco
product, i.e., cigars, pipes, snuff, chewing tobacco, etc., in the past [12]
months?
[ ] Yes
[ ] No
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
B. BENEFICIARY OF PROCEEDS PAYABLE IN THE EVENT OF THE INSURED'S DEATH
- --------------------------------------------------------------------------------
Please indicate full name and relationship to the Proposed Insured.
(please print)
Proceeds at death of any person other than the Proposed Insured shall be paid as
provided in the applicable benefit provision.
The right is reserved to the owner to change the beneficiary as to any proceeds.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
C. COMPLETE THIS BOX ONLY IF OWNER IS NOT THE PROPOSED INSURED
- --------------------------------------------------------------------------------
1. Owner name (First, MI, Last) or name of trust or corp.
(If more space is needed, use Special Request box and check here [_])
____________________________________________________________
2. Soc. Sec. Number ___ - __ - ____
(or Tax ID Number ______ -_________________________________)
3. Occupation__________________________________________________
4. Relationship to Proposed Insured
------------------------------------------------------------
5. Date of birth ___/___/___
6. Address
____________________________________________________________
STREET ADDRESS
____________________________________________________________
CITY STATE ZIP
7a. (If PI is under age 15) Contingent Owner name and relationship to Proposed
Insured (If none, leave blank)
____________________________________________________________
7b. Contingent Owner age ______________________________________
- --------------------------------------------------------------------------------
D. COMPLETE THIS BOX ONLY IF SPOUSE, APPLICANT OWNER, OR CHILDREN'S RIDERS
DESIRED
- --------------------------------------------------------------------------------
1. Please give the following information for all (other than Proposed Insured)
being proposed for insurance, or Applicant Owner if Applicant Waiver applied
for. If Children's Insurance is applied for, give names of Proposed Insured's
children, adopted children, and stepchildren under age 15. If any child under
age 15 is omitted, give name and explain why in box S. on Page 4.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Date Height Weight Relationship to Present Total
First Name MI Last Name of Birth (ft./in.) (lbs.) Proposed Insured Life Insurance
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
/ /
- ---------------------------------------------------------------------------------------------------
/ /
- ---------------------------------------------------------------------------------------------------
/ /
- ---------------------------------------------------------------------------------------------------
/ /
- ---------------------------------------------------------------------------------------------------
</TABLE>
2a. Spouse's occupation ____________ Military Pay Grade (if applicable)___
2b. Spouse's Soc. Sec. Number __ - __ - ____
3. Has the Proposed Insured's spouse (if applying for insurance) smoked
cigarettes or used any other tobacco product, i.e., cigars, pipes, snuff,
chewing tobacco, etc., within the past [12] months? [ ] Yes [ ] No
- --------------------------------------------------------------------------------
Page 1
<PAGE>
<TABLE>
<CAPTION>
[Logo of John Hancock Financial Part A Statements to the Company's Agent
Services Appears Here]
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE COMPLETE THIS PAGE IF TRADITIONAL or TERM IS DESIRED
===================================================================================================================================
<S> <C>
E. PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] Modified Premium Whole Life (Mod Plus) [ ] Indeterminate Premium Yearly Renewable Term:
[ ] Level Premium Whole Life (Level Plus) Decreasing
[ ] [10] Year Level Premium Term
[ ] Indeterminate Premium Yearly Renewable Interest Rate______%; Term______years
Term: Level
[ ] Other (specify)___________________________
====================================================================================================================================
F. SUM DESIRED
- -----------------------------------------------------------------------------------------------------------------------------------
$
---------------------------------------
===================================================================================================================================
G. PAYMENT DETAILS
- ------------------------------------------------------------------------------------------------------------------------------------
1. Premium billing interval 2. Do you elect to have overdue premiums
automatically paid, if and when applicable
[ ] Annual [ ] Semiannual and available, by:
[ ] Quarterly [ ] Monthly(premiumatic)
[ ] Monthly-Military Allotment a. Dividend values? [ ] Yes [ ] No
[ ] Employee Consultation (Case # __________) b. Policy value loan? [ ] Yes [ ] No
===================================================================================================================================
H. DIVIDEND OPTION ELECTION (Whole Life only. If AIP Rider is elected in Box below, do not choose a dividend option)
- -----------------------------------------------------------------------------------------------------------------------------------
Select one of the 15 options in this box.
[ ] A. Taken in cash [ ] BC. Applied to premium, balance left on
[ ] B. Applied to premium deposit
[ ] C. Left on deposit [ ] BD. Applied to premium, balance to buy
[ ] D. Buy paid-up insurance paid-up insurance
[ ] LA. Levelize premium, balance in cash [ ] BI. Applied to premium, balance to repay
[ ] LC. Levelize premium, balance left on loan and then buy paid-up insurance
deposit [ ] EA. Buy one-year term, balance in cash
[ ] LD. Levelize premium, balance to buy [ ] EB. Buy one-year term, balance to reduce
paid-up insurance premium
[ ] LI. Levelize premium, balance to repay [ ] EC. Buy one-year term, balance left on
loan and then buy paid-up insurance deposit
[ ] ED. Buy one-year term, balance to buy
paid-up insurance
===================================================================================================================================
I. RIDERS ON PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
[ ] Disability Waiver of Premiums [ ] Paid-Up Insurance (PUI)
[ ] Accidental Death Benefit $__________ [ ] Lump Sum Payment (Option 1) $_________
[ ] YRT Level Death Benefit $__________ [ ] Level Annual Premium (Option 2)
[ ] YRT Decreasing Death Benefit $________ $____________ per year for ______ years
Interest Rate_____%; Term______years [ ] Modified fill-in premium for 5 years
[ ] Additional Insurance Protection (AIP) (Option 3)
Premium $________ Face amount $_______ [ ] Living Care Benefit
Optional Lump Sum $__________ (Accelerated Death Benefit)
[ ] AIP Levelized Premium Option [ ] Insurance of Insurability,
[ ] AIP Cost Recovery Option;______years, ______% Purchase Limit $_______________
[ ] AIP Increase Option;_______years, ______% [ ] Other Available Riders (please specify)
__________________________________________
__________________________________________
__________________________________________
===================================================================================================================================
J. RIDERS ON OTHER THAN PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
(Please be sure info on any person proposed for insurance is on Page 1, Box D.)
[ ] Children's Insurance $_________________ [ ] Applicant's Disability Waiver of Premiums
[ ] YRT Level on Spouse $_________________ [ ] Other Available Riders (please specify)
[ ] YRT Decreasing on Spouse $________________ ___________________________________________
Interest Rate______%; Term ______years ___________________________________________
___________________________________________
===================================================================================================================================
Page 2 (Traditional/Term)
</TABLE>
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
PLEASE COMPLETE THIS PAGE IF Flex V or MVL IS DESIRED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
E. PLAN
[_] Scheduled Premium Variable Whole Life Insurance (Flex V)
[_] Medallion Variable Life Insurance (MVL)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
F. SUM INSURED
- --------------------------------------------------------------------------------
$______________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
H. DEATH BENEFIT OPTIONS
- --------------------------------------------------------------------------------
[_] Option 1: Level Death Benefit
(Guideline Premium Test)
[_] Option 2: Variable Death Benefit
(Guideline Premium Test)
[_] Option 3: Level Death Benefit with Greater Funding
(Cash Value Accumulation Test)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I. RIDERS ON OTHER THAN PROPOSED INSURED
- --------------------------------------------------------------------------------
(Please be sure information on any person for insurance
is completed on Page 1, Box D.)
[_] Children's Insurance $__________________________________
[_] YRT Level on spouse $__________________________________
[_] YRT Decreasing on Spouse $______________________________
Interest Rate____ %; Term ____ years
[_] Applicant's Disability Payment of Required Premiums
(Not available for MVL)
[_] Other Available Riders (please specify)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
K. SUBACCOUNT INVESTMENT OPTION
- --------------------------------------------------------------------------------
Equity Stock.............................. ____%
Select Stock....................... ____%
Special Opportunities.............. ____%
Real Estate Equity................. ____%
International...................... ____%
Bond and Money Market
Bond............................... ____%
Short-Term U.S. Government......... ____%
Money Market....................... ____%
Asset Allocation
Managed........................... ____%
Fixed
Fixed Account..................... ____%
- -------------------------------------------------------------
PERCENTAGES MUST BE WHOLE AND TOTAL 100%
- --------------------------------------------------------------------------------
Telephone Transfer and Loan Option
[_] Yes [_] Transfer Only [_] Loan Only [_] No
I direct the Company to act upon telephone instructions
from the owner (a trustee, if the owner is a trust; or an
authorized business official, if the owner is a business entity)
to change future payment allocations, transfer existing funds
among the investment options, and process policy loans,
subject to the provisions of the Contract.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
G. PAYMENT DETAILS
- --------------------------------------------------------------------------------
1. Premium billing interval (Choose One)
[_] Annual [_] Semiannual
[_] Quarterly [_] Monthly-(premiumatic)
[_] Monthly--Military Allotment (Not available for MVL)
[_] Employee Consultation (Case #___________)
2. Do you elect to have premiums paid [_] Yes [_] No
by automatic loan? (Not available for MVL)
3. Planned Premium $ ______ (Enter annual amount)
Optional: Annual increase at _____% OR $ _______ annually
for _____ years
4. Planned First Year Lump Sum $ _____________
(in addition to amount indicated in #3)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
J. RIDERS ON PROPOSED INSURED
- --------------------------------------------------------------------------------
[_] Disability Payment of Required Premiums
[_] Accidental Death Benefit $ ____________
[_] Living Care Benefit (Accelerated Death Benefit)
[_] Premium Cost Recovery (YRT Death Benefit)
Term _____ years
Interest Rate ____%(Optional)
[_] Renewal Term Riders $_______________
(Choose one of the following):
[_] YRT Level Death Benefit
[_] YRT Target Term
[_] YRT Increasing Death Benefit
Interest Rate ____% Term ____ years
[_] YRT Decreasing Death Benefit
Interest Rate ____% Term ____ years
[_] Other Available Riders (Please Specify)
--------------------------------------------------------------------
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
L. SUITABILITY (Applies to both the Proposed Insured and if different, the
Owner)
- --------------------------------------------------------------------------------
1. Have you received a prospectus for the policy applied for? [_] Yes [_] No
(If YES, Prospectus Date: ______________________________)
2. Do you understand that the amount above the initial
Death Benefit and the entire amount of the Account [_] Yes [_] No
Value may increase or decrease depending on investment
experience?
3. Is the policy and allocation of subaccounts in
accord with your insurance objectives and your [_] Yes [_] No
anticipated financial needs?
4. Have you received an illustration of benefits based [_] Yes [_] No
on your Planned Premium?
- --------------------------------------------------------------------------------
Page 2 (FlexV/MVL)
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE] Part A Statements to the Company's Agent
Financial Services
- --------------------------------------------------------------------------------
PLEASE COMPLETE THIS PAGE IF UNIVERSAL LIFE IS DESIRED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
E. PLAN
- --------------------------------------------------------------------------------
[_] Flexible Premium Adjustable Life (Universal Life)
[_] Other (specify) ____________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
F. SUM INSURED
- --------------------------------------------------------------------------------
$ ______________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
G. PAYMENT DETAILS
- --------------------------------------------------------------------------------
1. Premium billing interval
[_] Annual
[_] Quarterly
[_] Monthly-Military Allotment
[_] Employee Consultation (Case #_________)
[_] Planned Single Payment
[_] Semiannual
[_] Monthly (premiumatic)
2. Planned premium for interval $ ____________
3. Intended additional first year premium $ ____________
Limited and Single payment projections are based on variable assumptions and are
not guaranteed. Additional premiums may have to be paid to keep your insurance
in force.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
H. DEATH BENEFIT OPTION (check one)
- --------------------------------------------------------------------------------
[_] Option 1-Sum Insured
[_] Option 2-Sum Insured plus Policy Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I. RIDERS ON PROPOSED INSURED
- --------------------------------------------------------------------------------
[_] Disability Waiver of Monthly Charges
[_] Accidental Death Benefit
Initial Amount $_________________________________
[_] Insurance of Insurability (issue ages 37 and under)
Increase Limit $_________________________________
[_] Living Care Benefit (Accelerated Death Benefit)
[_] Other Available Riders (please specify)
____________________________________________________________________
____________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
J. RIDERS ON OTHER THAN PROPOSED INSURED
- --------------------------------------------------------------------------------
(Please be sure information on any person proposed for insurance is completed on
Page 1, Box D.)
[_] Children's Insurance $_______________________________
[_] YRT Level on Spouse $_______________________________
[_] Other Available Riders (please specify)
____________________________________________________________________
____________________________________________________________________
- --------------------------------------------------------------------------------
K. TELEPHONE LOAN OPTION
- --------------------------------------------------------------------------------
I direct the Company to act upon telephone instructions from the owner (a
trustee, if the owner is a trust, or an authorized business official, if the
owner is a business entity) to process policy loans, subject to the provisions
of the contract.
[_] Yes [_] No
- --------------------------------------------------------------------------------
Page 2 (Universal Life)
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
PLEASE COMPLETE THIS PAGE IF HIGH BAND UNIVERSAL LIVE IS DESIRED
- --------------------------------------------------------------------------------
E. PLAN
[_] Flexible Premium Adjustable Life - HBI
[_] Flexible Premium Adjustable Life - HB2
- --------------------------------------------------------------------------------
F. BENEFITS
- --------------------------------------------------------------------------------
1. Basic Sum Insured ______________________
2. Death Benefit Option (choose one)
[_] Option A - Sum Insured only
[_] Option B - Sum Insured plus Account Value
[_] Option M - Sum Insured, plus Optional Extra Death
Benefit with calculation beginning
[_] at Date of Issue or
[_] at policy year _______
3. [_] Additional Sum Insured (ASI) (check if desired)
a. Check no more than one of the following
[_] ASI of $________
[_] for life of policy or [_]________policy years.
[_] with Total Sum Insured increasing by
[_]____% or [_]$______per year for
[_] life of policy or [_]____policy years.
[_] Customized Schedule (list by policy year or years):
Policy Year(s) ASI Amount
-------------- ----------
______-_______ $ _______________ (1)
______-_______ $ _______________ (2)
______-_______ $ _______________ (3)
______-_______ $ _______________ (4)
______-_______ $ _______________ (5)
______-_______ $ _______________ (6)
______-_______ $ _______________ (7)
______-_______ $ _______________ (8)
______-_______ $ _______________ (9)
______-_______ $ _______________ (10)
(If more space needed, attach separate schedule)
b. [_] Premium Cost Recovery
[_] life of policy or [_]______ policy years
Optional: Recovery increase percentage___________%
Optional: Recovery increase years__________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
G. PAYMENT DETAILS
- --------------------------------------------------------------------------------
1. Premium Billing Interval
[_] Annual [_] Semiannual
[_] Quarterly [_] Monthly (premiumatic only)
[_] Employee Consultation (Case#__________)
2. Planned Premium (Check a or b, or Target Premium will be billed.)
a. [_] $______________annually for______years(s)
Optional: Annual Increase of______% OR
$____________annually for _____year(s)
Additional first year Planned Premium $_____________
b. [_] Customized Schedule (list by policy year or years):
Policy Year(s) Planned Premium Amount
-------------- ----------------------
______-_______ $ _______________ (1)
______-_______ $ _______________ (2)
______-_______ $ _______________ (3)
______-_______ $ _______________ (4)
______-_______ $ _______________ (5)
______-_______ $ _______________ (6)
______-_______ $ _______________ (7)
______-_______ $ _______________ (8)
______-_______ $ _______________ (9)
______-_______ $ _______________ (10)
(If more space needed, attach separate schedule)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
H. RIDERS ON PROPOSED INSURED
- --------------------------------------------------------------------------------
[_] Disability Waiver of Monthly Charges
[_] Living Care Benefit (Accelerated Death Benefit)
[_] Other Available Riders (please specify)
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I. LIFE INSURANCE DEFINITION
- --------------------------------------------------------------------------------
[_] Cash Value Accumulation Test [_] Guideline Premium Test
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
K. TELEPHONE LOAN OPTION
- --------------------------------------------------------------------------------
I direct the Company to act upon telephone instructions from the owner (a
trustee, if the owner is a trust or an authorized business official, if the
owner is a business entity) to process policy loans, subject to the provisions
of the contract.
[_] Yes [_] No
- --------------------------------------------------------------------------------
Page 2 (Universal Life HB1/HB2)
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
M. UNDERWRITING INFORMATION
("ANY PERSON" MEANS ANY PERSON BEING PROPOSED FOR INSURANCE ON THIS PART A.)
- --------------------------------------------------------------------------------
1. Has any person done in the past three years, or intend to do any:
a. flying except as a passenger on regularly
scheduled airlines? [ ] Yes [ ] No
(If yes, please complete aviation questionnaire.)
b. skin/scuba diving, parachuting, motorized racing,
or other hazardous sports? [ ] Yes [ ] No
(If yes, please complete avocation questionnaire.)
2. In the past three years has any person been convicted
of two or more motor vehicle moving violations or had
a driving license suspended or revoked? [ ] Yes [ ] No
3. In the past 10 years has any person been convicted of
or incarcerated for the violation of any criminal law
(unless later acquited), are any criminal charges now
pending against any person, or is any person currently
on probation? [ ] Yes [ ] No
4. Does any person intend to reside or travel outside
the U.S. or Canada? [ ] Yes [ ] No
If any of questions 2 - 4 are answered "yes", please explain:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
N. OTHER INSURANCE/REPLACEMENT INFORMATION
- --------------------------------------------------------------------------------
1. Give information indicated as to all insurance in force on any person
proposed for insurance, including term riders.
- --------------------------------------------------------------------------------
Company Issue Year Plan Amount ADB Amount Business Insurance?
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
2. Is any other insurance application now pending or
contemplated on the life of any person proposed for
insurance? [ ] Yes [ ] No
If yes, which person(s)?
-----------------------------------------------------
What company(ies)/amounts?
---------------------------------------------------
3a. Is the insurance applied for intended to replace
or change any life insurance or annuity now in
force on any person proposed for insurance? (If
yes, give writing company of insurance being
replaced, policy number, and insurance amount.) [ ] Yes [ ] No
- --------------------------------------------------------------------------------
Company Policy # Amount Company Policy # Amount
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3b. Check this box if this case is a 1035 exchange [_]
(Please refer to inside front cover for 1035 Exchange Guidelines.)
4. Is Disability Insurance with Provident or Long Term Care Insurance with John
Hancock currently being applied for?
[_] No [_] Yes, DI (Date of application ____________ )
[_] Yes, LTC (Date of application ___________________ )
5. Has any application for life, disability, or health
insurance on any person being proposed for insurance
ever been declined, postponed, or modified? [ ] Yes [ ] No
(If "Yes," give most recent company, including John Hancock.)
----------------------------------------------------------------------------
COMPANY APPROXIMATE DATE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
O. PLEASE COMPLETE THIS BOX ONLY IF ADVANCE PAYMENT IS BEING MADE
- --------------------------------------------------------------------------------
1. How much advance payment is included with this Part A? $ ____________
(Write check to John Hancock Mutual Life or John Hancock Variable Life, as
appropriate. 1035 external replacements may not be prepaid.)
- --------------------------------------------------------------------------------
Page 3
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
P. CUSTOM DATING (OPTIONAL)
- --------------------------------------------------------------------------------
If no other date request is indicated, our regular dating practices will apply.
[_] Back date to save age [_] Issue date of ___ / ___ /___
(Generally, for FlexV and MVL the issue date may not be earlier than the Part A
date.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
R. CONVERSION DETAILS Note: Complete this box only for conversion of Term
Insurance. Children's Insurance, or Purchase Options (1 of 1, SPB, PPB)
- --------------------------------------------------------------------------------
1. [_] This is a [_] Full [_] Partial Term Conversion from:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
a. Policy Number Conversion Type Amount Converted Amount Remaining In Force
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Policy Amount
------------------------------------------------------------------------
# ___________ Rider
------------------------------------------------------------------------------------------------------
___________ Rider
------------------------------------------------------------------------------------------------------
b. Policy Number Conversion Type Amount Converted Amount Remaining In Force
------------------------------------------------------------------------------------------------------
Base Policy Amount
------------------------------------------------------------------------
# ___________ Rider
------------------------------------------------------------------------------------------------------
___________ Rider
------------------------------------------------------------------------------------------------------
</TABLE>
2. [_] Conversion of Children's Insurance from Policy # ________________________
3. [_] This is an election under [_] 1 of 1 [_] SPB [_]PPB from Policy #_______
[_] Regular Purchase Date, OR [_] Alternate Purchase Date because of ________
on ___ / ___ / ___
4. Is Insured now totally disabled, or is Insured receiving any payments for
sickness or injury? [_] Yes [_] No
(If yes, give details in Box S below.)
- --------------------------------------------------------------------------------
S. SPECIAL REQUESTS
- --------------------------------------------------------------------------------
[_] Please change Question ____ in Box ____ on Page ____ of this Part A to read:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
[_] Conversion - Benefits Carried Over [_] Conversion - Preferred Requested
[_] Contractual Change Request Please change Policy Number _______ as follows:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
[_] Change Planned Premium, if applicable, for above contractual change.
(FLEXV, MVL, UL only)
[_] Other special requests:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Page 4
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE] Part B Statements to the Company's Agent
Financial Services
- --------------------------------------------------------------------------------
COMPLETE FOR NON-MEDICAL APPLICATIONS ONLY
- --------------------------------------------------------------------------------
Please give full details below for every "Yes" answer to Questions 1 - 4 as
to each person proposed for insurance, who is referred to below as "any
person." BE SURE TO INCLUDE THE NAMES/ADDRESSES OF ANY TREATMENT PROVIDERS.
1. Has any person ever been treated for or had any known indication of disease
of the heart or blood vessels, chest pain or high blood pressure, stroke or
paralysis, diabetes, tumor or cancer, convulsions, kidney disease, gastro-
intestinal disease, mental or psychiatric disorder, lung or respiratory
disease, or blood disorder?
[ ] Yes [ ] No
2. Has any person had or ever been diagnosed or treated by a physician or other
medical practitioner for Human Immunodeficiency Virus III or Acquired Immune
Deficiency Syndrome (AIDS)?
[ ] Yes [ ] No
3. Within the past 5 years has any person received counseling or treatment
regarding the use of alcohol, drugs, illegal drugs, or used any illegal drug
or controlled substance?
[ ] Yes [ ] No
4. Other than the above, within the past 5 years has any person
a) been admitted to a hospital or other medical or rehabilitation
facility? [ ] Yes [ ] No
b) consulted or been treated by a physician, or had a medical exam or
checkup? [ ] Yes [ ] No
5. Is any person proposed for insurance currently taking any prescription drug?
[ ] Yes [ ] No
If yes, which person? _______________________________________________________
What drugs? How frequently? _________________________________________________
6. If the Proposed Insured has a personal physician, please enter name, address,
and details below. Otherwise leave blank.
_____________________________________________________________________________
FIRST NAME MI LAST NAME
_____________________________________________________________________________
STREET ADDRESS CITY STATE ZIP CODE
Date last seen____________________ Reason(s) last seen____________________
- --------------------------------------------------------------------------------
Details to "yes" answers.
Question No.___________________________________
Name of person_________________________________
Condition______________________________________
Date of onset_________ Last occurrence_________
Treatment/medication, if any___________________
Names/addresses of physicians/hospitals providing treatment
___________________________________________________________
___________________________________________________________
- --------------------------------------------------------------------------------
Question No.___________________________________
Name of person_________________________________
Condition______________________________________
Date of onset_________ Last occurrence_________
Treatment/medication, if any___________________
Names/addresses of physicians/hospitals providing treatment
___________________________________________________________
___________________________________________________________
___________________________________________________________
- --------------------------------------------------------------------------------
Question No.___________________________________
Name of person_________________________________
Condition______________________________________
Date of onset_________ Last occurrence_________
Treatment/medication, if any___________________
Names/addresses of physicians/hospitals providing treatment
___________________________________________________________
___________________________________________________________
___________________________________________________________
- --------------------------------------------------------------------------------
Question No.___________________________________
Name of person_________________________________
Condition______________________________________
Date of onset_________ Last occurrence_________
Treatment/medication, if any___________________
Names/addresses of physicians/hospitals providing treatment
___________________________________________________________
___________________________________________________________
___________________________________________________________
Please record any additional details on a separate piece of paper.
- --------------------------------------------------------------------------------
Page 5
<PAGE>
- --------------------------------------------------------------------------------
AGREEMENT AND SIGNATURES
- --------------------------------------------------------------------------------
A. The statements and answers on pages 1 through 5 of Part A and Part B of the
attached application are, to the best of my knowledge and belief, complete,
true, and correctly recorded. All statements and answers are representations
and not warranties, and with all Parts B of the attached application will
form the basis for and be a part of any new policy or additional benefit
provision issued on this application.
B. Coverage will take effect as provided in and subject to the terms and
conditions of Conditional Temporary Insurance Agreement Form 156-TIA-95
bearing the same date and number of this Part A if: (1) an advance payment of
at least the Minimum Temporary Insurance Premium is made with this Part A
which satisfies the requirements of such Conditional Temporary Insurance
Agreement; and (2) the amount applied for in this and all other applications
now pending in John Hancock Mutual Life Insurance Company and the John
Hancock Variable Life Insurance Company does not exceed $1,000,000 life
insurance.
C. If the applicant has a right to have the new policy issued as requested
without completing any Part B, the new policy will take effect as of its Date
of Issue, provided the initial payment has been made with this application.
D. In cases other than those described in B and C above, any new policy or
Benefit provision will take effect as of the Date of Issue of the policy,
but: (1) only on delivery to and receipt by the Applicant of the policy and
payment of the minimum initial premium thereon and (2) only if at the time of
such delivery and payment each person proposed for insurance in parts A and B
of this application is living and has not consulted or been examined or
treated by a physician or practitioner since the latest Part B pertaining to
such person was completed.
E. No agent or medical examiner is authorized to make or discharge contracts or
waive or change any of the conditions or provisions of any application,
policy, or receipt, or to accept risks or pass on insurability. Any such
unauthorized action is not notice to or knowledge of the company. A medical
examiner is not an agent of the Company.
Provisions F and G apply only if FlexV or MVL is applied for
F. All benefits, payments, and values, including the Death Benefit and Account
or Cash Value, under any policy issued which is based upon the investment
experience of a separate investment account may increase or decrease in
accordance with the investment experience of the separate investment account
and are not guaranteed as to fixed dollar amount. The Account Value or Cash
Value may even decrease to zero.
G. The registered representative's signature below certifies that a prospectus
for the policy applied for has been given to the Proposed Insured and/or to
the Applicant and that no written sales materials other than those approved
by JHVLICO have been used.
Provisions H, I, J, K, and L apply if the policy applied for is a term
conversion or purchase option
H. The new policy will be a new, separate contract. If the new policy is issued
in exchange for the original insurance, all liability of the Company under
the original insurance will cease when the new policy takes effect. Until the
new policy is issued, coverage will still be in force under the original
policy. Coverage under the new policy will take effect as indicated in
Paragraph C above.
I. The application for the original insurance, unless such insurance is now
incontestable, and the application for each additional benefit provision
which is to be retained as specified on page 2 of this Application, unless
such provision is now incontestable, will also form a basis for and be a part
of the new policy.
J. If the original policy or benefit provision is being exchanged and is subject
to an assignment, the new policy will be subject to the same assignment
unless it is discharged or, in the case of a policy loan assignment, unless
the indebtedness has been repaid.
K. If the new policy is issued in exchange for the original policy, any
nonforfeiture option election applicable to the original policy will be
applicable to the new policy, if available, unless otherwise requested in
writing.
L. Ownership and control of any policy issued on the attached application will
be determined by the terms of the new policy.
- --------------------------------------------------------------------------------
All statements and answers in this application are to the best of my
knowledge and belief, true and complete. They are representations and not
warranties. I assent to this application.
_______________________________________ _____________________________________
Signature of Proposed Insured, Applicant's Signature
if other than Applicant
and age 15 or over
_______________________________________ _____________________________________
Signature of Proposed Insured's Spouse, Witness (Agent must witness where
if proposed for insurance required by law)
_______________________________________ _____________________________________
Policyowner, Assignee or irrevocable City or Town State
Beneficiary (Signature required only for
exchange of policy or benefit provisions)
on__________________, 19_____
Date
Page 6
<PAGE>
This page is intentionally left blank
<PAGE>
- --------------------------------------------------------------------------------
TO BE COMPLETED IN EVERY CASE. DO NOT DETACH
- --------------------------------------------------------------------------------
Authorization and Acknowledgment
I hereby authorize any licensed physician, medical practitioner, hospital,
clinic, or other medical or medically related facility, insurance company, the
Medical Information Bureau or other organization, institution, or person that
has any records or knowledge regarding each of the undersigned and any children
of the undersigned if proposed for insurance to give to the John Hancock Company
or its affiliates and reinsurers any such information, including information
concerning every condition for which each has been under observation or
treatment, including if the information specified contains information related
to treatment for drug and/or alcohol abuse or for psychiatric and/or mental
conditions, the history obtained, physical and laboratory findings, diagnosis
and treatment. I hereby authorize the Company to release any records or other
information in their possession regarding each of the undersigned, and any
children of the undersigned if proposed for insurance, to the JH Networking
Insurance Agency, Inc. which may use this information in its efforts to secure
insurance coverage for substandard risks with other insurance companies, a list
of which is available upon request.
I acknowledge receipt of the Federal Fair Credit Reporting Act notice which
contains on the reverse side a notice concerning the Medical Information Bureau.
A copy of this authorization is as valid as the original. This
authorization is valid for 24 months from the date of the proposed Insured's
signature.
______________________________________ _____________________________________
Signature of Proposed Insured's Spouse, Signature of Proposed Insured, if age
if proposed for Insurance 15 or over, or Applicant if Proposed
Insured is under age 15
______________________________________ _________________________19__________
Name of Proposed Insured, if under 15 Date
(please print)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REFERRED LEADS: TO BE DETACHED IN AGENCY
- --------------------------------------------------------------------------------
____________________________________________________________
FIRST NAME MI LAST NAME
____________________________________________________________
STREET ADDRESS
____________________________________________________________
CITY STATE ZIP
Home Phone (____)____-______
Work Phone (____)____-______
____________________________________________________________
FIRST NAME MI LAST NAME
____________________________________________________________
STREET ADDRESS
____________________________________________________________
CITY STATE ZIP
Home Phone (____)____-______
Work Phone (____)____-______
MORE ON REVERSE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DETACH THIS SECTION AND GIVE TO CLIENT
- --------------------------------------------------------------------------------
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
Notice to Each Person Proposed for New or Changed Coverage
As required by the Federal Fair Credit Reporting Act, we wish to advise
that in connection with the insurance (or change in coverage) applied for, an
investigative consumer report may be requested by the Company with respect to
any person proposed for insurance or change in coverage. Such a report may
contain information as to character, general reputation, personal
characteristics and mode of living of such person, and is customarily obtained
through personal interviews with neighbors, friends, or associates of the
subject of the report. You have a right to make a written request for
information as to the nature and scope of any such report under the Act by
writing to us at:
John Hancock
P.O. Box 111 John Hancock Place
Underwriting - Federal Fair Credit Control C-5
Boston, Massachusetts 02117
For identification purposes, your request must include your full name,
birthdate, address, and any applicable policy number.
- --------------------------------------------------------------------------------
Page 7
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE]
Financial Services
- --------------------------------------------------------------------------------
REFERRED LEADS: TO BE DETACHED IN AGENCY
- --------------------------------------------------------------------------------
___________________________________________________________________________
FIRST NAME MI LAST NAME
___________________________________________________________________________
STREET ADDRESS
___________________________________________________________________________
CITY STATE ZIP
Home Phone(____)_____-_______
Work Phone(____)_____-_______
- --------------------------------------------------------------------------------
___________________________________________________________________________
FIRST NAME MI LAST NAME
___________________________________________________________________________
STREET ADDRESS
___________________________________________________________________________
CITY STATE ZIP
Home Phone(____)_____-_______
Work Phone(____)_____-_______
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DETACH THIS SECTION AND GIVE TO CLIENT
- --------------------------------------------------------------------------------
Information obtained about your insurability will be treated as
confidential. The Company may, however, make a brief report thereon to the
Medical Information Bureau, a non-profit membership organization of life
insurance companies which operates an information exchange on behalf of its
members. If you apply to another Bureau member company for life or health
insurance coverage, or a claim for benefits is submitted to such a company, the
Bureau, upon request, will supply such company with the information it may have
in its file.
Upon receipt of a request from you, the Bureau will arrange disclosure of
any information it may have in your file. If you question the accuracy of
information in the Bureau's file, you may contact the Bureau and seek a
correction in accordance with procedures similar to those set forth in the
Federal Fair Credit Reporting Act.
The address of the Bureau's information office is:
Medical Information Bureau
Post Office Box 105, Essex Station
Boston, Massachusetts 02112
Telephone (617) 426-3660
The Company may also release limited information in its file to other
properly authorized life insurance companies to which you may apply for life or
health insurance, or to which a claim for benefits may be submitted.
Information may be released to proper regulatory agencies on request and to
insurance companies in connection with reinsurance.
Underwriting actions are not reported to the Bureau, nor is the Company
informed through the Bureau of the underwriting actions of other companies to
whom you may have applied for life or health insurance.
- --------------------------------------------------------------------------------
Form 156-Comb-95
Page 8
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SALES CREDIT FOR APPLICATION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AGENCY NAME ORD. CODE CITY TAX GA/AM INITIALS
[_______________________] [_][_][_] [_][_][_][_] [_][_][_]
SALES/STAFF MGR. NAME NUMBER 1 MARKETING REP. NAME CONTRACT MARKTG REP. # MARKTG TERR. # %
[_______________________] [_][_][_][_][_][_] [_______________________] [_][_] [_][_][_][_][_][_] [_][_][_][_][_] [_][_][_]
SALES/STAFF MGR. NAME NUMBER 2 MARKETING REP. NAME CONTRACT MARKTG REP. # MARKTG TERR. # %
[_______________________] [_][_][_][_][_][_] [_______________________] [_][_] [_][_][_][_][_][_] [_][_][_][_][_] [_][_][_]
SALES/STAFF MGR. NAME NUMBER 3 MARKETING REP. NAME CONTRACT MARKTG REP. # MARKTG TERR. # %
[_______________________] [_][_][_][_][_][_] [_______________________] [_][_] [_][_][_][_][_][_] [_][_][_][_][_] [_][_][_]
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
SUPPLEMENTARY UNDERWRITING INFORMATION (REQUIRED FOR ALL CASES)
- --------------------------------------------------------------------------------
1. Please provide the Proposed Insured's addresses for the last two years.
Time at Residence Street Address City/Town State ZIP
See Part A, Page 1
___yrs. ___mos. ___________________________________________________________
___yrs. ___mos. ___________________________________________________________
___yrs. ___mos. ___________________________________________________________
2. Please provide the Proposed Insured's employment details for the last two
years.
Time Employed Employer Name Street Address City/Town State ZIP
___yrs. ___mos. ___________________________________________________________
___yrs. ___mos. ___________________________________________________________
___yrs. ___mos. ___________________________________________________________
3. Driver's License State__________ Number_____________
4. How long have you known the Proposed Insured? ______________
5. Are you related to the Proposed Insured? [_] Yes (relationship)_______ [_] No
6. Has Proposed Insured been known by any [_] Yes (what names)_________ [_] No
other names within the last ten years?
7. Check the ONE choice that best describes the Proposed Insured's marital
status (in case of juvenile insurance, the premium payor).
[_] a. Married with ONE spouse working full time for pay
[_] b. Married with BOTH spouses working full time for pay
[_] c. Retired married couple
[_] d. Never married
[_] e. Divorced
[_] f. Widowed
[_] g. Other____________________________
8. What is the approximate household income of the Proposed Insured?
[_] a. Less than $20,000
[_] b. $20,000 to $29,000
[_] c. $30,000 to $39,000
[_] d. $40,000 to $49,000
[_] e. $50,000 to $74,999
[_] f. $75,000 to $100,000
[_] g. More than $100,000
9. What is the approximate household income of the Policy Owner?
[_] a. Less than $20,000
[_] b. $20,000 to $29,000
[_] c. $30,000 to $39,000
[_] d. $40,000 to $49,000
[_] e. $50,000 to $74,999
[_] f. $75,000 to $100,000
[_] g. More than $100,000
10. (For contractual changes) To the best of your [_] Yes [_] No
knowledge, is the Insured now in good health?
- --------------------------------------------------------------------------------
From my knowledge and investigation, the proposed insured is of temperate
habits and good moral character, and I know nothing affecting the insurability
of the Proposed Insured not stated hereon, and I recommend his/her acceptance
without qualification.
Proposed Insured interviewed by me on ___/___/___.
The Federal Fair Credit Reporting Act notice has been delivered as required.
- --------------------------------------------------------------------------------
Sales Manager/Staff Manager/Marketing Representative
- -------AGENT--------------------------------------------------------------------
Is the insurance applied for a replacement according to John Hancock's current
replacement rules? [_] Yes [_] No
- --------------------------------------------------------------------------------
This application and report have been reviewed by me, and I recommend risk.
- --------------------------------------------------------------------------------
General Agent/Agency Manager
- --------------------------------------------------------------------------------
Page 9
<PAGE>
[lOGO OF JOHN HANCOCK APPEARS HERE]
Financial Services
- --------------------------------------------------------------------------------
AUTHORIZATION FOR PREMIUMATIC BILLING (DO NOT REMOVE FROM APPLICATION)
- --------------------------------------------------------------------------------
I authorize the John Hancock Company to deduct the monthly premiums for the
policy applied for on this application from the bank account listed below. I
understand that the deduction will take place on or about the third Friday of
each month.
Transit Routing Number__________________________
PC Control Number (If an existing account)_________
Bank Account Number__________________________________________
EFTS Transfer Code____
Name(s) of Depositor(s)__________________________
Signature(s) of Depositor(s)___________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE COMPLETE ANY SECTION BELOW THAT PERTAINS TO THIS CASE
- --------------------------------------------------------------------------------
I. COMPLETE FOR MILITARY CASES
1. Permanent U.S. Residence________________________________________________
2. Pay Grade____________________
3. Soc. Sec. or ID# of person entering allotment___________________________
4. Anticipated date of discharge or retirement__________month___________year
- --------------------------------------------------------------------------------
II. COMPLETE FOR JUVENILE OR CHILDREN'S INSURANCE
1. Did you see the Proposed Insured/Child?
[_]Yes [_]No (If not, explain on additional sheet of paper.)
2. With whom does Proposed Insured/Child reside?
Name_________________________________________________
Relationship to Proposed Insured/Child__________________________
3. Is Proposed Insured in school? [_]Yes (Grade_____) [_]No
4. Amount of life insurance in force or applied for on the:
Father $________________ Mother $________________
5. Are all siblings under age 15 insured for at least this amount?
[_]Yes [_]No (If not, explain on additional sheet of paper.)
- --------------------------------------------------------------------------------
III. COMPLETE FOR ALTERNATE PREMIUM PAYMENT PLAN POLICIES
1. Alternate premium payment payment plan testing should begin at year______
(Same year should be indicated on page 11.)
2. Has the Policyowner read and signed page 11 of this application?
[_]Yes [_]No
- --------------------------------------------------------------------------------
IV. COMPLETE FOR MODIFIED ENDOWMENTS
1. Does the sales illustration show that the policy applied for is a Modified
Endowment Contract (MEC)? [_]Yes [_]No
2. If yes, has the Policyowner signed the MEC Acknowledgment Form on Page 12?
[_]Yes [_]No
- --------------------------------------------------------------------------------
V. COMPLETE FOR BUSINESS INSURANCE
1. Authorized officer signing the application
Name___________________________ Title___________________________
2. Amount of business insurance already in force on Proposed Insured
$________________________
3. Proposed Insured's total compensation from the business for each of the
last two years.
Year_________ Compensation $______________
Year_________ Compensation $______________
4. Total book value of business $______________________
5. Total market value of business $______________________
6. Year founded or incorporated _________________________
7. % of business owned by Proposed Insured _____________%
- --------------------------------------------------------------------------------
VI. COMPLETE FOR ADVANCED SALES CASES
1. Does this insurance satisfy one of the estate and business needs listed
below? [_]Yes [_]No
If yes, check one need catagory and one sales concept, if applicable.
1 [_]Estate Conservation
a [_] Irrevocable Trust Owned
b [_] Adult Children Owned
2 [_]Business Continuation
c [_] Stock Redemption
d [_] Stock Purchase
3 [_]Qualified Retirement Plan (Pension, Profit Sharing, 401(k), HR-10)
4 [_]Individually Owned Insurance
e [_] Collateral Assignment Split Dollar
f [_] Executive Bonus
5 [_]Non-Qualified Retirement Plan
g [_] Salary Continuation
h [_] True Deferral
i [_] Death Benefit Only
j [_] Severance Benefit
6 [_]Corporate Owned Insurance
k [_] Endorsement Split Dollar
l [_] Key Person
m [_] Business Loan
7 [_]Charitable Insurance
- --------------------------------------------------------------------------------
VII. COMPLETE FOR COLLEGE SAVINGS PLUS
1. Is this insurance part of a College Savings Plus Plan? [_]Yes [_]No
- --------------------------------------------------------------------------------
Page 10
<PAGE>
- --------------------------------------------------------------------------------
REQUEST TO USE POLICY VALUES TO PAY PREMIUMS (TRADITIONAL ONLY)
- --------------------------------------------------------------------------------
I elect to have my policy premiums paid by non-guaranteed policy values, if
sufficient, beginning in the year selected below. This payment option is
possible only if future dividend and/or cash values are large enough to pay the
required premium which is due each year. Lower dividends, policy loans, or
withdrawals taken from the policy could cause additional premiums to be
required. John Hancock recommends that I review illustrations using various
dividend projections to understand how actual dividend experience may affect the
policy values and payment schedule.
- --------------------------------------------------------------------------------
ALTERNATE PREMIUM PAYMENT PLAN COMMENCEMENT
- --------------------------------------------------------------------------------
I elect to have the Alternate Premium Payment Plan begin in policy year______.
This year is based upon an illustration at issue assuming (circle one) CURRENT
or REDUCED dividend scale (Indicate reduction from current scale by ___%
interest).
At the beginning of the year indicated above, John Hancock will test my policy
using the dividend scale in effect at that time. If the test shows that
projected policy values are adequate to pay all future premiums based on that
current dividend scale, my premiums will be eligible to be paid from policy
values. If the test shows that projected policy values are not adequate to pay
all future premiums, the test will continue to be repeated each year. Policy
premiums will be eligible to be paid in the earliest year when values are shown
to be sufficient to pay all future premiums.
John Hancock will notify me in writing when my policy becomes eligible for this
payment option. At that time i may choose to allow the Alternate Premium Payment
Plan to begin, or I may choose to continue to pay premiums in cash to further
build my policy's values.
- --------------------------------------------------------------------------------
ALTERNATE PREMIUM PAYMENT PLAN MECHANICS
- --------------------------------------------------------------------------------
When I elect the Alternate Premium Payment Plan, policy values will be applied
in the following order to pay the premium amount due:
1. Dividends declared for payment on the policy anniversary;
2. Amounts accumulated, if any, of dividends on deposit;
3. Surrender value of any paid-up insurance.
- --------------------------------------------------------------------------------
CHANGES IN ALTERNATE PREMIUM PAYMENT PLAN STATUS
- --------------------------------------------------------------------------------
Any of the following may affect my future eligibility to begin or continue to
pay my premiums from policy values:
. Partial surrenders of paid-up additions or paid-up insurance;
. Policy loans;
. Actual dividends which are less than those projected (dividends are not
guaranteed);
. Changes in the dividend option;
. Any requested change to the policy that affects the premium.
John Hancock strongly recommends that I review policy illustrations using
various dividend assumptions to see the impact of lower than current dividend
scales and the impact on the Alternate Premium Payment Plan.
If at any time, policy values are not sufficient to pay the amount of premium
then required, no policy values will be applied to pay premiums, and billing for
the required premium will resume. I will be notified if that occurs.
- --------------------------------------------------------------------------------
ACKNOWLEDGMENT
- --------------------------------------------------------------------------------
I UNDERSTAND THAT I HAVE THE OPPORTUNITY TO USE NON-GUARANTEED POLICY VALUES TO
PAY REQUIRED PREMIUM PAYMENTS. I UNDERSTAND THAT THE YEAR INDICATED ABOVE
REPRESENTS THE YEAR TO BEGIN TESTING FOR THE ALTERNATE PREMIUM PAYMENT PLAN, AND
THAT THIS YEAR IS NOT GUARANTEED AND DEPENDENT ON POLICY VALUES ACTUALLY
AVAILABLE AT THE TIME OF THE TEST AND THE DIVIDEND SCALE THEN APPLICABLE TO MY
POLICY.
Policyowner Signature __________________________ Date ________________
- --------------------------------------------------------------------------------
Page 11
<PAGE>
- --------------------------------------------------------------------------------
NOTICE OF POTENTIAL INCOME TAX IMPLICATIONS FOR MODIFIED ENDOWMENT CONTRACTS
- --------------------------------------------------------------------------------
On November 10, 1988, the Technical and Miscellaneous Revenue Act of 1988
(TAMRA) was signed by President Reagan. This law changes the income taxation of
cash withdrawn from certain affected life insurance policies called Modified
Endowment Contracts, or MECs. Due to the amount of premium you plan to pay into
this policy, you will be affected by this law.
It is important for you to understand that all distributions made from your
policy as applied for, including policy loans, withdrawals, partial surrenders
and certain dividends, will be considered to be a distribution of any gain. This
means that if your policy is in a gain position when the withdrawal is made
(i.e., the value of your policy exceeds the amount you've paid into it), you
will owe ordinary income tax on the amount you withdraw. In addition, a 10%
penalty tax is imposed by the IRS on any taxable distribution made prior to age
59 1/2, except on disability or if taken in the form of an annuity.
The insurance proceeds payable to your beneficiary upon the death of the
Proposed Insured will continue to be income tax free under current legislation.
This notice is designed to inform you of the income taxation of life insurance
based upon our understanding of the information currently available. It is not
intended to provide you with legal advice, which neither John Hancock nor its
Representatives can give. Therefore, if you have questions as to the
applicability of any provision of the law, you should seek the advice of your
own tax and legal counsel.
If you wish to modify your planned premium payments to avoid creating a Modified
Endowment Contract, your Marketing Representative will assist you. Otherwise,
please sign the Acknowledgment below.
- --------------------------------------------------------------------------------
POLICYOWNER ACKNOWLEDGMENT AND SIGNATURE
- --------------------------------------------------------------------------------
I have read the above Notice of Potential Income Tax Implications. I understand
that my premium payments will cause the proposed policy to become a Modified
Endowment. I also understand the potential income tax effects of a distribution
from a Modified Endowment.
Policyowner Signature Date
---------------------------- -----------------------
________________________________________________________________________________
- --------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION NUMBER CERTIFICATION
- --------------------------------------------------------------------------------
PART I.-TAXPAYER IDENTIFICATION NUMBER
Enter the Owner's taxpayer identification
number in the appropriate box. For most
individual taxpayers, this is the social
security number.
------------------------------------------
Social Security number
--- ---
------------------------------------------
OR
------------------------------------------
Employer identification number
---
------------------------------------------
PART 2.-BACKUP WITHHOLDING
Check the appropriate box.
(a) Owner is NOT subject to backup withholding
[_] under the provisions of section 3406(a)(l)(c) of
the Internal Revenue Code.
(b) Owner is subject to backup withholding
[_] under the provisions of section 3406(a)(l)(c) of
the Internal Revenue Code.
- --------------------------------------------------------------------------------
Certification: Under the penalties of perjury, I certify that the information
provided above is true, correct, and complete.
Signature_________________________________ Date_______________
- --------------------------------------------------------------------------------
Page 12
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR PREMIUMATIC BILLING: PLEASE SEND TO AUTOMATIC COLLECTIONS, C-8
- --------------------------------------------------------------------------------
Please make sure that the Premiumatic Authorization on Page 10 is completed and
signed.
Name of Insured ____________________ Policy Number ________________________
1. All cases: please check one of a or b
[_] a. This is a new Premiumatic account. Please attach either 1) a blank
voided check; 2) a copy of the Payor's check for the initial premium;
or 3) a copy of a cancelled check.
Note: Do not send voided check until policy is issued.
[_] b. This is an addition to an existing Premiumatic account.
Control Number_________________________________________________________
2. Required for FlexV, UL, MVL
Please place policy on Premiumatic effective _____ / _____.
3. If you have other comments, please check here: [_] and use reverse side.
Agency Name __________________________ Ord Code __________________________
Submitted by _________________________ Date ______________________________
- --------------------------------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- --------------------------------------------------------------------------------
RECEIPT AND CONDITIONAL TEMPORARY INSURANCE AGREEMENT
- --------------------------------------------------------------------------------
. This Receipt and Conditional Temporary Insurance Agreement is governed by
Agreement B of the application bearing the same number as this receipt.
. There is a TOTAL temporary insurance coverage limit of $250,000 on all
applications pending on each person proposed for insurance with John Hancock
Mutual Life Insurance Company and John Hancock Variable Life Insurance
Company, regardless of the number of applications, and the face amounts of the
policies applied for.
- --------------------------------------------------------------------------------
6861590
Proposed Insured ______________________ Application Number _______________
Plan ___________________________________ Date _____________________________
Received from________________ the sum of $_____________ paid with application
to John Hancock Company with the same date and number as this receipt. This
receipt is issued on the condition that any check, draft, or other order for
the payment of money is good and can be collected.
Please make all premium checks payable to the company under which your
application is being made (John Hancock Mutual Life or John Hancock Variable
Life), at John Hancock Place, Boston, MA. Do not make check payable to the
agent or leave the payee blank.
- --------------------------------------------------------------------------------
Conditions of Temporary Insurance Coverage. 1) The amount received must be at
least the Minimum Temporary Insurance Premium, 2) Parts A and B of the
application and any required medical examinations and tests must be completed,
and 3) The following questions are answered "NO."
a. In the past two years, has any person proposed for insurance consulted a
physician, been diagnosed with, or had treatment for heart disease,
stroke, or cancer?_______
b. Has any person proposed for insurance been hospitalized within the past 6
months or been advised by a physician that he or she needs hospitalization
for any reason (other than for normal pregnancy)?_______
c. Within the past 5 years has any person received counseling or treatment
regarding the use of alcohol, drugs, illegal drugs, or used any illegal
drug or controlled substance?_______
d. In the past 3 years has any person had a driving license suspended or
revoked?_______
Commencement of Temporary Insurance Coverage. If the above Conditions of
Temporary Insurance Coverage are met, coverage in accordance with the terms and
conditions of the policy applied for will take effect on the latest "Completion
Date" of all persons proposed for insurance. Each person's "Completion Date"
will be the date of completion of the latest of the Parts A and B of the
application and any medical examinations and tests required by the Company's
published initial underwriting requirements, according to the age and amount
applied for.
Amount of Temporary Insurance Coverage. The amount of Coverage will be the
lesser of: 1) the amount applied for on each person excluding the amount payable
under Option 1 of the Paid Up Insurance Rider, if applied for, unless the amount
received with the application is equal to or greater than (i) the Minimum
Temporary Insurance Premium plus (ii) the Lump Sum Payment shown on Page 2
(Traditional/Term) in Box 1; and 2) $250,000. However, the amount of coverage
will never exceed $250,000 LESS the total of all amounts payable under all
conditional temporary insurance agreements issued by John Hancock Mutual Life
Insurance Company or John Hancock Variable Life Insurance Company in connection
with any insurance application pending on the proposed insured as of the date of
this Receipt and Conditional Temporary Insurance Agreement. No benefit will be
paid under this Agreement if the Proposed Insured's death results, directly or
indirectly, or wholly or partially, from intentionally self-inflicted injury
while sane, or self-inflicted injury while insane.
(continued on reverse)
- --------------------------------------------------------------------------------
Page 13
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR PREMIUMATIC BILLING (CONTINUED)
- --------------------------------------------------------------------------------
Special Premiumatic Requests:
- --------------------------------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Receipt and Conditional Temporary Insurance Agreement (continued)
Fraud Warning. Any person who, with intent to defraud or knowing that he is
facilitating a fraud against an insurer, submits an application or files a claim
containing a false or deceptive statement is guilty of insurance fraud.
Termination of Temporary Insurance Coverage. The conditional temporary insurance
coverage provided by this Agreement will end on the earliest of:
1) The commencement of coverage under the policy issued on the basis of the
application.
2) The date the Applicant refuses to accept the policy as offered for delivery.
3) The date the application is declined or deemed declined (Policy is deemed
declined if not approved within 60 days of the latest Completion Date.).
Notice of any such declination will be furnished.
If termination occurs under 2) or 3) above, the amount paid will be returned on
surrender of this Receipt. In no event will coverage be in effect under both
this Conditional Temporary Insurance Agreement and any policy issued on the
basis of the application, and any amendment thereto, with the same date and
number as this Receipt and Conditional Temporary Insurance Agreement.
Commencement of Coverage Under the Policy. Coverage under any policy issued on
the basis of the application will replace the coverage provided by this
Agreement as of the policy Date of Issue but only if:
1) The policy is delivered to and accepted by the Applicant while all persons
proposed for insurance are living and within 60 days of the latest
"Completion Date," and
2) The balance of any premium required for the policy as delivered is paid
while all persons proposed for insurance are living and within 60 days after
the latest "Completion Date."
Minimum Temporary Insurance Premium. The Minimum Temporary Insurance Premium is
one month's proportionate part of the premium according to the Company's
published rates for the policy and premium interval applied for.
(check one) [ ] John Hancock Mutual Life Insurance Company
[ ] John Hancock Variable Life Insurance Company
- ------------------------------------ ------------------------------------
PROPOSED INSURED DATE MARKETING REPRESENTATIVE DATE
- --------------------------------------------------------------------------------
(To be used in event of refund of payment)
Received of the John Hancock Company, Boston, Massachusetts, the sum of $_____.
The amount mentioned in the receipt on the reverse side hereof.
Date _____________________________, 19______ _________________________________
- --------------------------------------------------------------------------------
Page 14
<PAGE>
EXHIBIT 6
February 22, 1996
Board of Directors
John Hancock Variable Life Insurance Company
Members of the Board:
This opinion is furnished in connection with the filing of this Post-Effective
Amendment to the Registration Statement on Form S-6 by John Hancock Variable
Life Insurance Company (JHVLICO) under the Securities Act of 1933, as amended,
with respect to the flexible premium variable life insurance policy under which
amounts will be allocated by JHVLICO to one or more of the subaccounts of John
Hancock Variable Life Account U ("Account"). The flexible premium policy is
described in the prospectus indicated in the amended Registration Statement.
The policy form was prepared under my direction, and I am familiar with the
amended Registration Statement and exhibits thereto. In my opinion:
1. Except to the extent that exemptive relief is applicable, the "sales load",
as defined in paragraph (c)(4) of Rule 6e-3(T) under the Investment Company
Act of 1940, will not exceed 9 per centum of the "payments" (as defined in
the first sentence of paragraph (c)(7) of the (Rule) equal to the sum of
the guideline annual premiums (as defined in paragraph (c)(8) of the Rule)
that would be paid during the period equal to the lesser of 20 years or the
anticipated life expectancy of the insured named in the policy based on the
1980 Commissioners Standard Ordinary Mortality Tables. The sales load on
payments made in excess of such sum will not exceed 9%. Sales loads in
excess of (1) 30% of payments made which are less than or equal to one
guideline annual premium, plus (2) 10% of payments greater than one but not
greater than two guideline annual premiums, plus (3) 9% of payments in
excess of two guideline annual premiums, will be refunded if the policy is
surrendered during the first twenty-four months after issue.
<PAGE>
-2-
2. Except to the extent that exemptive relief is applicable, the proportionate
amount of sales load deducted from any payment during the policy period
will not exceed the proportionate amount deducted from any prior payment
during the policy period, unless an increase is caused by a reduction in
the annual cost of insurance.
3. The illustration of death benefit, account value, surrender value, and
accumulated premiums shown in the appendix of the flexible premium
prospectus included in the amended Registration Statement, based on the
assumptions stated in the illustrations, are consistent with the provisions
of the policy. Such assumptions, including the current cost of insurance
rates and other charges, are reasonable. The policy has not been designed
so as to make the relationship between premiums and benefits, as shown in
the illustrations, appear disproportionately more favorable to a
prospective purchaser of a Policy for a standard risk male nonsmoker age
35, than to a prospective purchaser of a policy for a male at other ages or
in another risk classification or for a female nor have the particular
examples set forth in the illustrations been selected for the purpose of
making this relationship appear more favorable.
4. The charge for federal taxes that is imposed under the policy is reasonable
in relation to JHVLICO's increased tax burden under Section 848 of the
Internal Revenue Code of 1986, resulting from JHVLICO's receipt of such
premiums. The cost to JHVLICO of capital used to satisfy its increased tax
burden under Section 848 is, in essence, JHVLICO's targeted rate of return.
The targeted rate of return is reasonable and the factors taken into
account by JHVLICO in determining such targeted rate of return are
appropriate factors to consider.
I hereby consent to the filing of this opinion as an exhibit to the amended
Registration Statement and to the use of my name relating to actuarial matters
under the heading "Experts" in the prospectus contained in the Registration
Statement.
/s/ Randi M. Sterrn
------------------
Randi M. Sterrn, FSA
Senior Associate Actuary
<PAGE>
EXHIBIT 7
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Prospectus and to the use of our reports dated February 9, 1996, with respect to
the financial statements of John Hancock Variable Life Account U and February 7,
1996 with respect to the financial statements of John Hancock Variable Life
Insurance Company, included in this Post-Effective Amendment No. 2 to the
Registration Statement (Form S-6, No. 33-76660).
/s/Ernst & Young LLP
ERNST & YOUNG LLP
Boston, Massachusetts
March 4, 1996
<PAGE>
EXHIBIT 9
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
John Hancock Variable Annuity and Variable Life Insurance Accounts
------------------------------------------------------------------
POWER OF ATTORNEY
The undersigned member of the Board of Directors of John Hancock Variable
Life Insurance Company does hereby constitute and appoint Henry D. Shaw, Francis
C. Cleary, Thomas J. Lee, Sandra M. DaDalt and Laura M. Mangan, and each of them
individually, with full power of substitution, his or her true and lawful
attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statements
under the Securities Act of 1933 and the Investment Company Act of 1940, and
each amendment to the Registration Statements, to be filed for John Hancock
Variable Life Account V, John Hancock Variable Annuity Account I and any other
variable annuity or variable life insurance account of John Hancock Variable
Life Insurance Company with the Securities and Exchange Commission and to take
any and all action and to execute in the name of, and on behalf of, the
undersigned as a member of said Board of Directors or otherwise any and all
instruments, including applications for exemptions from such Acts, which said
attorneys and agents deem necessary or advisable to enable any variable annuity
or variable life insurance account of John Hancock Variable Life Insurance
Company to comply with the Securities Act of 1933, as amended, the Investment
Company Act of 1940, as amended, and the rules, regulations and requirements of
the Securities and Exchange Commission in respect thereof; and the undersigned
hereby ratifies and confirms as his or her own act and deed all that each of
said attorneys and agents shall do or cause to have done by virtue hereof. Each
of said attorneys and agents shall have, and may exercise, all of the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand on
the date shown.
DATE DIRECTOR
---- --------
9-15-94 /s/ HENRY D. SHAW
9-15-94 /s/ JOSEPH A. TOMLINSON
9-15-94 /s/ ROBERT R. REITANO
9-15-94 /s/ THOMAS J. LEE
9-15-94 /s/ FRANCIS C. CLEARY, JR.
10-12-94 /s/ BARBARA L. LUDDY
10-13-94 /s/ MICHELE G. VAN LEER
3-9-95 /s/ ROBERT S. PASTER
4-5-95 /s/ DAVID F. D'ALESSANDRO
<PAGE>
EXHIBIT 11
February 29, 1996
United States Securities
and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
This opinion is being furnished with respect to the filing of this post-
effective amendment of the Registrant's Registration Statement with the
Securities and Exchange Commission as required by Rule 485 under the Securities
Act of 1933.
We have acted as counsel to Registrant for the purpose of preparing this
post-effective amendment which is being filed pursuant to paragraph (b) of Rule
485 and hereby represent to the Commission that in our opinion this post-
effective amendment does not contain disclosures which would render it
ineligible to become effective pursuant to paragraph (b).
We hereby consent to the filing of this opinion with and as a part of this
post-effective amendment to Registrant's Registration Statement with the
Commission.
Very truly yours,
/s/ Francis C. Cleary Jr.
Francis C. Cleary, Jr.
Vice President and Counsel
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> SELECT STOCK SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 38,494,572
<INVESTMENTS-AT-VALUE> 47,448,842
<RECEIVABLES> 45,560
<ASSETS-OTHER> 11,435,654
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 58,930,056
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45,561
<TOTAL-LIABILITIES> 45,561
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 58,884,495
<DIVIDEND-INCOME> 3,899,925
<INTEREST-INCOME> 755,070
<OTHER-INCOME> 0
<EXPENSES-NET> 278,461
<NET-INVESTMENT-INCOME> 4,376,534
<REALIZED-GAINS-CURRENT> 465,096
<APPREC-INCREASE-CURRENT> 6,578,435
<NET-CHANGE-FROM-OPS> 11,420,065
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<NUMBER-OF-SHARES-SOLD> 8,571,530
<NUMBER-OF-SHARES-REDEEMED> 1,211,887
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 16,086,271
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<GROSS-EXPENSE> 278,461
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> BOND SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
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<INVESTMENTS-AT-VALUE> 212,243,929
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 59,930,056
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<OTHER-ITEMS-LIABILITIES> 148,656
<TOTAL-LIABILITIES> 148,656
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
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<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 236,668,207
<DIVIDEND-INCOME> 161,214,565
<INTEREST-INCOME> 3,820,851
<OTHER-INCOME> 0
<EXPENSES-NET> 1,372,266
<NET-INVESTMENT-INCOME> 18,663,150
<REALIZED-GAINS-CURRENT> 331,252
<APPREC-INCREASE-CURRENT> 18,687,187
<NET-CHANGE-FROM-OPS> 37,681,589
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20,869,990
<NUMBER-OF-SHARES-REDEEMED> 9,827,533
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 32,284,869
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 1,372,266
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> INTERNATIONAL SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 9,999,647
<INVESTMENTS-AT-VALUE> 10,420,030
<RECEIVABLES> 1,974,799
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,394,829
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 3,498
<TOTAL-LIABILITIES> 3,498
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<SHARES-COMMON-PRIOR> 0
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 12,391,331
<DIVIDEND-INCOME> 114,361
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<EXPENSES-NET> 65,044
<NET-INVESTMENT-INCOME> 195,348
<REALIZED-GAINS-CURRENT> 294,206
<APPREC-INCREASE-CURRENT> 353,155
<NET-CHANGE-FROM-OPS> 842,709
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<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 1,389,989
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<NET-CHANGE-IN-ASSETS> 815,137
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<GROSS-EXPENSE> 65,044
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> MONEY MARKET SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
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<PERIOD-START> JAN-01-1995
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> REAL ESTATE EQUITY SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> SPECIAL OPPORTUNITIES SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
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<NET-ASSETS> 1,709,613
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<NET-INVESTMENT-INCOME> 36,311
<REALIZED-GAINS-CURRENT> 11,582
<APPREC-INCREASE-CURRENT> 124,460
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<EQUALIZATION> 0
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<NUMBER-OF-SHARES-SOLD> 1,600,584
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> STOCK SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 444,829,697
<INVESTMENTS-AT-VALUE> 539,025,912
<RECEIVABLES> 120,312,260
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 659,338,172
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<OTHER-ITEMS-LIABILITIES> 584,711
<TOTAL-LIABILITIES> 584,711
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<SHARES-COMMON-PRIOR> 0
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 658,753,461
<DIVIDEND-INCOME> 51,822,706
<INTEREST-INCOME> 8,594,774
<OTHER-INCOME> 0
<EXPENSES-NET> 3,246,229
<NET-INVESTMENT-INCOME> 57,171,251
<REALIZED-GAINS-CURRENT> 6,161,063
<APPREC-INCREASE-CURRENT> 81,121,360
<NET-CHANGE-FROM-OPS> 144,453,674
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 60,739,486
<NUMBER-OF-SHARES-REDEEMED> 21,299,081
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 137,469,677
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 3,246,229
<AVERAGE-NET-ASSETS> 0
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<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
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<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> MANAGED SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 241,375,170
<INVESTMENTS-AT-VALUE> 280,030,027
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 146,911
<TOTAL-LIABILITIES> 146,911
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<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 337,309,764
<DIVIDEND-INCOME> 26,974,536
<INTEREST-INCOME> 3,999,426
<OTHER-INCOME> 0
<EXPENSES-NET> 1,677,243
<NET-INVESTMENT-INCOME> 29,296,718
<REALIZED-GAINS-CURRENT> 2,658,955
<APPREC-INCREASE-CURRENT> 30,787,175
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<NUMBER-OF-SHARES-SOLD> 32,850,913
<NUMBER-OF-SHARES-REDEEMED> 12,965,430
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> SHORT-TERM U.S. GOVERNMENT SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 82,837
<INVESTMENTS-AT-VALUE> 83,976
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<OTHER-ITEMS-ASSETS> 0
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<EXPENSES-NET> 312
<NET-INVESTMENT-INCOME> 2,598
<REALIZED-GAINS-CURRENT> 945
<APPREC-INCREASE-CURRENT> 1,166
<NET-CHANGE-FROM-OPS> 4,709
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<NUMBER-OF-SHARES-SOLD> 104,744
<NUMBER-OF-SHARES-REDEEMED> 29,276
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<NET-CHANGE-IN-ASSETS> 6,397
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
