<PAGE>
Registration No. 33-76660
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
Post-Effective Amendment No.7 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
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02117
(Complete address of depositor's principal executive offices)
RONALD J. BOCAGE, ESQ.
JOHN HANCOCK LIFE INSURANCE COMPANY
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02117
(Name and complete address of agent for service)
Copy to:
THOMAS C. LAUERMAN, 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
/ / on (date) pursuant to paragraph (b) of Rule 485
/X/ 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 1998 pursuant to Rule 24f-2 on March 23, 1999.
<PAGE>
CROSS-REFERENCE TABLE
Form N-8B-2
Item Caption in Prospectus
- - ---- ---------------------
1 Additional Information - How we support the policy and
investment options - Separate Account U
2 Cover Page
3 Not Applicable
4 Additional Information - How we market the policies
5,6 Additional Information - How we support the policy and
investment options - Separate Account U
7, 8, 9 Not Applicable
10(a), (b), (c), (d) Basic Information - How can you access your investment
in the policy?; "Basic Information - How can you change
your policy's investment allocations?; "Basic
Information - Who owns the policy?
10(e) Basic Information - Is there a minimum amount you must
invest?
10(f) Additional Information - Voting privileges that you will
have
10(g), (h) Additional Information - Changes that we can make as to
your policy
10(i) Not Applicable
11, 12 Cover Page
13 Basic Information - What charges will we deduct from your
investment in the policy?; Basic Information - What
charges will the Trusts deduct from your investment in
the policy?; Basic Information - What other changes could
we impose in the future?
14, 15 Additional Information - Procedures for issuance of a
policy; Additional Information - How we process certain
policy transactions
16 Additional Information - How we support the policy and
investment options
<PAGE>
Form N-8B-2
Item Caption in Prospectus
- - ---- ---------------------
17 Basic Information - How do you communicate with us?; Basic
Information - Is there a minimum amount you must invest?;
Additional Information - Effect of policy loans
18 Basic Information - How will the value of my investment in
the policy change over time; Additional Information - How
we support the policy and investment options
19 Additional Information - Reports that you will receive
20 Not Applicable
21 Basic Information - How can you access your investment
in the policy?; Additional
Information - Effects of policy loans
22,23 Not Applicable
24 Additional Information - Adjustments we make to death
benefits
25 Additional Information - Description of us
26 Basic Information - What charges will we deduct from your
investment in the policy?; Basic Information - What charges
will the Trusts deduct from your investment in the policy?
27 Additional Information - Reports that you will receive
28 Additional Information - List of Our Directors and
Executive Officers
29 Additional Information - Description of us
30, 31, 32, 33, 34 Not Applicable
35 Additional Information - Description of us
36, 37 Not Applicable
38,39 Additional Information - How we market the policies
<PAGE>
Form N-8B-2
Item Caption in Prospectus
- - ---- ---------------------
40 Not Applicable
41(a) Additional Information - How we market the policies
41(b), (c), (d) Not Applicable
42, 43 Not Applicable
44 Additional Information - How we support the policy
and investment options - Separate Account U
45 Not Applicable
46, 47 Additional Information - How we support the policy
and investment options - Separate Account U;
Additional Information - When we pay policy
proceeds
48, 49, 50 Not Applicable
51(a) - (f) Cover Page; Basic Information - What is the policy?
51(g) Basic Information - How can you invest money
in the policy?; Basic Information - Is there
a minimum amount you must invest?
51(h) - (j) Not Applicable
52 Additional Information - Changes that we can make
as to your policy
53(a) Cover Page; Additional Information - How we
support the policy and investment options
53(b), 54, 55, 56 Not Applicable
57, 58, 59 Not Applicable
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that Section.
REPRESENTATION OF REASONABLENESS
John Hancock Variable Life Insurance Company ("JHVLICO") 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 as
an officer or a director of JHVLICO.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet.
Cross-Reference Table.
The prospectus consisting of __ pages.
The undertaking to file reports.
The representation of reasonableness
The undertaking regarding indemnification.
The signatures.
The following exhibits:
1. A. (1) JHVLICO Board Resolution establishing the separate account included
in account included in Post-Effective Amendment No. 2 to this Form S-6
Registration Statement, filed March 5, 1996.
(2) Not applicable
(3) Distributing Contracts
(a) Form of Distribution and Servicing Agreement by and among
Signator Investors, Inc. (formerly known as "John Hancock
Distributors, Inc."), John Hancock Life Insurance Company
(formerly known as "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 on April 18, 1997.
(b) Specimen Variable Contracts Selling Agreement between John
Hancock 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 on April 18, 1997.
(c) Schedule of Sales Commissions included in Exhibit 1.A.(3)(a)
above.
(4) Not applicable
(5) Form of variable life insurance policy (Filed herewith).
(6) Certificate of Incorporation and By-Laws of John Hancock Variable
Life Insurance Company included in Post-Effective Amendment No. 2
to this Form S-6 Registration Statement, filed March 5, 1996.
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Form of application for Policy included in Post-Effective Amendment
No. 2 to this Form S-6 Registration Statement, filed March 5, 1996.
(11) Not Applicable. The Registrant invests only in shares of open-end
Funds.
2. Included as exhibit 1.A(5) above.
3. Opinion and consent of counsel as to securities being registered, included
in Pre-Effective Amendment No. 1 to this Form S-6 Registration Statement
filed August 30, 1994.
4. Not Applicable
5. Not Applicable
6. Opinion and consent of actuary (to be filed by amendment)
7. Consent of independent auditors (to be filed by amendment)
8. Memorandum describing John Hancock's issuance, transfer and redemption
procedures for the policies pursuant to Rule 6e- 3(T)(b)(12)(iii), included
in Post-Effective Amendment No. 2 to this Form S-6 Registration Statement,
filed March 5, 1996.
9. Powers of attorney for Tomlinson, D'Alessandro, Luddy, Lee, Reitano, and
Paster included in Post-Effective Amendment No. 2 to this Form S-6
Registration Statement, filed March 5, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
John Hancock Variable Life Account U, 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
11th day of February, 2000.
JOHN HANCOCK VARIABLE LIFE ACCOUNT U
(Registrant)
By John Hancock Variable Life Insurance Company
(Depositor)
(SEAL) By /s/ Michele G. Van Leer
-----------------------
Michele G. Van Leer
President
Attest: /s/ Peter Scavongelli
----------------------
Peter Scavongelli
Secretary
<PAGE>
Pursuant to the requirements or 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>
Signature Title Date
<S> <C> <C>
/s/ Michele G. Van Leer Vice-Chairman of the Board and
----------------------- President (Acting Principal Executive February 11, 2000
Michele G. Van Leer Officer)
For herself and as
Attorney-in-Fact
For:
David F. D'Alessandro Chairman of the Board
Robert S. Paster Director
Thomas J. Lee Director
Joseph A. Tomlinson Director
Barbara L. Luddy Director
Robert R. Reitano Director
/s/ Patrick F. Smith Controller (Principal Accounting February 11, 2000
-------------------- Officer and Acting Principal Financial
Patrick F. Smith Officer)
/Ronald J. Bocage Director February 11, 2000
- - ---------------------
Ronald J. Bocage
</TABLE>
<PAGE>
PROSPECTUS DATED ________
MEDALLION VARIABLE UNIVERSAL LIFE II
a flexible premium variable life insurance policy
issued by
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
("JHVLICO")
The policy provides an investment option with fixed rates of return declared
by JHVLICO and the following 34 variable investment options:
<TABLE>
<CAPTION>
VARIABLE INVESTMENT OPTION MANAGED BY
- - -------------------------- ----------
- - --------------------------------------------------------------------------------------------------------------
<S> <C>
Managed . . . . . . . . . . Independence Investment Associates, Inc.
Growth & Income . . . . . . Independence Investment Associates, Inc.
Fidelity VIP Contrafund(R). Fidelity Management & Research Company
Equity Index . . . . . . . . State Street Global Advisors
Large Cap Value. . . . . . T. Rowe Price Associates, Inc.
American Leaders Large Cap Value Federated Investment Management Company
Large Cap Growth . . . . . . Independence Investment Associates, Inc.
Large Cap Aggressive Growth Alliance Capital Management L.P.
Fidelity VIP Growth. . . . Fidelity Management & Research Company
AIM V.I. Value. . . . . . . A I M Advisors, Inc.
Janus Aspen Global Technology Janus Capital Corporation
Mid Cap Value . . . . . . . Neuberger Berman, LLC
Fundamental Mid Cap Growth. OppenheimerFunds, Inc.
Mid Cap Growth . . . . . . . Janus Capital Corporation
Real Estate Equity . . . . . Independence Investment Associates, Inc.
Small/Mid Cap Growth. . . . Wellington Management Company, LLP
Small/Mid Cap CORE . . . . . Goldman Sachs Asset Management
Small Cap Value . . . . . . INVESCO Management & Research, Inc.
Small Cap Growth . . . . . . John Hancock Advisers, Inc.
MFS New Discovery. . . . . MFS Investment Management(R)
Global Equity . . . . . . . Scudder Kemper Investments, Inc.
Global Balanced . . . . . . Brinson Partners, Inc.
Janus Aspen Worldwide Growth. . . Janus Capital Corporation
Templeton International - Class 2 Templeton Investment Counsel, Inc.
International Equity Index . Independence International Associates, Inc.
International Opportunities Rowe Price-Fleming International, Inc.
Morgan Stanley Dean Witter Investment Management
Emerging Markets Equity . . Inc.
Short-Term Bond . . . . . . Independence Investment Associates, Inc.
Bond Index . . . . . . . . . Mellon Bond Associates, LLP
Active Bond . . . . . . . . John Hancock Advisers, Inc.
Core Bond. . . . . . . . . Federated Investment Management Company
Global Bond . . . . . . . . J.P. Morgan Investment Management, Inc.
High Yield Bond . . . . . . Wellington Management Company, LLP
Money Market . . . . . . . . John Hancock Life Insurance Company
- - --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
The variable investment options shown on page 1 are those available as of the
date of this prospectus. We may add or delete variable investment options in
the future.
When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of one or more of the
following: the John Hancock Declaration Trust, the John Hancock Variable Series
Trust I, the AIM Variable Insurance Funds, Inc., the Templeton Variable Products
Series Fund, Fidelity's Variable Insurance Products Fund and Variable Insurance
Products Fund II, the Janus Aspen Series (Service Shares) and the MFS Variable
Insurance Trust (together, "the Trusts"). In this prospectus, the investment
options of the Trusts are referred to as "funds". In the prospectuses for the
Trusts, the investment options may be referred to as "funds", "portfolios" or
"series".
Each Trust is a so-called "series" type mutual fund registered with the
Securities and Exchange Commission ("SEC"). The investment results of each
variable investment option you select will depend on those of the corresponding
fund of one of the Trusts. Each of the funds is separately managed and has its
own investment objective and strategies. Attached at the end of this prospectus
is a prospectus for each Trust. The Trust prospectuses contain detailed
information about each available fund. Be sure to read those prospectuses
before selecting any of the variable investment options shown on page 1.
* * * * * * * * * * * *
Please note that the SEC has not approved or disapproved these securities, or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
* * * * * * * * * * * *
JHVLICO SERVICING OFFICE
------------------------
Express Delivery U.S. Mail
---------------- ---------
529 Mail Street (X-4) P.O. Box 111
Charlestown, MA 02129 Boston, MA 02117
Phone: 1-800-732-5543
Fax: 1-617-886-3048
2
<PAGE>
GUIDE TO THIS PROSPECTUS
This prospectus contains information that you should know before you buy a
policy or exercise any of your rights under the policy. However, please keep in
mind that this is a prospectus - - it is not the policy. The prospectus
---
simplifies many policy provisions to better communicate the policy's essential
features. Your rights and obligations under the policy will be determined by the
language of the policy itself. When you receive your policy, read it carefully.
This prospectus is arranged in the following way:
. The section which follows is called "Basic Information". It contains
basic information about the policy in a question and answer format.
You should read the Basic Information before reading any other
section of the prospectus.
. Behind the Basic Information section are illustrations of
hypothetical policy benefits that help clarify how the policy works.
These start on page __.
. Behind the illustrations is a section called "Additional
Information." This section gives more details about the policy. It
generally does not repeat information contained in the Basic
---
Information section. A table of contents for the Additional
Information section appears on page __.
. Behind the Additional Information section are the financial
statements for us and for the Separate Account that we use for this
policy. These start on page __.
. Finally, there is an Alphabetical Index of Key Words and Phrases at
the back of the prospectus on page __.
After the Alphabetical Index of Key Words and Phrases, this prospectus
ends and the prospectuses for the Trusts begin.
3
<PAGE>
BASIC INFORMATION
This "Basic Information" section provides answers to commonly asked questions
about the policy. Here are the page numbers where the questions and answers
appear:
<TABLE>
<CAPTION>
<S> <C>
Question Pages to See
- - --------
.What is the policy?. . . . . . . . . . . . . . .
.Who owns the policy?. . . . . . . . . . . . . .
.How can you invest money in the policy?. . . . .
.Is there a minimum amount you must invest?. . .
.How will the value of your investment in the policy change
over time?. . . . . . . . . . . . . . . . . . . .
.What charges will we deduct from your investment in the
policy?. . . . . . . . . . . . . . . . . . . . .
.What charges will the Trusts deduct from your investment in
the policy?. . . . . . . . . . . . . . . . . . .
.What other charges can we impose in the future?.
.How can you change your policy's investment allocations?
.How can you access your investment in the policy?
.How much will we pay when the insured person dies?
.Can you add additional benefit riders?
.How can you change your policy's insurance coverage?
.Can you cancel your policy after it's issued?. .
.Can you choose the form in which we pay out policy proceeds?
.To what extent can we vary the terms and conditions of the
policies in particular cases?. . . . . . . . . .
.How will your policy be treated for income tax purposes?
.How do you communicate with us?. . . . . . . . .
</TABLE>
4
<PAGE>
WHAT IS THE POLICY?
The policy's primary purpose is to provide lifetime protection against
economic loss due to the death of the insured person. The value of the amount
you have invested under the policy may increase or decrease daily based upon the
investment results of the variable investment options that you choose. The
amount we pay to the policy's beneficiary if the insured person dies (we call
this the "death benefit") may be similarly affected.
While the insured person is alive, you will have a number of options under the
policy. Here are some major ones:
. Determine when and how much you invest in the various investment
options
. Borrow or withdraw amounts you have in the investment options
. Change the beneficiary who will receive the death benefit
. Change the amount of insurance
. Turn in (i.e., "surrender") the policy for the full amount of its
surrender value
. Choose the form in which we will pay out the death benefit or other
proceeds
Most of these options are subject to limits that are explained later in
this prospectus.
WHO OWNS THE POLICY?
That's up to the person who applies for the policy. The owner of the policy is
the person who can exercise most of the rights under the policy, such as the
right to choose the investment options or the right to surrender the policy. In
many cases, the person buying the policy is also the person who will be the
owner. However, the application for a policy can name another person or entity
(such as a trust) as owner. Whenever we've used the term "you" in this
prospectus, we've assumed that the reader is the person who has whatever right
or privilege is being discussed. There may be tax consequences if the owner and
the insured person are different, so you should discuss this issue with your tax
adviser.
HOW CAN YOU INVEST MONEY IN THE POLICY?
Premium Payments
We call the investments you make in the policy "premiums" or "premium
payments". The amount we require as your first premium depends upon the
-----
specifics of your policy and the insured person. Except as noted below, you can
make any other premium payments you wish at any time. That's why the policy is
called a "flexible premium" policy.
Maximum premium payments
Federal tax law limits the amount of premium payments you can make relative to
the amount of your policy's insurance coverage. We will not knowingly accept any
amount by which a premium payment exceeds the maximum. If you exceed certain
other limits, the law may impose a penalty on amounts you take out of your
policy. More discussion of these tax law requirements begins on page __. Also,
we may refuse to accept any amount of an additional premium if:
. that amount of premium would increase our insurance risk exposure,
and
. the insured person doesn't provide us with adequate evidence that he
or she continues to meet our requirements for issuing insurance.
In no event, however, will we refuse to accept any premium necessary to
prevent the policy or the guaranteed death benefit feature from
terminating.
5
<PAGE>
Ways to pay premiums
If you pay premiums by check or money order, they must be drawn on a U.S. bank
in U.S. dollars and made payable to "John Hancock Variable Life Insurance
Company." Premiums after the first must be sent to the JHVLICO Life Servicing
Office at the appropriate address shown on page 2 of this prospectus.
We will also accept premiums:
. by wire or by exchange from another insurance company,
. via an electronic funds transfer program (any owner interested in
making monthly premium payments must use this method), or
-------
. if we agree to it, through a salary deduction plan with your
employer.
You can obtain information on these other methods of premium payment by
contacting your JHVLICO representative or by contacting the JHVLICO Life
Servicing Office.
IS THERE A MINIMUM AMOUNT YOU MUST INVEST?
Planned Premiums
The Policy Specifications page of your policy will show the "Planned Premium"
for the policy. You choose this amount in the policy application. You will also
choose how often to pay premiums-- annually, semi-annually, quarterly or
monthly. The premium reminder notice we send you is based on the amount and
period you choose. However, payment of Planned Premiums is not necessarily
required. You need only invest enough to keep the policy in force (see "Lapse
and reinstatement" and "Guaranteed death benefit feature" below).
Guaranteed death benefit feature
This feature guarantees that your Basic Sum Insured will not terminate (i.e.,
lapse), regardless of adverse investment performance, if on each "testing date"
the amount of cumulative premiums you have paid (less all withdrawals from the
policy and all outstanding loans) equals or exceeds the sum of all Guaranteed
Death Benefit Premium ("GDB Premium") due to date. If the Guaranteed Death
Benefit test is not satisfied on any grace period testing date, the guaranteed
death benefit feature will not be "in effect" on that date. We currently test on
a quarterly basis, but reserve the right to test on each monthly deduction date.
(The term "monthly deduction date" is defined on page __ under "Procedures for
issuance of a policy".)
Your policy will show two types of GDB Premium:
. Age 65/10 Year GDB Premium - is used on each testing date until the
policy anniversary nearest the insured person's 65th birthday (or, if
longer, until the 10th policy anniversary). The GDB premium that is
"due" during this period is equal to the Age 65/10 Year GDB Premium
times the number of elapsed policy months on a testing date.
. Age 100 GDB Premium - is used on each testing date that occurs on and
after the policy anniversary nearest the insured person's 65th
birthday (or on and after the 10th policy anniversary) until the
policy anniversary nearest the insured person's 100th birthday. The
GDB premium that is "due" during this period is equal to the number
of elapsed policy months on the testing date, measured from the Date
of Issue, times the Age 100 GDB Premium.
The Age 100 Year GDB Premium is higher than the Age 65/10 Year GDB Premium,
but neither will ever be greater than the so-called "guideline premium" for the
policy as defined in Section 7702 of the Internal Revenue Code.
The guaranteed death benefit feature applies only to the Basic Sum Insured in
effect when we issue the policy. It does not apply to any amount of Additional
---
Sum Insured and it will not be in effect if you increase the Basic Sum Insured
---
(see "How much will we pay when the insured person dies?" on page __). The
amount of the Basic Sum Insured that is guaranteed will be reduced to the extent
that we pay it to you under a living care or life-time care
6
<PAGE>
additional benefit rider while the insured is living (see "Can you add
additional benefit riders?" on page __). If there are monthly charges that
remain unpaid because of this feature, we will deduct such charges when there is
sufficient surrender value to pay them.
Lapse and Reinstatement
Either your entire policy or the Additional Sum Insured portion of your Total
Sum Insured can lapse for failure to pay charges due under the policy. If the
guaranteed death benefit feature is in effect, the Additional Sum Insured and
any additional benefit riders (unless otherwise stated therein) will lapse if
the policy's surrender value is not sufficient to pay the charges on a grace
period test date. If the guaranteed death benefit feature is not in effect, the
---
entire policy will lapse if the policy's surrender value is not sufficient to
pay the charges on a grace period test date. In either case, we will notify you
of how much you will need to pay to keep the Additional Sum Insured or the
policy in force. You will have a 61 day "grace period" to make these payments.
If you don't pay at least the required amount by the end of the grace period,
the Additional Sum Insured and any additional benefit riders (unless otherwise
stated therein) or your policy will lapse. If your policy lapses, all coverage
under the policy will cease. Even if the policy or the Additional Sum Insured
terminates in this way, you can still reactivate (i.e., "reinstate") it within 3
years from the beginning of the grace period. You will have to provide evidence
that the insured person still meets our requirements for issuing coverage. You
will also have to pay a minimum amount of premium and be subject to the other
terms and conditions applicable to reinstatements, as specified in the policy.
If the guaranteed death benefit is not in effect and the insured person dies
during the grace period, we will deduct any unpaid monthly charges from the
death benefit. During a grace period, you cannot make a partial withdrawal or
policy loan. How will the value of your investment in the policy change over
time?
From each premium payment you make, we deduct the charges described under
"Deductions from premium payments" below. We invest the rest in the investment
options you've elected. Special investment rules apply for the first 20 days
after your policy becomes effective. (See "Commencement of investment
performance" beginning on page __.)
Over time, the amount you've invested in any variable investment option will
--------
increase or decrease the same as if you had invested the same amount directly in
the corresponding fund of one of the Trusts and had reinvested all fund
dividends and distributions in additional fund shares; except that we will
deduct certain additional charges which will reduce your account value. We
describe these charges under "What charges will we deduct from your investment
in the policy?" below.
The amount you've invested in the fixed investment option will earn interest
-----
at a rate we declare from time to time. We guarantee that this rate will be at
least 4%. If you want to know what the current declared rate is, just call or
write to us. The current declared rate will also appear in the annual statement
we will send you. Amounts you invest in the fixed investment option will not be
---
subject to the asset-based risk charge described on page _. Otherwise, the
charges applicable to the fixed investment option are the same as those
applicable to the variable investment options.
At any time, the "account value" of your policy is equal to:
. the amount you invested,
. plus or minus the investment experience of the investment options
you've chosen,
. minus all charges we deduct, and
. minus all withdrawals you have made.
If you take a loan on the policy, however, your account value will be
computed somewhat differently. This is discussed beginning on page __.
7
<PAGE>
WHAT CHARGES WILL WE DEDUCT FROM YOUR INVESTMENT IN THE POLICY?
Deductions from premium payments
. Premium tax charge - A charge to cover state premium taxes we currently
--------------------
expect to pay, on average. This charge is currently 2.35% of each premium.
. DAC tax charge - A charge to cover the increased Federal income tax
----------------
burden that we currently expect will result from receipt of premiums. This
charge is currently 1.25% of each premium.
. Premium sales charge - A charge to help defray our sales costs. The
----------------------
charge is 4% of a certain portion of the premium you pay. The portion of
each year's premium that is subject to the charge is called the "Target
Premium". It's determined at the time the policy is issued and will appear
in the "Policy Specifications" section of the policy. We currently waive
one half of this charge for policies with a Total Sum Insured (excluding
any Premium Cost Recovery Benefit) of $250,000 or higher, but continuation
of that waiver is not guaranteed. Also, we currently intend to stop making
this charge on premiums received after the 10th policy year, but this is
not guaranteed either. Because policies of this type were first offered
for sale in ___, no termination of this charge has yet occurred.
Deductions from account value
. Issue charge - A monthly charge to help defray our administrative costs.
--------------
This is a flat dollar charge of $20 and is deducted only during the first
policy year.
. Maintenance charge - A monthly charge to help defray our administrative
--------------------
costs. This is a flat dollar charge of up to $8 (currently $6).
. Insurance charge - A monthly charge for the cost of insurance. To
------------------
determine the charge, we multiply the amount of insurance for which we are
at risk by a cost of insurance rate. The rate is derived from an actuarial
table and the ratio of Basic Sum Insured to Additional Sum Insured on the
date we issue your policy. The table in your policy will show the maximum
-------
cost of insurance rates. The cost of insurance rates that we currently
apply are generally less than the maximum rates. We will review the cost
of insurance rates at least every 5 years and may change them from time to
time. However, those rates will never be more than the maximum rates shown
in the policy. The table of rates we use will depend on the insurance risk
characteristics and (usually) gender of the insured person, the Total Sum
Insured and the length of time the policy has been in effect. Regardless
of the table used, cost of insurance rates generally increase each year
that you own your policy, as the insured person's attained age increases.
(The insured person's "attained age" on any date is his or her age on the
birthday nearest that date.) We currently apply three "bands" of insurance
rates, based on a policy's Total Sum Insured (excluding any Premium Cost
Recovery Benefit) on the date of issue, but continuation of that practice
is not guaranteed. The lowest band of rates is for policies of $1 million
or more, next lower for policies between $250,000 to $999,999, and the
highest band is for policies between $100,000 to $249,999.
. Extra mortality charge - A monthly charge specified in your policy for
------------------------
additional mortality risk if the insured person is subject to certain
types of special insurance risk.
. Asset-based risk charge - A monthly charge for mortality and expense
-------------------------
risks we assume. The charge is a percentage of that portion of your
account value allocated to variable investment options. The current
--------
percentages are .050% for policy years 1 - 10, .035% for policy year 11,
decreasing by .001% each year thereafter through policy year 28, and .017%
for policy year 29 and each policy year thereafter. These percentages
equate to effective annual rates of .60% for policy years 1 - 10, .40% for
policy year 11, grading down to .20% for policy years 29 and thereafter.
The reductions after policy year 10 have not occurred yet under any
policy, since no policy has been outstanding for 10 years. We guarantee
that this charge will never exceed .050% of that portion of your account
value allocated to variable investment options. This percentage equates to
an effective annual rate of .60%. This charge does not apply to the fixed
investment option.
. Optional benefits charge - Monthly charges for certain optional insurance
--------------------------
benefits added to the policy by means of a rider. Some of the riders we
currently offer are described under "Can you add additional benefit
riders?" on page __.
8
<PAGE>
. ASI reduction charge - A charge we deduct if you decrease the Additional
----------------------
Sum Insured during the first 20 policy years. A table in your policy will
state the maximum rate for the charge per $1,000 of Additional Sum Insured
surrendered, based on the insured person's issue age, insurance risk
characteristics and (usually) gender. The rates are shown in the policy
and generally range from less than $1 per $1,000 for issue age 40 or less,
and increase for issue ages thereafter, to over $10 per $1,000 for issue
ages after 70. We do not deduct this charge if the Additional Sum Insured
is reduced because of a withdrawal of surrender value or surrender of the
policy.
. Contingent deferred sales charge ("CDSC") - A charge we deduct if the
-------------------------------------------
policy lapses or is surrendered within the first 10 policy years. We
deduct this charge to compensate us for sales expenses that we would
otherwise not recover in the event of early lapse or surrender. The charge
is a percentage of the premiums we received in the first policy year that
do not exceed the first year Target Premium, as shown in the following
table:
POLICY YEAR(S) PERCENTAGE OF FIRST YEAR TARGET PREMIUM
-------------- ---------------------------------------
1-5 100%
6 80%
7 70%
8 60%
9 40%
10 20%
11 and later 0%
The above table applies only if the insured person is less than attained
age 45 at issue. For older issue ages, the maximum is reached earlier and
the percentage may decrease to zero in fewer than 10 policy years.
Regardless of issue age, there is a further limitation on the CDSC that
can be charged if surrender or lapse occurs in the second policy year.
. Partial withdrawal charge - A charge for each partial withdrawal of
---------------------------
account value to compensate us for the administrative expenses of
processing the withdrawal. The charge is equal to the lesser of $20 or 2%
of the withdrawal amount.
WHAT CHARGES WILL THE TRUSTS DEDUCT FROM YOUR INVESTMENT IN THE POLICY?
The Trusts must pay investment management fees and other operating expenses.
These fees and expenses are different for each fund of the Trusts and reduce the
investment return of each fund. Therefore, they also indirectly reduce the
return you will earn on any variable investment options you select.
For the American Leaders Cap Value fund and the Core Bond fund, all figures
shown in the following table are estimates for the current fiscal year because
those funds were not in operation prior to the date of this prospectus. For all
of the other funds of the John Hancock Variable Series Trust I, the following
table shows the management fees currently payable and other fund expenses for
each fund for the fiscal year ended December 31, 1999. The figures in the table
are expressed as percentages (rounded to two decimal places) of each fund's
average daily net assets for 1999.
<TABLE>
<CAPTION>
OTHER FUND
EXPENSES AFTER TOTAL FUND OTHER FUND
MANAGEMENT REIMBURSEMENT EXPENSES AFTER EXPENSES ABSENT
FUND NAME FEES (1) REIMBURSEMENT REIMBURSEMENT
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Managed. . . . . . . . . . 0.32%
- - ----------------------------------------------------------------------------------------------------
Growth & Income 0.25%
- - ----------------------------------------------------------------------------------------------------
Equity Index 0.14%
- - ----------------------------------------------------------------------------------------------------
Large Cap Value 0.74%
- - ----------------------------------------------------------------------------------------------------
American Leaders Large Cap
Value 0.75%
- - ----------------------------------------------------------------------------------------------------
Large Cap Growth 0.37%
- - ----------------------------------------------------------------------------------------------------
Large Cap Aggressive Growth 1.00%
- - ----------------------------------------------------------------------------------------------------
Mid Cap Value 0.80%
- - ----------------------------------------------------------------------------------------------------
Fundamental Mid Cap Growth 0.85%
- - ----------------------------------------------------------------------------------------------------
Mid Cap Growth 0.85%
- - ----------------------------------------------------------------------------------------------------
Real Estate Equity 0.60%
- - ----------------------------------------------------------------------------------------------------
Small/Mid Cap Growth 0.75%
- - ----------------------------------------------------------------------------------------------------
Small/Mid Cap CORE 0.80%
- - ----------------------------------------------------------------------------------------------------
Small Cap Value 0.80%
- - ----------------------------------------------------------------------------------------------------
Small Cap Growth 0.75%
- - ----------------------------------------------------------------------------------------------------
Global Equity 0.90%
- - ----------------------------------------------------------------------------------------------------
Global Balanced 0.85%
- - ----------------------------------------------------------------------------------------------------
International Equity Index 0.17%
- - ----------------------------------------------------------------------------------------------------
International Opportunities 0.87%
- - ----------------------------------------------------------------------------------------------------
Emerging Markets Equity 1.30%
- - ----------------------------------------------------------------------------------------------------
Short-Term Bond 0.30%
- - ----------------------------------------------------------------------------------------------------
Bond Index 0.15%
- - ----------------------------------------------------------------------------------------------------
Active Bond 0.25%
- - ----------------------------------------------------------------------------------------------------
Core Bond 0.65%
- - ----------------------------------------------------------------------------------------------------
Global Bond 0.69%
- - ----------------------------------------------------------------------------------------------------
High Yield Bond 0.65%
- - ----------------------------------------------------------------------------------------------------
Money Market 0.25%
- - ----------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
(1) John Hancock Life Insurance Company reimburses a fund when the fund's other
operating expenses exceed 0.10% of the fund's average daily net assets.
The following table for the funds of the Variable Insurance Products Fund and
the Variable Insurance Products Fund II states the total management fee, the
distribution and service fee, the other Service Class operating expense and the
total annual Service Class operating expense for each fund for the fiscal year
ended December 31, 1999. The figures in the table are expressed as percentages
(rounded to two decimal places) of each fund's average daily net assets for
1999. The total class operating expenses do not reflect the effect of any
reduction of certain expenses during the period.
<TABLE>
<CAPTION>
DISTRIBUTION AND OTHER CLASS TOTAL CLASS
MANAGEMENT SERVICE (12B-1) OPERATING OPERATING
FUND NAME FEES FEES EXPENSES EXPENSES(3)
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity VIP Contrafund(R) 0.59%
- - ---------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth 0.59%
- - ---------------------------------------------------------------------------------------------------------------
</TABLE>
(2)Fidelity Management & Research Company has voluntarily agreed to reimburse
the Service Class of the funds to the extent that total operating expenses
(excluding interest, taxes, securities lending fees, brokerage commissions and
extraordinary expenses), as a percentage of their respective average net
assets, exceed 1.10% for the Contrafund and 1.60% for the Growth fund. If
certain expense reductions resulting from the use of brokerage commissions and
uninvested cash balances were included, the above operating expense percentages
would have been reduced by 0.05% for the Contrafund and Growth fund.
10
<PAGE>
The following table for the fund of the Templeton Variable Products Series
Fund shows the management fees, 12b-1 fees and other fund expenses for the
fiscal year ended December 31, 1999. The figures in the table are expressed as
percentages (rounded to two decimal places) of the fund's average daily net
assets for 1999.
<TABLE>
<CAPTION>
DISTRIBUTION AND
MANAGEMENT SERVICE (12B-1) OTHER FUND TOTAL FUND
FUND NAME FEES FEES (4) EXPENSES EXPENSES
- - ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Templeton
International - Class 0.69%
2
- - ------------------------------------------------------------------------------------
</TABLE>
(3)The "Rule 12b-1 Plan" for Class 2 shares of the fund is described in the
attached prospectus of the Templeton Variable Products Series Fund.
The following table for the fund of the MFS Variable Insurance Trust shows the
management fees and other fund expenses for the fiscal year ended December 31,
1999. The figures in the table are expressed as percentages (rounded to two
decimal places) of the fund's average daily net assets for 1999.
<TABLE>
<CAPTION>
TOTAL FUND OTHER FUND
OTHER FUND EXPENSES AFTER EXPENSES ABSENT
MANAGEMENT EXPENSES AFTER REIMBURSEMENT REIMBURSEMENT
FUND NAME FEES REIMBURSEMENT (5) (6)
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS New Discovery 0.90%
- - ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(4)The fund has an expense offset arrangement which reduces the fund's custodian
fee based upon the amount of cash maintained by the fund with its custodian and
dividend disbursing agent. The fund may enter into other such arrangements and
directed brokerage arrangements, which would also have the effect of reducing
the fund's expenses. Expenses do not take into account these expense
reductions, and are therefore higher than the actual expenses of the fund.
(5)MFS Investment Management(R) (also doing business as Massachusetts Financial
Services Company) has contractually agreed to bear expense for the New
Discovery fund, subject to reimbursement by the fund, such that the fund's
"other fund expenses" shall not exceed 0.25% of the average daily net assets of
the fund during the current fiscal year.
The following table for the fund of the AIM Variable Insurance Funds, Inc.,
shows the management fees and other fund expenses for the fiscal year ended
December 31, 1999. The figures in the table are expressed as percentages
(rounded to two decimal places) of the fund's average daily net assets for 1999.
<TABLE>
<CAPTION>
MANAGEMENT OTHER FUND TOTAL FUND
FUND NAME FEES EXPENSES EXPENSES
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AIM V.I. Value 0.61%
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The following table for the fund of the Janus Aspen Series (Service Shares)
shows the management fees and other fund expenses for each fund for the fiscal
year ended December 31, 1999. The figures in the table are expressed as
percentages (rounded to two decimal places) of each fund's average daily net
assets for 1999.
<TABLE>
<CAPTION>
MANAGEMENT OTHER FUND TOTAL FUND
FUND NAME FEES EXPENSES EXPENSES
- - -------------------------------------------------------------------
<S> <C> <C> <C>
Janus Aspen Global Technology
- - -------------------------------------------------------------------
Janus Aspen Worldwide Growth
- - -------------------------------------------------------------------
</TABLE>
We may receive payments from a fund or its affiliates at an annual rate of up
to approximately 0.25% of the average net assets that holders of our variable
life insurance policies and variable annuity contracts have invested in these
funds. Any such payments do not, however, result in any charge to you in
addition to what is disclosed in the above tables.
11
<PAGE>
WHAT OTHER CHARGES COULD WE IMPOSE IN THE FUTURE?
Except for the premium and DAC tax charge, we currently make no charge against
account value for our Federal income taxes. However, if we incur, or expect to
incur, income taxes attributable to any subaccount of the Account or this class
of policies in future years, we reserve the right to make such a charge. Any
such charge would reduce what you earn on any affected investment options.
However, we expect that no such charge will be necessary.
We also reserve the right to increase the premium and DAC tax charge in order
to correspond with changes in the state premium tax levels or in the Federal
income tax treatment of the deferred acquisition costs for this type of policy.
Under current laws, we 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, we may make charges
for such taxes.
HOW CAN YOU CHANGE YOUR POLICY'S INVESTMENT ALLOCATIONS?
Future premium payments
At any time, you may change the investment options in which future premium
payments will be invested. You make the original allocation in the application
for the policy. The percentages you select must be in whole numbers and must
equal 100% in total.
Transfers of existing account value
You may also transfer your existing account value from one investment option
to another. To do so, you must tell us how much to transfer, either as a whole
number percentage or as a specific dollar amount.
Under our current rules, you can make transfers out of any variable investment
--------
option anytime you wish. However, transfers out of the fixed investment option
-----
are currently subject to the following restrictions:
. You can only make such a transfer once in each policy year.
. The most you can transfer at any one time is the greater of $500 or 20%
of the assets in your fixed investment option.
We reserve the right to impose limits on:
. the minimum amount of each transfer out of the fixed investment option;
. the maximum amount of any transfer into the fixed investment option after
the second policy year; and
. the number and frequency of transfers out of the variable investment
options.
Dollar cost averaging
This is a program of automatic monthly transfers out of the Money Market
investment option into one or more of the other variable investment options. You
choose the investment options and the dollar amount and timing of the transfers.
The program is designed to reduce the risks that result from market
fluctuations. It does this by spreading out the allocation of your money to
investment options over a longer period of time. This allows you to reduce the
risk of investing most of your money at a time when market prices are high.
Obviously, the success of this strategy depends on market trends and is not
guaranteed.
Rebalancing
This is a program that automatically re-sets the percentage of your account
value allocated to the variable investment options. Over time, the variations in
the investment results for each variable investment option you've elected will
shift the percentage allocations among them. The rebalancing program will
periodically transfer your account value among the variable investment options
to reestablish the preset percentages you have chosen. Rebalancing would usually
result in transferring amounts from a variable investment option with relatively
higher
12
<PAGE>
investment performance since the last rebalancing to one with relatively lower
investment performance. However, rebalancing can also result in transferring
amounts from a variable investment option with relatively lower current
investment performance to one with relatively higher current investment
performance. Rebalancing and dollar cost averaging cannot be in effect at the
same time.
HOW CAN YOU ACCESS YOUR INVESTMENT IN THE POLICY?
Full surrender
You may surrender your policy in full at any time. If you do, we will pay you
the account value, less any policy loans and less any CDSC charge that then
applies. This is called your "surrender value." You must return your policy when
you request a full surrender.
Partial withdrawals
You may make a partial withdrawal of your surrender value at any time after
the first policy year. Each partial withdrawal must be at least $1,000. There is
a charge (usually $20) for each partial withdrawal. We will automatically reduce
the account value of your policy by the amount of the withdrawal and the related
charge. Unless we agree otherwise, each investment option will be reduced in the
same proportion as the account value is then allocated among them. We will not
permit a partial withdrawal if it would cause your surrender value to fall below
3 months' worth of monthly charges (see "Deductions from account value" on page
__). We also reserve the right to refuse any partial withdrawal that would cause
the policy's Total Sum Insured to fall below $100,000, or the policy's Basic Sum
Insured to fall below $100,000. Under the Option A death benefit, the reduction
of your account value occasioned by a partial withdrawal could cause the minimum
insurance amount to become less than your Total Sum Insured (see "How much will
we pay when the insured person dies?" on page _). If that happens, we will
automatically reduce your Total Sum Insured. The calculation of that reduction
is explained in the policy, and will be implemented by first reducing any
Additional Sum Insured in effect. If the reduction in Total Sum Insured would
cause your policy to fail the Internal Revenue Code's definition of life
insurance, we will not permit the partial withdrawal.
Policy loans
You may borrow from your policy at any time after it has been in effect for 1
year by completing a form satisfactory to us or, if the telephone transaction
authorization form has been completed, by telephone. The maximum amount you can
borrow is determined as follows:
. We first determine the surrender value of your policy.
. We then subtract an amount equal to 12 times the monthly charges then
being deducted from account value.
. We then multiply the resulting amount by.75% in policy years 1
through 10, .50% in policy years 11 through 20, and .25% thereafter.
. We then subtract the third item above from the second item above.
The minimum amount of each loan is $300. The interest charged on any loan is
an effective annual rate of 4.75% in the first 10 policy years, 4.50% in policy
years 11 through 20, and 4.25% thereafter. Accrued interest will be added to the
loan daily and will bear interest at the same rate as the original loan amount.
The amount of the loan is deducted from the investment options in the same
proportion as the account value is then allocated among them and is placed in a
special loan account. This special loan account will earn interest at an
effective annual rate of 4.0%. However, if we determine that a loan will be
treated as a taxable distribution because of the differential between the loan
interest rate and the rate being credited on the special loan account, we
reserve the right to decrease the rate credited on the special loan account to a
rate that would, in our reasonable judgement, result in the transaction being
treated as a loan under Federal tax law.
13
<PAGE>
You can repay all or part of a loan at any time. Unless we agree otherwise,
each repayment will be allocated among the investment options as follows:
. The same proportionate part of the loan as was borrowed from the
fixed investment option will be repaid to the fixed investment
option.
. The remainder of the repayment will be allocated among the investment
options in the same way a new premium payment would be allocated.
If you want a payment to be used as a loan repayment, you must include
instructions to that effect. Otherwise, all payments will be assumed to be
premium payments.
HOW MUCH WILL WE PAY WHEN THE INSURED PERSON DIES?
In your application for the policy, you will tell us how much life insurance
coverage you want on the life of the insured person. This is called the "Total
Sum Insured" of insurance. Total Sum Insured is composed of the Basic Sum
Insured and any Additional Sum Insured you elect. The maximum amount of
Additional Sum Insured you can have when we issue the policy is generally
limited to 400% of the Basic Sum Insured. There are a number of factors you
should consider in determining whether to elect coverage in the form of Basic
Sum Insured or in the form of Additional Sum Insured. These factors are
discussed under "Basic Sum Insured vs. Additional Sum Insured" on page __.
When the insured person dies, we will pay the death benefit minus any
outstanding loans. There are two ways of calculating the death benefit. You
choose which one you want in the application. The two death benefit options are:
. Option A - The death benefit will equal the greater of (1) the Total
Sum Insured or (2) the minimum insurance amount under the "guideline
premium and cash value corridor test" or under the "cash value
accumulation test" (as described below).
. Option B - The death benefit will equal the greater of (1) the Total
Sum Insured amount plus your policy's account value on the date of
death, or (2) the minimum insurance amount under the "guideline
premium and cash value corridor test".
For the same premium payments, the death benefit under Option B will tend to
be higher than the death benefit under Option A. On the other hand, the monthly
insurance charge will be higher under Option B to compensate us for the
additional insurance risk. Because of that, the account value will tend to be
higher under Option A than under Option B for the same premium payments.
The minimum insurance amount
In order for a policy to qualify as life insurance under Federal tax law,
there has to be a minimum amount of insurance in relation to account value.
There are two tests that can be applied under Federal tax law - -the "guideline
premium and cash value corridor test" and the "cash value accumulation test."
When you elect the Option A death benefit, you must elect which test you wish
to have applied. If you elect the Option B death benefit, the guideline premium
and cash value corridor test will automatically be applied. Under the guideline
premium and cash value corridor test, we compute the minimum insurance amount
each business day by multiplying the account value on that date by the so-called
"corridor factor" applicable on that date. The corridor factors are derived by
applying the "guideline premium and cash value corridor test." The corridor
factor starts out at 2.50 for ages at or below 40 and decreases as attained age
increases, reaching a low of 1.0 at age 95. A table showing the factor for each
age will appear in the policy. Under the cash value accumulation test, we
compute the minimum insurance amount each business day by multiplying the
account value on that date by the so-called "death benefit factor" applicable on
that date. The death benefit factors are derived by applying the "cash value
accumulation test." The death benefit factor decreases as attained age
increases. A table showing the factor for each age will appear in the policy.
As noted above, you have to elect which test will be applied if you elect the
Option A death benefit. The cash value accumulation test may be preferable if
you want an increasing death benefit in later policy years and/or want to fund
the policy at the "7 pay" limit for the full 7 years (see "Tax Considerations"
beginning on page __). The
14
<PAGE>
guideline premium and cash value corridor test may be preferable if you want the
account value under the policy to increase without increasing the death benefit
as quickly as might otherwise be required.
When the insured person reaches 100
On the policy anniversary nearest the insured person's 100th birthday, the
death benefit will become equal to the account value on the date of death. Death
benefit Options A and B (as described above) will cease to apply. Also, we will
stop deducting any monthly charges (other than the asset-based risk charge) and
will stop accepting any premium payments.
In the next section, we describe an optional Age 100 Waiver of Charges Rider
that provides for continuation of the Total Sum Insured after the insured person
reaches 100.
CAN YOU ADD ADDITIONAL BENEFIT RIDERS?
When you apply for a policy, you can request any of the additional benefit
riders that we then make available. Availability and rider benefits may vary by
state. Charges for the selected rider will generally increase the monthly
deductions from your policy's account value. We may change the rates of these
charges, but not above the maximum amounts that will be stated in the Policy
Specifications page of your policy. Our rules and procedures will govern
eligibility for the riders, or any changes to these benefits. Each rider
contains specific details that you should review if you desire to choose the
additional benefit. We may add to, delete from, or modify the following list of
additional benefit riders:
. Disability Waiver of Charges Rider - Provides for the waiver of monthly
deductions if the insured person becomes totally and permanently disabled,
as defined in the rider, prior to age 60. If the insured person becomes
totally and permanently disabled after age 60, monthly deductions are only
waived until age 65. Benefits under this rider do not reduce the
Guaranteed Death Benefit Premium payment requirements described on page
___that are necessary for the guaranteed death benefit feature to remain
in effect.
. Living Care Benefit Rider - Provides for an advance payment to you of a
portion of the death benefit if the insured person becomes terminally ill,
as defined in the rider, with death expected within 24 months. Advances
under the rider are discounted for interest at the rates specified in the
rider, and we may use a portion of any advance to repay loans under your
policy. The maximum advance is $1,000,000.
. Age 100 Waiver of Charges Rider - Provides for the continuation of the
Total Sum Insured in force when the insured person attains age 100,
without charge, if the policy's account value at the time is greater than
the sum of 1 plus the amount of any surrender charges then existing. The
monthly charge for this rider currently begins in the 6th policy year.
. Children's Insurance Benefit Rider - Provides term insurance up through
age 21 on each covered child of the insured person. A child must be more
than 14 days old and less than 15 years old to begin coverage.
. Accidental Death Benefit Rider - Provides for an additional insurance
benefit if the insured person's death is due to accidental causes between
the policy anniversaries nearest the insured person's 5th and 70th
birthdays.
. Deferral of Tax Charge Rider - Provides for monthly deductions from
account value in lieu of the deductions from premium payments for the
premium tax charge and the DAC tax charge. Each monthly deduction is
based on (1)a deferral factor shown in your policy and (2) the sum of the
special loan account and the account value that is allocated to the
variable investment options. (The term "special loan account" is explained
in "Policy Loans" on page __.) We determine the deferral factor at the
time we issue a policy and anticipate that it will range from .20% to .60%
per year. Monthly deductions under the rider are taken from your account
value in the same manner as the other monthly deductions under your policy
are taken from the variable investment options and the fixed investment
option.
. Long-Term Care Acceleration Rider - intended only for policies where the
death benefit is determined under Option A and the "cash value
accumulation test" described on page ___. This rider provides for
periodic advance payments to you of a portion of the death benefit if the
insured person: (1) is unable to
15
<PAGE>
perform at least 2 activities of daily living without human assistance or
has a cognitive impairment; and (2) is receiving certain qualified
services described in the rider. The rider also provides a waiver of
monthly deductions from the policy's account value.
Benefits under the rider will not begin until we receive proof that the
insured person qualifies and has received 100 days of long-term care
service while the policy was in force. You must continue to submit
evidence during the insured person's lifetime of the insured person's
eligibility for rider benefits.
We determine a maximum amount of death benefit that we will advance for
each month of qualification. This amount, called the "Monthly Benefit"
is based on the percentage of the policy's death benefit that you select
when you apply for the policy, and the death benefit amount in effect when
the insured person qualifies for benefits. The actual amount of any
advance is based on the expense incurred by the insured person, up to the
Monthly Benefit, for each day of long-term care service in a calendar
month. The first 100 days of long-term care service, however, are
excluded in any determination of an advance. We will recalculate the
Monthly Benefit if you make a partial withdrawal of account value, or if
the insured person requalifies for benefits. Each advance reduces the
remaining death benefit under your policy, and causes a proportionate
reduction in your policy's account value. If you have a policy loan, we
will use a portion of each death benefit advance to repay indebtedness.
We will waive monthly deductions on the first monthly processing day
following our approval of a request for benefits. The waiver of monthly
deductions will end if we do not receive proof during any 90 day period
that the insured person continues to qualify and has incurred long-term
care services
We restrict your account value's exposure to market risk when benefits are
paid under the rider. We do this in several ways. First, before we begin
paying any Monthly Benefit or waiving monthly deductions, we will transfer
all account value from the variable investment options to the fixed
---
investment option. (The amount to be transferred will be determined on the
Business Day immediately following the date we approve a request for
benefits under the rider.) In addition, you will not be permitted to
---
transfer account value or allocate any additional premium payment to a
variable investment option while rider benefits are paid or monthly
deductions waived. Your participation in any of the automatic investment
plans will also be suspended during this period.
If the insured person no longer qualifies for rider benefits and your
policy remains in force, you will be permitted to invest new premium
payments or existing account value in the variable investment options at
the end of a 90 day "wait" period described in the rider. (The
restriction on transfers from the Fixed Account described on page ___ will
continue to apply.) Benefits under this rider do not reduce the
Guaranteed Death Benefit Premium payment requirements described on page
___ that may be necessary for the guaranteed death benefit feature to
remain in effect after a termination of rider benefits.
In certain marketing materials, this rider may be referred to as
"CareSolutions Plus." If you purchase this rider, it is our intent that
you and your immediate family will also have access to:
. a national program designed to help the elderly maintain their
independent living by providing advice about an array of elder care
services available to seniors, and
. a list of long-term care providers in your area who provide special
discounts to persons who belong to the national program.
The Long-Term Care Acceleration Rider is not available on the date of this
prospectus. Although we intend to make it available to you, assuming the
insured person qualifies under our then existing underwriting rules, we
can provide no assurance that it will be so offered. We also reserve the
right to limit your ability to select the rider if you purchased a policy
prior to the date the rider first becomes available in your local
jurisdiction.
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<PAGE>
HOW CAN YOU CHANGE YOUR POLICY'S INSURANCE COVERAGE?
Increase in coverage
You may request an increase in the Additional Sum Insured of insurance
coverage to become effective on any policy anniversary (but see "Effective date
of other policy transactions" on page __). Generally, each such increase must be
at least $50,000. However, you will have to provide us with evidence that the
insured person still meets our requirements for issuing insurance coverage.
Unless we consent otherwise, you may not increase the Additional Sum Insured if
the increase would cause the entire Additional Sum Insured to equal or exceed
800% of the Basic Sum Insured.
Decrease in coverage
After the first policy year, you may request a reduction in the Total Sum
Insured at any time, but only if:
. the remaining Basic Sum Insured will be at least $100,000, and
. the remaining Additional Sum Insured will not exceed 800% of the
Basic Sum Insured, and
. the remaining Total Sum Insured will at least equal the minimum
required by the tax laws to maintain the policy's life insurance
status.
Change of death benefit option
If the "guideline premium and cash value corridor test" applies to your
policy, you may change your coverage from death benefit Option A to Option B or
vice-versa on any policy anniversary, but only if there is no change in the
Federal tax law test used to determine the minimum insurance amount. If you
change from Option A to Option B, we will require evidence that the insured
person still meets our requirements for issuing coverage. This is because such a
change increases our insurance risk exposure.
If the "cash value accumulation test" applies to your policy, you can never
change to either Option A under the "guideline premium and cash value corridor
test" or to Option B.
Please read the "minimum insurance amount" starting on page __for more
information about the "guideline premium and cash value corridor test" and the
"cash value accumulation test."
Tax consequences
Please read "Tax considerations" starting on page __ to learn about possible
tax consequences of changing your insurance coverage under the policy.
CAN YOU CANCEL YOUR POLICY AFTER IT'S ISSUED?
You have the right to cancel your policy within 10 days (or longer in some
states) after you receive it. This is often referred to as the "free look"
period. To cancel your policy, simply deliver or mail the policy to:
. JHVLICO at one of the addresses shown on page 2, or
. the JHVLICO representative who delivered the policy to you.
In most states, you will receive a refund of any premiums you've paid. In some
states, the refund will be your account value on the date of cancellation plus
all charges deducted by JHVLICO or the Trust prior to that date. The date of
cancellation will be the date of such mailing or delivery.
17
<PAGE>
CAN YOU CHOOSE THE FORM IN WHICH WE PAY OUT POLICY PROCEEDS?
Choosing a payment option
You may choose to receive proceeds from the policy as a single sum. This
includes proceeds that become payable because of death or full surrender.
Alternatively, you can elect to have proceeds of $1,000 or more applied to any
of a number of other payment options, including the following:
. Option 1 - Proceeds left with us to accumulate with interest
. Option 2A - Equal monthly payments of a specified amount until all
proceeds are paid out
. Option 2B - Equal monthly payments for a specified period of time
. Option 3 - Equal monthly payments for life, but with payments
guaranteed for a specific number of years
. Option 4 - Equal monthly payments for life with no refund
. Option 5 - Equal monthly payments for life with a refund if all of
the proceeds haven't been paid out
You cannot choose an option if the monthly payments under the option would be
less than $50. We will issue a supplementary agreement when the proceeds are
applied to any alternative payment option. That agreement will spell out the
terms of the option in full. We will credit interest on each of the above
options. For options 1 and 2A, the interest will be at least an effective annual
rate of 3 1/2%.
Changing a payment option
You can change the payment option at any time before the proceeds are payable.
If you haven't made a choice, the payee of the proceeds has a prescribed period
in which he or she can make that choice.
Tax impact
There may be tax consequences to you or your beneficiary depending upon which
payment option is chosen. You should consult with a qualified tax adviser before
making that choice.
TO WHAT EXTENT CAN WE VARY THE TERMS AND CONDITIONS OF OUR POLICIES IN
PARTICULAR CASES?
Listed below are some variations we can make in the terms of our policies. Any
variation will be made only in accordance with uniform rules that we apply
fairly to all of our customers.
State law insurance requirements
Insurance laws and regulations apply to us in every state in which its
policies are sold. As a result, various terms and conditions described in the
prospectus may vary depending upon where you reside. These variations will be
reflected in your policy or in endorsements attached to your policy.
Variations in expenses or risks
We may vary the charges and other terms of our policies where special
circumstances result in sales or administrative expenses, mortality risks or
other risks that are different from those normally associated with the policies.
These include the type of variations discussed under "Reduced charges for
eligible classes" on page __. No variation in any charge will exceed any maximum
stated in this prospectus with respect to that charge.
HOW WILL MY POLICY BE TREATED FOR INCOME TAX PURPOSES?
Generally, death benefits paid under policies such as yours are not subject to
income tax. Earnings on your account value are not subject to income tax as long
as we don't pay them out to you. If we do pay out any amount of your account
value upon surrender or partial withdrawal, all or part of that distribution
should generally be treated
18
<PAGE>
as a return of the premiums you've paid and should not be subject to income tax.
Amounts you borrow are generally not taxable to you.
However, some of the tax rules change if your policy is found to be a
"modified endowment contract." This can happen if you've paid more than a
certain amount of premiums that is prescribed by the tax laws. Additional taxes
and penalties may be payable for policy distributions of any kind.
For further information about the tax consequences of owning a policy, please
read "Tax considerations" beginning of page __.
HOW DO YOU COMMUNICATE WITH US?
General Rules
You should mail or express all checks and money orders for premium payments
and loan repayments to the JHVLICO Life Servicing Office at the appropriate
address shown on page 2.
Certain requests must be made in writing and be signed and dated by you. They
include the following:
. loans, surrenders or partial withdrawals
. transfers of account value among investment options
. change of allocation among investment options for new premium
payments
. change of death benefit option
. increase or decrease in Total Sum Insured
. change of beneficiary
. election of payment option for policy proceeds
. tax withholding elections
. election of telephone transaction privilege
You should mail or express these requests to our Life Servicing Office at
the appropriate address shown on page 2. You should also send notice of
the insured person's death and related documentation to our Life Servicing
Office. We don't consider that we've "received" any communication until
such time as it has arrived at the proper place and in the proper and
complete form.
We have special forms that should be used for a number of the requests
mentioned above. You can obtain these forms from our Life Servicing Office or
your JHVLICO representative. Each communication to us must include your name,
your policy number and the name of the insured person. We cannot process any
request that doesn't include this required information. Any communication that
arrives after the close of our business day, or on a day that is not a business
day, will be considered "received" by us on the next following business day. Our
business day currently closes at 4:00 p.m. Eastern Standard Time, but special
circumstances (such as suspension of trading on a major exchange) may dictate an
earlier closing time.
Telephone Transactions
If you complete a special authorization form, you can request loans, transfers
among investment options and changes of allocation among investment options
simply by telephoning us at 1-800-732-5543 or by faxing us at 1-617-886-3048.
Any fax request should include your name, daytime telephone number, policy
number and, in the case of transfers and changes of allocation, the names of the
investment options involved. We will honor telephone instructions from anyone
who provides the correct identifying information, so there is a risk of loss to
you if this service is used by an unauthorized person. However, you will receive
written confirmation of all telephone
19
<PAGE>
transactions. There is also a risk that you will be unable to place your request
due to equipment malfunction or heavy phone line usage. If this occurs, you
should submit your request in writing.
The policies are not designed for professional market timing organizations or
other entities that use programmed and frequent transfers among investment
options. For reasons such as that, we reserve the right to change our telephone
transaction policies or procedures at any time. We also reserve the right to
suspend or terminate the privilege altogether.
20
<PAGE>
ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables illustrate the changes in death benefit, account value
and surrender value of the policy under certain hypothetical circumstances that
we assume solely for this purpose. Each table separately illustrates the
operation of a policy for a specified issue age, premium payment schedule and
face amount. The amounts shown are for the end of each policy year and assume
that all of the account value is invested in funds that achieve investment
returns at constant gross annual rates of 0%, 6% and 12% (i.e., before any fees
or expenses deducted from Trust assets). After the deduction of average fees and
expenses at the Trust level (as described below), the corresponding net annual
rates would be -.66%, 5.30% and 11.26%, respectively. Investment return reflects
investment income and all realized and unrealized capital gains and losses. The
tables assume annual Planned Premiums that are paid at the beginning of each
policy year for an insured person who is a 35 year old male standard non-smoker
underwriting risk when the policy is issued.
Tables are provided for each of the two death benefit options. The tables
headed "Current Charges" assume that the current rates for all charges deducted
by JHVLICO will apply in each year illustrated, including the intended waiver of
-
the premium sales charge after the tenth policy year and the intended reduction
in the insurance charge after the twentieth policy year. The tables headed
"Maximum Charges" are the same, except that the maximum permitted rates for all
years are used for all charges. The tables do not reflect any charge that we
reserve the right to make but are not currently making. The tables assume that
no optional rider benefits have been elected.
With respect to fees and expenses deducted from assets of the Trusts, the
amounts shown in all tables reflect (1) investment management fees equivalent to
an effective annual rate of 0.59%, and (2) an assumed average asset charge for
all other operating expenses of the Trusts equivalent to an effective annual
rate of 0.07%. These rates are the arithmetic average for all funds of the
Trusts that are available as investment options under this prospectus. In other
words, they are based on the hypothetical assumption that policy account values
are allocated equally among the variable investment options. The actual rates
associated with any policy will vary depending upon the actual allocation of
policy values among the investment options.
The second column of each table shows the amount you would have at the end of
each Policy year if an amount equal to the assumed Planned Premiums were
invested to earn interest, after taxes, at 5% compounded annually. This is not a
policy value. It is included for comparison purposes only.
Because your circumstances will no doubt differ from those in the
illustrations that follow, values under your policy will differ, in most cases
substantially. Upon request, we will furnish you with a comparable illustration
reflecting your proposed insured person's issue age, sex and underwriting risk
classification, and the Basic Sum Insured, Additional Sum Insured and annual
Planned Premium amount requested.
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<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE
TOTAL SUM INSURED: $100,000 (BASIC SUM INSURED OF $_______/ADDITIONAL SUM
INSURED OF $____)
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
OPTION A DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $ *
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- - ------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>
- - ---------
* The amount shown is equal to the Target Premium for the basic policy. If
premiums are paid more frequently than annually, the above values shown would
be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
22
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE
TOTAL SUM INSURED: $100,000 (BASIC SUM INSURED OF $_______/ADDITIONAL SUM
INSURED OF $____)
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
OPTION A DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $ *
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- - ------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>
- - ---------
* The amount shown is equal to the Target Premium for the basic policy. If
premiums are paid more frequently than annually, the above values shown would
be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
23
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE
TOTAL SUM INSURED: $100,000 (BASIC SUM INSURED OF $_______/ADDITIONAL SUM
INSURED OF $____)
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
OPTION B DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $ *
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- - ------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>
- - ---------
* The amount shown is equal to the Target Premium for the basic policy. If
premiums are paid more frequently than annually, the above values shown would
be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
24
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE
TOTAL SUM INSURED: $100,000 (BASIC SUM INSURED OF $_______/ADDITIONAL SUM
INSURED OF $____)
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
OPTION B DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $ *
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- - ------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>
- - ---------
* The amount shown is equal to the Target Premium for the basic policy. If
premiums are paid more frequently than annually, the above values shown would
be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
25
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE
TOTAL SUM INSURED: $100,000 (BASIC SUM INSURED OF $_______/ADDITIONAL SUM
INSURED OF $____)
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
OPTION A DEATH BENEFIT
CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $ *
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- - ------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>
- - ---------
* The amount shown is equal to the Target Premium for the basic policy. If
premiums are paid more frequently than annually, the above values shown would
be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
26
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE
TOTAL SUM INSURED: $100,000 (BASIC SUM INSURED OF $_______/ADDITIONAL SUM
INSURED OF $____)
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
OPTION A DEATH BENEFIT
CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $ *
USING MAXIMUM CHARGES*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- - ------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
35
40
45
</TABLE>
- - ---------
* The amount shown is equal to the Target Premium for the basic policy. If
premiums are paid more frequently than annually, the above values shown would
be affected.
** Policy lapses unless additional premium payments are made.
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
27
<PAGE>
ADDITIONAL INFORMATION
This section of the prospectus provides additional detailed information that
is not contained in the Basic Information section on pages 4 through 20.
<TABLE>
<CAPTION>
CONTENTS OF THIS SECTION PAGES TO SEE
- - ------------------------ ------------
<S> <C>
Description of us.........................
How we support the policy and investment options
Procedures for issuance of a policy.......
Basic Sum Insured vs. Additional Sum Insured
Commencement of investment performance....
How we process certain policy transactions
Effects of policy loans...................
Additional information about how certain policy charges
work......................................
How we market the policies................
Tax considerations........................
Reports that you will receive.............
Voting privileges that you will have......
Changes that we can make as to your policy
Adjustments we make to death benefits.....
When we pay policy proceeds...............
Other details about exercising rights and paying benefits
Legal matters.............................
Registration statement filed with the SEC.
Accounting and actuarial experts..........
Financial statements of JHVLICO and the Account
List of our Directors and Executive Officers
</TABLE>
28
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DESCRIPTION OF US
We are JHVLICO, a stock life insurance company chartered in 1979 under
Massachusetts law. We are authorized to transact a life insurance and annuity
business in all states other than New York and in the District of Columbia. We
began selling variable life insurance policies in 1980.
We are regulated and supervised by the Massachusetts Commissioner of
Insurance, who periodically examines our affairs. We also are subject to the
applicable insurance laws and regulations of all jurisdictions in which we are
authorized to do business. We are required to submit annual statements of our
operations, including financial statements, to the insurance departments of the
various jurisdictions in which we do business for purposes of determining
solvency and compliance with local insurance laws and regulations. The
regulation to which we are subject, however, does not provide a guarantee as to
such matters.
We are an indirect wholly-owned subsidiary of John Hancock Life Insurance
Company ("John Hancock"), a Massachusetts stock life insurance company. On
February 1, 2000, John Hancock Mutual Life Insurance Company (which was
chartered in Massachusetts in 1862) converted to a stock company by
"demutualizing" and changed its name to John Hancock Life Insurance Company. As
part of the demutualization process, John Hancock became a subsidiary of John
Hancock Financial Services, Inc., a newly formed publicly-traded corporation.
John Hancock's home office is at John Hancock Place, Boston, Massachusetts
02117. At year end 1998, John Hancock's assets were approximately $67 billion
and it had invested over $380 million in JHVLICO in connection with our
organization and operation. It is anticipated that John Hancock will from time
to time make additional capital contributions to JHVLICO to enable us to meet
our reserve requirements and expenses in connection with our business. John
Hancock is committed to make additional capital contributions if necessary to
ensure that we maintain a positive net worth.
HOW WE SUPPORT THE POLICY AND INVESTMENT OPTIONS
Separate Account U
The variable investment options shown on page 1 are in fact subaccounts of
Separate Account U (the "Account"), a separate account established by us under
Massachusetts law. The Account 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"). Such registration does not
involve supervision by the SEC of the management of the Account or of us.
The Account's assets are our property. Each policy provides that amounts we
hold in the Account pursuant to the policies cannot be reached by any other
persons who may have claims against us.
The assets in each subaccount are invested in the corresponding fund of one of
theTrusts. New subaccounts may be added as new funds are added to the Trust and
made available to policy owners. Existing subaccounts may be deleted if existing
funds are deleted from the Trusts.
We will purchase and redeem Trust shares for the Account at their net asset
value without any sales or redemption charges. Shares of a Trust represent an
interest in one of the funds of the Trust which corresponds to a subaccount of
the Account. Any dividend or capital gains distributions received by the Account
will be reinvested in shares of that same fund at their net asset value as of
the dates paid.
On each business day, shares of each fund are purchased or redeemed by us for
each subaccount based on, among other things, the amount of net premiums
allocated to the subaccount, distributions reinvested, and transfers to, from
and among subaccounts, all to be effected as of that date. Such purchases and
redemptions are effected at each fund's net asset value per share determined for
that same date. A "business day" is any date on which the New York Stock
Exchange is open for trading. We compute policy values for each business day as
of the close of that day (usually 4:00 p.m. Eastern Standard Time).
Our general account
Our obligations under the policy's fixed investment option are backed by our
general account assets. Our general account consists of assets owned by us other
than those in the Account and in other separate accounts that we may establish.
Subject to applicable law, we have sole discretion over the investment of assets
of the general account and policy owners do not share in the investment
experience of, or have any preferential claim on, those assets. Instead, we
guarantee that the account value allocated to the fixed investment option will
accrue interest daily at an effective annual rate of at least 4% without regard
to the actual investment experience of the general account.
Because of exemptive and exclusionary provisions, interests in our fixed
investment option have not been registered under the Securities Act of 1933 and
our general account has not been registered as an investment company under the
1940 Act. Accordingly, neither the general account nor any interests therein are
subject to the provisions of these acts, and we have been advised that the staff
of the SEC has not reviewed the disclosure in this prospectus relating to the
fixed investment option. Disclosure regarding the fixed investment option may,
however, be subject to certain generally-applicable provisions
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of the Federal securities laws relating to accuracy and completeness of
statements made in prospectuses.
PROCEDURES FOR ISSUANCE OF A POLICY
Generally, the policy is available with a minimum Basic Sum Insured at issue
of $100,000. At the time of issue, the insured person must have an attained age
of no more than 80. All insured persons must meet certain health and other
insurance risk criteria called "underwriting standards".
Policies issued in Montana or in connection with certain employee plans will
not directly reflect the sex of the insured person in either the premium rates
or the charges or values under the policy. The illustrations set forth in this
prospectus are sex-distinct and, therefore, may not reflect the rates, charges,
or values that would apply to such policies.
Minimum Initial Premium
The Minimum Initial Premium must be received by us at our Life Servicing
Office in order for the policy to be in full force and effect. There is no grace
period for the payment of the Minimum Initial Premium. The Minimum Initial
Premium is determined by us based on the characteristics of the insured person,
the Basic Sum Insured and the Additional Sum Insured at issue, and the policy
options you have selected.
Commencement of insurance coverage
After you apply for a policy, it can sometimes take up to several weeks for us
to gather and evaluate all the information we need to decide whether to issue a
policy to you and, if so, what the insured person's rate class should be. After
we approve an application for a policy and assign an appropriate insurance rate
class, we will prepare the policy for delivery. We will not pay a death benefit
under a policy unless the policy is in effect when the insured person dies
(except for the circumstances described under "Temporary insurance coverage
prior to policy delivery" on page __).
The policy will take effect only if all of the following conditions are
satisfied:
. The policy is delivered to and received by the applicant.
. The Minimum Initial Premium is received by us.
. Each insured person is living and still meets our health criteria for
issuing insurance.
If all of the above conditions are satisfied, the policy will take effect
on the date shown in the policy as the "date of issue." That is the date
on which we begin to deduct monthly charges. Policy months, policy years
and policy anniversaries are all measured from the date of issue.
Backdating
In order to preserve a younger age at issue for the insured person, we can
designate a date of issue that is up to 60 days earlier than the date that would
otherwise apply. This is referred to as "backdating" and is allowed under state
insurance laws. Backdating can also be used in certain corporate-owned life
insurance cases involving multiple policies to retain a common monthly deduction
date.
The conditions for coverage described above under "Commencement of insurance
coverage" must still be satisfied, but in a backdating situation the policy
always takes effect retroactively. Backdating results in a lower insurance
charge (because of the insured person's younger age at issue), but monthly
charges begin earlier than would otherwise be the case. Those monthly charges
will be deducted as soon as we receive premiums sufficient to pay them.
Temporary coverage prior to policy delivery
If a specified amount of premium is paid with the application for a policy and
other conditions are met, we will provide temporary term life insurance coverage
on the insured person for a period prior to the time coverage under the policy
takes effect. Such temporary term coverage will be subject to the terms and
conditions described in the application for the policy, including limits on
amount and duration of coverage.
Monthly deduction dates
Each charge that we deduct monthly is assessed against your account value or
the subaccounts at the close of business on the date of issue and at the close
of the first business day in each subsequent policy month.
BASIC SUM INSURED VS. ADDITIONAL SUM INSURED
As noted earlier in this prospectus, you should consider a number of factors
in determining whether to elect coverage in the form of Basic Sum Insured or in
the form of Additional Sum Insured.
The amount of sales charge deducted from premiums and the amount of
compensation paid to the selling insurance agent will be less if coverage is
included as Additional Sum Insured, rather than as Basic Sum Insured. On the
other hand, the amount of any Additional Sum Insured is not included in the
guaranteed death benefit feature. Therefore, if the policy's surrender value is
insufficient to pay the monthly charges as they fall due (including the charges
for the Additional Sum Insured), the Additional Sum Insured coverage will lapse,
even if the Basic Sum Insured stays in effect pursuant to the guaranteed death
benefit feature.
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Generally, you will incur lower sales charges and have more flexible coverage
with respect to the Additional Sum Insured than with respect to the Basic Sum
Insured. If this is your priority, you may wish to maximize the proportion of
the Additional Sum Insured. However, if your priority is to take advantage of
the guaranteed death benefit feature, the proportion of the Policy's Total Sum
Insured that is guaranteed can be increased by taking out more coverage as Basic
Sum Insured at the time of policy issuance.
Any decision you make to modify the amount of Additional Sum Insured coverage
after issue can have significant tax consequences (see "Tax Considerations"
beginning on page __).
COMMENCEMENT OF INVESTMENT PERFORMANCE
Any premium payment processed prior to the twentieth day after the date of
issue will automatically be allocated to the Money Market investment option. On
the later of the date such payment is received or the twentieth day following
the date of issue, the portion of the Money Market investment option
attributable to such payment will be reallocated automatically among the
investment options you have chosen.
All other premium payments will be allocated among the investment options you
have chosen as soon as they are processed.
HOW WE PROCESS CERTAIN POLICY TRANSACTIONS
Premium payments
We will process any premium payment as of the day we receive it, unless one of
the following exceptions applies:
(1) We will process a payment received prior to a policy's date of issue as if
received on the date of issue.
(2) If the Minimum Initial Premium is not received prior to the date of issue,
we will process each premium payment received thereafter as if received on the
business day immediately preceding the date of issue until all of the Minimum
Initial Premium is received.
(3) We will process the portion of any premium payment for which we require
evidence of the insured person's continued insurability only after we have
received such evidence and found it satisfactory to us.
(4) If we receive any premium payment that we think will cause a policy to
become a modified endowment or will cause a policy to lose its status as life
insurance under the tax laws, we will not accept the excess portion of that
premium payment and will immediately notify the owner. We will refund the excess
premium when the premium payment check has had time to clear the banking system
(but in no case more than two weeks after receipt), except in the following
circumstances:
. The tax problem resolves itself prior to the date the refund is to be
made; or
. The tax problem relates to modified endowment status and we receive a
signed acknowledgment from the owner prior to the refund date instructing
us to process the premium notwithstanding the tax issues involved.
In the above cases, we will treat the excess premium as having been received
on the date the tax problem resolves itself or the date we receive the signed
acknowledgment. We will then process it accordingly.
(4) If a premium payment is received or is otherwise scheduled to be processed
(as specified above) on a date that is not a business day, the premium payment
will be processed on the business day next following that date.
Transfers among investment options
Any reallocation among investment options must be such that the total in all
investment options after reallocation equals 100% of account value. Transfers
out of any investment option will be effective at the end of the business day in
which we receive at our Life Servicing Office notice satisfactory to us.
We have the right to defer transfers of amounts out of the fixed investment
option for up to six months.
Dollar cost averaging
Scheduled transfers under this option may be made from the Money Market
investment option to not more than nine other variable investment options.
However, the amount transferred to any one investment option must be at least
$100.
Once we receive the election in form satisfactory to us at our Life Servicing
Office, transfers will begin on the second monthly deduction date following its
receipt. If you have any questions with respect to this provision, call
1-800-732-5543.
Once elected, the scheduled monthly transfer option will remain in effect for
so long as you have at least $2,500 of your account value in the Money Market
investment option, or until we receive written notice from you of cancellation
of the option or notice of the death of the insured person. The dollar cost
averaging and rebalancing options cannot be in effect at the same time. We
reserve the right to modify, terminate or suspend the dollar cost averaging
program at any time.
Rebalancing
This option can be elected in the application or by sending the appropriate
form to our Life Servicing Office. You must
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specify the frequency for rebalancing (quarterly, semi-annually or annually),
the preset percentage for each variable investment option and a future beginning
date. The first rebalancing will occur on the monthly deduction date that occurs
on or next follows the beginning date you select.
Once elected, rebalancing will continue until we receive notice of
cancellation of the option or notice of the death of the last surviving insured
person. If you cancel rebalancing, you will have to wait 30 days before you can
start it again.
The fixed investment option does not participate in and is not affected by
rebalancing.The rebalancing and dollar cost averaging options cannot be in
effect at the same time. We reserve the right to modify, terminate or suspend
the rebalancing program at any time.
Telephone transfers and policy loans
Once you have completed a written authorization, you may request a transfer or
policy loan by telephone or by fax. If the fax request option becomes
unavailable, another means of telecommunication will be substituted.
If you authorize telephone transactions, you will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which we reasonably believe to be genuine, unless such loss,
expense or cost is the result of our mistake or negligence. We employ procedures
which provide safeguards against the execution of unauthorized transactions, and
which are reasonably designed to confirm that instructions received by telephone
are genuine. These procedures include requiring personal identification, tape
recording calls, and providing written confirmation to the owner. If we do not
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine, we may be liable for any loss due to unauthorized or
fraudulent instructions.
Effective date of other policy transactions
The following transactions take effect on the policy anniversary on or next
following the date we approve your request:
. Additional Sum Insured increases.
. Change of death benefit Option from A to B.
A change from Option B to Option A is effective on the policy anniversary on
or next following the date we receive the request.
The following transactions take effect on the monthly deduction date on or
next following the date we approve your request:
. Total Sum Insured decreases
. Reinstatements of lapsed policies
We process loans, surrenders, partial withdrawals and loan repayments as of
the day we receive such request or repayment.
EFFECTS OF POLICY LOANS
The account value, the surrender value, and any death benefit above the Total
Sum Insured are permanently affected by any loan, whether or not it is repaid in
whole or in part. This is because the amount of the loan is deducted from the
investment options and placed in a special loan account. The investment options
and the special loan account will generally have different rates of investment
return.
The amount of the outstanding loan (which includes accrued and unpaid
interest) is subtracted from the amount otherwise payable when the policy
proceeds become payable.
Whenever the outstanding loan equals or exceeds the surrender value, the policy
will terminate 31 days after we have mailed notice of termination to you (and to
any assignee of record at such assignee's last known address) specifying the
minimum amount that must be paid to avoid termination, unless a repayment of at
least the amount specified is made within that period.
ADDITIONAL INFORMATION ABOUT HOW CERTAIN POLICY CHARGES WORK
Sales expenses and related charges
The sales charges (i.e., the premium sales charge and the CDSC) help to
compensate us for the cost of selling our policies. (See "What charges will we
deduct from your investment in the policy?" in the Basic Information section of
this prospectus.) The amount of the charges in any policy year does not
specifically correspond to sales expenses for that year. We expect to recover
our total sales expenses over the life of the policies. To the extent that the
sales charges do not cover total sales expenses, the sales expenses may be
recovered from other sources, including gains from the charge for mortality and
expense risks and other gains with respect to the policies, or from our general
assets. (See "How we market the policies" on page __.)
Effect of premium payment pattern
You may structure the timing and amount of premium payments to minimize the
sales charges, although doing so involves certain risks. Paying less than one
Target Premium in any policy year, or paying more than one Target Premium in any
policy year could reduce your total sales charges over time. For example, if the
Target Premium was $1,000 and you paid a premium of $1,000 for ten years, you
would pay total premium sales charges of $400 and be subject to a maximum CDSC
of
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$1,000. If you paid $2,000 every other policy year for ten policy years, you
would pay total premium sales charges of only $200 and be subject to a maximum
CDSC of $1,000. However, delaying the payment of Target Premiums to later
policy years could increase the risk that the guaranteed death benefit feature
will lapse and the account value will be insufficient to pay As a result, the
policy or any Additional Sum Insured may lapse and eventually terminate.
Conversely, accelerating the payment of Target Premiums to earlier policy years
could cause aggregate premiums paid to exceed the policy's 7-pay premium limit
and, as a result, cause the policy to become a modified endowment, with adverse
tax consequences to you upon receipt of policy distributions. (See "Tax
consequences" beginning on page __.)
Monthly charges
Unless we agree otherwise, we will deduct the monthly charges described in the
Basic Information section from your policy's investment options in proportion to
the amount of account value you have in each. For each month that we cannot
deduct any charge because of insufficient account value, the uncollected charges
will accumulate and be deducted when and if sufficient account value becomes
available.
The insurance under the policy continues in full force during any grace period
but, if the insured person dies during the policy grace period, the amount of
unpaid monthly charges is deducted from the death benefit otherwise payable.
Reduced charges for eligible classes
The charges otherwise applicable may be reduced with respect to policies
issued to a class of associated individuals or to a trustee, employer or similar
entity where we anticipate that the sales to the members of the class will
result in lower than normal sales or administrative expenses, lower taxes or
lower risks to us. We will make these reductions in accordance with our rules in
effect at the time of the application for a policy. The factors we consider in
determining the eligibility of a particular group for reduced charges, and the
level of the reduction, are as follows: the nature of the association and its
organizational framework; the method by which sales will be made to the members
of the class; the facility with which premiums will be collected from the
associated individuals and the association's capabilities with respect to
administrative tasks; the anticipated lapse and surrender rates of the policies;
the size of the class of associated individuals and the number of years it has
been in existence; the aggregate amount of premiums paid; and any other such
circumstances which result in a reduction in sales or administrative expenses,
lower taxes or lower risks. Any reduction in charges will be reasonable and will
apply uniformly to all prospective policy purchasers in the class and will not
unfairly discriminate against any owner.
HOW WE MARKET THE POLICIES
Signator Investors, Inc. ("Signator"), an indirect wholly-owned subsidiary of
John Hancock located at 197 Clarendon Street, Boston, MA 02117, is registered as
a broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. and the Securities Investor
Protection Corporation. Signator acts as principal underwriter and principal
distributor of the policies pursuant to a sales agreement among John Hancock,
Signator, JHVLICO, and the Account. Signator also serves as principal
underwriter for 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, all of which are registered under the 1940 Act. Signator is
also the principal underwriter for John Hancock Variable Series Trust I.
Applications for policies are solicited by agents who are licensed by state
insurance authorities to sell JHVLICO's policies and who are also registered
representatives ("representatives") of Signator 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
person's risk classification. JHVLICO will make the appropriate refund if a
policy ultimately is not issued or is returned under the "free look" 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.
Signator's representatives are compensated for sales of the policies on a
commission and service fee basis by Signator, and JHVLICO reimburses Signator
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 Signator representative for selling a
policy is 45% of the Target Premium paid in the first policy year, and 3% of any
additional premium paid in the first policy year and thereafter. In addition, a
"trail" commission is payable at the end of policy year 5 and annually each year
thereafter equal to .15% of that portion of account value allocated to the
variable investment options for the applicable policy year.
Representatives with less than four years of service with Signator 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
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standards with respect to the sale of policies issued by JHVLICO and John
Hancock will be eligible for additional compensation.
The policies are also sold through other registered broker-dealers that have
entered into selling agreements with Signator 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 Signator's representatives. In
addition, their qualified registered representatives may be reimbursed by the
broker-dealers under expense reimbursement allowance programs in any year for
approved voucherable expenses incurred. Signator will compensate the
broker-dealers as provided in the selling agreements, and JHVLICO will reimburse
Signator for such amounts and for certain other direct expenses in connection
with marketing the policies through other broker-dealers.
Representatives of Signator and the other broker-dealers mentioned above may
also earn "credits" toward qualification for attendance at certain business
meetings sponsored by John Hancock.
The offering of the policies is intended to be continuous, but neither JHVLICO
nor Signator is obligated to sell any particular amount of policies.
TAX CONSIDERATIONS
This description of federal income tax consequences is only a brief summary
and is not intended as tax advice. Tax consequences will vary based on your own
particular circumstances, and for further information you should consult a
qualified tax advisor. Federal, state and local tax laws, regulations and
interpretations can change from time to time. As a result, the tax consequences
to you and the beneficiary may be altered, in some cases retroactively.
Policy proceeds
We believe the policy will receive the same federal income and estate tax
treatment as fixed benefit life insurance policies. Section 7702 of the Internal
Revenue Code (the "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 satisfy that definition. We will monitor compliance with these standards.
If the policy complies with the definition of life insurance, we believe the
death benefit under the policy will be excludable from the beneficiary's gross
income under the Code. In addition, increases in account value as a result of
interest or investment experience will not be subject to federal income tax
unless and until values are actually received through distributions.
Distributions for tax purposes can include amounts received upon surrender or
partial withdrawals. You may also be deemed to have received a distribution for
tax purposes if you assign all or part of your policy rights or change your
policy's ownership.
In general, the owner will be taxed on the amount of distributions that exceed
the premiums paid under the policy. But under certain circumstances within the
first 15 policy years, the owner may be taxed on a distribution even if total
withdrawals do not exceed total premiums paid. Any taxable distribution will be
ordinary income to the owner (rather than capital gains).
We also believe that, except as noted below, loans received under the policy
will be treated as indebtedness of an owner and that no part of any loan will
constitute income to the owner. However, the amount of any outstanding loan that
was not previously considered income (as discussed below) will be treated as if
it had been distributed to the owner if the policy terminates for any reason.
It is possible that, despite our monitoring, a policy might fail to qualify as
life insurance under Section 7702 of the Code. This could happen, for example,
if we inadvertently failed to return to you any premium payments that were in
excess of permitted amounts, or if the Trust failed to meet certain investment
diversification or other requirements of the Code. If this were to occur, you
would be subject to income tax on the income and gains under the policy for the
period of the disqualification and for subsequent periods.
In the past, the United States Treasury Department has stated that it
anticipated issuing guidelines prescribing circumstances in which the ability of
a policy owner to direct his or her investment to particular funds may cause the
policy owner, rather than the insurance company, to be treated as the owner of
the shares of those funds. In that case, any income and gains attributable to
those shares would be included in your current gross income for federal income
tax purposes. Under current law, however, we believe that we, and not the owner
of a policy, would be considered the owner of the fund's shares for tax
purposes.
Tax consequences of ownership or receipt of policy proceeds under federal,
state and local estate, inheritance, gift and other tax laws depend on the
circumstances of each owner or beneficiary.
Because there may be unfavorable tax consequences (including recognition of
taxable income and the loss of income tax-free treatment for any death benefit
payable to the beneficiary), you should consult a qualified tax adviser prior to
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changing the policy's ownership or making any assignment of ownership interests.
7-pay premium limit
At the time of policy issuance, we will determine whether the Planned Premium
schedule will exceed the 7-pay limit discussed below. If so, our standard
procedures prohibit issuance of the policy unless you sign a form acknowledging
that fact.
The 7-pay limit is the total of net level premiums that would have been
payable at any time for a comparable fixed policy to be fully "paid-up" after
the payment of 7 equal annual premiums. "Paid-up" means that no further premiums
would be required to continue the coverage in force until maturity, based on
certain prescribed assumptions. If the total premiums paid at any time during
the first 7 policy years exceed the 7-pay limit, the policy will be treated as a
"modified endowment", which can have adverse tax consequences.
The owner will be taxed on distributions and loans from a "modified endowment"
to the extent of any income (gain) to the owner (on an income-first basis). The
distributions and loans affected will be those made on or after, and within the
two year period prior to, the time the policy becomes a modified endowment.
Additionally, a 10% penalty tax may be imposed on taxable portions of such
distributions or loans that are made before the owner attains age 591/2.
Furthermore, any time there is a "material change" in an increase in the
Additional Sum Insured, the addition of certain other policy benefits after
issue, a change in death benefit option, or reinstatement of a lapsed policy),
the policy will have a new 7-pay limit as if it were a newly-issued policy. If a
prescribed portion of the policy's then account value, plus all other premiums
paid within 7 years after the material change, at any time exceed the new 7-pay
limit, the policy will become a modified endowment.
Moreover, if benefits under a policy are reduced (such as a reduction in the
Total Sum Insured or death benefit or the reduction or cancellation of certain
rider benefits) during the 7 years in which a 7-pay test is being applied, the
7-pay limit will be recalculated based on the reduced benefits. If the premiums
paid to date are greater than the recalculated 7-pay limit, the policy will
become a modified endowment.
All modified endowments issued by the same insurer (or its affiliates) to the
owner during any calendar year generally will be treated as one contract for the
purpose of applying the modified endowment rules. A policy received in exchange
for a modified endowment will itself also be a modified endowment. You should
consult your tax advisor if you have questions regarding the possible impact of
the 7-pay limit on your policy.
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. We are not responsible for compliance with the
terms of any such plan or with the requirements of applicable provisions of the
Code.
REPORTS THAT YOU WILL RECEIVE
At least annually, we will send you a statement setting forth the following
information as of the end of the most recent reporting period: the amount of the
death benefit, the Basic Sum Insured and the Additional Sum Insured, the account
value, the portion of the account value in each investment option, the surrender
value, premiums received and charges deducted from premiums since the last
report, and any outstanding policy loan (and interest charged for the preceding
policy year). Moreover, you also will receive confirmations of premium payments,
transfers among investment options, policy loans, partial withdrawals and
certain other policy transactions.
Semiannually we will send you a report containing the financial statements of
the Trusts, including a list of securities held in each fund.
VOTING PRIVILEGES THAT YOU WILL HAVE
All of the assets in the subaccounts of the Account are invested in shares of
the corresponding funds of the Trusts. We will vote the shares of each of the
funds of the Trusts which are deemed attributable to variable life insurance
policies at regular and special meetings of the Trusts' shareholders in
accordance with instructions received from owners of such policies. Shares of
the Trusts held in the Account which are not attributable to such policies, as
well as shares for which instructions from owners are not received, will be
represented by us at the meeting. We will vote such shares for and against each
matter in the same proportions as the votes based upon the instructions received
from the owners of such policies.
We determine the number of a fund's shares held in a subaccount attributable
to each owner by dividing the amount of a policy's account value held in the
subaccount by the net asset value of one share in the fund. Fractional votes
will be counted. We determine the number of shares as to which the owner may
give instructions as of the record date for the Trust's meeting. Owners of
policies may give instructions regarding the election of the Board of Trustees
or Board of Directors of the Trust, ratification of the selection of independent
auditors, approval of Trust investment advisory agreements and other matters
requiring a shareholder vote. We will furnish owners with
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information and forms to enable owners to give voting instructions.
However, we may, in certain limited circumstances permitted by the SEC's
rules, disregard voting instructions. If we do disregard voting instructions,
you will receive a summary of that action and the reasons for it in the next
semi-annual report to owners.
CHANGES THAT WE CAN MAKE AS TO YOUR POLICY
Changes relating to a Trust or the Account
The voting privileges described in this prospectus reflect our 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, we reserve the right to proceed in accordance with any
such revised requirements. We also reserve 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 your policy belongs from the Account to another separate account or
subaccount, (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, John Hancock, or an affiliate of either, (3)
to deregister the Account under the 1940 Act, (4) to substitute for the fund
shares held by a subaccount any other investment permitted by law, and (5) to
take any action necessary to comply with or obtain any exemptions from the 1940
Act. We 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.
Other permissible changes
We reserve the right to make any changes in the policy necessary to ensure the
policy is within the definition of life insurance under the Federal tax laws and
is in compliance with any changes in Federal or state tax laws.
In our policies, we reserve the right to make certain changes if they would
serve the best interests of policy owners or would be appropriate in carrying
out the purposes of the policies. Such changes include the following:
. Changes necessary to comply with or obtain or continue exemptions under
the federal securities laws
. Combining or removing investment options
. Changes in the form of organization of any separate account
Any such changes will be made only to the extent permitted by applicable laws
and only in the manner permitted by such laws. When required by law, we will
obtain your approval of the changes and the approval of any appropriate
regulatory authority.
ADJUSTMENTS WE MAKE TO DEATH BENEFITS
If the insured person commits suicide within certain time periods, the amount
of death benefit we pay will be limited as described in the policy. Also, if an
application misstated the age or gender of the insured person, we will adjust
the amount of any death benefit as described in the policy.
WHEN WE PAY POLICY PROCEEDS
General
We will pay any death benefit, withdrawal, surrender value or loan within 7
days after we receive the last required form or request (and, with respect to
the death benefit, any other documentation that may be required). If we don't
have information about the desired manner of payment within 7 days after the
date we receive notification of the insured person's death, we will pay the
proceeds as a single sum, normally within 7 days thereafter.
Delay to challenge coverage
We may challenge the validity of your insurance policy based on any material
misstatements made to us in the application for the policy. We cannot make such
a challenge, however, beyond certain time limits that are specified in the
policy.
Delay for check clearance
We reserve the right to defer payment of that portion of your account value
that is attributable to a premium payment made by check for a reasonable period
of time (not to exceed 15 days) to allow the check to clear the banking system.
Delay of separate account proceeds
We reserve the right to defer payment of any death benefit, loan or other
distribution that is derived from a variable investment option if (1) the New
York Stock Exchange is closed (other than customary weekend and holiday
closings) or trading on the New York Stock Exchange is restricted; (2) an
emergency exists, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to fairly determine the account
value; or (3) the SEC by order permits the delay for the protection of owners.
Transfers and allocations of account value among the investment options may also
be postponed under these circumstances. If we need to defer calculation of
separate account values for any of the foregoing
36
<PAGE>
reasons, all delayed transactions will be processed at the next values that we
do compute.
OTHER DETAILS ABOUT EXERCISING RIGHTS AND PAYING BENEFITS
Joint ownership
If more than one person owns a policy, all owners must join in most requests
to exercise rights under the policy.
Assigning your policy
You may assign your rights in the policy to someone else as collateral for a
loan or for some other reason. Assignments do not require the consent of any
revocable beneficiary. A copy of the assignment must be forwarded to us. We are
not responsible for any payment we make or any action we take before we receive
notice of the assignment in good order. Nor are we responsible for the validity
of the assignment. An absolute assignment is a change of ownership. All
collateral assignees of record must consent to any full surrender, partial
withdrawal or loan from the policy.
Your beneficiary
You name your beneficiary when you apply for the policy. The beneficiary is
entitled to the proceeds we pay following the insured person's death. You may
change the beneficiary during the insured person's lifetime. Such a change
requires the consent of any irrevocable named beneficiary. A new beneficiary
designation is effective as of the date you sign it, but will not affect any
payments we make before we receive it. If no beneficiary is living when the
insured person dies, we will pay the insurance proceeds to the owner or the
owner's estate.
LEGAL MATTERS
The legal validity of the policies described in this prospectus has been
passed on by Ronald J. Bocage, Vice President and Counsel for JHVLICO. Messrs.
Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised us on certain
Federal securities law matters in connection with the policies.
REGISTRATION STATEMENT FILED WITH THE SEC
This prospectus omits certain information contained in the Registration
Statement which has been filed with the SEC. More details may be obtained from
the SEC upon payment of the prescribed fee.
ACCOUNTING AND ACTUARIAL EXPERTS
The financial statements of JHVLICO included in this prospectus have been
audited by Ernst & Young LLP, independent auditors, for the periods indicated in
their report thereon which appears elsewhere herein and has been included in
reliance on their report given on their authority as experts in accounting and
auditing. Actuarial matters included in this prospectus have been examined by
______________, F.S.A.,an Actuary of JHVLICO and Second Vice President of John
Hancock.
FINANCIAL STATEMENTS OF JHVLICO AND THE ACCOUNT
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.
In addition to those financial statements of JHVLICO and the Account included
herein that have been audited by Ernst & Young LLP, this prospectus also
contains unaudited financial statements of both JHVLICO and the Account for a
period subsequent to the audited financial statements.
37
<PAGE>
LIST OF OUR DIRECTORS AND EXECUTIVE OFFICERS
The Directors and Executive Officers of JHVLICO and their principal
occupations during the past five years are as follows:
<TABLE>
<CAPTION>
Directors Principal Occupations
- - --------- ---------------------
<S> <C>
David F. D'Alessandro Chairman of the Board and Chief Executive Officer of
JHVLICO; President and Chief Operating Officer, John
Hancock Life Insurance Company.
Michele G. Van Leer Vice Chairman of the Board and President of JHVLICO;
Senior Vice President, John Hancock Life Insurance
Company.
Ronald J. Bocage Director, Vice President and Counsel of JHVLICO; Vice
President and Counsel, John Hancock Life Insurance
Company.
Bruce M. Jones Director and Vice President of JHVLICO; Vice President,
John Hancock Life Insurance Company.
Thomas J. Lee Director and Vice President of JHVLICO; Vice President,
John Hancock Life Insurance Company.
Barbara L. Luddy Director, Vice President and Actuary of JHVLICO; Second
Vice President, John Hancock Life Insurance Company.
Robert S. Paster Director and Vice President of JHVLICO; Second Vice
President, John Hancock Life Insurance Company.
Robert R. Reitano Director and Vice President of JHVLICO; Vice President,
John Hancock Life Insurance Company.
Joseph A. Tomlinson Director and Vice President of JHVLICO; Vice President,
John Hancock Life Insurance Company.
Daniel L. Ouellette Vice President, Marketing, of JHVLICO; Senior Vice
President, John Hancock Life Insurance Company.
Edward P. Dowd Vice President, Investments, of JHVLICO; Senior Vice
President, John Hancock Life Insurance Company
Roger G. Nastou Vice President, Investments, of JHVLICO; Vice
President, John Hancock Life Insurance Company
Todd G. Engelsen Vice President and Illustration Actuary of JHVLICO;
Second Vice President, John Hancock Life Insurance
Company
Julie H. Indge Treasurer of JHVLICO; Financial Officer, John Hancock
Life Insurance Company
Patrick F. Smith Controller of JHVLICO; Senior Associate Controller,
John Hancock Life Insurance Company.
Peter H. Scavongelli Secretary of JHVLICO; State Compliance Officer, John
Hancock Life Insurance Company
</TABLE>
38
<PAGE>
[JHVLICO AND ACCOUNT FINANCIALS TO BE INSERTED HERE BY AMENDMENT]
39
<PAGE>
ALPHABETICAL INDEX OF KEY WORDS AND PHRASES
This index should help you locate more information about many of the important
concepts in this prospectus.
<TABLE>
<CAPTION>
KEY WORD OR PHRASE PAGE KEY WORD OR PHRASE PAGE
<S> <C> <C> <C> <C>
Account. . . . . . . .
account value. . . . .
Additional Sum Insured
attained age. . . . .
automatic asset
rebalancing
Basic Sum Insured. . .
beneficiary. . . . . .
business day. . . . .
changing Option A orB .
changing the Total Sum
Insured . . . . . . .
charges. . . . . . . .
Code. . . . . . . . .
cost of insurance rates
date of issue. . . . .
death benefit. . . . .
deductions. . . . . .
dollar cost averaging.
expenses of the Trust.
fixed investment option
full surrender. . . .
fund. . . . . . . . .
grace period. . . . .
guaranteed death
benefit feature. . .
Guaranteed Death
Benefit Premium. . .
insurance charge. . .
insured person. . . .
investment options. .
JHVLICO. . . . . . . .
lapse. . . . . . . . .
loan. . . . . . . . .
loan interest. . . . .
maximum premiums. . .
Minimum Initial Premium
minimum insurance
amount. . . . . . . .
minimum premiums. . .
modified endowment
contract. . . . . . .
</TABLE>
40
<PAGE>
[LOGO] John Hancock Place
Variable Life Insurance Company Boston, Massachusetts 02117
[(800)-521-1234]
INSURED [John Hancock] TOTAL SUM INSURED AT ISSUE [$500,000]
POLICY NUMBER [ML 7100000] DATE OF ISSUE [September 1, 1999]
DEATH BENEFIT [Option A]
PLAN Medallion Variable Universal Life II
INDIVIDUAL VARIABLE LIFE INSURANCE
The John Hancock Life Insurance Company ("the Company") agrees, subject to the
conditions and provisions of this policy, to pay the Death Benefit to the
Beneficiary upon the death of the Insured if such death occurs while the policy
is in full force, and to provide the other benefits, rights, and privileges of
the policy. The Death Benefit (see Section 4) will be payable, subject to the
"Deferral of Determinations and Payments" provision, on receipt at the Servicing
Office of the Company of due proof of the Insured's death.
The policy, which includes any Riders which are a part of the policy on
delivery, is issued in consideration of the application and payment of the
Minimum Initial Premium as shown on page 3.
The Policy Specifications and the conditions and provisions on this and the
following pages are part of the policy.
THE POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY. READ YOUR
POLICY CAREFULLY.
Signed for the Company at Boston, Massachusetts:
PRESIDENT SECRETARY
Variable Life Insurance policy
Flexible Premiums
Death Benefit payable at death of Insured
Not eligible for dividends
Benefits, premiums, and the Premium Class are shown in Section 1.
To the extent any benefit, payment, or value under this policy (including the
Account Value) is based on the investment experience of a Separate Account, such
benefit, payment or value may increase or decrease in accordance with the
investment experience of the Separate Account and is not guaranteed as to fixed
dollar amount. However, this policy provides a Guaranteed Death Benefit,
provided that premiums are paid on a timely basis and other conditions are met
as described in Sections 4, 6, and 7.
Right to Cancel--The Owner may surrender this policy by delivering or mailing it
to the Company at its Servicing Office as shown on the back cover (or to the
agent or agency office through which it was delivered) within 10 days after
receipt by the Owner of the policy. Immediately on such delivery or mailing,
the policy shall be deemed void from the beginning. Any premium paid on this
policy will be refunded within 10 days after timely surrender of the policy.
00MVL V0100V
<PAGE>
Policy Provisions
Section
1. Policy Specifications
2. Table Of Rates
3. Definitions
4. Death Benefit
5. Payments
6. Guaranteed Death Benefit Feature
7. Grace Period
8. Account Value
9. Charges
10. Loans
11. Surrenders and Withdrawals
12. Basis of Computations
13. Separate Account and Fixed Account
14. Allocation To Subaccounts
15. Investment Policy Change
16. Annual Report To Owner
17. Reinstatement
18. Owner and Beneficiary
19. Interest On Proceeds
20. Deferral Of Determinations And Payments
21. Claims Of Creditors
22. Assignment
23. Incontestability
24. Misstatements
25. Suicide Exclusion
26. The Contract
27. Settlement Provisions
2
<PAGE>
- - --------------------------------------------------------------------------------
1. POLICY SPECIFICATIONS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Insured [JOHN HANCOCK] Plan Medallion Variable
Universal Life II
Issue Age [35] Policy Number [ML 7100000]
Sex [Male] Date of Issue [September 1, 1999]
Premium Class [SELECT]
[NonTOBACCO]
Owner, Beneficiary As designated in the application subject to Section 18 of the policy
Death Benefit Option at Issue [Option A]
Definition of Life Insurance [Cash Value Accumulation
Elected Test]
Sum Insured
Basic Sum Insured at Issue $[250,000]
Additional Sum Insured at Issue $[250,000]
----------------------
Total Sum Insured at Issue $[500,000]
Minimum Total Sum Insured [$100,000]
Minimum Basic Sum Insured [$100,000]
</TABLE>
Other Benefits and Specifications
---------------------------------
Disability Benefit Rider
PREMIUMS
--------
Planned Premium $[4,530] per year
Target Premium $[1,900] per year
Minimum Initial Premium $[423.13]
Age 65 or 10 Years Guaranteed $[297.29] per month
Death Benefit Premium
Age 100 Guaranteed Death Benefit $[503.33] per month
Premium
Billing Interval [Annual]
Notice: The actual premiums paid will affect the Account Value, the duration of
insurance coverage, and the amount of Death Benefit as described in Section 4.
Even if the Planned Premiums shown above are paid as scheduled, they may not be
sufficient to continue the policy in force until the death of the Insured.
Unless the Guaranteed Death Benefit feature is in effect, the policy will
continue in force until the death of the Insured only if on each Grace Period
Testing Date the policy's Account Value, less any indebtedness, is sufficient to
provide for all Policy Charges then due.
3 M0300V
- - --------------------------------------------------------------------------------
1. POLICY SPECIFICATIONS, continued
- - --------------------------------------------------------------------------------
CURRENT POLICY CHARGES1
----------------------
<PAGE>
Deductions from Premium Payments
Sales Load For the first ten Policy Years, in accordance with the table below:
<TABLE>
<CAPTION>
Total Sum Insured Percentage of Premium Percentage of Premium
Up to Target Paid in Excess of Target
----------------------------------------------------------------------------------
<S> <C> <C>
Less than $250,000 4% 0%
----------------------------------------------------------------------------------
$250,000 to $999,999 2% 0%
----------------------------------------------------------------------------------
$1,000,000+ 2% 0%
----------------------------------------------------------------------------------
</TABLE>
State Premium Tax 2.35% of Payments
Federal DAC Tax 1.25% of Payments
Monthly Deductions from Account Value
Maintenance Charge $6.00 for all Policy Years
Issue Charge $20 for the first Policy Year
Cost of Insurance Charge Determined in accordance with Section 9, and
deducted for all Policy Years
<TABLE>
<CAPTION>
---------------------------------------------------------------
Asset-Based Risk Policy Years: Percentage of Separate Account assets:
Charge ------------- --------------------------------------
---------------------------------------------------------------
<S> <C> <C>
1-10 .050%
---------------------------------------------------------------
11-28 Starting at .035% and decreasing by .001% per
policy year
---------------------------------------------------------------
29 and later .017%
---------------------------------------------------------------
</TABLE>
Rider Charges as shown on page 3C
Contingent Deferred Sales Charge
<TABLE>
<S> <C>
Policy Years 1-5 100.00% of first year paid premium up to one year's Target Premium
Policy Year 6 80.00% of first year paid premium up to one year's Target Premium
Policy Year 7 70.00% of first year paid premium up to one year's Target Premium
Policy Year 8 60.00% of first year paid premium up to one year's Target Premium
Policy Year 9 40.00% of first year paid premium up to one year's Target Premium
Policy Year 10 20.00% of first year paid premium up to one year's Target Premium
Policy Years 11 and after 0 %
</TABLE>
1We reserve the right to change the amount or percentage of any of these
charges, but no charge will exceed the amount or percentage shown in the Table
of Maximum Policy Charges on page 3B.
3A M3A00V
- - --------------------------------------------------------------------------------
1. POLICY SPECIFICATIONS, continued
- - --------------------------------------------------------------------------------
MAXIMUM POLICY CHARGES
----------------------
Deductions from Premium Payments
Sales Charge For the first ten Policy Years, in accordance with the table
below:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Total Sum Insured Percentage of Premium Up Percentage of Premium Paid
to Target in Excess of Target
-------------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
-------------------------------------------------------------------------------
Less than $250,000 4% 0%
-------------------------------------------------------------------------------
$250,000 to $999,999 4% 0%
-------------------------------------------------------------------------------
$1,000,000+ 4% 0%
-------------------------------------------------------------------------------
</TABLE>
State Premium Tax 2.35% of Payments
Federal DAC Tax 1.25% of Payments
Monthly Deductions from Account Value
<TABLE>
<S> <C>
Maintenance Charge $8.00 for all Policy Years
Issue Charge $20 for the first Policy Year
Cost of Insurance Charge Determined in accordance with Section 9, and deducted for all
Policy Years; Maximum Monthly Rates are shown in Section 2
Asset-Based Risk .050% of Separate Account assets deducted monthly for all Policy
Charge Years.
</TABLE>
Rider Charges as shown on page 3C
Contingent Deferred Sales Charge
<TABLE>
<S> <C>
Policy Years 1-5 100.00% of first year paid premium up to one year's Target Premium
Policy Year 6 80.00% of first year paid premium up to one year's Target Premium
Policy Year 7 70.00% of first year paid premium up to one year's Target Premium
Policy Year 8 60.00% of first year paid premium up to one year's Target Premium
Policy Year 9 40.00% of first year paid premium up to one year's Target Premium
Policy Year 10 20.00% of first year paid premium up to one year's Target Premium
Policy Years 11 and after 0 %
</TABLE>
3B M03B00V1.
<PAGE>
- - --------------------------------------------------------------------------------
1. POLICY SPECIFICATIONS, continued
- - --------------------------------------------------------------------------------
Insured [JOHN HANCOCK] Plan Medallion Variable
- - ------- ---- Universal Life II
-----------------
Policy Number [ML 7100000]
Rider Date of Issue [September 1, 1999]
RIDER INFORMATION
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------------------------
Type Description Amount
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Disability Benefit Charges are waived in event of Insured's See Section 2, Disability
Total Disability. Waiver of Charges Rates
This Benefit is in a Special Premium Class.
- - ---------------------------------------------------------------------------------------------------------
</TABLE>
3C M3C00V
<PAGE>
- - --------------------------------------------------------------------------------
2. TABLE OF RATES
- - --------------------------------------------------------------------------------
A. RATE TABLE
Maximum Monthly
Rates per $1,000 of Death Benefit Factor
Age/1/ Net Amount at Risk/2/
- - --------------------------------------------------------------------
35 .1410 4.2907
36 .1480 4.1482
37 .1570 4.0105
38 .1670 3.8777
39 .1790 3.7496
40 .1910 3.6262
41 .2060 3.5073
42 .2210 3.3929
43 .2390 3.2827
44 .2560 3.1767
45 .2770 3.0745
46 .3000 2.9762
47 .3240 2.8817
48 .3500 2.7907
49 .3790 2.7031
50 .4100 2.6189
51 .4470 2.5378
52 .4900 2.4599
53 .5370 2.3851
54 .5930 2.3134
55 .6540 2.2448
56 .7220 2.1791
57 .7940 2.1162
58 .8730 2.0560
59 .9610 1.9983
60 1.059 1.9431
61 1.169 1.8903
62 1.294 1.8398
63 1.437 1.7916
64 1.599 1.7457
65 1.778 1.7020
1. As defined in Section 3..
2. Maximum Monthly Rates and Minimum Values are based on the 1980
Commissioners Standard Ordinary Mortality Table.
4 M0400V
- - --------------------------------------------------------------------------------
2. TABLE OF RATES, continued
- - --------------------------------------------------------------------------------
A. RATE TABLE (cont'd.)
<PAGE>
Age/1/ Maximum Monthly Death Benefit Factor
Rates per $1,000 of Net
Amount at Risk2
Net Amount at Risk/2/
- - --------------------------------------------------------------------
66 1.971 1.6605
67 2.181 1.6211
68 2.407 1.5835
69 2.653 1.5477
70 2.933 1.5136
71 3.302 1.4811
72 3.618 1.4507
73 4.042 1.4216
74 4.521 1.3943
75 5.037 1.3688
76 5.590 1.3449
77 6.175 1.3225
78 6.787 1.3014
79 7.440 1.2815
80 8.162 1.2626
81 8.973 1.2447
82 9.898 1.2277
83 10.952 1.2118
84 12.118 1.1971
85 13.375 1.1835
86 14.699 1.1709
87 16.081 1.1593
88 17.497 1.1484
89 18.966 1.1381
90 20.512 1.1282
91 22.165 1.1183
92 23.987 1.1084
93 26.066 1.0980
94 28.784 1.0869
95 32.818 1.0748
96 39.643 1.0616
97 53.066 1.0476
98 85.527 1.0334
99 165.340 1.0198
100+ 0.000 1.0000
1. As defined in Section 3.
2. Maximum Monthly Rates and Minimum Values are based on the 1980
Commissioners Standard Ordinary Mortality Table
4A M4A00V
<PAGE>
- - --------------------------------------------------------------------------------
2. TABLE OF RATES, continued
- - --------------------------------------------------------------------------------
B. Charge for Reduction in Additional Sum Insured (As defined in Section 4)/1/
<TABLE>
<CAPTION>
Issue Age Male Male Female Female
(Select/Preferred) (Standard) (Select/Preferred) (Standard)
<S> <C> <C> <C> <C>
(0-10) 0.36 0.38 0.36 0.38
(11-20) 0.36 0.38 0.36 0.38
(21-30) 0.40 0.54 0.36 0.42
(31-40) 0.60 0.90 0.54 0.66
(41-50) 1.40 1.80 1.00 1.26
(51-60) 3.00 3.60 1.80 2.20
(61-70) 5.40 6.60 4.20 4.60
(71-80) 10.20 11.40 8.40 9.60
(81-85) 14.40 17.40 11.40 13.20
</TABLE>
/1/ Applies in policy years 1-20
4B M4B00V
<PAGE>
- - --------------------------------------------------------------------------------
2. TABLE OF RATES, continued
- - --------------------------------------------------------------------------------
C. DISABILITY WAIVER OF CHARGES RATE TABLE
Age1 Rate
35 0.15
36 0.15
37 0.15
38 0.15
39 0.15
40 0.15
41 0.15
42 0.15
43 0.15
44 0.15
45 0.15
46 0.16
47 0.17
48 0.18
49 0.19
50 0.20
51 0.21
52 0.22
53 0.23
54 0.24
55 0.25
56 0.24
57 0.23
58 0.22
59 0.21
60 0.14
61 0.12
62 0.10
63 0.08
64 0.05
1 These rates are attained age and per $1 of section 9 charges.
4C M4C00V
<PAGE>
3. DEFINITIONS
The term "Account Value" is as defined in Section 8.
The term "Age" means on any policy anniversary, the age of the person in
question at his or her birthday nearest that date.
The term "Annual Processing Date" means every 12th Processing Date starting with
the Processing Date next after the Date of Issue.
The term "Excess Premium" means that portion of the total Premiums received
during any Policy Year that exceeds the Target Premium.
The term "Fixed Account" means an account established by us which accumulates at
rates which we will determine and declare from time to time, but which will not
be less than 4%. The assets of a Fixed Account are invested in a segment of our
General Account. The General Account consists of assets owned by us other than
those in the Separate Account.
The term "Fund" means each division, with a specific investment objective, of a
Series Fund.
The term "Grace Period Testing Date" means a Processing Date on which we make
the determination described in Section 7. We will set a Grace Period Testing
Date no less frequently than every 3rd Processing Date, and reserve the right to
set a Grace Period Testing Date for each and any Processing Date. .
The term "Guaranteed Death Benefit Premium" means the amounts shown in Section
1.
The term "in full force" means that the policy has not lapsed in accordance with
Section 7.
The term "indebtedness" means the unpaid balance of a policy loan. As provided
in Section 10, the policy loan amount includes accrued interest.
The term "Minimum Initial Premium" is the amount shown in Section 1.
The term "Net Premium" is as defined in Section 5.
The term "Payment" means, unless otherwise stated, payment at our Servicing
Office in Boston, Massachusetts.
The term "Planned Premium" is the amount shown in Section 1.
The term "Policy Year" means (a) or (b) below whichever is applicable:
(a) The first Policy Year is the period beginning on the Date of Issue and
ending on the Valuation Date immediately preceding the first Annual Processing
Date;
(b) Each subsequent Policy Year is the period beginning on an Annual Processing
Date and ending on the Valuation Date immediately preceding the next Annual
Processing Date.
The term "Premium" is as defined in Section 5.
The term "Processing Date" means the first day of a policy month. A policy month
shall begin on the day in each calendar month which corresponds to the day of
the calendar month on which the Date of Issue occurred. If the Date of Issue is
the 29th, 30th, or 31st day of a calendar month, then for any calendar month
which has fewer days, the first day of the policy month will be the last day of
such calendar month. The Date of Issue is not a Processing Date.
The term "Separate Account", unmodified, means a separate investment account,
established by us pursuant to applicable law, in which you are eligible to
invest under this policy.
The term "Series Fund" means a series type mutual fund registered under the
Investment Company Act of 1940 as an open-end diversified management investment
company.
The term "Servicing Office" means, on the Date of Issue, the Company's
Servicing Office at the address shown on the back cover of this policy. We will
send you a notice to your last know address if we change our Servicing Office
after that.
The term "Subaccount" means a Variable Account or a Fixed Account.
The term "Target Premium" is the amount shown in Section 1.
The term "Valuation Date" means any date on which we are open for business, the
New York Stock Exchange is open for trading, and on which a Series Fund values
its Fund.
The term "Valuation Period" means the period of time from the beginning of the
day of a Valuation Date to the end of that Valuation Date.
The term "Variable Account" means each division, with a specific investment
objective, of a Separate Account. The assets of each Variable Account are
invested solely in shares of the corresponding Portfolio of a Fund.
The terms "we", "us", and "our" refer only to the John Hancock Variable Life
Insurance Company.
The term "written notice" means, unless otherwise stated, a written notice
received at our Servicing Office.
The terms "you" and "your" refer only to the Owner of this policy.
5 M0500V
<PAGE>
4. DEATH BENEFIT
The Death Benefit is payable when the Insured dies while the policy is in full
force. The Death Benefit will equal the death benefit of the policy minus any
indebtedness on the date of death. We reserve the right to deduct any unpaid
charges under Section 9. In addition, if the Insured dies during a grace period
as described in Section 7, we reserve the right to deduct the amount of any
unpaid default payment described in that section.
The death benefit of the policy depends on which of the following Options is
selected in the application for the policy.
The determination of the death benefit under each of these Options will be
affected by withdrawals as described in Section 11.
Option A: Level Death Benefit: The death benefit of the policy is the greater
of: (i) the Total Sum Insured; and (ii) the Account Value on the date of death
times the applicable Corridor Factor or Death Benefit Factor, shown in Section
2.
Option B: Variable Death Benefit: The death benefit of the policy is the
greater of: (i) the Total Sum Insured plus the Account Value on the Date of
Death; and (ii) the Account Value on the Date of Death times the applicable
Corridor Factor shown in Section 2.
The Total Sum Insured equals the sum of the Basic Sum Insured and any Additional
Sum Insured, subject to the provisions on withdrawals in Section 11.
Death Benefit At and After Age 100
If this policy is in full force, on the policy anniversary nearest the Insured's
100th birthday, Death Benefit Options A and B described above) will cease to
apply. We will automatically set the Sum Insured equal to zero, and
discontinue deduction of the Maintenance Charge, the Cost of Insurance Charge,
and the sum of the charges for ratings and riders which are part of the policy,
if applicable, from the Account Value. As a result of such changes, the death
benefit of the policy will thereafter be equal to the Account Value, and the
applicable Corridor Factor and Death Benefit Factor will be 1.00. In no event
will premium payments be accepted after the policy anniversary nearest the
Insured's 100th birthday.
Change of Death Benefit Option
You may change from Option B to Option A on any policy anniversary. At the time
of a change from Option B to Option A, the Death Benefit under the new Option
will be the same as it was under the old Option. A change from Option B will
therefore increase the Additional Sum Insured by the Account Value at the time
the new Option takes effect. If you change a death benefit option, the
Guaranteed Death Benefit Premium described in Section 6 may increase.
Reduction of Total Sum Insured
You may request a reduction in the Total Sum Insured at any time. A charge will
be deducted from the policy account value if a reduction in Additional Sum
Insured is processed during the first 20 policy years that is not due to a
partial withdrawal or surrender of the policy. At no point, will this charge
exceed the rate per thousand of Additional Sum Insured reduced below the initial
amount of Additional Sum Insured in effect on the Date of Issue . There is no
charge for a reduction in Basic Sum Insured, but the Basic Sum Insured generally
can not be reduced below the minimum as shown in section 1. The guaranteed
death benefit is reduced if the Basic Sum Insured is reduced.
6
<PAGE>
5. PAYMENTS
- - --------------------------------------------------------------------------------
Payments under the policy shall be made only to us at our Servicing Office. A
premium reminder notice for Planned Premiums, as shown in the application for
the policy, will be sent to you at the beginning of each payment interval.
When we receive a payment, we first deduct any amount specified as payment of
accrued interest on loans then due under Section 10 and any amount specified as
loan repayment. The remainder will constitute Premium. We then deduct the State
Premium Tax Charge, the Federal DAC Tax Charge and the applicable Sales Charge.
The remainder will constitute Net Premium.
If coverage under the policy takes effect in accordance with the provisions of
the application, we will process any premium payment as of the Valuation Period
in which we receive it, unless one of the following exceptions applies:
(i) We will process a payment received prior to the Date of Issue as if
received on the Date of Issue;
(ii) We will process the portion of any premium payment for which we require
evidence of the Insured's continued insurability on the first Valuation
Date after we have received such evidence and found it satisfactory to us;
(iii) If a payment equal to the Minimum Initial Premium is not received prior to
the Date of Issue, a portion of each payment subsequently received will be
processed as if received on the Date of Issue. Each such portion will be
equal to the (i) Minimum Initial Premium minus (ii) all payments
previously received. The remainder, if any, of each such payment will be
processed as of the date of receipt;
(iv) If our receipt of any premium payment (or portion thereof) would cause a
problem for the policy to qualify as a "life insurance contract" under the
Federal income tax laws, we will not process such payment or portion.
However, in the case of certain other tax problems, we will process the
payment or portion on the first Valuation Date after we have received
written instructions satisfactory to us from you to process such payment
or portion notwithstanding the existence of the tax problem.
Premiums are payable in advance and a premium receipt will be furnished upon
request. Except as provided above, all payments will be processed as of the
date of receipt.
Subject to our maximum limits, you may pay Premiums in excess of the Planned
Premium while the policy is in full force. We may require evidence of
insurability for any such excess premium.
The following applies if the Tax Test elected for Federal income tax purposes is
"Guideline Premium Test", as shown in Section 1.
The provisions of this policy are to be interpreted to ensure or maintain
qualification as a life insurance contract for federal tax purposes,
notwithstanding any other provisions to the contrary. If at any time the
premiums paid under the Policy exceed the amount allowable for such tax
qualification, such excess amount shall be removed from the policy as of the
date of its payment, together with investment experience thereon from such date,
and any appropriate adjustment in the Death Benefit shall be made as of such
date. This excess amount (plus or minus any investment experience) shall be
refunded to you no later than 60 days after the end of the applicable Policy
Year. If this excess amount (plus or minus any investment experience) is not
refunded by then, the Sum Insured under the policy shall be increased
retroactively so that at no time is the Death Benefit ever less than the amount
necessary to ensure or maintain such tax qualification. In no event, however,
will we refuse to accept any premium necessary to prevent the policy from
terminating.
The following applies if the Tax Test elected for Federal income tax purposes is
"Cash Value Accumulation Test", as shown in Section 1.
We reserve the right to modify the Death Benefit Factors shown in Section 2,
retroactively if necessary, to ensure or maintain qualification of this policy
as a life insurance contract for Federal tax purposes, notwithstanding any other
provisions of this policy to the contrary.
7 M0700V
<PAGE>
6. GUARANTEED DEATH BENEFIT FEATURE
The Guaranteed Death Benefit feature is a guarantee that the Basic Sum Insured
portion of your policy will not terminate, regardless of Account Value if the
"Cumulative Premium Balance" equals or exceeds the applicable "Guaranteed Death
Benefit Premium Target" on the applicable Grace Period Testing Date. If there
--------------------------------------------
are monthly charges that remain unpaid because of this feature, we will deduct
such charges when there is sufficient Account Value to pay them.
Your policy contains a Guaranteed Death Benefit feature only if the Premiums
shown in Section 1 include amounts for an "Age 65 or 10 Years Guaranteed Death
Benefit Premium" and an "Age 100 Guaranteed Death Benefit Premium." These
amounts are used to determine the "Guaranteed Death Benefit Premium Target" as
explained below.
The Funding Requirement
At the beginning of each Grace Period Testing Date, we will determine whether
the Cumulative Premium Balance (as defined below) equals or exceeds a Guaranteed
Death Benefit Premium Target (as defined below). If it does, the Guaranteed
Death Benefit feature will be in effect on that Grace Period Testing Date until
-----
the next Grace Period Testing Date. The Guaranteed Death Benefit feature will
- - -----------------------------------
no longer be in effect, however, after any increase in the Basic Sum Insured.
The "Cumulative Premium Balance" is equal to the sum of all Premiums paid prior
to a Grace Period Testing Date, less the sum of all withdrawals made prior to
that date and less the policy indebtedness as of that date.
The "Guaranteed Death Benefit Premium Target" is equal to the applicable
Guaranteed Death Benefit Premium times the number of elapsed policy months from
the Date of Issue to a Grace Period Testing Date. There are two types of
Guaranteed Death Benefit ("GDB") Premium:
. The Age 65 or 10 Years GDB Premium is used to determine the Guaranteed
Death Benefit Premium Target on each Grace Period Testing Date from the
Date of Issue until the later of the policy anniversary nearest the
Insured's 65th birthday or the tenth policy anniversary.
. After that, the Age 100 GDB Premium is used on each Grace Period Testing
Date to determine the Guaranteed Death Benefit Premium Target until the
policy anniversary nearest the Insured's 100th birthday. We will multiply
the Age 100 GDB Premium by the number of elapsed policy months from the
Date of Issue.
The amounts shown in Section 1 for GDB Premium may change in the event of any
decrease in Sum Insured or any change in the death benefit option. If so, we
will use the new GDB Premium from the date of such decrease or change to
determine the Guaranteed Death Benefit Premium Target.
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7. GRACE PERIOD
- - --------------------------------------------------------------------------------
On each Grace Period Testing Date, we will determine if the total of all unpaid
Section 9 charges as of such date are greater than the Account Value minus
indebtedness as of such date. If that is the case:
If the Guaranteed Death Benefit feature is in effect, the Basic Sum
Insured will remain in effect, buy any Additional Sum Insured and any
rider benefits (unless otherwise stated therein) will be in default as of
that Grace Period Testing Date (referred to below as an "ASI Default");
and
If the Guaranteed Death Benefit feature is not in effect, the Basic Sum
Insured, any Additional Sum Insured and any rider benefits will be in
default as of that Grace Period Testing Date (referred to below as an
"Policy Default")
The minimum amount you must pay to cure either type of default is "the Default
Payment". The Default Payment will be equal to a payment which, after deduction
of all Section 5 charges, equals: (i) any and all Section 9 charges unpaid
prior to the date of default plus (ii) the total of all Section 9 charges for
the date of default and the next two Processing Dates, where the charges for
each of the next two Processing Dates are assumed to be equal to such charges on
the date of default.
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<PAGE>
An amount equal at least to the Default Payment must be received within a grace
period of 61 days after the date of default. We will send notice to your last
known address and to any assignee of record at least 31 days before the end of
this grace period specifying whether there is an ASI Default or a Policy Default
and the Default Payment which you must make to cure the default.
If a payment at least equal to the Default Payment is received before the end of
the grace period, there will no longer be a default. Any payment received will
be processed as of the date of receipt at our Servicing Office. When payment is
received, any Section 9 charges which are past due and unpaid will be deducted
from the Account Value.
If there is an ASI Default and a payment at least equal to the Default Payment
is not received by the end of the grace period, then any Additional Sum Insured,
and any riders (unless otherwise stated therein), will cease to be in effect and
will be removed from the policy. If there is a Policy Default and a payment at
least equal to the Default Payment is not received by the end of the grace
period, then the policy will lapse and will no longer be in full force. Upon a
lapse of the policy the remaining Surrender Value, if any, will be paid to the
Owner.
If the Insured dies during a Policy Default or during an ASI Default, then we
will deduct the applicable Default Payment from the proceeds.
The policy may also lapse due to excess indebtedness as described in Section 10.
No Rider provisions will be in effect after the policy ceases to be in full
force.
8. ACCOUNT VALUE
The Account Value as of the end of any Valuation Period is derived as follows:
(a) We will determine the value of each Subaccount as of the close of
business on the last day of the Valuation Period in accordance with
Section 13. ( Call our Servicing Office to determine when the "close
of business" currently occurs.)
(b) We will then determine the share of this policy in each Subaccount and
the total value of such shares.
(c) We will then add any amount of Loan Assets, as defined in Section 10.
(d) We will then add any Net Premium received during the Valuation Period
to the value derived in (c) above.
(e) If applicable, we will then compute and deduct all Section 9 charges
in the manner specified in Section 9.
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9. CHARGES
- - --------------------------------------------------------------------------------
On the Date of Issue and on every Processing Date, we will deduct, in order,
each of the charges (a) through (f) from the Account Value, where:
(a) Asset-Based Risk Charge
(b) is the Issue Charge, if any; and
(c) is the Maintenance Charge
(d) is the sum of the charges for Riders which are part of the policy, if
any, provided such charges are deducted from the Account Value;
(e) is the sum of all charges for ratings, if applicable;
(f) is the Cost of Insurance Charge.
The Cost of Insurance Charge on the Date of Issue or on any Processing Date is
an amount equal to the applicable Applied Monthly Rate on that date divided by
1,000, multiplied by the Net Amount at Risk on that date.
Each Cost of Insurance Charge is deducted in advance of the insurance coverage
to which it applies.
9 M0900V
<PAGE>
The Net Amount at Risk is the amount determined by subtracting (a) from the
greater of (b) or (c) where:
(a) is the Account Value at the end of the immediately preceding Valuation
Period less all charges due on the Date of Issue or Processing Date;
(b) (i) is the Sum Insured divided by 1.0032737 for death benefit Option
A; or (ii) is the Sum Insured divided by 1.0032737, plus the Account
Value for death benefit Option B; and
(c) is the amount defined in (a) multiplied by the applicable Corridor or
Death Benefit Factor described in Section 4.
The Applied Monthly Rates are the actual rates used to calculate the Cost of
Insurance Charge. We will determine the Applied Monthly Rates to be used for
this policy. They will be reviewed at least once every 5 Policy Years. Any
change in Applied Monthly Rates will be made on a uniform basis for insureds of
the same sex, Issue Age, and premium class, including smoker status, and whose
policies have been in force for the same length of time.
10. LOANS
You may borrow money from us on receipt at our Servicing Office of a completed
form satisfactory to us assigning the policy as the only security for the loan.
Loans may be made after the first policy year if a Loan Value is available.
Each loan must be for at least $300. We may defer loans as provided by law or
as provided in Section 20.
The Loan Value while the policy is in full force will be an amount equal to (i)
the Surrender Value, less (ii) 12 times the monthly charges then being deducted
from the Account Value, less (iii) and amount determined as follows:
. Deduct (ii) above from (i) above.
. Multiply the result by the difference between the effective annual
rate then being charged on loans and the effective annual rate then
being credited on Loan Assets.
Values will be determined, subject to the "Deferral of Determinations and
Payments" provision, at the end of the Valuation Period in which the date of
receipt of the loan application at our Servicing Office occurs.
The interest charged on any loan will be at an effective annual rate of 4.75%
for years 1-10, 4.5% for years 11-20 and 4.25% thereafter. Loan interest will
accrue daily and will be payable on each Annual Processing Date and on the date
the loan is settled. Accrued interest will be added to the loan daily and will
bear interest from that date. Interest may be paid in advance at the equivalent
effective rate.
A loan may be repaid in full or in part at any time before the Insured's death,
and while the policy is in full force.
When excess indebtedness occurs, the policy will terminate on the 31st day after
the Notice Date occurs if such excess has not been repaid by that date. "Excess
indebtedness" is the amount, if any, by which indebtedness exceeds an amount
equal to the Account Value. "Notice Date" is the date on which notice of Excess
indebtedness is mailed to you and any assignee of record with us at the address
last known to us.
Loan Assets are equal to the total of all loans advanced plus interest credited
on each loan amount measured from the date of the loan. When a loan is made, the
amount of the loan will be transferred to Loan Assets. The interest rate
credited to Loan Assets is fixed. The interest credited to Loan Assets will be
added daily and will bear interest from that date at the same rate.
The effective annual rate of interest credited to Loan Assets is 4%. The amount
transferred to Loan Assets will be removed from the Subaccounts in proportion to
your policy investment in each Subaccount on the date such loan is made (unless
our then current rules allow you to designate different proportions in your loan
request and you in fact do so). Upon loan repayment, the same proportionate
amount of the entire loan as was borrowed from the Fixed Account will be repaid
to the Fixed Account. The remainder of the loan repayment will be allocated to
the appropriate Subaccounts as stipulated in the current Subaccount Investment
Option (unless our then current rules allow you to designate a different
allocation with your repayment and you in fact do so).
11. SURRENDERS AND WITHDRAWALS
We will determine the Surrender Value of the policy if the Insured is then
alive, subject to Section 20, and if the policy is in full force. The policy
will terminate as of the Surrender Date. The Surrender Date is the end of the
day in which we have received at our Servicing Office (i) written notice
requesting full surrender of the policy, and (ii) the surrendered policy.
While the policy is in full force, the Surrender Value will be an amount equal
to the Account Value less any indebtedness less the Contingent Deferred Sales
Charge.
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<PAGE>
You may request a withdrawal of part of the Surrender Value in accordance with
our rules then in effect. Unless we approve otherwise, the amount of the
withdrawal will be removed from the Subaccounts in proportion to your policy
investment in each Subaccount on the date such withdrawal is made (unless our
then current rules allow you to designate a different allocation of your
withdrawal and you in fact do so). For each withdrawal, we reserve the right to
make a charge to the Account Value of an amount not to exceed $20. Generally,
each withdrawal must be at least $1,000. No withdrawal can be made unless the
resulting Total Sum Insured is at least equal to the Minimum Total Sum Insured
shown in Section 1 and the Surrender Value is equal to or greater than three
times the Section 9 charges at the time of withdrawal.
All amounts withdrawn will be subtracted from the Cumulative Premium Balance as
described in Section 6 and will also be subtracted from your Account Value.
Further, your death benefit will be affected as provided below.
With respect to determining the death benefit under Death Benefit Option A
(Level Death Benefit), an amount equal to any withdrawal and its related charge
will be deducted from the Account Value until the Account Value multiplied by
the appropriate Corridor Factor or Death Benefit Factor becomes equal to the
Total Sum Insured. After that point is reached, both the Total Sum Insured and
the Account Value will each be reduced by an amount equal to any remaining
withdrawal amounts. Your Death Benefit will continue to be determined in
accordance with Section 4.
With respect to determining the death benefit under Death Benefit Option B
(Variable Death Benefit), an amount equal to any withdrawal and its related
charge will be deducted from the Account Value. Withdrawals will not affect the
Total Sum Insured. Your Death Benefit will continue to be determined in
accordance with Section 4.
12. BASIS OF COMPUTATIONS
Minimum surrender values, reserves and net single premiums referred to in the
policy, if any, are computed on the basis of the Commissioners 1980 Standard
Ordinary Mortality Tables with percentage ratings, if applicable, and based on
the underwriting class of the Insured on the Date of Issue. The computations are
made using interest at the rate of 4% a year and using continuous functions.
The Account Value while the policy is in full force is computed as described in
Section 8. A detailed statement of the method of computation of values has been
filed with insurance supervisory officials of the jurisdiction in which this
policy has been delivered. The values are not less than the minimum values under
the law of that jurisdiction. Any values, reserves and premiums applicable to
any provision for an additional benefit shall be specified in the provision and
have no effect in determining the values available under the provisions of this
Section 12.
- - --------------------------------------------------------------------------------
13. SEPARATE ACCOUNT AND FIXED ACCOUNT
- - --------------------------------------------------------------------------------
We will allocate Net Premiums, other credits, and charges to the Variable
Accounts and the Fixed Account in accordance with Section 14. We will allocate a
proportional share of the investment results of the Variable Accounts to your
policy. We also reserve the right to make a charge for any applicable income
taxes.
The assets of the Variable Accounts will be invested in shares of corresponding
Funds of a Series Fund. The Portfolios will be valued at the end of each
Valuation Period at a fair value in accordance with applicable law. We will
deduct liabilities attributable to a Variable Account when determining the value
of a Variable Account. The Variable Accounts available on the Date of Issue of
this policy are shown in the Prospectus for this policy, along with any
investment management fees associated with the corresponding Funds.
The assets of the Separate Account are the property of the Company. They shall
be available to cover liabilities of our general account only to the extent that
the assets of the Separate Account exceed the reserves and other liabilities of
the Separate Account arising under the variable life insurance policies
supported by the Separate Account.
We reserve the right to make certain changes if, in our judgment, they would
best serve the interests of the owners of policies such as this or would be
appropriate in carrying out the purposes of such policies. Any changes will be
made only to the extent and in the manner permitted by applicable laws. Also,
when required by law, we will obtain your approval of the changes and approval
from any appropriate regulatory authority.
If any of these changes results in a material change in the underlying
investments of Variable Accounts to which the reserves for this policy are
allocated, we will notify you of such change. You may then make a new election
under the investment policy change provisions in Section 15.
11 M1100V
<PAGE>
Examples of the changes we may make include the following:
(a) To operate a Separate Account in any form permitted under the
Investment Company Act of 1940, or in any other form permitted by law.
(b) To take any action necessary to comply with or obtain and continue any
exemptions from the Investment Company Act of 1940.
(c) To transfer any assets in a Variable Account to another Variable
Account; or to add, combine or remove Subaccounts.
(d) To substitute, for the investment company stock held in any Portfolio,
another class of stock of the investment company or the stock of
another investment company or any other investment permitted by law.
(e) To make any other necessary technical changes in this policy in order
to conform with any action this provision permits us to take.
14. ALLOCATION TO SUBACCOUNTS
Any Net Premium processed prior to the 20th day after the Date of Issue will be
invested in the Money Market Subaccount. On the 20th day after the Date of Issue
(or on the date such Net Premium is received, if later), we will reallocate the
amount in the Money Market Subaccount attributable to any such Net Premium in
accordance with the Subaccount Investment Option then in effect. We will
allocate all other Net Premiums and all other credits among the Subaccounts in
accordance with the Subaccount Investment Option then in effect. You may elect
to change the Subaccount Investment Option at any time. A change will be
effective at the end of the Valuation Period in which we receive notice
satisfactory to us. We reserve the right to impose limits on the number and
frequency of such changes. the minimum percentage that may be allocated to any
Subaccount and the maximum number of Subaccounts in which assets may be held
will be subject to our administrative rules in effect at the time of election.
Unless we agree otherwise, we will allocate any charges under Section 9 among
the applicable Subaccounts in proportion to the value of your policy investment
in each Subaccount on the date of the charge.
Account Transfer Restrictions
General Restrictions
- - --------------------
Subject to the limitations below, you may elect to transfer amounts among the
Subaccounts at any time while the policy is in full force. We reserve the right
to (i) impose limits on the number of such transfers in any Policy Year to any
number greater than 12, (ii) impose limits on the frequency of such transfers,
and (iii) impose a charge for each transfer that exceeds 12 in any Policy Year.
Such charge will not exceed $25 per transfer. A transfer will be effective at
the end of the Valuation Period in which we receive notice satisfactory to us.
The maximum number of Subaccounts in which assets may be held will be subject to
our rules in effect at the time of transfer.
Restrictions on Transfers to Subaccounts
- - ----------------------------------------
Without our prior approval, the maximum amount which may be transferred to a
Subaccount in any Policy Year is $1,000,000.
Restrictions on Transfers to and from the Fixed Account
- - -------------------------------------------------------
At any time during the first two Policy Years, you may elect to transfer all
assets held in the Variable Accounts to the Fixed Account. No charge will be
made for any such transfer, regardless of the number of transfers previously
made. We reserve the right to impose restrictions on transfers to the Fixed
Account after the first two Policy Years. Transfers from the Fixed Account will
be permitted only once in each Policy Year. The maximum transfer amount in each
Policy Year is 20% of the value of the Fixed Account as of the effective date of
the transfer, or $500, if greater. We may defer the transfer for up to 6 months
after the date your election would have been effective.
15. INVESTMENT POLICY CHANGE
The investment policy of the Variable Accounts shall not be materially changed
unless a statement of the change is filed with, and not disapproved by, the
Insurance Commissioner of Massachusetts. In the event of such a change in
investment policy, and while this policy is in full force you may elect a
transfer in accordance with Section 14 within 60 days after (i) the effective
date of the material change or (ii) the receipt of a notice of the available
options, whichever is later. No charge will be made for any such transfer
(regardless of the number of transfers previously made), which will be effective
as of the end of the Valuation Period in which we receive the notice. If
required, any statement of material change filed with the Insurance Commissioner
of Massachusetts will be filed with the insurance supervisory officials of the
jurisdiction in which this policy is delivered or issued for delivery.
12
<PAGE>
16. REPORTS TO OWNER
While the policy is in full force, we will send you a statement at least
annually, setting forth the following information:
(a) The Death Benefit, in connection with the Death Benefit Option elected,
Guaranteed Death Benefit, and Account Value as of the date of the report;
(b) Payments received and charges made since the last report;
(c) Withdrawals since the last report; and
(d) Loan information.
We will furnish other reports if required by law or regulation.
17. REINSTATEMENT
If there is a Policy Default or ASI Default under Section 7, the policy or the
Additional Sum Insured (as the case may be) may be reinstated within 3 years
after the beginning of the grace period.
The date of reinstatement of the policy or the Additional Sum Insured is the
date as of which all 4 requirements below have been satisfied:
(1) We have received a written application for reinstatement.
(2) We have received evidence of insurability satisfactory to us.
(3) We have received a payment which, after deduction of all Section 5
charges (i.e., State Premium Tax Charge, Federal DAC Tax Charge, and
applicable Sales Charges) is at least equal to the sum of (i) all unpaid
charges described in Section 9, plus interest on each such charge from
the date due up to and including the date of reinstatement at an annual
effective rate of 6%, compounded annually, plus (ii) the total of all
Section 9 charges for the three Processing Dates next following the date
of reinstatement, where the Section 9 charges for the three Processing
Dates next following the date of reinstatement are assumed to be equal
to such charges on the date of default.
(4) We have verified receipt of items (2) and (3) above and have approved
the application for reinstatement.
On the date of reinstatement of the policy (i) the death benefit of the policy
will be the same as if no lapse had occurred and (ii) the policy will have
indebtedness equal to any indebtedness at the end of the day immediately
preceding the date of reinstatement.
The Account Value on the date of reinstatement of the policy will be the amount
specified in (3) above (i) less the sum of all Section 9 charges that would have
been made from the date of lapse to the date of reinstatement if the policy had
not lapsed, (ii) less interest on each such charge at an effective annual rate
of 6%, compounded annually, from the date such charge would have been due up to
and including the date of reinstatement.
18. OWNER AND BENEFICIARY
The Owner and the Beneficiary will be as shown in the application unless you
change them or they are changed by the terms of this provision.
You shall have the sole and absolute power to exercise all rights and privileges
without the consent of any other person unless you provide otherwise by written
notice.
If there is no surviving Beneficiary upon the death of the Insured, you will be
the Beneficiary, but if you were the Insured, your estate will be Beneficiary.
While the Insured is alive, you may change the Owner and Beneficiary by written
notice. You may also revoke any change of Owner prior to its effective date by
written notice. No change or revocation will take effect unless we acknowledge
receipt on the notice. If such acknowledgment occurs, then (i) a change of
Beneficiary will take effect on the date the notice is signed, and (ii) a change
or a revocation of Owner will take effect as of the date specified in the
notice, or if no such date is specified, on the date the notice is signed. A
change or revocation will take effect whether or not you or the Insured is alive
on the date we acknowledge receipt. A change or revocation will be subject to
the rights of any assignee of record with us and subject to any payment made or
other action taken by us before we acknowledge receipt.
13 M1300V
<PAGE>
19. INTEREST ON PROCEEDS
We will pay interest on proceeds paid in one sum in the event of the Insured's
death from the date of death to the date of payment. The rate will be the same
as declared for Option 1 in Section 27, Settlement Provisions, or such greater
rate as is required by law.
20. DEFERRAL OF DETERMINATIONS AND PAYMENTS
We reserve the right to defer payment of the Surrender Value from the Fixed
Account for a period of six months.
During any period when the New York Stock Exchange is closed for trading (except
for normal holiday closings) or when the Securities and Exchange Commission
("the SEC") has determined that a state of emergency exists which may make
payment impractical, or the SEC by order permits postponement for the protection
of our policyholders, we reserve the right to do the following:
(1) To defer determination of the Account Value, and if such determination
has been deferred, to defer:
(a) determination of the values for a loan as of the end of the day we
receive the loan application at our Servicing Office, and payment of
the loan; and
(b) payment or application of any Death Benefit in excess of the
Guaranteed Death Benefit.
(2) To defer determination, application, processing or payment of a
Surrender Value or any other policy transaction dependent upon Account
Value.
A deferral, as described above, will be applicable only if any portion of the
Account Value is invested in a Variable Account.
Except as provided in this provision we will make payment of the Death Benefit,
any Surrender Value, any withdrawal, or any loan amount within 7 days of the
date it becomes payable.
21. CLAIMS OF CREDITORS
The proceeds and any income payments under the policy will be exempt from the
claims of creditors to the extent permitted by law and as stated in Section 13.
These proceeds and payments may not be assigned or withdrawn before becoming
payable without our agreement.
22. ASSIGNMENT
Your interest in this policy may be assigned without the consent of any
revocable Beneficiary. Your interest, any interest of the Insured and of any
revocable Beneficiary shall be subject to the terms of the assignment.
We will not be on notice of any assignment unless it is in writing, nor will we
be on notice until a duplicate of the original assignment has been filed at our
Servicing Office. We assume no responsibility for the validity or sufficiency
of any assignment.
23. INCONTESTABILITY
This policy, except any provision for a disability benefit, shall be
incontestable after it has been in force during the lifetime of the Insured for
2 years from its Date of Issue, except for nonpayment of premium or fraud.
However, if we require evidence of insurability with respect to any payment we
are authorized to refuse under Section 5, any increase in the Death Benefit
resulting from such payment shall be incontestable after such increase has been
in force during the lifetime of the Insured for 2 years from the effective date
of such increase. Further, any reinstatement will be contestable as to material
misrepresentations in the reinstatement application for 2 years from the
effective date of such reinstatement.
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24. MISSTATEMENTS
- - --------------------------------------------------------------------------------
If the age or sex of the Insured has been misstated, we will adjust the Basic
Sum Insured, any Additional Sum Insured, and every other benefit to that which
would have been purchased at the correct age or sex by the most recent Cost of
Insurance charge deducted under Section 9.
25. SUICIDE EXCLUSION
If the Insured commits suicide, while sane or insane, within 2 years from the
Date of Issue, the policy will terminate on the date of such suicide and we will
pay (in place of all other benefits, if any) an amount equal to the Premiums
paid less the amount of any indebtedness on the date of death and less any
withdrawals under Section 11. If the Insured commits suicide, while sane or
insane, after 2 years from the Date of Issue and within 2 years from the
effective date of any increase in the Death Benefit resulting from any payment
of Premium we are authorized to refuse under Section 5, the benefits payable
under the policy will not include the amount of such Death Benefit increase but
will include the amount of such Premium.
26. THE CONTRACT
The written application for the policy is attached at issue. The entire contract
between the applicant and us consists of the policy, such application, and any
riders and endorsements. However, additional written requests or applications
for policy changes or acceptance of excess payment under Section 5 may be
submitted to us after issue and such additional requests may become part of the
policy. All statements made in any application shall, in the absence of fraud,
be deemed representations and not warranties. We will use no statement made by
or on behalf of the Insured to defend a claim under the policy unless it is in a
written application. Policy Years, policy months, and policy anniversaries are
measured from the Date of Issue.
Any reference in this policy to a date means a calendar day ending at midnight
local time at our Servicing Office.
An exchange of this policy for a new policy on a different plan may be made by
agreement between you and us in accordance with our published rules in effect at
that time.
We reserve the right to make any changes necessary in order to keep this policy
in compliance with any changes in federal or state tax laws. Other changes in
this policy may be made by agreement between you and us. Only the President,
Vice President, the Secretary, or an Assistant Secretary of the Company has
authority to waive or agree to change in any respect any of the conditions or
provisions of the policy, or to extend credit or to make an agreement for us.
15 M1500V
<PAGE>
27. SETTLEMENT PROVISIONS
Optional Methods of Settlement
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 us,
under the terms of a supplementary agreement. The agreement will be issued when
the proceeds are applied through the choice of any one of the options below, or
any additional options we, in our sole discretion, may make available after
issue. We shall at least annually declare the rate of interest or amount of
payment for each option. Such declaration shall be effective until the date
specified in the next declaration.
Option 1--Interest Income at the declared rate but not less than 3.5% a year on
proceeds held on deposit. The proceeds may be paid or withdrawn in whole or in
part at any time as elected.
Option 2A--Income of a Specified Amount, with payments each year totaling at
least 1/12th of the proceeds, until the proceeds plus interest is paid in full.
We will credit interest on unpaid balances at the declared rate but not less
than 3.5% a year.
Option 2B-- Income for a Fixed Period with each payment as declared but not less
than that shown in the Table for Option 2B.
Option 3-- Life Income with Payments for a Guaranteed Period, with each payment
as declared but not less than that shown in the Table for Option 3. If the Payee
dies within that period, we will pay the present value of the remaining
payments. In determining present value, we will use the same interest rate used
to determine the payments for this option.
Option 4-- Life Income without Refund at the death of the Payee of any part of
the proceeds applied. The amount of each payment shall be as declared but not
less than that shown in the Table for Option 4.
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.
The amount of each payment shall be as declared but not less than that shown in
the Table for Option 5.
You may choose an option by written notice to us: (a) while the Insured is
alive; and (b) before the proceeds become payable. If you have made no effective
choice, the Payee may make one by written notice within: (a) 6 months after the
death of the Insured; or (b) 2 months after the date on which the proceeds, if
any, are payable in any case except death.
No choice of an option may provide for payments of less than $50.00. The first
payment will be payable as of the date the proceeds are applied, except that
under Option 1 it will be payable at the end of the first payment interval.
The Payee under an option shall be the Insured, if living, and otherwise the
Beneficiary.
No option may be chosen without our consent if the proceeds are payable: (1) in
any case, except death, before the policy has been in force on the same plan for
at least 5 years; or (2) in any case to an executor, administrator, trustee,
corporation, partnership, association, or assignee.
A Payee may, by written notice, name and change a Contingent Payee to receive
any final amount that would otherwise be payable to the Payee's estate.
16
<PAGE>
Table for Settlement Options 2B, 3, 4, and 5
(Monthly payments for each $1,000 of proceeds applied)
<TABLE>
<CAPTION>
Option 2B Age of Payee at Option 3 Option 4 Option 5
Income for a Fixed Birthday Nearest Life Income with Guaranteed Life Life
Period Date of First Period Income Income
Payment without with Cash
- - --------------------- ---------------------------------- Refund Refund
Period Payment 10 Years 20 Years
of Years
- - --------------------- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 84.46 40 3.53 3.50 3.54 3.46
2 42.86 41 3.57 3.54 3.58 3.50
3 28.99 42 3.62 3.58 3.63 3.54
4 22.06 43 3.66 3.62 3.68 3.58
5 17.91 44 3.77 3.66 3.73 3.62
6 15.14 45 3.76 3.71 3.78 3.66
7 13.16 46 3.82 3.75 3.83 3.71
8 11.68 47 3.87 3.80 3.89 3.75
9 10.53 48 3.93 3.85 3.95 3.80
10 9.61 49 3.99 3.90 4.02 3.85
11 8.86 50 4.05 3.95 4.08 3.91
12 8.24 51 4.12 4.01 4.15 3.96
13 7.71 52 4.19 4.06 4.22 4.02
14 7.26 53 4.26 4.12 4.30 4.08
15 6.87 54 4.34 4.18 4.38 4.15
16 6.53 55 4.42 4.24 4.47 4.21
17 6.23 56 4.50 4.31 4.56 4.28
18 5.96 57 4.59 4.37 4.66 4.36
19 5.73 58 4.69 4.44 4.76 4.44
20 5.51 59 4.79 4.50 4.87 4.52
21 5.32 60 4.89 4.57 4.99 4.60
22 5.15 61 5.00 4.64 5.11 4.69
23 4.99 62 5.12 4.71 5.25 4.78
24 4.84 63 5.24 4.77 5.39 4.88
25 4.71 64 5.37 4.84 5.54 4.99
26 4.59 65 5.50 4.91 5.70 5.09
27 4.47 66 5.64 4.97 5.87 5.21
28 4.37 67 5.79 5.03 6.06 5.33
29 4.27 68 5.94 5.09 6.26 5.46
30 4.18 69 6.10 5.14 6.47 5.59
- - ------------------ 70 6.27 5.19 6.69 5.73
Annual, Semi-annual, 71 6.44 5.24 6.94 5.88
or quarterly 72 6.61 5.28 7.20 6.04
payments under 73 6.79 5.32 7.48 6.20
Option 2B are 74 6.98 5.36 7.79 6.38
11.839, 5.963, and 75 7.16 5.38 8.11 6.56
2.993 respectively 76 7.35 5.41 8.47 6.75
times the monthly 77 7.54 5.43 8.84 6.96
payments. 78 7.72 5.45 9.25 7.17
- - --------------------- 79 7.91 5.46 9.69 7.39
80 8.08 5.48 10.17 7.64
81 8.25 5.49 10.68 7.88
82 8.41 5.49 11.23 8.13
83 8.56 5.50 11.82 8.43
84 8.71 5.50 12.46 8.70
85 & over 8.83 5.51 13.14 8.99
-------------------------------------------------------------------------------------
Options 3, 4 and 5 are available only at the ages as shown.
-------------------------------------------------------------------------------------
</TABLE>
17 M1700V
<PAGE>
Communications about this policy may be sent to the Company at John Hancock
Place, Boston, Massachusetts 02117.
Variable Life Insurance policy
Flexible Premiums
<PAGE>
Death Benefit payable at death of Insured
Not eligible for dividends
Benefits, premiums and the Premium Class are shown in Section 1.
00MVL MBP00V Printed in U.S.A.
