HANCOCK JOHN VARIABLE LIFE ACCOUNT V, 485BPOS, 1996-04-12

HANCOCK JOHN VARIABLE LIFE ACCOUNT V
485BPOS, 1996-04-12

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

Registration No. 33-16611
- --------------------------------------------------------------------------------

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

FORM S-6
Post-Effective Amendment No. 11 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:
THOMAS C. LAUERMAN, ESQ.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
--------------------

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

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

If appropriate check the following box

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

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

<PAGE>

CROSS-REFERENCE TABLE

Form N-8B-2 Item Caption in Prospectus
- ---------------- ---------------------
<S> <C>
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 in Applicable Law
-- Funding and Otherwise

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

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

13 Charges and expenses,
Appendix--Illustration of Death
Benefits, 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 in Applicable Law
-- Funding and Otherwise

21 Policy Provisions and Benefits

22 Policy Provisions and Benefits

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, 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 in Applicable
Law -- Funding and Otherwise

53,54,55 Not Applicable

56,57,58,59 Not Applicable

</TABLE>
<PAGE>

John Hancock Variable Life
Insurance Company
(JHVLICO)
[FLEX VI JOHN HANCOCK LOGO TO APPEAR 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").

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

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

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

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
SUMMARY.................................................................... 1
JHVLICO AND JOHN HANCOCK................................................... 6
THE ACCOUNT AND THE SERIES FUNDS........................................... 6
THE FIXED ACCOUNT.......................................................... 10
POLICY PROVISIONS AND BENEFITS............................................. 11
Requirements for Issuance of Policy...................................... 11
Premiums................................................................. 11
Account Value and Surrender Value........................................ 14
Death Benefits........................................................... 15
Value Options............................................................ 15
Partial Withdrawal of Excess Value....................................... 17
Transfers Among Subaccounts.............................................. 17
Loan Provisions and Indebtedness......................................... 18
Default and Options on Lapse............................................. 19
Exchange Privilege....................................................... 20
CHARGES AND EXPENSES....................................................... 20
Charges Deducted from Premiums........................................... 20
Sales Charges............................................................ 20
Reduced Charges for Eligible Groups...................................... 22
Charges Deducted from Account Value...................................... 22
DISTRIBUTION OF POLICIES................................................... 25
TAX CONSIDERATIONS......................................................... 25
Policy Proceeds.......................................................... 25
Charge for JHVLICO's Taxes............................................... 26
Corporate and H.R. 10 Plans.............................................. 26
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO....................... 27
REPORTS.................................................................... 27
VOTING PRIVILEGES.......................................................... 28
CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE........................... 29
STATE REGULATION........................................................... 29
LEGAL MATTERS.............................................................. 29
REGISTRATION STATEMENT..................................................... 29
EXPERTS.................................................................... 29
FINANCIAL STATEMENTS....................................................... 30
APPENDIX--OTHER POLICY PROVISIONS.......................................... 50
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, SURRENDER VALUES AND
ACCUMULATED PREMIUMS...................................................... 52
</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....................................................... 14
Attained Age........................................................ 15
Basic Death Benefit................................................. 15
Basic Premium....................................................... 12
Benchmark Value..................................................... 15
Contingent Deferred Sales Charge.................................... 21
Current Death Benefit............................................... 15
Death Benefit Factor................................................ 15
Excess Value........................................................ 15
Experience Component................................................ 16
Extra Death Benefit................................................. 15
Fixed Account....................................................... 10
Grace Period........................................................ 19
Guaranteed Death Benefit............................................ 15
Home Office......................................................... 6
Indebtedness........................................................ 18
Investment Rule..................................................... 13
Issue Charge........................................................ 22
Level Schedule...................................................... 12
Loan Account........................................................ 18
Minimum First Premium............................................... 11
Modified Schedule................................................... 12
Premium Component................................................... 16
Premium Credit Factor............................................... 17
Premium Processing Charge........................................... 20
Premium Recalculation............................................... 12
Required Premium.................................................... 11
Subaccount.......................................................... Cover
Sum Insured at Issue................................................ 15
Surrender Value..................................................... 14
Valuation Date...................................................... 10
Value Option........................................................ 16
</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 policies purchased by the payment of fixed
annual premiums and policies purchased by the payment of a single premium.
These other policies are not funded by the Account and are offered by means of
other prospectuses.

As explained below, the death benefit and surrender value under the Policy
may increase or decrease daily. The Policies differ from ordinary fixed-
benefit life insurance in the way they work. However, the Policies are 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 expenses, taxes, and sales load. JHVLICO then places the
rest of the premium into as many as ten subaccounts as directed by the Owner.
The assets allocated to each variable subaccount are invested in shares of the
corresponding Portfolio of the Funds. The currently available Portfolios are
identified on the cover of this Prospectus. The assets allocated to the Fixed
Account are invested in the general account of JHVLICO. During the year,
JHVLICO takes charges from each subaccount and credits or charges each
subaccount with its respective investment performance. The insurance charge,
which is deducted from the invested assets attributable to each Policy
("Account Value"), varies monthly with the then attained age of the insured
and with the amount of insurance provided at the start of each month.

The death benefit may increase or decrease daily depending on the investment
experience of the subaccounts to which premiums are allocated. In general, the
Current Death Benefit equals the Account Value times a factor ("Death Benefit
Factor") which depends upon the sex and attained age of the insured. If the
Account Value increases, the Current Death Benefit will increase, and, if the
Account Value decreases, the Current Death Benefit will decrease. However,
JHVLICO guarantees that, regardless of the investment experience, the death
benefit payable will never be less than the amount of insurance originally
purchased in the absence of a subsequent 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 reaches or 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 reaches 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 basically the sum of the amounts of the premium
that JHVLICO, at the direction of the Owner, places in the Account and in the
Fixed Account. The Account Value increases or decreases daily depending on the
investment experience of the subaccounts to which the amounts are
allocated. 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 unpaid Issue 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

1
<PAGE>

other investments without sales charges) and, consequently, the insurance
protection provided prior to surrender would be costly.

The minimum initial death benefit that may be bought is $25,000 for insureds
less than 25 years of age at the time of issue of the Policy and $50,000 for
insureds with ages 25 through 75 at issue. All persons insured must meet
certain health and other criteria called "underwriting standards." The smoking
status of the insured is generally reflected in the insurance charges made. If
the minimum death benefit 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?

Premiums are determined under one of two premium schedules selected by the
Owner. Under the Level Schedule, premiums are fixed for the life of the
Policy. Under the Modified Schedule, a lower fixed premium is applicable which
does not vary until the Policy anniversary nearest the insured's 72nd
birthday. On this date, in the absence of an earlier election by the Owner,
the Policy premium is automatically shifted to the Level Schedule and a new
fixed annual premium becomes payable on a scheduled basis. The new 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 72nd birthday. In addition to the premium schedule chosen, the
amount of the premium for a Policy depends upon the Sum Insured at Issue and
the insured's age and sex (unless the Policy is sex-neutral). Premiums are
payable annually or more frequently over the insured's lifetime. Additional
premiums are charged for Policies in cases involving extra mortality risks and
for additional insurance benefits. There is a 61-day grace period in which to
make premium payments due after the Minimum First Premium is received.

Within limits, scheduled premiums may be paid in advance and more than the
scheduled premiums may be paid. If the Account Value under a Policy is
sufficiently high, a 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 or of M Fund, Inc., each of
which is a "series" type of mutual fund. The Portfolios of the Funds which are
currently available are Growth and Income, Large Cap Growth, Sovereign Bond,
Money Market, Managed, Real Estate Equity, International Equities, Short-Term
U.S. Government, Special Opportunities, Small Cap Growth, Small Cap Value, Mid
Cap Growth, Mid Cap Value, International Balanced, International
Opportunities, Large Cap Value, Strategic Bond, Equity Index, Edinburgh
Overseas Equity, Turner Core Growth and Frontier Capital Appreciation.

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

2
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million of the average daily net assets and at lesser percentages for amounts
above $300 million; with respect to the International Equities Portfolio, at
an annual rate of .60% of the first $250 million of the average daily net
assets and at lesser percentages for amounts above $250 million; with respect
to the Special Opportunities Portfolio, at an annual rate of .75% of the first
$250 million of the average daily net assets and at lesser percentages for
amounts above $250 million; with respect to the Equity Index Portfolio at an
annual rate of 0.25% of the net assets; with respect to the Large Cap Value
and Small Cap Growth Portfolios at an annual rate of 0.75% of the net assets;
with respect to the Mid Cap Growth Portfolio at an annual rate of 0.85% for
the first $100,000,000 of 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 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 net
assets and at lesser percentages for amounts above $100,000,000; with respect
to the Strategic Bond Portfolio at an annual rate of 0.75% of the first
$25,000,000 of 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 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 net assets
and at a lesser percentage for amounts above $100,000,000.

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

Premium Processing Charge. A charge not to exceed $2 is deducted from each
premium payment.

State Premium Tax Charge. A charge equal to 2 1/2% of each premium payment
after deduction of the Premium Processing Charge.

Sales Charge Deduction from Premium. A charge equal to 4 1/2% of each
premium payment after deduction of the Premium Processing Charge.

Contingent Deferred Sales Charge. A charge deducted from Account Value if
the Policy lapses or is surrendered during the first 14 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 premiums paid to date. The total
charge 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.

Issue Charges. A charge deducted monthly from Account Value in 48 equal
installments totalling $240 per Policy and 48c per $1000 of Sum Insured at
Issue.

Maintenance Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $4 per Policy and 2c per $1000 of current Sum
Insured.

3
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Insurance Charge. A charge based upon the amount at risk, 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.

Guaranteed Death Benefit Charges. 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.
Upon any exercise of the Extra Death Benefit Option or the Basic Premium
Reduction Option, a one-time charge not to exceed 3% (currently 1 1/2%) of the
amount applied to exercise the option.

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 7% of each year's additional premium is deducted from
premiums when paid and 93% 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 7% of each year's
additional premium is deducted from premiums when paid and 93% of the
additional premium is deducted monthly from Account Value in equal
installments.

Charge for Partial Withdrawal. A charge equal to the lesser of $25 or 2% of
the amount withdrawn made against Account Value at the time of withdrawal.

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 a processing charge, the charges
deducted for sales expenses and state premium taxes. 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".)

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<PAGE>

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 load, 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?

The death benefit payable is the greater of the Guaranteed Death Benefit,
including any Extra Death Benefit Value Option which may have been exercised,
or the Current Death Benefit. Whenever 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 it will decrease whenever there is
a decrease in the Policy's Account Value but never below the Guaranteed Death
Benefit. (See "Death Benefits".)

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.

IS THERE A SHORT-TERM CANCELLATION RIGHT?

5
<PAGE>

by state law, the refund will equal the Account Value at the end of the
Valuation Period in which the Policy is received plus all charges or
deductions made against premiums plus an amount reflecting charges against the
subaccounts and the investment management fee of the Funds.

WHAT IS THE EXCHANGE PRIVILEGE ALLOWED AN OWNER?

The Owner may transfer the entire Account Value in variable subaccounts
under a Policy to the Fixed Account at any time. The transfer will take effect
at the end of the Valuation Period in which JHVLICO receives, at its Home
Office, notice satisfactory to JHVLICO. (See "Exchange Privilege".)

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

There has been a determination by the Internal Revenue Service that death
benefits payable under variable life insurance policies (which appear to be
similar to those described in this Prospectus in all material respects) are
excludable from the beneficiary's gross income for Federal income tax
purposes. It is also believed that an Owner will not be deemed to be in
constructive receipt of the cash values of the Policy until values are
actually received through withdrawal, surrender, or other distributions. 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.

Under recent Federal tax legislation, distributions from Policies entered
into after June 20, 1988 on which premiums greater than a "7-pay" premium
limit (as defined in the law) have been paid, will be subject to taxation. See
"Flexibility as to Premium Payments" for a discussion of how the "7-pay"
premium limit may be exceeded under a Policy. A distribution on such a Policy
(called by the law a "modified endowment contract") will be taxed to the
extent there is any income (gain) to the Owner and an additional tax may be
imposed on the taxable amount (See "Flexibility as to Premium Payments" and
"Policy Proceeds" under "Tax Considerations").

JHVLICO AND JOHN HANCOCK

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

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

THE ACCOUNT AND THE SERIES FUNDS

The Account, 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").

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

THE SERIES FUNDS

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

Growth and Income (formerly Stock) Portfolio

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

Large Cap Growth (formerly Select Stock) Portfolio

The investment objective of this Portfolio is to achieve above-average
capital appreciation through the ownership of common stocks of companies
believed by management to offer above-average capital appreciation
opportunities. Current income is not an objective of the Portfolio.

Sovereign Bond (formerly Bond) Portfolio

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

7
<PAGE>

Money Market Portfolio

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

Managed Portfolio

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

Real Estate Equity Portfolio

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

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

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

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

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

Large Cap Value Portfolio. To provide substantial dividend income, as well
as long-term capital appreciation, through investments in the common stocks of
established companies believed 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.

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 emerging
growth companies.

Small Cap Value Portfolio. To provide long-term growth of capital by
investing in a well diversified portfolio of common stocks of small-sized
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.

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, Managed, Real Estate Equity, Equity Index
and Short-Term U.S. Government Portfolios. Another indirectly owned
subsidiary, John Hancock Advisers, Inc., located at 101 Huntington Avenue,
Boston, Massachusetts, and its subsidiary, John Hancock Advisers
International, Limited, located at 34 Dover Street, London, England, provide
sub-investment advice with respect to the International Equities Portfolio,
and John Hancock Advisers, Inc. does likewise with respect to the Sovereign
Bond, Small Cap Growth and Special Opportunities Portfolios.

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

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

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

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

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

M Financial Investment Advisers, Inc., acts as the investment manager for
the three Portfolios described above. Edinburgh Fund Managers PLC, provides
sub-investment 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.

9
<PAGE>

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

THE FIXED ACCOUNT

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

The Account Value in the Fixed Account is equal to the portion of the net
premiums allocated to it, plus any amounts transferred to it and interest
credited to it, minus any charges deducted from it or partial withdrawals or
amounts transferred from it. JHVLICO guarantees that interest credited to the
Account Value in the Fixed Account will not be less than an effective annual
rate of 4%. JHVLICO may, in its sole discretion, credit a higher rate 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 Securities and Exchange 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.

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<PAGE>

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. For the effect of a default in payment of premiums, see "Default and
Options on Lapse", and of a loan, see "Loan Provision and Indebtedness".

REQUIREMENTS FOR ISSUANCE OF POLICY

The Policy is generally available with a minimum Sum Insured at Issue of
$25,000 for insureds less than 25 years of age at the time of issue of the
Policy and minimum Sum Insured at Issue of $50,000 for insureds with ages 25
through 75 at issue. All persons insured must meet certain health and other
criteria called "underwriting standards". The smoking status of the insured is
reflected in the 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, factors
and premiums set forth in this Prospectus may differ for such Policies.

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. All
Policies operate under the same schedule of due dates.

After the payment of the Minimum First Premium (see "Minimum Premium
Requirements" below) there are three scheduled due dates in the first Policy
year. Due dates are the last Valuation Date in the third, sixth and ninth
Policy months. In the second Policy year, the scheduled due dates are the last
Valuation Date in the sixth and twelfth Policy months. In the third and all
later Policy years, the scheduled due date is the last Valuation Date of the
Policy year.

Minimum Premium Requirements

An amount of Required Premium (see "Amount of Required Premium" below) is
determined at the start of each Policy year. Generally, the full amount of
Required Premium must be paid by the last scheduled due date of the Policy
year. In the first and second Policy years, however, there are additional
requirements.

In the first Policy year, 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 equal to the greater of $150 or one-fourth of the
Required Premium. Also in the first Policy year, one-half of the Required
Premium must be received on or before the last Valuation Date in the third
Policy month and three-quarters of the Required Premium must be received on or
before the last Valuation Date in the sixth Policy month.

In the second Policy year, one-half of the Required Premium for the second
Policy year must be received on or before the last Valuation Date in the sixth
Policy month.

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.

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<PAGE>

Generally, all premiums 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 and amounts applied from
the Premium Component to any Value Option other than the Accumulate Option.
The premium requirement will also be deemed satisfied on the last Valuation
Date of the second or any later Policy year if any Excess Value is available
on the scheduled due date. See "Value Options".

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 Policy year equals an
amount for the Basic Death Benefit ("Basic Premium") or $300 if the annual
Basic Premium is less than $300, plus any additional premium because the
insured is an extra mortality risk or because additional insurance benefits
have been purchased. The Basic Premium is a level amount that does not change
if the Level Schedule is selected. If the Modified Schedule is selected, the
Basic Premium does not change until the Premium Recalculation occurs. See
"Choice of Premium Schedule" and "Premium Recalculation".

If the Account Value on the Valuation Date immediately preceding the Policy
anniversary, when multiplied by the Death Benefit Factor on that Policy
anniversary, is equal to or greater than the Guaranteed Death Benefit, then no
Required Premium is applicable to the following Policy year. This means that
even if no premium is paid during the Policy year, the premium requirement
will be met on the scheduled due date at the end of the Policy year. If
applicable, Owners will be mailed a written notice by JHVLICO within 10 days
after any Policy anniversary that no premium payment is required in that
Policy year.

Choice of Premium Schedule

At the time of application, the applicant can select either a Level Schedule
or a Modified Schedule as the basis for the Basic Premium on the Policy. The
Modified Schedule alternative is not available if the insured is over age 70
on the issue date of the Policy. If the Level Schedule is chosen, the Basic
Premium will never increase during the lifetime of the insured. With the Level
Schedule, the Basic Premium is completely insulated from any adverse
investment performance. If the Modified Schedule is chosen, the Basic Premium
is initially lower than under the Level Schedule. However, a Premium
Recalculation (described below) must occur no later than the Policy
anniversary nearest the insured's 72nd birthday. At the time of the Premium
Recalculation, JHVLICO determines a new Basic Premium which is payable through
the remaining lifetime of the insured.

A comparison of the Basic Premiums at issue under the Level and Modified
Schedules for a Sum Insured at issue of $100,000 for a male is shown below:

<TABLE>
<CAPTION>
Issue
Age Level Modified
----- ----- --------
<S> <C> <C>
25 $1,113.00 $ 708.00
40 $1,954.00 $1,305.00
55 $3,869.00 $2,585.00
</TABLE>

Premium Recalculation (Modified Schedule Only)

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<PAGE>

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 by
JHVLICO on the Policy anniversary nearest the insured's 72nd birthday.

The new Basic Premium resulting from a Premium Recalculation may be less
than, equal to or greater than the original Basic Premium but it will never
exceed the maximum Basic Premium shown in the Policy. The new Basic Premium
depends on the insured's sex and 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 charge will be made if the new Basic Premium is below the Basic Premium on
the Level Schedule for the insured's age at issue of the Policy. The charge
(currently 1 1/2%) will not exceed 3% of the amount of Account Value applied
by JHVLICO to reduce the new Basic Premium to an amount below the Basic
Premium which would have been payable on the Level Schedule for the insured's
age at issue. See "Guaranteed Death Benefit Charges".

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. A Premium Processing Charge,
not to exceed $2, is deducted from each premium payment. All premiums are
payable at JHVLICO's Home Office.

Any premium payment will be processed by JHVLICO as of the end of the
Valuation Period in which it is received, unless one of the three exceptions
noted below is applicable. Each premium payment will be reduced, first by the
Premium Processing Charge and then by the state premium tax charge and the
sales charge deducted from 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 of the ten subaccounts. The
Owner must select allocation percentages in whole numbers, and the total
allocated must equal 100%. The Owner may thereafter change the Investment Rule
prospectively at any time. The change will be effective as to any net premiums
and credits applied after receipt at JHVLICO's Home Office of notice
satisfactory to JHVLICO.

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

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

(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
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 issue
date, 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.

Flexibility as to Premium Payments

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<PAGE>

However, each premium payment must be at least $25. JHVLICO reserves the right
to limit premium payments above the amount of the cumulative Required Premiums
due on the Policy.

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 applied under a Value Option (See "Value Options"), 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 due 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. If, however, the Owner were to
apply $500 of the additional premium to a Value Option, then only $1,500 would
remain to meet Required Premiums. The Policy would remain in force for at
least 9 years but a payment of $500 may be necessary by the end of the tenth
Policy year to keep the Policy in force.

Recent Federal legislation has modified 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 that exceed a "7-pay' premium as defined in the law.
The "7-pay' premium is greater than the Required Premium on the Policy but is
generally less than the amount an Owner may choose to pay and JHVLICO will
accept. If the total premium paid exceeds the 7-pay limitation, the Owner will
be subject to the new tax rules on any distributions made from the Policy. A
material change in the Policy will result in a new "7-pay" limitation and test
period. A reduction in death benefit within the seven year period following
issuance of, or a material change in, the Policy may also result in the
application of the modified endowment treatment. See "Policy Proceeds" under
"Tax Considerations."

ACCOUNT VALUE AND SURRENDER VALUE

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

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

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

The Contingent Deferred Sales Charge is deducted from the Account Value upon
surrender of the Policy during the first fourteen Policy years after issue.
The amount of this charge is set forth in a schedule under "Sales Charges".
The total charge 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 over that period.

14
<PAGE>

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
for the Policy will be adjusted to reflect the new Sum Insured. A pro-rata
portion of any Contingent Deferred Sales Charge will be deducted. A possible
alternative to the partial surrender of a Policy is the withdrawal of Excess
Value. See "Value Options".

DEATH BENEFITS

The death benefit payable is the greater of the Guaranteed Death Benefit,
including any Extra Death Benefit, or the Current Death Benefit.

Guaranteed Death Benefit. The Guaranteed Death Benefit at any time is the
sum of the Basic Death Benefit and any Extra Death Benefit. The Basic Death
Benefit at issue of the Policy is the same as the Sum Insured at Issue shown
in the Policy. Thereafter the Basic 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.

Extra Death Benefit. An Extra Death Benefit may be available from time to
time on Policy anniversaries. If the Owner exercises an Extra Death Benefit
Value Option on a Policy anniversary, the amount of Extra Death Benefit
produced under the Option becomes a Guaranteed Death Benefit. The amount of
any Extra Death Benefit depends upon the Account Value, Benchmark Value (see
"Value Options") and the sex and age of the Insured on the Policy anniversary
as of which the Option is exercised. See "Value Options". The insured's age on
a Policy anniversary is the age of the insured on his or her birthday nearest
that date.

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 the Death
Benefit Factor shown in the Policy. The Death Benefit Factor depends upon the
sex and the then attained age of the insured. The Death Benefit Factor
decreases from year to year as the attained age of the insured increases. For
example, the Death Benefit Factor for a male age 75 is 1.3546, for a male age
76 is 1.3325. (A complete list of Death Benefit Factors is set forth in the
Policy.) The Current Death Benefit is variable: it increases as the Account
Value increases and decreases as the Account Value decreases.

VALUE OPTIONS

As of the last Valuation Date in each Policy year, the Account Value of the
Policy will be compared against an amount (the Benchmark Value described
below) to determine if any Excess Value exists under the Policy. Any Excess
Value will be applied according to the election made in the application for
the Policy or in a written notice from the Owner after issue of the Policy.

The Benchmark Value depends upon the Policy's Guaranteed Death Benefit, the
Required Premium, any Indebtedness, the sex and attained age of the insured,
and any Surrender Charge. The formula describing precisely how Benchmark Value
is calculated on each Policy anniversary is set forth in the Policy under
"Excess Value". In general, the Benchmark Value increases as more guarantees
are provided in the Policy, either in the form of higher Guaranteed Death
Benefits or lower premiums. The Benchmark Value is also not less than 110% of
any Indebtedness. The Benchmark Value generally increases as the attained age
of the insured increases.

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<PAGE>

Excess Value is any amount of Account Value greater than Benchmark Value.
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 or applied under certain Value Options)
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.

If Excess Value is available on a Policy anniversary, any Premium Component
and Experience Component will be applied under Value Options elected by the
Owner. Either component may be applied to any available Value Option except
that the Premium Component must be applied to the Accumulate Option until the
second Policy anniversary. The amounts to be applied will be determined in
accordance with the Owner's election and in accordance with the then current
JHVLICO rules. A change in an election will be effective as of the Policy
anniversary next following its date of receipt in writing by JHVLICO at its
Home Office or, if subject to underwriting rules, its date of approval. Any
change in election does not affect amounts previously applied under any Value
Option.

The Policy includes three Value Options:

The Accumulate Option leaves any Excess Value in the Account Value and does
not affect the guarantees under the Policy. The Accumulate Option is available
on both Premium Schedules and no limit is placed on the amount that may be
applied from either the Premium Component or the Experience Component.

The Extra Death Benefit Option increases the amount of Guaranteed Death
Benefit. The Extra Death Benefit Option is available on both Premium
Schedules. No limit is placed on the amount that may be applied from the
Experience Component. The amount that may be applied from the Premium
Component is limited to an amount that depends upon the Sum Insured at Issue
and the insured's age at issue of the Policy. Amounts applied from the Premium
Component reduce the cumulative amount of premiums received under the Policy
for purposes of determining whether the Policy will continue to remain in
force. A Guaranteed Death Benefit Charge (see "Charges and Expenses") is made
against the Account Value to cover the risk assumed by JHVLICO in providing
the increased Guaranteed Death Benefit. The Extra Death Benefit Value Option
may not be available if the insured is an extra mortality risk.

The increase in Guaranteed Death Benefit equals the amount applied less the
Guaranteed Death Benefit Charge times the Death Benefit Factor shown in the
Policy. An increase in the Guaranteed Death Benefit may increase the amount at
risk under the Policy which would increase the amount of the Insurance Charge.
See "Charges Deducted from Account Value". The Owner may decrease the amount
of any Extra Death Benefit on the Policy. Depending upon the amount of Account
Value under a Policy, a decrease may result in an amount of Excess Value which
may be taken by the Owner as a partial withdrawal. See "Partial Withdrawal of
Excess Value". Any decrease is effective at the end of the Valuation Period in
which JHVLICO receives written notice of the request.

16
<PAGE>

Guaranteed Death Benefit will remain in effect notwithstanding the lower
future premiums. The reduction in Basic Premium equals the amount applied,
less the Guaranteed Death Benefit Charge, divided by the Premium Credit Factor
shown in the Policy. The Premium Credit Factor depends upon the sex and the
then attained age of the insured. The Premium Credit Factor decreases from
year to year as the attained age of the insured increases. For example, the
Premium Credit Factor for a female age 60 is 13.6798, for a female age 61 is
13.3382.

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 $500. Unless the Current Death Benefit exceeds the
Guaranteed Death Benefit, a partial withdrawal will not affect the death
benefit payable. An amount equal to the lesser of $25 or 2% of the amount
withdrawn is charged against Account Value for each partial withdrawal.

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 is deducted upon a partial
withdrawal. Amounts withdrawn from the Premium Component reduce the cumulative
amount of premiums received for purposes of determining whether the premium
requirements of the Policy have been met. On a Modified Schedule, because the
Account Value is reduced by a partial withdrawal, the premium that results
from the 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
up to twelve times in each Policy year with no charge. If any additional
transfers in a Policy year are permitted, JHVLICO may impose a charge of not
more than $5 against Account Value for each additional transfer. 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 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

17
<PAGE>

reallocated to no more than ten subaccounts. Furthermore, 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.

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

An owner who authorizes telephone transactions will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which JHVLICO reasonably believes to be genuine. 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 instruction.

LOAN PROVISIONS AND INDEBTEDNESS

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

The amount of any outstanding loan plus accrued interest is called the
"Indebtedness". 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 premiums are being duly paid.
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

18
<PAGE>

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.

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 an 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.

DEFAULT AND OPTIONS ON LAPSE

Premium Grace Period, Default and Lapse. Any amount of premium required to
keep the Policy in force is in default if not paid on or before its scheduled
due 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.

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".

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.

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<PAGE>

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:

Premium Processing Charge. A charge, not to exceed $2, will be deducted from
each premium payment for collection and processing costs. Policyholders who
pay premiums annually will incur lower aggregate processing charges than those
who pay premiums more frequently. The processing charge is currently $2 but
may be different for payments made under special billing arrangements
acceptable to JHVLICO.

State Premium Tax Charge. A charge equal to 2 1/2% of each premium payment,
after the deduction of the Premium Processing Charge, will be deducted from
each premium payment except in any state where a lower charge is required.
Premium taxes vary from state to state. The 2 1/2% rate is the average rate
expected to be paid on premiums received in all states over the lifetimes of
the insureds covered by the Policies.

SALES CHARGES

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<PAGE>

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."

Part of the sales charge is deducted from each premium payment received.
This amount is 4 1/2% of the premium, after deduction of the Premium
Processing Charge. JHVLICO will waive the portion of the sales charge
otherwise to be deducted from each premium paid 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 at some future date.

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 fourteenth anniversary, and it will be reduced for a Policy
that lapses or is surrendered between the end of the tenth Policy year and the
end of the fourteenth 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 Modified Premiums or portions thereof due on or before the
date of surrender or lapse.

<TABLE>
<CAPTION>
Maximum Contingent Deferred Sales
Charge as a Percentage of Modified
Premiums Due Through Effective
For Surrenders or Lapses Effective During: Date of Surrender or Lapse*
------------------------------------------ ----------------------------------
<S> <C>
Policy Years 1-8......................... 15.00%
Policy Year 9............................ 14.38%
Policy Year 10........................... 13.89%
Policy Year 11........................... 10.80%
Policy Year 12........................... 7.35%
Policy Year 13........................... 4.50%
Policy Year 14........................... 2.08%
Policy Year 15 and Later................. 0%
</TABLE>
- --------
* A slightly lower percentage than that shown applies in the last Valuation
Period of Policy years 8 through 14.

The amount of the Contingent Deferred Sales Charge is calculated on the
basis of the premium under the Modified Schedule for the age of the insured at
the time of issue of the Policy, regardless of whether the Policy uses the
Level Schedule or the Modified Schedule. At issue ages above 70, however,
where only the Level Schedule is available, the Contingent Deferred Sales
Charge depends on the premium under that schedule. Also, lower percentages
apply at higher issue ages.

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<PAGE>

on the sum of five Modified 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 (i.e., from Modified to Level
Schedule) or a premium reduction is implemented, 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 premium
schedule in effect prior to such recalculation or reduction.

The Contingent Deferred Sales Charge reaches its maximum at the end of the
ninth Policy year and equals this amount for the entire tenth Policy year. The
Contingent Deferred Sales Charge is reduced in each Policy year after the
tenth. At issue ages higher than age 57, the maximum is reached at an earlier
Policy year, e.g., the end of the fifth Policy year at issue age 70, and may
be reduced to zero over a shorter number of years.

REDUCED CHARGES FOR ELIGIBLE GROUPS

The sales charges 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 Policyowner.

CHARGES DEDUCTED FROM ACCOUNT VALUE

In addition to the possible transfer charge discussed above under "Transfers
Among Subaccounts", the following charges are deducted from Account Value:

Issue Charge. JHVLICO will deduct from Account Value a charge ($240 per
Policy and 48c per $1,000 of the Sum Insured at Issue) 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. For a Policy with a $50,000 Sum Insured
at Issue, the total Issue Charge would be $264.

This charge is fully assessed upon the issuance of the Policy, but will be
deducted from the Account Value in 48 equal monthly installments. On the Date
of Issue and on the first day of each subsequent Policy month, JHVLICO will
deduct $5 per Policy and 1c per $1,000 of the Sum Insured at Issue. For each
month that JHVLICO is unable to deduct the charge because there is
insufficient Account Value, the period over which JHVLICO will make this
deduction will be extended by one month.

If a Policy lapses or is surrendered before the Issue Charge has been fully
recovered, the unpaid balance is part of the Surrender Charge. If a Policy
terminates by reason of the death of the insured, the unpaid balance will not
reduce the death benefit. The unpaid Issue Charge also reduces the amount that
may be borrowed through a Policy loan.

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<PAGE>

Maintenance Charge. JHVLICO will deduct from the Account Value a charge
equal to $4 per Policy and 2c per $1,000 of the current Sum Insured. For a
Policy with a Sum Insured at Issue of $50,000 the maintenance charge deducted
during a Policy year would be $60.

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.

The maximum maintenance charge currently is $6.75 no matter how large a
Policy's current Sum Insured. Based on the current monthly charge, this
maximum will benefit all Policies which have a current Sum Insured above
$137,500. Policies with a Sum Insured below this amount are not affected by
the maximum. This current maximum is not contractually guaranteed and may be
withdrawn or modified by JHVLICO at some future date.

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.

Current monthly rates for insurance are based on the sex, age, and
underwriting class of the insured. 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.

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 and be age 20 or over. Insureds who
are under 20 years of age may ask us to review their current smoking habits
after they reach their 20th birthday.

JHVLICO will also charge lower current insurance rates under a Policy with a
current Sum Insured of $250,000 or higher if the insured is over age 32 in the
standard underwriting class or the insured is over age 34 in the preferred
underwriting class. These lower current insurance rates are not contractually
guaranteed and may be withdrawn or modified by JHVLICO at some future date.

Guaranteed Death Benefit Charges. 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 an Extra Death Benefit Value Option is exercised, JHVLICO guarantees a
higher Guaranteed Death Benefit. When a Basic Premium Reduction Value Option
is exercised, JHVLICO provides the same Guaranteed Death Benefit with less
premiums. In either event, JHVLICO makes a one-time deduction from the amount
applied as compensation for making the additional guarantee. The current
charge is 1 1/2% of the amount applied. This charge may be increased by
JHVLICO but it will never exceed 3% of the amount applied.

When a Premium Recalculation is effected on Policy on a Modified Schedule,
and the new Basic Premium is less than the Basic Premium on the Level Schedule
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 amount applied to reduce the new Basic Premium
to an amount below the Basic Premium on the Level Schedule for the insured's
age at issue. This charge may be increased by JHVLICO but it will never exceed
3% of the amount applied.

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<PAGE>

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.

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 7% of the additional premium is deducted from
premiums when paid and 93% of the additional premium is deducted monthly from
Account Value in equal installments.

An insured who is charged an additional Required Premium because of the
extra mortality risk may not be eligible to exercise the Extra Death Benefit
Value Option.

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 7% of the additional
premium is deducted from premiums when paid and 93% 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 effect 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 fifth 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 $500. An administrative charge equal to the
lesser of $25 or 2% of the amount withdrawn will be deducted from the Account
Value on the date of withdrawal.

Guarantee of Premiums and Certain Charges. The Policy's Basic Premium is
guaranteed not to increase, except that a larger Basic Premium may result from
the Premium Recalculation for a Modified Schedule Policy. The state premium
tax charge, sales charges, 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. Any charge for transfers among subaccounts, the
Premium Processing Charge, the maintenance charge, the Guaranteed Death
Benefit Charges 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 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.

24
<PAGE>

DISTRIBUTION OF POLICIES

Applications are solicited by agents who are licensed by state insurance
authorities to sell JHVLICO's Policies and who are also registered
representatives of John Hancock. John Hancock performs suitability and
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.

Agents 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 premium that would be payable under a Modified Schedule in the first
Policy year, 10% of such premiums payable in the second, third and fourth
Policy years and 3% of any other premiums received by JHVLICO.

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. 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 principal investment
manager and principal underwriter for John Hancock Variable Series Trust I.

TAX CONSIDERATIONS

POLICY PROCEEDS

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<PAGE>

the Internal Revenue Code ("Code") defines life insurance for Federal tax
purposes. If certain standards are met at issue and over the life of the
Policy, the Policy will come within that definition. JHVLICO will monitor
compliance with these standards.

JHVLICO believes that the death benefit under the Policy will be excludable
from the beneficiary's gross income under Section 101 of the Code. The Owner
of a Policy is not deemed to be in constructive receipt of the cash values
until a withdrawal or surrender. A surrender, partial surrender or withdrawal
may have tax consequences. For example, the Owner will be taxed on a surrender
to the extent that the surrender value exceeds the net premiums paid under the
Policy, i.e., ignoring premiums paid for optional benefits and riders. But
under certain circumstances the Owner may be taxed on a withdrawal of Policy
values even if total withdrawals do not exceed total premiums paid.

JHVLICO also believes that, 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.

Distributions under Policies entered into after June 20, 1988, on which
premiums greater than the "7-pay' limit have been paid will be subject to
taxation based on recent 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). Additionally, a 10% penalty tax may be imposed on income distributed
before the Owner attains age 59 1/2. Policies entered into prior to June 21,
1988, may also be subject to a tax on distributions if there is a material
change in the benefits or other terms of the Policy. 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 recent tax law 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.

The above description of Federal tax consequences is only a brief summary
and is not intended as tax advice. For further information consult a qualified
tax advisor.

Federal and state tax laws can change from time to time and, as a result,
the tax consequences to the Owner and beneficiary may be altered.

CHARGE FOR JHVLICO'S TAXES

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

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

CORPORATE AND H.R. 10 PLANS

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

26
<PAGE>

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO

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

<TABLE>
<CAPTION>
Directors--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.
Robert R. Reitano 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.
Michele G. Van Leer 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.

REPORTS

27
<PAGE>

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 Funds, including a list of securities held in each
Portfolio.

VOTING PRIVILEGES

All of the assets in the variable subaccounts of the Account, apart from
assets attributable to Policy loans, 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 the Policies at
regular and special meetings of the Funds' shareholders in accordance with
instructions received from Owners of the Policies. Shares of the Funds held in
the Account which are not attributable to the Policies and shares for which
instructions from Owners are not received will be voted by JHVLICO for and
against each matter in the same proportions as the votes based upon the
instructions received from the Owners.

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

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

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

28
<PAGE>

CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE

The voting privileges described in this Prospectus are afforded based on
JHVLICO's understanding of applicable Federal securities law requirements. To
the extent that applicable law, regulations or interpretations change to
eliminate or restrict the need for such voting privileges, JHVLICO reserves
the right to proceed in accordance with any such revised requirements. JHVLICO
also reserves the right, subject to compliance with applicable law, including
approval of Owners if so required, (1) to transfer assets determined by
JHVLICO to be associated with the class of policies to which the Policies
belong from the Account to another separate account or 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, and (3) to deregister the Account under
the 1940 Act. JHVLICO would notify Owners of any of the foregoing changes and,
to the extent legally required, obtain approval of Owners and any regulatory
body prior thereto. Such notice and approval, however, may not be legally
required in all cases.

STATE REGULATION

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

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

LEGAL MATTERS

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

REGISTRATION STATEMENT

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

EXPERTS

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

29
<PAGE>

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.

30
<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.

31
<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.

32
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

<TABLE>
<CAPTION>
Special
Opportunities
Real Estate Equity Subaccount Subaccount* Stock Subaccount
------------------------------- ------------------------ -----------------------------------
Year Ended Period Ended
Year Ended December 31 December 31 December 31 Year Ended December 31
------------------------------- ----------- ------------ -----------------------------------
1995 1994 1993 1995 1994 1995 1994 1993
---------- --------- -------- ----------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from
the Portfolios
of John Hancock
Variable Series
Trust I......... $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
December 31 December 31 Year Ended December 31
----------- ------------ -------------------------------------
1995 1994 1995 1994 1993
----------- ------------ ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Investment
Income:
Distributions
received from
the Portfolios
of John Hancock
Variable Series
Trust I......... $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.

33
<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.

34
<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 Period Ended Year Ended
December 31 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 Period Ended Year 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.

35
<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.

36
<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>

37
<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

38
<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.

39
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

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

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

40
<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.

41
<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.

42
<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.

43
<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

44
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED

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

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

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

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

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

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

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

NOTE 2--CAPITALIZATION

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

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

NOTE 3--ACQUISITION

On June 23, 1993, the Company acquired all of the outstanding shares of stock
of Colonial Penn Annuity and Life Insurance Company (CPAL) from Colonial Penn
Life Insurance Company for an aggregate purchase price

45
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

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

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

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

NOTE 4--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

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

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

Net realized capital gains consist of the following items:

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

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

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

46
<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>

47
<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>

48
<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 adjust-
ment):
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.

49
<PAGE>

APPENDIX--OTHER POLICY PROVISIONS

SETTLEMENT PROVISIONS

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

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

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

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

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

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

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

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

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

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

ADDITIONAL INSURANCE BENEFITS

On payment of an additional 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.

50
<PAGE>

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

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

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

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

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

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

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

51
<PAGE>

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

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

The amounts shown for the death benefit and surrender value are as of the
end of each Policy year. The tables headed "Using Current Charges" assume that
current monthly rates for insurance and current charges for expenses will be
made in each year illustrated. The tables headed "Using Maximum Charges"
assume that the maximum (guaranteed) charge will be made for insurance and for
expense charges in each year illustrated. The amounts shown in all tables
reflect an average asset charge for the daily investment advisory expense
charges to the Portfolios of the Fund (equivalent to an effective annual rate
of .63%) and an assumed average asset charge for the annual nonadvisory
operating expenses of each Portfolio of the Fund (equivalent to an effective
annual rate of .20%). For a description of expenses charged to the Portfolios,
including the reimbursement of any Portfolio for annual non-advisory operating
expenses in excess of an effective annual rate of .25%, a continuing
obligation of the Fund's investment adviser, see the attached prospectus for
the Fund. The charges for the daily investment management fee and the annual
non-advisory operating expenses are based on the hypothetical assumption that
Policy values are allocated equally among the nine variable subaccounts. The
actual charges and expenses associated with any Policy will vary depending
upon the actual allocation of Policy values among subaccounts. During the
first 14 Policy years, the surrender values for the base Policy are the
Account Values less the Contingent Deferred Sales Charge (and, during the
first four years, less any unpaid Issue Charge). Thereafter the Account Value
will be equal to the surrender value.

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

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

The amounts shown for the death benefit and surrender value reflect Excess
Value, if any, applied under the Accumulate Option.

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

52
<PAGE>

PLAN: SCHEDULE PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE--LEVEL
$1,113 BASIC PREMIUM (1)
USING CURRENT CHARGES

(1) If premiums are paid more frequently than annually the payments would be
$556.50 semiannually, $278.25 quarterly, or $92.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
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 AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.

53
<PAGE>

(1) If premiums are paid more frequently than annually the payments would be
$354.00 semiannually, $177.00 quarterly, or $59.00 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,973 for a hypothetical
gross investment return of 0%, $8,644 for a gross return of 6%, and $0 for
a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.

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 AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.

54
<PAGE>

PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 40, PREFERRED UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE--LEVEL
$1,954 BASIC PREMIUM (1)
USING CURRENT CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated 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
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,052 100,000 100,000 100,000 1,062 1,159 1,257
2 4,206 100,000 100,000 100,000 2,380 2,665 2,964
3 6,468 100,000 100,000 100,000 3,667 4,235 4,851
4 8,843 100,000 100,000 100,000 4,923 5,870 6,939
5 11,337 100,000 100,000 100,000 6,150 7,578 9,253
6 13,955 100,000 100,000 100,000 7,335 9,350 11,810
7 16,705 100,000 100,000 100,000 8,491 11,203 14,647
8 19,592 100,000 100,000 100,000 9,673 13,194 17,851
9 22,623 100,000 100,000 100,000 10,815 15,264 21,390
10 25,806 100,000 100,000 100,000 12,040 17,537 25,422
11 29,148 100,000 100,000 100,000 13,438 20,108 30,081
12 32,657 100,000 100,000 100,000 14,931 22,903 35,333
13 36,342 100,000 100,000 100,000 16,380 25,789 41,093
14 40,211 100,000 100,000 105,149 17,784 28,770 47,401
15 44,273 100,000 100,000 116,202 19,135 31,844 54,270
16 48,538 100,000 100,000 127,897 20,081 34,667 61,398
17 53,017 100,000 100,000 140,274 20,966 37,591 69,186
18 57,719 100,000 100,000 153,385 21,791 40,624 77,695
19 62,657 100,000 100,000 167,265 22,547 43,770 86,981
20 67,841 100,000 100,000 182,001 23,237 47,040 97,119
25 97,922 100,000 108,401 270,954 25,531 65,365 163,383
30 136,313 100,000 128,177 392,210 24,595 86,140 263,582
35 185,310 100,000 148,072 561,290 19,081 109,311 414,358
40 247,845 100,000 169,835 802,997 4,584 135,219 639,328
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.84 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.

55
<PAGE>

PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 40, PREFERRED UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE AT ISSUE--MODIFIED
$1,305 INITIAL BASIC PREMIUM AT ISSUE (1)
USING CURRENT CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated 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
- ------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,370 100,000 100,000 100,000 466 527 589
2 2,809 100,000 100,000 100,000 1,195 1,372 1,558
3 4,320 100,000 100,000 100,000 1,901 2,249 2,628
4 5,906 100,000 100,000 100,000 2,582 3,159 3,812
5 7,571 100,000 100,000 100,000 3,241 4,107 5,125
6 9,320 100,000 100,000 100,000 3,864 5,082 6,572
7 11,157 100,000 100,000 100,000 4,464 6,099 8,181
8 13,085 100,000 100,000 100,000 5,094 7,213 10,023
9 15,109 100,000 100,000 100,000 5,690 8,362 12,050
10 17,235 100,000 100,000 100,000 6,372 9,666 14,405
11 19,467 100,000 100,000 100,000 7,231 11,217 17,199
12 21,810 100,000 100,000 100,000 8,188 12,940 20,380
13 24,271 100,000 100,000 100,000 9,104 14,695 23,835
14 26,855 100,000 100,000 100,000 9,976 16,485 27,598
15 29,568 100,000 100,000 100,000 10,796 18,300 31,694
16 32,417 100,000 100,000 100,000 11,210 19,792 35,813
17 35,408 100,000 100,000 100,000 11,562 21,306 40,344
18 38,548 100,000 100,000 100,000 11,850 22,843 45,340
19 41,846 100,000 100,000 100,000 12,065 24,397 50,853
20 45,309 100,000 100,000 106,646 12,206 25,972 56,908
25 65,398 100,000 100,000 160,023 11,607 34,107 96,492
30 91,038 100,000 100,000 232,671 7,100 41,843 156,365
35 133,139 100,000 100,000 327,861 20,523 58,122 242,035
40 193,931 100,000 107,886 460,175 45,834 85,896 366,381
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$652.50 semiannually, $326.25 quarterly, or $108.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,418 for a hypothetical
gross investment return of 0%, $4,138 for a gross return of 6%, and $0 for
a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.

56
<PAGE>

<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated 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
- ------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,169 100,000 100,000 100,000 345 395 445
2 2,396 100,000 100,000 100,000 973 1,114 1,262
3 3,684 100,000 100,000 100,000 1,595 1,872 2,173
4 5,037 100,000 100,000 100,000 2,210 2,667 3,185
5 6,458 100,000 100,000 100,000 2,815 3,502 4,310
6 7,949 100,000 100,000 100,000 3,409 4,378 5,564
7 9,515 100,000 100,000 100,000 3,989 5,296 6,957
8 11,160 100,000 100,000 100,000 4,593 6,292 8,540
9 12,886 100,000 100,000 100,000 5,179 7,331 10,291
10 14,699 100,000 100,000 100,000 5,821 8,484 12,298
11 16,603 100,000 100,000 100,000 6,565 9,801 14,628
12 18,602 100,000 100,000 100,000 7,360 11,234 17,253
13 20,700 100,000 100,000 100,000 8,134 12,712 20,124
14 22,904 100,000 100,000 100,000 8,884 14,234 23,266
15 25,218 100,000 100,000 100,000 9,610 15,802 26,708
16 27,647 100,000 100,000 100,000 10,117 17,224 30,289
17 30,198 100,000 100,000 108,190 10,595 18,693 34,212
18 32,877 100,000 100,000 117,956 11,043 20,210 38,502
19 35,689 100,000 100,000 128,228 11,459 21,776 43,190
20 38,643 100,000 100,000 139,040 11,844 23,394 48,313
25 55,776 100,000 100,000 202,487 13,218 32,315 81,886
30 77,644 100,000 100,000 285,797 13,389 42,785 133,475
35 105,553 100,000 102,997 396,169 11,610 54,961 211,403
40 141,173 100,000 113,610 543,171 6,726 68,506 327,527
45 186,634 100,000 123,475 739,582 0 82,980 497,031
50 244,655 100,000 132,373 1,002,000 0 97,721 739,702
55 318,706 100,000 141,201 1,353,864 0 112,421 1,077,917
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$556.50 semiannually, $278.25 quarterly, or $92.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.

57
<PAGE>

PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT
ISSUE (GUARANTEED DEATH BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--
MODIFIED $708 INITIAL BASIC PREMIUM AT ISSUE (1) USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated 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
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 743 100,000 100,000 100,000 0 0 28
2 1,524 100,000 100,000 100,000 233 307 385
3 2,344 100,000 100,000 100,000 493 633 786
4 3,204 100,000 100,000 100,000 750 976 1,234
5 4,108 100,000 100,000 100,000 1,001 1,338 1,737
6 5,057 100,000 100,000 100,000 1,246 1,719 2,301
7 6,053 100,000 100,000 100,000 1,481 2,118 2,931
8 7,099 100,000 100,000 100,000 1,744 2,571 3,671
9 8,197 100,000 100,000 100,000 1,994 3,041 4,487
10 9,350 100,000 100,000 100,000 2,302 3,598 5,461
11 10,561 100,000 100,000 100,000 2,716 4,291 6,647
12 11,833 100,000 100,000 100,000 3,186 5,070 8,005
13 13,168 100,000 100,000 100,000 3,637 5,860 9,471
14 14,570 100,000 100,000 100,000 4,067 6,662 11,057
15 16,042 100,000 100,000 100,000 4,475 7,473 12,774
16 17,587 100,000 100,000 100,000 4,668 8,100 14,440
17 19,210 100,000 100,000 100,000 4,833 8,733 16,263
18 20,914 100,000 100,000 100,000 4,970 9,371 18,257
19 22,703 100,000 100,000 100,000 5,077 10,011 20,441
20 24,581 100,000 100,000 100,000 5,153 10,654 22,836
25 35,480 100,000 100,000 100,000 4,985 13,824 38,851
30 49,391 100,000 100,000 137,160 3,557 16,595 64,058
35 67,144 100,000 100,000 191,433 0 18,069 102,152
40 89,803 100,000 100,000 263,578 0 16,765 158,935
45 118,721 100,000 100,000 359,857 0 9,201 241,839
50 185,008 100,000 100,000 485,054 12,664 17,532 358,079
55 291,724 100,000 100,000 651,021 26,907 43,181 518,329
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$354.00 semiannually, $177.00 quarterly, or $59.00 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,973 for a hypothetical
gross investment return of 0%, $9,583 for a gross return of 6%, and $0 for
a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
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 AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.

58
<PAGE>

(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.84 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments.
(2) The premium accumulated at 5% interest in Column 2 are those payable is
the gross investment return is 6%.
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 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.

59
<PAGE>

<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated 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
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,370 100,000 100,000 100,000 308 364 421
2 2,809 100,000 100,000 100,000 870 1,028 1,193
3 4,320 100,000 100,000 100,000 1,398 1,701 2,032
4 5,906 100,000 100,000 100,000 1,889 2,383 2,944
5 7,571 100,000 100,000 100,000 2,343 3,076 3,942
6 9,320 100,000 100,000 100,000 2,757 3,777 5,033
7 11,157 100,000 100,000 100,000 3,130 4,487 6,228
8 13,085 100,000 100,000 100,000 3,524 5,269 7,602
9 15,109 100,000 100,000 100,000 3,874 6,057 9,102
10 17,235 100,000 100,000 100,000 4,308 6,978 10,869
11 19,467 100,000 100,000 100,000 4,913 8,123 13,008
12 21,810 100,000 100,000 100,000 5,590 9,391 15,438
13 24,271 100,000 100,000 100,000 6,204 10,647 18,045
14 26,855 100,000 100,000 100,000 6,748 11,883 20,842
15 29,568 100,000 100,000 100,000 7,211 13,090 23,847
16 32,417 100,000 100,000 100,000 7,237 13,911 26,733
17 35,408 100,000 100,000 100,000 7,171 14,691 29,877
18 38,548 100,000 100,000 100,000 7,011 15,425 33,315
19 41,846 100,000 100,000 100,000 6,748 16,106 37,082
20 45,309 100,000 100,000 100,000 6,373 16,725 41,222
25 65,398 100,000 100,000 114,591 2,259 18,303 69,097
30 91,038 100,000 100,000 164,724 0 14,954 110,701
35 147,666 100,000 100,000 224,469 12,664 24,797 165,708
40 237,935 100,000 100,000 300,831 26,907 49,371 239,515
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$652.50 semiannually, $326.25 quarterly, or $108.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,973 for a hypothetical
gross investment return of 0%, $8,527 for a gross return of 6%, and $0 for
a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
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 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.

60
<PAGE>

[JOHN HANCOCK WORLDWIDE SPONSOR LOGO TO APPEAR HERE]

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

S8138 5/95
<PAGE>

John Hancock Variable Life
Insurance Company
(JHVLICO)
[FLEX VI JOHN HANCOCK LOGO 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 ("Fund"), a
mutual fund advised by John Hancock Mutual Life Insurance Company ("John
Hancock"). The assets of the Fixed Account will be invested in the general
account of John Hancock Variable Life Insurance Company ("JHVLICO").

The prospectus for the Fund, which is attached to this Prospectus, describes
the investment objectives, policies and risks of investing in the Portfolios
of the Fund: 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. Other
variable subaccounts and Portfolios may be added in the future.

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 SERIES FUND................................................ 6
THE FIXED ACCOUNT.......................................................... 9
POLICY PROVISIONS AND BENEFITS............................................. 10
Requirements for Issuance of Policy...................................... 10
Premiums................................................................. 10
Account Value and Surrender Value........................................ 14
Death Benefits........................................................... 14
Value Options............................................................ 15
Partial Withdrawal of Excess Value....................................... 16
Transfers Among Subaccounts.............................................. 17
Loan Provisions and Indebtedness......................................... 18
Default and Options on Lapse............................................. 18
Exchange Privilege....................................................... 19
CHARGES AND EXPENSES....................................................... 20
Charges Deducted from Premiums........................................... 20
Sales Charges............................................................ 20
Reduced Charges for Eligible Groups...................................... 21
Charges Deducted from Account Value...................................... 22
DISTRIBUTION OF POLICIES................................................... 24
TAX CONSIDERATIONS......................................................... 25
Policy Proceeds.......................................................... 25
Charge for JHVLICO's Taxes............................................... 26
Corporate and H.R. 10 Plans.............................................. 26
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO....................... 27
REPORTS.................................................................... 27
VOTING PRIVILEGES.......................................................... 28
CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE........................... 28
STATE REGULATION........................................................... 29
LEGAL MATTERS.............................................................. 29
REGISTRATION STATEMENT..................................................... 29
EXPERTS.................................................................... 29
FINANCIAL STATEMENTS....................................................... 29
APPENDIX--OTHER POLICY PROVISIONS.......................................... 49
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, SURRENDER VALUES AND
ACCUMULATED PREMIUMS...................................................... 51
</TABLE>

INDEX OF DEFINED WORDS AND PHRASES

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

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Account Value....................................................... 14
Attained Age........................................................ 15
Basic Death Benefit................................................. 14
Basic Premium....................................................... 11
Benchmark Value..................................................... 15
Contingent Deferred Sales Charge.................................... 20
Current Death Benefit............................................... 15
Death Benefit Factor................................................ 15
Excess Value........................................................ 15
Experience Component................................................ 15
Extra Death Benefit................................................. 14
Fixed Account....................................................... 9
Grace Period........................................................ 18
Guaranteed Death Benefit............................................ 14
Home Office......................................................... 6
Indebtedness........................................................ 18
Investment Rule..................................................... 12
Issue Charge........................................................ 22
Level Schedule...................................................... 12
Loan Account........................................................ 18
Minimum First Premium............................................... 11
Modified Schedule................................................... 12
Premium Component................................................... 15
Premium Credit Factor............................................... 15
Premium Processing Charge........................................... 20
Premium Recalculation............................................... 12
Required Premium.................................................... 11
Subaccount.......................................................... Cover
Sum Insured at Issue................................................ 14
Surrender Value..................................................... 14
Valuation Date...................................................... 9
Value Option........................................................ 15
</TABLE>
<PAGE>

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 expenses, taxes, and sales load. 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 initial Account Value is basically the sum of the amounts of the premium
that JHVLICO, at the direction of the Owner, places in the Account and in the
Fixed Account. The Account Value increases or decreases daily depending on the
investment experience of the subaccounts to which the amounts are allocated.
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

1
<PAGE>

unpaid Issue 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.

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, a "series" type of mutual
fund. The Portfolios of the Fund which are currently available are Growth and
Income, Large Cap Growth, Sovereign Bond, Money Market, Managed, Real Estate
Equity, International Equities, Short-Term U.S. Government, Special
Opportunities, Small Cap Growth, Small Cap Value, Mid Cap Growth, Mid Cap
Value, International Balanced, International Opportunities, Large Cap Value,
Strategic Bond, and Equity Index.

Each Portfolio has a different investment objective and is managed by John
Hancock. John Hancock receives a fee from the Fund for providing investment
management services with respect to the Growth and Income, Sovereign Bond and
Money Market Portfolios at an annual rate of .25% of the average daily net
assets; with respect to the Large Cap Growth and Managed Portfolios, at an
annual rate of .40% of the first $500 million of the average daily net assets
and at lesser percentages for amounts above $500 million; with respect to the
Short-Term U.S. Government Portfolio at an annual rate of .50% of the first
$250 million of the average daily

2
<PAGE>

net assets and, at lesser percentages for amounts above $250 million; with
respect to the Real Estate Equity Portfolio, at an annual rate of .60% of the
first $300 million of the average daily net assets and at lesser percentages
for amounts above $300 million; with respect to the International Equities
Portfolio, at an annual rate of .60% of the first $250 million of the average
daily net assets and at lesser percentages for amounts above $250 million;
with respect to the Special Opportunities Portfolio, at an annual rate of .75%
of the first $250 million of the average daily net assets and at lesser
percentages for amounts above $250 million; with respect to the Equity Index
Portfolio at an annual rate of 0.25% of the net assets; with respect to the
Large Cap Value and Small Cap Growth Portfolios at an annual rate of 0.75% of
the net assets; with respect to the Mid Cap Growth Portfolio at an annual rate
of 0.85% for the first $100,000,000 of 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 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 net
assets and at lesser percentages for amounts above $100,000,000; with respect
to the Strategic Bond Portfolio at an annual rate of 0.75% of the first
$25,000,000 of 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 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 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?

Premium Processing Charge. A charge not to exceed $2 is deducted from each
premium payment.

State Premium Tax Charge. A charge equal to 2 1/2% of each premium payment
after deduction of the Premium Processing Charge.

Sales Charge Deduction from Premium. A charge equal to 4 1/2% of each
premium payment after deduction of the Premium Processing Charge.

Issue Charges. A charge deducted monthly from Account Value in 48 equal
installments totalling $240 per Policy and 48c per $1000 of Sum Insured at
Issue.

Maintenance Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $4 per Policy and 2c per $1000 of current Sum
Insured.

Guaranteed Death Benefit Charges. 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

3
<PAGE>

Account allocations. Upon any exercise of the Extra Death Benefit Option or
the Basic Premium Reduction Option, a one-time charge not to exceed 3%
(currently 1 1/2%) of the amount applied to exercise the option.

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

Charge for Partial Withdrawal. A charge equal to the lesser of $25 or 2% of
the amount withdrawn made against Account Value at the time of withdrawal.

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?

WHAT COMMISSIONS ARE PAID TO AGENTS?

4
<PAGE>

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?

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

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

IS THERE A SHORT-TERM CANCELLATION RIGHT?

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 at Boston,
Massachusetts, 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.

5
<PAGE>

WHAT IS THE EXCHANGE PRIVILEGE ALLOWED AN OWNER?

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

JHVLICO AND JOHN HANCOCK

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 commited to make additional capital contributions if necessary
to ensure that JHVLICO maintains a positive net worth.

THE ACCOUNT AND SERIES FUND

6
<PAGE>

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 assets in the variable subaccounts are invested in corresponding
Portfolios of the Fund, 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.

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

Large Cap Growth (formerly Select Stock) Portfolio

Sovereign Bond (formerly Bond) Portfolio

Money Market Portfolio

7
<PAGE>

Managed Portfolio

Real Estate Equity 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.

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

Equity Index Portfolio: to provide investment results that correspond to the
total return of the U.S. market 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 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.

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 emerging
growth companies.

Small Cap Value Portfolio: to provide long-term growth of capital by
investing in a well-diversified portfolio of common stocks of small-sized
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.

8
<PAGE>

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

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.

John Hancock will purchase and redeem Fund shares for the Account at their
net asset value without any sales or redemption charges. Shares of the Fund
represent an interest in one of the Portfolios of the Fund which corresponds
to the 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.

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.

THE FIXED ACCOUNT

9
<PAGE>

investment experience of the general account. Consequently, if an Owner pays
the scheduled 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".

POLICY PROVISIONS AND BENEFITS

REQUIREMENTS FOR ISSUANCE OF POLICY

PREMIUMS

Payment Schedule

10
<PAGE>

Minimum Premium Requirements

In the second Policy year, one-half of the Required Premium for the second
Policy year must be received on or before the last Valuation Date in the sixth
Policy month.

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

If the Account Value on the Valuation Date immediately preceding the Policy
anniversary, when multiplied by the Death Benefit Factor on that Policy
anniversary , is equal to or greater than the Guaranteed Death Benefit, then
no Required Premium is applicable to the following Policy year. This means
that even if no premium is paid during the Policy year, the premium
requirement will be met on the scheduled due date at the end of the

11
<PAGE>

Policy year. If applicable, Owners will be mailed a written notice by JHVLICO
within 10 days after any Policy anniversary that no premium payment is
required in that Policy year.

Choice of Premium Schedule

A comparison of the Basic Premiums at issue under the Level and Modified
Schedules for a Sum Insured at issue of $100,000 for a male is shown below:

<TABLE>
<CAPTION>
Issue
Age Level Modified
----- ----- --------
<S> <C> <C>
25 $1,113.00 $ 708.00
40 $1,954.00 $1,305.00
55 $3,869.00 $2,585.00
</TABLE>

Premium Recalculation (Modified Schedule Only)

The Premium Recalculation applicable to any Policy on a Modified Schedule
may be elected by the Owner at any time after the first Policy anniversary up
to the Policy anniversary nearest the insured's 72nd birthday. 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 by
JHVLICO on the Policy anniversary nearest the insured's 72nd birthday.

Billing, Allocation of Premium Payments (Investment Rule)

12
<PAGE>

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

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

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. However, each
premium payment must be at least $25. JHVLICO reserves the right to limit
premium payments above the amount of the cumulative Required Premiums due on
the Policy.

13
<PAGE>

will result in a new "7-pay" limitation and test period. A reduction in death
benefit within the seven year period following issuance of, or a material
change in, the Policy may also result in the application of the modified
endowment treatment. See "Policy Proceeds" under "Tax Considerations."

ACCOUNT VALUE AND SURRENDER VALUE

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

When Policy may be Surrendered. A Policy may be surrendered for its
Surrender Value at any time while the insured is living. Surrender takes
effect and the Surrender Value is determined as of the end of the Valuation
Period in which occurs the later of receipt at JHVLICO's Home Office of a
signed request and the surrendered Policy.

DEATH BENEFITS

The death benefit payable is the greater of the Guaranteed Death Benefit,
including any Extra Death Benefit, or the Current Death Benefit.

14
<PAGE>

Benefit produced under the Option becomes a Guaranteed Death Benefit. The
amount of any Extra Death Benefit depends upon the Account Value, Benchmark
Value (see "Value Options") and the sex and age of the Insured on the Policy
anniversary as of which the Option is exercised. See "Value Options". The
insured's age on a Policy anniversary is the age of the insured on his or her
birthday nearest that date.

VALUE OPTIONS

The Policy includes three Value Options:

15
<PAGE>

The Basic Premium Reduction Option permanently decreases the amount of the
Basic Premium that would otherwise have to be paid in a Policy year to avoid a
lapse at the end of the year. The Basic Premium Reduction Option is available
only on the Level Schedule. No limit is currently placed on the amount that
may be applied from either component except that the Basic Premium may not be
reduced below zero. Amounts applied from the Premium Component reduce the
cumulative amounts of premiums received under the Policy for purposes of
determining whether the Policy will continue to remain in force. A Guaranteed
Death Benefit Charge (see "Charges and Expenses") is made against the Account
Value to cover the risk assumed by JHVLICO that the Guaranteed Death Benefit
will remain in effect notwithstanding the lower future premiums. The reduction
in Basic Premium equals the amount applied, less the Guaranteed Death Benefit
Charge, divided by the Premium Credit Factor shown in the Policy. The Premium
Credit Factor depends upon the sex and the then attained age of the insured.
The Premium Credit Factor decreases from year to year as the attained age of
the insured increases. For example, the Premium Credit Factor for a female age
60 is 13.6798, for a female age 61 is 13.3382.

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 $500. Unless the Current Death Benefit exeeds the
Guaranteed Death Benefit, a partial withdrawal will not affect the death
benefit payable. An amount equal to the lesser of $25 or 2% of the amount
withdrawn is charged against Account Value for each partial withdrawal.

16
<PAGE>

Schedule, because the Account Value is reduced by a partial withdrawal, the
premium that results from the Premium Recalculation will be higher because of
the partial withdrawal.

TRANSFERS AMONG SUBACCOUNTS

Furthermore, 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.

17
<PAGE>

LOAN PROVISIONS AND INDEBTEDNESS

DEFAULT AND OPTIONS ON LAPSE

18
<PAGE>

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 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.

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.

19
<PAGE>

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

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 load 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."

20
<PAGE>

The absence of any need to pay a Required Premium because of the adequacy of
the Account Value on a Policy anniversary does not impact the amount of
Modified 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 Modified 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 (i.e., from
Modified to Level Schedule) or a premium reduction is implemented, 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 premium schedule in effect prior to such recalculation or reduction.

REDUCED CHARGES FOR ELIGIBLE GROUPS

21
<PAGE>

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 Policyowner.

CHARGES DEDUCTED FROM ACCOUNT VALUE

In addition to the possible transfer charge discussed above under "Transfers
Among Subaccounts", the following charges are deducted from Account Value:

22
<PAGE>

An insured who is charged an additional Required Premium because of the
extra mortality risk may not be eligible to exercise the Extra Death Benefit
Value Option.

23
<PAGE>

Fund Investment Management Fee. The Account purchases shares of the Fund at
net asset value, a value which reflects the deduction from the assets of the
Fund of its investment management fee which is described briefly at page 2 of
this prospectus and of certain non-advisory operating expenses. For a full
description of these deductions, see the attached prospectus for the Fund.

DISTRIBUTION OF POLICIES

24
<PAGE>

John Hancock serves as principal underwriter for six 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 principal investment
manager and principal underwriter for the Fund.

TAX CONSIDERATIONS

POLICY PROCEEDS

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

JHVLICO 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.

25
<PAGE>

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 recent tax law 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.

The above description of Federal tax consequences is only a brief summary
and is not intended as tax advice. For further information consult a qualified
tax advisor.

Federal and state tax laws can change from time to time and, as a result,
the tax consequences to the Owner and beneficiary may be altered.

CHARGE FOR JHVLICO'S TAXES

CORPORATE AND H.R. 10 PLANS

26
<PAGE>

BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO

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

<TABLE>
<CAPTION>
Directors--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.
Robert R. Reitano 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.
Michele G. Van Leer Director of JHVLICO; Second Vice Presi-
dent, John Hancock Mutual Life Insurance
Company.
Robert S. Paster Director of JHVLICO; Second Vice Presi-
dent, John Hancock Mutual Life Insurance
Company.
Barbara L. Luddy Director and Actuary, JHVLICO; Second
Vice President, John Hancock Mutual Life
Insurance Company.
Daniel L. Ouellette Vice President, Marketing, JHVLICO; Sec-
ond Vice President, John Hancock Mutual
Life Insurance 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.

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.

27
<PAGE>

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

VOTING PRIVILEGES

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

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

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

CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE

28
<PAGE>

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, and (3) to deregister the Account under the 1940
Act. JHVLICO would notify Owners of any of the foregoing changes and, to the
extent legally required, obtain approval of Owners and any regulatory body
prior thereto. Such notice and approval, however, may not be legally required
in all cases.

STATE REGULATION

LEGAL MATTERS

REGISTRATION STATEMENT

EXPERTS

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

FINANCIAL STATEMENTS

29
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1995

See accompanying notes.

30
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS

31
<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

See accompanying notes.

32
<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.

33
<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 Period Ended Year Ended
December 31 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 Period Ended Year 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.

34
<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.

35
<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:

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

36
<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

37
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF FINANCIAL POSITION

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

38
<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.

39
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATEMENTS OF CASH FLOWS

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

40
<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.