<PAGE>
As filed with the Securities and Exchange Commission on April 28, 1997
Registration No. 2-68061
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-6
Post-Effective Amendment No. 24 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)
--------------------
RONALD J. BOCAGE, ESQ.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, 02117
(Name and complete address of agent for service)
--------------------
Copy to:
GARY O. COHEN, ESQ.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
--------------------
It is proposed that this filing become effective(check appropriate box)
[ ]immediately upon filing pursuant to paragraph (b) of Rule 485
---
[X]on May 1, 1997 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 1996 pursuant to Rule 24f-2 on February 26, 1997.
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Form N-8B-2 Item Caption in Prospectus
- ---------------- ---------------------
<S> <C>
1, 2 Cover, The Account and The Series
Fund, JHVLICO and John Hancock
3 Inapplicable
4 Cover, Distribution of Policies
5,6 The Account and The Series Fund, State
Regulation
7, 8, 9 Inapplicable
10(a),(b),(c),(d),(e) Principal Policy Provisions
10(f) Voting Privileges
10(g),(h) Changes in Applicable Laws--Funding and otherwise
10(i) Appendix--Other Policy
Provisions, The Account and
The Series Fund
11, 12 Summary of Policies, The Account and
The SeriesFund, Distribution of Policies
13 Charges and Expenses,
Appendix--Illustration of Death
Benefits, Cash Values
and Accumulated Premiums
14, 15 Summary of Policies, Premiums
16 The Account and The Series Fund
17 Summary of Policies, Principal
Policy Provisions
18 The Account and The Series Fund,
Tax Considerations
19 Reports
20 Changes in Applicable Law--Funding and
Otherwise
21 Principal Policy Provisions
22 Principal Policy Provisions
23 Distribution of Policies
24 Not Applicable
25 JHVLICO and John Hancock
26 Not Applicable
27,28,29,30 JHVLICO and John Hancock, Management
31,32,33,34 Not Applicable
35 JHVLICO and John Hancock
37 Not Applicable
38,39,40,41(a) Distribution of Policies,
JHVLICO and John Hancock,
Charges and Expenses
42, 43 Not Applicable
44 The Account and The Series Fund,
Principal Policy Provisions,
Appendix--Illustration of Death
Benefits,Cash Values
and Accumulated Premiums
45 Not Applicable
46 The Account and The Series Fund,
Principal Policy Provisions,
Appendix--Illustration of Death
Benefits, Surrender Values
and Accumulated Values
47, 48, 49, 50 Not Applicable
51 Principal Policy Provisions,
Appendix--Other Policy
Provisions
52 The Account and The Series Fund,
Changes in Applicable Law--Funding and
Otherwise
53,54,55 Not Applicable
56,57,58 Not Applicable
59 Financial Statements
</TABLE>
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE]
Variable Life
Insurance Company
(JHVLICO)
ANNUAL PREMIUM VARIABLE LIFE INSURANCE POLICIES
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
JOHN HANCOCK PLACE
BOSTON, MASSACHUSETTS 02117
JOHN HANCOCK SERVICING OFFICE:
P.O. BOX 111
BOSTON, MASSACHUSETTS 02117
TELEPHONE 1-800-REAL LIFE (1-800-732-5543)
FAX 617-572-5410
PROSPECTUS MAY 1, 1997
The annual premium variable life Policies described in this prospectus can
be funded, at the discretion of the Owner, by one or more of seven subaccounts
of John Hancock Variable Life Account U ("Account"). The assets of each
subaccount will be invested in a corresponding Portfolio of John Hancock
Variable Series Trust I ("Fund"), a mutual fund advised by John Hancock Mutual
Life Insurance Company ("John Hancock").
The prospectus for the Fund, which is attached to this Prospectus, describes
the investment objectives, policies and risks of investing in a number of
Portfolios of the Fund. Of these Portfolios, only the Growth & Income
Portfolio, Sovereign Bond Portfolio, Money Market Portfolio, Large Cap Growth
Portfolio, Managed Portfolio, Real Estate Equity Portfolio and International
Equities Portfolio and their corresponding subaccounts are available to Owners
of the Policies described in this Prospectus.
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 THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SUMMARY OF POLICIES....................................................... 1
JHVLICO AND JOHN HANCOCK.................................................. 5
THE ACCOUNT AND THE SERIES FUND........................................... 5
The Account............................................................. 5
The Series Fund......................................................... 6
PRINCIPAL POLICY PROVISIONS............................................... 7
Death Benefit........................................................... 8
Account Net Investment Rate (ANIR)...................................... 9
Annual Dividends........................................................ 10
Surrender Value......................................................... 10
Loan Provision and Indebtedness......................................... 11
Premiums................................................................ 12
Investment Option....................................................... 13
Transfer Option......................................................... 13
Default and Options on Lapse............................................ 13
Exchange of Policy During First 24 Months............................... 14
CHARGES AND EXPENSES...................................................... 15
Charges Deducted from Premiums.......................................... 15
Expenses Charged to Account............................................. 16
Guarantee of Premiums and Certain Charges............................... 16
DISTRIBUTION OF POLICIES.................................................. 17
TAX CONSIDERATIONS........................................................ 18
Policy Proceeds......................................................... 18
Charge for JHVLICO's Taxes.............................................. 18
Corporate and H.R. 10 Plans............................................. 18
MANAGEMENT................................................................ 19
THE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO.................. 19
VOTING PRIVILEGES......................................................... 19
CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE.......................... 20
REPORTS................................................................... 20
STATE REGULATION.......................................................... 21
LEGAL MATTERS............................................................. 21
REGISTRATION STATEMENT.................................................... 21
EXPERTS................................................................... 21
FINANCIAL STATEMENTS...................................................... 21
APPENDIX--OTHER POLICY PROVISIONS......................................... 52
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, CASH VALUES AND ACCUMULATED
PREMIUMS................................................................. 54
</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>
- --------------------------------------------------------------------------------
THE PURPOSE OF THE POLICIES IS TO PROVIDE INSURANCE PROTECTION FOR THE
BENEFICIARY NAMED IN THE POLICY.
NO CLAIM IS MADE THAT THE POLICIES ARE IN ANY WAY SIMILAR OR COMPARABLE
TO A SYSTEMATIC INVESTMENT PLAN OF A MUTUAL FUND.
- --------------------------------------------------------------------------------
SUMMARY OF POLICIES
WHAT ARE THE VARIABLE LIFE INSURANCE POLICIES BEING OFFERED?
JHVLICO issues variable life insurance policies. The Policies described in
this prospectus are fixed annual premium policies. JHVLICO also issues
scheduled annual premium policies that provide for additional premium
flexibilities. These other policies are offered by means of another
prospectus, but use the same underlying Fund.
As explained below, the death benefit under the Policies increases or
decreases monthly; the cash value increases or decreases daily. The Policies,
therefore, differ from ordinary fixed-benefit life insurance in the way they
work. However, the Policies are the same as ordinary fixed-benefit life
insurance in providing lifetime protection against economic loss resulting
from the death of the person insured. So, the Policies are primarily insurance
and not investments.
The Policies work generally as follows: A fixed premium is made to JHVLICO
each year. JHVLICO takes from the premium an amount for expenses. JHVLICO then
places the rest of the premium into one or more of the seven subaccounts of
the Account that are currently available under the Policies. The owner of the
Policy (the "Owner") decides how much goes into each subaccount. The assets in
each subaccount, other than assets attributable to policy loans, are invested
in shares of the corresponding Portfolio of the Fund. The seven Portfolios
currently available are Growth & Income Portfolio, Sovereign Bond Portfolio,
Money Market Portfolio, Large Cap Growth Portfolio, Managed Portfolio, Real
Estate Equity Portfolio and International Equities Portfolio. During the year
JHVLICO takes certain charges from each subaccount and credits or charges each
subaccount with its respective investment performance. Costs of insurance,
which are deducted from each Policy's cash value, vary monthly with the
attained age of the insured and with the Variable Sum Insured.
The death benefit increases or decreases monthly depending on the investment
experience of the subaccounts to which premiums are allocated. In general, if
the net investment experience is more favorable than 4 1/2% per year, the
death benefit will increase, and, if less than 4 1/2% per year, the death
benefit will decrease. However, JHVLICO guarantees that, regardless of the
investment experience, the death benefit will never be less than the amount
originally purchased. (This is called the Guaranteed Minimum Death Benefit.)
The Owner, therefore, bears the investment risk for the amount above the
Guaranteed Minimum Death Benefit, and JHVLICO bears the investment risk for
the Guaranteed Minimum Death Benefit.
The Owner may surrender a Policy for its cash value (the "Policy Cash
Value") at any time while the insured is living. The Policy Cash Value is
initially the amount of the premium that JHVLICO places in the Account, as
explained above. The Policy Cash Value increases or decreases daily depending
on the investment experience. However, JHVLICO does not guarantee a minimum
amount of Policy Cash Value. Therefore, the Owner bears the investment risk
for the Policy Cash Value. If the Owner surrenders in the early policy years,
the amount of Policy Cash Value would be low (as compared with the premiums
accumulated with interest), and, consequently, the insurance protection
provided prior to surrender would be costly.
1
<PAGE>
This Prospectus describes three types of Policies being offered by JHVLICO:
a Variable Whole Life Policy, a Variable Whole Life P 50 Policy and a Variable
Whole Life 100 Policy. The minimum death benefit that may be bought is $25,000
for the Whole Life Policy, $50,000 for the Whole Life P 50 Policy and $100,000
for the Whole Life 100 Policy. For the Whole Life Policy and the Whole Life P
50 Policy, all persons insured must meet certain health and other criteria
called "underwriting standards." All persons insured under the Whole Life 100
Policy must meet "preferred risk" and non-smoking underwriting standards. All
Policies may be issued on insureds between ages of 0 and 75. Discounts are
available to insureds meeting non-smoking underwriting criteria.
WHAT IS THE AMOUNT OF THE PREMIUMS?
Premiums are fixed and level and do not vary with the Account's investment
experience. The amount of the premium depends on the type of Policy, the
Policy's Initial Sum Insured, the insured's age, sex and smoking habits, and
the frequency of premium payments. Premiums are payable annually or more
frequently over the insured's lifetime. Additional premiums are charged for
Policies in cases involving extra mortality risks and for additional insurance
benefits. There is a 31-day grace period in which to make premium payments due
after the first. (See "Premiums".)
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 certain of its
variable life insurance policies. There are currently eighteen subaccounts
within the Account, but only seven of those subaccounts are currently
available to the Policies described in this Prospectus. Each is invested in a
corresponding Portfolio of John Hancock Variable Series Trust I, a "series"
type of mutual fund. The seven Portfolios of the Fund which are currently
available are Growth & Income Portfolio, Sovereign Bond Portfolio, Money
Market Portfolio, Large Cap Growth Portfolio, Managed Portfolio, Real Estate
Equity Portfolio and International Equities Portfolio.
The Fund pays John Hancock a fee for providing investment management
services to each of its Portfolios. The Fund also pays for certain non-
advisory Fund expenses. The figures in the following chart are expressed as a
percentage of each Portfolio's average daily net assets. The figures reflect
the investment management fees currently payable and the 1996 non-advisory
expenses that would have been allocated to the Fund under the allocation rules
currently in effect.
<TABLE>
<CAPTION>
Other Total Fund Other Fund
Investment Fund Operating Expenses Absent
Portfolio Management Fee Expenses Expenses Reimbursement*
--------- -------------- -------- ---------- ---------------
<S> <C> <C> <C> <C>
Managed...................... 0.34% 0.03% 0.37% N/A
Growth & Income.............. 0.25% 0.03% 0.28% N/A
Large Cap Growth............. 0.40% 0.05% 0.45% N/A
Real Estate Equity........... 0.60% 0.11% 0.71% N/A
International Equities....... 0.60% 0.18% 0.78% N/A
Sovereign Bond............... 0.25% 0.06% 0.31% N/A
Money Market................. 0.25% 0.07% 0.32% N/A
</TABLE>
- --------
* John Hancock reimburses a Portfolio when the Portfolio's Other Expenses
exceed 0.25% of the Portfolio's average daily net assets.
For a full description of the Fund, see the prospectus for the Fund attached
to this Prospectus.
2
<PAGE>
WHAT CHARGES ARE DEDUCTED FROM THE PREMIUM IN DETERMINING THE AMOUNT ALLOCATED
TO THE SUBACCOUNTS?
A modal net premium is allocated by JHVLICO from its general account to one
or more of the subaccounts on the premium due date. The modal net premium for
each Policy year is the actuarial equivalent, for the premium payment interval
in effect, of the basic annual premium for a standard or preferred mortality
risk payable for such year, less the charges deducted for sales loads, state
premium taxes, annual administrative expenses, contributions for dividends and
risk charge ("modal net premium"). An additional deduction for administrative
expenses in connection with the issuance of a Policy is made in the first
Policy year. Additional premiums are charged for Policies where the insured is
classified as a substandard mortality risk and a portion of these premiums may
be allocated to the subaccounts from time to time to support the reserves for
extra mortality risks. The additional premiums for extra mortality risks are
determined such that the Policy Cash Value for a substandard risk policy is
the same as for a comparable standard risk policy.
The charges deducted from premiums are for administrative expenses ($50 in
each Policy year plus a one-time charge the first Policy year of as much as
$13 per $1,000 of initial guaranteed minimum death benefit), sales expenses
(which during the first two Policy years shall not exceed 30% of the basic
annual premium paid during the first Policy year plus 10% of the basic annual
premium paid for the second Policy year and which, including sales expenses in
the third and later Policy years, average up to 9% over 20 years), state
premium taxes (2 1/2% of the basic annual premium), the risk that the death
benefit payable will be the guaranteed minimum death benefit rather than a
lesser amount (approximately 3% of the basic annual premium) and for dividends
(approximately 5-9% of the basic annual premium). See "Charges Deducted from
Premiums".
WHAT ARE THE OTHER CHARGES?
Charges are made against each subaccount for the mortality and expense risks
assumed by JHVLICO (at an effective annual rate of .50% of the assets of the
subaccount). The Policy Cash Value is charged monthly for the cost of
insurance for the insured (at varying levels). See "Expenses Charged to
Account".
HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?
At issue and subsequently thereafter the Owner will have the option of
deciding what percentage or amount of the reserves held for the Policy will be
invested in the seven subaccounts. (See "Investment Option" and "Transfer
Option".)
ARE DIVIDENDS PAID ON THE POLICIES?
Beginning two or three years after issue, depending on the form of Policy
purchased, JHVLICO expects to pay dividends on each policy anniversary. (See
"Annual Dividends".)
WHAT COMMISSIONS ARE PAID TO AGENTS?
The Policies are sold through agents who are licensed by state authorities
to sell JHVLICO's insurance policies. Agent's commissions for the first Policy
year do not exceed a maximum of 55% of the premiums paid. Commissions payable
for later years are described under "Distribution of Policies". Sales expenses
in any year are not equal to the deduction for sales load 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.
3
<PAGE>
HOW DOES THE DEATH BENEFIT VARY IN RELATION TO THE SUBACCOUNTS' INVESTMENT
EXPERIENCE?
The Death Benefit during the first policy month is equal to the Initial Sum
Insured shown on the Policy at issue and thereafter will vary monthly
depending on the subaccounts' rates of return after charges against the
subaccounts' (the "Account Net Investment Rate"). In general, if the Account
Net Investment Rate on an annual basis is greater than 4 1/2% the Death
Benefit will increase and if less than 4 1/2% the Death Benefit will decrease
(but never less than the Guaranteed Minimum Death Benefit.) (See "Death
Benefit".)
HOW DOES THE POLICY CASH VALUE VARY IN RELATION TO THE SUBACCOUNTS' INVESTMENT
EXPERIENCE?
In general, the Policy Cash Value for any day equals the Policy Cash Value
for the previous day, increased by any modal net premium placed in the
subaccounts for the Policy and decreased by any charge for the cost of
insurance for the insured, accumulated at the subaccounts' rates of return
after charges against the subaccounts. The Policy Cash Value for substandard
risk policies is the same as for comparable standard risk policies. (See
"Surrender Value".)
WHAT IS THE LOAN PROVISION AND HOW DOES A LOAN AFFECT THE DEATH BENEFIT AND
POLICY CASH VALUE?
The Owner may obtain a Policy loan of up to 90% of the Policy Cash Value.
Interest charged on any loan will accrue and compound daily either at an
annual rate determined by JHVLICO at the start of each Policy Year (Variable
Loan Interest Rate) or, at the election of the Owner or in jurisdictions where
a Variable Loan Interest Rate is not available, at an effective annual rate of
8%. A loan plus accrued interest 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 portion of the Policy Cash Value equal to
the loan plus accrued interest is credited with the Policy Loan Rate (the
Fixed or Variable Loan Interest Rate less an amount not exceeding 2%, assuming
no taxes) rather than the subaccounts' net investment experience during such
period. Therefore, the Death Benefit above the Guaranteed Minimum Death
Benefit and the Policy Cash Value are permanently affected by any loan,
whether or not it is repaid in whole or in part. Also, the amount of any
outstanding loan plus accrued interest is subtracted from the Death Benefit or
Policy Cash Value otherwise payable. (See "Loan Provision and Indebtedness".)
IS THERE A SHORT-TERM CANCELLATION RIGHT?
The Owner may surrender this Policy by delivering or mailing it within 45
days after the date of Part A of the application, or within 10 days after
receipt of the Policy by the Owner, or within 10 days after mailing by JHVLICO
of the Notice of Withdrawal Right, whichever is latest, to JHVLICO at Boston,
Massachusetts, or to the agent or agency office through which it was
delivered. Immediately on such delivery or mailing, the Policy shall be deemed
void from the beginning. Any premium paid on it will be refunded.
CAN A POLICY BE EXCHANGED FOR A FIXED BENEFIT LIFE INSURANCE POLICY?
Within twenty four months after a Policy's issue date, the Policy may be
exchanged without evidence of insurability for a fixed benefit policy on the
life of the Insured having the same face amount as the Initial Sum Insured of
the Policy. (See "Exchange of Policy During First 24 Months".)
4
<PAGE>
ARE THE BENEFITS UNDER A POLICY SUBJECT TO FEDERAL INCOME TAX?
There has been a determination by the Internal Revenue Service that death
benefits payable under variable life insurance policies (which appear to be
similar to those described in this Prospectus in all material respects) are
excludable from the beneficiary's gross income for Federal tax purposes. It is
also believed that an Owner will not be deemed to be in constructive receipt
of the cash values of his or her Policy until its actual surrender. 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. (See "Tax
Considerations".)
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".)
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 other states. 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 approximately $59 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 FUND
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 daily charges made by JHVLICO and, possibly, funds previously
contributed 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. Additional premiums are charged for Policies where the
insured is classified as a substandard risk and a portion of these premiums
may be allocated to one or more of the subaccounts from time to time to
support the reserves for extra mortality risks.
5
<PAGE>
The Account is registered with the Securities and Exchange Commission (the
"Commission") under the 1940 Act. Such registration does not involve the
supervision by the Commission of the management or policies of the Account,
JHVLICO or John Hancock.
There currently are eighteen subaccounts in the Account, but only seven of
those subaccounts are available to the Policies described in this Prospectus.
The assets in each, apart from assets attributable to policy loans, are
invested in a separate class of shares issued by the Fund, but the assets of
one subaccount are not necessarily legally insulated from liabilities
associated with another subaccount. New subaccounts may be added as new
portfolios are added to the Fund and made available to Owners.
THE SERIES FUND
The Fund is a "series" type of mutual fund registered with the Commission as
an open-end diversified management investment company. Pursuant to an
Agreement and Plan of Reorganization and with the approval of the Owners, the
predecessor to the Fund, a Maryland corporation, was dissolved on April 29,
1988 and all of its assets, liabilities and operations were assumed and
carried on by John Hancock Variable Series Trust I, a Massachusetts business
trust organized for that purpose. The Fund serves as the investment medium for
the Account and for other unit investment trust separate accounts established
for other variable life insurance policies and for variable annuity contracts.
(See the attached Fund prospectus for the description of a need to monitor for
possible conflicts and other consequences.) A very brief summary of the
investment objectives of the Portfolios available to the Account is set forth
below.
Growth & Income 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
securities convertible into or with rights to purchase common stocks) of
companies believed to offer growth potential over both the intermediate and
the long term.
Sovereign 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 primarily 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.
Large Cap Growth Portfolio
The investment objective of this Portfolio is to achieve above-average
capital appreciation through the ownership of common stocks (and securities
convertible into or with rights to purchase common stocks) of companies
believed to offer above-average capital appreciation opportunities. Current
income is not an objective of the Portfolio.
6
<PAGE>
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 equity investments, in bonds and
other fixed income securities and in money market instruments.
Real Estate Equity Portfolio
The investment objective of this Portfolio is to provide above-average
income and long-term growth of capital by investment principally in equity
securities of companies in the real estate and related industries.
International Equities Portfolio
The investment objective of this Portfolio is to achieve long-term growth of
capital by investing primarily in foreign equity securities.
John Hancock acts as the investment manager for the Fund. Its indirectly
owned subsidiary, Independence Investment Associates, Inc., with its principal
place of business at 53 State Street, Boston, MA 02109 provides sub-investment
advice with respect to the Growth & Income, Large Cap Growth and Managed
Portfolios. Independence Investment Associates, Inc., also provides sub-
investment advice with respect to the Real Estate Equity Portfolio. Another
indirectly owned subsidiary, John Hancock Advisers, Inc., located at 101
Huntington Avenue, Boston, MA 02199 and its subsidiary, John Hancock Advisers
International, Limited, located at 34 Dover Street, London, England, provide
sub-investment advice with respect to International Equities Portfolio and
John Hancock Advisers, Inc. does likewise with respect to Sovereign Bond
Portfolio.
John Hancock 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 the 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. Any such distribution will result in a reduction
in the value of the Fund shares of the Portfolio from which the distribution
was made. The total net asset value of the Account will not change because of
such distribution, however.
On each Valuation Date, shares of each Portfolio are purchased or redeemed
by John Hancock for each subaccount based on, among other things, the amount
of modal net premiums allocated to the subaccount, dividends and distributions
reinvested, and transfers to, from and among subaccounts, all to be effected
as of that date. Such purchases and redemptions are effected at the net asset
value per Fund share for each Portfolio determined on that same Valuation
Date.
A full description of the Fund, its investment objectives, policies and
restrictions, its charges, expenses and all other aspects of its operation is
contained in the attached prospectus and the statement of additional
information referred to therein, which should be read together with this
Prospectus.
PRINCIPAL POLICY PROVISIONS
The discussions which follow under "Death Benefit", "Surrender Value" and
"Loan Provision and Indebtedness" assume that premiums have been duly paid
and, in the case of Death Benefit and Surrender Value that there has been no
Policy loan. Benefits and values are affected if premiums are not paid or if a
Policy loan is made. For the effect of a default in payment of premiums, see
"Default and Options on Lapse", and of a
7
<PAGE>
loan, see "Loan Provision and Indebtedness". Determinations, applications, and
payments may be deferred, see "Deferral of Determinations and Payments".
DEATH BENEFIT
The Death Benefit will be an amount equal to the greater of the Initial Sum
Insured and the Variable Sum Insured on the date of death of the insured. The
Variable Sum Insured is an amount equal to the Initial Sum Insured at issue
and thereafter is the amount of life insurance determined according to the
Valuation Provisions of the Policy.
Guaranteed Minimum Death Benefit. The Guaranteed Minimum Death Benefit is
equal to the Initial Sum Insured on the date of issue of the Policy. JHVLICO
guarantees that, regardless of what the Account earns, the Death Benefit will
never be less than the Guaranteed Minimum Death Benefit.
Changes in Death Benefit. After the first policy month, the Death Benefit is
determined once each policy month on the Monthly Date. (The Monthly Date is
the first day of a policy month which day immediately follows a date which is
a Valuation Date.) The Death Benefit remains level during the policy month
following the determination. The Owner bears the investment risk that the
Death Benefit could decrease on any Monthly Date (but not below the Guaranteed
Minimum Death Benefit) and forgoes any increase in Death Benefit from
favorable investment results until the next Monthly Date.
Changes in the Death Benefit for each policy month are computed by a
formula, filed with the insurance supervisory officials of the jurisdiction in
which the Policy has been delivered or issued for delivery. Under the formula
the difference between the applicable Account Net Investment Rate (ANIR) for
each Valuation Period and the Policy's assumed annual rate of 4 1/2% is
translated, on an actuarial basis, into a change in the Death Benefit.
If the Death Benefit were equal to the Guaranteed Minimum Death Benefit for
a policy month, it would increase above the Guaranteed Minimum Death Benefit
on the next Monthly Date only if the applicable ANIR for the last policy month
were sufficiently greater than a monthly rate equivalent to an annual rate of
4 1/2% to result in such an increase. If the ANIR was equivalent to an annual
rate of less than 4 1/2% and the Death Benefit was greater than the Guaranteed
Minimum Death Benefit, the Death Benefit would be reduced (but not below the
Guaranteed Minimum Death Benefit). The percentage change in the Death Benefit
is not the same as the Account Net Investment Rate.
The changes in Death Benefit may be more readily understood by reference to
the following examples.
Using the Variable Whole Life P50 Policy (Age 25 Years Male--Smoker)
illustrated in this Prospectus and the 6% hypothetical gross annual investment
return assumption (equivalent to an ANIR of 4.85%), the Death Benefit shown at
the end of Policy year 5 would increase to the amount shown at the end of
Policy year 6, as follows:
<TABLE>
<S> <C>
Death Benefit at end of Policy year 5............... $62,736
Increase in Death Benefit........................... $ 322(.51% increase)
Death Benefit at end of Policy year 6............... $63,058
</TABLE>
8
<PAGE>
If, instead, the 0% hypothetical gross annual investment return assumption
(equivalent to an ANIR of-1.09%) were used, the Death Benefit shown at the end
of Policy year 5 would decrease to an amount at the end of Policy year 6 as
follows:
<TABLE>
<S> <C>
Death Benefit at end of Policy year 5.............. $62,736
Decrease in Death Benefit.......................... $ 298 (.48% decrease)
Death Benefit at end of Policy year 6.............. $62,438
</TABLE>
In the case of a Death Benefit which was equal to the Guaranteed Minimum
Death Benefit because the Variable Sum Insured was less than the Guaranteed
Minimum Death Benefit, such Death Benefit would increase on a Monthly Date
only if the ANIR for the last policy month was sufficiently greater than an
equivalent annual rate of 41/2% to result in an increase sufficiently large to
bring the Variable Sum Insured above the Guaranteed Minimum Death Benefit.
ACCOUNT NET INVESTMENT RATE (ANIR)
The ANIR for each subaccount in which the Policy reserve is invested is
determined separately for each Policy. The ANIR for a Valuation Period is
determined as of the end of the Valuation Period as a weighted average of the
Policy Loan Rate and the Account Equity Rate and reflects the Policy's
indebtedness allocated to the subaccounts. In the absence of any indebtedness,
the ANIR equals the Account Equity Rate. The ANIR may be positive or negative.
Valuation Date
A Valuation Date is any date on which the New York Stock Exchange is open
for trading and on which the Fund values its shares.
Valuation Period
A Valuation Period is that period of time from the beginning of the day
following a Valuation Date to the end of the next following Valuation Date.
Values during Valuation Periods
The values of the Fund shares in the Account will be determined as of the
end of each Valuation Period and shall be the same for each day of the
Valuation Period.
Account Equity Rate
For each subaccount the Account Equity Rate for a Valuation Period is
determined as of the end of the Valuation Period and reflects the subaccount's
accrued investment income (excluding accrued policy loan interest) and capital
gains and losses, realized or unrealized, of the subaccount for the Valuation
Period, and any applicable income taxes paid or change in any provision for
taxes maintained in the subaccount during the Valuation Period, and a
Valuation Period charge at an effective rate of .50% annually of the value of
the subaccount at the beginning of the Valuation Period.
Policy Loan Rate
For each Policy the Policy Loan Rate for a Valuation Period is determined as
of the end of the Valuation Period and reflects the Policy's accrued Policy
loan interest for the Valuation Period, any applicable income taxes
9
<PAGE>
paid, or change in any provision for taxes maintained by the Account during
the Valuation Period, and a Valuation Period charge at an effective rate of
not more than 2% annually of the total indebtedness of the Policy at the
beginning of the Valuation Period.
ANNUAL DIVIDENDS
These Policies are participating policies which, except while in force as
Fixed Extended Term Insurance, are entitled to the share, if any, of the
divisible surplus which JHVLICO shall annually determine and apportion to
them. Any share will be distributed as a dividend payable annually on the
Policy anniversary beginning not later than the end of the second Policy year
for the Variable Whole Life 100 Policy and not later than the end of the third
Policy year for the Variable Whole Life Policy and Variable Whole Life P50
Policy.
Dividends under participating policies may be described as refunds of
premiums which adjust the cost of a policy to the actual level of cost
emerging over time after the Policy's issue. Thus, participating policies
generally have gross premiums which are higher than those for comparable non-
participating policies. If a Policy is surrendered before dividends become
payable, the Owner does not benefit from having a participating policy.
Both Federal and state law recognize that dividends are considered to be a
refund of a portion of the premium paid and therefore are not treated as
income for Federal or state income tax purposes.
Dividend illustrations published at the time of issue of a Policy reflect
the actual recent experience of the issuing insurance company with respect to
factors such as interest, mortality, and expenses. State law generally
prohibits a company from projecting or estimating future results. State law
also requires that dividends must be based on surplus, after setting aside
certain necessary amounts, and that such surplus must be apportioned equitably
among participating policies. In other words, in principle and by statute,
dividends must be based on actual experience and cannot be guaranteed at issue
of a Policy.
Each year JHVLICO's actuary analyzes the current and recent past experience
and compares it to the assumptions used in determining the premium rates at
the time of issue. Some of the more important data studied includes mortality
and withdrawal rates, investment yield in the general account, and actual
expenses incurred in administering the Policies. Such data is then allocated
to each dividend class, e.g., by year of issue, age, smoking habits and plan.
The actuary then determines what dividends can be equitably apportioned to
each Policy class and makes a recommendation to JHVLICO's Board of Directors.
The Board of Directors, which has the ultimate authority to ascertain
dividends, will vote the amount of surplus to be apportioned to each policy
class, thereby authorizing the distribution of each year's dividend.
Dividend Options. The Owner may in general elect to have any dividend paid
or applied under any one of the following options: paid in cash; applied to
premium payments; left to accumulate with interest of at least 3 1/2% a year;
purchase fixed paid-up insurance; purchase one year term insurance; or
purchase variable paid-up insurance.
SURRENDER VALUE
Amount of Policy Cash Value. The Policy Cash Value increases or decreases
depending on the applicable subaccount's investment experience and the
proportion of the Policy's reserve invested in each subaccount. The Policy
Cash Value for any day equals the Policy Cash Value for the previous day,
increased by any modal net premium placed in the subaccounts and decreased by
any charge for the cost of insurance for the insured, accumulated at the
subaccounts' rates of return after charges against the subaccounts. A modal
net premium is
10
<PAGE>
placed into the subaccounts on the Monthly Date if a premium is due in that
Policy Month. The cost of insurance for the insured is deducted from the
Account on every Monthly Date. No minimum amount of Policy Cash Value is
guaranteed.
Even though the premium is higher for a substandard mortality risk policy
than for a comparable standard risk policy and the premium is lower if a non-
smoker discount has been made available to an insured than in the case of a
comparable standard risk policy, the premium is determined such that the
Policy Cash Value in either instance is the same as the Policy Cash Value for
a standard risk policy of the same age and sex, for the same Initial Sum
Insured and having the same date of issue.
When Policy may be Surrendered. A Policy may be surrendered for its
surrender value at any time while the insured is living. Surrender takes
effect and the surrender value is determined as of the end of the Valuation
Period in which occurs the later of receipt of JHVLICO's Servicing Office of a
signed request and the surrendered policy. The surrender value will be the
Policy Cash Value plus any dividends and interest unpaid or unapplied, and the
cash value of any insurance purchased under any dividend option with an
adjustment to reflect the difference between the gross premium and the net
premium for the period beyond the date of surrender, less any indebtedness.
When Part of Policy may be Surrendered. A Policy may be partially
surrendered in accordance with JHVLICO's rules. The Policy after the partial
surrender must have an Initial Sum Insured at least as great as the minimum
issue size for that type of Policy. The premium and the Guaranteed Minimum
Death Benefit for the Policy will be based on the new Initial Sum Insured.
LOAN PROVISION 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 on completion of a
form satisfactory to JHVLICO assigning the Policy as the only security for the
loan. The Loan Value will be 90% of the total of the Policy Cash Value
(assuming no dividends) and any cash value under the variable paid-up
insurance dividend option, plus any cash value under the fixed paid up
insurance dividend option. Interest accrues and is compounded daily at an
effective annual rate equal to the then applicable Variable Loan Interest
Rate. If the Owner elects the Fixed Loan Interest Rate or the Variable Loan
Interest Rate is unavailable in the Owner's state, interest accrues and is
compounded daily at an effective annual rate of 8%.
The amount of any outstanding loan plus accrued interest is called the
"indebtedness". Except when used to pay premiums, a loan will not be permitted
unless it is at least $100. The Owner may repay all or a portion of any
indebtedness while the insured is living and premiums are being duly paid. Any
loan is charged against the subaccounts in proportion to the Policy Cash Value
allocated to the subaccounts and, upon repayment, the repayment is allocated
to the subaccounts in proportion to the outstanding indebtedness in each
subaccount at such time.
Loan Interest Rates. The Variable Loan Interest Rate is determined annually
for a Policy by JHVLICO. The Fixed Loan Interest Rate is 8% for the life of
the Policy. The Owner, at the time of issue, can elect which loan interest
rate will apply to any Policy Loan. If permitted by the law of the state in
which the Policy is issued, the Owner may change a prior choice of Loan
Interest Rate. If at the time of such request there is outstanding
indebtedness, the change will generally become effective on the next Policy
anniversary.
The Variable Loan Interest Rate determined annually for a Policy will apply
to all indebtedness outstanding during the policy year following the date of
determination. The rate will not exceed the higher of 51/2% or the
11
<PAGE>
Published Monthly Average (as defined below) for the calendar month which is
two months prior to the month in which the date of determination occurs. The
Published Monthly Average means Moody's Corporate Bond Yield Average as
published by Moody's Investors Service, Inc. or any successor thereto.
Effect of Loan and Indebtedness. A loan does not affect the amount of the
premiums due. While the indebtedness is outstanding, that portion of the
indebtedness attributable to the Account is credited with the Policy Loan Rate
rather than the Account Equity Rate. The Policy Loan Rate is either the Fixed
or Variable Loan Interest Rate less an amount not exceeding 2%, assuming no
taxes. Therefore, the Death Benefit above the Guaranteed Minimum Death
Benefit, the Policy Cash Value and any insurance and cash value under the
variable paid up dividend option are permanently affected by any indebtedness,
whether or not it is repaid in whole or in part. The amount of any outstanding
indebtedness is subtracted from the amount otherwise payable when the Policy
proceeds become payable.
Whenever the then outstanding indebtedness equals or exceeds the Policy Cash
Value, plus any cash values under a dividend option providing paid-up
insurance, 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.
PREMIUMS
Payment Period and Frequency. Premiums are payable annually or more
frequently over the insured's lifetime in accordance with JHVLICO's published
rules and rates. Premiums are payable at JHVLICO's Servicing Office on or
before the due date specified in the Policy. A refund or charge will be made
to effect premium payment to the end of the policy month in which the insured
dies.
Level Premiums. The level premiums act as an averaging device to cover
expenses which are highest in the early Policy years and the cost of insurance
which increases with age. In the early Policy years premiums are higher than
needed to pay death claims, while in the later years premiums are less than
required to pay the death claims. Also, assets are allocated to JHVLICO's
general account to accumulate as a reserve to cover the contingency that the
insured will die at a time when the Guaranteed Minimum Death Benefit exceeds
the death benefit which would have been payable in the absence of such
guarantee.
Illustration of Premium Rates. The tables below show premium rates on an
annual and special monthly basis for each Policy of various Initial Sums
Insured for various issue ages. Payments may also be made on a semiannual and
quarterly basis. When payments are made on other than an annual basis, the
aggregate premium amounts for a Policy year are higher, reflecting higher
surrender experience and additional billing and collection expenses.
12
<PAGE>
PREMIUMS FOR $1,000 OF INITIAL SUM INSURED
<TABLE>
<CAPTION>
% Excess of Total
Special Monthly
Premiums for Policy
Special Year Over
Annual Basis Monthly Basis Annual Premiums
------------- -------------- ----------------------
Initial
Issue Sum
Age Insured Male Female Male Female Male Female
- ----- -------- ------ ------ ------ ------- --------- ----------
VARIABLE WHOLE LIFE (STANDARD MORTALITY RATE)
<S> <C> <C> <C> <C> <C> <C> <C>
25.......... $ 25,000 $13.02 $12.22 $1.15 $1.08 6.0% 6.1%
40,000 12.27 11.47 1.08 1.01 5.6 5.7
VARIABLE WHOLE LIFE P50 (STANDARD MORTALITY RATE)
25.......... 50,000 11.54 10.77 1.01 .94 5.0 4.7
100,000 11.04 10.27 .96 .89 4.3 4.0
40.......... 50,000 20.95 19.12 1.82 1.66 4.2 4.2
100,000 20.45 18.62 1.77 1.61 3.9 3.8
VARIABLE WHOLE LIFE 100 (PREFERRED MORTALITY RATE)
25.......... 100,000 9.38 9.23 .81 .80 3.6 4.0
40.......... 100,000 17.61 17.13 1.52 1.48 3.6 3.7
</TABLE>
Policies issued in certain jurisdictions or in connection with certain
employee plans will not directly reflect the sex of the insured in the premium
rates.
INVESTMENT OPTION
The Owner has the option to allocate applicable premiums (other than
premiums for any additional insurance benefits) and dividends under the
variable paid-up insurance dividend option to any of the seven subaccounts.
The Owner must select allocation percentages in whole numbers. The minimum
allocation to a subaccount may not be less than 10% and the total allocated
must equal 100%.
The initial election must be made by the Owner at the time of completion of
the application for the Policy. The Owner may thereafter change the election
at any time. The change will be effective as to any applicable premiums and
dividends applied after receipt at JHVLICO's Servicing Office of notice
satisfactory to JHVLICO.
TRANSFER OPTION
The Owner may reallocate the amounts held for the Policy in the subaccounts
six times in each Policy year with no charge. The Owner may use either
percentages (in whole numbers) or designate the amount of money to be
transferred between subaccounts. The reallocation must be such that the total
after reallocation equals 100%. The change will be effective at the end of the
Valuation Period in which JHVLICO receives at its Servicing Office notice
satisfactory to JHVLICO.
DEFAULT AND OPTIONS ON LAPSE
A premium unpaid as of its due date is in default, but the Policy provides
for a 31-day grace period for the payment of each premium after the first. The
insurance continues in full force during the grace period but, if the insured
dies during the grace period, the portion of the premium due which is
applicable to the period from the premium due date to the end of the policy
month in which the insured dies is deducted from the amount otherwise payable.
13
<PAGE>
Prior to the end of the Valuation Period immediately preceding the 70th day
after the date of default, any Policy values available determined in
accordance with the Policy may be applied as of the date of default under one
of the following options for continued insurance not requiring further payment
of premiums. These options provide for Variable or Fixed Paid-Up Insurance or
Fixed Extended Term Insurance on the life of the insured commencing on the
date of default.
Both the Variable and Fixed Paid-Up Insurance options provide an amount of
paid-up whole life insurance which the available Policy values will purchase.
The amount of Variable Paid-Up Insurance may then increase or decrease in
accordance with the investment experience of the Account. The Fixed Paid-Up
Insurance option provides a fixed and level amount of insurance. The Fixed
Extended Term Insurance option provides a fixed amount of insurance determined
in accordance with the Policy, with the insurance coverage continuing for as
long a period as the available Policy values will purchase.
For example, using the Variable Whole Life P50 Policy (Age 25 years
Male-Smoker) illustrated in this Prospectus and the 6% hypothetical gross
annual investment return assumption, if an option was elected and became
effective at the end of Policy year 5, the insurance coverage provided by
the options on lapse would be as follows:
<TABLE>
<CAPTION>
Variable or Fixed
Paid-Up Whole Life Fixed Extended Term Insurance
----------------- -----------------------------
Death Benefit Death Benefit Term in Years and Days
------------- ------------- ----------------------
or
<S> <C> <C>
$10,427 $62,736 12 years 331 days
</TABLE>
- --------------------------------------------------------------------------------
If no option has been elected before the end of the Valuation Period
immediately preceding the 70th day after the date of default, the Fixed
Extended Term Insurance option automatically applies unless the amount of
Fixed Paid-Up Insurance would equal or exceed the amount of Fixed Extended
Term Insurance or unless the insured is a substandard risk, in either of which
cases Fixed Paid-Up Insurance is provided.
If the insured dies after the grace period but before the end of the
Valuation Period immediately preceding the 70th day after the date of default
and prior to any election, and if the Policy is then in force, JHVLICO will
pay a death benefit equal to the greater of the death benefits provided under
Fixed Extended Term Insurance (if available) or Fixed Paid-Up Insurance
determined in accordance with the Policy.
A Policy continued under any option may be surrendered for its cash value
while the insured is living. Loans may be available under the Variable and
Fixed Paid-Up Insurance options, but not under the Fixed Extended Term
Insurance option.
Reinstatement. The Policy may be reinstated in accordance with its terms
(including evidence of insurability satisfactory to JHVLICO and payment of the
required charges) within 3 years after the due date of the first unpaid
premium unless the surrender value has been paid or otherwise exhausted, or
the period of any extended term insurance has expired.
EXCHANGE OF POLICY DURING FIRST 24 MONTHS
At any time during the first twenty-four months after the issue date shown
in the Policy while premiums are being duly paid, the Owner may exchange the
Policy without evidence of insurability for the fixed benefit life
14
<PAGE>
insurance policy specified in the Policy on the insured's life. The new policy
will have the same issue date, issue age, and risk classification for the
insured as the Policy but will be issued by John Hancock. The Sum Insured will
be equal to the Initial Sum Insured. Premiums for the new policy will be based
on the premium rates which were in effect on the issue date of the Policy.
The exchange will be effective on receipt of written notice at JHVLICO's
Servicing Office satisfactory to JHVLICO, the surrender of the Policy, and
payment to JHVLICO of any cost to exchange.
The exchange shall be subject to an equitable adjustment in premiums, cash
values and dividends to reflect variances, if any, in the premiums, cash
values, and dividends under the Policy and the new policy. Any outstanding
indebtedness must be repaid on or before the effective date of the exchange.
The exchange is subject to the restrictions and limitations stated in the
Policy. The method of calculating the adjustment is filed by JHVLICO with the
appropriate state insurance regulatory authorities and as an exhibit to the
Registration Statement which has been filed with the Commission.
The foregoing description of Policy provisions is qualified by reference to
the specimen Policies which have been filed as exhibits to the Registration
Statement.
CHARGES AND EXPENSES
CHARGES DEDUCTED FROM PREMIUMS
The basic annual premium is the annual premium less the premiums for any
optional insurance benefits, additional charges for extra mortality risks and
a $50 annual administrative charge. Premiums paid more frequently than
annually (modal premiums) are higher.
Annual Administrative Charge. The $50 charge in each Policy year is for
annual administrative expenses, including premium billing and collection,
recordkeeping, processing Death Benefit claims, cash surrenders and Policy
changes, reporting and other communications to Owners and other similar
expense and overhead costs.
The amount allocated to the Account for a Policy equals the basic annual
premium less the charges and deduction listed below.
Charge for Sales Load. A charge not to exceed 9% of the basic annual premium
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 Table. The charge during the first two Policy
years shall not exceed 30% of the basic annual premium paid during the first
Policy year plus 10% of the basic annual premium paid for the second Policy
year. Charges of 10% or less are made for later Policy years. The amount of
the charge in any Policy year cannot be specifically related to sales expenses
for that year. To the extent that sales expenses are not recovered from the
charge for sales load, such expenses may be recovered from other sources,
including any gains attributable to operations with respect to the Policies or
JHVLICO's general assets.
Additional First Year Administrative Charge. A charge in the first Policy
year at the rate of $13 per $1,000 of Initial Sum Insured for a Variable Whole
Life Policy, $7 per $1,000 for a Variable Whole Life P50 Policy and $4 per
$1,000 for a Variable Whole Life 100 policy or a pro rata portion thereof, to
cover administrative expenses in connection with the issuance of the Policy.
Such expenses include medical examination, insurance underwriting costs, and
costs incurred in processing applications and establishing permanent Policy
records. JHVLICO does not expect to profit from this charge.
15
<PAGE>
State Premium Tax Charge. A charge equal to 2 1/2% of the basic annual
premium. Premium taxes vary from state to state. The 2 1/2% rate is the
average rate expected to be paid on premiums received in all states over the
lifetimes of the insureds covered by the Policies.
Risk Charge. A charge necessary to cover the risk assumed by JHVLICO that
the Variable Sum Insured will be less than the Guaranteed Minimum Death
Benefit. This charge will vary by age of the insured but averages
approximately 3% of the basic annual premium.
Deduction for Dividends. A deduction for dividends to be paid or credited in
accordance with the dividend scale in effect on the issue date of the Policy.
This deduction will vary by age of the insured and duration of the Policy but
is expected to average approximately 5-9% of the basic annual premium.
EXPENSES CHARGED TO ACCOUNT
Charge for Mortality and Expense Risks. A daily charge is made for mortality
and expense risks assumed by JHVLICO at an effective annual rate of .50% of
the value of the Account's assets attributable to the Policies. The mortality
risk assumed is that insureds may live for a shorter period of time than
estimated and, therefore, a greater amount of Death Benefits 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.
The charge for mortality and expense risks constitutes the Valuation Period
charge. See "Account Net Investment Rate (ANIR)".
Charge for Taxes. Currently no charge is made to the subaccounts for company
Federal income taxes but if JHVLICO incurs, or expects to incur, income taxes
attributable to the subaccounts 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 Cost of Insurance. A charge for the cost of insurance for the
insured is deducted each month in advance over the life of the Policy. This
charge is based on the attained age of the insured and the Variable Sum
Insured. The cost of insurance rates for these Policies will not exceed the
rates stated in the 1980 Commissioners Standard Ordinary Mortality Table. The
cost of insurance generally increases over time. The increase in the cost of
insurance deducted reflects the increase in the attained age of the insured.
Each charge reduces the Policy Cash Value. See "Surrender Value".
Fund Investment Management Fee. The Account purchases shares of the Fund at
net asset value, a value which reflects the deduction from the assets of the
Fund of its investment management fee and of certain non-advisory Fund
operating expenses which are described briefly in the Summary of this
Prospectus. For a full description of these deductions, see the attached
prospectus for the Fund.
GUARANTEE OF PREMIUMS AND CERTAIN CHARGES
JHVLICO guarantees, and may not increase, the amount of the premiums,
charges deducted from premiums and charges to the Account for mortality and
expense risks. JHVLICO further guarantees that the method by which the ANIR is
calculated will not be changed for the life of any policy.
16
<PAGE>
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 Distributors, Inc.
("Distributors"), an indirect wholly-owned subsidiary of John Hancock located
at 197 Clarendon Street, Boston, MA 02117, or other broker-dealer firms, as
discussed below. John Hancock performs insurance underwriting and determines
whether to accept or reject the application for a Policy and each insured's
risk classification. Pursuant to a sales agreement among John Hancock,
Distributors, JHVLICO, and the Account, Distributors 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.
Distributors' representatives are compensated for sales of the Policies on a
commission and service fee basis by Distributors, and JHVLICO reimburses
Distributors 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.
The maximum commission payable to a Distributors representative for selling
a Policy is 14% of the target premium paid in each of the first 10 Policy
years, and 3% of the target premium paid in each year thereafter. The maximum
commission on any premium paid in any Policy year in excess of the target
premium is 2%.
In addition, Distributors' representatives may earn "credits" toward
qualification for attendance at certain business meetings sponsored by John
Hancock.
Representatives with less than four years of service with Distributors 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.
Distributors is registered with the Commission under the Securities Exchange
Act of 1934 as a broker-dealer, is a member of the National Association of
Securities Dealers, Inc., and is a member of the Securities Investor
Protection Corporation. The Policies are also sold through other registered
broker-dealers that have entered into selling agreements with Distributors 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
Distributors' 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. Distributors will compensate the broker-dealers as provided in the
selling agreements, and JHVLICO will reimburse Distributors for such amounts
and for certain other direct expenses in connection with marketing the
Policies through other broker-dealers.
Distributors 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. Distributors is also the principal underwriter
for John Hancock Variable Series Trust I.
17
<PAGE>
TAX CONSIDERATIONS
POLICY PROCEEDS
Although the Policy contains provisions not found in fixed benefit life
insurance policies, JHVLICO believes the Policy will nevertheless receive the
same federal income and estate tax treatment. Section 7702 of the Internal
Revenue Code ("Code") defines life insurance for federal tax purposes. 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.
JHVLICO believes that the death benefit under the Policy will be excludable
from the beneficiary's gross income under Section 101 of the Code. The Owner
of a Policy is not deemed to be in constructive receipt of the cash values
until a partial withdrawal or surrender. A surrender, partial surrender or
withdrawal may have tax consequences. For example, the Owner will be taxed on
a surrender to the extent that the surrender value exceeds the net premiums
paid under the Policy, i.e., ignoring premiums paid for optional benefits and
riders. But under certain circumstances 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 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 when the Policy lapses.
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.
The above description of Federal tax consequences is only a brief summary
and is not intended as tax advice. For further information consult a qualified
tax adviser.
Federal and state tax laws can change from time to time and, as a result,
the tax consequences to the Owner and beneficiary may be altered.
CHARGE FOR JHVLICO'S TAXES
Currently JHVLICO makes no charge against the Account 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.
18
<PAGE>
MANAGEMENT
THE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO
The Directors and Executive Officers of JHVLICO and their principal
occupations during the past five years as follows:
<TABLE>
<CAPTION>
Directors--Officers Principal Occupation
------------------- --------------------
<S> <C>
David F. D'Alessandro Chairman of the Board and Chief Executive Of-
ficer of JHVLICO; Senior Executive Vice Pres-
ident 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
Mutual Life Insurance Company.
Thomas J. Lee Director of JHVLICO; Vice President, John
Hancock Mutual Life Insurance Company.
Robert R. Reitano Director of JHVLICO; Second Vice President,
John Hancock Mutual Life Insurance Company.
Ronald J. Bocage Director, Vice President and Counsel of
JHVLICO; Vice President and Counsel, John
Hancock Mutual Life Insurance Company.
Robert S. Paster Director of JHVLICO; Second Vice President,
John Hancock Mutual Life Insurance Company.
Michele G. Van Leer Director of JHVLICO; Vice President, John
Hancock Mutual Life Insurance Company.
Daniel L. Ouellette Vice President, Marketing, of JHVLICO; Vice
President, John Hancock Mutual Life Insurance
Company.
Joseph A. Tomlinson Director and Vice President of JHVLICO; Vice
President, John Hancock Mutual Life Insurance
Company.
Barbara L. Luddy Director and Actuary of JHVLICO; Second Vice
President, John Hancock Mutual Life Insurance
Company.
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.
VOTING PRIVILEGES
All of the assets in the subaccounts of the Account, apart from assets
attributable to policy loans, are invested in shares of the corresponding
Portfolios of the Fund. JHVLICO will vote the shares of each of the Portfolios
of the Fund which are deemed attributable to the qualifying variable life
insurance policies and variable annuity contracts at meetings of the Fund's
shareholders in accordance with instructions received from owners of all such
policies or contracts. Shares of the Fund which are not attributable to such
policies or contracts and shares for which instructions from owners are not
received will be represented by JHVLICO at the
19
<PAGE>
meeting and will be voted for and against each matter in the same proportion
as the votes based upon the instructions received from the owners of all such
policies and contracts.
The number of Fund shares held in each subaccount deemed attributable to
each owner is determined by dividing a Policy's cash value (less any
outstanding indebtedness) in the subaccount by the net asset value of one
share in the corresponding Fund Portfolio in which the assets of that
subaccount are invested. Fractional votes will be counted. The number of
shares as to which the owner may give instructions will be determined as of
the record date for the Fund's meeting.
Owners of Policies may give instructions regarding the election of the Board
of Trustees of the Fund, ratification of the selection of independent
auditors, approval of the Fund's investment management agreement 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 of the Fund
or to approve or disapprove an investment advisory or underwriting contract
for the Fund. JHVLICO also may disregard voting instructions in favor of
changes initiated by an owner or the Fund's Board of Trustees in the
investment policy, investment adviser or principal underwriter of the Fund, if
JHVLICO (i) reasonably disapproves of such changes and (ii) in the case of a
change of investment policy or investment adviser, makes a good-faith
determination that the proposed change is contrary to state law or prohibited
by state regulatory authorities or that the change would be inconsistent with
a 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 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 IN APPLICABLE LAW--FUNDING AND OTHERWISE
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 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
JHVLICO, an affiliate of John Hancock, and (3) to deregister the Account under
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.
REPORTS
In each Policy year (except while the Policy is continued in effect under a
fixed option on lapse) a statement will be sent to the Owner setting forth the
Death Benefit, Policy Cash Value, any cash value of Variable Paid-Up Insurance
and any outstanding indebtedness (and interest charged for the preceding
Policy year) as of the last
20
<PAGE>
day of such year. Moreover, confirmations will be furnished to the Owner of
transfers between subaccounts, Policy loans, partial surrenders and certain
other Policy transactions.
Owners will be sent semiannually a report containing the financial
statements of the Fund, including a list of securities held in each Portfolio.
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 Ronald J. Bocage, Vice President and 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 Commission upon payment of the prescribed fee.
EXPERTS
The financial statements of JHVLICO and of 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.
21
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
22
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Large Cap Sovereign International Small Cap International Mid Cap Large Cap Money Mid Cap
Growth Bond Equities Growth Balanced Growth Value Market Value
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ------------ ------------- ---------- ------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value........... $65,826,786 $216,724,318 $15,676,880 $1,203,845 $217,329 $567,251 $2,924,101 $50,801,546 $359,228
Investments in
shares of
portfolios of M
Fund Inc., at
value........... -- -- -- -- -- -- -- -- --
Policy loans and
accrued interest
receivable...... 13,529,134 52,294,393 2,268,378 12,867,387
Receivable from:
John Hancock
Variable Series
Trust I........ 23,279 147,825 8,055 409 261 111 2,355 77,379 377
M Fund Inc. .... -- -- -- -- -- -- -- -- --
----------- ------------ ----------- ---------- -------- -------- ---------- ----------- --------
TOTAL ASSETS..... 79,379,199 269,166,536 17,953,313 1,204,254 217,590 567,362 2,926,456 63,746,312 359,605
Liabilities
Payable to John
Hancock Variable
Life Insurance
Company......... 22,075 143,762 7,784 389 258 102 2,307 76,413 371
Asset charges
payable......... 1,204 4,063 271 20 3 9 48 966 6
----------- ------------ ----------- ---------- -------- -------- ---------- ----------- --------
TOTAL
LIABILITIES..... 23,279 147,825 8,055 409 261 111 2,355 77,379 377
----------- ------------ ----------- ---------- -------- -------- ---------- ----------- --------
Net Assets....... $79,355,920 $269,018,711 $17,945,258 $1,203,845 $217,329 $567,251 $2,924,101 $63,668,933 $359,228
=========== ============ =========== ========== ======== ======== ========== =========== ========
<CAPTION>
Special Real Estate
Opportunities Equity
Subaccount Subaccount
------------- -----------
<S> <C> <C>
Assets
Investments in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value........... $6,900,122 $ 9,861,910
Investments in
shares of
portfolios of M
Fund Inc., at
value........... -- --
Policy loans and
accrued interest
receivable...... 1,788,166
Receivable from:
John Hancock
Variable Series
Trust I........ 11,505 8,058
M Fund Inc. .... -- --
------------- -----------
TOTAL ASSETS..... 6,911,627 11,658,134
Liabilities
Payable to John
Hancock Variable
Life Insurance
Company......... 11,392 7,883
Asset charges
payable......... 113 175
------------- -----------
TOTAL
LIABILITIES..... 11,505 8,058
------------- -----------
Net Assets....... $6,900,122 $11,650,076
============= ===========
</TABLE>
See accompanying notes.
23
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Short-Term Edinburgh
Growth & U.S. Small Cap International Equity Strategic Turner Core International
Income Managed Government Value Opportunities Index Bond Growth Equity
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
------------ ------------ ---------- ---------- ------------- ---------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value........... $624,414,237 $300,159,311 $328,711 $891,733 $1,306,509 $343,746 $677,446 $ -- $ --
Investments in
portfolios of
M Fund Inc., at
value........... -- -- -- -- -- -- -- 12,490 44,456
Policy loans and
accrued interest
receivable...... 131,830,597 62,263,515
Receivable from:
John Hancock
Variable Series
Trust I........ 71,816 142,881 68 1,824 96 468 1,624 -- --
M Fund Inc...... -- -- -- -- -- -- -- -- 1
------------ ------------ -------- -------- ---------- -------- -------- ------- -------
TOTAL ASSETS..... 756,316,650 362,565,707 328,779 893,557 1,306,605 344,214 679,070 12,490 44,457
Liabilities
Payable to John
Hancock Variable
Life Insurance
Company......... 60,388 137,434 63 1,810 75 462 1,613 -- --
Asset charges
payable......... 11,428 5,447 5 14 21 6 11 -- 1
------------ ------------ -------- -------- ---------- -------- -------- ------- -------
TOTAL
LIABILITIES..... 71,816 142,881 68 1,824 96 468 1,624 -- 1
------------ ------------ -------- -------- ---------- -------- -------- ------- -------
Net Assets....... $756,244,834 $362,422,826 $328,711 $891,733 $1,306,509 $343,746 $677,446 $12,490 $44,456
============ ============ ======== ======== ========== ======== ======== ======= =======
<CAPTION>
Frontier
Capital
Appreciation
Subaccount
------------
<S> <C>
Assets
Investments in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value........... $ --
Investments in
portfolios of
M Fund Inc., at
value........... 43,177
Policy loans and
accrued interest
receivable......
Receivable from:
John Hancock
Variable Series
Trust I........ --
M Fund Inc...... 1
------------
TOTAL ASSETS..... 43,178
Liabilities
Payable to John
Hancock Variable
Life Insurance
Company......... --
Asset charges
payable......... 1
------------
TOTAL
LIABILITIES..... 1
------------
Net Assets....... $43,177
============
</TABLE>
See accompanying notes.
24
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF OPERATIONS
FOR THE YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
International Equities
Large Cap Growth Subaccount Sovereign Bond Subaccount Subaccount
------------------------------------ ------------------------------------- -----------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
----------- ----------- ----------- ----------- ----------- ------------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from:
John Hancock
Variable Series
Trust I........ $ 9,763,606 $ 3,899,925 $ 1,782,463 $15,986,241 $16,214,565 $ 13,598,258 $ 166,193 $114,316 $ 150,711
M Fund Inc. .... -- -- -- -- -- -- -- -- --
Interest income
on policy
loans.......... 881,144 755,070 571,576 3,908,756 3,820,851 3,640,202 161,938 146,076 103,567
----------- ----------- ----------- ----------- ----------- ------------ ---------- -------- ---------
TOTAL INVESTMENT
INCOME.......... 10,644,750 4,654,995 2,354,039 19,894,997 20,035,416 17,238,460 328,131 260,392 254,278
Expenses:
Mortality and
expense
risks.......... 381,331 278,461 216,050 1,444,137 1,372,266 1,302,570 85,694 65,044 51,915
----------- ----------- ----------- ----------- ----------- ------------ ---------- -------- ---------
NET INVESTMENT
INCOME (LOSS)... 10,263,419 4,376,534 2,137,989 18,450,860 18,663,150 15,935,890 242,437 195,348 202,363
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized
gain (loss).... 840,044 465,096 549,396 690,912 331,252 301,782 254,188 294,206 146,459
Net unrealized
appreciation
(depreciation)
during the
year........... (889,487) 6,578,435 (2,618,550) (8,059,332) 18,687,187 (18,898,104) 676,006 353,155 (863,194)
----------- ----------- ----------- ----------- ----------- ------------ ---------- -------- ---------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS..... (49,443) 7,043,531 (2,069,154) (7,368,420) 19,018,439 (18,596,322) 930,194 647,361 (716,735)
----------- ----------- ----------- ----------- ----------- ------------ ---------- -------- ---------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS...... $10,213,976 $11,420,065 $ 68,835 $11,082,440 $37,681,589 $ (2,660,432) $1,172,631 $842,709 $(514,372)
=========== =========== =========== =========== =========== ============ ========== ======== =========
<CAPTION>
Small Cap International
Growth Balanced
Subaccount Subaccount
----------- -------------
1996* 1996*
----------- -------------
<S> <C> <C>
Investment
Income:
Distributions
received from:
John Hancock
Variable Series
Trust I........ $ 1,207 $2,850
M Fund Inc. .... -- --
Interest income
on policy
loans.......... -- --
----------- -------------
TOTAL INVESTMENT
INCOME.......... 1,207 2,850
Expenses:
Mortality and
expense
risks.......... 2,956 301
----------- -------------
NET INVESTMENT
INCOME (LOSS)... (1,749) 2,549
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized
gain (loss).... (2,047) 65
Net unrealized
appreciation
(depreciation)
during the
year........... (24,023) 3,632
----------- -------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS..... (26,070) 3,697
----------- -------------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS...... $(27,819) $6,246
=========== =============
</TABLE>
* From May 1, 1996 (commencement of operations).
See accompanying notes.
25
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
Mid Cap Growth Large Cap Value Mid Cap Value Special Opportunities
Subaccount Subaccount Money Market Subaccount Subaccount Subaccount
-------------- --------------- -------------------------------- ------------- ------------------------
1996* 1996* 1996 1995 1994 1996* 1996 1995 1994**
-------------- --------------- ---------- ---------- ---------- ------------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from:
John Hancock
Variable Series
Trust I........ $ 1,635 $ 72,511 $2,527,378 $2,690,892 $1,862,712 $ 7,418 $265,602 $ 39,684 $ 25
M Fund Inc...... -- -- -- -- -- -- -- -- --
Interest income
on policy loans. -- -- 929,499 952,455 935,777 -- -- -- --
------- -------- ---------- ---------- ---------- ------- -------- -------- ------
TOTAL INVESTMENT
INCOME........... 1,635 72,511 3,456,877 3,643,347 2,798,489 7,418 265,602 39,684 25
Expenses:
Mortality and
expense risks.. 814 8,169 342,603 340,195 331,873 580 23,603 3,373 12
------- -------- ---------- ---------- ---------- ------- -------- -------- ------
NET INVESTMENT
INCOME.......... 821 64,342 3,114,274 3,303,152 2,466,616 6,838 241,999 36,311 13
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized
gain (loss).... 1,295 11,265 -- -- -- 1,099 125,955 11,582 (2)
Net unrealized
appreciation
(depreciation)
during the
year........... (3,899) 197,424 -- -- -- 23,234 615,079 124,460 1,019
------- -------- ---------- ---------- ---------- ------- -------- -------- ------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS..... (2,604) 208,689 -- -- -- 24,333 741,034 136,042 1,017
------- -------- ---------- ---------- ---------- ------- -------- -------- ------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS...... $(1,783) $273,031 $3,114,274 $3,303,152 $2,466,616 $31,171 $983,033 $172,353 $1,030
======= ======== ========== ========== ========== ======= ======== ======== ======
</TABLE>
*From May 1, 1996 (commencement of operations).
**From May 6, 1994 (commencement of operations).
See accompanying notes.
26
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
Real Estate Equity Subaccount Growth & Income Subaccount Managed Subaccount
----------------------------- -------------------------------------- --------------------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
---------- -------- --------- ------------ ------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from:
John Hancock
Variable Series
Trust I......... $ 477,763 $409,525 $ 353,259 $ 78,415,408 $ 51,822,706 $ 28,013,646 $ 37,103,617 $26,974,536 $ 10,625,950
M Fund Inc...... -- -- -- -- -- -- -- -- --
Interest income
on policy loans. 117,955 121,494 99,709 9,420,070 8,594,774 7,780,984 4,337,281 3,999,425 3,637,463
---------- -------- --------- ------------ ------------ ------------ ------------ ----------- ------------
TOTAL INVESTMENT
INCOME........... 595,718 531,019 452,968 87,835,478 60,417,480 35,794,630 41,440,898 30,973,961 14,263,413
Expenses:
Mortality and
expense risks... 50,069 41,982 40,183 3,854,562 3,246,229 2,876,205 1,886,000 1,677,243 1,541,565
---------- -------- --------- ------------ ------------ ------------ ------------ ----------- ------------
NET INVESTMENT
INCOME........... 545,649 489,037 412,785 83,980,916 57,171,251 32,918,425 39,554,898 29,296,718 12,721,848
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized
gain (loss)..... 9,177 97,602 148,913 15,416,898 6,161,063 5,831,652 3,870,923 2,658,955 2,204,918
Net unrealized
appreciation
(depreciation)
during the year. 1,862,071 184,090 (354,296) 12,987,718 81,121,360 (36,174,705) (11,548,110) 30,787,175 (18,206,145)
---------- -------- --------- ------------ ------------ ------------ ------------ ----------- ------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS...... 1,871,248 281,692 (205,383) 28,404,616 87,282,423 (30,343,053) (7,677,187) 33,446,130 (16,001,227)
---------- -------- --------- ------------ ------------ ------------ ------------ ----------- ------------
NET INCREASE
(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS.. $2,416,897 $770,729 $ 207,402 $112,385,532 $144,453,674 $ 2,575,372 $ 31,877,711 $62,742,848 $ (3,279,379)
========== ======== ========= ============ ============ ============ ============ =========== ============
<CAPTION>
Short-Term U.S.
Government Subaccount
----------------------
1996 1995 1994**
-------- ------ ------
<S> <C> <C> <C>
Investment
Income:
Distributions
received from:
John Hancock
Variable Series
Trust I......... $11,196 $2,910 $ 25
M Fund Inc...... -- -- --
Interest income
on policy loans. -- -- --
-------- ------ ------
TOTAL INVESTMENT
INCOME........... 11,196 2,910 25
Expenses:
Mortality and
expense risks... 1,201 312 1
-------- ------ ------
NET INVESTMENT
INCOME........... 9,995 2,598 24
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized
gain (loss)..... (922) 945 --
Net unrealized
appreciation
(depreciation)
during the year. (1,542) 1,166 (27)
-------- ------ ------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS...... (2,464) 2,111 (27)
-------- ------ ------
NET INCREASE
(DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS.. $ 7,531 $4,709 $ (3)
======== ====== ======
</TABLE>
*From May 1, 1996 (commencement of operations).
**From May 1, 1994 (commencement of operations).
See accompanying notes.
27
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
Edinburgh Frontier
Small Cap International Turner International Capital
Value Opportunities Equity Index Strategic Bond Core Growth Equity Appreciation
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
---------- ------------- ------------ -------------- ----------- ------------- ------------
1996* 1996* 1996* 1996* 1996* 1996* 1996*
---------- ------------- ------------ -------------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Distributions received
from:
John Hancock Variable
Series Trust I........ $23,766 $ 5,965 $ 7,847 $29,029 $ -- $ -- $ --
M Fund Inc............. -- -- -- -- 415 255 --
Interest income on
policy loans.......... -- -- -- -- -- -- --
------- ------- ------- ------- ----- ------- -------
TOTAL INVESTMENT INCOME. 23,766 5,965 7,847 29,029 415 255 --
Expenses:
Mortality and expense
risks................. 2,451 3,038 575 1,782 31 122 112
------- ------- ------- ------- ----- ------- -------
NET INVESTMENT INCOME
(LOSS)................. 21,315 2,927 7,272 27,247 384 133 (112)
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss)................ 891 304 3,982 1,518 (238) (1,091) (1,199)
Net unrealized
appreciation
(depreciation) during
the year.............. 49,892 57,387 13,544 6,688 456 (345) 2,105
------- ------- ------- ------- ----- ------- -------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS......... 50,783 57,691 17,526 8,206 218 (1,436) 906
------- ------- ------- ------- ----- ------- -------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS........ $72,098 $60,618 $24,798 $35,453 $ 602 $(1,303) $ 794
======= ======= ======= ======= ===== ======= =======
</TABLE>
* From May 1, 1996 (commencement of operations).
See accompanying notes.
28
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
Large Cap Growth Subaccount Sovereign Bond Subaccount
------------------------------------- ----------------------------------------
1996 1995 1994 1996 1995 1994
----------- ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in Net
Assets
From operations:
Net investment
income (loss)... $10,263,419 $ 4,376,534 $ 2,137,989 $ 18,450,860 $ 18,663,150 $ 15,935,890
Net realized
gains (losses).. 840,044 465,096 549,396 690,912 331,252 301,782
Net unrealized
appreciation
(depreciation)
during the year. (889,487) 6,578,435 (2,618,550) (8,059,332) 18,687,187 (18,898,104)
----------- ----------- ----------- ------------ ------------ ------------
Net increase
(decrease) in
net assets
resulting from
operations...... 10,213,976 11,420,065 68,835 11,082,440 37,681,589 (2,660,432)
From policyholder
transactions:
Net premiums from
policyholders... 20,123,261 12,618,748 14,995,398 34,090,208 31,560,554 33,964,744
Net benefits to
policyholders... (11,910,005) (9,566,825) (13,285,350) (40,719,213) (39,010,974) (45,032,511)
Net increase in
policy loans.... 2,044,193 1,614,283 2,229,978 897,069 2,053,700 928,620
----------- ----------- ----------- ------------ ------------ ------------
Net increase
(decrease) in
net assets from
policyholder
transactions.... 10,257,449 4,666,206 3,940,026 (5,731,936) (5,396,720) (10,139,147)
----------- ----------- ----------- ------------ ------------ ------------
Net increase
(decrease) in
net assets..... 20,471,425 16,086,271 4,008,861 5,350,504 32,284,869 (12,799,579)
Net Assets at
beginning of
year............ 58,884,495 42,798,224 38,789,363 263,668,207 231,383,338 244,182,917
----------- ----------- ----------- ------------ ------------ ------------
Net Assets at end
of year......... $79,355,920 $58,884,495 $42,798,224 $269,018,711 $263,668,207 $231,383,338
=========== =========== =========== ============ ============ ============
<CAPTION>
Small Cap International
Growth Balanced
International Equities Subaccount Subaccount Subaccount
-------------------------------------- ----------- -------------
1996 1995 1994 1996* 1996*
------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Increase
(Decrease) in Net
Assets
From operations:
Net investment
income (loss)... $ 242,437 $ 195,348 $ 202,363 $ (1,749) $ 2,549
Net realized
gains (losses).. 254,188 294,206 146,459 (2,047) 65
Net unrealized
appreciation
(depreciation)
during the year. 676,006 353,155 (863,194) (24,023) 3,632
------------ ------------ ------------ ----------- -------------
Net increase
(decrease) in
net assets
resulting from
operations...... 1,172,631 842,709 (514,372) (27,819) 6,246
From policyholder
transactions:
Net premiums from
policyholders... 8,485,184 4,546,347 8,974,098 1,361,402 216,486
Net benefits to
policyholders... (4,391,767) (4,766,724) (4,180,134) (129,738) (5,403)
Net increase in
policy loans.... 287,879 192,805 735,457 -- --
------------ ------------ ------------ ----------- -------------
Net increase
(decrease) in
net assets from
policyholder
transactions.... 4,381,296 (27,572) 5,529,421 1,231,664 211,083
------------ ------------ ------------ ----------- -------------
Net increase
(decrease) in
net assets..... 5,553,927 815,137 5,015,049 1,203,845 217,329
Net Assets at
beginning of
year............ 12,391,331 11,576,194 6,561,145 -- --
------------ ------------ ------------ ----------- -------------
Net Assets at end
of year......... $17,945,258 $12,391,331 $11,576,194 $1,203,845 $217,329
============ ============ ============ =========== =============
</TABLE>
* From May 1, 1996 (commencement of operations).
See accompanying notes.
29
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
Mid Cap Large Cap Mid Cap
Growth Value Value
Subaccount Subaccount Money Market Subaccount Subaccount
---------- ---------- ---------------------------------------- ----------
1996* 1996* 1996 1995 1994 1996*
---------- ---------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in
Net Assets
From operations:
Net investment
income......... $ 821 $ 64,342 $ 3,114,274 $ 3,303,152 $ 2,466,616 $ 6,838
Net realized
gains (losses). 1,295 11,265 -- -- -- 1,099
Net unrealized
appreciation
(depreciation)
during the
year........... (3,899) 197,424 -- -- -- 23,234
-------- ---------- ------------ ------------ ------------ --------
Net increase
(decrease) in
net assets
resulting from
operations..... (1,783) 273,031 3,114,274 3,303,152 2,466,616 31,171
From
policyholder
transactions:
Net premiums
from
policyholders.. 599,576 2,999,086 15,561,906 11,104,365 11,955,284 337,092
Net benefits to
policyholders.. (30,542) (348,016) (16,132,881) (12,775,695) (14,818,286) (9,035)
Net increase
(decrease) in
policy loans... -- -- (260,051) (323,666) 124,027 --
-------- ---------- ------------ ------------ ------------ --------
Net increase
(decrease) in
net assets from
policyholder
transactions... 569,034 2,651,070 (831,026) (1,994,996) (2,738,975) 328,057
-------- ---------- ------------ ------------ ------------ --------
Net increase
(decrease) in
net assets.... 567,251 2,924,101 2,283,248 1,308,156 (272,359) 359,228
Net Assets at
beginning of
year............ -- -- 61,385,685 60,077,529 60,349,888 --
-------- ---------- ------------ ------------ ------------ --------
Net Assets at end
of year......... $567,251 $2,924,101 $ 63,668,933 $ 61,385,685 $ 60,077,529 $359,228
======== ========== ============ ============ ============ ========
<CAPTION>
Special Opportunities Subaccount
------------------------------------
1996 1995 1994**
------------- ------------ ---------
<S> <C> <C> <C>
Increase
(Decrease) in
Net Assets
From operations:
Net investment
income......... $ 241,999 $ 36,311 $ 13
Net realized
gains (losses). 125,955 11,582 (2)
Net unrealized
appreciation
(depreciation)
during the
year........... 615,079 124,460 1,019
------------- ------------ ---------
Net increase
(decrease) in
net assets
resulting from
operations..... 983,033 172,353 1,030
From
policyholder
transactions:
Net premiums
from
policyholders.. 5,492,467 1,682,424 37,133
Net benefits to
policyholders.. (1,284,991) (182,908) (419)
Net increase
(decrease) in
policy loans... -- -- --
------------- ------------ ---------
Net increase
(decrease) in
net assets from
policyholder
transactions... 4,207,476 1,499,516 36,714
------------- ------------ ---------
Net increase
(decrease) in
net assets.... 5,190,509 1,671,869 37,744
Net Assets at
beginning of
year............ 1,709,613 37,744 --
------------- ------------ ---------
Net Assets at end
of year......... $ 6,900,122 $ 1,709,613 $ 37,744
============= ============ =========
</TABLE>
*From May 1, 1996 (commencement of operations).
**From May 6, 1994 (commencement of operations).
See accompanying notes.
30
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
Real Estate Equity Subaccount Growth & Income Subaccount
----------------------------------- ----------------------------------------
1996 1995 1994 1996 1995 1994
----------- ---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in Net
Assets
From operations:
Net investment
income.......... $ 545,649 $ 489,037 $ 412,785 $ 83,980,916 $ 57,171,251 $ 32,918,425
Net realized
gains (losses).. 9,177 97,602 148,913 15,416,898 6,161,063 5,831,652
Net unrealized
appreciation
(depreciation)
during the year. 1,862,071 184,090 (354,296) 12,987,718 81,121,360 (36,174,705)
----------- ---------- ---------- ------------ ------------ ------------
Net increase
(decrease) in
net assets
resulting from
operations...... 2,416,897 770,729 207,402 112,385,532 144,453,674 2,575,372
From policyholder
transactions:
Net premiums from
policyholders... 3,620,035 2,176,970 3,275,364 76,046,396 73,672,198 72,117,431
Net benefits to
policyholders... (2,413,828) (2,711,578) (2,843,516) (102,757,132) (90,829,678) (89,384,442)
Net increase in
policy loans.... 156,802 30,224 350,970 11,816,577 10,173,483 5,694,330
----------- ---------- ---------- ------------ ------------ ------------
Net increase
(decrease) in
net assets from
policyholder
transactions.... 1,363,009 (504,384) 782,818 (14,894,159) (6,983,997) (11,572,681)
----------- ---------- ---------- ------------ ------------ ------------
Net increase
(decrease) in
net assets..... 3,779,906 266,345 990,220 97,491,373 137,469,677 (8,997,309)
Net Assets at
beginning of
year............ 7,870,170 7,603,825 6,613,605 658,753,461 521,283,784 530,281,093
----------- ---------- ---------- ------------ ------------ ------------
Net Assets at end
of year......... $11,650,076 $7,870,170 $7,603,825 $756,244,834 $658,753,461 $521,283,784
=========== ========== ========== ============ ============ ============
<CAPTION>
Short-Term U.S.
Managed Subaccount Government Subaccount
----------------------------------------- ---------------------------
1996 1995 1994 1996 1995 1994*
------------- ------------- ------------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in Net
Assets
From operations:
Net investment
income.......... $ 39,554,898 $ 29,296,718 $ 12,721,848 $ 9,995 $ 2,598 $ 24
Net realized
gains (losses).. 3,870,923 2,658,955 2,204,918 (922) 945 --
Net unrealized
appreciation
(depreciation)
during the year. (11,548,110) 30,787,175 (18,206,145) (1,542) 1,166 (27)
------------- ------------- ------------- --------- --------- -------
Net increase
(decrease) in
net assets
resulting from
operations...... 31,877,711 62,742,848 (3,279,379) 7,531 4,709 (3)
From policyholder
transactions:
Net premiums from
policyholders... 40,512,423 38,619,260 39,071,265 328,192 94,623 6,405
Net benefits to
policyholders... (52,043,620) (47,824,820) (51,322,737) (90,988) (21,753) (5)
Net increase in
policy loans.... 4,766,548 5,387,424 2,529,492 -- -- --
------------- ------------- ------------- --------- --------- -------
Net increase
(decrease) in
net assets from
policyholder
transactions.... (6,764,649) (3,818,136) (9,721,980) 237,204 72,870 6,400
------------- ------------- ------------- --------- --------- -------
Net increase
(decrease) in
net assets..... 25,113,062 58,924,712 (13,001,359) 244,735 77,579 6,397
Net Assets at
beginning of
year............ 337,309,764 278,385,052 291,386,411 83,976 6,397 --
------------- ------------- ------------- --------- --------- -------
Net Assets at end
of year......... $362,422,826 $337,309,764 $278,385,052 $328,711 $ 83,976 $6,397
============= ============= ============= ========= ========= =======
</TABLE>
* From May 1, 1994 (commencement of operations).
See accompanying notes.
31
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
Frontier
Small Cap International Turner Core Edinburgh Capital
Value Opportunities Equity Index Strategic Bond Growth International Appreciation
Subaccount Subaccount Subaccount Subaccount Subaccount Equity Subaccount Subaccount
---------- ------------- ------------ -------------- ----------- ----------------- ------------
1996* 1996* 1996* 1996* 1996* 1996* 1996*
---------- ------------- ------------ -------------- ----------- ----------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets
From operations:
Net investment income
(loss)............... $ 21,315 $ 2,927 $ 7,272 $ 27,247 $ 384 $ 133 $ (112)
Net realized gains
(losses)............. 891 304 3,982 1,518 (238) (1,091) (1,199)
Net unrealized
appreciation
(depreciation) during
the year............. 49,892 57,387 13,544 6,688 456 (345) 2,105
--------- ---------- -------- -------- -------- -------- --------
Net increase
(decrease) in net
assets resulting from
operations........... 72,098 60,618 24,798 35,453 602 (1,303) 794
From policyholder
transactions:
Net premiums from
policyholders........ 925,601 1,364,628 350,310 718,958 26,825 68,170 58,477
Net benefits to
policyholders........ (105,966) (118,737) (31,362) (76,965) (14,937) (22,411) (16,094)
Net increase
(decrease) in policy
loans................ -- -- -- -- -- -- --
--------- ---------- -------- -------- -------- -------- --------
Net increase in net
assets from
policyholder
transactions......... 819,635 1,245,891 318,948 641,993 11,888 45,759 42,383
--------- ---------- -------- -------- -------- -------- --------
Net increase in net
assets.............. 891,733 1,306,509 343,746 677,446 12,490 44,456 43,177
Net Assets at beginning
of year............... -- -- -- -- -- -- --
--------- ---------- -------- -------- -------- -------- --------
Net Assets at end of
year.................. $ 891,733 $1,306,509 $343,746 $677,446 $ 12,490 $ 44,456 $ 43,177
========= ========== ======== ======== ======== ======== ========
</TABLE>
* From May 1, 1996 (commencement of operations).
See accompanying notes.
32
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
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 twenty-one subaccounts. The assets of each subaccount are invested
exclusively in shares of a corresponding Portfolio of John Hancock Variable
Series Trust I (the Fund) or of M Fund Inc. (M Fund). New subaccounts may be
added as new Portfolios are added to the Fund or to M Fund, or as other
investment options are developed and made available to policyholders. The
twenty-one Portfolios of the Fund and of M Fund which are currently available
are the Large Cap Growth, Sovereign Bond, International Equities, Small Cap
Growth, International Balanced, Mid Cap Growth, Large Cap Value, Money Market,
Mid Cap Value, Special Opportunities, Real Estate Equity, Growth & Income,
Managed, Short-Term U.S. Government, Small Cap Value, International
Opportunities, Equity Index, Strategic Bond, Turner Core Growth, Edinburgh
International Equity and Frontier Capital Appreciation Subaccounts. 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
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Valuation of Investments: Investment in shares of the Fund and of M 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.
33
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
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.
With respect to the single premium policy, during the first nine years after
policy issue, JHVLICO assesses a contingent deferred sales charge at varying
levels in the event of early surrender of the variable life insurance policy.
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.
NOTE 3--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 4--DETAILS OF INVESTMENTS
The details of the shares owned and cost and value of investments in the
Portfolios of the Fund and of M Fund at December 31, 1996, are as follows:
<TABLE>
<CAPTION>
Portfolio Shares Owned Cost Value
--------- ------------ ------------ ------------
<S> <C> <C> <C>
Large Cap Growth........................ 3,763,308 $ 57,762,003 $ 65,826,786
Sovereign Bond.......................... 22,181,035 211,556,712 216,724,318
International Equities.................. 931,429 14,580,491 15,676,880
Small Cap Growth........................ 121,181 1,227,869 1,203,845
International Balanced.................. 20,911 213,697 217,329
Mid Cap Growth.......................... 55,491 571,150 567,251
Large Cap Value......................... 263,683 738,803 2,924,101
Money Market............................ 5,080,155 50,801,546 50,801,546
Mid Cap Value........................... 31,654 335,995 359,228
Special Opportunities................... 417,635 6,159,564 6,900,122
Real Estate Equity...................... 673,843 7,988,690 9,861,910
Growth & Income......................... 42,609,332 517,230,305 624,414,237
Managed................................. 22,479,957 273,052,564 300,159,311
Short-Term U.S. Government.............. 32,717 329,114 328,711
Small Cap Value......................... 83,106 841,840 891,733
International Opportunities............. 123,289 1,249,122 1,306,509
Equity Index............................ 30,976 330,202 343,746
Strategic Bond.......................... 66,689 670,758 677,446
Turner Core Growth...................... 1,077 12,034 12,490
Edinburgh International Equity.......... 4,500 44,801 44,456
Frontier Capital Appreciation........... 3,449 41,073 43,177
</TABLE>
34
<PAGE>
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 4--DETAILS OF INVESTMENTS--CONTINUED
Purchases, including reinvestment of dividend distributions and proceeds from
the sales of shares in the Portfolios of the Fund and of M Fund during 1996,
were as follows:
<TABLE>
<CAPTION>
Portfolio Purchases Sales
--------- ----------- -----------
<S> <C> <C>
Large Cap Growth....................................... $20,381,233 $ 1,953,846
Sovereign Bond......................................... 24,860,291 13,011,482
International Equities................................. 5,571,003 1,244,347
Small Cap Growth....................................... 1,337,858 107,942
International Balanced................................. 216,981 3,349
Mid Cap Growth......................................... 616,784 46,929
Large Cap Value........................................ 3,116,439 401,027
Money Market........................................... 11,059,956 8,498,091
Mid Cap Value.......................................... 344,956 10,060
Special Opportunities.................................. 4,859,191 409,716
Real Estate Equity..................................... 2,354,165 607,463
Growth & Income........................................ 98,572,585 41,588,875
Managed................................................ 43,447,544 15,641,073
Short-Term U.S. Government............................. 346,257 99,058
Small Cap Value........................................ 954,995 114,046
International Opportunities............................ 1,376,296 127,478
Equity Index........................................... 366,782 40,562
Strategic Bond......................................... 755,947 86,707
Turner Core Growth..................................... 25,144 12,872
Edinburgh International Equity......................... 68,089 22,197
Frontier Capital Appreciation.......................... 55,645 13,373
</TABLE>
35
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Policyholders
John Hancock Variable Life Account U
of John Hancock Variable Life Insurance Company
We have audited the accompanying statement of assets and liabilities of John
Hancock Variable Life Account U (the Account) (comprising, respectively, the
Large Cap Growth, Sovereign Bond, International Equities, Small Cap Growth,
International Balanced, Mid Cap Growth, Large Cap Value, Money Market, Mid Cap
Value, Special Opportunities, Real Estate Equity, Growth & Income, Managed,
Short-Term U.S. Government, Small Cap Value, International Opportunities,
Equity Index, Strategic Bond, Turner Core Growth, Edinburgh International
Equity and Frontier Capital Appreciation Subaccounts) as of December 31, 1996,
and the related statements of operations and statements of changes in net
assets for each of the periods indicated therein. These financial statements
are the responsibility of the Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
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,
1996, 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 7, 1997
36
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors
John Hancock Variable Life Insurance Company
We have audited the accompanying statutory-basis statements of financial
position of John Hancock Variable Life Insurance Company as of December 31,
1996 and 1995, and the related statutory-basis 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.
As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the Commonwealth of Massachusetts Division of Insurance, which
practices differ from generally accepted accounting principles. The variances
between such practices and generally accepted accounting principles also are
described in Note 1. The effects on the financial statements of these
variances are not reasonably determinable but are presumed to be material.
In our report dated February 7, 1996, we expressed an opinion that the 1995
financial statements of the Company fairly present, in all material respects,
the Company's financial position, results of operations, and cash flows in
conformity with generally accepted accounting principles for 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. As described in Note 1, the accompanying
statutory-basis financial statements are no longer considered to be prepared
in conformity with generally accepted accounting principles. Accordingly, our
present opinion on the 1995 financial statements, as presented in the
following paragraph, is different from that expressed in our previous report.
In our opinion, because of the effects of the matter described in the second
preceding paragraph, the financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of John Hancock Variable Life Insurance Company at December
31, 1996 and 1995, or the results of its operations or its cash flows for the
years then ended.
Also, in our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of John Hancock
Variable Life Insurance Company at December 31, 1996 and 1995, and the results
of its operations and its cash flows for the years then ended in conformity
with accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance.
Ernst & Young LLP
Boston, Massachusetts
February 14, 1997
37
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
December 31
------------------
1996 1995
---- ----
(In millions)
<S> <C> <C>
Assets
Bonds--Note 7.............................................. $ 753.5 $ 552.8
Preferred stocks........................................... 9.6 5.0
Common stocks.............................................. 1.4 1.7
Investment in affiliates................................... 72.0 65.3
Mortgage loans on real estate--Note 7...................... 212.1 146.7
Real estate................................................ 38.8 36.4
Policy loans............................................... 80.8 61.8
Cash items:
Cash in banks............................................ 26.7 11.6
Temporary cash investments............................... 5.2 65.0
-------- --------
31.9 76.6
Premiums due and deferred.................................. 36.8 39.6
Investment income due and accrued.......................... 22.6 18.6
Other general account assets............................... 17.8 20.8
Assets held in separate accounts........................... 3,290.5 2,421.0
-------- --------
TOTAL ASSETS............................................... $4,567.8 $3,446.3
======== ========
Obligations and Stockholder's Equity
OBLIGATIONS
Policy reserves.......................................... $ 877.8 $ 612.3
Federal income and other taxes payable--Note 1........... 29.4 14.2
Other accrued expenses................................... 75.1 138.7
Asset valuation reserve--Note 1.......................... 16.6 15.4
Obligations related to separate accounts................. 3,285.8 2,417.0
-------- --------
TOTAL OBLIGATIONS.......................................... 4,284.7 3,197.6
Stockholder's Equity--Notes 2 and 6
Common Stock, $50 par value; authorized 50,000 shares;
issued and
outstanding 50,000 shares............................... 2.5 2.5
Paid-in capital.......................................... 377.5 377.5
Unassigned deficit....................................... (96.9) (131.3)
-------- --------
TOTAL STOCKHOLDER'S EQUITY................................. 283.1 248.7
-------- --------
TOTAL OBLIGATIONS AND STOCKHOLDER'S EQUITY................. $4,567.8 $3,446.3
======== ========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
38
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT
<TABLE>
<CAPTION>
Year ended December 31
------------------------
1996 1995
---- ----
(In millions)
<S> <C> <C>
Income
Premiums............................................ $ 820.6 $ 570.9
Net investment income--Note 4....................... 76.1 62.1
Other, net.......................................... 406.0 85.7
----------- ----------
1,302.7 718.7
Benefits and Expenses
Payments to policyholders and beneficiaries......... 236.1 213.4
Additions to reserves to provide for future payments
to policyholders and beneficiaries................. 790.1 282.4
Expenses of providing service to policyholders and
obtaining new insurance--Note 6.................... 183.8 150.7
State and miscellaneous taxes....................... 17.3 12.7
----------- ----------
1,227.3 659.2
----------- ----------
GAIN FROM OPERATIONS BEFORE FEDERAL INCOME TAXES
AND NET REALIZED CAPITAL GAINS (LOSSES).......... 75.4 59.5
Federal income taxes--Note 1.......................... 38.6 28.4
----------- ----------
GAIN FROM OPERATIONS BEFORE NET REALIZED CAPITAL
GAINS (LOSSES)................................... 36.8 31.1
Net realized capital gains (losses)--Note 5........... (1.5) 0.5
----------- ----------
NET INCOME........................................ 35.3 31.6
Unassigned deficit at beginning of year............... (131.3) (162.1)
Net unrealized capital gains (losses) and other
adjustments--Note 5.................................. 2.5 (3.0)
Other reserves and adjustments........................ (3.4) 2.2
----------- ----------
UNASSIGNED DEFICIT AT END OF YEAR................. $ (96.9) $ (131.3)
=========== ==========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
39
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31
----------------------
1996 1995
---- ----
(In millions)
<S> <C> <C>
Cash flows from operating activities:
Insurance premiums................................. $ 824.2 $ 574.0
Net investment income.............................. 73.4 59.2
Benefits to policyholders and beneficiaries........ (212.7) (198.3)
Dividends paid to policyholders.................... (15.7) (13.2)
Insurance expenses and taxes....................... (196.6) (161.5)
Net transfers to separate accounts................. (524.2) (257.4)
Other, net......................................... 386.7 55.1
----------- -----------
NET CASH PROVIDED FROM OPERATIONS.............. 335.1 57.9
----------- -----------
Cash flows used in investing activities:
Bond purchases..................................... (489.9) (172.5)
Bond sales......................................... 228.3 18.9
Bond maturities and scheduled redemptions.......... 27.8 36.0
Bond prepayments................................... 31.9 20.6
Stock purchases.................................... (6.5) (1.7)
Proceeds from stock sales.......................... 0.4 1.4
Real estate purchases.............................. (10.5) (16.2)
Real estate sales.................................. 8.5 9.3
Other invested assets purchases.................... 0.0 (0.4)
Proceeds from the sale of other invested assets.... 1.5 0.3
Mortgage loans issued.............................. (84.4) (19.8)
Mortgage loan repayments........................... 17.7 21.1
Other, net......................................... (104.6) 45.7
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES.......... (379.8) (57.3)
----------- -----------
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH IN-
VESTMENTS........................................... (44.7) 0.6
Cash and temporary cash investments at beginning of
year................................................ 76.6 76.0
----------- -----------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR... $ 31.9 $ 76.6
=========== ===========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
40
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS 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, domiciled in the Commonwealth of Massachusetts, 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
unaffiliated 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 requires management to make
estimates and assumptions that affect amounts reported in the financial
statements and accompanying notes. Such estimates and assumptions could change
in the future as more information becomes known, which could impact the
amounts reported and disclosed herein.
Basis of Presentation: The financial statements have been prepared using
accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance and in conformity with the practices of
the National Association of Insurance Commissioners (NAIC), which practices
differ from generally accepted accounting principles (GAAP). The 1995
financial statements presented for comparative purposes were previously
described as being prepared in accordance with GAAP for stock life insurance
companies wholly-owned by a mutual life insurance company. Pursuant to
Financial Accounting Standards Board Interpretation 40, "Applicability of
Generally Accepted Accounting Principles to Mutual Life Insurance and Other
Enterprises" (FIN 40), as amended, which is effective for 1996 financial
statements, financial statements based on statutory accounting practices can
no longer be described as prepared in conformity with GAAP. Furthermore,
financial statements prepared in conformity with statutory accounting
practices for periods prior to the effective date of FIN 40 are not considered
GAAP presentations when presented in comparative form with financial
statements for periods subsequent to the effective date. Accordingly, the 1995
financial statements are no longer considered to be presented in conformity
with GAAP.
The significant differences from GAAP include: (1) policy acquisition costs
are charged to expense as incurred rather than deferred and amortized over the
related premium-paying period; (2) policy reserves are based on statutory
mortality, morbidity, and interest requirements without consideration of
withdrawals and Company experience; (3) certain assets designated as
"nonadmitted assets" are excluded from the balance sheet by direct charges to
surplus; (4) reinsurance recoverables are netted against reserves and claim
liabilities rather than reflected as an asset; (5) bonds held as available for
sale are recorded at amortized cost or market value as determined by the NAIC
rather than at fair value; (6) an Asset Valuation Reserve and Interest
Maintenance Reserve as prescribed by the NAIC are not calculated under GAAP.
Under GAAP, realized capital gains and losses are reported in the income
statement on a pretax basis as incurred and investment valuation allowances
are provided when there has been a decline in value deemed other than
temporary; (7) investments in affiliates are carried at their net equity value
with changes in value being recorded directly to unassigned deficit rather
than consolidated in the financial statements; and (8) no provision is made
for the deferred income tax effects of temporary differences between book and
tax basis reporting. The effects of the foregoing variances from GAAP have not
been determined but are presumed to be material.
41
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
The significant accounting practices of the Company are as follows:
Pending Statutory Standards: The NAIC currently is in the process of
recodifying statutory accounting practices, the result of which is expected to
constitute the only source of prescribed statutory accounting practices.
Accordingly, that project, which is expected to be completed in 1999 will
likely change, to some extent, prescribed statutory accounting practices, and
may result in changes to the accounting practices that the Company uses to
prepare its statutory-basis financial statements. The impact of any such
changes on the Company's unassigned deficit cannot be determined at this time
and could be material.
Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of
new business, are charged to operations as incurred and policyholder dividends
are provided as paid or accrued.
Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-
term, highly-liquid investments both readily convertible to known amounts of
cash and so near maturity that there is insignificant risk of changes in value
because of changes in interest rates.
Valuation of Assets: General account investments are carried at amounts
determined on the following bases:
Bond and stock values are carried as prescribed by the NAIC; bonds
generally at amortized amounts or cost, preferred stocks generally at cost
and common stocks at market. The discount or premium on bonds is amortized
using the interest method.
Investments in affiliates are included on the statutory equity method.
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. Accumulated depreciation amounted to $1.2 million in 1996 and $0.5
million in 1995.
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,
42
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
principally bonds and mortgage loans, attributable to changes in the general
level of interest rates. Such gains and losses are deferred and amortized into
income over the remaining expected lives of the investments sold. At December
31, 1996, the IMR, net of 1996 amortization of $1.2 million, amounted to $5.9
million, which is included in policy reserves. The corresponding 1995 amounts
were $1.2 million and $6.9 million, respectively.
Separate Accounts: Separate account assets and liabilities reported in the
accompanying statements of financial position represent funds that are
separately administered and for which the contractholder, rather than the
Company, generally bears the investment risk. Separate account contractholders
have no claim against the assets of the general account of the Company.
Separate account assets are reported at market value. The operations of the
separate accounts are not included in the summary of operations; however,
income earned on amounts initially invested by the Company in the formation of
new separate accounts is included in other income.
Fair Values of Financial Instruments: Statement of Financial Accounting
Standards (SFAS) No. 107, "Disclosure about Fair Value of Financial
Instruments," requires disclosure of fair value information about financial
instruments, whether or not recognized in the statement of financial position,
for which it is practicable to estimate the value. In situations where quoted
market prices are not available, fair values are based on estimates using
present value or other valuation techniques. SFAS No. 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements. Therefore, the aggregate fair value amounts presented do not
represent the underlying value of the Company.
The methods and assumptions utilized by the Company in estimating its fair
value disclosures for financial instruments are as follows:
The carrying amounts reported in the statement of financial position for
cash and temporary cash investments approximate their fair values.
Fair values for public bonds are obtained from an independent pricing
service. Fair values for private placement securities and publicly traded
bonds not provided by the independent pricing service are estimated by the
Company by discounting expected future cash flows using current market
rates applicable to the yield, credit quality and maturity of the
investments. The fair values for common and preferred stocks, other than
its subsidiary investments, which are carried at equity values, are based
on quoted market prices.
The fair value of interest rate swaps and currency rate swaps is estimated
using a discounted cash flow method adjusted for the difference between the
rate of the existing swap and the current swap market rate. Discounted cash
flows in foreign currencies are converted to U.S. dollars using current
exchange rates.
The fair value for mortgage loans is estimated using discounted cash flow
analyses using interest rates adjusted to reflect the credit
characteristics of the underlying loans. Mortgage loans with similar
characteristics and credit risks are aggregated into qualitative categories
for purposes of the fair value calculations.
The carrying 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 and
issue real estate mortgages is estimated using a discounted cash flow
method incorporating adjustments for the difference in the level of
interest rates between the dates the commitments were made and December 31,
1996. The fair value for commitments to purchase real estate approximates
the amount of the initial commitment.
43
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
Capital Gains and Losses: Realized capital gains and losses are determined
using the specific identification basis. Realized capital gains and losses,
net of taxes and amounts transferred to the IMR, are included in net 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: Life reserves are developed by actuarial methods and are
determined based on published tables using statutorily specified interest
rates and valuation methods that will provide, in the aggregate, reserves that
are greater than or equal to the minimum or guaranteed policy cash values or
the amounts required by the Commonwealth of Massachusetts Division of
Insurance. Reserves for 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 and 1996.
Federal Income Taxes: Federal income taxes are reported in the financial
statements based on amounts determined to be payable as a result of operations
within the current accounting period. The operations of the Company are
consolidated with John Hancock 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 adjustments. The Company
made payments of $33.5 million in 1996 and $32.2 million in 1995.
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 temporary differences that may exist
between financial reporting and taxable income or loss.
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 1995 amounts have been reclassified to permit
comparison with the corresponding 1996 amounts.
44
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
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 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 each of 1996 and 1995.
Unamortized goodwill at December 31, 1996 was $15.2 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>
1996 1995
---- ----
(In millions)
<S> <C> <C>
Investment expenses............................................... $ 7.0 $ 5.1
Depreciation expense.............................................. 0.9 1.0
Investment taxes.................................................. 0.5 0.5
------ ------
$ 8.4 $ 6.6
====== ======
</TABLE>
45
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS
Net realized capital gains (losses) consist of the following items:
<TABLE>
<CAPTION>
1996 1995
---- ----
(In millions)
<S> <C> <C>
Net gains (losses) from asset sales............................. $ (0.2) $ 4.0
Capital gains tax............................................... (1.0) (2.5)
Net capital gains transferred to IMR............................ (0.3) (1.0)
------ ------
Realized Capital Gains (Losses)............................... $ (1.5) $ 0.5
====== ======
</TABLE>
Net unrealized capital gains (losses) and other adjustments consist of the
following items:
<TABLE>
<CAPTION>
1996 1995
---- ----
(In millions)
<S> <C> <C>
Net gains (losses) from changes in security values and book
value adjustments.............................................. $ 3.7 $ (0.2)
Increase in asset valuation reserve............................. (1.2) (2.8)
------ ------
Net Unrealized Capital Gains (Losses) and Other Adjustments... $ 2.5 $ (3.0)
====== ======
</TABLE>
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 1996 and 1995 to reflect continuing changes
in the Company's operations. The amount of the service fee charged to the
Company was $111.7 million and $97.9 million in 1996 and 1995, 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 $1.6 million and
$1.8 million in 1996 and 1995, 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 1996, 1995 and 1994 issues of
flexible premium variable life insurance and scheduled premium variable life
insurance policies. In connection with this agreement, John Hancock
transferred $24.5 million and $32.7 million of cash for tax, commission, and
expense allowances to the Company, which increased the Company's net gain from
operations by $15.7 million and $20.3 million in 1996 and 1995, respectively.
Effective January 1, 1996, the Company entered into a modified coinsurance
agreement with John Hancock to reinsure 50% of 1995 and 1996 issues of retail
annuity contracts (Independence Preferred and Declaration). In connection with
this agreement, John Hancock transferred $23.2 million of cash for surrender
benefits, tax, reserve increase, commission, expense allowances and premium to
the Company, which increased the Company's net gain from operations by $15.1
million in 1996.
46
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
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, 1996 Value Gains Losses Value
---------------------------- --------- ---------- ---------- -----
(In millions)
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations
of U.S. government corporations and
agencies............................... $ 44.4 $ 0.2 $0.2 $ 44.4
Obligations of states and political
subdivisions........................... 12.6 0.4 0.0 13.0
Debt securities issued by foreign
governments............................ 0.8 0.1 0.0 0.9
Corporate securities.................... 623.2 29.8 3.4 649.6
Mortgage-backed securities.............. 72.5 10.2 0.1 82.6
------ ----- ---- ------
Total bonds........................... $753.5 $40.7 $3.7 $790.5
====== ===== ==== ======
<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
------ ----- ---- ------
Total bonds........................... $552.8 $46.2 $1.7 $597.3
====== ===== ==== ======
</TABLE>
The statement value and fair value of bonds at December 31, 1996, by
contractual maturity, are shown below. Maturities will differ from contractual
maturities because eligible borrowers may exercise their right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Statement Fair
Value Value
--------- -----
(In millions)
<S> <C> <C>
Due in one year or less....................................... $ 51.6 $ 52.9
Due after one year through five years......................... 260.8 267.7
Due after five years through ten years........................ 244.3 253.7
Due after ten years........................................... 124.3 133.6
------ ------
681.0 707.9
Mortgage-backed securities.................................... 72.5 82.6
------ ------
$753.5 $790.5
====== ======
</TABLE>
47
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--INVESTMENTS--CONTINUED
Proceeds from sales of bonds during 1996 and 1995 were $228.3 million and
$18.9 million, respectively. Gross gains of $1.3 million in 1996 and $0.2
million in 1995 and gross losses of $2.1 million in 1996 and $0.1 million in
1995 were realized on these transactions.
The cost of common stocks was $0.0 million and $0.1 million at December 31,
1996 and 1995, respectively. Gross unrealized appreciation on common stocks
totaled $1.4 million, and gross unrealized depreciation totaled $0.0 million
at December 31, 1996. The fair value of preferred stock totaled $9.6 million
at December 31, 1996 and $5.2 million at December 31, 1995.
Bonds with amortized cost of $11.3 million were nonincome producing for the
twelve months ended December 31, 1996.
At December 31, 1996, the mortgage loan portfolio was diversified by
geographic region and specific collateral property type as displayed below.
The Company controls credit risk through credit approvals, limits and
monitoring procedures.
<TABLE>
<CAPTION>
Statement
Property Type Value
------------- ---------
(In millions)
<S> <C>
Apartments.............. $ 96.0
Industrial.............. 35.0
Office buildings........ 11.3
Retail.................. 29.0
Agricultural............ 28.9
Other................... 11.9
------
$212.1
======
</TABLE>
<TABLE>
<CAPTION>
Geographic Statement
Concentration Value
------------- ---------
(In millions)
<S> <C>
East North Central...... $ 31.1
Middle Atlantic......... 11.5
Mountain................ 7.6
New England............. 27.6
Pacific................. 49.9
South Atlantic.......... 58.8
West South Central...... 25.6
------
$212.1
======
</TABLE>
At December 31, 1996, the fair values of the commercial and agricultural
mortgage loans portfolios were $189.0 million and $30.4 million, respectively.
The corresponding amounts as of December 31, 1995 were approximately $132.1
million and $22.2 million, respectively.
The maximum and minimum lending rates for mortgage loans during 1996 were
8.69% and 7.04% for agricultural loans and 8.5% and 7.2% for other properties.
Generally, the maximum percentage of any loan to the value of security at the
time of the loan, exclusive of insured or guaranteed or purchase money
mortgages, is 75%. For city mortgages, fire insurance is carried on all
commercial and residential properties at least equal to the excess of the loan
over the maximum loan which would be permitted by law on the land without the
building, except as permitted by regulations of the Federal Housing Commission
on loans fully insured under the provisions of the National Housing Act. For
agricultural mortgage loans, fire insurance is not normally required on land
based loans except in those instances where a building is critical to the
farming operation. Fire insurance is required on all agri-business facilities
in an aggregate amount equal to the loan balance.
48
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
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 1996 were $384.3 million, $9.9 million, and $12.1 million,
respectively. The corresponding amounts in 1995 were $72.4 million, $8.7
million, and $12.1 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--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Company enters into interest rate swap contracts for the purpose of
converting the interest rate characteristics (fixed or variable) of certain
investments to match those of related insurance liabilities. Maturities of
current agreements range through 2011. These swaps involve, to varying
degrees, interest rate risk in excess of amounts recognized in the statement
of financial position.
The Company enters into currency rate swap agreements to manage exposure to
foreign exchange rate fluctuations. Maturities of current agreements range
through 2006. Should the counterparty fail to meet the terms of the contract,
the Company's market risk is limited to the currency rate differential.
The Company enters into interest rate cap contracts to manage exposure on
underlying security values due to a rise in interest rates. Maturities of
current agreements range through 2006.
The Company also uses financial futures contracts to hedge public bonds
intended for future sale in order to lock in the market value at the date of
contract. The Company is subject to the risks associated with changes in the
value of the underlying securities; however, such changes in value generally
are offset by changes in the value of the hedged items. The contract or
notional amounts of the contracts represent the extent of the Company's
involvement but not in the future cash requirements, as the Company intends to
close the open positions prior to settlement.
The contract or notional amount of the foregoing financial instruments, which
indicates the Company's involvement and in certain instances, maximum credit
risk related to those instruments, is as follows:
<TABLE>
<CAPTION>
December 31
-------------
1996 1995
---- ----
(In millions)
<S> <C> <C>
Futures contracts to sell securities............................ $ 73.0 $ 0.0
======= =====
Notional amount of interest rate swaps, currency rate swaps, and
interest rate caps to:
Receive variable rates........................................ $ 215.9 $ 0.0
======= =====
Receive fixed rates........................................... $ 26.6 $ 5.0
======= =====
</TABLE>
49
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 9--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK--CONTINUED
The Company continually monitors its positions and the credit ratings of the
counterparties to these financial instruments. The Company believes the risk
of incurring losses due to the nonperformance by its counterparties is remote
and that any such losses would be immaterial.
Based on the market rates in effect at December 31, 1996, the Company's
interest rate swaps, currency rate swaps and interest rate caps represented
(assets) liabilities to the Company with fair values of $2.3 million, $(8.2)
million and $(2.0) million, respectively. The corresponding amounts as of
December 31, 1995 were $0.0 million.
NOTE 10--POLICYHOLDERS' RESERVES AND BENEFICIARIES' FUND
The Company's annuity reserves and deposit fund liabilities that are subject
to discretionary withdrawal and subject to discretionary withdrawal (without
adjustment) are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1996 Percent
----------------- -------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal at book value
less surrender charge............................... $441.9 89.3%
Subject to discretionary withdrawal at book value
(without adjustment)................................ 53.0 10.7
------ -----
Total annuity reserves and deposit liabilities....... $494.9 100.0%
====== =====
</TABLE>
NOTE 11--COMMITMENTS AND CONTINGENCIES
The Company has extended commitments to purchase long-term bonds and real
estate and issue real estate mortgages totalling $42.1 million, $0.1 million,
and $33.5 million, respectively, at December 31, 1996. 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 $76.2 million at December 31,
1996. The majority of these commitments expire in 1997.
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, 1996. 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.
50
<PAGE>
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 12--FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the carrying amounts and fair values of the
Company's financial instruments:
<TABLE>
<CAPTION>
Year ended December 31
--------------------------------
1996 1995
--------------- ---------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ------ -------- ------
(In millions)
<S> <C> <C> <C> <C>
Assets
Bonds--Note 7............................... $753.5 $790.5 $552.8 $597.3
Preferred stocks--Note 7.................... 9.6 9.6 5.0 5.2
Common stocks--Note 7....................... 1.4 1.4 1.7 1.7
Mortgage loans on real estate--Note 7....... 212.1 219.4 146.7 154.3
Policy loans--Note 1........................ 80.8 80.8 61.8 61.8
Cash and cash equivalents--Note 1........... 31.9 31.9 76.6 76.6
Derivatives liabilities relating to:--Note 9
Interest rate swaps......................... -- 2.3 -- 0.0
Currency rate swaps......................... -- (8.2) -- 0.0
Interest rate caps.......................... -- (2.0) -- 0.0
Liabilities
Commitments--Note 11........................ -- 76.2 -- 23.8
</TABLE>
The carrying amounts in the table are included in the statutory-basis
statements of financial position. The method and assumptions utilized by the
Company in estimating its fair value disclosures are described in Note 1.
51
<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 Policies.
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 Disability
Waiver of Premiums and Accidental Death Benefits, 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 Servicing Office. JHVLICO assumes no
responsibility for the validity or sufficiency of any assignment.
AGE AND SEX. If the age or sex of the insured has been misstated, JHVLICO
will adjust the Initial Sum Insured and every other benefit to that which the
premium paid would have purchased at the correct age and sex.
52
<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 premiums paid less any indebtedness.
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 premiums paid or the surrender value, less indebtedness.
INCONTESTABILITY. The Policy, except for any provision for a disability
benefit or additional benefits provisions added after issue, shall be
incontestable after it has been in force during the lifetime of the insured
for 2 years from its issue date except for nonpayment of premium.
DEFERRAL OF DETERMINATIONS AND PAYMENTS. If the Policy is not on a fixed
non-forfeiture option, payment of any death, surrender, or loan proceeds will
ordinarily be made within seven days after receipt at JHVLICO's Servicing
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 the determination, payment or application of such amounts
if the effective date for determining such amounts falls within any period
during which: (1) the disposal or valuation of the Accounts' assets is not
reasonably practicable because the New York Stock Exchange is closed or
conditions are such that, under the Commissions' 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 Policies which have been filed as exhibits to the Registration
Statement.
53
<PAGE>
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, CASH VALUES
AND ACCUMULATED PREMIUMS.
The following tables illustrate the way in which the three types of Policies
operate. Each table illustrates the changes in the death benefit and cash
value of the base Policy, disregarding any dividends or Policy loans. Each
table separately illustrates the operation of a Policy assuming dividends
WHICH ARE NOT GUARANTEED are used to purchase additional variable paid-up
death benefits. The tables show how the death benefit and cash value may vary
over an extended period of time assuming the subaccounts experience
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 for a
standard risk and will assist in a comparison of the total death benefit and
cash 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 cash value for a Policy would be different from those shown
if premiums are paid more frequently than annually or if the actual gross
rates of investment return applicable to the Policy 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 cash value as of the end of each
Policy year reflect a total asset charge of 1.086% comprised of the daily
charge against the Account for mortality and expense risks (equivalent to an
effective annual rate of .50% of the value of the Account's assets), an
average asset charge for the daily investment advisory expense charges to the
Portfolios of the Fund (equivalent to an effective annual rate of .39%) and an
assumed average asset charge for the annual non-advisory operating expenses of
each Portfolio of the Fund (equivalent to an effective annual rate of .20%).
For a description of expenses charged to the Portfolios, including the
reimbursement of any Portfolio for annual non-advisory operating expenses in
excess of an effective annual rate of .25%, a continuing obligation of the
Fund's investment adviser, see the attached prospectus for the Fund. The
charges for the daily investment management fee and the annual non-advisory
operating expenses are based on the hypothetical assumption that Policy values
are allocated equally among the seven subaccounts. The actual charges and
expenses associated with any Policy may be more or less than 1.086% and 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.
The second column of each table shows the amount to which the total premiums
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 death benefits (and resulting cash values) shown for additional variable
paid-up death benefits purchased with dividends paid under a Policy are
illustrative of those which would be paid if investment returns of 0%, 6% and
12% are realized, if JHVLICO's mortality and expense experience in the future
is as currently experienced and if its dividend scale remains unchanged.
However, as experience has clearly shown, conditions cannot be expected to
continue unchanged, and accordingly dividend scales must be expected to change
from time to time. MOREOVER, THERE IS NO GUARANTEE AS TO THE AMOUNT OF
DIVIDENDS, IF ANY, THAT WILL BE PAID UNDER A POLICY. Although the tables are
based on the assumption that dividends will be used to purchase additional
variable paid-up death benefits, other dividend options are available. (See
"Annual Dividends".)
JHVLICO will furnish upon request a comparable illustration reflecting the
proposed insured's age, sex, smoking status and the Initial Sum Insured or
premium amount requested, and assuming that premiums are paid on an annual
basis and the proposed insured is a standard risk.
54
<PAGE>
PLAN:VARIABLE WHOLE LIFE 100
AGE 25 YEARS MALE--NON-SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $135,135
ANNUAL PREMIUM $1,250.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are
Not Guaranteed
<TABLE>
<CAPTION>
0% 6% 12%
---------------------- ---------------------- -----------------------
Death Benefit Death Benefit Death Benefit
---------------------- ---------------------- -----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------- ------ ------- ------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,313 135,135 0 135,135 135,550 0 135,550 142,561 0 142,561
2 2,691 135,135 208 135,343 135,588 208 135,796 143,283 208 143,491
3 4,138 135,135 400 135,535 135,786 410 136,196 147,033 421 147,454
4 5,657 135,135 575 135,710 135,993 608 136,600 151,098 642 151,739
5 7,252 135,135 734 135,869 136,206 799 137,005 155,417 869 156,286
6 8,928 135,135 879 136,014 136,423 986 137,409 159,987 1,105 161,092
7 10,686 135,135 1,011 136,146 136,644 1,168 137,812 164,813 1,350 166,164
8 12,533 135,135 1,153 136,288 136,870 1,374 138,244 169,906 1,679 171,585
9 14,472 135,135 1,302 136,437 137,099 1,601 138,700 175,277 2,126 177,403
10 16,508 135,135 1,458 136,593 137,332 1,853 139,185 180,939 2,712 183,652
15 28,322 135,135 2,420 137,555 138,519 3,981 142,500 213,370 8,251 221,620
20 43,399 135,135 3,384 138,519 139,804 7,708 147,512 255,762 19,892 275,654
25 62,642 135,135 4,103 139,238 141,231 12,607 153,838 312,737 40,264 353,002
30 87,201 135,135 4,595 139,730 142,712 18,666 161,378 386,200 74,054 460,254
35 118,545 135,135 4,986 140,121 144,248 26,213 170,461 481,203 129,322 610,525
Age 65 158,550 135,135 5,342 140,477 145,835 35,315 181,150 604,241 217,588 821,829
<CAPTION>
0% 6% 12%
---------------------- ---------------------- -----------------------
Cash Value Cash Value Cash Value
---------------------- ---------------------- -----------------------
Base Prem
Accum at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------- ------ ------- ------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,313 94 0 94 99 0 99 105 0 105
2 2,691 934 34 968 995 34 1,028 1,056 34 1,090
3 4,138 1,774 67 1,841 1,937 69 2,007 2,108 71 2,179
4 5,657 2,613 100 2,713 2,929 106 3,035 3,269 112 3,381
5 7,252 3,448 132 3,580 3,968 145 4,112 4,548 158 4,706
6 8,928 4,278 164 4,443 5,056 185 5,241 5,957 208 6,165
7 10,686 5,101 196 5,297 6,192 227 6,420 7,503 264 7,767
8 12,533 5,915 232 6,147 7,379 277 7,656 9,202 340 9,542
9 14,472 6,720 271 6,991 8,614 335 8,949 11,063 447 11,510
10 16,508 7,513 315 7,828 9,899 402 10,301 13,102 591 13,693
15 28,322 11,495 627 12,123 17,345 1,036 18,381 26,840 2,156 28,996
20 43,399 15,037 1,045 16,082 26,110 2,390 28,499 47,986 6,193 54,178
25 62,642 17,723 1,498 19,221 35,800 4,623 40,423 79,639 14,826 94,465
30 87,201 19,972 1,967 21,938 46,822 8,025 54,847 127,290 31,977 159,267
35 118,545 21,708 2,473 24,181 58,936 13,060 71,996 197,510 64,715 262,225
Age 65 158,550 22,958 3,032 25,990 71,982 20,142 92,124 299,610 124,650 424,260
</TABLE>
- --------
* Corresponding to modal premiums of: Semi-annual $638.73, Quarterly $325.90,
Special Monthly $108.30
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT HYPOTHETICAL INVESTMENT RESULTS ARE
ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS 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>
PLAN:VARIABLE WHOLE LIFE 100
AGE 40 YEARS MALE--NON-SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $113,968
ANNUAL PREMIUM $2,000.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are
Not Guaranteed
<TABLE>
<CAPTION>
0% 6% 12%
---------------------- ---------------------- -----------------------
Death Benefit Death Benefit Death Benefit
---------------------- ---------------------- -----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------- ------ ------- ------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,100 113,968 0 113,968 114,318 0 114,318 120,231 0 120,231
2 4,305 113,968 102 114,070 114,417 102 114,519 122,111 102 122,213
3 6,620 113,968 196 114,164 114,581 202 114,783 125,257 262 125,519
4 9,051 113,968 282 114,250 114,754 342 115,096 128,695 511 129,206
5 11,604 113,968 362 114,330 114,931 536 115,467 132,341 854 133,196
6 14,284 113,968 459 114,427 115,112 780 115,892 136,184 1,296 137,479
7 17,098 113,968 577 114,545 115,295 1,072 116,367 140,221 1,840 142,061
8 20,053 113,968 735 114,703 115,480 1,437 116,917 144,460 2,529 146,989
9 23,156 113,968 923 114,891 115,667 1,867 117,535 148,909 3,365 152,273
10 26,413 113,968 1,139 115,107 115,857 2,366 118,224 153,577 4,367 157,944
15 45,315 113,968 2,421 116,389 116,823 5,812 122,635 180,222 12,462 192,684
20 69,438 113,968 3,776 117,744 117,844 10,765 128,609 214,207 27,661 241,868
Age 65 100,226 113,968 4,895 118,863 118,945 16,990 135,935 258,552 53,375 311,927
30 139,521 113,968 5,836 119,804 120,069 24,212 144,791 314,489 95,727 410,216
35 189,672 113,968 6,651 120,619 121,212 34,125 155,337 385,101 163,843 548,944
<CAPTION>
0% 6% 12%
---------------------- ---------------------- -----------------------
Cash Value Cash Value Cash Value
---------------------- ---------------------- -----------------------
Base Prem
Accum at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------- ------ ------- ------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,100 591 0 591 626 0 626 662 0 662
2 4,305 1,986 28 2,014 2,137 28 2,165 2,291 28 2,319
3 6,620 3,350 57 3,407 3,694 58 3,752 4,056 76 4,132
4 9,051 4,682 84 4,767 5,296 102 5,399 5,967 154 6,121
5 11,604 5,984 112 6,096 6,947 166 7,113 8,036 266 8,302
6 14,284 7,254 147 7,401 8,644 250 8,894 10,273 417 10,690
7 17,098 8,494 191 8,685 10,391 356 10,746 12,695 613 13,308
8 20,053 9,705 251 9,956 12,187 493 12,680 15,315 871 16,186
9 23,156 10,886 326 11,212 14,035 662 14,697 18,151 1,198 19,350
10 26,413 12,037 416 12,453 15,934 868 16,801 21,218 1,607 22,826
15 45,315 17,504 1,037 18,541 26,385 2,499 28,884 40,891 5,380 46,270
20 69,438 22,070 1,878 23,948 37,910 5,381 43,291 69,226 13,883 83,110
Age 65 100,226 25,346 2,780 28,126 49,861 9,691 59,552 108,880 30,573 139,453
30 139,521 27,731 3,736 31,467 62,133 15,892 78,025 163,488 61,828 225,316
35 189,672 29,282 4,725 34,007 74,287 24,354 98,641 237,100 117,438 354,538
</TABLE>
- --------
* Corresponding to modal premiums of: Semi-annual $1,021.60, Quarterly
$520.90, Special Monthly $172.80
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT HYPOTHETICAL INVESTMENT RESULTS ARE
ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS 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>
PLAN:VARIABLE WHOLE LIFE P50
AGE 25 YEARS MALE--NON-SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $65,723
ANNUAL PREMIUM $700.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are
Not Qualified
<TABLE>
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Death Benefit Death Benefit Death Benefit
-------------------- -------------------- ----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 735 65,723 0 65,723 65,925 0 65,925 69,335 0 69,335
2 1,507 65,723 0 65,723 65,930 0 65,930 69,442 0 69,442
3 2,317 65,723 175 65,898 66,029 192 66,221 71,304 211 71,515
4 3,168 65,723 352 66,075 66,130 402 66,533 73,289 456 73,745
5 4,061 65,723 527 66,250 66,234 625 66,859 75,389 735 76,124
6 4,999 65,723 702 66,425 66,340 862 67,202 77,607 1,052 78,659
7 5,984 65,723 876 66,599 66,448 1,114 67,562 79,948 1,407 81,356
8 7,019 65,723 1,056 66,779 66,557 1,388 67,945 82,417 1,816 84,234
9 8,105 65,723 1,240 66,963 66,669 1,684 68,352 85,021 2,282 87,302
10 9,245 65,723 1,428 67,151 66,782 2,002 68,784 87,765 2,810 90,575
15 15,860 65,723 2,434 68,157 67,358 4,007 71,365 103,443 6,732 110,175
20 24,303 65,723 3,406 69,129 67,982 6,620 74,601 123,953 13,481 137,433
25 35,079 65,723 4,135 69,858 68,677 9,555 78,232 151,610 23,919 175,529
30 48,833 65,723 4,571 70,294 69,399 12,600 81,999 187,256 39,210 226,466
35 66,385 65,723 4,740 70,463 70,147 15,688 85,835 233,343 61,314 294,657
Age
65 88,788 65,723 4,692 70,415 70,919 18,763 89,682 293,022 92,895 385,917
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Cash Value Cash Value Cash Value
-------------------- -------------------- ----------------------
Base Prem
Accum at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 735 13 0 13 14 0 14 15 0 15
2 1,507 423 0 423 450 0 450 476 0 476
3 2,317 834 29 863 908 32 941 985 35 1,021
4 3,168 1,244 61 1,305 1,390 70 1,461 1,548 80 1,628
5 4,061 1,652 95 1,747 1,896 113 2,009 2,168 133 2,301
6 4,999 2,057 131 2,188 2,425 162 2,587 2,850 198 3,048
7 5,984 2,459 170 2,629 2,978 217 3,195 3,600 275 3,874
8 7,019 2,857 212 3,069 3,555 280 3,835 4,423 368 4,790
9 8,105 3,250 258 3,508 4,156 352 4,508 5,324 479 5,804
10 9,245 3,637 309 3,946 4,781 435 5,216 6,312 612 6,925
15 15,860 5,592 631 6,223 8,416 1,043 9,459 12,984 1,759 14,743
20 24,303 7,332 1,051 8,383 12,696 2,052 14,749 23,256 4,197 27,453
25 35,079 8,636 1,509 10,145 17,409 3,503 20,912 38,608 8,808 47,416
30 48,833 9,727 1,956 11,683 22,769 5,417 28,186 61,719 16,933 78,652
35 66,385 10,569 2,351 12,920 28,660 7,817 36,477 95,776 30,686 126,461
Age
65 88,788 11,176 2,664 13,839 35,004 10,702 45,706 145,295 53,222 198,517
</TABLE>
- --------
*Corresponding to modal premiums of: Semi-annual $357.95, Quarterly $182.90,
Special Monthly $61.00
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT HYPOTHETICAL INVESTMENT RESULTS ARE
ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS 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>
PLAN:VARIABLE WHOLE LIFE P50
AGE 40 YEARS MALE--NON-SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $62,945
ANNUAL PREMIUM $1,200.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are
Not Guaranteed
<TABLE>
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Death Benefit Death Benefit Death Benefit
-------------------- -------------------- ----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,260 62,945 0 62,945 63,138 0 63,138 66,404 0 66,404
2 2,583 62,945 0 62,945 63,183 0 63,183 67,251 0 67,251
3 3,972 62,945 98 63,043 63,273 119 63,392 68,979 140 69,119
4 5,431 62,945 212 63,157 63,369 264 63,633 70,870 322 71,192
5 6,962 62,945 338 63,283 63,467 435 63,901 72,875 547 73,422
6 8,570 62,945 472 63,417 63,566 627 64,193 74,988 814 75,802
7 10,259 62,945 605 63,550 63,667 829 64,496 77,207 1,114 78,321
8 12,032 62,945 752 63,697 63,769 1,060 64,830 79,536 1,471 81,007
9 13,893 62,945 903 63,848 63,873 1,311 65,184 81,981 1,879 83,860
10 15,848 62,945 1,061 64,006 63,977 1,584 65,562 84,546 2,345 86,890
15 27,189 62,945 1,911 64,856 64,509 3,297 67,806 99,150 5,778 104,928
20 41,663 62,945 2,691 65,636 65,071 5,414 70,486 117,795 11,414 129,209
Age 65 60,136 62,945 3,279 66,224 65,682 7,724 73,406 142,241 19,839 162,080
30 83,713 62,945 3,713 66,658 66,304 10,211 76,516 173,058 32,226 205,284
35 113,804 62,945 3,971 66,916 66,936 12,826 79,673 211,949 50,237 262,186
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Cash Value Cash Value Cash Value
-------------------- -------------------- ----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,260 251 0 251 266 0 266 281 0 281
2 2,583 1,026 0 1,026 1,101 0 1,101 1,177 0 1,177
3 3,972 1,784 28 1,813 1,962 34 1,996 2,149 41 2,189
4 5,431 2,525 63 2,588 2,848 79 2,927 3,200 97 3,296
5 6,962 3,248 104 3,353 3,760 135 3,895 4,338 170 4,508
6 8,570 3,954 151 4,105 4,699 201 4,900 5,568 262 5,830
7 10,259 4,643 200 4,843 5,664 275 5,939 6,900 371 7,271
8 12,032 5,316 257 5,573 6,657 364 7,021 8,341 507 8,848
9 13,893 5,972 319 6,292 7,679 465 8,144 9,901 669 10,570
10 15,848 6,612 388 7,000 8,729 581 9,310 11,588 863 12,451
15 27,189 9,670 818 10,488 14,530 1,418 15,947 22,435 2,494 24,929
20 41,663 12,227 1,335 13,562 20,933 2,698 23,631 38,068 5,711 43,780
Age 65 60,136 14,029 1,862 15,892 27,533 4,405 31,938 59,900 11,365 71,265
30 83,713 15,340 2,377 17,717 34,311 6,567 40,878 89,965 20,816 110,781
35 113,804 16,191 2,821 19,013 41,023 9,154 50,177 130,493 36,012 166,505
</TABLE>
- --------
* Corresponding to modal premiums of Semi-annual $613.20, Quarterly $312.90,
Special Monthly $104.00.
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT HYPOTHETICAL INVESTMENT RESULTS ARE
ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS 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>
PLAN:VARIABLE WHOLE LIFE P50
AGE 25 YEARS MALE--SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $61,670
ANNUAL PREMIUM $700.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are
Not Guaranteed
<TABLE>
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Death Benefit Death Benefit Death Benefit
-------------------- -------------------- ----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 735 61,670 0 61,670 61,859 0 61,859 65,059 0 65,059
2 1,507 61,670 0 61,670 61,865 0 61,865 65,160 0 65,160
3 2,317 61,670 164 61,834 61,957 181 62,138 66,907 198 67,105
4 3,168 61,670 331 62,001 62,052 378 62,430 68,769 428 69,198
5 4,061 61,670 495 62,165 62,150 586 62,736 70,740 690 71,430
6 4,999 61,670 659 62,329 62,249 809 63,058 72,821 987 73,808
7 5,984 61.670 822 62,492 62,350 1,045 63,395 75,018 1,321 76,339
8 7,019 61,670 991 62,661 62,453 1,303 63,755 77,335 1,705 79,039
9 8,105 61,670 1,163 62,833 62,557 1,580 64,137 79,778 2,141 81,919
10 9,245 61,670 1,339 63,009 62,664 1,879 64,543 82,352 2,637 84,989
15 15,860 61,670 2,283 63,953 63,204 3,760 66,964 97,064 6,317 103,381
20 24,303 61.670 3,195 64,865 63,789 6,211 70,001 116,309 12,650 128,959
25 35,079 61,670 3,880 65,550 64,442 8,965 73,408 142,261 22,445 164,705
30 48,833 61,670 4,289 65,959 65,119 11,823 76,942 175,708 36,793 212,501
35 66,385 61,670 4,448 66,118 65,821 14,721 80,542 218,954 57,534 276,488
Age
65 88,788 61,670 4,402 66,072 66,546 17,606 84,152 274,952 87,168 362,121
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Cash Value Cash Value Cash Value
-------------------- -------------------- ----------------------
Base Prem
Accum at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 735 12 0 12 13 0 13 14 0 14
2 1,507 397 0 397 422 0 422 446 0 446
3 2,317 782 28 810 852 30 883 924 33 958
4 3,168 1,167 58 1,224 1,305 66 1,370 1,452 75 1,527
5 4,061 1,550 89 1,639 1,779 106 1,885 2,034 125 2,159
6 4,999 1,930 123 2,053 2,276 152 2,428 2,675 186 2,860
7 5,984 2,307 159 2,466 2,794 203 2,998 3,378 258 3,635
8 7,019 2,681 199 2,880 3,336 263 3,599 4,150 345 4,495
9 8,105 3,049 242 3,292 3,900 331 4,230 4,996 450 5,446
10 9,245 3,413 290 3,702 4,486 408 4,894 5,923 575 6,498
15 15,860 5,247 592 5,839 7,897 979 8,876 12,183 1,651 13,834
20 24,303 6,880 986 7,866 11,913 1,926 13,839 21,822 3,939 25,760
25 35,079 8,103 1,416 9,519 16,335 3,287 19,622 36,227 8,265 44,492
30 48,833 9,127 1,836 10,963 21,365 5,083 26,448 57,913 15,889 73,802
35 66,385 9,918 2,206 12,123 26,893 7,334 34,227 89,870 28,794 118,663
Age
65 88,788 10,487 2,499 12,986 32,846 10,042 42,888 136,335 49,941 186,276
</TABLE>
- --------
* Corresponding to modal premiums of: Semi-annual $357.95, Quarterly $182.90.
Special Monthly $61.00.
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS SHOWN
ABOVE ARE ILLLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS
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.
59
<PAGE>
PLAN:VARIABLE WHOLE LIFE P50
AGE 40 YEARS MALE--SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $57,644
ANNUAL PREMIUM $1,200.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are
Not Guaranteed
<TABLE>
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Death Benefit Death Benefit Death Benefit
-------------------- -------------------- ----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,260 57,644 0 57,644 57,821 0 57,821 60,812 0 60,812
2 2,583 57,644 0 57,644 57,862 0 57,862 61,587 0 61,587
3 3,972 57,644 90 57,734 57,945 109 58,053 63,170 128 63,299
4 5,431 57,644 194 57,838 58,032 242 58,274 64,902 295 65,197
5 6,962 57,644 309 57,953 58,122 398 58,520 66,738 501 67,239
6 8,570 57,644 432 58,076 58,213 574 58,787 68,672 746 69,418
7 10,259 57,644 554 58,198 58,305 759 59,065 70,705 1,020 71,725
8 12,032 57,644 688 58,332 58,399 971 59,370 72,838 1,347 74,185
9 13,893 57,644 827 58,471 58,494 1,201 59,695 75,077 1,721 76,797
10 15,848 57,644 972 58,616 58,589 1,451 60,040 77,425 2,148 79,573
15 27,189 57,644 1,750 59,394 59,076 3,019 62,096 90,800 5,291 96,092
20 41,663 57,644 2,464 60,108 59,591 4,959 64,550 107,875 10,453 118,327
Age
65 60,136 57,644 3,003 60,647 60,151 7,073 67,224 130,262 18,169 148,430
30 83,712 57,644 3,400 61,044 60,720 9,351 70,072 158,484 29,512 187,996
35 113,803 57,644 3,637 61,281 61,299 11,746 73,045 194,100 46,007 240,106
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Cash Value Cash Value Cash Value
-------------------- -------------------- ----------------------
Base Prem
Accum at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,260 230 0 230 244 0 244 258 0 258
2 2,583 940 0 940 1,008 0 1,008 1,078 0 1,078
3 3,972 1,634 26 1,660 1,797 31 1,828 1,968 37 2,005
4 5,431 2,312 58 2,370 2,608 72 2,681 2,930 88 3,019
5 6,962 2,975 96 3,070 3,444 123 3,567 3,972 156 4,128
6 8,570 3,621 138 3,759 4,303 184 4,487 5,099 240 5,339
7 10,259 4,252 183 4,435 5,187 252 5,439 6,319 340 6,659
8 12,032 4,868 235 5,103 6,097 333 6,430 7,639 464 8,103
9 13,893 5,469 292 5,762 7,032 426 7,458 9,067 613 9,680
10 15,848 6,055 355 6,410 7,994 532 8,526 10,612 790 11,402
15 27,189 8,856 749 9,605 13,306 1,298 14,604 20,545 2,284 22,830
20 41,663 11,197 1,222 12,420 19,170 2,471 21,641 34,862 5,230 40,093
Age
65 60,136 12,848 1,705 14,553 25,214 4,034 29,249 54,855 10,408 65,263
30 83,712 14,048 2,177 16,225 31,421 6,014 37,435 82,389 19,063 101,451
35 113,803 14,828 2,584 17,412 37,568 8,383 45,951 119,504 32,979 152,483
</TABLE>
- --------
* Corresponding to modal premiums of: Semi-Annual $613.20, Quarterly $312.90,
Special Monthly $104.00
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT HYPOTHETICAL INVESTMENT RESULTS ARE
ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS 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.
60
<PAGE>
PLAN:VARIABLE WHOLE LIFE
AGE 25 YEARS MALE--NON-SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $28,930
ANNUAL PREMIUM $350.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are
Not Guaranteed
<TABLE>
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Death Benefit Death Benefit Death Benefit
-------------------- -------------------- ----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 368 28,930 0 28,930 29,019 0 29,019 30,520 0 30,520
2 753 28,930 0 28,930 29,021 0 29,021 30,567 0 30,567
3 1,159 28,930 26 28,956 29,065 26 29,090 31,387 33 31,419
4 1,584 28,930 49 28,979 29,109 61 29,171 32,260 81 32,341
5 2,031 28,930 79 29,009 29,155 106 29,261 33,185 143 33,328
6 2,500 28,930 114 29,044 29,202 160 29,361 34,161 222 34,383
7 2,992 28,930 152 29,082 29,249 222 29,471 35,192 316 35,508
8 3,509 28,930 199 29,129 29,297 296 29,593 36,279 432 36,711
9 4,052 28,930 251 29,181 29,346 382 29,729 37,424 573 37,997
10 4,622 28,930 310 29,240 29,396 482 29,878 38,632 739 39,371
15 7,930 28,930 1,001 29,931 29,650 1,533 31,183 45,534 2,474 48,008
20 12,152 28,930 1,741 30,671 29,924 3,006 32,931 54,562 5,636 60,198
25 17,540 28,930 2,208 31,138 30,230 4,526 34,756 66,736 10,369 77,105
30 24,416 28,930 2,440 31,370 30,548 6,022 36,570 82,426 17,198 99,625
35 33,193 28,930 2,513 31,443 30,877 7,507 38,384 102,713 27,021 129,734
Age
65 44,394 28,930 2,479 31,409 31,217 8,977 40,194 128,983 41,035 170,018
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Cash Value Cash Value Cash Value
-------------------- -------------------- ----------------------
Base Prem
Accum at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 368 6 0 6 6 0 6 7 0 7
2 753 186 0 186 198 0 198 209 0 209
3 1,159 367 4 371 400 4 404 434 5 439
4 1,584 547 9 556 612 11 623 681 14 695
5 2,031 727 14 741 835 19 854 954 26 980
6 2,500 905 21 927 1,068 30 1,098 1,255 42 1,296
7 2,992 1,082 30 1,112 1,311 43 1,354 1,585 62 1,646
8 3,509 1,257 40 1,297 1,565 60 1,625 1,947 88 2,034
9 4,052 1,430 52 1,483 1,829 80 1,909 2,344 120 2,464
10 4,622 1,601 67 1,668 2,105 105 2,209 2,779 161 2,940
15 7,930 2,462 260 2,721 3,705 399 4,104 5,715 646 6,362
20 12,152 3,227 538 3,765 5,589 932 6,521 10,237 1,755 11,991
25 17,540 3,801 806 4,607 7,663 1,659 9,322 16,994 3,818 20,813
30 24,416 4,282 1,044 5,326 10,022 2,589 12,612 27,167 7,427 34,595
35 33,193 4,652 1,247 5,899 12,616 3,740 16,356 42,159 13,523 55,682
Age
65 44,394 4,919 1,407 6,327 15,408 5,120 20,528 63,956 23,510 87,466
</TABLE>
- --------
* Corresponding to modal premiums of: Semi-annual $179.28, Quarterly $91.90,
Special Monthly $30.90
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT HYPOTHETICAL INVESTMENT RESULTS ARE
ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS 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.
61
<PAGE>
PLAN:VARIABLE WHOLE LIFE
AGE 40 YEARS MALE--NON-SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $28,661
ANNUAL PREMIUM $600.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are
Not Guaranteed
<TABLE>
<CAPTION>
0% 6% 12%
-------------------- -------------------- ---------------------
Death Benefit Death Benefit Death Benefit
-------------------- -------------------- ---------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 630 28,661 0 28,661 28,749 0 28,749 30,236 0 30,236
2 1,291 28,661 0 28,661 28,752 0 28,752 30,284 0 30,284
3 1,986 28,661 15 28,676 28,795 17 28,812 31,101 26 31,127
4 2,715 28,661 35 28,696 28,839 50 28,889 31,965 72 32,037
5 3,481 28,661 64 28,725 28,884 94 28,978 32,873 136 33,009
6 4,285 28,661 102 28,763 28,929 152 29,082 33,825 221 34,046
7 5,129 28,661 142 28,803 28,975 217 29,192 34,823 320 35,144
8 6,016 28,661 190 28,851 29,021 296 29,317 35,870 445 36,315
9 6,947 28,661 245 28,906 29,068 386 29,455 36,968 592 37,559
10 7,924 28,661 305 28,966 29,116 489 29,604 38,119 765 38,884
15 13,594 28,661 1,041 29,702 29,355 1,584 30,939 44,623 2,551 47,174
20 20,831 28,661 1,800 30,461 29,610 3,043 32,652 52,948 5,621 58,569
Age
65 30,068 28,661 2,260 30,921 29,891 4,474 34,365 64,018 9,994 74,012
30 41,856 28,661 2,512 31,173 30,177 5,897 36,074 77,947 16,251 94,198
35 56,901 28,661 2,630 31,291 30,466 7,342 37,809 95,511 25,239 120,750
<CAPTION>
0% 6% 12%
-------------------- -------------------- ---------------------
Cash Value Cash Value Cash Value
-------------------- -------------------- ---------------------
Base Prem
Accum at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 630 12 0 12 12 0 12 13 0 13
2 1,291 371 0 371 394 0 394 417 0 417
3 1,986 722 4 726 787 5 792 854 8 861
4 2,715 1,065 11 1,076 1,191 15 1,206 1,327 22 1,348
5 3,481 1,401 20 1,421 1,608 29 1,637 1,839 42 1,881
6 4,285 1,728 32 1,761 2,037 49 2,085 2,392 71 2,463
7 5,129 2,048 47 2,095 2,477 72 2,549 2,991 107 3,098
8 6,016 2,360 65 2,425 2,931 102 3,032 3,639 153 3,792
9 6,947 2,664 87 2,751 3,397 137 3,534 4,341 211 4,551
10 7,924 2,961 112 3,073 3,877 179 4,056 5,099 282 5,380
15 13,594 4,406 446 4,851 6,558 681 7,239 10,014 1,101 11,115
20 20,831 5,618 893 6,511 9,525 1,516 11,041 17,112 2,812 19,924
Age
65 30,068 6,429 1,283 7,712 12,530 2,552 15,082 26,959 5,725 32,684
30 41,856 7,018 1,608 8,626 15,616 3,792 19,408 40,521 10,497 51,018
35 56,901 7,398 1,868 9,267 18,672 5,240 23,912 58,804 18,092 76,897
</TABLE>
- --------
* Corresponding to modal premiums of: Semi-Annual $306.90. Quarterly $156.90,
Special Monthly $52.40.
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS SHOWN
ABOVE ARE ILLLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS
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.
62
<PAGE>
PLAN:VARIABLE WHOLE LIFE
AGE 25 YEARS MALE--SMOKER
INITIAL SUM INSURED (GUARANTEED MINIMUM DEATH BENEFIT) $27,223
ANNUAL PREMIUM $350.00* (PRMS ACCUM MEANS PREMIUMS ACCUMULATED)
Dividends Purchasing Variable Paid-Up Additions (Var Pu Adds) Dividends are Not
Guaranteed
<TABLE>
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Death Benefit Death Benefit Death Benefit
-------------------- -------------------- ----------------------
Prms Accum
at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 368 27,223 0 27,223 27,307 0 27,307 28,719 0 28,719
2 753 27,223 0 27,223 27,309 0 27,309 28,764 0 28,764
3 1,159 27,223 24 27,247 27,350 24 27,374 29,535 31 29,565
4 1,584 27,223 47 27,270 27,392 58 27,450 30,357 76 30,433
5 2,031 27,223 74 27,297 27,435 100 27,534 31,227 135 31,361
6 2,500 27,223 107 27,330 27,479 150 27,629 32,146 209 32,354
7 2,992 27,223 143 27,366 27,523 208 27,732 33,115 297 33,413
8 3,509 27,223 187 27,410 27,569 278 27,847 34,138 407 34,545
9 4,052 27,223 236 27,459 27,615 360 27,975 35,216 539 35,755
10 4,622 27,223 291 27,514 27,662 453 28,115 36,353 696 37,048
15 7,930 27,223 942 28,165 27,900 1,443 29,343 42,847 2,328 45,175
20 12,152 27,223 1,638 28,861 28,159 2,829 30,987 51,342 5,303 56,646
25 17,540 27,223 2,077 29,300 28,447 4,258 32,705 62,798 9,757 72,555
30 24,416 27,223 2,296 29,519 28,746 5,667 34,412 77,563 16,183 93,746
35 33,193 27,223 2,365 29,588 29,055 7,064 36,119 96,653 25,426 122,079
Age 65 44,394 27,223 2,332 29,555 29,375 8,447 37,822 121,372 38,613 159,985
<CAPTION>
0% 6% 12%
-------------------- -------------------- ----------------------
Cash Value Cash Value Cash Value
-------------------- -------------------- ----------------------
Base Prem
Accum at Base Var Pu Base Var Pu Base Var Pu
Year 5%/Annum Policy Adds Total Policy Adds Total Policy Adds Total
---- ---------- ------ ------ ------ ------ ------ ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 368 5 0 5 6 0 6 6 0 6
2 753 175 0 175 186 0 186 197 0 197
3 1,159 345 4 349 376 4 380 408 5 413
4 1,584 515 8 523 576 10 586 641 13 654
5 2,031 684 13 697 785 18 803 898 24 922
6 2,500 852 20 872 1,005 28 1,033 1,181 39 1,220
7 2,992 1,018 28 1,046 1,234 41 1,274 1,491 58 1,549
8 3,509 1,183 38 1,221 1,473 56 1,529 1,832 82 1,914
9 4,052 1,346 49 1,395 1,721 75 1,797 2,205 113 2,319
10 4,622 1,506 63 1,570 1,980 98 2,079 2,615 152 2,766
15 7,930 2,316 244 2,561 3,486 375 3,861 5,378 608 5,986
20 12,152 3,037 506 3,543 5,259 877 6,136 9,633 1,651 11,284
25 17,540 3,577 758 4,335 7,211 1,561 8,772 15,992 3,593 19,585
30 24,416 4,029 983 5,012 9,431 2,436 11,867 25,564 6,989 32,553
35 33,193 4,378 1,173 5,551 11,871 3,519 15,391 39,671 12,725 52,396
Age 65 44,394 4,629 1,324 5,953 14,499 4,818 19,317 60,182 22,122 82,305
</TABLE>
- --------
* Corresponding to modal premiums of: Semi-Annual $179.28, Quarterly $91.90,
Special Monthly $30.90
DIVIDENDS ILLUSTRATED ARE BASED ON CURRENT SCALES AND EXPERIENCE AND ARE NOT
GUARANTEED. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS SHOWN
ABOVE ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED REPRESENTATIVE 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 AN OWNER. THE DEATH BENEFIT AND CASH 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 NEVERTHELESS
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.
63
<PAGE>
[LOGO OF JOHN HANCOCK WORLDWIDE SPONSOR APPEARS HERE]
POLICIES ISSUED BY JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, MASSACHUSETTS 02117
H6001 5/97
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities and
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.
REPRESENTATION OF REASONABLENESS
John Hancock Variable Life Insurance Company represents that the fees and
charges deducted under the Policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the insurance company.
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 of
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 annual premium prospectus consisting of 65 pages.
The undertaking to file reports.
The signatures.
The following exhibits:
1.A. (1) JHVLICO Board Resolution establishing the separate account, previously
filed electronically on April 12, 1996.
(2) Not Applicable
(3) (a) Form of Distribution Agreement by and among John Hancock
Distributors, Inc., John Hancock Mutual Life Insurance Company, and
John Hancock Variable Life Insurance Company, incorporated by
reference from Pre-Effective Amendment No. 2 to Form S-6
Registration Statement of John Hancock Variable Life Account S
(File No. 333-15075) filed April 18, 1997.
(b) Specimen Variable Contracts Selling Agreement between John Hancock
Distributors, Inc., and selling broker-dealers, incorporated by
reference from Pre-Effective Amendment No. 2 to Form S-6
Registration Statement of John Hancock Variable Life Account S
(File No. 333-15075) filed April 18, 1997.
(c) Schedule of sales commissions included in Exhibit 1. A. (3) (a)
above.
(4) Not Applicable
(5) (a) Form of annual premium policy, included in Post-Effective
Amendment No. 15 to this File No. 2-68061 filed in October,
1988.
(b) Form of single premium policy, incorporated in Post-Effective
Amendment No. 6 to this File No. 2-68061 filed in October,
1984
<PAGE>
(c) Forms of endorsement for annual premium policies to reflect
separate account restructuring included in Post-Effective
Amendment No. 8 to this File No. 2-68061 filed December, 1985
(d) Forms of endorsement for single premium policies to reflect
separate account restructuring included in Post-Effective
Amendment No. 8 to this File No. 2-68061 filed December, 1985
(6) (a) JHVLICO Certificate of Incorporation, included in the initial
Registration Statement under this File No. 2-68061, filed in
June, 1980
(b) JHVLICO By-laws, included in the initial Registration Statement
under this File No. 2-68061, filed in June, 1980
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) Forms of application for Policies, included in Post-Effective
Amendment No. 3 to this File No. 2-68061 filed in March, 1983
(annual premium policies) and Post-Effective Amendment No. 6 to
this File No. 2-68061 filed in October, 1984 (single premium
policy)
2. Included as Exhibit 1.A (5) above
3. Opinion and consent of counsel as to securities being registered included
in Post-Effective Amendment No. 14 to this File No. 2-68061 filed in June,
1988
4. Not Applicable
5. Not Applicable
6.(a) Opinion and consent of actuary as to annual premium policy and
prospectus included in Post-Effective Amendment No. 15 to this File No.
2-6806l filed in October, l988.
(b) Opinion and consent of actuary as to single premium policy and prospectus,
included in Post-Effective Amendment No. 14 to this File No. 2-68061
filed in June, 1988.
7. Consent of independent auditors.
8. Memorandum describing JHVLICO's issuance, transfer and redemption procedures
for Policies pursuant to Rule 6e-2(b)(12)(ii) and method of computing
adjustments in payments and cash values of Policies upon conversion to fixed
benefit policies pursuant to Rule 6e-2(b)(13)(v)(B), included in Post-
Effective Amendment No. 10 to this File No. 2-68061 filed in March, 1986
<PAGE>
9. Power of attorney for Ronald J. Bocage, incorporated by reference from
Form 10-K annual report for John Hancock Variable Life Insurance Company
(File No. 33-62895) filed March 28, 1997. Powers of attorney for
D'Alessandro, Shaw, Lee, Van Leer, Tomlinson, Reitano, Luddy and
Paster. included in Post-Effective Amendment No. 22 to this file no. 2-68061
filed in April, 1995.
10. Opinion of counsel as to eligibility of this Post-Effective Amendment for
filing pursuant to Rule 485(b).
PRIOR EXEMPTIVE ORDER
JHVLICO, its Variable Life Account U (formerly JHVLICO's Variable Life Bond
Account) and John Hancock intend to continue to rely, to the extent necessary,
on the exemptive relief granted to them in SEC Release No. IC-14,365 (February
11, 1985).
- ----------------------------------------
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the John
Hancock Variable Life Insurance Company has duly caused this Post-Effective
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
17th day of April, 1997.
JOHN HANCOCK VARIABLE LIFE
INSURANCE COMPANY
(SEAL)
By HENRY D. SHAW
----------------------
Henry D. Shaw
President
Attest: RONALD J. BOCAGE
---------------------------
Ronald J. Bocage
Vice President and 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>
ROBERT R. REITANO
- --------------------
Robert R. Reitano Director(Principal Financial Officer) April 16, 1997
PATRICK F. SMITH
- ----------------------
Patrick F. Smith Controller (Principal Accounting Officer) April 16, 1997
HENRY D. SHAW
- --------------------
Henry D. Shaw Vice Chairman of the Board
for himself and as and President(Acting Principal
Attorney-in-Fact Executive Officer) April 17, 1997
</TABLE>
For: David F. D'Alessandro Chairman of the Board
Robert S. Paster Director
Thomas J. Lee Director
Michele G. Van Leer Director
Joseph A. Tomlinson Director
Barbara L. Luddy Director
Ronald J. Bocage Director
<PAGE>
-3-
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 Securitles 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
17th day of April, 1997.
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
(Registrant)
By John Hancock Variable Life Insurance Company
(Depositor)
(SEAL)
By HENRY D. SHAW
-------------
Henry D. Shaw
President
Attest RONALD J. BOCAGE
----------------------
Ronald J. Bocage
Vice President and
Counsel
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> LARGE CAP GROWTH
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 57,762,003
<INVESTMENTS-AT-VALUE> 65,826,786
<RECEIVABLES> 13,529,134
<ASSETS-OTHER> 23,279
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 79,379,199
<PAYABLE-FOR-SECURITIES> 22,075
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,204
<TOTAL-LIABILITIES> 23,279
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 79,355,920
<DIVIDEND-INCOME> 9,763,606
<INTEREST-INCOME> 881,144
<OTHER-INCOME> 0
<EXPENSES-NET> 381,331
<NET-INVESTMENT-INCOME> 10,263,419
<REALIZED-GAINS-CURRENT> 840,044
<APPREC-INCREASE-CURRENT> (889,487)
<NET-CHANGE-FROM-OPS> 10,213,976
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 20,381,233
<NUMBER-OF-SHARES-REDEEMED> 1,953,846
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 20,471,425
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 381,331
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> SOVEREIGN BOND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 211,556,712
<INVESTMENTS-AT-VALUE> 216,724,318
<RECEIVABLES> 52,294,393
<ASSETS-OTHER> 147,825
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 269,166,536
<PAYABLE-FOR-SECURITIES> 143,762
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,063
<TOTAL-LIABILITIES> 147,825
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 269,018,711
<DIVIDEND-INCOME> 15,986,241
<INTEREST-INCOME> 3,908,756
<OTHER-INCOME> 0
<EXPENSES-NET> 1,444,137
<NET-INVESTMENT-INCOME> 18,450,860
<REALIZED-GAINS-CURRENT> 690,912
<APPREC-INCREASE-CURRENT> (8,059,332)
<NET-CHANGE-FROM-OPS> 11,082,440
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 24,860,291
<NUMBER-OF-SHARES-REDEEMED> 13,011,482
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,350,504
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,444,137
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> INTERNATIONAL EQUITIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 14,580,491
<INVESTMENTS-AT-VALUE> 15,676,880
<RECEIVABLES> 2,268,378
<ASSETS-OTHER> 8,055
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17,953,313
<PAYABLE-FOR-SECURITIES> 7,784
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 271
<TOTAL-LIABILITIES> 8,055
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 17,945,258
<DIVIDEND-INCOME> 166,193
<INTEREST-INCOME> 161,938
<OTHER-INCOME> 0
<EXPENSES-NET> 85,694
<NET-INVESTMENT-INCOME> 242,437
<REALIZED-GAINS-CURRENT> 254,188
<APPREC-INCREASE-CURRENT> 676,006
<NET-CHANGE-FROM-OPS> 1,172,631
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,571,003
<NUMBER-OF-SHARES-REDEEMED> 1,244,347
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,553,927
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 85,694
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> SMALL CAP GROWTH
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1,227,869
<INVESTMENTS-AT-VALUE> 1,203,845
<RECEIVABLES> 0
<ASSETS-OTHER> 409
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,204,254
<PAYABLE-FOR-SECURITIES> 389
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20
<TOTAL-LIABILITIES> 409
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,203,845
<DIVIDEND-INCOME> 1,207
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,956
<NET-INVESTMENT-INCOME> (1,749)
<REALIZED-GAINS-CURRENT> (2,047)
<APPREC-INCREASE-CURRENT> (24,023)
<NET-CHANGE-FROM-OPS> (27,819)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,337,858
<NUMBER-OF-SHARES-REDEEMED> 107,942
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,203,845
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,956
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> INTERNATIONAL BALANCED
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 213,697
<INVESTMENTS-AT-VALUE> 217,329
<RECEIVABLES> 0
<ASSETS-OTHER> 261
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 217,590
<PAYABLE-FOR-SECURITIES> 258
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3
<TOTAL-LIABILITIES> 261
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 217,329
<DIVIDEND-INCOME> 2,850
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 301
<NET-INVESTMENT-INCOME> 2,549
<REALIZED-GAINS-CURRENT> 65
<APPREC-INCREASE-CURRENT> 3,632
<NET-CHANGE-FROM-OPS> 6,246
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 216,981
<NUMBER-OF-SHARES-REDEEMED> 3,349
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 217,329
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 301
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> MID CAP GROWTH
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 571,150
<INVESTMENTS-AT-VALUE> 567,251
<RECEIVABLES> 0
<ASSETS-OTHER> 111
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 567,362
<PAYABLE-FOR-SECURITIES> 102
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9
<TOTAL-LIABILITIES> 111
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 567,251
<DIVIDEND-INCOME> 1,635
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 814
<NET-INVESTMENT-INCOME> 821
<REALIZED-GAINS-CURRENT> 1,295
<APPREC-INCREASE-CURRENT> (3,899)
<NET-CHANGE-FROM-OPS> (1,783)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 616,784
<NUMBER-OF-SHARES-REDEEMED> 46,929
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 567,251
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 814
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> LARGE CAP VALUE
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 738,803
<INVESTMENTS-AT-VALUE> 2,924,101
<RECEIVABLES> 0
<ASSETS-OTHER> 2,355
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,926,456
<PAYABLE-FOR-SECURITIES> 2,307
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48
<TOTAL-LIABILITIES> 2,355
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,924,101
<DIVIDEND-INCOME> 72,511
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 8,169
<NET-INVESTMENT-INCOME> 64,342
<REALIZED-GAINS-CURRENT> 11,265
<APPREC-INCREASE-CURRENT> 197,424
<NET-CHANGE-FROM-OPS> 273,031
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,116,439
<NUMBER-OF-SHARES-REDEEMED> 401,027
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,924,101
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8,169
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> MONEY MARKET
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 50,801,546
<INVESTMENTS-AT-VALUE> 50,801,546
<RECEIVABLES> 12,867,387
<ASSETS-OTHER> 77,379
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 63,746,312
<PAYABLE-FOR-SECURITIES> 76,413
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 966
<TOTAL-LIABILITIES> 77,379
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 63,668,933
<DIVIDEND-INCOME> 2,527,378
<INTEREST-INCOME> 929,499
<OTHER-INCOME> 0
<EXPENSES-NET> 342,603
<NET-INVESTMENT-INCOME> 3,114,274
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 3,114,274
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,059,956
<NUMBER-OF-SHARES-REDEEMED> 8,498,091
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,283,248
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 342,603
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> MID CAP VALUE
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 335,995
<INVESTMENTS-AT-VALUE> 359,228
<RECEIVABLES> 0
<ASSETS-OTHER> 377
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 359,605
<PAYABLE-FOR-SECURITIES> 371
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6
<TOTAL-LIABILITIES> 377
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 359,228
<DIVIDEND-INCOME> 7,418
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 580
<NET-INVESTMENT-INCOME> 6,838
<REALIZED-GAINS-CURRENT> 1,099
<APPREC-INCREASE-CURRENT> 23,234
<NET-CHANGE-FROM-OPS> 31,171
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 344,956
<NUMBER-OF-SHARES-REDEEMED> 10,060
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 359,228
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 580
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> SPECIAL OPPORTUNITIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 6,159,564
<INVESTMENTS-AT-VALUE> 6,900,122
<RECEIVABLES> 0
<ASSETS-OTHER> 11,505
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,911,627
<PAYABLE-FOR-SECURITIES> 11,392
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 113
<TOTAL-LIABILITIES> 11,505
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 6,900,122
<DIVIDEND-INCOME> 265,602
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 23,603
<NET-INVESTMENT-INCOME> 241,999
<REALIZED-GAINS-CURRENT> 125,955
<APPREC-INCREASE-CURRENT> 615,079
<NET-CHANGE-FROM-OPS> 983,033
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,859,191
<NUMBER-OF-SHARES-REDEEMED> 409,716
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,190,509
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 23,603
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> REAL ESTATE EQUITY
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 7,988,690
<INVESTMENTS-AT-VALUE> 9,861,910
<RECEIVABLES> 1,788,166
<ASSETS-OTHER> 8,058
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11,658,134
<PAYABLE-FOR-SECURITIES> 7,883
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 175
<TOTAL-LIABILITIES> 8,058
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 11,650,076
<DIVIDEND-INCOME> 477,763
<INTEREST-INCOME> 117,955
<OTHER-INCOME> 0
<EXPENSES-NET> 50,069
<NET-INVESTMENT-INCOME> 545,649
<REALIZED-GAINS-CURRENT> 9,177
<APPREC-INCREASE-CURRENT> 1,862,071
<NET-CHANGE-FROM-OPS> 2,416,897
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,354,165
<NUMBER-OF-SHARES-REDEEMED> 607,463
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,779,906
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 50,069
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> GROWTH & INCOME
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 517,230,305
<INVESTMENTS-AT-VALUE> 624,414,237
<RECEIVABLES> 131,830,597
<ASSETS-OTHER> 71,816
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 756,316,650
<PAYABLE-FOR-SECURITIES> 60,388
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,428
<TOTAL-LIABILITIES> 71,816
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 756,244,834
<DIVIDEND-INCOME> 78,415,408
<INTEREST-INCOME> 9,420,070
<OTHER-INCOME> 0
<EXPENSES-NET> 3,854,562
<NET-INVESTMENT-INCOME> 83,980,916
<REALIZED-GAINS-CURRENT> 15,416,898
<APPREC-INCREASE-CURRENT> 12,987,718
<NET-CHANGE-FROM-OPS> 112,385,532
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 98,572,585
<NUMBER-OF-SHARES-REDEEMED> 41,588,875
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 97,491,373
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,854,562
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> MANAGED
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 273,052,564
<INVESTMENTS-AT-VALUE> 300,159,311
<RECEIVABLES> 62,263,515
<ASSETS-OTHER> 142,881
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 362,595,707
<PAYABLE-FOR-SECURITIES> 137,434
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,447
<TOTAL-LIABILITIES> 142,881
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 362,422,826
<DIVIDEND-INCOME> 37,103,617
<INTEREST-INCOME> 4,337,281
<OTHER-INCOME> 0
<EXPENSES-NET> 1,886,000
<NET-INVESTMENT-INCOME> 39,554,898
<REALIZED-GAINS-CURRENT> 3,870,923
<APPREC-INCREASE-CURRENT> (11,548,110)
<NET-CHANGE-FROM-OPS> 31,877,711
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 43,447,544
<NUMBER-OF-SHARES-REDEEMED> 15,641,073
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 25,143,062
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,886,000
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 14
<NAME> SHORT-TERM U.S. GOVERNMENT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 329,114
<INVESTMENTS-AT-VALUE> 328,711
<RECEIVABLES> 0
<ASSETS-OTHER> 68
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 328,779
<PAYABLE-FOR-SECURITIES> 63
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5
<TOTAL-LIABILITIES> 68
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 328,711
<DIVIDEND-INCOME> 11,916
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,201
<NET-INVESTMENT-INCOME> 9,995
<REALIZED-GAINS-CURRENT> (922)
<APPREC-INCREASE-CURRENT> (1,542)
<NET-CHANGE-FROM-OPS> 7,531
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 346,257
<NUMBER-OF-SHARES-REDEEMED> 99,058
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 244,735
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,201
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 15
<NAME> SMALL CAP VALUE
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 841,840
<INVESTMENTS-AT-VALUE> 891,733
<RECEIVABLES> 0
<ASSETS-OTHER> 1,824
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 893,557
<PAYABLE-FOR-SECURITIES> 1,810
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14
<TOTAL-LIABILITIES> 1,824
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 891,733
<DIVIDEND-INCOME> 23,766
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,451
<NET-INVESTMENT-INCOME> 21,315
<REALIZED-GAINS-CURRENT> 891
<APPREC-INCREASE-CURRENT> 49,892
<NET-CHANGE-FROM-OPS> 72,098
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 954,995
<NUMBER-OF-SHARES-REDEEMED> 114,046
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 891,733
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,451
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 16
<NAME> INTERNATIONAL OPPORTUNITIES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1,249,122
<INVESTMENTS-AT-VALUE> 1,306,509
<RECEIVABLES> 0
<ASSETS-OTHER> 96
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,306,605
<PAYABLE-FOR-SECURITIES> 75
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 21
<TOTAL-LIABILITIES> 96
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,306,509
<DIVIDEND-INCOME> 7,487
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 575
<NET-INVESTMENT-INCOME> 7,272
<REALIZED-GAINS-CURRENT> 3,982
<APPREC-INCREASE-CURRENT> 13,544
<NET-CHANGE-FROM-OPS> 24,798
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,376,296
<NUMBER-OF-SHARES-REDEEMED> 127,478
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,306,509
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 575
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 17
<NAME> EQUITY INDEX
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 330,202
<INVESTMENTS-AT-VALUE> 343,746
<RECEIVABLES> 0
<ASSETS-OTHER> 468
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 344,214
<PAYABLE-FOR-SECURITIES> 462
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 6
<TOTAL-LIABILITIES> 468
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 343,746
<DIVIDEND-INCOME> 7,847
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 575
<NET-INVESTMENT-INCOME> 7,272
<REALIZED-GAINS-CURRENT> 3,982
<APPREC-INCREASE-CURRENT> 13,544
<NET-CHANGE-FROM-OPS> 24,798
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 366,782
<NUMBER-OF-SHARES-REDEEMED> 40,562
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 343,746
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 575
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 18
<NAME> STRATEGIC BOND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 670,758
<INVESTMENTS-AT-VALUE> 677,446
<RECEIVABLES> 0
<ASSETS-OTHER> 1,624
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 679,070
<PAYABLE-FOR-SECURITIES> 1,613
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11
<TOTAL-LIABILITIES> 1,624
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 677,446
<DIVIDEND-INCOME> 29,029
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,782
<NET-INVESTMENT-INCOME> 27,247
<REALIZED-GAINS-CURRENT> 1,518
<APPREC-INCREASE-CURRENT> 6,688
<NET-CHANGE-FROM-OPS> 35,453
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 755,947
<NUMBER-OF-SHARES-REDEEMED> 86,707
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 677,446
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,782
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 19
<NAME> TURNER CORE GROWTH
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 12,034
<INVESTMENTS-AT-VALUE> 12,490
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,490
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 12,490
<DIVIDEND-INCOME> 415
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 31
<NET-INVESTMENT-INCOME> 384
<REALIZED-GAINS-CURRENT> (238)
<APPREC-INCREASE-CURRENT> 456
<NET-CHANGE-FROM-OPS> 602
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 25,144
<NUMBER-OF-SHARES-REDEEMED> 12,872
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 12,490
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 31
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 20
<NAME> EDINBURGH INT'L EQUITY
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 44,801
<INVESTMENTS-AT-VALUE> 44,456
<RECEIVABLES> 0
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 44,456
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 44,456
<DIVIDEND-INCOME> 255
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 122
<NET-INVESTMENT-INCOME> 133
<REALIZED-GAINS-CURRENT> (1,091)
<APPREC-INCREASE-CURRENT> (345)
<NET-CHANGE-FROM-OPS> (1,303)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 68,089
<NUMBER-OF-SHARES-REDEEMED> 22,197
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 44,456
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 122
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 21
<NAME> FRONTIER CAPITAL APPRECIATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 41,073
<INVESTMENTS-AT-VALUE> 43,177
<RECEIVABLES> 0
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 43,177
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 43,177
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 112
<NET-INVESTMENT-INCOME> (112)
<REALIZED-GAINS-CURRENT> (1,199)
<APPREC-INCREASE-CURRENT> 2,105
<NET-CHANGE-FROM-OPS> 794
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 55,645
<NUMBER-OF-SHARES-REDEEMED> 13,373
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 43,177
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 112
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<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 7, 1997, with respect to
the financial statements of John Hancock Variable Life Account U and February
14, 1997, with respect to the financial statements of John Hancock Variable Life
Insurance Company, included in this Post-Effective Amendment No. 24 to the
Registration Statement (Form S-6, No. 2-68061).
/s/Ernst & Young LLP
ERNST & YOUNG LLP
Boston, Massachusetts
April 28, 1997
<PAGE>
EXHIBIT 10
[LETTERHEAD OF JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY APPEARS HERE]
April 28, 1997
United States Securities
and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
John Hancock Variable Life Account U
File Nos. 2-68061 811-3068
Commissioners:
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/ Sandra M. DaDalt
--------------------
Sandra M. DaDalt
Counsel
