HANCOCK JOHN VARIABLE LIFE ACCOUNT V, 485BPOS, 1996-04-23

HANCOCK JOHN VARIABLE LIFE ACCOUNT V
485BPOS, 1996-04-23

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<PAGE>

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

Registration No. 33-75610
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------

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

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

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(Name of depositor)

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

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

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

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

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

If appropriate check the following box

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

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

FCC0015)
<PAGE>

CROSS-REFERENCE TABLE

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

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

3 Inapplicable

4 Cover, Distribution of Policies

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

7, 8, 9 Inapplicable

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

10(f) Voting Privileges

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

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

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

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

14, 15 Summary, Distribution of
Policies, Premiums

16 The Account and The Series Fund or
Funds

17 Summary, Policy Provisions and
Benefits

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

19 Reports

20 Changes that JHVLICO Can Make

21 Policy Provisions and Benefits

22 Policy Provisions and Benefits
<PAGE>

23 Distribution of Policies

24 Not Applicable

25 JHVLICO and John Hancock

26 Not Applicable

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

31,32,33,34 Not Applicable

35 JHVLICO and John Hancock

37 Not Applicable

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

42, 43 Not Applicable

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

45 Not Applicable

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

47 Not Applicable

48,49,50 Not Applicable

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

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

53,54,55 Not Applicable

56,57,58,59 Not Applicable

FCC0131.DOC
<PAGE>

John Hancock Variable
Life
Insurance Company
(JHVLICO)

[LOGO OF JOHN HANCOCK FLEXV2 APPEARS HERE]

SCHEDULED PREMIUM VARIABLE LIFE INSURANCE POLICY
JOHN HANCOCK VARIABLE LIFE ACCOUNT V

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

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

PROSPECTUS MAY 1, 1996

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

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

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

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

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

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SUMMARY................................................................... 1
JHVLICO AND JOHN HANCOCK.................................................. 6
THE ACCOUNT AND THE SERIES FUND........................................... 6
THE FIXED ACCOUNT......................................................... 10
POLICY PROVISIONS AND BENEFITS............................................ 10
Requirements for Issuance of Policy..................................... 10
Premiums................................................................ 11
Account Value and Surrender Value....................................... 14
Death Benefits.......................................................... 15
Death Benefit Options................................................... 16
Definition of Life Insurance............................................ 16
Excess Value............................................................ 17
Partial Withdrawal of Excess Value...................................... 17
Transfers Among Subaccounts............................................. 18
Loan Provisions and Indebtedness........................................ 19
Default and Options on Lapse............................................ 20
Exchange Privilege...................................................... 21
CHARGES AND EXPENSES...................................................... 21
Charges Deducted from Premiums.......................................... 21
Sales Charges........................................................... 22
Administrative Surrender Charge......................................... 23
Reduced Charges for Eligible Groups..................................... 24
Charges Deducted from Account Value..................................... 24
DISTRIBUTION OF POLICIES.................................................. 26
TAX CONSIDERATIONS........................................................ 27
Policy Proceeds......................................................... 27
Charge for JHVLICO's Taxes.............................................. 28
Corporate and H.R. 10 Plans............................................. 29
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO...................... 29
REPORTS................................................................... 30
VOTING PRIVILEGES......................................................... 30
CHANGES THAT JHVLICO CAN MAKE............................................. 31
STATE REGULATION.......................................................... 31
LEGAL MATTERS............................................................. 31
REGISTRATION STATEMENT.................................................... 31
EXPERTS................................................................... 32
FINANCIAL STATEMENTS...................................................... 32
APPENDIX--OTHER POLICY PROVISIONS......................................... 52
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES
AND ACCUMULATED PREMIUMS................................................. 54
</TABLE>

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

INDEX OF DEFINED WORDS AND PHRASES

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

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Account Value....................................................... 15
Administrative Surrender Charge..................................... 24
Attained Age........................................................ 16
Base Policy Premium................................................. 12
Basic Account Value................................................. 18
Contingent Deferred Sales Charge.................................... 23
Corridor Factor..................................................... 16
Current Death Benefit............................................... 16
Death Benefit Factor................................................ 16
Excess Value........................................................ 17
Experience Component................................................ 18
Fixed Account....................................................... 10
Grace Period........................................................ 21
Guaranteed Death Benefit............................................ 16
Guaranteed Maximum Recalculation Premium............................ 12
Home Office......................................................... 6
Indebtedness........................................................ 20
Investment Rule..................................................... 13
Loan Account........................................................ 20
Minimum First Premium............................................... 11
Modal............................................................... 11
Premium Component................................................... 18
Premium Recalculation............................................... 12
Required Premium.................................................... 12
Subaccount.......................................................... Cover
Sum Insured......................................................... 16
Surrender Value..................................................... 15
Valuation Date...................................................... 10
</TABLE>
<PAGE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?

John Hancock Variable Life Insurance Company ("JHVLICO") issues variable
life insurance policies. The Policies described in this Prospectus are
scheduled annual premium policies that provide for additional premium
flexibilities. JHVLICO also issues in some states an earlier version of these
policies. These other policies are offered by means of other prospectuses.

The Policies differ from ordinary fixed-benefit life insurance in the way
they work. However, the Policies are the same as fixed-benefit life insurance
in providing lifetime protection against economic loss resulting from the
death of the person insured. The Policies are primarily insurance and not
investments.

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

The death benefit may be either level or variable as elected by the Owner.
The level death benefit provides a death benefit that generally remains fixed
in amount and an Account Value that varies daily. Two versions of the level
death benefit are available. The variable death benefit provides for a death
benefit and Account Value that may vary daily. JHVLICO guarantees that the
death benefit will never be less than the Sum Insured at issue, absent a
partial surrender ("Guaranteed Death Benefit").

At issue of the Policy, the Current Death Benefit is generally well below
the Guaranteed Death Benefit. Whether or not it exceeds the Guaranteed Death
Benefit depends upon the timing and amount of the premium payments, the
investment experience, the activity under the Policy with respect to Policy
loans, additional benefits and the like, the charges made against the Policy,
and the attained age of the insured. Once the Current Death Benefit exceeds
the Guaranteed Death Benefit, the Owner bears the investment risk for any
amount above the Guaranteed Death Benefit, and JHVLICO bears the investment
risk for the Guaranteed Death Benefit.

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

1
<PAGE>

The minimum Sum Insured at issue is $50,000. All persons insured must be no
more than 75 years of age at issue and meet certain health and other criteria
called "underwriting standards." The smoking status of the insured is
generally reflected in the premiums required and insurance charges made. If
the Sum Insured at issue is at least $100,000, the insured may be eligible for
the "preferred" class, which has the lowest insurance charges for this Policy.
Policies issued under certain circumstances will not directly reflect the sex
of the insured in either the premium rates or the charges and values under the
Policy.

WHAT IS THE AMOUNT OF THE PREMIUMS?

Base Policy Premiums are determined as follows: A fixed premium is
applicable which does not vary until the Policy anniversary nearest the
insured's 70th birthday or, if later, the tenth Policy anniversary. On this
date, in the absence of an earlier election by the Owner, the "Base Policy
Premium" is automatically shifted to a new premium schedule and a new fixed
annual premium becomes payable on a scheduled basis for the remaining life of
the Policy. The new Base Policy Premium depends upon the Policy's Guaranteed
Death Benefit and Account Value at the time of the premium recalculation. The
Owner may request that the Premium Recalculation take place on any Policy
anniversary prior to that nearest the insured's 70th birthday or, if later,
the tenth Policy anniversary. The Base Policy Premium depends upon the Sum
Insured at issue and the insured's age, smoking status and sex (unless the
Policy is sex-neutral). Base Policy Premiums are payable annually or more
frequently over the insured's lifetime. Additional premiums are charged for
Policies in cases involving extra mortality risks and for additional insurance
benefits. These premiums, along with the Base Policy Premiums, are the
Required Premium. There is a 61-day grace period in which to make Required
Premium payments due after the Minimum First Premium is received.

Within limits, Required Premiums may be paid in advance and more than the
Required Premiums may be paid. If the Account Value under a Policy is
sufficiently high, a Required Premium payment otherwise scheduled need not be
paid.

WHAT IS JOHN HANCOCK VARIABLE LIFE ACCOUNT V?

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

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

2
<PAGE>

the Special Opportunities Portfolio, at an annual rate of .75% of the first
$250 million of the average daily net assets and at lesser percentages for
amounts above $250 million; with respect to the Equity Index Portfolio at an
annual rate of 0.25% of the average daily net assets; with respect to the
Large Cap Value and Small Cap Growth Portfolios at an annual rate of 0.75% of
the average daily net assets; with respect to the Mid Cap Growth Portfolio at
an annual rate of 0.85% for the first $100,000,000 of average daily net assets
and at lesser percentages for amounts above $100,000,000; with respect to the
Mid Cap Value Portfolio at an annual rate of 0.80% of the first $250,000,000
of average daily net assets and at lesser percentages for amounts above
$250,000,000; with respect to the Small Cap Value Portfolio at an annual rate
of 0.80% of the first $100,000,000 of average daily net assets and at lesser
percentages for amounts above $100,000,000; with respect to the Strategic Bond
Portfolio at an annual rate of 0.75% for the first $25,000,000 of average
daily net assets and at lesser percentages for amounts above $25,000,000; with
respect to the International Opportunities Portfolio at an annual rate of 1%
of the first $20,000,000 of average daily net assets and at lesser percentages
for amounts above $20,000,000; and for the International Balanced Portfolio at
an annual rate of 0.85% of the first $100,000,000 of average daily net assets
and at a lesser percentage for amounts above $100,000,000.

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

WHAT ARE THE CHARGES MADE BY JHVLICO?

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

Sales Charge Deduction from Premium. A charge equal to no more than 5% of
all premiums received in any Policy year up to the Required Premium for that
year. JHVLICO currently intends to waive this deduction from Required Premiums
received after the first 10 Policy years.

Contingent Deferred Sales Charge. A charge deducted from Account Value if
the Policy lapses or is surrendered during the first 13 Policy years. The
amount of the charge depends upon the year in which lapse or surrender occurs.
The charge will never be higher than 15% of Base Policy Premiums paid to date.
The total charges for sales expenses over the lesser of 20 years or the life
expectancy of the insured will not exceed 9% of the premium payments under the
Policy, assuming all Required Premiums are paid, over that period.

Administrative Surrender Charge. A charge deducted from Account Value if the
Policy lapses or is surrendered in the first 9 Policy years. The amount of the
charge depends upon the year in which lapse or surrender occurs and the amount
of the Policy's Guaranteed Death Benefit at that time. The maximum charge is
$5 per $1000 of Guaranteed Death Benefit.

Issue Charge. A $20 charge deducted monthly from Account Value in the first
Policy year.

Maintenance Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $8 per Policy (currently $6.00).

Insurance Charge. A charge based upon the amount for which JHVLICO is at
risk, considering the attained age and risk classification of the insured and
JHVLICO's then current monthly insurance rates (never to exceed rates based on
the 1980 CSO Tables) deducted monthly from Account Value. JHVLICO currently
intends to reduce this charge beginning in the tenth Policy year.

Guaranteed Death Benefit Charge. A charge not to exceed 3c per $1000 of
current Sum Insured (currently 1c per $1000) deducted monthly from that
portion of Account Value not attributable to the Fixed Account allocations.

3
<PAGE>

Charge for Mortality and Expense Risks. A charge made daily at an effective
annual rate of .60% of the assets of the Account.

Charges for Extra Mortality Risks. An additional premium, depending upon the
Sum Insured at issue, age of the insured and the degree of additional
mortality risk, is required if the insured does not qualify for either the
preferred or standard underwriting class. This additional premium is collected
in two ways: up to 8.6% of each year's additional premium is deducted from
premiums when paid and the remainder of each year's additional premium is
deducted monthly from Account Value in equal installments.

Charges for Additional Insurance Benefits. An additional premium is required
if the Owner elects to purchase an additional insurance benefit. This
additional premium is collected in two ways: up to 8.6% of each year's
additional premium is deducted from premiums when paid and the remainder of
the additional premium is deducted monthly from Account Value in equal
installments.

Charge for Partial Withdrawal. A charge of $20 is made at the time of any
partial withdrawal of any Excess Value. No Contingent Deferred Sales Charge or
Administrative Surrender Charge is applicable to any such withdrawals.

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

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

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

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

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

HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?

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

WHAT COMMISSIONS ARE PAID TO AGENTS?

4
<PAGE>

year. Rather, total sales expenses under the Policies are intended to be
recovered over the lifetimes of the insureds covered by the Policies.

WHAT IS THE DEATH BENEFIT?

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

Option 1: Level Death Benefit. A level death benefit equal to the greater of
the Guaranteed Death Benefit or the Current Death Benefit.

Option 2: Variable Death Benefit. A variable death benefit equal to the
greater of the Guaranteed Death Benefit plus any Excess Value or the Current
Death Benefit.

Option 3: Level Death Benefit With Greater Funding. A level death benefit
equal to the greater of the Guaranteed Death Benefit or the Current Death
Benefit. It differs from the Level Death Benefit Option described above in
that a greater amount of premium payments can generally be made by the Owner.

The Current Death Benefit is equal to the Account Value multiplied by a
Corridor Factor or a Death Benefit Factor. In all three Options, when the
Current Death Benefit exceeds the Guaranteed Death Benefit, the death benefit
will increase whenever the Policy's Account Value increases, and decrease
whenever the Account Value decreases, but never below the Guaranteed Death
Benefit. These factors increase the death benefit if necessary to ensure that
the Policy will continue to qualify as life insurance under the Federal tax
law. See "Death Benefits"; "Death Benefit Options"; "Definition of Life
Insurance" and "Tax Considerations".

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

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

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

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

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

5
<PAGE>

IS THERE A SHORT-TERM CANCELLATION RIGHT?

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

WHAT INVESTMENT TRANSFERS ARE ALLOWED AN OWNER?

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

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

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

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

JHVLICO AND JOHN HANCOCK

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

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

THE ACCOUNT AND THE SERIES FUND

The Account, a separate account established under Massachusetts law in 1986
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").

6
<PAGE>

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

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

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

THE SERIES FUND

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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<PAGE>

THE FIXED ACCOUNT

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

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

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

POLICY PROVISIONS AND BENEFITS

The discussions which follow under "Death Benefits", "Account Value" and
"Surrender Value" assume that there has been no Policy loan. Benefits and
values are affected if premiums are not paid as scheduled or if a Policy loan
is made.

REQUIREMENTS FOR ISSUANCE OF POLICY

The Policy is generally available with a minimum Sum Insured at issue of
$50,000. All persons insured must be age 75 or under and meet certain health
and other criteria called "underwriting standards". The smoking status of the
insured is reflected in the premiums required and insurance charges made. If
the Sum Insured at issue is at least $100,000, the insured may be eligible for
the "preferred" underwriting class of this Policy, which has the lowest
insurance charges. Policies issued in certain jurisdictions and in connection
with certain employee plans will not directly reflect the sex of the insured
in either the premium rates or the charges or values under the Policy.
Accordingly, the illustrations set forth in this Prospectus may differ for
such Policies.

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<PAGE>

PREMIUMS

Payment Schedule. Premiums are scheduled and payable during the lifetime of
the insured in accordance with JHVLICO's established rules and rates. Premiums
are payable at JHVLICO's Home Office on or before the due date specified in
the Policy.

Scheduled premiums are payable annually or more frequently, depending upon
the premium schedule mode chosen by the Owner. The scheduled payment date of
any premium is the first day of the applicable Modal period. The "Modal"
periods are the monthly, quarterly, semi-annual or annual intervals at which
the Owner elects to have the scheduled premium payments fall due. The Owner
may change the frequency of scheduled premium payments. No additional charge
is made for premium payments made more frequently than annually.

Minimum Premium Requirements. An amount of Required Premium (see below) is
determined by JHVLICO at the time of issue of the Policy.

A Minimum First Premium must be received by JHVLICO at its Home Office
before the Policy is in full force and effect. The Minimum First Premium is
the first Modal premium. For example, if the Owner has elected a quarterly
Modal premium, one-quarter of the initial Required Premium must be received by
JHVLICO at the time of issue of the Policy.

Premium requirements are met by premium payments on a cumulative basis. For
example, the premium requirement on all scheduled due dates of the first
Policy year would be met if the full Required Premium for the first Policy
year were paid at issue of the Policy, regardless of the mode elected.

Generally, all premiums received, regardless of when received, are counted
by JHVLICO when it determines whether the premium requirement is met on a
scheduled due date. This cumulative amount of premiums received is reduced for
this purpose by amounts withdrawn from the Premium Component of Excess Value.
The premium requirement will also be deemed satisfied on any scheduled due
date if any Excess Value is available on that scheduled due date. See "Excess
Value".

Failure to satisfy a premium requirement on a scheduled due date may cause
the Policy to terminate. See "Default and Options on Lapse".

Amount of Required Premium. The Required Premium determined at the start of
each Modal premium period equals an amount for the Sum Insured ("Base Policy
Premium") plus any additional premium because the insured is an extra
mortality risk or because additional insurance benefits have been purchased.
The Base Policy Premium does not change until the Premium Recalculation occurs
or the Policy is partially surrendered.

Premium Recalculation. All Policies are issued on a Modified Schedule as the
basis for the Base Policy Premium. The Base Policy Premium under the Modified
Schedule may increase or decrease upon any Premium Recalculation, whether
automatic or elected earlier by the Owner. A Premium Recalculation must occur
no later than the Policy anniversary nearest the insured's 70th birthday or,
if later, on the tenth Policy anniversary. At the time of the Premium
Recalculation, JHVLICO determines a new Base Policy Premium which is payable
through the remaining lifetime of the insured.

The Premium Recalculation applicable to any Policy may be elected by the
Owner at any time up to the Policy anniversary prior to that nearest the
insured's 70th birthday or, if later, the tenth Policy anniversary. If
elected, the Premium Recalculation will be effected on the Policy anniversary
next following receipt by JHVLICO at its Home Office of satisfactory written
notice. If not elected sooner, the Premium Recalculation will be effected
automatically by JHVLICO as noted above.

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<PAGE>

The new Base Policy Premium resulting from a Premium Recalculation may be
less than, equal to or greater than the original Base Policy Premium. The new
Base Policy Premium depends on the insured's sex, smoking status, attained
age, the Guaranteed Death Benefit under the Policy and the Account Value on
the Valuation Date immediately preceding the date of the Premium
Recalculation.

A table of Guaranteed Maximum Recalculation Premiums for the insured is
determined by JHVLICO and set forth in the Policy. The Guaranteed Maximum
Recalculation Premium increases as the insured's attained age increases. The
new Base Policy Premium will never exceed the Policy's Guaranteed Maximum
Recalculation Premium based on the insured's attained age at the time of the
recalculation.

The Premium Recalculation feature makes it possible for JHVLICO to set a
lower Base Policy Premium (and thus a lower Required Premium) at the time of
Policy issuance than would be possible without this feature. If a purchaser at
any time wishes to "lock in" a Base Policy Premium (and Required Premium) for
the life of the Policy, he or she may request a Premium Recalculation at that
time.

The Guaranteed Maximum Recalculation Premium is lowest for a recalculation
at the time a Policy is issued and increases each year the recalculation is
delayed. Accordingly, by delaying the Premium Recalculation, the Owner assumes
the risk that the Base Policy Premium following the recalculation will be
higher than it would have been had the recalculation been performed at the
time the Policy was issued. The longer the delay and the lower the Policy's
Account Value, the greater this risk. On the other hand, an Owner who defers
the Premium Recalculation has the benefit of a lower Base Policy Premium prior
to the recalculation and a longer period of time to permit the Policy to
accumulate a sufficient amount of Account Value to reduce the possibility or
amount of an increase in the Base Policy Premium at the time of the
recalculation.

If the Policy's Account Value at the time of the Premium Recalculation
exceeds the Policy's Basic Account Value, the Base Policy Premium will be less
following the recalculation than it would have been had the recalculation been
performed at the time of Policy issuance. Otherwise it will be more. As to how
the Basic Account Value is determined, see "Excess Value."

As an example, consider the Policy illustrated on page 55, of this
Prospectus (Death Benefit Option 1 in the amount of $100,000, assuming current
charge rates, for a male standard risk non-smoker age 35 at issue). If no
Premium Recalculation is made at Policy issuance, the Base Policy Premium for
this Policy would be $900 until such time as the Premium Recalculation is
made. Assuming such premium is paid annually until the Premium Recalculation,
and assuming constant gross annual investment returns at the rates set forth
below, the following table illustrates what the Base Policy Premium would be
following a recalculation on the dates shown.

<TABLE>
<CAPTION>
Base Policy Premium Following
Policy Anniversary of Recalculation Assuming Hypothetical Gross
Premium Recalculation Annual Rate of Return of:
- --------------------- ------------------------------------------
0% 6% 12%
------------- ------------- --------------
<S> <C> <C> <C>
0(Issue Date)........................ $1,414.00 $1,414.00 $1,414.00
5.................................... $1,607.99 $1,581.92 $1,551.41
10.................................... $1,900.30 $1,791.31 $1,635.15
15.................................... $2,334.72 $2,058.15 $1,566.76
20.................................... $3,008.11 $2,433.77 $1,151.92
25.................................... $4,077.27 $2,998.48 $0.00
30.................................... $5,845.15 $3,914.46 $0.00
35*................................... $8,404.00 $5,561.76 $0.00
</TABLE>
- --------
* Mandatory Premium Recalculation if Owner does not choose earlier date.

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<PAGE>

A charge will be made if the new Base Policy Premium is below the Guaranteed
Maximum Recalculation Premium for the insured's age at issue of the Policy.
The charge will not exceed 3% (currently 1 1/2%) of the amount by which the
Policy's Account Value exceeds its Basic Account Value at the time of the
Premium Recalculation. See "Guaranteed Minimum Death Benefit Charges." This
charge compensates JHVLICO for the risk inherent in "locking in" the Base
Policy Premium at a lower rate than would have been charged if the Premium
Recalculation had been performed at the time of the Policy issuance.

The amount of any Account Value that is considered Excess Value under a
Policy may increase or decrease as a result of a Premium Recalculation. See
"Excess Value."

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

Any premium payment will be processed by JHVLICO as of the end of the
Valuation Period in which it is received, unless one of the four exceptions
noted below is applicable. The net premium begins to earn a return in the
Account or Fixed Account, as the case may be, at the close of business on the
date as of which it is processed. Each premium payment will be reduced by the
state premium tax charge, the Federal DAC tax charge and the sales charge
deducted from certain premiums. See "Charges and Expenses". The remainder is
the net premium.

The Owner at the time of application must elect an Investment Rule which
will allocate net premiums and any credits to any one or more of the ten
subaccounts. The Owner must select allocation percentages in whole numbers,
the minimum allocation to a subaccount may not be less than 1 %, and the total
allocated must equal 100%. The Owner may thereafter change the Investment Rule
prospectively at any time. The change will be effective as to any net premiums
and credits applied after receipt at JHVLICO's Home Office of notice
satisfactory to JHVLICO. If the Owner requests a change inconsistent with the
transfer provisions, the portion of the request inconsistent with the transfer
provisions will not be effective.

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

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

(2) A payment made during a Policy's grace period will be processed as
of the scheduled due date to the extent it represents the amount of
Required Premium in default; any excess will be processed as of the
date of receipt.

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

(4) That portion of any premium that JHVLICO delays accepting as
described under "Other Premium Limitations" or "7-Pay Premium
Limit" below, will be processed as of the end of the Valuation
Period in which that amount is accepted.

Flexibility as to Premium Payments. The Owner may pay more than the Required
Premium during a Policy year and may ask to be billed for an amount greater
than any Required Premium. The Owner may also

13
<PAGE>

pay amounts in addition to any billed amount. JHVLICO reserves the right to
limit premium payments above the amount of the cumulative Required Premiums
due on the Policy. At the time of Policy issuance, JHVLICO will determine
whether the planned premium billing schedule will exceed the 7-pay limit
discussed below. If so, JHVLICO will not issue the Policy unless the Owner
signs a form acknowledging that fact.

The ability to pay more than the Required Premium provides the Owner with
considerable payment flexibility in meeting the premium requirements of the
Policy. Consider a Policy with a $1,000 Required Premium and where the Owner
pays $1,250 in each of the first eight Policy years. If none of the additional
premium of $2,000 is withdrawn, the Policy will remain in force for at least
ten years without any further premium payments. During each of these ten
years, the premium received ($1,250 a year for eight years) at least equals
the aggregate Required Premiums ($1,000 a year for 10 years) on the scheduled
payment dates. In other words, the payment of more than the Required Premium
in a year can be relied upon to satisfy the Required Premium requirements in
later years.

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

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

ACCOUNT VALUE AND SURRENDER VALUE

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<PAGE>

general the Account Value for any day equals the Account Value for the
previous day, decreased by charges against the Account Value, increased or
decreased by the investment experience of the subaccounts and increased by net
premiums received. No minimum amount of Account Value is guaranteed.

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

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

The Contingent Deferred Sales Charge is deducted from the Account Value upon
surrender of the Policy during the first thirteen Policy years after issue.
The amount of this charge is set forth in a schedule under "Sales Charges".
The total charges for sales expenses, including the Contingent Deferred Sales
Charge, over the lesser of 20 years or the life expectancy of the insured,
will not exceed 9% of the payments under the Policy, assuming that all
Required Premiums are paid, over that period.

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

When Part of Policy may be Surrendered. A Policy may be partially
surrendered upon submission of a written request satisfactory to JHVLICO in
accordance with its rules. Currently, the Policy after partial surrender must
have a Sum Insured at least as large as the minimum amount for which JHVLICO
would issue a Policy on the life of the insured. The Guaranteed Death Benefit
and Required Premium for the Policy will be adjusted to reflect the new Sum
Insured. A pro-rata portion of the Account Value will be paid to the Owner and
a pro-rata portion of any Contingent Deferred Sales Charge and any
Administrative Surrender Charge will be deducted. A possible alternative to
the partial surrender of a Policy is the withdrawal of Excess Value. See
"Excess Value".

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

DEATH BENEFITS

The death benefit proceeds are payable upon the death of the insured while
the Policy is in effect. The proceeds will equal the death benefit of the
Policy, plus any additional rider benefits then due, less any Indebtedness.
The death benefit payable under Death Benefit Options 1 and 3, described
below, is the greater of the Guaranteed Death Benefit or the Current Death
Benefit. The death benefit payable under Death Benefit Option 2 described
below is the greater of the Guaranteed Death Benefit, increased by any Excess
Value (see "Excess Value") or the Current Death Benefit.

Guaranteed Death Benefit. The Guaranteed Death Benefit at issue of the
Policy is the same as the Sum Insured at issue shown in the Policy. Thereafter
the Guaranteed Death Benefit may be reduced by a partial surrender on request
of the Owner. JHVLICO guarantees that, regardless of the investment experience
of the subaccounts, the death benefit will never be less than the Guaranteed
Death Benefit.

15
<PAGE>

upon the sex, smoking status and the then attained age of the insured. The
Death Benefit Factor decreases slightly from year to year as the attained age
of the insured increases. A complete list of Death Benefit Factors is set
forth in the Policy. The Corridor Factor depends upon the then attained age of
the insured. The Corridor Factor decreases slightly (or remains the same at
older and younger ages) from year to year as the attained age of the insured
increases. A complete list of Corridor Factors is set forth in the Policy. See
"Definition of Life Insurance". The Current Death Benefit is variable; it
increases as the Account Value increases and decreases as the Account Value
decreases.

DEATH BENEFIT OPTIONS

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

Option 1: Level Death Benefit: Under this option, the death benefit will
equal the Guaranteed Death Benefit, unless the Account Value multiplied by the
Corridor Factor produces a higher death benefit. The Policy will be subject
under this option to the "guideline premium and cash value corridor" test as
defined by Internal Revenue Code ("Code") Section 7702. This option will offer
the best opportunity for the Account Value under a Policy to increase without
increasing the death benefit as quickly as it might under the other options.
When the Current Death Benefit exceeds the Guaranteed Death Benefit, the death
benefit will increase whenever there is an increase in the Policy's Account
Value and will decrease whenever there is a decrease in the Account Value, but
never below the Guaranteed Death Benefit.

Option 2: Variable Death Benefit: Under this option, the death benefit will
equal the Guaranteed Death Benefit, plus any Excess Value, unless the Account
Value multiplied by the Corridor Factor produces a higher death benefit. Under
this option, the Policy will be subject to the "guideline premium and cash
value corridor" test as defined by Code Section 7702. This option will offer
the best opportunity for the Owner who would like to have an increasing death
benefit as early as possible. When the Current Death Benefit exceeds the
Guaranteed Death Benefit plus Excess Value (see below), the death benefit will
increase whenever there is an increase in the Policy's Account Value and will
decrease whenever there is a decrease in the Account Value, but never below
the Guaranteed Death Benefit.

Option 3: Level Death Benefit With Greater Funding: Under this option, the
death benefit will equal the Guaranteed Death Benefit, unless the Account
Value, multiplied by the Death Benefit Factor, gives a higher death benefit.
Under this option, the Policy will be subject to the "cash value accumulation"
test as defined by Code Section 7702. This option will offer the best
opportunity for the Owner who is looking for an increasing death benefit in
later Policy years and/or would like to fund the policy at the "7 pay" limit
for the full 7 years. When the Current Death Benefit exceeds the Guaranteed
Death Benefit, the death benefit will increase whenever there is an increase
in the Policy's Account Value and will decrease whenever there is a decrease
in the Account Value, but never below the Guaranteed Death Benefit.

DEFINITION OF LIFE INSURANCE

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

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<PAGE>

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

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

EXCESS VALUE

As of the last Valuation Date in each Policy month, the Account Value of the
Policy will be compared against an amount (the Basic Account Value described
below) to determine if any "Excess Value" exists under the Policy. Any Excess
Value may be withdrawn (as described below) or, if the Variable Death Benefit
Option has been elected, will be used in computing the amount of variable
death benefit. Excess Value is any amount of Account Value greater than Basic
Account Value.

The annual account statement that JHVLICO sends to each Owner will specify
the amount of any excess value at the end of the reporting period. Owners who
wish this information at any other time may contact their sales representative
or telephone JHVLICO at 1-800-732-5543.

Generally, the Basic Account Value at any time is what the Policy's Account
Value would have been at that time if level annual premiums (and no additional
premiums) had been paid in the amount of the Maximum Guaranteed Recalculation
Premium at issue and earned a constant net return of 4% per annum and if the
cost of insurance charges had been deducted at the maximum rates set forth in
the Policy, and no other charges. The Maximum Guaranteed Recalculation Premium
at issue is described under "Premiums--Premium Recalculation" and its amount
is specified in each Policy. Notwithstanding the foregoing, if there is a
Policy loan outstanding, the Basic Account Value will not be less than 110% of
Policy Indebtedness. Also, in all cases where optional rider benefits have
been selected, or the insured person is in a substandard risk category, an
additional amount will be added in computing the Basic Account Value to cover
these items through the end of the then-current Policy year.

The Basic Account Value generally increases as the attained age of the
insured increases. Basic Account Value can also be thought of as what the
guaranteed cash value would be under an otherwise comparable non-variable
whole life policy. It is the amount deemed necessary to support the Policy's
benefits at any time based on accepted actuarial methods.

Excess Value may arise from two sources. The Premium Component is Excess
Value up to the amount by which the cumulative premiums paid (excluding
amounts from this component previously withdrawn) exceed the cumulative sum of
Required Premiums. The Premium Component may be zero. The Experience Component
is any amount of Excess Value above the Premium Component and arises out of
favorable investment experience or lower than maximum insurance and expense
charges.

PARTIAL WITHDRAWAL OF EXCESS VALUE

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<PAGE>

withdrawal and the associated charge, may be exercised only once in a Policy
year and will be effective as of the end of the Valuation Period in which
JHVLICO receives written notice satisfactory to it at its Home Office. The
minimum amount that may be withdrawn is $1,000. Unless the Current Death
Benefit exceeds the Guaranteed Death Benefit, a partial withdrawal will not
affect the death benefit payable. A charge of $20 is made against Account
Value for each partial withdrawal. A withdrawal will reduce the death benefit
under the Variable Death Benefit Option by the amount withdrawn and the
associated charge. A withdrawal may have significant tax consequences. See
"Tax Considerations".

An amount equal to the Excess Value withdrawn will be removed from each
subaccount in the same proportion as the Account Value is then allocated among
the subaccounts. A partial withdrawal is not a loan and, once made, cannot be
repaid. No Contingent Deferred Sales Charge or Administrative Surrender Charge
is deducted upon a partial withdrawal. Amounts withdrawn may reduce the
cumulative amount of premiums received for purposes of determining whether the
premium requirements of the Policy have been met. Moreover, because the
Account Value is reduced by a partial withdrawal, the premium that results
from a Premium Recalculation will be higher because of the partial withdrawal.

TRANSFERS AMONG SUBACCOUNTS

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

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

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

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

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<PAGE>

Eligibility for this option is limited to an Owner who has $2500 or more in
the Money Market Subaccount on the day the transfer is scheduled to begin.
Scheduled transfers may be made to any one or more but not more than nine of
any other variable subaccounts but the amount to be transferred monthly to any
subaccount must be $100 or more.

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

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

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

An Owner who authorizes telephone transactions will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
transaction instructions which JHVLICO reasonably believes to be genuine.
JHVLICO employs procedures which include requiring personal identification,
tape recording calls, and providing written confirmation to the Owner. If
JHVLICO does not employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, it may be liable for any loss due to
unauthorized or fraudulent instructions.

LOAN PROVISIONS AND INDEBTEDNESS

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

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<PAGE>

The amount of any outstanding loan plus accrued interest is called the
"Indebtedness". Except when used to pay premiums, a loan will not be permitted
unless it is at least $300. The Owner may repay all or a portion of any
Indebtedness while the insured is living and the Policy is not in a grace
period. When a loan is made, an amount equal to the loan proceeds will be
transferred out of the Account and the Fixed Account, as applicable. This
amount is allocated to the Loan Account, a portion of JHVLICO's general
account. Each subaccount will be reduced in the same proportion as the Account
Value is then allocated among the subaccounts. Upon each loan repayment, the
same proportionate amount of the entire loan as was borrowed from the Fixed
Account will be repaid to the Fixed Account. The remainder of the loan
repayment will be allocated to the appropriate subaccounts as stipulated in
the current Investment Rule. For example, if the entire loan outstanding is
$3000 of which $1000 was borrowed from the Fixed Account, then upon a
repayment of $1500, $500 would be allocated to the Fixed Account and the
remaining $1000 would be allocated to the appropriate subaccounts as
stipulated in the current Investment Rule. If an Owner wishes any payment to
constitute a loan repayment (rather than a premium payment), the Owner must so
specify.

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

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

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

DEFAULT AND OPTIONS ON LAPSE

Premium Grace Period, Default and Lapse. Any Required Premium, unless paid
in advance, is in default if not paid on or before its Modal scheduled payment
date, but the Policy provides a 61-day grace period for the payment of each
such amount. (This grace period does not apply to the receipt of the Minimum
First Premium.) The insurance continues in full force during the grace period
but, if the insured dies during the grace period, the amount in default is
deducted from the death benefit otherwise payable. The premium requirement may
also be satisfied and, thus, default may be avoided, if any Excess Value is
available on the scheduled due date.

Written notice will be furnished to the Owner at his or her last known
address, at least 31 days prior to the end of the grace period, specifying the
minimum amount which must be paid to continue the Policy in force on a premium
paying basis after the end of the grace period. If a payment at least equal to
the amount in default is not received by the end of the grace period, the
Policy will lapse. If payment by the Owner of an amount at least equal to the
amount in default is received prior to the end of the grace period, the Policy
will no longer be in default. The portion of the payment equal to the amount
in default will be processed as if it had been received the day it was due;
any excess payment will be processed as of the end of the Valuation Period in
which it is received. See "Premium Payments".

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<PAGE>

Options on Lapse. If a Policy lapses, the Surrender Value on the date of
lapse is applied under one of the following options for continued insurance
not requiring further payment of premiums. These options provide for Variable
or Fixed Paid-Up Insurance or Fixed Extended Term Insurance on the life of the
insured commencing on the date of lapse.

Both the Variable and Fixed Paid-Up Insurance options provide an amount of
paid-up whole life insurance, determined in accordance with the Policy, which
the Surrender Value will purchase. The amount of Variable Paid-Up Insurance
may then increase or decrease, subject to any guarantee, in accordance with
the investment experience of the subaccounts. The Fixed Paid-Up Insurance
option provides a fixed and level amount of insurance. The Fixed Extended Term
Insurance option provides a fixed amount of insurance determined in accordance
with the Policy, with the insurance coverage continuing for as long a period
as the available Policy values will purchase.

If no option has been elected before the end of the grace period, the Fixed
Extended Term Insurance option automatically applies unless the amount of
Fixed Paid-Up Insurance would equal or exceed the amount of Fixed Extended
Term Insurance or unless the insured is a substandard risk, in either of which
cases Fixed Paid-Up Insurance is provided.

The Variable Paid-Up Insurance option is not available unless the initial
amount of Variable Paid-Up Insurance is at least $5,000.

A Policy continued under any option may be surrendered for its Surrender
Value while the insured is living. Loans may be available under the Variable
and Fixed Paid-Up Insurance options.

Reinstatement. The Policy may be reinstated in accordance with its terms
(including evidence of insurability satisfactory to JHVLICO and payment of the
required premium and charges) within 3 years after the beginning of the grace
period unless the Surrender Value has been paid or otherwise exhausted or the
period of any Fixed Extended Term Insurance has expired.

EXCHANGE PRIVILEGE

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

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

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

CHARGES AND EXPENSES

CHARGES DEDUCTED FROM PREMIUMS

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

State Premium Tax Charge. A charge equal to 2.35% of each premium payment
will be deducted from each premium payment. Premium taxes vary from state to
state, ranging from zero to 4% currently. A charge of 2.35% is made,
regardless of the premium tax imposed by any state. The 2.35% rate is the
average rate expected to be paid on premiums received in all states over the
lifetimes of the insureds covered by the Policies.

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<PAGE>

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

SALES CHARGES

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

From Premiums. Part of the sales charge is deducted from premiums received.
This amount is 5% of the premiums received in any Policy year that do not
exceed that year's total Required Premium. JHVLICO currently intends to make
this deduction only in the first 10 Policy years, but this is not
contractually guaranteed and the right is reserved to continue deductions over
a longer period. Because the Policies were first offered for sale in 1994, no
Policies have yet been outstanding for more than 10 years.

JHVLICO will waive a portion of the sales charge (it is currently waiving a
portion equal to 1 1/2% of the Required Premium) otherwise to be deducted on a
Policy with a current Sum Insured of $250,000 or higher. The continuation of
this waiver is not contractually guaranteed and the waiver may be withdrawn or
modified by JHVLICO in the future.

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

Paying more than one Required Premium in any Policy year could reduce the
Owner's total sales charges. For example, if a Required Premium of $1,000 were
paid in each of the first two Policy years, total sales charges deducted would
be $100. If instead both of these Required Premiums were paid during the first
Policy year, the total sales charge deducted would be only $50. Nevertheless,
attempting to accelerate or decelerate premium payments to reduce the
potential sales charge deducted from premiums is not recommended. Any such
acceleration of premium payments could result in a greater Contingent Deferred
Sales Charge (and, hence, a greater overall sales charge) if the Policy were
surrendered and would increase the likelihood that the Policy would become a
modified endowment (see "Tax Considerations--Policy Proceeds"). On the other
hand, to pay less than the amount of Required Premiums by their due dates is
to run the risk that the Policy will lapse, in which case the Owner will lose
insurance coverage and be subject to additional charges.

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<PAGE>

on or after the Policy's thirteenth anniversary, and it will be reduced for a
Policy that lapses or is surrendered between the end of the seventh Policy
year and the end of the thirteenth Policy year.

The Contingent Deferred Sales Charge is a percentage of the lesser of (a)
the total amount of premiums paid before the date of surrender or lapse and
(b) the sum of the Base Policy Premiums due on or before the date of surrender
or lapse. (For this purpose Base Policy Premiums are pro-rated through the end
of the Policy Month in which the surrender or lapse occurs).

<TABLE>
<CAPTION>
Maximum Contingent Deferred Sales
Charge as a Percentage of Base Policy
Premiums Due Through Effective
For Surrenders or Lapses Effective During: Date of Surrender or Lapse
------------------------------------------ -------------------------------------
<S> <C>
Policy Years 1-6....................... 15.00%
Policy Year 7.......................... 12.85%
Policy Year 8.......................... 10.00%
Policy Year 9.......................... 7.77%
Policy Year 10......................... 6.00%
Policy Year 11......................... 4.55%
Policy Year 12......................... 2.92%
Policy Year 13......................... 1.54%
Policy Year 14 and Later............... 0%
</TABLE>
- --------

The amount of the Contingent Deferred Sales Charge is calculated on the
basis of the Base Policy Premium for the age of the insured at the time of
issue of the Policy.

The absence of any need to pay a Required Premium because of the existence
of Excess Value on a scheduled due date does not impact the amount of Base
Policy Premiums deemed to have been due to date for purposes of the Contingent
Deferred Sales Charge. For example, if the size of the Account Value is
sufficiently large that the Required Premium for the fifth Policy year
otherwise payable need not be paid and the Owner surrenders the Policy at the
end of the fifth Policy year, the Contingent Deferred Sales Charge would be
based on the sum of five Base Policy Premiums on the Policy (or, if less, the
total amount of premiums actually paid during all five Policy years).
Similarly, if a Premium Recalculation is required or effected, the amount of
premiums due to the date of any subsequent surrender or lapse for purposes of
calculating the Contingent Deferred Sales Charge will continue to be based on
the Base Policy Premium in effect prior to such recalculation.

The Contingent Deferred Sales Charge reaches its maximum at the end of the
sixth Policy year, stays level in the seventh Policy year and is reduced in
each Policy year thereafter until it reaches zero in Policy year 14. At issue
ages higher than age 54, the maximum is reached at an earlier Policy year, and
may be reduced to zero over a shorter number of years.

ADMINISTRATIVE SURRENDER CHARGE

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<PAGE>

not charged. A Policy of less than $250,000 Guaranteed Death Benefit at time
of surrender or lapse is not currently charged if the surrender or lapse is
after the fourth Policy year and is charged no more than $300 if the surrender
or lapse is in the first four Policy years. These lower current charges may be
withdrawn or modified by JHVLICO at some future date.

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

REDUCED CHARGES FOR ELIGIBLE GROUPS

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

CHARGES DEDUCTED FROM ACCOUNT VALUE

The following charges are deducted from Account Value:

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

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

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

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

24
<PAGE>

time, but they will never be more than the guaranteed maximum rates based on
the 1980 Commissioners' Standard Ordinary Mortality Tables set forth in the
Policy.

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

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

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

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

Lower current insurance rates are offered at most ages for insureds who
qualify as non-smokers. To qualify, an insured must meet additional
requirements that relate to smoking habits.

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

Guaranteed Death Benefit Charge. JHVLICO deducts a charge from that portion
of the Account Value attributable to the variable subaccounts for the minimum
death benefit that has been guaranteed. JHVLICO guarantees that the death
benefit will never be less than the Sum Insured. In return for making this
guarantee, JHVLICO currently makes a monthly charge of 1c per $1000 of the
current Sum Insured. This charge may be increased by JHVLICO but will never
exceed 3c per $1000 of the current Sum Insured.

When a Premium Recalculation is effected, and the new Base Policy Premium is
less than the Guaranteed Maximum Recalculated Premium for the insured's age at
issue of the Policy, a one-time deduction is made from the amount applied as
compensation for the additional guarantee. The current charge is 1 1/2% of the
portion of the Account Value applied to reduce the new Base Policy Premium to
an amount below the Guaranteed Maximum Recalculated Premium for the insured's
age at issue. This charge may be increased by JHVLICO but it will never exceed
3% of the amount applied.

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

25
<PAGE>

premium is collected in two ways: up to 8.6% of the additional premium is
deducted from premiums when paid and the remainder of the additional premium
is deducted monthly from Account Value in equal installments.

Charges for Additional Insurance Benefits. An additional Required Premium
must be paid if the Owner elects to purchase an additional insurance benefit.
This additional premium is collected in two ways: up to 8.6% of the additional
premium is deducted from premiums when paid and the remainder of the
additional premium is deducted monthly from Account Value in equal
installments.

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

Charge for Partial Withdrawal. On or after the first Policy anniversary, the
Owner may withdraw all or part of any Excess Value in the Policy. The amount
to be withdrawn must be at least $1,000. An administrative charge equal to $20
will be deducted from the Account Value on the date of withdrawal.

Guarantee of Premiums and Certain Charges. The Policy's Base Policy Premium
is guaranteed not to increase, except that a larger Base Policy Premium may
result from the Premium Recalculation. The state premium tax charge, the
Federal DAC tax charge, mortality and expense risk charge, the charge for
partial withdrawals and the Issue Charge are guaranteed not to increase over
the life of the Policy. The maintenance charge, the Guaranteed Death Benefit
Charge, the sales charges, the Administrative Surrender Charge and the
insurance charge are guaranteed not to exceed the maximums set forth in the
Policy.

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

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

DISTRIBUTION OF POLICIES

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

26
<PAGE>

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

The maximum commission payable to an agent for selling a Policy is 50% of
the Base Policy Premiums (prior to any Premium Recalculation) that would be
payable in the first Policy year, 8% of such premiums payable in the second,
third and fourth Policy years and 3% of any such premiums received by JHVLICO
in later years. The maximum commission on any other premium paid in any year
is 3%.

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

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

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

TAX CONSIDERATIONS

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

POLICY PROCEEDS

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

27
<PAGE>

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

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

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

Distributions under Policies on which premiums greater than the "7-pay"
limit have been paid will be treated as distributions from a "modified
endowment," which are subject to taxation based on Federal tax legislation.
The Owner of such a Policy will be taxed on distributions such as loans,
surrenders, partial surrenders and withdrawals to the extent of any income
(gain) to the Owner (income-first basis). The distributions affected will be
those made on or after, and within the two year period prior to the time the
Policy becomes a modified endowment. Additionally, a 10% penalty tax may be
imposed on income distributed before the Owner attains age 59 1/2.
Furthermore, any time there is a "material change" in a Policy (such as an
increase in Sum Insured, the addition of certain other Policy benefits after
issue, or reinstatement of a lapsed policy), the Policy will be subject to a
new "7-pay" test, with the possibility of a tax on distributions if it were
subsequently to become a modified endowment. Moreover, if benefits under a
Policy are reduced (such as a reduction in the Sum Insured or death benefit or
the reduction or cancellation of certain rider benefits, or Policy
termination) during the 7 years in which the 7-pay test is being applied, the
7-pay limit will be recalculated based on the reduced benefits. If the
premiums paid to date are greater than the recalculated 7-pay limit, the
policy will become a modified endowment.

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

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

CHARGE FOR JHVLICO'S TAXES

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

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

28
<PAGE>

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.

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO

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

<TABLE>
<CAPTION>
Directors--Officers Principal Occupations
------------------- ---------------------
<S> <C>
David F. D'Alessandro Chairman of the Board and Chief Execu-
tive Officer of JHVLICO; Senior Execu-
tive Vice President and Director, John
Hancock Mutual Life Insurance Company.
Henry D. Shaw Vice Chairman of the Board and President
of JHVLICO; Senior Vice President, John
Hancock Mutual Life Insurance Company.
Thomas J. Lee Director of JHVLICO; Vice President,
John Hancock Mutual Life Insurance Com-
pany.
Michele G. Van Leer Director of JHVLICO; Vice President,
John Hancock Mutual Life Insurance Com-
pany.
Francis C. Cleary, Jr. Director and Counsel, JHVLICO; Vice
President and Counsel, John Hancock Mu-
tual Life Insurance Company.
Joseph A. Tomlinson Director and Vice President, JHVLICO;
Vice President, John Hancock Mutual Life
Insurance Company.
Robert R. Reitano Director of JHVLICO; Vice President,
John Hancock Mutual Life Insurance Com-
pany.
Robert S. Paster Director and Actuary of JHVLICO; Second
Vice President, John Hancock Mutual Life
Insurance Company.
Barbara L. Luddy Director, JHVLICO; Second Vice Presi-
dent, John Hancock Mutual Life Insurance
Company.
Daniel L. Ouellette Vice President, Marketing, JHVLICO; Vice
President, John Hancock Mutual Life In-
surance Company.
Patrick F. Smith Controller of JHVLICO; Assistant Con-
troller, John Hancock Mutual Life Insur-
ance Company.
</TABLE>

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

29
<PAGE>

REPORTS

In each Policy year (except while the Policy is continued in effect under a
fixed option on lapse) a statement will be sent to the Owner setting forth the
amount of the Current and Guaranteed Death Benefits, the Account Value, the
portion of the Account Value in each subaccount, the Surrender Value, premiums
received and charges deducted from premium since the last report, and any
outstanding indebtedness (and interest charged for the preceding Policy year)
as of the last day of such year. Moreover, confirmations will be furnished to
Owners of transfers among subaccounts, Policy loans, partial withdrawals of
Excess Value and certain other Policy transactions. Premium payments not in
response to a billing notice are "unscheduled" and will be separately
confirmed. Therefore, an Owner who makes a premium payment that differs by
more than $25 from that billed will receive a separate confirmation of that
premium payment.

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

VOTING PRIVILEGES

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

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

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

JHVLICO may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to change the investment objectives of the Portfolios or to
approve or disapprove an investment advisory or underwriting contract for the
Fund. JHVLICO also may disregard voting instructions in favor of changes
initiated by an Owner or a Fund's Board of Trustees in an investment policy,
investment adviser or principal underwriter of the Fund, if JHVLICO (i)
reasonably disapproves of such changes and (ii) in the case of a change of
investment policy or investment adviser, makes a good-faith determination that
the proposed change is contrary to state law or prohibited by state regulatory
authorities or that the change would be inconsistent with a variable
subaccount's investment objectives or would

30
<PAGE>

result in the purchase of securities which vary from the general quality and
nature of investments and investment techniques utilized by other separate
accounts of JHVLICO or of an affiliated life insurance company, which separate
accounts have investment objectives similar to those of the variable
subaccount. In the event JHVLICO does disregard voting instructions, a summary
of that action and the reasons for such action will be included in the next
semi-annual report to Owners.

CHANGES THAT JHVLICO CAN MAKE

The voting privileges described in this Prospectus are afforded based on
JHVLICO's understanding of applicable Federal securities law requirements. To
the extent that applicable law, regulations or interpretations change to
eliminate or restrict the need for such voting privileges, JHVLICO reserves
the right to proceed in accordance with any such revised requirements. JHVLICO
also reserves the right, subject to compliance with applicable law, including
approval of Owners if so required, (1) to transfer assets determined by
JHVLICO to be associated with the class of policies to which the Policies
belong from the Account to another separate account or variable subaccount by
withdrawing the same percentage of each investment in the Account with
appropriate adjustments to avoid odd lots and fractions, (2) to operate the
Account as a "management-type investment company" under the 1940 Act, or in
any other form permitted by law, the investment adviser of which would be
JHVLICO, an affiliate or John Hancock, (3) to deregister the Account under the
1940 Act, (4) to substitute for the Portfolio shares held by a subaccount any
other investment permitted by law, and (5) to take any action necessary to
comply with or obtain any exemptions from the 1940 Act. JHVLICO would notify
Owners of any of the foregoing changes and, to the extent legally required,
obtain approval of Owners and any regulatory body prior thereto. Such notice
and approval, however, may not be legally required in all cases.

STATE REGULATION

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

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

LEGAL MATTERS

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

REGISTRATION STATEMENT

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

31
<PAGE>

EXPERTS

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

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

FINANCIAL STATEMENTS

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

32
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1995

<TABLE>
<CAPTION>
Short-Term
Select Real Estate Special U.S.
Stock Bond International Money Market Equity Opportunities Stock Government
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
------------ ----------- ------------- ------------ ----------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investment in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value .......... $113,649,478 $56,377,102 $30,932,790 $19,684,014 $22,246,848 $20,167,152 $217,256,965 $2,466,466
Receivable from
John Hancock
Variable Life
Insurance
Company......... 172,252 67,008 125,749 687,213 12,476 82,622 154,538 15,053
------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------
Total Assets.... 113,821,730 56,444,110 31,058,539 20,371,227 22,259,324 20,249,774 217,411,503 2,481,519
Liabilities
Payable to John
Hancock Variable
Series Trust I . 166,670 64,238 124,279 686,277 11,432 81,681 143,853 14,960
Asset charges
payable ........ 5,582 2,770 1,470 936 1,044 940 10,686 93
------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------
Total
Liabilities.... 172,252 67,008 125,749 687,213 12,476 82,621 154,539 15,053
------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------
Total Net Assets. $113,649,478 $56,377,102 $30,932,790 $19,684,014 $22,246,848 $20,167,153 $217,256,964 $2,466,466
============ =========== =========== =========== =========== =========== ============ ==========
Net Assets
Attributable to
John Hancock
Variable Life
Insurance
Company......... -- -- $ 902,753 -- $ 933,401 $ 683,604 -- $1,907,125
Attributable to
Policyholders... $113,649,478 $56,377,102 30,030,037 $19,684,014 21,313,447 19,483,549 $217,256,964 559,341
------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------
Total Net As-
sets........... $113,649,478 $56,377,102 $30,932,790 $19,684,014 $22,246,848 $20,167,153 $217,256,964 $2,466,466
============ =========== =========== =========== =========== =========== ============ ==========
<CAPTION>
Managed
Subaccount
------------
<S> <C>
Assets
Investment in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value .......... $262,405,591
Receivable from
John Hancock
Variable Life
Insurance
Company......... 454,178
------------
Total Assets.... 262,859,769
Liabilities
Payable to John
Hancock Variable
Series Trust I . 441,295
Asset charges
payable ........ 12,883
------------
Total
Liabilities.... 454,178
------------
Total Net Assets. $262,405,591
============
Net Assets
Attributable to
John Hancock
Variable Life
Insurance
Company......... --
Attributable to
Policyholders... $262,405,591
------------
Total Net As-
sets........... $262,405,591
============
</TABLE>
- ------

See accompanying notes.

33
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Select Stock Subaccount Bond Subaccount International Subaccount
---------------------------------- ---------------------------------- ----------------------------------
Year Ended December 31 Year Ended December 31 Year Ended December 31
---------------------------------- ---------------------------------- ----------------------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
----------- ---------- ---------- ---------- ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from
the Portfolios
of John Hancock
Variable Series
Trust I........ $ 9,127,019 $2,816,218 $1,554,404 $3,997,055 $2,577,160 $2,170,190 $ 313,290 $ 334,752 $ 190,792
Expenses:
Mortality and
expense risks.. 527,639 251,870 112,906 288,879 210,831 178,618 158,467 92,706 23,714
----------- ---------- ---------- ---------- ----------- ---------- ---------- ----------- ----------
Net Investment
Income......... 8,599,380 2,564,348 1,441,498 3,708,176 2,366,329 1,991,572 154,823 242,046 167,078
Net realized and
Unrealized Gain
(Loss) on
Investments:
Net realized
gain........... 839,997 637,109 599,094 63,373 126,799 603,946 709,715 390,493 100,167
Net unrealized
appreciation
(depreciation)
during the
year........... 13,485,769 (4,019,164) 294,584 4,386,358 (3,555,116) 195,384 1,169,158 (1,861,119) 1,229,760
----------- ---------- ---------- ---------- ----------- ---------- ---------- ----------- ----------
Net Realized and
Unrealized Gain
(Loss) on
Investments..... 14,325,766 (3,382,055) 893,678 4,449,731 (3,428,317) 799,330 1,878,873 (1,470,626) 1,329,927
----------- ---------- ---------- ---------- ----------- ---------- ---------- ----------- ----------
Net Increase
(Decrease) in
Net Assets
Resulting From
Operations...... $22,925,146 $(817,707) $2,335,176 $8,157,907 $(1,061,988) $2,790,902 $2,033,696 $(1,228,580) $1,497,005
=========== ========== ========== ========== =========== ========== ========== =========== ==========
<CAPTION>
Money Market Subaccount
----------------------------
Year Ended December 31
----------------------------
1995 1994 1993
---------- -------- --------
<S> <C> <C> <C>
Investment
Income:
Distributions
received from
the Portfolios
of John Hancock
Variable Series
Trust I........ $1,021,645 $730,311 $179,437
Expenses:
Mortality and
expense risks.. 108,941 108,665 35,572
---------- -------- --------
Net Investment
Income......... 912,704 621,646 143,865
Net realized and
Unrealized Gain
(Loss) on
Investments:
Net realized
gain........... -- -- --
Net unrealized
appreciation
(depreciation)
during the
year........... -- -- --
---------- -------- --------
Net Realized and
Unrealized Gain
(Loss) on
Investments..... -- -- --
---------- -------- --------
Net Increase
(Decrease) in
Net Assets
Resulting From
Operations...... $ 912,704 $621,646 $143,865
========== ======== ========
</TABLE>
- ------

See accompanying notes.

34
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

<TABLE>
<CAPTION>
Special
Opportunities
Real Estate Equity Subaccount Subaccount* Stock Subaccount
------------------------------- ------------------------ -----------------------------------
Year Ended December 31 Year Ended Period Ended Year Ended December 31
------------------------------- December 31 December 31 -----------------------------------
1995 1994 1993 1995 1994 1995 1994 1993
---------- --------- -------- ----------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from
the Portfolios
of John Hancock
Variable Series
Trust I......... $1,424,926 $ 993,202 $356,397 $ 483,189 $ 17,225 $20,402,345 $ 8,501,308 $8,517,796
Expenses:
Mortality and
expense risks... 117,861 89,294 38,740 57,525 4,657 1,040,658 679,481 489,537
---------- --------- -------- ---------- -------- ----------- ----------- ----------
Net Investment
Income.......... 1,307,065 903,908 317,657 425,664 12,568 19,361,687 7,821,827 8,028,259
Net Realized and
Unrealized Gain
(Loss) on
Investments:
Net realized
gain (loss)..... (132,712) 302,731 381,959 118,503 (5,379) 1,182,185 913,991 1,623,888
Net unrealized
appreciation
(depreciation)
during the year. 1,164,732 (984,298) (16,951) 2,655,206 (8,734) 28,390,863 (9,911,015) 190,590
---------- --------- -------- ---------- -------- ----------- ----------- ----------
Net Realized and
Unrealized Gain
(Loss) on
Investments...... 1,032,020 (681,567) 365,008 2,773,709 (14,113) 29,573,048 (8,997,024) 1,814,478
---------- --------- -------- ---------- -------- ----------- ----------- ----------
Net Increase
(Decrease) in Net
Assets Resulting
From Operations.. $2,339,085 $ 222,341 $682,665 $3,199,373 $ (1,545) $48,934,735 $(1,175,197) $9,842,737
========== ========= ======== ========== ======== =========== =========== ==========
<CAPTION>
Short-Term
U.S.
Government
Subaccount* Managed Subaccount
------------------------ -------------------------------------
Year Ended Period Ended Year Ended December 31
December 31 December 31 -------------------------------------
1995 1994 1995 1994 1993
----------- ------------ ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from
the Portfolios
of John Hancock
Variable Series
Trust I......... $103,070 $ 26,186 $24,582,126 $ 7,481,584 $10,157,641
Expenses:
Mortality and
expense risks... 8,335 729 1,324,428 953,550 725,512
----------- ------------ ----------- ------------- -----------
Net Investment
Income.......... 94,735 25,457 23,257,698 6,528,034 9,432,129
Net Realized and
Unrealized Gain
(Loss) on
Investments:
Net realized
gain (loss)..... 20,630 (1,779) 3,530,479 1,168,573 2,225,422
Net unrealized
appreciation
(depreciation)
during the year. 77,274 (23,668) 24,157,024 (12,012,242) 830,965
----------- ------------ ----------- ------------- -----------
Net Realized and
Unrealized Gain
(Loss) on
Investments...... 97,904 (25,447) 27,687,503 (10,843,669) 3,056,387
----------- ------------ ----------- ------------- -----------
Net Increase
(Decrease) in Net
Assets Resulting
From Operations.. $192,639 $ 10 $50,945,201 $ (4,315,635) $12,488,516
=========== ============ =========== ============= ===========
</TABLE>
- ----
* The Short-Term U.S. Government and the Special Opportunities subaccounts
commenced operations on May 1 and May 6, 1994, respectively.

See accompanying notes.

35
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
Select Stock Subaccount Bond Subaccount
-------------------------------------- -------------------------------------
Year ended December 31 Year ended December 31
-------------------------------------- -------------------------------------
1995 1994 1993 1995 1994 1993
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in Net
Assets
From operations:
Net investment
income.......... $ 8,599,380 $ 2,564,348 $ 1,441,498 $ 3,708,176 $ 2,366,329 $ 1,991,572
Net realized
gains........... 839,997 637,109 599,094 63,373 126,799 603,946
Net unrealized
appreciation
(depreciation)
during the year. 13,485,769 (4,019,164) 294,584 4,386,358 (3,555,116) 195,384
------------ ----------- ----------- ----------- ----------- -----------
Net increase
(decrease) in
net assets
resulting from
operations...... 22,925,146 (817,707) 2,335,176 8,157,907 (1,061,988) 2,790,902
From policyholder
transactions:
Net premiums from
policyholders 51,711,591 51,007,044 18,577,185 23,206,469 20,368,275 16,530,998
Net benefits to
policyholders (19,250,850) (18,333,049) (7,776,653) (14,981,037) (11,586,357) (11,672,488)
------------ ----------- ----------- ----------- ----------- -----------
Net increase in
net assets from
policyholder
transactions.... 32,460,741 32,673,995 10,800,532 8,225,432 8,781,918 4,858,510
------------ ----------- ----------- ----------- ----------- -----------
Net increase in
net assets..... 55,385,887 31,856,288 13,135,708 16,383,339 7,719,930 7,649,412
Net Assets:
Beginning of
year............ 58,263,591 26,407,303 13,271,595 39,993,763 32,273,833 24,624,421
------------ ----------- ----------- ----------- ----------- -----------
End of year...... $113,649,478 $58,263,591 $26,407,303 $56,377,102 $39,993,763 $32,273,833
============ =========== =========== =========== =========== ===========
<CAPTION>
International Subaccount Money Market Subaccount
------------------------------------- -------------------------------------
Year ended December 31 Year ended December 31
------------------------------------- -------------------------------------
1995 1994 1993 1995 1994 1993
------------ ------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Increase
(Decrease) in Net
Assets
From operations:
Net investment
income.......... $ 154,823 $ 242,046 $ 167,078 $ 912,704 $ 621,646 $ 143,865
Net realized
gains........... 709,715 390,493 100,167 -- -- --
Net unrealized
appreciation
(depreciation)
during the year. 1,169,158 (1,861,119) 1,229,760 -- -- --
------------ ------------ ----------- ------------ ------------ -----------
Net increase
(decrease) in
net assets
resulting from
operations...... 2,033,696 (1,228,580) 1,497,005 912,704 621,646 143,865
From policyholder
transactions:
Net premiums from
policyholders 17,644,301 21,632,192 5,920,835 21,430,904 58,454,926 8,826,180
Net benefits to
policyholders (12,682,229) (5,717,640) (1,262,467) (19,852,589) (51,398,824) (4,772,045)
------------ ------------ ----------- ------------ ------------ -----------
Net increase in
net assets from
policyholder
transactions.... 4,962,072 15,914,552 4,658,368 1,578,315 7,056,102 4,054,135
------------ ------------ ----------- ------------ ------------ -----------
Net increase in
net assets..... 6,995,768 14,685,972 6,155,373 2,491,019 7,677,748 4,198,000
Net Assets:
Beginning of
year............ 23,937,022 9,251,050 3,095,677 17,192,995 9,515,247 5,317,247
------------ ------------ ----------- ------------ ------------ -----------
End of year...... $30,932,790 $23,937,022 $9,251,050 $19,684,014 $17,192,995 $9,515,247
============ ============ =========== ============ ============ ===========
</TABLE>
- ------

See accompanying notes.

36
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

<TABLE>
<CAPTION>
Special
Real Estate Opportunities
Equity Subaccount Subaccount* Stock Subaccount
------------------------------------- ------------------------- ---------------------------------------
Year Ended Year Ended
December 31 Year Ended Period ended December 31
------------------------------------- December 31 December 31 ---------------------------------------
1995 1994 1993 1995 1994 1995 1994 1993
----------- ----------- ----------- ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase
(decrease) in Net
Assets
From operations:
Net investment
income........... $ 1,307,065 $ 903,908 $ 317,657 $ 425,664 $ 12,568 $ 19,361,687 $ 7,821,827 $ 8,028,259
Net realized
gains (losses)... (132,712) 302,731 381,959 118,503 (5,379) 1,182,185 913,991 1,623,888
Net unrealized
appreciation
(depreciation)
during the year.. 1,164,732 (984,298) (16,951) 2,655,206 (8,734) 28,390,863 (9,911,015) 190,590
----------- ----------- ----------- ----------- ---------- ------------ ------------ -----------
Net increase
(decrease) in net
assets resulting
from operations.. 2,339,085 222,341 682,665 3,199,373 (1,545) 48,934,735 (1,175,197) 9,842,737
From policyholder
transactions:
Net premiums from
policyholders 10,547,817 13,824,052 9,937,807 15,268,369 5,297,072 76,729,116 67,541,450 54,985,522
Net benefits to
policyholders (10,156,449) (5,898,220) (2,766,409) (3,375,070) (221,046) (41,442,095) (31,434,994) (29,859,615)
----------- ----------- ----------- ----------- ---------- ------------ ------------ -----------
Net increase in
net assets from
policyholder
transactions..... 391,368 7,925,832 7,171,398 11,893,299 5,076,026 35,287,021 36,106,456 25,125,907
----------- ----------- ----------- ----------- ---------- ------------ ------------ -----------
Net increase in
net assets...... 2,730,453 8,148,173 7,854,063 15,092,672 5,074,481 84,221,756 34,931,259 34,968,644
Net assets:
Beginning of
period........... 19,516,395 11,368,222 3,514,159 5,074,481 -- 133,035,208 98,103,949 63,135,305
----------- ----------- ----------- ----------- ---------- ------------ ------------ -----------
End of period.... $22,246,848 $19,516,395 $11,368,222 $20,167,153 $5,074,481 $217,256,964 $133,035,208 $98,103,949
=========== =========== =========== =========== ========== ============ ============ ===========
<CAPTION>
Short-Term
U.S.
Government
Subaccount* Managed Subaccount
------------------------- -----------------------------------------
Year Ended
Year Ended Period ended December 31
December 31 December 31 -----------------------------------------
1995 1994 1995 1994 1993
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Increase
(decrease) in Net
Assets
From operations:
Net investment
income........... $ 94,735 $ 25,457 $ 23,257,698 $ 6,528,034 $ 9,432,129
Net realized
gains (losses)... 20,630 (1,779) 3,530,479 1,168,573 2,225,422
Net unrealized
appreciation
(depreciation)
during the year.. 77,274 (23,668) 24,157,024 (12,012,242) 830,965
------------ ------------ ------------- ------------- -------------
Net increase
(decrease) in net
assets resulting
from operations.. 192,639 10 50,945,201 (4,315,635) 12,488,516
From policyholder
transactions:
Net premiums from
policyholders 2,846,775 1,178,590 80,690,820 87,141,271 67,668,655
Net benefits to
policyholders (1,637,415) (114,133) (48,646,275) (43,706,261) (40,199,547)
------------ ------------ ------------- ------------- -------------
Net increase in
net assets from
policyholder
transactions..... 1,209,360 1,064,457 32,044,545 43,435,010 27,469,108
------------ ------------ ------------- ------------- -------------
Net increase in
net assets...... 1,401,999 1,064,467 82,989,746 39,119,375 39,957,624
Net assets:
Beginning of
period........... 1,064,467 -- 179,415,845 140,296,470 100,338,846
------------ ------------ ------------- ------------- -------------
End of period.... $2,466,466 $1,064,467 $262,405,591 $179,415,845 $140,296,470
============ ============ ============= ============= =============
</TABLE>
- ----
* The Short-Term U.S. Government and the Special Opportunities subaccounts
commenced operations on May 1 and May 6, 1994, respectively.

See accompanying notes.

37
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995

NOTE 1--ORGANIZATION

John Hancock Variable Life Account V (the Account) is a separate investment
account of John Hancock Variable Life Insurance Company (JHVLICO), a wholly-
owned subsidiary of John Hancock Mutual Life Insurance Company (John Hancock).
The Account was formed to fund variable life insurance policies (Policies)
issued by JHVLICO. The Account is operated as a unit investment trust
registered under the Investment Company Act of 1940, as amended, and currently
consists of nine subaccounts. The assets of each subaccount are invested
exclusively in shares of a corresponding portfolio of John Hancock Variable
Series Trust I (the Fund). New subaccounts may be added as new portfolios are
added to the Fund, or as other investment options are developed and made
available to policyholders. The nine portfolios of the Fund which are
currently available are Select Stock, Bond, International, Money Market, Real
Estate Equity, Special Opportunities, Stock, Short-Term U.S. Government and
Managed. Each portfolio has a different investment objective.

The net assets of the Account may not be less than the amount required under
state insurance law to provide for death benefits (without regard to the
minimum death benefit guarantee) and other policy benefits. Additional assets
are held in JHVLICO's general account to cover the contingency that the
guaranteed minimum death benefit might exceed the death benefit which would
have been payable in the absence of such guarantee.

The assets of the Account are the property of JHVLICO. The portion of the
Account's assets applicable to the policies may not be charged with
liabilities arising out of any other business JHVLICO may conduct.

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES

Valuation of Investments: Investment in shares of the Fund are valued at the
reported net asset values of the respective portfolios. Investment
transactions are recorded on the trade date. Dividend income is recognized on
the ex-dividend date. Realized gains and losses on sales of fund shares are
determined on the basis of identified cost.

Federal Income Taxes: The operations of the Account are included in the
federal income tax return of JHVLICO, which is taxed as a life insurance
company under the Internal Revenue Code. JHVLICO has the right to charge the
Account any federal income taxes, or provision for federal income taxes,
attributable to the operations of the Account or to the policies funded in the
Account. Currently, JHVLICO does not make a charge for income or other taxes.
Charges for state and local taxes, if any, attributable to the Account may
also be made.

Expenses: JHVLICO assumes mortality and expense risks of the variable life
insurance policies for which asset charges are deducted at an annual rate of
.60% of net assets (excluding policy loans) of the Account. In addition, a
monthly charge at varying levels for the cost of insurance is deducted from
the net assets of the Account.

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

38
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 3--NET ASSETS

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

NOTE 4--TRANSACTIONS WITH AFFILIATES

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

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

NOTE 5--DETAILS OF INVESTMENT

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

<TABLE>
<CAPTION>
Shares
Portfolio Owned Cost Value
--------- ------ ---- -----
<S> <C> <C> <C>
Select Stock.............................. 6,543,480 $103,139,549 $113,649,478
Bond...................................... 5,566,616 54,653,090 56,377,102
International............................. 1,981,646 30,163,057 30,392,791
Money Market.............................. 1,968,401 19,684,014 19,684,014
Real Estate Equity........................ 1,902,059 21,767,182 22,246,849
Special Opportunities..................... 1,529,602 17,520,681 20,167,153
Stock..................................... 15,583,784 197,432,046 217,256,965
Short-Term U.S. Government................ 241,045 2,412,860 2,466,467
Managed................................... 19,116,115 244,207,400 262,405,591
</TABLE>

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

<TABLE>
<CAPTION>
Portfolio Purchases Sales
--------- --------- -----
<S> <C> <C>
Select Stock........................................... $49,568,131 $ 8,508,010
Bond................................................... 18,755,232 6,821,624
International.......................................... 11,419,611 6,302,715
Money Market........................................... 30,725,098 28,234,079
Real Estate Equity..................................... 7,174,344 5,475,910
Special Opportunities.................................. 13,145,725 826,762
Stock.................................................. 66,187,098 11,538,389
Short-Term U.S. Government............................. 2,665,120 1,361,025
Managed................................................ 77,829,013 22,526,769
</TABLE>

39
<PAGE>

REPORTS OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

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

We have audited the accompanying statement of assets and liabilities of John
Hancock Variable Life Account V (the "Account") (comprising, respectively, the
Select Stock, Bond, International, Money Market, Real Estate Equity, Special
Opportunities, Stock, Short-Term U.S. Government, and Managed Subaccounts) as
of December 31, 1995, and the related statements of operations and statements
of changes in net assets for each of the three years in the period then ended
for the Select Stock, Bond, International, Money Market, Real Estate Equity,
Stock, and Managed Subaccounts; the related statements of operations and
statements of changes in net assets for the year ended December 31, 1995 and
for the period from May 6, 1994 (commencement of operations) to December 31,
1994 for the Special Opportunities Subaccount; and the related statements of
operations and statements of changes in net assets for the year ended December
31, 1995 and for the period from May 1, 1994 (commencement of operations) to
December 31, 1994 for the Short-Term U.S. Government Subaccount. These
financial statements are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Variable Life Account V at December 31,
1995, and the results of their operations and the changes in their net assets
for each of the periods indicated, in conformity with generally accepted
accounting principles.
Ernst & Young LLP

Boston, Massachusetts
February 9, 1996

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

We have audited the accompanying statements of financial position of John
Hancock Variable Life Insurance Company as of December 31, 1995 and 1994, and
the related statements of operations and unassigned deficit and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

Ernst & Young LLP

Boston, Massachusetts
February 7, 1996

40
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF FINANCIAL POSITION

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

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

41
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

<TABLE>
<CAPTION>
Year Ended December 31
------------------------
1995 1994
---- ----
(In millions)
<S> <C> <C>
Income
Premiums....................................... $ 570.9 $ 430.5
Net investment income--Note 4.................. 62.1 57.6
Other, net..................................... 85.7 95.5
----------- -----------
718.7 583.6
Benefits and Expenses
Payments to policyholders and beneficiaries.... 213.4 187.5
Additions to reserves to provide for future
payments to policyholders and beneficiaries... 282.4 185.3
Expenses of providing service to policyholders
and obtaining new insurance--Note 6........... 150.7 168.9
Cost of restructuring.......................... 0.0 3.0
State and miscellaneous taxes.................. 12.7 11.3
----------- -----------
659.2 556.0
----------- -----------
GAIN FROM OPERATIONS BEFORE FEDERAL INCOME
TAXES AND NET REALIZED CAPITAL GAINS........ 59.5 27.6
Federal income taxes--Note 1..................... 28.4 15.0
----------- -----------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL GAINS............................... 31.1 12.6
Net realized capital gains--Note 5............... 0.5 0.4
----------- -----------
NET INCOME................................... 31.6 13.0

Unassigned deficit at beginning of year.......... (162.1) (177.2)
Net unrealized capital losses and other adjust-
ments--Note 5................................... (3.0) (1.5)
Valuation reserve changes--Note 1................ 0.0 2.7
Change in separate account surplus............... 0.7 0.0
Other reserves and adjustments................... 1.5 0.9
----------- -----------
UNASSIGNED DEFICIT AT END OF YEAR............ $(131.3) $(162.1)
=========== ===========
</TABLE>

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

42
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS

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

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

43
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES

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

The preparation of the financial statements of insurance companies requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Such estimates and
assumptions could change in the future as more information becomes known,
which could impact the amounts reported and disclosed herein.

The significant accounting practices of the Company are as follows:

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

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

Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of
new business, are charged to operations as incurred and policyholder dividends
are provided as paid or accrued.

Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-
term, highly-liquid investments both readily convertible to known amounts of
cash and so near maturity that there is insignificant risk of changes in value
because of changes in interest rates.

44
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED

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

Valuation of Assets: General account investments are carried at amounts
determined on the following bases:

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

Investments in affiliates are included on the statutory equity method.

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

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

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

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

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

Asset Valuation and Interest Maintenance Reserves: The Asset Valuation Reserve
(AVR) is computed in accordance with the prescribed NAIC formula and
represents a provision for possible fluctuations in the value of bonds, equity
securities, mortgage loans, real estate and other invested assets. Changes to
the AVR are charged or credited directly to the unassigned deficit.

The Company also records the NAIC prescribed Interest Maintenance Reserve
(IMR) that represents that portion of the after tax net accumulated
unamortized realized capital gains and losses on sales of fixed income
securities, principally bonds and mortgage loans attributable to changes in
the general level of interest rates. Such gains and losses are deferred and
amortized into income over the remaining expected lives of the investments
sold. At December 31, 1995, the IMR, net of 1995 amortization of $1.2 million,
amounted to $6.9 million, which is included in policy reserves. The
corresponding 1994 amounts were $1.1 million and $7.1 million, respectively.

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

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

45
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

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

The methods and assumptions utilized by the Company in estimating its fair
value disclosures for financial instruments are as follows:

The carrying amounts reported in the statement of financial position for
cash and temporary cash investments approximate their fair values.

Fair values for public bonds are obtained from an independent pricing
service. Fair values for private placement securities and publicly traded
bonds not provided by the independent pricing service are estimated by the
Company by discounting expected future cash flows using current market
rates applicable to the yield, credit quality and maturity of the
investments. The fair values for common and preferred stocks, other than
its subsidiary investments, which are carried at equity values, are based
on quoted market prices.

The fair value for mortgage loans is estimated using discounted cash flow
analyses using interest rates adjusted to reflect the credit
characteristics of the loans. Mortgage loans with similar characteristics
and credit risks are aggregated into qualitative categories for purposes of
the fair value calculations.

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

The fair value for outstanding commitments to purchase long-term bonds is
estimated using a discounted cash flow method incorporating adjustments for
the difference in the level of interest rates between the dates the
commitments were made and December 31, 1995. The fair value for commitments
to purchase real estate approximates the amount of the initial commitment.

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

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

Federal Income Taxes: Federal income taxes are provided in the financial
statements based on amounts determined to be payable as a result of operations
within the current accounting period. The operations of the Company are
consolidated with John Hancock, its Parent, in filing a consolidated federal
income tax return for the affiliated group. The federal income taxes of the
Company are allocated on a separate return basis with certain adjustments. The
Company made payments of $32.2 million in 1995 and received tax benefits of
$7.0 million in 1994.

46
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

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

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

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

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

Reinsurance: Premiums, commissions, expense reimbursements, benefits and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies issued and the terms
of the reinsurance contracts. Premiums ceded to other companies have been
reported as a reduction of premium income. Amounts applicable to reinsurance
ceded for future policy benefits, unearned premium reserves and claim
liabilities have been reported as reductions of these items.

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

NOTE 2--CAPITALIZATION

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

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

NOTE 3--ACQUISITION

On June 23, 1993, the Company acquired all of the outstanding shares of stock
of Colonial Penn Annuity and Life Insurance Company (CPAL) from Colonial Penn
Life Insurance Company for an aggregate purchase price of approximately $42.5
million. At the date of acquisition, assets of CPAL were approximately $648.5
million, consisting principally of cash and temporary cash investments and
liabilities were approximately $635.2 million, consisting principally of
reserves related to a block of interest sensitive single-premium whole life
insurance business assumed by CPAL from Charter National Life Insurance
Company (Charter). The purchase price

47
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

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

includes contingent payments of up to approximately $7.3 million payable
between 1994 and 1998 based on the actual lapse experience of the business in
force on June 23, 1993. The Company made contingent payments to CPAL of $1.5
million during 1995 and 1994. Unamortized goodwill at December 31, 1995 was
$17.1 million and is being amortized over ten years on a straight-line basis.

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

NOTE 4--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

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

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

Net realized capital gains consist of the following items:

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

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

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

48
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 6--TRANSACTIONS WITH PARENT

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

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

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

NOTE 7--INVESTMENTS

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

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

49
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

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

The statement value and fair value of bonds at December 31, 1995, by
contractual maturity, are shown below. Maturities will differ from contractual
maturities because eligible borrowers may exercise their right to call or
prepay obligations with or without call or prepayment penalties.

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

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

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

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

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

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

50
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

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

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

NOTE 8--REINSURANCE

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

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

NOTE 9--POLICYHOLDERS' RESERVES AND BENEFICIARIES' FUND

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

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

NOTE 10--COMMITMENTS AND CONTINGENCIES

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

In the normal course of its business operations, the Company is involved in
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 1995. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position of the Company.

51
<PAGE>

APPENDIX--OTHER POLICY PROVISIONS

SETTLEMENT PROVISIONS

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

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

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

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

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

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

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

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

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

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

ADDITIONAL INSURANCE BENEFITS

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

GENERAL PROVISIONS

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

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

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

52
<PAGE>

SUICIDE. If the insured commits suicide, while sane or insane, within 2
years (except where state law requires a shorter period) from the issue date
shown in the Policy, JHVLICO will pay in place of all other benefits an amount
equal to the premium paid less any Indebtedness on the date of death and any
withdrawals. If the suicide is more than 2 years from the issue date but
within 2 years of any increase in death benefit due to payment of any premium
in excess of the Required Premium or change in Death Benefit Option the
benefits payable will not include the increased benefit but will include the
excess premium.

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

INCONTESTABILITY. The Policy, except for any provision for a disability
benefit or additional benefits provisions added after issue, shall be
incontestable other than for nonpayment of premiums after it has been in force
during the lifetime of the insured for 2 years from its issue date. If,
however, evidence of insurability is required with respect to any increase in
death benefit, it shall be incontestable after the increase has been in force
for 2 years from the increase date.

DEFERRAL OF DETERMINATION AND PAYMENTS. If the Policy is not on a fixed non-
forfeiture option, payment of any death, surrender, withdrawal or loan
proceeds will ordinarily be made within seven days after receipt at JHVLICO's
Home Office of all documents required for any such payment. Approximately two-
thirds of the claims for death proceeds which are made within two years after
the date of issue of the Policy will be investigated to determine whether the
claim should be contested and payment of these claims will therefore be
delayed.

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

Under a Policy being continued under a fixed non-forfeiture option, payment
of the cash value or loan proceeds may be deferred by JHVLICO for up to six
months after receipt of a request therefor. Interest will be accrued at an
annual rate of 3 1/2% if such a deferment extends beyond 29 days.

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

53
<PAGE>

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

The following tables illustrate the changes in death benefit, Account Value
and Surrender Value of the Policy, disregarding any Policy loans. Each table
separately illustrates the operation of a Policy for an identified issue age,
premium schedule and Sum Insured and shows how the death benefit, Account
Value and Surrender Value (reflecting the deduction of surrender charges, if
any) may vary over an extended period of time assuming hypothetical rates of
investment return (i.e., investment income and capital gains and losses,
realized or unrealized) equivalent to constant gross annual rates of 0%, 6%
and 12%. The tables are based on given annual premiums paid at the beginning
of each Policy year and will assist in a comparison of the values set forth in
the tables with those under other variable life insurance policies which may
be issued by JHVLICO or other companies. Tables are provided for each of the
three available death benefit options. The values for a Policy would be
different from those shown if premiums are paid in different amounts or at
different times or if the actual gross rates of investment return average 0%,
6% or 12% over a period of years, but nevertheless fluctuated above or below
the average for individual Policy years.

The amounts shown for the death benefit, Account Value and Surrender Value
are as of the end of each Policy year. The tables headed "Using Current
Charges" assume that current monthly rates for insurance and current charges
for expenses (including JHVLICO's intended waiver after ten Policy years of
the sales charge deducted from certain premiums and its intended reduction in
the tenth Policy year in the insurance charge deducted monthly from Account
Value) will be made in each year illustrated. The tables headed "Using Maximum
Charges" assumes that the maximum (guaranteed) charge will be made for the
monthly rates for insurance and for expense charges in each year illustrated
without waivers or reductions. The amounts shown in all tables reflect an
average asset charge for the daily investment advisory expense charges to the
Portfolios of the Fund (equivalent to an effective annual rate of .60%) and an
assumed average asset charge for the annual nonadvisory operating expenses of
each Portfolio of the Fund (equivalent to an effective annual rate of .19%).
For a description of expenses charged to the Portfolios, including the
reimbursement of any Portfolio for annual non-advisory operating expenses in
excess of an effective annual rate of .25%, a continuing obligation of the
Fund's investment adviser, see the attached prospectus for the Fund. The
charges for the daily investment management fee and the annual non-advisory
operating expenses are based on the hypothetical assumption that Policy values
are allocated equally among the variable subaccounts. The actual charges and
expenses associated with any Policy will vary depending upon the actual
allocation of Policy values among subaccounts.

The tables reflect that no charge is currently made to the Account for
Federal income taxes. However, JHVLICO reserves the right to make such a
charge in the future and any charge would require higher rates of investment
return in order to produce the same Policy values.

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

JHVLICO will furnish upon request a comparable illustration reflecting the
proposed insured's age, sex, underwriting risk classification and the Sum
Insured at issue or premium amount requested, and assuming annual premiums and
that the proposed insured is not in a substandard underwriting risk
classification.

54
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT): $100,000
$900 BASE POLICY PREMIUM (1)

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
-------------------------------- -------------------------------- --------------------------------
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(2) 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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,065 303 397 495
3 2,979 100,000 100,000 100,000 1,405 1,595 1,802 700 890 1,097
4 4,073 100,000 100,000 100,000 1,919 2,241 2,605 1,079 1,401 1,765
5 5,222 100,000 100,000 100,000 2,414 2,904 3,479 1,739 2,229 2,804
6 6,428 100,000 100,000 100,000 2,889 3,584 4,431 2,079 2,774 3,621
7 7,694 100,000 100,000 100,000 3,341 4,279 5,468 2,531 3,469 4,658
8 9,024 100,000 100,000 100,000 3,770 4,989 6,598 3,050 4,269 5,878
9 10,420 100,000 100,000 100,000 4,175 5,713 7,828 3,545 5,083 7,198
10 11,886 100,000 100,000 100,000 4,565 6,466 9,191 4,025 5,926 8,651
11 13,425 100,000 100,000 100,000 4,976 7,283 10,732 4,526 6,833 10,282
12 15,042 100,000 100,000 100,000 5,361 8,120 12,423 5,046 7,805 12,108
13 16,739 100,000 100,000 100,000 5,721 8,977 14,280 5,541 8,797 14,100
14 18,521 100,000 100,000 100,000 6,053 9,856 16,322 6,053 9,856 16,322
15 20,392 100,000 100,000 100,000 6,356 10,753 18,567 6,356 10,753 18,567
16 22,356 100,000 100,000 100,000 6,629 11,671 21,040 6,629 11,671 21,040
17 24,419 100,000 100,000 100,000 6,862 12,601 23,759 6,862 12,601 23,759
18 26,585 100,000 100,000 100,000 7,048 13,539 26,751 7,048 13,539 26,751
19 28,859 100,000 100,000 100,000 7,184 14,480 30,044 7,184 14,480 30,044
20 31,247 100,000 100,000 100,000 7,263 15,420 33,672 7,263 15,420 33,672
25 45,102 100,000 100,000 100,000 6,576 19,934 58,479 6,576 19,934 58,479
30 62,785 100,000 100,000 120,995 3,172 23,413 100,829 3,172 23,413 100,829
35 85,353 100,000 100,000 196,302 0 23,764 170,697 0 23,764 170,697
40 142,635 100,000 100,000 293,236 1,781 39,744 279,272 1,781 39,744 279,272
45 215,744 100,000 100,000 482,900 0 34,278 459,905 0 34,278 459,905
</TABLE>
- --------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.

(2) Assumes payment of recalculated annual premium amounts of $5,809 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.

(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,809 6% and $0 at 12%, subject to any maximums required to
maintain the Policy's status for federal income tax purposes.

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

55
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT): $100,000
$900 BASE POLICY PREMIUM (1)

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
-------------------------------- -------------------------------- --------------------------------
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(2) 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>
1 945 100,000 100,000 100,000 276 307 339 0 0 0
2 1,937 100,000 100,000 100,000 778 866 958 8 96 188
3 2,979 100,000 100,000 100,000 1,264 1,440 1,633 359 535 728
4 4,073 100,000 100,000 100,000 1,732 2,030 2,367 692 990 1,327
5 5,222 100,000 100,000 100,000 2,181 2,633 3,165 1,006 1,458 1,990
6 6,428 100,000 100,000 100,000 2,611 3,251 4,033 1,301 1,941 2,723
7 7,694 100,000 100,000 100,000 3,018 3,881 4,976 1,808 2,671 3,766
8 9,024 100,000 100,000 100,000 3,404 4,523 6,003 2,284 3,403 4,883
9 10,420 100,000 100,000 100,000 3,765 5,175 7,118 2,835 4,245 6,188
10 11,886 100,000 100,000 100,000 4,102 5,839 8,334 3,562 5,299 7,794
11 13,425 100,000 100,000 100,000 4,412 6,511 9,658 3,962 6,061 9,208
12 15,042 100,000 100,000 100,000 4,693 7,190 11,098 4,378 6,875 10,783
13 16,739 100,000 100,000 100,000 4,944 7,874 12,668 4,764 7,694 12,488
14 18,521 100,000 100,000 100,000 5,164 8,564 14,380 5,164 8,564 14,380
15 20,392 100,000 100,000 100,000 5,348 9,255 16,249 5,348 9,255 16,249
16 22,356 100,000 100,000 100,000 5,496 9,947 18,289 5,496 9,947 18,289
17 24,419 100,000 100,000 100,000 5,601 10,633 20,517 5,601 10,633 20,517
18 26,585 100,000 100,000 100,000 5,658 11,308 22,948 5,658 11,308 22,948
19 28,859 100,000 100,000 100,000 5,661 11,966 25,604 5,661 11,966 25,604
20 31,247 100,000 100,000 100,000 5,602 12,598 28,505 5,602 12,598 28,505
25 45,102 100,000 100,000 100,000 4,147 15,131 47,784 4,147 15,131 47,784
30 62,785 100,000 100,000 100,000 0 15,525 79,544 0 15,525 79,544
35 85,353 100,000 100,000 152,207 0 10,772 132,354 0 10,772 132,354
40 150,868 100,000 100,000 221,590 0 15,987 211,039 0 15,987 211,039
45 234,483 100,000 100,000 356,624 0 0 339,642 0 0 339,642
</TABLE>
- --------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.

(2) Assumes payment of recalculated annual premium amounts of $7,228 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.

(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,228 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT, ACCOUNT VALUE AND SURRENDER VALUE FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT
RETURN AVERAGE 0%, 5% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE
OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE
MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

56
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT): $100,000
$900 BASE POLICY PREMIUM (1)

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
-------------------------------- -------------------------------- --------------------------------
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(2) 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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,065 303 397 495
3 2,979 100,000 100,000 100,000 1,405 1,595 1,802 700 890 1,097
4 4,073 100,000 100,000 100,000 1,919 2,241 2,605 1,079 1,401 1,765
5 5,222 100,000 100,000 100,000 2,414 2,904 3,479 1,739 2,229 2,804
6 6,428 100,000 100,000 100,000 2,889 3,584 4,431 2,079 2,774 3,621
7 7,694 100,000 100,000 100,000 3,341 4,279 5,468 2,531 3,469 4,658
8 9,024 100,000 100,000 100,000 3,770 4,989 6,598 3,050 4,269 5,878
9 10,420 100,000 100,000 100,000 4,175 5,713 7,828 3,545 5,083 7,198
10 11,886 100,000 100,000 100,000 4,565 6,466 9,191 4,025 5,926 8,651
11 13,425 100,000 100,000 100,000 4,976 7,283 10,732 4,526 6,833 10,282
12 15,042 100,000 100,000 100,000 5,361 8,120 12,423 5,046 7,805 12,108
13 16,739 100,000 100,000 100,000 5,721 8,977 14,280 5,541 8,797 14,100
14 18,521 100,000 100,000 100,000 6,053 9,856 16,322 6,053 9,856 16,322
15 20,392 100,000 100,000 100,000 6,356 10,753 18,567 6,356 10,753 18,567
16 22,356 100,000 100,000 100,173 6,629 11,671 21,040 6,629 11,671 21,040
17 24,419 100,000 100,000 101,272 6,862 12,601 23,757 6,862 12,601 23,757
18 26,585 100,000 100,000 102,601 7,048 13,539 26,737 7,048 13,539 26,737
19 28,859 100,000 100,000 104,187 7,184 14,480 30,008 7,184 14,480 30,008
20 31,247 100,000 100,000 106,064 7,263 15,420 33,598 7,263 15,420 33,598
25 45,102 100,000 100,000 121,108 6,576 19,934 57,607 6,576 19,934 57,607
30 62,785 100,000 100,000 150,402 3,172 23,413 96,351 3,172 23,413 96,351
35 85,353 100,000 100,000 203,738 0 23,764 159,166 0 23,764 159,166
40 142,635 100,000 104,578 284,760 1,781 38,194 257,817 1,781 38,194 257,817
45 215,744 100,000 100,000 442,603 0 31,391 421,527 0 31,391 421,527
</TABLE>
- --------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.

(2) Assumes payment of recalculated annual premium amounts of $5,809 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.

(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,809 at 6% and $0 at 12%, subject to any maximum required
to maintain the Policy's status for federal income tax purposes.

57
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE
(GUARANTEED DEATH BENEFIT): $100,000 $900 BASE POLICY PREMIUM (1)

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
-------------------------------- -------------------------------- --------------------------------
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(2) 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>
1 945 100,000 100,000 100,000 276 307 339 0 0 0
2 1,937 100,000 100,000 100,000 778 866 958 8 96 188
3 2,979 100,000 100,000 100,000 1,264 1,440 1,633 359 535 728
4 4,073 100,000 100,000 100,000 1,732 2,030 2,367 692 990 1,327
5 5,222 100,000 100,000 100,000 2,181 2,633 3,165 1,006 1,458 1,990
6 6,428 100,000 100,000 100,000 2,611 3,251 4,033 1,301 1,941 2,723
7 7,694 100,000 100,000 100,000 3,018 3,881 4,976 1,808 2,671 3,766
8 9,024 100,000 100,000 100,000 3,404 4,523 6,003 2,284 3,403 4,883
9 10,420 100,000 100,000 100,000 3,765 5,175 7,118 2,835 4,245 6,188
10 11,886 100,000 100,000 100,000 4,102 5,839 8,334 3,562 5,299 7,794
11 13,425 100,000 100,000 100,000 4,412 6,511 9,658 3,962 6,061 9,208
12 15,042 100,000 100,000 100,000 4,693 7,190 11,098 4,378 6,875 10,783
13 16,739 100,000 100,000 100,000 4,944 7,874 12,688 4,764 7,694 12,488
14 18,521 100,000 100,000 100,000 5,164 8,564 14,380 5,164 8,564 14,380
15 20,392 100,000 100,000 100,000 5,348 9,255 16,249 5,348 9,255 16,249
16 22,356 100,000 100,000 100,000 5,496 9,947 18,289 5,496 9,947 18,289
17 24,419 100,000 100,000 100,000 5,601 10,633 20,517 5,601 10,633 20,517
18 26,585 100,000 100,000 100,000 5,658 11,308 22,948 5,658 11,308 22,948
19 28,859 100,000 100,000 100,000 5,661 11,966 25,604 5,661 11,966 25,604
20 31,247 100,000 100,000 100,969 5,602 12,598 28,503 5,602 12,598 28,503
25 45,102 100,000 100,000 110,966 4,147 15,131 47,465 4,147 15,131 47,465
30 62,785 100,000 100,000 130,989 0 15,525 76,938 0 15,525 76,938
35 85,353 100,000 100,000 167,604 0 10,772 123,033 0 10,772 123,033
40 150,868 100,000 100,000 218,826 0 15,434 191,883 0 15,434 191,883
45 234,483 100,000 100,000 324,082 0 0 303,284 0 0 303,284
</TABLE>
- --------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.

(2) Assumes payment of recalculated annual premium amounts of $7,228 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.

58
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE
(GUARANTEED DEATH BENEFIT): $100,000 $900 BASE POLICY PREMIUM (1)

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
-------------------------------- -------------------------------- --------------------------------
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(2) 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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,065 303 397 495
3 2,979 100,000 100,000 100,000 1,405 1,595 1,802 700 890 1,097
4 4,073 100,000 100,000 100,000 1,919 2,241 2,605 1,079 1,401 1,765
5 5,222 100,000 100,000 100,000 2,414 2,904 3,479 1,739 2,229 2,804
6 6,428 100,000 100,000 100,000 2,889 3,584 4,431 2,079 2,774 3,621
7 7,694 100,000 100,000 100,000 3,341 4,279 5,468 2,531 3,469 4,658
8 9,024 100,000 100,000 100,000 3,770 4,989 6,598 3,050 4,269 5,878
9 10,420 100,000 100,000 100,000 4,175 5,713 7,828 3,545 5,083 7,198
10 11,886 100,000 100,000 100,000 4,565 6,466 9,191 4,025 5,926 8,651
11 13,425 100,000 100,000 100,000 4,976 7,283 10,732 4,526 6,833 10,282
12 15,042 100,000 100,000 100,000 5,361 8,120 12,423 5,046 7,805 12,108
13 16,739 100,000 100,000 100,000 5,721 8,977 14,280 5,541 8,797 14,100
14 18,521 100,000 100,000 100,000 6,053 9,856 16,322 6,053 9,856 16,322
15 20,392 100,000 100,000 100,000 6,356 10,753 18,567 6,356 10,753 18,567
16 22,356 100,000 100,000 100,000 6,629 11,671 21,040 6,629 11,671 21,040
17 24,419 100,000 100,000 100,000 6,862 12,601 23,759 6,862 12,601 23,759
18 26,585 100,000 100,000 100,000 7,048 13,539 26,751 7,048 13,539 26,751
19 28,859 100,000 100,000 100,000 7,184 14,480 30,044 7,184 14,480 30,044
20 31,247 100,000 100,000 100,000 7,263 15,420 33,672 7,263 15,420 33,672
25 45,102 100,000 100,000 113,311 6,576 19,934 58,314 6,576 19,934 58,314
30 62,785 100,000 100,000 165,106 3,172 23,413 97,007 3,172 23,413 97,007
35 85,353 100,000 100,000 235,773 0 23,764 155,770 0 23,764 155,770
40 142,635 100,000 100,000 325,483 16,177 48,358 237,787 16,177 48,358 237,787
45 215,744 100,000 102,204 451,336 30,905 80,947 357,466 30,905 80,947 357,466
</TABLE>
- --------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.

(2) Assumes payment of recalculated annual premium amounts of $5,809 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.

(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,809 at 6% and $0 at 12%.

59
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE
(GUARANTEED DEATH BENEFIT): $100,000 $900 BASE POLICY PREMIUM (1)

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
-------------------------------- -------------------------------- --------------------------------
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(2) 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>
1 945 100,000 100,000 100,000 276 307 339 0 0 0
2 1,937 100,000 100,000 100,000 778 866 958 8 96 188
3 2,979 100,000 100,000 100,000 1,264 1,440 1,633 359 535 728
4 4,073 100,000 100,000 100,000 1,732 2,030 2,367 692 990 1,327
5 5,222 100,000 100,000 100,000 2,181 2,633 3,165 1,006 1,458 1,990
6 6,428 100,000 100,000 100,000 2,611 3,251 4,033 1,301 1,941 2,723
7 7,694 100,000 100,000 100,000 3,018 3,881 4,976 1,808 2,671 3,766
8 9,024 100,000 100,000 100,000 3,404 4,523 6,003 2,284 3,403 4,883
9 10,420 100,000 100,000 100,000 3,765 5,175 7,118 2,835 4,245 6,188
10 11,886 100,000 100,000 100,000 4,102 5,839 8,334 3,562 5,299 7,794
11 13,425 100,000 100,000 100,000 4,412 6,511 9,658 3,962 6,061 9,208
12 15,042 100,000 100,000 100,000 4,693 7,190 11,098 4,378 6,875 10,783
13 16,739 100,000 100,000 100,000 4,944 7,874 12,668 4,764 7,694 12,488
14 18,521 100,000 100,000 100,000 5,164 8,564 14,380 5,164 8,564 14,380
15 20,392 100,000 100,000 100,000 5,348 9,255 16,249 5,348 9,255 16,249
16 22,356 100,000 100,000 100,000 5,496 9,947 18,289 5,496 9,947 18,289
17 24,419 100,000 100,000 100,000 5,601 10,633 20,517 5,601 10,633 20,517
18 26,585 100,000 100,000 100,000 5,658 11,308 22,948 5,658 11,308 22,948
19 28,859 100,000 100,000 100,000 5,661 11,966 25,604 5,661 11,966 25,604
20 31,247 100,000 100,000 100,000 5,602 12,598 28,505 5,602 12,598 28,505
25 45,102 100,000 100,000 100,000 4,147 15,131 47,784 4,147 15,131 47,784
30 62,785 100,000 100,000 132,867 0 15,525 78,065 0 15,525 78,065
35 85,353 100,000 100,000 185,887 0 10,772 122,811 0 10,772 122,811
40 150,868 100,000 100,000 248,477 6,412 32,194 181,529 6,412 32,194 181,529
45 234,483 100,000 100,000 333,496 11,219 55,449 264,134 11,219 55,449 264,134
</TABLE>
- --------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.

(2) Assumes payment of recalculated annual premium amounts of $7,228 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.

(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,228 at 6% and $0 at 12%.

60
<PAGE>

[LOGO OF JOHN HANCOCK WORLDWIDE SPONSOR APPEARS HERE]

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

S8144 5/95
(94-85)
<PAGE>

John Hancock Variable
Life
Insurance Company
(JHVLICO)
[THE LOGO OF FLEX V2 JOHN HANCOCK APPEARS HERE]

SCHEDULED PREMIUM VARIABLE LIFE INSURANCE POLICY
JOHN HANCOCK VARIABLE LIFE ACCOUNT V

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

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

PROSPECTUS MAY 1, 1996

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

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

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

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SUMMARY................................................................... 1
JHVLICO AND JOHN HANCOCK.................................................. 6
THE ACCOUNT AND THE SERIES FUNDS.......................................... 7
THE FIXED ACCOUNT......................................................... 10
POLICY PROVISIONS AND BENEFITS............................................ 11
Requirements for Issuance of Policy..................................... 11
Premiums................................................................ 11
Account Value and Surrender Value....................................... 15
Death Benefits.......................................................... 16
Death Benefit Options................................................... 16
Definition of Life Insurance............................................ 17
Excess Value............................................................ 17
Partial Withdrawal of Excess Value...................................... 18
Transfers Among Subaccounts............................................. 19
Loan Provisions and Indebtedness........................................ 20
Default and Options on Lapse............................................ 21
Exchange Privilege...................................................... 22
CHARGES AND EXPENSES...................................................... 22
Charges Deducted from Premiums.......................................... 22
Sales Charges........................................................... 22
Administrative Surrender Charge......................................... 24
Reduced Charges for Eligible Groups..................................... 24
Charges Deducted from Account Value..................................... 25
DISTRIBUTION OF POLICIES.................................................. 27
TAX CONSIDERATIONS........................................................ 28
Policy Proceeds......................................................... 28
Charge for JHVLICO's Taxes.............................................. 29
Corporate and H.R. 10 Plans............................................. 29
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO...................... 29
REPORTS................................................................... 30
VOTING PRIVILEGES......................................................... 30
CHANGES THAT JHVLICO CAN MAKE............................................. 31
STATE REGULATION.......................................................... 31
LEGAL MATTERS............................................................. 31
REGISTRATION STATEMENT.................................................... 31
EXPERTS................................................................... 32
FINANCIAL STATEMENTS...................................................... 32
APPENDIX--OTHER POLICY PROVISIONS......................................... 52
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES
AND ACCUMULATED PREMIUMS................................................. 54
</TABLE>

INDEX OF DEFINED WORDS AND PHRASES

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

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?

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

1
<PAGE>

The minimum Sum Insured at issue is $50,000. All persons insured must be no
more than 75 years of age at issue and meet certain health and other criteria
called "underwriting standards." The smoking status of the insured is
generally reflected in the premiums required and insurance charges made. If
the Sum Insured at issue is at least $100,000, the insured may be eligible for
the "preferred" class, which has the lowest insurance charges for this Policy.
Policies issued in certain jurisdictions or in connection with certain
employee plans will not directly reflect the sex of the insured in either the
premium rates or the charges and values under the Policy.

WHAT IS THE AMOUNT OF THE PREMIUMS?

WHAT IS JOHN HANCOCK VARIABLE LIFE ACCOUNT V?

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

2
<PAGE>

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

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

WHAT ARE THE CHARGES MADE BY JHVLICO?

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

Issue Charge. A $20 charge deducted monthly from Account Value in the first
Policy year.

Maintenance Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $8 per Policy (currently $6.00).

3
<PAGE>

Guaranteed Death Benefit Charge. A charge not to exceed 3c (cents) per $1000
of current Sum Insured (currently 1c (cent) per $1000) deducted monthly from
that portion of Account Value not attributable to the Fixed Account allocations.

Charge for Mortality and Expense Risks. A charge made daily at an effective
annual rate of .60% of the assets of the Account.

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

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

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

HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?

4
<PAGE>

may change the Investment Rule under which JHVLICO will allocate amounts to
subaccounts. (See "Investment Rule".)

WHAT COMMISSIONS ARE PAID TO AGENTS?

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

WHAT IS THE DEATH BENEFIT?

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

Option 1: Level Death Benefit. A level death benefit equal to the greater of
the Guaranteed Death Benefit or the Current Death Benefit.

Option 2: Variable Death Benefit. A variable death benefit equal to the
greater of the Guaranteed Death Benefit plus any Excess Value or the Current
Death Benefit.

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

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

5
<PAGE>

start of each Policy Year. This interest rate will not exceed the greater of
(1) the "Published Monthly Average" (see "Loan Provision and Indebtedness")
for the calendar month ending two months before the calendar month of the
Policy anniversary or (2) 5%. In jurisdictions where a fixed loan rate is
applicable, JHVLICO will charge interest at an effective annual rate of 6%,
accrued daily. A loan plus accrued interest ("Indebtedness") may be repaid at
the discretion of the Owner in whole or in part in accordance with the terms
of the Policy.

IS THERE A SHORT-TERM CANCELLATION RIGHT?

WHAT INVESTMENT TRANSFERS ARE ALLOWED AN OWNER?

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

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

JHVLICO AND JOHN HANCOCK

6
<PAGE>

operations. It is anticipated that John Hancock will from time to time make
additional capital contributions to JHVLICO to enable it to meet its reserve
requirements and expenses in connection with its business and John Hancock is
committed to make additional capital contributions if necessary to ensure that
JHVLICO maintains a positive net worth.

THE ACCOUNT AND THE SERIES FUNDS

THE SERIES FUNDS

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

7
<PAGE>

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

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

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

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

8
<PAGE>

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

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

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

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

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

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

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

9
<PAGE>

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

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

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

THE FIXED ACCOUNT

10
<PAGE>

POLICY PROVISIONS AND BENEFITS

REQUIREMENTS FOR ISSUANCE OF POLICY

PREMIUMS

Minimum Premium Requirements. An amount of Required Premium (see below) is
determined by JHVLICO at the time of issue of the Policy.

11
<PAGE>

a quarterly Modal premium, one-quarter of the initial Required Premium must be
received by JHVLICO at the time of issue of the Policy.

Failure to satisfy a premium requirement on a scheduled due date may cause
the Policy to terminate. See "Default and Options on Lapse".

12
<PAGE>

The amount of any Account Value that is considered Excess Value under a
Policy may increase or decrease as a result of a Premium Recalculation. See
"Excess Value."

13
<PAGE>

program may be available to an Owner interested in making monthly premium
payments. All premiums are payable at JHVLICO's Home Office.

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

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

Flexibility as to Premium Payments. The Owner may pay more than the Required
Premium during a Policy year and may ask to be billed for an amount greater
than any Required Premium. The Owner may also pay amounts in addition to any
billed amount. JHVLICO reserves the right to limit premium payments above the
amount of the cumulative Required Premiums due on the Policy. At the time of
Policy issuance, JHVLICO will determine whether the planned premium billing
schedule will exceed the 7-pay limit discussed below. If so, JHVLICO will not
issue the Policy unless the Owner signs a form acknowledging that fact.

14
<PAGE>

ACCOUNT VALUE AND SURRENDER VALUE

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

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

15
<PAGE>

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

DEATH BENEFITS

Current Death Benefit. The Current Death Benefit on any date is the Account
Value at the end of the Valuation Period containing that date times either the
Death Benefit Factor or Corridor Factor. The Factor used depends upon the
Death Benefit Option selected by the Owner (see below). The Death Benefit
Factor depends upon the sex, smoking status and the then attained age of the
insured. The Death Benefit Factor decreases slightly from year to year as the
attained age of the insured increases. A complete list of Death Benefit
Factors is set forth in the Policy. The Corridor Factor depends upon the then
attained age of the insured. The Corridor Factor decreases slightly (or
remains the same at older and younger ages) from year to year as the attained
age of the insured increases. A complete list of Corridor Factors is set forth
in the Policy. See "Definition of Life Insurance". The Current Death Benefit
is variable; it increases as the Account Value increases and decreases as the
Account Value decreases.

DEATH BENEFIT OPTIONS

16
<PAGE>

will be subject under this option to the "guideline premium and cash value
corridor" test as defined by Internal Revenue Code ("Code") Section 7702. This
option will offer the best opportunity for the Account Value under a Policy to
increase without increasing the death benefit as quickly as it might under the
other options. When the Current Death Benefit exceeds the Guaranteed Death
Benefit, the death benefit will increase whenever there is an increase in the
Policy's Account Value and will decrease whenever there is a decrease in the
Account Value, but never below the Guaranteed Death Benefit.

DEFINITION OF LIFE INSURANCE

EXCESS VALUE

17
<PAGE>

has been elected, will be used in computing the amount of variable death
benefit. Excess Value is any amount of Account Value greater than Basic
Account Value.

PARTIAL WITHDRAWAL OF EXCESS VALUE

Under JHVLICO's current administrative rules, an Owner may withdraw Excess
Value from the Policy on or after the first Policy anniversary. This
privilege, which reduces the Account Value by the amount of the withdrawal and
the associated charge, may be exercised only once in a Policy year and will be
effective as of the end of the Valuation Period in which JHVLICO receives
written notice satisfactory to it at its Home Office. The minimum amount that
may be withdrawn is $1,000. Unless the Current Death Benefit exceeds the
Guaranteed Death Benefit, a partial withdrawal will not affect the death
benefit payable. A charge of $20 is made against Account Value for each
partial withdrawal. A withdrawal will reduce the death benefit under the
Variable Death Benefit Option by the amount withdrawn and the associated
charge. A withdrawal may have significant tax consequences. See "Tax
Considerations".

18
<PAGE>

TRANSFERS AMONG SUBACCOUNTS

19
<PAGE>

telephone authorization form.) Any fax request should include the Owner's
name, daytime telephone number, Policy number and, in the case of transfers,
the names of the subaccounts from which and to which money will be
transferred. The right to discontinue telephone transactions at any time
without notice to Owners is specifically reserved.

LOAN PROVISIONS AND INDEBTEDNESS

The amount of any outstanding loan plus accrued interest is called the
"Indebtedness". Except when used to pay premiums, a loan will not be permitted
unless it is at least $300. The Owner may repay all or a portion of any
Indebtedness while the insured is living and the Policy is not in a grace
period. When a loan is made, an amount equal to the loan proceeds will be
transferred out of the Account and the Fixed Account, as applicable. This
amount is allocated to the Loan Account, a portion of JHVLICO's general
account. Each subaccount will be reduced in the same proportion as the Account
Value is then allocated among the subaccounts. Upon each loan repayment, the
same proportionate amount of the entire loan as was borrowed from the Fixed
Account will be repaid to the Fixed Account. The remainder of the loan
repayment will be allocated to the appropriate subaccounts as stipulated in
the current Investment Rule. For example, if the entire loan outstanding is
$3000 of which $1000 was borrrowed from the Fixed Account, then upon a
repayment of $1500, $500 would be allocated to the Fixed Account and the
remaining $1000 would be allocated to the appropriate subaccounts as
stipulated in the current Investment Rule. If an Owner wishes any payment to
constitute a loan repayment (rather than a premium payment), the Owner must so
specify.

20
<PAGE>

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

DEFAULT AND OPTIONS ON LAPSE

The Variable Paid-Up Insurance option is not available unless the initial
amount of Variable Paid-Up Insurance is at least $5,000.

A Policy continued under any option may be surrendered for its Surrender
Value while the insured is living. Loans may be available under the Variable
and Fixed Paid-Up Insurance options.

21
<PAGE>

EXCHANGE PRIVILEGE

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

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

CHARGES AND EXPENSES

CHARGES DEDUCTED FROM PREMIUMS

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

SALES CHARGES

22
<PAGE>

intends to make this deduction only in the first 10 Policy years, but this is
not contractually guaranteed and the right is reserved to continue deductions
over a longer period. Because the Policies were first offered for sale in
1994, no Policies have yet been outstanding for more than 10 years.

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

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

23
<PAGE>

- --------

The amount of the Contingent Deferred Sales Charge is calculated on the
basis of the Base Policy Premium for the age of the insured at the time of
issue of the Policy.

ADMINISTRATIVE SURRENDER CHARGE

A charge is made if the Policy is surrendered or lapses in the first nine
Policy years to recover administrative expenses relating to the issue of the
Policy which would not otherwise be recouped. The maximum charge in Policy
years 1 through 6 is $5 per $1,000 of Guaranteed Death Benefit, in Policy
years 7 and 8 is $4 per $1,000 of Guaranteed Death Benefit and in Policy year
9 is $3 per $1,000 of Guaranteed Death Benefit. For insureds age 24 or less at
issue, this charge will never be more than $200 and will be charged only in
the first four Policy years. Currently a Policy with a Guaranteed Death
Benefit at time of surrender or lapse of $250,000 or more is not charged. A
Policy of less than $250,000 Guaranteed Death Benefit at time of surrender or
lapse is not currently charged if the surrender or lapse is after the fourth
Policy year and is charged no more than $300 if the surrender or lapse is in
the first four Policy years. These lower current charges may be withdrawn or
modified by JHVLICO at some future date.

REDUCED CHARGES FOR ELIGIBLE GROUPS

24
<PAGE>

and will apply uniformly to all prospective Policy purchasers in the class and
will not be unfairly discriminatory to the interests of any Policy Owner.

CHARGES DEDUCTED FROM ACCOUNT VALUE

The following charges are deducted from Account Value:

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

Current monthly rates for insurance are based on the sex, age, smoking
status, underwriting class of the insured and the length of time the Policy
has been in effect. JHVLICO may change these rates from time to time, but they
will never be more than the guaranteed maximum rates based on the 1980
Commissioners' Standard Ordinary Mortality Tables set forth in the Policy.

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

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

Lower current insurance rates are offered at most ages for insureds who
qualify as non-smokers. To qualify, an insured must meet additional
requirements that relate to smoking habits.

25
<PAGE>

Guaranteed Death Benefit Charge. JHVLICO deducts a charge from that portion
of the Account Value attributable to the variable subaccounts for the minimum
death benefit that has been guaranteed. JHVLICO guarantees that the death
benefit will never be less than the Sum Insured. In return for making this
guarantee, JHVLICO currently makes a monthly charge of 1c (cent) per $1000 of
the current Sum Insured. This charge may be increased by JHVLICO but will never
exceed 3c (cents) per $1000 of the current Sum Insured.

Charges for Extra Mortality Risks. An insured who does not qualify for
either the preferred or standard underwriting class must pay an additional
Required Premium because of the extra mortality risk. This additional premium
is collected in two ways: up to 8.6% of the additional premium is deducted
from premiums when paid and the remainder of the additional premium is
deducted monthly from Account Value in equal installments.

26
<PAGE>

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

DISTRIBUTION OF POLICIES

27
<PAGE>

TAX CONSIDERATIONS

POLICY PROCEEDS

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

28
<PAGE>

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

CHARGE FOR JHVLICO'S TAXES

CORPORATE AND H.R. 10 PLANS

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO

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

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

29
<PAGE>

REPORTS

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

VOTING PRIVILEGES

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

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

JHVLICO may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to change the investment objectives of the Portfolios or to
approve or disapprove an investment advisory or underwriting contract for the
Funds. JHVLICO also may disregard voting instructions in favor of changes
initiated by an Owner or a Fund's Board of Trustees in an investment policy,
investment adviser or principal underwriter of the Fund, if JHVLICO (i)
reasonably disapproves of such changes and (ii) in the case of a change of
investment policy or investment adviser, makes a good-faith determination that
the proposed change is contrary to state law or prohibited by state regulatory
authorities or that the change would be inconsistent with a variable
subaccount's investment objectives or would

30
<PAGE>

CHANGES THAT JHVLICO CAN MAKE

STATE REGULATION

LEGAL MATTERS

REGISTRATION STATEMENT

31
<PAGE>

EXPERTS

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

FINANCIAL STATEMENTS

32
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1995

See accompanying notes.

33
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS

34
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

See accompanying notes.

35
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS

See accompanying notes.

36
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

<TABLE>
<CAPTION>
Real Estate Special
Equity Subaccount Opportunities Subacount* Stock Subaccount
------------------------------------- ------------------------- ---------------------------------------
Year Ended Year Ended
December 31 Year Ended Period ended December 31
------------------------------------- December 31 December 31 ---------------------------------------
1995 1994 1993 1995 1994 1995 1994 1993
----------- ----------- ----------- ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase
(decrease) in Net
Assets
From operations:
Net investment
income........... $ 1,307,065 $ 903,908 $ 317,657 $ 425,664 $ 12,568 $ 19,361,687 $ 7,821,827 $ 8,028,259
Net realized
gains (losses)... (132,712) 302,731 381,959 118,503 (5,379) 1,182,185 913,991 1,623,888
Net unrealized
appreciation
(depreciation)
during the year.. 1,164,732 (984,298) (16,951) 2,655,206 (8,734) 28,390,863 (9,911,015) 190,590
----------- ----------- ----------- ----------- ---------- ------------ ------------ -----------
Net increase
(decrease) in net
assets resulting
from operations.. 2,339,085 222,341 682,665 3,199,373 (1,545) 48,934,735 (1,175,197) 9,842,737
From policyholder
transactions:
Net premiums from
policyholders 10,547,817 13,824,052 9,937,807 15,268,369 5,297,072 76,729,116 67,541,450 54,985,522
Net benefits to
policyholders (10,156,449) (5,898,220) (2,766,409) (3,375,070) (221,046) (41,442,095) (31,434,994) (29,859,615)
----------- ----------- ----------- ----------- ---------- ------------ ------------ -----------
Net increase in
net assets from
policyholder
transactions..... 391,368 7,925,832 7,171,398 11,893,299 5,076,026 35,287,021 36,106,456 25,125,907
----------- ----------- ----------- ----------- ---------- ------------ ------------ -----------
Net increase in
net assets...... 2,730,453 8,148,173 7,854,063 15,092,672 5,074,481 84,221,756 34,931,259 34,968,644
Net assets:
Beginning of
period........... 19,516,395 11,368,222 3,514,159 5,074,481 -- 133,035,208 98,103,949 63,135,305
----------- ----------- ----------- ----------- ---------- ------------ ------------ -----------
End of period.... $22,246,848 $19,516,395 $11,368,222 $20,167,153 $5,074,481 $217,256,964 $133,035,208 $98,103,949
=========== =========== =========== =========== ========== ============ ============ ===========
<CAPTION>
Short-Term
U.S.
Government
Subaccount* Managed Subaccount
------------------------- -----------------------------------------
Year Ended
Year Ended Period ended December 31
December 31 December 31 -----------------------------------------
1995 1994 1995 1994 1993
------------ ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(decrease) in Net
Assets
From operations:
Net investment
income........... $ 94,735 $ 25,457 $ 23,257,698 $ 6,528,034 $ 9,432,129
Net realized
gains (losses)... 20,630 (1,779) 3,530,479 1,168,573 2,225,422
Net unrealized
appreciation
(depreciation)
during the year.. 77,274 (23,668) 24,157,024 (12,012,242) 830,965
------------ ------------ ------------- ------------- -------------
Net increase
(decrease) in net
assets resulting
from operations.. 192,639 10 50,945,201 (4,315,635) 12,488,516
From policyholder
transactions:
Net premiums from
policyholders 2,846,775 1,178,590 80,690,820 87,141,271 67,668,655
Net benefits to
policyholders (1,637,415) (114,133) (48,646,275) (43,706,261) (40,199,547)
------------ ------------ ------------- ------------- -------------
Net increase in
net assets from
policyholder
transactions..... 1,209,360 1,064,457 32,044,545 43,435,010 27,469,108
------------ ------------ ------------- ------------- -------------
Net increase in
net assets...... 1,401,999 1,064,467 82,989,746 39,119,375 39,957,624
Net assets:
Beginning of
period........... 1,064,467 -- 179,415,845 140,296,470 100,338,846
------------ ------------ ------------- ------------- -------------
End of period.... $2,466,466 $1,064,467 $262,405,591 $179,415,845 $140,296,470
============ ============ ============= ============= =============
</TABLE>
- ----
* The Short-Term U.S. Government and the Special Opportunities subaccounts
commenced operations on May 1 and May 6, 1994, respectively.

See accompanying notes.

37
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1995

NOTE 1--ORGANIZATION

NOTE 2--SIGNIFICANT ACCOUNTING POLICIES

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

38
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 3--NET ASSETS

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

NOTE 4--TRANSACTIONS WITH AFFILIATES

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

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

NOTE 5--DETAILS OF INVESTMENT

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

<TABLE>
<CAPTION>
Shares
Portfolio Owned Cost Value
--------- ---------- ------------ ------------
<S> <C> <C> <C>
Select Stock.............................. 6,543,480 $103,139,549 $113,649,478
Bond...................................... 5,566,616 54,653,090 56,377,102
International............................. 1,981,646 30,163,057 30,392,791
Money Market.............................. 1,968,401 19,684,014 19,684,014
Real Estate Equity........................ 1,902,059 21,767,182 22,246,849
Special Opportunities..................... 1,529,602 17,520,681 20,167,153
Stock..................................... 15,583,784 197,432,046 217,256,965
Short-Term U.S. Government................ 241,045 2,412,860 2,466,467
Managed................................... 19,116,115 244,207,400 262,405,591
</TABLE>

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

<TABLE>
<CAPTION>
Portfolio Purchases Sales
--------- ----------- ----------
<S> <C> <C>
Select Stock............................................ $49,568,131 $8,508,010
Bond.................................................... 18,755,232 6,821,624
International........................................... 11,419,611 6,302,715
Money Market............................................ 30,725,098 28,234,079
Real Estate Equity...................................... 7,174,344 5,475,910
Special Opportunities................................... 13,145,725 826,762
Stock................................................... 66,187,098 11,538,389
Short-Term U.S. Government.............................. 2,665,120 1,361,025
Managed................................................. 77,829,013 22,526,769
</TABLE>

39
<PAGE>

REPORTS OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

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

Boston, Massachusetts
February 9, 1996

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

Ernst & Young LLP

Boston, Massachusetts
February 7, 1996

40
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF FINANCIAL POSITION

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

41
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

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

42
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS

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

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

43
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES

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