HANCOCK JOHN VARIABLE LIFE ACCOUNT V, 485BPOS, 1998-05-01

HANCOCK JOHN VARIABLE LIFE ACCOUNT V
485BPOS, 1998-05-01

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<PAGE>

As filed with the Securities and Exchange Commission on April 30, 1998

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

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

FORM S-6
Post-Effective Amendment No. 13 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)
--------------------

RONALD J. BOCAGE,ESQ.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, 02117
(Name and complete address of agent for service)
--------------------

Copy to:
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 1,1998 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 1997 pursuant to Rule 24f-2 on February 26, 1998.

<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 LOGO APPEARS HERE]

John Hancock Variable Life Insurance Company
(JHVLICO)

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

John Hancock Place Boston, Massachusetts 02117

JOHN HANCOCK SERVICING OFFICE:
P.O. Box 111 Boston, Massachusetts 02117

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

PROSPECTUS MAY 1, 1998

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 "series" type mutual fund
advised by John Hancock Mutual Life Insurance Company ("John Hancock") or of M
Fund, Inc., a "series" type 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 the Funds: Managed, Growth & Income, Equity Index, Large Cap
Value, Large Cap Growth, Mid Cap Value, Mid Cap Growth, Diversified Mid Cap
Growth (formerly, Special Opportunities), Real Estate Equity, Small/Mid Cap
CORE, Small Cap Value, Small Cap Growth, Global Equity, International Balanced,
International Equity Index (formerly, International Equities), International
Opportunities, Emerging Markets Equity, Short-Term Bond (formerly, Short-Term
U.S. Government), Bond Index, Sovereign Bond, Strategic Bond, High Yield Bond,
Money Market, Edinburgh Overseas Equity, Turner Core Growth, Frontier Capital
Appreciation, and Enhanced U.S. Equity. (The Small/Mid Cap CORE, Global Equity,
Emerging Markets Equity, Bond Index, High Yield Bond, and Enhanced U.S. Equity
Portfolios are not currently available to Owners but are expected to be made
available later in 1998.) 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.

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 . . . . . . . . . . . . . . . . . . . . . . 7
THE ACCOUNT AND THE SERIES FUNDS . . . . . . . . . . . . . . . . . . 7
THE FIXED ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . 11
POLICY PROVISIONS AND BENEFITS . . . . . . . . . . . . . . . . . . . 11
Requirements for Issuance of Policy . . . . . . . . . . . . . . . . 11
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Account Value and Surrender Value . . . . . . . . . . . . . . . . . 15
Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Value Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Partial Withdrawal of Excess Value . . . . . . . . . . . . . . . . 18
Transfers Among Subaccounts . . . . . . . . . . . . . . . . . . . . 18
Loan Provisions and Indebtedness . . . . . . . . . . . . . . . . . 19
Default and Options on Lapse . . . . . . . . . . . . . . . . . . . 20
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . 21
CHARGES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 21
Charges Deducted from Premiums . . . . . . . . . . . . . . . . . . 21
Sales Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Reduced Charges for Eligible Groups . . . . . . . . . . . . . . . . 23
Charges Deducted from Account Value . . . . . . . . . . . . . . . . 23
DISTRIBUTION OF POLICIES . . . . . . . . . . . . . . . . . . . . . . 26
TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 27
Policy Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Charge for JHVLICO's Taxes . . . . . . . . . . . . . . . . . . . . 28
Corporate and H.R. 10 Plans . . . . . . . . . . . . . . . . . . . . 28
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO . . . . . . . . 29
REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
VOTING PRIVILEGES . . . . . . . . . . . . . . . . . . . . . . . . . . 30
CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE . . . . . . . . . . 31
STATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . 31
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . 31
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 32
APPENDIX--OTHER POLICY PROVISIONS . . . . . . . . . . . . . . . . . . 62
APPENDIX--IMPACT OF YEAR 2000 . . . . . . . . . . . . . . . . . . . .
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, SURRENDER VALUES AND
ACCUMULATED PREMIUMS . . . . . . . . . . . . . . . . . . . . . . . . 65
</TABLE>

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

INDEX OF DEFINED WORDS AND PHRASES

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

<TABLE>
<CAPTION>
Page
<S> <C>
Account Value . . . . . . . . . . . . . . . . . . . . . 15
Attained Age . . . . . . . . . . . . . . . . . . . . . 16
Basic Death Benefit . . . . . . . . . . . . . . . . . . 16
Basic Premium . . . . . . . . . . . . . . . . . . . . . 13
Benchmark Value . . . . . . . . . . . . . . . . . . . . 16
Contingent Deferred Sales Charge . . . . . . . . . . . 22
Current Death Benefit . . . . . . . . . . . . . . . . . 16
Death Benefit Factor . . . . . . . . . . . . . . . . . 16
Excess Value . . . . . . . . . . . . . . . . . . . . . 16
Experience Component . . . . . . . . . . . . . . . . . 17
Extra Death Benefit . . . . . . . . . . . . . . . . . . 16
Fixed Account . . . . . . . . . . . . . . . . . . . . . 11
Grace Period . . . . . . . . . . . . . . . . . . . . . 20
Guaranteed Death Benefit . . . . . . . . . . . . . . . 16
Indebtedness . . . . . . . . . . . . . . . . . . . . . 20
Investment Rule . . . . . . . . . . . . . . . . . . . . 14
Issue Charge . . . . . . . . . . . . . . . . . . . . . 23
Level Schedule . . . . . . . . . . . . . . . . . . . . 13
Loan Assets . . . . . . . . . . . . . . . . . . . . . . 20
Minimum First Premium . . . . . . . . . . . . . . . . . 12
Modified Schedule . . . . . . . . . . . . . . . . . . . 13
Premium Component . . . . . . . . . . . . . . . . . . . 17
Premium Credit Factor . . . . . . . . . . . . . . . . . 18
Premium Processing Charge . . . . . . . . . . . . . . . 21
Premium Recalculation . . . . . . . . . . . . . . . . . 13
Required Premium . . . . . . . . . . . . . . . . . . . 12
Servicing Office . . . . . . . . . . . . . . . . . . . 6
Subaccount . . . . . . . . . . . . . . . . . . . . . . Cover
Sum Insured at Issue . . . . . . . . . . . . . . . . . 16
Surrender Value . . . . . . . . . . . . . . . . . . . . 15
Valuation Date . . . . . . . . . . . . . . . . . . . . 10
Value Option . . . . . . . . . . . . . . . . . . . . . 17
Variable Subaccount . . . . . . . . . . . . . . . . . . 2
</TABLE>

<PAGE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?

JHVLICO issues variable life insurance Policies. The Policies described in
this Prospectus are scheduled annual premium policies that provide for
additional premium flexibility. 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: Premium payments are periodically made
to JHVLICO in amounts sufficient 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 of the Policy (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 issuance 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. 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

<PAGE>

amount of Surrender Value would be low (as compared with other investments
without sales charges) and, consequently, the insurance protection provided
prior to surrender would be costly.

The minimum 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. The
Account is divided into a number of variable Subaccounts, each of which
corresponds to one of the Portfolios of the Funds. The assets of each variable
Subaccount are invested in the corresponding Portfolio of the Funds. The current
Portfolios of the Funds are: Managed, Growth & Income, Equity Index, Large Cap
Value, Large Cap Growth, Mid Cap Value, Mid Cap Growth, Diversified Mid Cap
Growth, Real Estate Equity, Small/Mid Cap CORE, Small Cap Value, Small Cap
Growth, Global Equity, International Balanced, International Equity Index,
International Opportunities, Emerging Markets Equity, Short-Term Bond, Bond
Index, Sovereign Bond, Strategic Bond, High Yield Bond, Money Market, Edinburgh
Overseas Equity, Turner Core Growth, Frontier Capital Appreciation, and Enhanced
U.S. Equity.

The figures in the following chart are expressed as a percentage of each
Portfolio's average daily net assets. The figures reflect the investment
management fees currently payable and the 1997 other fund expenses allocated to
John Hancock Variable Series Trust I (except that other fund expenses for the
Small/Mid Cap CORE, Global Equity, Emerging Markets Equity, Bond Index, and High
Yield Bond Portfolios are based upon estimates for the current fiscal year).

<PAGE>

<TABLE>
<CAPTION>
Other
Fund
Other Fund Total Expenses
Expenses Fund Absent
Management After Expense Operating Expense
Fund Name Fee Reimbursement Expenses Reimbursement/*/
--------- ---------- ------------- --------- ----------------
<S> <C> <C> <C> <C>
Managed . . . . . . . 0.33% 0.04 % 0.37% N/A
Growth & Income . . . 0.25% 0.03 % 0.28% N/A
Equity Index. . . . . 0.15% 0.25 % 0.40% 0.40%
Large Cap Value . . . 0.75% 0.25 % 1.00% 0.31%
Large Cap Growth. . . 0.39% 0.05 % 0.44% N/A
Mid Cap Value . . . . 0.80% 0.25 % 1.05% 0.34%
Mid Cap Growth. . . . 0.85% 0.25 % 1.10% 0.57%
Diversified Mid Cap
Growth . . . . . . . 0.75% 0.10% 0.85% N/A
Real Estate Equity. . 0.60% 0.09 % 0.69% N/A
Small/Mid Cap CORE. .
Small Cap Value . . . 0.80% 0.25 % 1.05% 0.50%
Small Cap Growth. . . 0.75% 0.25 % 1.00% 0.37%
Global Equity . . . .
International Balanced 0.85% 0.25 % 1.10% 0.71%
International Equity
Index. . . . . . . . 0.18% 0.19 % 0.37% N/A
International
Opportunities. . . . 0.97% 0.25 % 1.22% 0.60%
Emerging Markets
Equity . . . . . . .
Short-Term Bond . . . 0.30% 0.21% 0.51%
Bond Index. . . . . .
Sovereign Bond. . . . 0.25% 0.06 % 0.31% N/A
Strategic Bond. . . . 0.75% 0.25 % 1.00% 0.57%
High Yield Bond . . .
Money Market. . . . . 0.25% 0.08 % 0.33% N/A
</TABLE>

- ---------

* John Hancock reimburses a Portfolio when the Portfolio's other fund expenses
exceed 0.25% of the Portfolio's average daily net assets.

M Fund, Inc., pays M Financial Investment Advisers, Inc. ("M Financial"), a
fee for providing investment management services to each of its Portfolios. M
Fund, Inc., also pays for certain other fund expenses. The figures in the
following chart are expressed as a percentage of each Portfolio's average daily
net assets. The figures reflect the investment management fees currently payable
and the 1997 other fund expenses allocated to the Fund .

<TABLE>
<CAPTION>
Other Total Fund
Investment Fund Operating Other Fund Expenses
Portfolio Management Fee Expenses Expenses Absent Reimbursement*
--------- -------------- -------- ---------- -----------------------
<S> <C> <C> <C> <C>
Edinburgh Overseas
Equity . . . . . . . 1.05% 0.25% 1.30% 3.89%
Turner Core Growth . 0.45% 0.25% 0.70% 5.72%
Frontier Capital
Appreciation . . . . 0.90% 0.25% 1.15% 1.96%
Enhanced U.S. Equity 0.55% 0.25% 0.80% 4.87%
</TABLE>

- ---------

* M Financial reimburses a Portfolio when the Portfolio's other fund expenses
exceed 0.25% of the Portfolio's average daily net assets.

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

<PAGE>

WHAT ARE THE CHARGES MADE BY JHVLICO?

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

State Premium Tax Charge. A charge equal to2 1/2% of each premium payment
after deduction of the Premium Processing Charge.

Sales Charge Deduction from Premium. A charge equal to4 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 plus 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 plus 2c per $1000 of current Sum Insured.

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
(currently 1c per $1000) of current Sum Insured 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% (currently1 1/2%) of the amount
applied to exercise the option.

Charge for Mortality and Expense Risks. A charge made daily from the variable
Subaccounts at an effective annual rate of .60% of the assets of each variable
Subaccount.

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 deducted from Account Value at the time of withdrawal.

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

<PAGE>

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".)

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 by any
partial withdrawal of Excess Value, and increased or decreased by the investment
experience of the Subaccounts. No minimum Account Value for the Policy is
guaranteed.

<PAGE>

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 and compound daily at an
effective 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 and compounded 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?

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

<PAGE>

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 approximately $59 billion and it
has invested over $380 million in JHVLICO in connection with JHVLICO's
organization and operations. It is anticipated that John Hancock will from time
to time make additional capital contributions to JHVLICO to enable it to meet
its reserve requirements and expenses in connection with its business and John
Hancock is committed to make additional capital contributions if necessary to
ensure that JHVLICO maintains a positive net worth.

THE ACCOUNT AND THE SERIES 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").

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 the
corresponding Portfolio 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

<PAGE>

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.

Managed Portfolio

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

Growth & Income Portfolio

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

Equity Index Portfolio

The investment objective of this Portfolio is 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

The investment objective of this Portfolio is to provide substantial dividend
income, as well as long-term capital appreciation, through investments in the
common stocks of established companies believed to offer favorable prospects for
increasing dividends and capital appreciation.

Large Cap Growth Portfolio

The investment objective of this Portfolio is to achieve above-average capital
appreciation through the ownership of common stocks (and securities convertible
into with rights to purchase common stocks) of companies believed to offer
above-average capital appreciation opportunities. Current income is not an
objective of the Portfolio.

Mid Cap Value Portfolio

The investment objective of this Portfolio is to provide long-term growth of
capital primarily through investment in the common stocks of medium
capitalization companies believed to sell at a discount to their intrinsic
value.

Mid Cap Growth Portfolio

The investment objective of this Portfolio is to provide long-term growth of
capital through a non-diversified portfolio investing primarily in common stocks
of medium capitalization companies.

Diversified Mid Cap Growth Portfolio

The investment objective of this Portfolio is to provide long-term growth of
capital through a diversified portfolio investing primarily in common stocks of
medium capitalization growth companies.

<PAGE>

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.

Small/Mid Cap CORE Portfolio

The investment of this Portfolio is to achieve long-term growth of capital
through a broadly diversified portfolio of equity securities of U.S. issuers
which are included in the Russell 2500 Index at the time of investment.

Small Cap Value Portfolio

The investment objective of this Portfolio is to provide long-term growth of
capital by investing in a well diversified portfolio of equity securities of
small capitalization companies exhibiting value characteristics.

Small Cap Growth Portfolio

The investment objective of this Portfolio is to provide long-term growth of
capital through a diversified portfolio investing primarily in common stocks of
small capitalization emerging growth companies.

Global Equity Portfolio

The investment objective of this Portfolio is to achieve long-term growth of
capital through a diversified portfolio of marketable securities, primarily
equity securities, of both U.S. and foreign issuers.

International Balanced Portfolio

The investment objective of this Portfolio is to maximize total U.S. dollar
return, consisting of capital appreciation and current income, through
investment in non-U.S. equity and fixed income securities.

International Equity Index Portfolio

The investment objective of this Portfolio is to provide investment results
that correspond to the total return of the major developed international
(non-U.S.) equity markets, as represented by the MSCI AEFE GDP Index.

International Opportunities Portfolio

The investment objective of this Portfolio is to provide capital appreciation
through investments in common stocks of primarily well-established, non-United
States companies.

Emerging Markets Equity Portfolio

The investment objective of this Portfolio is to achieve capital appreciation
by investing primarily in equity securities of companies in countries having
economies and markets generally considered by the World Bank or the United
Nations to be emerging or developing.

Short-Term Bond Portfolio

The investment objective of this Portfolio is to provide a high level of
current income consistent with a low degree of share price fluctuation through
investment primarily in a diversified portfolio of short- and intermediate-term
investment-grade debt obligations.

<PAGE>

Bond Index Portfolio

The investment objective of this Portfolio is to provide investment results
that correspond to the total return and risk characteristics of the U.S.
investment grade fixed income market, as represented by a Lehman Brothers bond
index that tracks the performance of investment grade debt securities.

Sovereign Bond Portfolio

The investment objective of this Portfolio is to provide as high a level of
long-term total rate of return as is consistent with prudent investment risk
through investment primarily in a diversified portfolio of freely marketable
debt securities.

Strategic Bond Portfolio

The investment objective of this Portfolio is to provide total return
consistent with moderate risk of capital and maintenance of liquidity, through a
portfolio of domestic and international fixed income securities.

High Yield Bond Portfolio

The investment objective of this Portfolio is to provide high current income
and capital appreciation with capital preservation through investing primarily
in high yield (below investment grade) debt securities.

Money Market Portfolio

The investment objective of this Portfolio is to provide maximum current
income consistent with capital preservation and liquidity, through investment in
high quality money market instruments.

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, MA 02109, provides sub-investment advice with respect to the Managed,
Growth & Income, Large Cap Growth, Real Estate Equity and Short-Term Bond
Portfolios. ndependence International Associates, Inc., a subsidiary of IIA
located at the same address as IIA, is a sub-investment adviser to the
International Equity Index Portfolio.

Another indirectly owned subsidiary of John Hancock, John Hancock Advisers,
Inc., located at 101 Huntington Avenue, Boston, MA 02199, provides
sub-investment advice with respect to the Sovereign Bond, Diversified Mid Cap
Growth, and Small Cap Growth 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 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.

State Street Bank & Trust, N.A., at Two International Place, Boston, MA 02110,
is the sub-investment adviser to the Equity Index Portfolio. INVESCO Management
& Research located at 101 Federal Street, Boston MA 02110, is the sub-investment
adviser to the Small Cap Value Portfolio. Janus Capital Corporation, 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 & Berman, LLC
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,

<PAGE>

NY 10036, provides sub-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.

Goldman Sachs & Company, located at One New York Plaza, New York, New York
10004, is sub-investment adviser to the Small/Mid Cap CORE Portfolio. Scudder
Kemper Investments, Inc., located at 345 Park Avenue, New York, New York 10154,
is the sub-investment adviser to the Global Equity Portfolio. Montgomery Asset
Management, LLC, located at 101 California Street, San Francisco, California
94111, is the sub-investment adviser to the Emerging Markets Equity Portfolio.
Mellon Bond Associates, located at One Mellon Bank Center, Suite 4135,
Pittsburgh, Pennsylvania 15258, is the sub-investment adviser to the Bond Index
Portfolio. Wellington Management Company, LLC, located at 75 State Street,
Boston, Massachusetts 02109, is the sub-investment adviser to the High Yield
Bond Portfolio.

Edinburgh Overseas Equity Portfolio. The investment objective of this
Portfolio is to provide 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. The investment objective of this
Portfolio is to seek 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.

Enhanced U.S. Equity Portfolio. The investment objective of this Portfolio is
to provide above market total return through investment in common stock of
companies perceived to provide a return higher than that of the S&P 500 at
approximately the same level of investment risk as the S&P 500.

M Financial Investment Advisers, Inc., acts as the investment manager for the
four 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; Frontier Capital Management Company, Inc., provides
sub-investment advice to the Frontier Capital Appreciation Portfolio; and
Franklin Portfolio Associates Trust provides sub-investment advice to the
Enhanced U.S. Equity 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.

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.

<PAGE>

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.

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

<PAGE>

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. Amounts of coverage that JHVLICO will accept under the
Policy may be limited by JHVLICO's underwriting and reinsurance procedures as in
effect from time to time.

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. The illustrations,
factors and premiums set forth in this Prospectus are sex-distinct and,
therefore, do not reflect the sex-neutral rates, charges or values that would
apply to 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 Servicing 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 Servicing Office in order for the Policy to be 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.

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".

<PAGE>

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 stating 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)

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 Servicing 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.

<PAGE>

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
(currently1 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
Servicing 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 as many as ten of the 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 Servicing Office of notice
satisfactory to JHVLICO. If an Owner requests a change inconsistent with the
transfer provisions, the portion of the request inconsistent with the transfer
provisions will not be effective.

There are 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

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.

<PAGE>

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.

7-Pay Premium Limitation

Federal tax law modifies the tax treatment of certain policy distributions
such as loans, surrenders, partial surrenders, and withdrawals. The application
of this modified treatment to any Owner depends upon whether premiums have been
paid 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." If John Hancock
receives any premium payment that will cause a Policy to become a modified
endowment, the excess portion of that premium payment will not be accepted
unless the Owner signs an acknowledgement of that fact. When it identifies such
excess premium, John Hancock sends the Owner immediate notice and refunds the
excess premium if it has not received the acknowledgement by the time the
premium payment check has had a reasonable time to clear the banking system, but
in no case longer than two weeks.

ACCOUNT VALUE AND SURRENDER VALUE

Amount of Account Value. The Account Value increases or decreases depending
upon a number of factors, such as the applicable Subaccount's investment
experience, the proportion of the Account Value invested in each Subaccount and
the interest credited to any Loan Assets 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 and by any partial
withdrawal of Excess 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.

<PAGE>

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 Servicing 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.

<PAGE>

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.

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 Servicing 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.

<PAGE>

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 Servicing 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 Servicing 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 Servicing Office. (JHVLICO reserves the
right to defer such Fixed Account transfers for up to 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.

<PAGE>

If the Owner requests a reallocation which would result in amounts being held
in more than ten Subaccounts, such reallocation will not be effective and a
revised reallocation may be chosen in order that amounts will be reallocated to
no more than ten Subaccounts. 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.

No transfers among Subaccounts may be made while the Policy is in a grace
period.

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 or sending a written request via fax to
1-800-621-0448. 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. If the fax transfer option becomes unavailable, another
means of telecommunications will be substituted.

An Owner who authorizes telephone transactions will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which JHVLICO reasonably believes to be genuine, unless such loss,
expense or cost is the result of JHVLICO's mistake or negligence. JHVLICO
employs procedures which provide safeguards against the execution of
unauthorized transactions, and which are reasonably designed to confirm that
instructions received by telephone are genuine. These procedures include
requiring personal identification, tape recording calls, and providing written
confirmation to the Owner. If JHVLICO does not employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, it may be
liable for any loss due to unauthorized or fraudulent instructions.

LOAN PROVISIONS AND INDEBTEDNESS

Loan Provision. Loans may be made at any time a Loan Value is available after
the first Policy year. The Owner may borrow money, assigning the Policy as the
only security for the loan, by completion of a form satisfactory to JHVLICO or,
if the telephone transaction authorization form has been completed, by
telephone. Assuming no outstanding Indebtedness in Policy years two and three,
the Loan Value will be 75% of that portion of the Surrender Value attributable
to the variable Subaccount investments, plus 100% of that portion of the
Surrender Value attributable to Fixed Account investments and, in later Policy
years, 90% of that portion of the Surrender Value attributable to variable
Subaccount investments, plus 100% of that portion of the Surrender Value
attributable to Fixed Account investments. Interest charged on any loan will
accrue and compound 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.

<PAGE>

same proportionate amount of the entire loan as was borrowed from the Fixed
Account will be repaid to the Fixed Account. The remainder of the loan repayment
will be allocated to the appropriate Subaccounts as stipulated in the then
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 then 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 Loan Assets is credited interest at a rate that for the
first 20 Policy years is 1% less than the loan interest rate and thereafter is
.5% less than the loan interest rate. The rate credited to Loan Assets will
usually be different than the net return for the Subaccounts. Since the Loan
Assets and the remaining portion of the Account Value will generally have
different rates of investment return, the Account Value, the Surrender Value,
and any death benefit above the Guaranteed Death Benefit are permanently
affected by an Indebtedness, whether or not it is 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.

<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
Servicing 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 and to any variations in Policy provisions required by the regulatory
authorities of the state that has approved the Policy for issue.

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 to2 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. The2 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

<PAGE>

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."

Part of the sales charge is deducted from each premium payment received. This
amount is4 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.

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

<PAGE>

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 plus 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.

<PAGE>

Maintenance Charge. JHVLICO will deduct from the Account Value a monthly
charge equal to $4 plus 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 monthly 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
is1 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
is1 1/2% of the amount applied to reduce the new Basic Premium to an amount
below the Basic Premium on the Level Schedule

<PAGE>

for the insured's age at issue. This charge may be increased by JHVLICO but it
will never exceed 3% of the amount applied.

Charge for Mortality and Expense Risks. A daily charge is deducted from the
variable Subaccounts for mortality and expense risks assumed by JHVLICO at an
effective annual rate of .60% of the value of the assets of each variable
Subaccount 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 Fees and Other Fund Expenses. 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 fees and certain other
non-advisory Fund operating expenses, which are described briefly in the Summary
of this Prospectus. For a full description of these deductions, see the attached
prospectuses for the Funds.

<PAGE>

DISTRIBUTION OF POLICIES

Applications are solicited by agents who are licensed by state insurance
authorities to sell JHVLICO's Policies and who are also registered
representatives ("representatives") of John Hancock Distributors, Inc.
("Distributors"), an indirect wholly-owned subsidiary of John Hancock located at
197 Clarendon Street, Boston, MA 02117, or other broker-dealer firms, as
discussed below. John Hancock performs insurance underwriting and determines
whether to accept or reject the application for a Policy and each insured's risk
classification. Pursuant to a sales agreement among John Hancock, Distributors,
JHVLICO, and the Account, Distributors acts as the principal underwriter of the
Policies. The sales agreement will remain in effect until terminated upon sixty
days' written notice by any party. JHVLICO will make the appropriate refund if a
Policy ultimately is not issued or is returned under the short-term cancellation
provision. Officers and employees of John Hancock and JHVLICO are covered by a
blanket bond by a commercial carrier in the amount of $25 million.

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

The maximum commission payable to an agent for selling a Policy is 45% of the
premium that would be payable under a Modified Schedule in the first Policy
year, 7.5% of such premiums payable in the second Policy year and 5% of any such
premiums received by JHVLICO in later years. The maximum commission on any other
premium paid in any year is 3%.

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

Distributors is registered with the Commission under the Securities Exchange
Act of 1934 as a broker-dealer, is a member of the National Association of
Securities Dealers, Inc., and is a member of the Securities Investor Protection
Corporation. The Policies are also sold through other registered broker-dealers
that have entered into selling agreements with Distributors and whose
representatives are authorized by applicable law to sell variable life insurance
policies. The commissions which will be paid by such broker-dealers to their
representatives will be in accordance with their established rules. The
commission rates may be more or less than those set forth above for
Distributors' representatives. In addition, their qualified registered
representatives may be reimbursed by the broker-dealers under expense
reimbursement allowance programs in any year for approved voucherable expenses
incurred. Distributors will compensate the broker-dealers as provided in the
selling agreements, and JHVLICO will reimburse Distributors for such amounts and
for certain other direct expenses in connection with marketing the Policies
through other broker-dealers. In addition, these representatives may earn
"credits" toward qualification for attendance at certain business meetings
sponsored by John Hancock.

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

<PAGE>

TAX CONSIDERATIONS

POLICY PROCEEDS

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

JHVLICO believes that the death benefit under the Policy will be excludable
from the beneficiary's gross income under Section 101 of the Code. The Owner of
a Policy is not deemed to be in constructive receipt of the cash values until a
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. However, the amount of any loan outstanding
will be taxed to the Owner when the Policy lapses.

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 Federal tax law. 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
age59 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.

<PAGE>

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.

<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 Executive Officer of
JHVLICO; President and Chief Operating Officer, John
Hancock Mutual Life Insurance Company.
Henry D. Shaw Vice Chairman of the Board and President of JHVLICO;
Senior Vice President, John Hancock Mutual Life
Insurance Company.
Thomas J. Lee Director of JHVLICO; Vice President, John Hancock
Mutual Life Insurance Company.
Robert R. Reitano Director of JHVLICO; Vice President, John Hancock
Mutual Life Insurance Company.
Ronald J. Bocage Director, Vice President, and Counsel of JHVLICO;
Vice President and Counsel, John Hancock Mutual Life
Insurance Company.
Joseph A. Tomlinson Director and Vice President of JHVLICO; Vice
President, John Hancock Mutual Life Insurance
Company.
Michele G. Van Leer Director of JHVLICO; Senior Vice President, John
Hancock Mutual Life Insurance Company.
Robert S. Paster Director of JHVLICO; Second Vice President, John
Hancock Mutual Life Insurance Company.
Barbara L. Luddy Director and Actuary of JHVLICO; Second Vice
President, John Hancock Mutual Life Insurance
Company.
Daniel L. Ouellette Vice President, Marketing, of JHVLICO; Vice
President, John Hancock Mutual Life Insurance
Company.
Patrick F. Smith Controller of JHVLICO; Assistant Controller, John
Hancock Mutual Life Insurance Company.
</TABLE>

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

<PAGE>

REPORTS

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

Owners will be sent semiannually a report containing the financial statements
of the 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 qualifying variable life insurance
policies and variable annuity contracts at regular and special meetings of the
Funds' shareholders in accordance with instructions received from owners of such
policies and contracts. Shares of the Funds held in the Account which are not
attributable to such policies or contracts and shares for which instructions
from owners are not received will be represented by JHVLICO at the meeting and
will be voted for and against each matter in the same proportions as the votes
based upon the instructions received from the owners of all such policies and
contracts.

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 a Fund.
JHVLICO also may disregard voting instructions in favor of changes initiated by
an owner or a 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

<PAGE>

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

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

The legal validity of the Policies described in this Prospectus has been
passed on by Ronald J. Bocage, Vice President and Counsel for JHVLICO. Messrs.
Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised 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.

<PAGE>

EXPERTS

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

Actuarial matters included in this Prospectus have been examined by Deborah
P. Poppel, 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.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1997

<TABLE>
<CAPTION>
Large Cap Sovereign International Small Cap International Mid Cap Large Cap
Growth Bond Equities Growth Balanced Growth Value
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
------------ ----------- ------------- ---------- ------------- ---------- ----------
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of portfolios
of John Hancock Variable Series
Trust I, at value . . . . . . . . $220,404,877 $77,364,479 $41,970,969 $8,388,753 $1,157,805 $4,786,962 $6,535,144
Investments in shares of portfolios
of M Fund Inc., at value . . . . . -- -- -- -- -- -- --
Receivable from:
John Hancock Variable Series Trust
I . . . . . . . . . . . . . . . . 136,286 346,734 1,409,104 66,139 502 5,059 45,146
M Fund Inc. . . . . . . . . . . . -- -- -- -- -- -- --
------------ ----------- ----------- ---------- ---------- ---------- ----------
TOTAL ASSETS . . . . . . . . . . . 220,541,163 77,711,213 43,380,073 8,454,892 1,158,307 4,792,021 6,580,290
LIABILITIES
Payable to:
John Hancock Variable Life
Insurance Company . . . . . . . 132,686 345,471 1,408,454 66,005 483 4,981 45,040
M Fund Inc. . . . . . . . . . . . -- -- -- -- -- -- --
Asset charges payable . . . . . . 3,600 1,263 650 134 19 78 106
------------ ----------- ----------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES . . . . . . . . . 136,286 346,734 1,409,104 66,139 502 5,059 45,146
------------ ----------- ----------- ---------- ---------- ---------- ----------
NET ASSETS . . . . . . . . . . . . $220,404,877 $77,364,479 $41,970,969 $8,388,753 $1,157,805 $4,786,962 $6,535,144
============ =========== =========== ========== ========== ========== ==========
<CAPTION>
Money Mid Cap Special Real Estate
Market Value Opportunities Equity
Subaccount Subaccount Subaccount Subaccount
----------- ----------- ------------- -------------
------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment in shares of portfolios $16,502,852 $13,182,435 $51,834,969 $42,559,352
of John Hancock Variable Series
Trust I, at value . . . . . . . .
Investments in shares of portfolios -- -- -- --
of M Fund Inc., at value . . . . .
Receivable from:
John Hancock Variable Series Trust 242,747 52,975 1,256,884 11,157
I . . . . . . . . . . . . . . . .
M Fund Inc. . . . . . . . . . . . -- -- -- --
----------- ----------- ----------- -----------
TOTAL ASSETS . . . . . . . . . . . 16,745,599 13,235,410 53,091,853 42,570,509
LIABILITIES
Payable to:
John Hancock Variable Life 242,480 52,761 1,256,074 10,480
Insurance Company . . . . . . .
M Fund Inc. . . . . . . . . . . . -- -- -- --
Asset charges payable . . . . . . 267 214 810 677
----------- ----------- ----------- -----------
TOTAL LIABILITIES . . . . . . . . . 242,747 52,975 1,256,884 11,157
----------- ----------- ----------- -----------
NET ASSETS . . . . . . . . . . . . $16,502,852 $13,182,435 $51,834,969 $42,559,352
=========== =========== =========== ===========
</TABLE>

- ---------
See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 1997

<TABLE>
<CAPTION>
Short-Term
Growth & U.S. Small Cap International
Income Managed Government Value Opportunities
Subaccount Subaccount Subaccount Subaccount Subaccount
------------ ------------ ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of portfolios of John Hancock
Variable Series Trust I, at value . . . . . . . . $415,058,955 $370,265,102 $4,477,991 $7,081,141 $6,510,024
Investments in shares of portfolios of M Fund Inc.,
at value . . . . . . . . . . . . . . . . . . . . . -- -- -- -- --
Receivable from:
John Hancock Variable Series Trust I . . . . . . . 1,579,180 67,783 8,610 30,094 33,701
M Fund Inc. . . . . . . . . . . . . . . . . . . . -- -- -- -- --
------------ ------------ ---------- ---------- ----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . 416,638,135 370,332,885 4,486,601 7,111,235 6,543,725
LIABILITIES
Payable to:
John Hancock Variable Life Insurance Company . . 1,572,407 61,715 8,547 29,979 33,594
M Fund Inc. . . . . . . . . . . . . . . . . . . . -- -- -- -- --
Asset charges payable . . . . . . . . . . . . . . 6,773 6,068 63 115 107
------------ ------------ ---------- ---------- ----------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . 1,579,180 67,783 8,610 30,094 33,701
------------ ------------ ---------- ---------- ----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $415,058,955 $370,265,102 $4,477,991 $7,081,141 $6,510,024
============ ============ ========== ========== ==========
<CAPTION>
Turner Edinburgh Frontier
Equity Strategic Core International Capital
Index Bond Growth Equity Appreciation
Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ---------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of portfolios of John Hancock $10,430,076 $2,627,808 $ -- $ -- $ --
Variable Series Trust I, at value . . . . . . . .
Investments in shares of portfolios of M Fund Inc., -- -- 244,835 794,869 2,536,602
at value . . . . . . . . . . . . . . . . . . . . .
Receivable from:
John Hancock Variable Series Trust I . . . . . . . 10,685 1,304 -- -- --
M Fund Inc. . . . . . . . . . . . . . . . . . . . -- -- 4 13 41
----------- ---------- -------- -------- ----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . 10,440,761 2,629,112 244,839 794,882 2,536,643
LIABILITIES
Payable to:
John Hancock Variable Life Insurance Company . . 10,514 1,261 -- -- --
M Fund Inc. . . . . . . . . . . . . . . . . . . . -- -- -- -- --
Asset charges payable . . . . . . . . . . . . . . 171 43 4 13 41
----------- ---------- -------- -------- ----------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . 10,685 1,304 4 13 41
----------- ---------- -------- -------- ----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . $10,430,076 $2,627,808 $244,835 $794,869 $2,536,602
=========== ========== ======== ======== ==========
</TABLE>

- ---------
See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Large Cap Growth Subaccount Sovereign Bond Subaccount
-------------------------------------- -------------------------------------
1997 1996 1995 1997 1996 1995
----------- ------------ ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I $19,906,569 $22,706,338 $ 9,127,019 $5,517,405 $ 4,518,056 $3,997,055
M Fund Inc. . . . . . . . . . . . . -- -- -- -- -- --
----------- ----------- ----------- ---------- ----------- ----------
Total investment income . . . . . . . 19,906,569 22,706,338 9,127,019 5,517,405 4,518,056 3,997,055
Expenses:
Mortality and expense risks . . . . 1,152,388 789,368 527,639 417,812 352,330 288,879
----------- ----------- ----------- ---------- ----------- ----------
Net investment income (loss) . . . . 18,754,181 21,916,970 8,599,380 5,099,593 4,165,726 3,708,176
Net realized and unrealized gain
(loss) on investments:
Net realized gain
(loss) . . . . . . . . . . . . . . 5,377,678 2,555,654 839,997 (316,608) (136,401) 63,373
Net unrealized appreciation
(depreciation) during the period . 24,886,516 (2,922,417) 13,485,769 1,592,275 (1,537,488) 4,386,358
----------- ----------- ----------- ---------- ----------- ----------
Net realized and unrealized gain
(loss) on investments . . . . . . . 30,264,194 (366,763) 14,325,766 1,275,667 (1,673,889) 4,449,731
----------- ----------- ----------- ---------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations . . . . . $49,018,375 $21,550,207 $22,925,146 $6,375,260 $ 2,491,837 $8,157,907
=========== =========== =========== ========== =========== ==========
<CAPTION>
International Small Cap
Equities Growth International Balanced
Subaccount Subaccount Subaccount
------------------------------------ -------------------- -----------------------
1997 1996 1995 1997 1996* 1997 1996*
------------ ---------- ---------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I $ 2,032,258 $ 460,651 $ 313,290 $ 3,380 $ 1,404 $ 62,258 $11,409
M Fund Inc. . . . . . . . . . . . . -- -- -- -- -- -- --
----------- ---------- ---------- -------- --------- -------- -------
Total investment income . . . . . . . 2,032,258 460,651 313,290 3,380 1,404 62,258 11,409
Expenses:
Mortality and expense risks . . . . 249,823 209,866 158,467 33,986 6,704 6,972 1,311
----------- ---------- ---------- -------- --------- -------- -------
Net investment income (loss) . . . . 1,782,435 250,785 154,823 (30,606) (5,300) 55,286 10,098
Net realized and unrealized gain
(loss) on investments:
Net realized gain 958,182 156,348 709,715 116,210 (210,939) 29,092 1,642
(loss) . . . . . . . . . . . . . .
Net unrealized appreciation
(depreciation) during the period . (4,981,747) 2,539,023 1,169,158 732,330 (86,846) (68,785) 18,954
----------- ---------- ---------- -------- --------- -------- -------
Net realized and unrealized gain
(loss) on investments . . . . . . . (4,023,565) 2,695,371 1,878,873 848,540 (297,785) (39,693) 20,596
----------- ---------- ---------- -------- --------- -------- -------
Net increase (decrease) in net assets
resulting from operations . . . . . $(2,241,130) $2,946,156 $2,033,696 $817,934 $(303,085) $ 15,593 $30,694
=========== ========== ========== ======== ========= ======== =======
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
Mid Cap Growth Large Cap Value
Subaccount Subaccount Money Market Subaccount
------------------ ------------------ ------------------------------
1997 1996* 1997 1996* 1997 1996 1995
--------- ------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . $ -- $ 7,102 $259,192 $ 36,343 $895,867 $918,057 $1,021,645
M Fund Inc. . . . . . . . . . . . . . . . -- -- -- -- -- -- --
-------- ------- -------- -------- -------- -------- ----------
Total investment income . . . . . . . . . . 7,102 259,192 36,343 895,867 918,057 1,021,645
Expenses:
Mortality and expense risks . . . . . . . 20,278 4,054 23,604 3,072 101,168 105,920 108,941
-------- ------- -------- -------- -------- -------- ----------
Net investment income (loss) . . . . . . . (20,278) 3,048 235,588 33,271 794,699 812,137 912,704
Net realized and unrealized gain (loss) on
investments:
Net realized gain . . . . . . . . . . . . 64,078 168 147,209 3,072 -- -- --
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . 567,677 38,250 547,716 87,225 -- -- --
-------- ------- -------- -------- -------- -------- ----------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 631,755 38,418 694,925 90,297 -- -- --
-------- ------- -------- -------- -------- -------- ----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $611,477 $41,466 $930,513 $123,568 $794,699 $812,137 $ 912,704
======== ======= ======== ======== ======== ======== ==========
<CAPTION>
Mid Cap Value
Subaccount Special Opportunities Subaccount
-------------------- ------------------------------------
1997 1996* 1997 1996 1995
---------- -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . $ 972,249 $ 28,018 $ 5,058,010 $1,789,171 $ 483,189
M Fund Inc. . . . . . . . . . . . . . . . -- -- -- -- --
---------- -------- ----------- ---------- ----------
Total investment income . . . . . . . . . . 972,249 28,018 5,058,010 1,789,171 483,189
Expenses:
Mortality and expense risks . . . . . . . 36,967 2,232 296,759 188,016 57,525
---------- -------- ----------- ---------- ----------
Net investment income (loss) . . . . . . . 935,282 25,786 4,761,251 1,601,155 425,664
Net realized and unrealized gain (loss) on
investments:
Net realized gain . . . . . . . . . . . . 148,954 2,034 4,458,015 1,418,069 118,503
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . 58,693 102,527 (7,254,086) 4,977,778 2,655,206
---------- -------- ----------- ---------- ----------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 207,647 104,561 (2,796,071) 6,395,847 2,773,709
---------- -------- ----------- ---------- ----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $1,142,929 $130,347 $ 1,965,180 $7,997,002 $3,199,373
========== ======== =========== ========== ==========
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
Growth & Income
Real Estate Equity Subaccount Subaccount
---------------------------------- -------------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust
I . . . . . . . . . . . . . . . . $2,934,672 $1,610,938 $1,424,926 $52,442,930 $37,254,741 $20,402,345
M Fund Inc. . . . . . . . . . . . -- -- -- -- -- --
---------- ---------- ---------- ----------- ----------- -----------
Total investment income . . . . . . 2,934,672 1,610,938 1,424,926 52,442,930 37,254,741 20,402,345
Expenses:
Mortality and expense risks . . . . 212,177 145,276 117,861 2,178,739 1,542,729 1,040,658
---------- ---------- ---------- ----------- ----------- -----------
Net investment income . . . . . . . 2,722,495 1,465,662 1,307,065 50,264,191 35,712,012 19,361,687
Net realized and unrealized gain
(loss):
Net realized gain (loss) . . . . . 751,985 184,058 (132,712) 7,351,086 3,938,033 1,182,185
Net unrealized appreciation
(depreciation) during the period . 2,343,294 5,976,712 1,164,732 32,872,184 6,429,197 28,390,863
---------- ---------- ---------- ----------- ----------- -----------
Net realized and unrealized gain
(loss) on investments . . . . . . . 3,095,279 6,160,770 1,032,020 40,223,270 10,367,230 29,573,048
---------- ---------- ---------- ----------- ----------- -----------
Net increase in net assets resulting
from operations . . . . . . . . . . $5,817,774 $7,626,432 $2,339,085 $90,487,461 $46,079,242 $48,934,735
========== ========== ========== =========== =========== ===========
<CAPTION>
Short-Term U.S.
Managed Subaccount Government Subaccount
--------------------------------------- ------------------------------
1997 1996 1995 1997 1996 1995
----------- ------------- ----------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust $34,981,042 $ 37,205,797 $24,582,126 $216,077 $140,926 $103,070
I . . . . . . . . . . . . . . . .
M Fund Inc. . . . . . . . . . . . -- -- -- -- -- --
----------- ------------ ----------- -------- -------- --------
Total investment income . . . . . . 34,981,042 37,205,797 24,582,126 216,077 140,926 103,070
Expenses:
Mortality and expense risks . . . . 2,035,959 1,678,618 1,324,428 17,975 12,366 8,335
----------- ------------ ----------- -------- -------- --------
Net investment income . . . . . . . 32,945,083 35,527,179 23,257,698 198,102 128,560 94,735
Net realized and unrealized gain
(loss):
Net realized gain (loss) . . . . . 3,754,808 3,555,551 3,530,479 (12,481) 20,920 20,630
Net unrealized appreciation
(depreciation) during the period . 19,460,056 (11,690,944) 24,157,024 24,408 (69,771) 77,274
----------- ------------ ----------- -------- -------- --------
Net realized and unrealized gain
(loss) on investments . . . . . . . 23,214,864 (8,135,393) 27,687,503 11,927 (48,851) 97,904
----------- ------------ ----------- -------- -------- --------
Net increase in net assets resulting
from operations . . . . . . . . . . $56,159,947 $ 27,391,786 $50,945,201 $210,029 $ 79,709 $192,639
=========== ============ =========== ======== ======== ========
<CAPTION>
Small Cap Value
Subaccount
------------------
1997 1996*
--------- ----------
<S> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust $537,451 $32,693
I . . . . . . . . . . . . . . . .
M Fund Inc. . . . . . . . . . . . -- --
-------- -------
Total investment income . . . . . . 537,451 32,693
Expenses:
Mortality and expense risks . . . . 21,374 2,395
-------- -------
Net investment income . . . . . . . 516,077 30,298
Net realized and unrealized gain
(loss):
Net realized gain (loss) . . . . . 179,065 (1,418)
Net unrealized appreciation
(depreciation) during the period . (60,841) 66,350
-------- -------
Net realized and unrealized gain
(loss) on investments . . . . . . . 118,224 64,932
-------- -------
Net increase in net assets resulting
from operations . . . . . . . . . . $634,301 $95,230
======== =======
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

International Opportunities Equity Index Strategic Bond
Subaccount Subaccount Subaccount
---------------------------- ------------------- -----------------
1997 1996* 1997 1996* 1997 1996*
-------------- ------------ ---------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . . . . . . . $ 85,488 $ 5,631 $ 289,092 $27,780 $155,751 $13,269
M Fund Inc. . . . . . . . . . . . . . . . . . . . . -- -- -- -- -- --
--------- -------- ---------- ------- -------- -------
Total investment income . . . . . . . . . . . . . . . 85,488 5,631 289,092 27,780 155,751 13,269
Expenses:
Mortality and expense risks . . . . . . . . . . . . . 27,161 3,818 33,761 2,194 10,483 675
--------- -------- ---------- ------- -------- -------
Net investment income (loss) . . . . . . . . . . . . . 58,327 1,813 255,331 25,586 145,268 12,594
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) . . . . . . . . . . . . . . 104,001 2,596 72,875 4,690 4,242 1,272
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . (279,934) 98,849 973,872 58,797 7,679 (2,250)
--------- -------- ---------- ------- -------- -------
Net realized and unrealized gain (loss) on investments (175,933) 101,445 1,046,747 63,487 11,921 (978)
--------- -------- ---------- ------- -------- -------
Net increase (decrease) in net assets resulting from
operations. . . . . . . . . . . . . . . . . . . . . . $(117,606) $103,258 $1,302,078 $89,073 $157,189 $11,616
========= ======== ========== ======= ======== =======
<CAPTION>
Edinburgh Frontier
Turner Core Growth International Equity Capital Appreciation
Subaccount Subaccount Subaccount
------------------- --------------------- ---------------------
1997 1996* 1997 1996* 1997 1996*
-------- ---------- ------------ -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . . . . . . . $ -- $ -- $ -- $ -- $ -- $ --
M Fund Inc. . . . . . . . . . . . . . . . . . . . . 22,593 91 11,174 362 59,777 --
------- -------- -------- ---- ------- ---------
Total investment income . . . . . . . . . . . . . . . 22,593 91 11,174 362 59,777 --
Expenses:
Mortality and expense risks . . . . . . . . . . . . . 828 1,556 2,688 74 7,104 1,628
------- -------- -------- ---- ------- ---------
Net investment income (loss) . . . . . . . . . . . . . 21,765 (1,465) 8,486 288 52,673 (1,628)
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) . . . . . . . . . . . . . . 1,020 (75,788) 371 (30) 10,828 (130,154)
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . 17,720 -- (32,110) 220 28,386 1,432
------- -------- -------- ---- ------- ---------
Net realized and unrealized gain (loss) on investments 18,740 (75,788) (31,739) 190 39,214 (128,722)
------- -------- -------- ---- ------- ---------
Net increase (decrease) in net assets resulting from
operations. . . . . . . . . . . . . . . . . . . . . . $40,505 $(77,253) $(23,253) $478 $91,887 $(130,350)
======= ======== ======== ==== ======= =========
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Large Cap Growth Subaccount Sovereign Bond Subaccount
------------------------------------------ ------------------------------------------
1997 1996 1995 1997 1996 1995
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets from operations:
Net investment income (loss) $ 18,754,181 $ 21,916,970 $ 8,599,380 $ 5,099,593 $ 4,165,726 $ 3,708,176
Net realized gains
(losses) . . . . . . . . . . 5,377,678 2,555,654 839,997 (316,608) (136,401) 63,373
Net unrealized appreciation
(depreciation) during the
period . . . . . . . . . . . 24,886,516 (2,922,417) 13,485,769 1,592,275 (1,537,488) 4,386,358
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations. . . . . . . . . . 49,018,375 21,550,207 22,925,146 6,375,260 2,491,837 8,157,907
From policyholder transactions:
Net premiums from
policyholders. . . . . . . . 50,870,640 51,040,008 51,711,591 21,348,125 20,848,505 23,206,470
Net benefits to policyholders (32,643,981) (33,079,850) (19,250,850) (14,778,316) (15,298,035) (14,981,037)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from policyholder
transactions . . . . . . . . 18,226,659 17,960,158 32,460,741 6,569,809 5,550,470 8,225,433
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net
assets . . . . . . . . . . . 67,245,034 39,510,365 55,385,887 12,945,069 8,042,307 16,383,340
Net assets at beginning of
period. . . . . . . . . . . . 153,159,843 113,649,478 58,263,591 64,419,410 56,377,103 39,993,763
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of
period . . . . . . . . . . . $220,404,877 $153,159,843 $113,649,478 $ 77,364,479 $ 64,419,410 $ 56,377,103
============ ============ ============ ============ ============ ============
<CAPTION>
International Balanced
Small Cap Growth Subaccount
International Equities Subaccount Subaccount ---------------------
------------------------------------------ -------------------------
1997 1996 1995 1997 1996* 1997 1996*
------------- ------------- ------------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets from operations:
Net investment income (loss) $ 1,782,435 $ 250,785 $ 154,823 $ (30,606) $ (5,300) $ 55,286 $ 10,098
Net realized gains 958,182 156,348 709,715 116,210 (210,939) 29,092 1,642
(losses) . . . . . . . . . .
Net unrealized appreciation
(depreciation) during the (4,981,747)
period . . . . . . . . . . . ------------ 2,539,023 1,169,158 732,330 (86,846) (68,785) 18,954
------------ ------------ ----------- ----------- ---------- --------
Net increase (decrease) in net (2,241,130) 2,946,156 2,033,696 817,934 (303,085) 15,593 30,694
assets resulting from
operations. . . . . . . . . .
From policyholder transactions:
Net premiums from 17,654,531 17,279,404 17,644,301 7,111,430 5,020,648 1,210,054 777,316
policyholders. . . . . . . .
Net benefits to policyholders (12,889,618) (11,711,164) (12,682,229) (2,474,024) (1,784,150) (811,533) (64,319)
------------ ------------ ------------ ----------- ----------- ---------- --------
Net increase in net assets
resulting from policyholder 4,764,913
transactions . . . . . . . . ------------ 5,568,240 4,962,072 4,637,406 3,236,498 398,521 712,997
------------ ------------ ----------- ----------- ---------- --------
Net increase in net 2,523,783 8,514,396 6,995,768 5,455,340 2,933,413 414,114 743,691
assets . . . . . . . . . . .
Net assets at beginning of
period. . . . . . . . . . . . 39,447,186 30,932,790 23,937,022 2,933,413 -- 743,691 --
------------ ------------ ------------ ----------- ----------- ---------- --------
Net assets at end of
period . . . . . . . . . . . $ 41,970,969 $ 39,447,186 $ 30,932,790 $ 8,388,753 $ 2,933,413 $1,157,805 $743,691
============ ============ ============ =========== =========== ========== ========
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
Mid Cap Growth Large Cap Value
Subaccount Subaccount
------------------------ ------------------------
1997 1996* 1997 1996*
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . $ (20,278) $ 3,048 $ 235,588 $ 33,271
Net realized gains . . . . . . . . . . . 64,078 168 147,209 3,072
Net unrealized appreciation
(depreciation) during the period . . . 567,677 38,250 547,716 87,225
----------- ---------- ----------- ----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . 611,477 41,466 930,513 123,568
From policyholder transactions:
Net premiums from policyholders . . . . 3,564,986 2,413,439 5,175,373 1,814,755
Net benefits to policyholders . . . . . (1,603,972) (240,434) (1,416,071) (92,994)
----------- ---------- ----------- ----------
Net increase (decrease) in net assets
resulting from policyholder
transactions . . . . . . . . . . . . . . 1,961,014 2,173,005 3,759,302 1,721,761
----------- ---------- ----------- ----------
Net increase (decrease) in net assets . . 2,572,491 2,214,471 4,689,815 1,845,329
Net assets at beginning of period . . . . 2,214,471 -- 1,845,329 --
----------- ---------- ----------- ----------
Net assets at end of period . . . . . . . $ 4,786,962 $2,214,471 $ 6,535,144 $1,845,329
=========== ========== =========== ==========
<CAPTION>
Money Market Mid Cap Value
Subaccount Subaccount
------------------------------------------ ------------------------
1997 1996 1995 1997 1996*
------------- ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . $ 794,699 $ 812,137 $ 912,704 $ 935,282 $ 25,786
Net realized gains . . . . . . . . . . . -- -- -- 148,954 2,034
Net unrealized appreciation
(depreciation) during the period . . . -- -- -- 58,693 102,527
------------ ------------ ------------ ----------- ----------
Net increase in net assets resulting from 794,699 812,137 912,704 1,142,929 130,347
operations . . . . . . . . . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . 19,719,031 24,680,961 21,430,904 12,224,626 1,258,509
Net benefits to policyholders . . . . . (21,386,542) (27,801,448) (19,852,589) (1,523,046) (50,930)
------------ ------------ ------------ ----------- ----------
Net increase (decrease) in net assets
resulting from policyholder (1,667,511)
transactions . . . . . . . . . . . . . . ------------ (3,120,487) 1,578,315 10,701,580 1,207,579
------------ ------------ ----------- ----------
Net increase (decrease) in net assets . . (872,812) (2,308,350) 2,491,019 11,844,509 1,337,926
Net assets at beginning of period . . . . 17,375,664 19,684,014 17,192,995 1,337,926 --
------------ ------------ ------------ ----------- ----------
Net assets at end of period . . . . . . . $ 16,502,852 $ 17,375,664 $ 19,684,014 $13,182,435 $1,337,926
============ ============ ============ =========== ==========
<CAPTION>
Special Opportunities
Subaccount
-----------------------------------------
1997 1996 1995
------------- ------------- --------------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . $ 4,761,251 $ 1,601,155 $ 425,664
Net realized gains . . . . . . . . . . . 4,458,015 1,418,069 118,503
Net unrealized appreciation
(depreciation) during the period . . . (7,254,086) 4,977,778 2,655,206
------------ ------------ -----------
Net increase in net assets resulting from 1,965,180 7,997,002 3,199,373
operations . . . . . . . . . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . 26,820,224 30,839,359 15,268,369
Net benefits to policyholders . . . . . (23,391,073) (12,562,876) (3,375,070)
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from policyholder 3,429,151
transactions . . . . . . . . . . . . . . ------------ 18,276,483 11,893,299
------------ -----------
Net increase (decrease) in net assets . . 5,394,331 26,273,485 15,092,672
Net assets at beginning of period . . . . 46,440,638 20,167,153 5,074,481
------------ ------------ -----------
Net assets at end of period . . . . . . . $ 51,834,969 $ 46,440,638 $20,167,153
============ ============ ===========
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Real Estate Equity Subaccount Growth & Income Subaccount
---------------------------------------- ------------------------------------------
1997 1996 1995 1997 1996 1995
------------ ------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets from
operations:
Net investment income . . $ 2,722,495 $ 1,465,662 $ 1,307,065 $ 50,264,191 $ 35,712,012 $ 19,361,687
Net realized gains
(losses) . . . . . . . . 751,985 184,058 (132,712) 7,351,086 3,938,033 1,182,185
Net unrealized
appreciation
(depreciation) during the
period . . . . . . . . . 2,343,294 5,976,712 1,164,732 32,872,184 6,429,197 28,390,863
----------- ----------- ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations 5,817,774 7,626,432 2,339,085 90,487,461 46,079,242 48,934,735
From policyholder
transactions:
Net premiums from
policyholders. . . . . . 13,842,210 10,025,714 10,547,817 94,961,660 93,961,136 76,729,116
Net benefits to
policyholders. . . . . . (8,886,892) (8,112,734) (10,156,449) (70,387,297) (57,300,211) (41,442,095)
----------- ----------- ------------ ------------ ------------ ------------
Net increase in net assets
resulting from
policyholder transactions 4,955,318 1,912,980 391,368 24,574,363 36,660,925 35,287,021
----------- ----------- ------------ ------------ ------------ ------------
Net increase in net assets 10,773,092 9,539,412 2,730,453 115,061,824 82,740,167 84,221,756
Net assets at beginning of
period. . . . . . . . . . 31,786,260 22,246,848 19,516,395 299,997,131 217,256,964 133,035,208
----------- ----------- ------------ ------------ ------------ ------------
Net assets at end of period $42,559,352 $31,786,260 $ 22,246,848 $415,058,955 $299,997,131 $217,256,964
=========== =========== ============ ============ ============ ============
<CAPTION>
Short-Term U.S. Government
Managed Subaccount Subaccount
------------------------------------------ ---------------------------------------
1997 1996 1995 1997 1996 1995
------------- ------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets from
operations:
Net investment income . . $ 32,945,083 $ 35,527,179 $ 23,257,698 $ 198,102 $ 128,560 $ 94,735
Net realized gains 3,754,808 3,555,551 3,530,479 (12,481) 20,920 20,630
(losses) . . . . . . . .
Net unrealized
appreciation 19,460,056 (11,690,944) 24,157,024 24,408 (69,771) 77,274
(depreciation) during the ------------ ------------ ------------ ----------- ----------- -----------
period . . . . . . . . .
Net increase in net assets 56,159,947 27,391,786 50,945,201 210,029 79,709 192,639
resulting from operations
From policyholder
transactions:
Net premiums from 71,811,719 71,167,775 80,690,820 3,042,915 2,675,105 2,846,775
policyholders. . . . . .
Net benefits to
policyholders. . . . . . (61,937,355) (56,734,361) (48,646,275) (1,790,137) (2,206,096) (1,637,415)
------------ ------------ ------------ ----------- ----------- -----------
Net increase in net assets
resulting from 9,874,364
policyholder transactions ------------ 14,433,414 32,044,545 1,252,778 469,009 1,209,360
------------ ------------ ----------- ----------- -----------
Net increase in net assets 66,034,311 41,825,200 82,989,746 1,462,806 548,718 1,401,999
Net assets at beginning of
period. . . . . . . . . . 304,230,791 262,405,591 179,415,845 3,015,184 2,466,466 1,064,467
------------ ------------ ------------ ----------- ----------- -----------
Net assets at end of period $370,265,102 $304,230,791 $262,405,591 $ 4,477,991 $ 3,015,184 $ 2,466,466
============ ============ ============ =========== =========== ===========
<CAPTION>
Small Cap Value
Subaccount
------------------------
1997 1996*
------------ -------------
<S> <C> <C>
Increase in net assets from
operations:
Net investment income . . $ 516,077 $ 30,298
Net realized gains 179,065 (1,418)
(losses) . . . . . . . .
Net unrealized
appreciation (60,841)
(depreciation) during the ----------- 66,350
period . . . . . . . . . ----------
Net increase in net assets 634,301 95,230
resulting from operations
From policyholder
transactions:
Net premiums from 6,430,967 1,344,453
policyholders. . . . . .
Net benefits to
policyholders. . . . . . (1,313,921) (109,889)
----------- ----------
Net increase in net assets
resulting from 5,117,046
policyholder transactions ----------- 1,234,564
----------
Net increase in net assets 5,751,347 1,329,794
Net assets at beginning of
period. . . . . . . . . . 1,329,794 --
----------- ----------
Net assets at end of period $ 7,081,141 $1,329,794
=========== ==========
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

International Opportunities Equity Index Strategic Bond
Subaccount Subaccount Subaccount
---------------------------- ------------------------ ---------------------
1997 1996* 1997 1996* 1997 1996*
-------------- ------------- ------------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . $ 58,327 $ 1,813 $ 255,331 $ 25,586 $ 145,268 $ 12,594
Net realized gains (losses) . . . . . . 104,001 2,596 72,875 4,690 4,242 1,272
Net unrealized appreciation
(depreciation) during the
period . . . . . . . . . . . . . . . . (279,934) 98,849 973,872 58,797 7,679 (2,250)
----------- ---------- ----------- ---------- ---------- --------
Net increase (decrease) in net assets
resulting from operations . . . . . . . (117,606) 103,258 1,302,078 89,073 157,189 11,616
From policyholder transactions:
Net premiums from
policyholders . . . . . . . . . . . . . 6,249,522 2,395,587 9,373,895 1,242,668 2,575,091 495,203
Net benefits to policyholders . . . . . (1,882,431) (238,306) (1,445,089) (132,549) (522,585) (88,706)
----------- ---------- ----------- ---------- ---------- --------
Net increase in net assets resulting from
policyholder transactions . . . . . . . 4,367,091 2,157,281 7,928,806 1,110,119 2,052,506 406,497
----------- ---------- ----------- ---------- ---------- --------
Net increase in net assets . . . . . . . 4,249,485 2,260,539 9,230,884 1,199,192 2,209,695 418,113
Net assets at beginning of period . . . . 2,260,539 -- 1,199,192 -- 418,113 --
----------- ---------- ----------- ---------- ---------- --------
Net assets at end of period . . . . . . . $ 6,510,024 $2,260,539 $10,430,076 $1,199,192 $2,627,808 $418,113
=========== ========== =========== ========== ========== ========
<CAPTION>
Frontier
Turner Core Edinburgh Capital
Growth International Equity Appreciation
Subaccount Subaccount Subaccount
---------------------- --------------------- ------------------------
1997 1996* 1997 1996* 1997 1996*
--------- ------------ ---------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . $ 21,765 $ (1,465) $ 8,486 $ 288 $ 52,673 $ (1,628)
Net realized gains (losses) . . . . . . 1,020 (75,788) 371 (30) 10,828 (130,154)
Net unrealized appreciation
(depreciation) during the 17,720
period . . . . . . . . . . . . . . . . -------- -- (32,110) 220 28,386 1,432
----------- -------- ------- ---------- -----------
Net increase (decrease) in net assets 40,505 (77,253) (23,253) 478 91,887 (130,350)
resulting from operations . . . . . . .
From policyholder transactions:
Net premiums from 209,202 1,525,222 764,978 64,120 2,429,648 1,568,562
policyholders . . . . . . . . . . . . .
Net benefits to policyholders . . . . . (7,612) (1,445,229) (10,047) (1,407) (47,057) (1,376,088)
-------- ----------- -------- ------- ---------- -----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . 201,590 79,993 754,931 62,713 2,382,591 192,474
-------- ----------- -------- ------- ---------- -----------
Net increase in net assets . . . . . . . 242,095 2,740 731,678 63,191 2,474,478 62,124
Net assets at beginning of period . . . . 2,740 -- 63,191 -- 62,124 --
-------- ----------- -------- ------- ---------- -----------
Net assets at end of period . . . . . . . $244,835 $ 2,740 $794,869 $63,191 $2,536,602 $ 62,124
======== =========== ======== ======= ========== ===========
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

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 twenty-one subaccounts. The assets of each subaccount are invested
exclusively in shares of a corresponding Portfolio of John Hancock Variable
Series Trust I (the Fund) or of M Fund Inc. (M Fund). New subaccounts may be
added as new portfolios are added to the Fund or to M Fund, or as other
investment options are developed and made available to policyholders. The
twenty-one Portfolios of the Fund and M Fund which are currently available are
the Large Cap Growth, Sovereign Bond, International Equities, Small Cap Growth,
International Balanced, Mid Cap Growth, Large Cap Value, Money Market, Mid Cap
Value, Special Opportunities, Real Estate Equity, Growth & Income, Managed,
Short-Term U.S. Government, Small Cap Value, International Opportunities, Equity
Index, Strategic Bond, Turner Core Growth, Edinburgh International Equity and
Frontier Capital Appreciation Portfolios. 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.

2. SIGNIFICANT ACCOUNTING POLICIES

ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

VALUATION OF INVESTMENTS

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

FEDERAL INCOME TAXES

The operations of the Account are included in the federal income tax return of
JHVLICO, which is taxed as a life insurance company under the Internal Revenue
Code. JHVLICO has the right to charge the Account any federal

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED

2. SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
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 .6% of net
assets 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.

3. TRANSACTIONS WITH AFFILIATES

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

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED
4. DETAILS OF INVESTMENTS

The details of the shares owned and cost and value of investments in the
Portfolios of the Fund and of M Fund at December 31, 1997 were as follows:

<TABLE>
<CAPTION>
Subaccount Shares Owned Cost Value
- ---------- ------------ ---- -----
<S> <C> <C> <C>
Large Cap Growth . . . . . . . 10,586,769 $187,930,849 $220,404,877
Sovereign Bond . . . . . . . . 7,776,122 75,958,729 77,364,479
International Equities . . . . 2,761,277 43,643,958 41,970,969
Small Cap Growth . . . . . . . 739,493 7,743,268 8,388,753
International Balanced . . . . 114,518 1,207,635 1,157,805
Mid Cap Growth . . . . . . . . 401,405 4,181,035 4,786,962
Large Cap Value . . . . . . . . 481,601 5,900,203 6,535,144
Money Market . . . . . . . . . 1,650,285 16,502,852 16,502,852
Mid Cap Value . . . . . . . . . 950,696 13,021,215 13,182,435
Special Opportunities . . . . . 3,369,163 51,464,805 51,834,969
Real Estate Equity . . . . . . 2,674,924 33,759,677 42,559,352
Growth & Income . . . . . . . . 24,995,259 355,932,656 415,058,955
Managed . . . . . . . . . . . . 25,803,545 344,297,799 370,265,102
Short-Term U.S. Government . . 444,097 4,469,746 4,477,991
Small Cap Value . . . . . . . . 571,000 7,075,632 7,081,141
International Opportunities . . 612,582 6,691,109 6,510,024
Equity Index . . . . . . . . . 733,831 9,397,407 10,430,076
Strategic Bond . . . . . . . . 256,555 2,622,381 2,627,808
Turner Core Growth . . . . . . 18,136 227,115 244,835
Edinburgh International Equity 79,806 826,979 794,869
Frontier Capital Appreciation . 170,014 2,508,216 2,536,602
</TABLE>

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED

4. DETAILS OF INVESTMENTS--CONTINUED
Purchases, including reinvestment of dividend distributions and proceeds from
sales of shares in the Portfolios of the Fund and of M Fund during 1997, were as
follows:

<TABLE>
<CAPTION>
Subaccount Purchases Sales
- ---------- --------- -----
<S> <C> <C>
Large Cap Growth . . . . . . . . . . . . . . $ 56,466,102 $19,485,262
Sovereign Bond . . . . . . . . . . . . . . . 19,397,400 7,727,997
International Equities . . . . . . . . . . . 15,253,207 8,705,859
Small Cap Growth . . . . . . . . . . . . . . 5,859,776 1,252,977
International Balanced . . . . . . . . . . . 1,159,181 705,374
Mid Cap Growth . . . . . . . . . . . . . . . 2,742,522 801,786
Large Cap Value . . . . . . . . . . . . . . . 4,652,964 658,074
Money Market . . . . . . . . . . . . . . . . 17,500,398 18,373,210
Mid Cap Value . . . . . . . . . . . . . . . . 12,117,784 480,923
Special Opportunities . . . . . . . . . . . . 21,744,442 13,554,039
Real Estate Equity . . . . . . . . . . . . . 11,188,184 3,510,371
Growth & Income . . . . . . . . . . . . . . . 101,356,390 26,517,836
Managed . . . . . . . . . . . . . . . . . . . 72,195,782 29,376,335
Short-Term U.S. Government . . . . . . . . . 2,905,273 1,454,395
Small Cap Value . . . . . . . . . . . . . . . 6,527,629 894,506
International Opportunities . . . . . . . . . 5,523,001 1,097,583
Equity Index . . . . . . . . . . . . . . . . 8,553,934 369,798
Strategic Bond . . . . . . . . . . . . . . . 2,740,710 542,935
Turner Core Growth . . . . . . . . . . . . . 234,152 10,793
Edinburgh International Equity . . . . . . . 783,703 20,053
Frontier Capital Appreciation . . . . . . . . 2,486,125 51,919
</TABLE>

5. IMPACT OF YEAR 2000 (UNAUDITED)

The John Hancock Variable Life Account V, along with John Hancock Mutual Life
Insurance Company, its ultimate parent (together, John Hancock), have developed
a plan to modify or replace significant portions of the Account's computer
information and automated technologies so that its systems will function
properly with respect to the dates in the year 2000 and thereafter. The Account
presently believes that with modifications to existing systems and conversions
to new technologies, the year 2000 will not pose significant operational
problems for its computer systems. However, if certain modifications and
conversions are not made, or are not completed timely, the year 2000 issue could
have an adverse impact on the operations of the Account.

John Hancock as early as 1994 had begun assessing, modifying and converting
the software related to its significant systems and has initiated formal
communications with its significant business partners and customers to determine
the extent to which John Hancock's interface systems are vulnerable to those
third parties' failure to remediate their own year 2000 issues. While John
Hancock is developing alternative third party processing arrangements as it
deems appropriate, there is no guarantee that the systems of other companies on
which the Account's systems rely will be converted timely or will not have an
adverse effect on the Account's systems.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED
5. IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

The Account expects the project to be substantially complete by early 1999.
This completion target was derived utilizing numerous assumptions of future
events, including availability of certain resources and other factors. However,
there can be no guarantee that this completion target will be achieved.

<PAGE>

REPORT 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
Large Cap Growth, Sovereign Bond, International Equities, Small Cap Growth,
International Balanced, Mid Cap Growth, Large Cap Value, Money Market, Mid Cap
Value, Special Opportunities, Real Estate Equity, Growth & Income, Managed,
Short-Term U.S. Government, Small Cap Value, International Opportunities, Equity
Index, Strategic Bond, Turner Core Growth, Edinburgh International Equity and
Frontier Capital Appreciation Subaccounts) as of December 31, 1997, and the
related statements of operations; and changes in net assets for each of the
periods indicated therein. These financial statements are the responsibility of
the Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Variable Life Account V at December 31,
1997, 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 6, 1998

<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Directors and Policyholders
John Hancock Variable Life Insurance Company

We have audited the accompanying statutory-basis statements of financial
position of John Hancock Variable Life Insurance Company as of December 31, 1997
and 1996, and the related statutory-basis statements of operations and
unassigned deficit and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the Commonwealth of Massachusetts Division of Insurance, which
practices differ from generally accepted accounting principles. The variances
between such practices and generally accepted accounting principles also are
described in Note 1. The effects on the financial statements of these variances
are not reasonably determinable but are presumed to be material.

In our opinion, because of the effects of the matter described in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of John Hancock Variable Life Insurance Company at December 31, 1997 and 1996,
or the results of its operations or its cash flows for the year ended December
31, 1997.

Also, in our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of John Hancock Variable Life
Insurance Company at December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance.

ERNST & YOUNG LLP

Boston, Massachusetts
February 18, 1998

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
December 31
-------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
ASSETS
Bonds--Note 6 . . . . . . . . . . . . . . . . . . . . $1,092.7 $ 753.5
Preferred stocks . . . . . . . . . . . . . . . . . . . 17.2 9.6
Common stocks . . . . . . . . . . . . . . . . . . . . 2.3 1.4
Investment in affiliates . . . . . . . . . . . . . . . 79.1 72.0
Mortgage loans on real estate--Note 6 . . . . . . . . 273.9 212.1
Real estate . . . . . . . . . . . . . . . . . . . . . 39.9 38.8
Policy loans . . . . . . . . . . . . . . . . . . . . . 106.8 80.8
Cash items:
Cash in banks . . . . . . . . . . . . . . . . . . . 83.1 26.7
Temporary cash investments . . . . . . . . . . . . . 60.1 5.2
-------- --------
143.2 31.9
Premiums due and deferred . . . . . . . . . . . . . . 33.8 36.8
Investment income due and accrued . . . . . . . . . . 24.7 22.6
Other general account assets . . . . . . . . . . . . . 16.8 17.8
Assets held in separate accounts . . . . . . . . . . . 4,691.1 3,290.5
-------- --------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $6,521.5 $4,567.8
======== ========
OBLIGATIONS AND STOCKHOLDER'S EQUITY
OBLIGATIONS
Policy reserves . . . . . . . . . . . . . . . . . . $1,124.3 $ 877.8
Federal income and other taxes payable--Note 1 . . . 36.1 29.4
Other accrued expenses . . . . . . . . . . . . . . . 335.1 75.1
Asset valuation reserve--Note 1 . . . . . . . . . . 18.6 16.6
Obligations related to separate accounts . . . . . . 4,685.7 3,285.8
-------- --------
TOTAL OBLIGATIONS . . . . . . . . . . . . . . . . . . 6,199.8 4,284.7
STOCKHOLDER'S EQUITY
Common Stock, $50 par value; authorized 50,000
shares;
issued and outstanding 50,000 shares . . . . . . . 2.5 2.5
Paid-in capital . . . . . . . . . . . . . . . . . . 377.5 377.5
Unassigned deficit . . . . . . . . . . . . . . . . . . (58.3) (96.9)
-------- --------
TOTAL STOCKHOLDER'S EQUITY . . . . . . . . . . . . . . 321.7 283.1
-------- --------
TOTAL OBLIGATIONS AND STOCKHOLDER'S EQUITY . . . . . . $6,521.5 $4,567.8
======== ========
</TABLE>

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
INCOME
Premiums . . . . . . . . . . . . . . . . . . . . $ 872.7 $ 820.6
Net investment income--Note 3 . . . . . . . . . 89.7 76.1
Other, net . . . . . . . . . . . . . . . . . . . 420.1 406.0
-------- --------
1,382.5 1,302.7
BENEFITS AND EXPENSES
Payments to policyholders and beneficiaries . . 264.0 236.1
Additions to reserves to provide for future
payments to policyholders and beneficiaries . 814.2 790.1
Expenses of providing service to policyholders
and obtaining new insurance--
Note 5 . . . . . . . . . . . . . . . . . . . . 216.2 183.8
State and miscellaneous taxes . . . . . . . . . 19.1 17.3
-------- --------
1,313.5 1,227.3
-------- --------
GAIN FROM OPERATIONS BEFORE FEDERAL INCOME
TAXES AND NET REALIZED CAPITAL LOSSES . . . 69.0 75.4
Federal income taxes--Note 1 . . . . . . . . . . . 38.5 38.6
-------- --------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL LOSSES . . . . . . . . . . . . . . . 30.5 36.8
Net realized capital losses--Note 4 . . . . . . . (3.0) (1.5)
-------- --------
NET INCOME . . . . . . . . . . . . . . . . . 27.5 35.3
Unassigned deficit at beginning of year . . . . . (96.9) (131.3)
Net unrealized capital gains and other
adjustments--Note 4 . . . . . . . . . . . . . . . 5.0 2.5
Other reserves and adjustments . . . . . . . . . . 6.1 (3.4)
-------- --------
UNASSIGNED DEFICIT AT END OF YEAR . . . . . . $ (58.3) $ (96.9)
======== ========
</TABLE>

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Insurance premiums . . . . . . . . . . . . . . . $ 877.0 $ 824.2
Net investment income . . . . . . . . . . . . . 89.9 73.4
Benefits to policyholders and beneficiaries . . (245.2) (212.7)
Dividends paid to policyholders . . . . . . . . (18.7) (15.7)
Insurance expenses and taxes . . . . . . . . . . (250.2) (196.6)
Net transfers to separate accounts . . . . . . . (703.2) (524.2)
Other, net . . . . . . . . . . . . . . . . . . . 379.9 386.7
------- -------
NET CASH PROVIDED FROM OPERATIONS . . . . . . 129.5 335.1
------- -------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Bond purchases . . . . . . . . . . . . . . . . . (621.6) (489.9)
Bond sales . . . . . . . . . . . . . . . . . . . 197.3 228.3
Bond maturities and scheduled redemptions . . . 34.1 27.8
Bond prepayments . . . . . . . . . . . . . . . . 51.6 31.9
Stock purchases . . . . . . . . . . . . . . . . (15.7) (6.5)
Proceeds from stock sales . . . . . . . . . . . 6.7 0.4
Real estate purchases . . . . . . . . . . . . . (1.3) (10.5)
Real estate sales . . . . . . . . . . . . . . . 0.4 8.5
Other invested assets purchases . . . . . . . . (1.0) 0.0
Proceeds from the sale of other invested assets 0.3 1.5
Mortgage loans issued . . . . . . . . . . . . . (94.5) (84.4)
Mortgage loan repayments . . . . . . . . . . . . 32.4 17.7
Other, net . . . . . . . . . . . . . . . . . . . 393.1 (104.6)
------- -------
NET CASH USED IN INVESTING ACTIVITIES . . . . (18.2) (379.8)
------- -------
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH
INVESTMENTS . . . . . . . . . . . . . . . . . . . 111.3 (44.7)
Cash and temporary cash investments at beginning of
year. . . . . . . . . . . . . . . . . . . . . . . 31.9 76.6
------- -------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR $ 143.2 $ 31.9
======= =======
</TABLE>

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES

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

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

Basis of Presentation: The financial statements have been prepared using
accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance and in conformity with the practices of the
National Association of Insurance Commissioners (NAIC), which practices differ
from generally accepted accounting principles (GAAP).

The significant differences from GAAP include: (1) policy acquisition costs are
charged to expense as incurred rather than deferred and amortized over the
related premium-paying period; (2) policy reserves are based on statutory
mortality, morbidity, and interest requirements without consideration of
withdrawals and Company experience; (3) certain assets designated as
"nonadmitted assets" are excluded from the balance sheet by direct charges to
surplus; (4) reinsurance recoverables are netted against reserves and claim
liabilities rather than reflected as an asset; (5) bonds held as available for
sale are recorded at amortized cost or market value as determined by the NAIC
rather than at fair value; (6) an Asset Valuation Reserve and Interest
Maintenance Reserve as prescribed by the NAIC are not calculated under GAAP.
Under GAAP, realized capital gains and losses are reported in the income
statement on a pretax basis as incurred and investment valuation allowances are
provided when there has been a decline in value deemed other than temporary; (7)
investments in affiliates are carried at their net equity value with changes in
value being recorded directly to unassigned deficit rather than consolidated in
the financial statements; (8) no provision is made for the deferred income tax
effects of temporary differences between book and tax basis reporting; and (9)
certain items, including modifications to required policy reserves resulting
from changes in actuarial assumptions or increased benefits, are recorded
directly to unassigned deficit rather than being reflected in income. The
effects of the foregoing variances from GAAP have not been determined but are
presumed to be material.

The significant accounting practices of the Company are as follows:

Pending Statutory Standards: The NAIC currently is in the process of recodifying
statutory accounting practices, the result of which is expected to constitute
the only source of prescribed statutory accounting practices. Accordingly, that
project, which is expected to be approved by the NAIC in 1998 will likely
change, to some extent, prescribed statutory accounting practices, and may
result in changes to the accounting practices that the Company uses to prepare
its statutory-basis financial statements. The impact of any such changes on the
Company's unassigned deficit is not expected to be material.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of new
business, are charged to operations as incurred and policyholder dividends are
provided as paid or accrued.

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

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

Bond and stock values are carried as prescribed by the NAIC; bonds generally
at amortized amounts or cost, preferred stocks generally at cost and common
stocks at fair value. The discount or premium on bonds is amortized using the
interest method.

Investments in affiliates are included on the statutory equity method.

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

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

Investment real estate is carried at depreciated cost, less encumbrances.
Depreciation on investment real estate is recorded on a straight-line basis.
Accumulated depreciation amounted to $2.1 million in 1997 and $1.2 million in
1996.

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, 1997, the IMR, net of 1997 amortization of $1.2 million, amounted to $7.8
million, which is included in policy reserves. The corresponding 1996 amounts
were $1.2 million and $5.9 million, respectively.

Goodwill: The excess of cost over the statutory book value of the net assets of
life insurance business acquired was $13.1 million and $15.1 million at December
31, 1997 and 1996, respectively, and generally is amortized over a ten-year
period using a straight-line method.

Accumulated amortization was $8.8 million and $6.7 million at December 31, 1997
and 1996, respectively.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
Separate Accounts: Separate account assets and liabilities reported in the
accompanying statements of financial position represent funds that are
separately administered, principally for variable life insurance policies, and
for which the contractholder, rather than the Company, generally bears the
investment risk. Separate account obligations are intended to be satisfied from
separate account assets and not from assets of the general account. Separate
accounts generally are reported at fair value. The operations of the separate
accounts are not included in the statement of operations; however, income earned
on amounts initially invested by the Company in the formation of new separate
accounts is included in other income.

Fair Value Disclosure 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 certain
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. See Note 11.

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

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

Fair values for public bonds are obtained from an independent pricing service.
Fair values for private placement securities and publicly traded bonds not
provided by the independent pricing service are estimated by the Company by
discounting expected future cash flows using current market rates applicable
to the yield, credit quality and maturity of the investments.

The fair values for common and preferred stocks, other than its subsidiary
investments, which are carried at equity values, are based on quoted market
prices.

The fair value of interest rate swaps and currency rate swaps is estimated
using a discounted cash flow method adjusted for the difference between the
rate of the existing swap and the current swap market rate. Discounted cash
flows in foreign currencies are converted to U.S. dollars using current
exchange rates.

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

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

The fair value for outstanding commitments to purchase long-term bonds and
issue real estate mortgages is estimated using a discounted cash flow method
incorporating adjustments for the difference in the level of interest rates
between the dates the commitments were made and December 31, 1997. The fair
value for commitments to purchase real estate approximates the amount of the
initial commitment.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
Capital Gains and Losses: Realized capital gains and losses are determined using
the specific identification basis. Realized capital gains and losses, net of
taxes and amounts transferred to the IMR, are included in net gain or loss.
Unrealized gains and losses, which consist of market value and book value
adjustments, are shown as adjustments to the unassigned deficit.

Policy Reserves: Life reserves are developed by actuarial methods and are
determined based on published tables using statutorily specified interest rates
and valuation methods that will provide, in the aggregate, reserves that are
greater than or equal to the minimum or guaranteed policy cash values or the
amounts required by the Commonwealth of Massachusetts Division of Insurance.
Reserves for variable life insurance policies are maintained principally on the
modified preliminary term method using the 1958 and 1980 Commissioner's Standard
Ordinary (CSO) mortality tables, with an assumed interest rate of 4% for
policies issued prior to May 1, 1983 and 41/2% 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 41/2% 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
51/2% interest for policies issued from 1988 through 1992; 5% interest for
policies issued in 1993 and 1994; and 41/2% interest for policies issued in 1995
through 1997.

Federal Income Taxes: Federal income taxes are reported in the financial
statements based on amounts determined to be payable as a result of operations
within the current accounting period. The operations of the Company are
consolidated with John Hancock in filing a consolidated federal income tax
return for the affiliated group. The federal income taxes of the Company are
allocated on a separate return basis with certain adjustments. The Company made
payments of $29.6 million in 1997 and $33.5 million in 1996.

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.

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 stockholder's equity. During
1997, the Company refined certain assumptions inherent in the calculation of
reserves related to AIDS claims under individual life policies resulting in a
$6.4 million increase in stockholder's equity at December 31, 1997.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 4--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS--CONTINUED
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.

NOTE 2--ACQUISITION

On June 23, 1993, the Company acquired all of the outstanding shares of stock of
Colonial Penn Annuity and Life Insurance Company (CPAL) from Colonial Penn Life
Insurance Company for an aggregate purchase price of approximately $42.5
million. At the date of acquisition, assets of CPAL were approximately $648.5
million, consisting principally of cash and temporary cash investments and
liabilities were approximately $635.2 million, consisting principally of
reserves related to a block of interest sensitive single-premium whole life
insurance business assumed by CPAL from Charter National Life Insurance Company
(Charter). The purchase price includes contingent payments of up to
approximately $7.3 million payable between 1994 and 1998 based on the actual
lapse experience of the business in force on June 23, 1993. The Company made
contingent payments to CPAL of $1.5 million during each of 1997 and 1996.
Unamortized goodwill at December 31, 1997 was $13.1 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 3--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

<TABLE>
<CAPTION>
1997 1996
---- ----
(In millions)
<S> <C> <C>
Investment expenses . . . . . . . . . . . . . . . . . $ 5.0 $7.0
Interest expense . . . . . . . . . . . . . . . . . . . 0.7 0.0
Depreciation expense . . . . . . . . . . . . . . . . . 1.1 0.9
Investment taxes . . . . . . . . . . . . . . . . . . . 0.4 0.5
-------------- ----
$ 7.2 $8.4
============== ====
</TABLE>

NOTE 4--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS

Net realized capital losses consist of the following items:

<TABLE>
<CAPTION>
1997 1996
---- ----
(In millions)
<S> <C> <C>
Net gains (losses) from asset sales . . . . . . . . $ 0.8 $(0.2)
Capital gains tax . . . . . . . . . . . . . . . . . (0.7) (1.0)
Net capital gains transferred to IMR . . . . . . . (3.1) (0.3)
-------------- -----
Realized Capital Losses . . . . . . . . . . . . . . $ (3.0) $(1.5)
============== =====
</TABLE>

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 4--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS--CONTINUED
Net unrealized capital gains and other adjustments consist of the following
items:

<TABLE>
<CAPTION>
1997 1996
---- ----
(In millions)
<S> <C> <C>
Net gains from changes in security values and book
value adjustments . . . . . . . . . . . . . . . . $ 7.0 $ 3.7
Increase in asset valuation reserve . . . . . . . . (2.0) (1.2)
-------------- -----
Net Unrealized Capital Gains and Other Adjustments $ 5.0 $ 2.5
============== =====
</TABLE>

NOTE 5--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 1997 and 1996 to reflect continuing changes in
the Company's operations. The amount of the service fee charged to the Company
was $123.6 million and $111.7 million in 1997 and 1996, 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 $0.9 million and
$1.6 million in 1997 and 1996, 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.

The Company has a modified coinsurance agreement with John Hancock to reinsure
50% of 1994 through 1997 issues of flexible premium variable life insurance and
scheduled premium variable life insurance policies. In connection with this
agreement, John Hancock transferred $22.0 million and $24.5 million of cash for
tax, commission, and expense allowances to the Company, which increased the
Company's net gain from operations by $10.1 million and $15.7 million in 1997
and 1996, respectively.

The Company has a modified coinsurance agreement with John Hancock to reinsure
50% of 1995 through 1997 issues of certain retail annuity contracts
(Independence Preferred and Declaration). In connection with this agreement, the
Company made a net cash payment of $1.1 million and received a net cash payment
of $35.0 million for surrender benefits, tax, reserve increase, commission,
expense allowances and premium. This agreement increased the Company's net gain
from operations by $9.8 million and $15.1 million and in 1997 and 1996,
respectively.

Effective January 1, 1997, the Company entered into a stop-loss agreement with
John Hancock to reinsure mortality claims in excess of 110% of expected
mortality claims in 1997 for all policies that are not reinsured under any other
indemnity agreement. In connection with the agreement, John Hancock transferred
$2.4 million of cash for mortality claims to the Company, which increased the
Company's net gain from operations by $1.3 million.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 6--INVESTMENTS

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

<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized Fair
Year ended December 31, 1997 Value Gains Losses Value
- ---------------------------- --------- ---------- ---------- -----
(In millions)
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies . . $ 254.5 $ 0.2 $0.1 $ 254.6
Obligations of states and
political subdivisions . . . . 12.1 1.0 0.0 13.1
Debt securities issued by
foreign governments . . . . . 0.2 0.0 0.0 0.2
Corporate securities . . . . . 712.7 43.9 2.7 753.9
Mortgage-backed securities . . 113.2 3.5 0.0 116.7
-------- ----- ---- --------
Total bonds . . . . . . . . . . $1,092.7 $48.6 $2.8 $1,138.5
======== ===== ==== ========
</TABLE>

<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized Fair
Year ended December 31, 1996 Value Gains Losses Value
- ---------------------------- --------- ---------- ---------- -----
(In millions)
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S.
government corporations and
agencies. . . . . . . . . . $ 44.4 $ 0.2 $0.2 $ 44.4
Obligations of states and
political subdivisions . . 12.6 0.4 0.0 13.0
Debt securities issued by
foreign governments . . . . 0.8 0.1 0.0 0.9
Corporate securities . . . . 623.2 29.8 3.4 649.6
Mortgage-backed securities . 72.5 10.2 0.1 82.6
-------------- ----- ---- ------
Total bonds . . . . . . . . $ 753.5 $40.7 $3.7 $790.5
============== ===== ==== ======
</TABLE>

The statement value and fair value of bonds at December 31, 1997, 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 . . . . . . . . . . . . . . . . $ 89.1 $ 90.7
Due after one year through five years . . . . . . . . . 466.8 477.0
Due after five years through ten years . . . . . . . . 284.2 299.2
Due after ten years . . . . . . . . . . . . . . . . . . 139.4 154.9
-------- --------
979.5 1,021.8
Mortgage-backed securities . . . . . . . . . . . . . . 113.2 116.7
-------- --------
$1,092.7 $1,138.5
======== ========
</TABLE>

Gross gains of $1.1 million in 1997 and $1.3 million in 1996 and gross losses of
$4.5 million in 1997 and $2.1 million in 1996 were realized from the sale of
bonds.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED
At December 31, 1997, bonds with an admitted asset value of $3.6 million were on
deposit with state insurance departments to satisfy regulatory requirements.

The cost of common stocks was $0.0 million at December 31, 1997 and 1996,
respectively. Gross unrealized appreciation on common stocks totaled $2.3
million, and gross unrealized depreciation totaled $0.0 million at December 31,
1997. The fair value of preferred stock totaled $17.2 million at December 31,
1997 and $9.6 million at December 31, 1996.

Bonds with amortized cost of $2.0 million were nonincome producing for the
twelve months ended December 31, 1997.

At December 31, 1997, 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 Geographic Statement
Property Type Value Concentration Value
------------- --------- ------------- ---------
(In millions) (In millions)
<S> <C> <C> <C>
Apartments. . . . . . $104.1 East North Central . . $ 32.7
Hotels. . . . . . . . 3.8 Middle Atlantic . . . 11.3
Industrial. . . . . . 51.3 Mountain . . . . . . . 17.9
Office buildings . . 32.2 New England . . . . . 35.8
Retail. . . . . . . . 33.2 Pacific . . . . . . . 64.2
Agricultural. . . . . 38.8 South Atlantic . . . . 67.9
Other . . . . . . . . 10.5 West North Central . . 2.5
West South Central . . 41.6
------ ------
$273.9 $273.9
====== ======
</TABLE>

At December 31, 1997, the fair values of the commercial and agricultural
mortgage loans portfolios were $243.8 million and $42.0 million, respectively.
The corresponding amounts as of December 31, 1996 were approximately $189.0
million and $30.4 million, respectively.

The maximum and minimum lending rates for mortgage loans during 1997 were 10.49%
and 8.14% for agricultural loans and 8.53% and 7.42% for other properties.
Generally, the maximum percentage of any loan to the value of security at the
time of the loan, exclusive of insured, guaranteed or purchase money mortgages,
is 75%. For city mortgages, fire insurance is carried on all commercial and
residential properties at least equal to the excess of the loan over the maximum
loan which would be permitted by law on the land without the building, except as
permitted by regulations of the Federal Housing Commission on loans fully
insured under the provisions of the National Housing Act. For agricultural
mortgage loans, fire insurance is not normally required on land based loans
except in those instances where a building is critical to the farming operation.
Fire insurance is required on all agri-business facilities in an aggregate
amount equal to the loan balance.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--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 1997 were $427.4 million, $18.3 million, and $10.1 million,
respectively. The corresponding amounts in 1996 were $384.3 million, $9.9
million, and $12.1 million, respectively.

Reinsurance ceded contracts do not relieve the Company from its obligations to
policyholders. The Company remains liable to its policyholders for the portion
reinsured to the extent that any reinsurer does not meet its obligations for
reinsurance ceded to it under the reinsurance agreements. Failure of the
reinsurers to honor their obligations could result in losses to the Company;
consequently, estimates are established for amounts deemed or estimated to be
uncollectible. To minimize its exposure to significant losses from reinsurance
insolvencies, the Company evaluates the financial condition of its reinsurers
and monitors concentration of credit risk arising from similar characteristics
of the reinsurer.

Neither the Company, nor any of its related parties, control, either directly or
indirectly, any external reinsurers with which the Company conducts business.
No policies issued by the Company have been reinsured with a foreign company
which is controlled, either directly or indirectly, by a party not primarily
engaged in the business of insurance.

The Company has not entered into any reinsurance agreements in which the
reinsurer may unilaterally cancel any reinsurance for reasons other than
nonpayment of premiums or other similar credits. The Company does not have any
reinsurance agreements in effect in which the amount of losses paid or accrued
through December 31, 1997 would result in a payment to the reinsurer of amounts
which, in the aggregate and allowing for offset of mutual credits from other
reinsurance agreements with the same reinsurer, exceed the total direct premiums
collected under the reinsured policies.

NOTE 8--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The Company utilizes a variety of off-balance sheet financial instruments as
part of its efforts to hedge and manage fluctuations in the market value of its
investment portfolio attributable to changes in general interest rate levels and
to manage duration mismatch of assets and liabilities. Those instruments
include swaps, caps, and future contracts.

The Company enters into interest rate swap contracts for the purpose of
converting the interest rate characteristics (fixed or variable) of certain
investments to match those of related insurance liabilities. Maturities of
current agreements range through 2011. These swaps involve, to varying degrees,
interest rate risk in excess of amounts recognized in the statement of financial
position.

The Company enters into interest rate cap contracts to manage exposure on
underlying security values due to a rise in interest rates. Maturities of
current agreements range through 2007.

The Company also uses financial futures contracts to hedge public bonds intended
for future sale in order to lock in the market value at the date of contract.
The Company is subject to the risks associated with changes in the value of the
underlying securities; however, such changes in value generally are offset by
changes in the value of the hedged items. The contract or notional amounts of
the contracts represent the extent of the Company's involvement

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK--CONTINUED
but not in the future cash requirements, as the Company intends to close the
open positions prior to settlement. Net deferred losses on financial contracts
were $2.8 million and $0.0 million at December 31, 1997 and 1996, respectively.

The Company enters into currency rate swap agreements to manage exposure to
foreign exchange rate fluctuations. Maturities of current agreements range
through 2009. Should the counterparty fail to meet the terms of the contract,
the Company's market risk is limited to the currency rate differential.

The contract or notional amount of the foregoing financial instruments, which
indicates the Company's involvement and in certain instances, maximum credit
risk related to those instruments, is as follows:

<TABLE>
<CAPTION>
December 31
----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Futures contracts to sell securities . . . . . . . . $ 40.8 $ 73.0
============== ======
Notional amount of interest rate swaps, currency rate
swaps, and interest rate caps to:
Receive variable rates . . . . . . . . . . . . . . $ 323.7 $215.9
============== ======
Receive fixed rates . . . . . . . . . . . . . . . $ 25.0 $ 26.6
============== ======
</TABLE>

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform according to the terms of the contract. The Company
continually monitors its positions and the credit ratings of the counterparties
to these financial instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency agreements, the Company enters into
master netting agreements with its counterparties. The Company believes the
risk of incurring losses due to nonperformance by its counterparties is remote
and that such losses, if any, would not be material.

Based on the market rates in effect at December 31, 1997, the Company's interest
rate swaps, currency rate swaps and interest rate caps represented (assets)
liabilities to the Company with fair values of $7.8 million, $2.1 million and
$(1.4) million, respectively. The corresponding amounts as of December 31, 1996
were $2.3 million, $(8.2) million, and $(2.0) million, respectively. The fair
values of the swap agreements are not recognized in the financial statements.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 9--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND OBLIGATIONS
RELATED TO SEPARATE ACCOUNTS

The Company's annuity reserves and deposit fund liabilities that are subject to
discretionary withdrawal, with and without adjustment, are summarized as
follows:

<TABLE>
<CAPTION>
December 31, 1997 Percent
----------------- -------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with
adjustment)
With market value adjustment . . . . . . . . . . $ 0.4 0.0%
At book value less surrender charge . . . . . . 970.3 88.7
-------- -----
Total with adjustment . . . . . . . . . . . . . 970.7 88.7
Subject to discretionary withdrawal at book value
(without adjustment) . . . . . . . . . . . . . 118.9 10.9
Not subject to discretionary withdrawal--general
account . . . . . . . . . . . . . . . . . . . . 4.1 0.4
-------- -----
Total annuity reserves and deposit liabilities . $1,093.7 100.0%
======== =====
</TABLE>

NOTE 10--COMMITMENTS AND CONTINGENCIES

The Company has extended commitments to purchase long-term bonds and issue real
estate mortgages totalling $168.6 million and $28.3 million, respectively, at
December 31, 1997. 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 estimated fair value of the commitments described
above is $194.5 million at December 31, 1997. The majority of these commitments
expire in 1998.

In the normal course of its business operations, the Company is involved with
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 1997. 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 or results of operations of the Company.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 11--FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and fair values of the
Company's financial instruments:

<TABLE>
<CAPTION>
Year ended December 31
-----------------------------------------
1997 1996
----------------------- ----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ----- -------- -----
(In millions)
<S> <C> <C> <C> <C>
Assets
Bonds--Note 6 . . . . . . . . $1,092.7 $1,138.5 $753.5 $790.5
Preferred stocks--Note 6 . . . 17.2 17.2 9.6 9.6
Common stocks--Note 6 . . . . 2.3 2.3 1.4 1.4
Mortgage loans on real
estate--Note 6 . . . . . . . 273.9 285.8 212.1 219.4
Policy loans--Note 1 . . . . . 106.8 106.8 80.8 80.8
Cash and cash equivalents--Note
1. . . . . . . . . . . . . . 143.2 143.2 31.9 31.9
Derivatives liabilities relating
to:--Note 8
Interest rate swaps . . . . . -- 7.8 -- 2.3
Currency rate swaps . . . . . -- 2.1 -- (8.2)
Interest rate caps . . . . . . -- (1.4) -- (2.0)
Liabilities
Commitments--Note 10 . . . . . -- 194.5 -- 76.2
</TABLE>

The carrying amounts in the table are included in the statutory-basis statements
of financial position. The method and assumptions utilized by the Company in
estimating its fair value disclosures are described in Note 1.

NOTE 12--IMPACT OF YEAR 2000 (UNAUDITED)

The Company relies on John Hancock, its parent company, for information
processing services. John Hancock has developed a plan to modify or replace
significant portions of its computer information and automated technologies so
that its systems, including those relied upon by the Company, will function
properly with respect to the dates in the year 2000 and thereafter. The
Company, along with John Hancock, presently believes that with modifications to
existing systems and conversions to new technologies, the year 2000 will not
pose significant operational problems for the computer systems upon which the
Company relies. However, if certain modifications and conversions are not made,
or are not completed timely, the year 2000 issue could have an adverse impact on
the operations of the Company.

John Hancock as early as 1994 had begun assessing, modifying and converting the
software related to its significant systems and has initiated formal
communications with significant business partners and customers to determine the
extent to which interface systems are vulnerable to those third parties' failure
to remediate their own year 2000 issues. While John Hancock is developing
alternative third party processing arrangements as it deems appropriate, there
is no guarantee that the systems of other companies on which John Hancock's
systems rely will be converted timely or will not have an adverse effect on John
Hancock's systems, including those upon which the Company relies.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 12--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

John Hancock expects the project to be substantially complete by early 1999.
This completion target was derived utilizing numerous assumptions of future
events, including availability of certain resources and other factors.
However, there can be no guarantee that this completion target will be achieved.

<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 than3 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 than3 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 Servicing 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 those which would have
been purchased at the correct age or sex by the most recent insurance charge
deducted from Account Value.

<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, the Policy will terminate and 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 less 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 during the
lifetime of the insured 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
Servicing Office of all documents required for any such payment. Approximately
two-thirds of the claims for death proceeds which are made within two years
after the date of issue of the Policy will be investigated to determine whether
the claim should be contested and payment of these claims will therefore be
delayed.

JHVLICO may defer 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
of3 1/2% if such a deferment extends beyond 29 days.

<PAGE>

APPENDIX--IMPACT OF YEAR 2000

The advent of the Year 2000 presents a technological challenge to JHVLICO. In
close cooperation with John Hancock Mutual Life Insurance Company, its ultimate
parent, JHVLICO has developed a plan to modify or replace significant portions
of JHVLICO's computer information and automated technologies so that its systems
will function properly with respect to dates in the year 2000 and thereafter.
The plan also involves coordination and testing with business partners to
ensure that external factors do not adversely impact JHVLICO's systems. JHVLICO
presently believes that with modifications to existing systems and conversions
to new technologies, the year 2000 will not pose significant operational
problems for its computer systems. However, if certain modifications and
conversions are not made, or are not completed on time, the year 2000 issue
could have an adverse impact on the operations of JHVLICO.

JHVLICO expects the project to be substantially complete by early 1999. This
completion target was derived utilizing numerous assumptions of future events,
including availability of certain resources and other factors. However, there
can be no guarantee that this estimate will be achieved, that these steps will
be sufficient or that actual results may not differ materially from those
anticipated.

<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 Funds (equivalent to an effective annual rate of .61%) and an
assumed average asset charge for the annual nonadvisory operating expenses of
each Portfolio of the Funds (equivalent to an effective annual rate of .19%).
For a description of expenses charged to the Portfolios, including the
reimbursement of any Portfolio for annual non-advisory operating expenses in
excess of an effective annual rate of .25%, a continuing obligation of the
Funds' investment adviser, see the attached prospectuses for the Funds. 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.

<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--LEVEL $1,113 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 1,169 100,000 100,000 100,000 369 419 470
2 2,396 100,000 100,000 100,000 1,020 1,165 1,316
3 3,684 100,000 100,000 100,000 1,666 1,949 2,258
4 5,037 100,000 100,000 100,000 2,304 2,773 3,304
5 6,458 100,000 100,000 100,000 2,932 3,638 4,468
6 7,949 100,000 100,000 100,000 3,549 4,546 5,765
7 9,515 100,000 100,000 100,000 4,152 5,497 7,205
8 11,160 100,000 100,000 100,000 4,778 6,528 8,841
9 12,886 100,000 100,000 100,000 5,387 7,603 10,650
10 14,699 100,000 100,000 100,000 6,051 8,794 12,722
11 16,603 100,000 100,000 100,000 6,816 10,152 15,124
12 18,602 100,000 100,000 100,000 7,634 11,629 17,830
13 20,700 100,000 100,000 100,000 8,432 13,153 20,793
14 22,904 100,000 100,000 100,000 9,207 14,726 24,037
15 25,218 100,000 100,000 100,000 9,957 16,347 27,592
16 27,647 100,000 100,000 102,178 10,490 17,827 31,296
17 30,198 100,000 100,000 111,786 10,994 19,356 35,350
18 32,877 100,000 100,000 121,878 11,469 20,937 39,783
19 35,689 100,000 100,000 132,496 11,912 22,571 44,628
20 38,643 100,000 100,000 143,673 12,323 24,260 49,923
25 55,776 100,000 100,000 209,355 13,839 33,610 84,663
30 77,644 100,000 100,000 295,779 14,177 44,673 138,137
35 105,553 100,000 107,703 410,532 12,612 57,472 219,067
40 141,173 100,000 118,848 563,776 8,044 71,664 339,952
45 186,634 100,000 129,129 768,205 0 86,780 516,267
50 244,655 100,000 138,764 1,041,607 0 102,439 768,940
55 318,706 100,000 147,948 1,407,908 0 117,793 1,120,946
</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%.

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.

<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 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>
1 743 100,000 100,000 100,000 0 25 53
2 1,524 100,000 100,000 100,000 281 358 439
3 2,344 100,000 100,000 100,000 564 710 871
4 3,204 100,000 100,000 100,000 844 1,082 1,353
5 4,108 100,000 100,000 100,000 1,118 1,473 1,894
6 5,057 100,000 100,000 100,000 1,385 1,886 2,501
7 6,053 100,000 100,000 100,000 1,643 2,317 3,178
8 7,099 100,000 100,000 100,000 1,928 2,805 3,969
9 8,197 100,000 100,000 100,000 2,199 3,311 4,844
10 9,350 100,000 100,000 100,000 2,530 3,906 5,881
11 10,561 100,000 100,000 100,000 2,965 4,638 7,137
12 11,833 100,000 100,000 100,000 3,458 5,460 8,575
13 13,168 100,000 100,000 100,000 3,933 6,297 10,133
14 14,570 100,000 100,000 100,000 4,387 7,148 11,819
15 16,042 100,000 100,000 100,000 4,820 8,012 13,647
16 17,587 100,000 100,000 100,000 5,038 8,696 15,439
17 19,210 100,000 100,000 100,000 5,229 9,389 17,402
18 20,914 100,000 100,000 100,000 5,392 10,090 19,552
19 22,703 100,000 100,000 100,000 5,526 10,797 21,909
20 24,581 100,000 100,000 100,000 5,628 11,510 24,496
25 35,480 100,000 100,000 103,489 5,601 15,108 41,851
30 49,391 100,000 100,000 147,688 4,342 18,473 68,974
35 67,144 100,000 100,000 206,211 988 20,812 110,038
40 89,803 100,000 100,000 284,232 0 20,851 171,389
45 118,721 100,000 100,000 388,208 0 15,380 260,893
50 181,786 100,000 100,000 523,841 12,744 24,256 386,712
55 281,964 100,000 100,000 703,645 27,179 49,199 560,227
</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%, $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%.

<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 2,666 2,964
3 6,468 100,000 100,000 100,000 3,668 4,236 4,853
4 8,843 100,000 100,000 100,000 4,925 5,872 6,941
5 11,337 100,000 100,000 100,000 6,153 7,580 9,256
6 13,955 100,000 100,000 100,000 7,338 9,354 11,814
7 16,705 100,000 100,000 100,000 8,495 11,208 14,654
8 19,592 100,000 100,000 100,000 9,678 13,201 17,860
9 22,623 100,000 100,000 100,000 10,822 15,273 21,402
10 25,806 100,000 100,000 100,000 12,047 17,548 25,438
11 29,148 100,000 100,000 100,000 13,447 20,122 30,102
12 32,657 100,000 100,000 100,000 14,942 22,920 35,359
13 36,342 100,000 100,000 100,000 16,392 25,809 41,125
14 40,211 100,000 100,000 105,237 17,798 28,793 47,441
15 44,273 100,000 100,000 116,307 19,150 31,872 54,319
16 48,538 100,000 100,000 128,021 20,098 34,700 61,457
17 53,017 100,000 100,000 140,418 20,986 37,629 69,257
18 57,719 100,000 100,000 153,552 21,813 40,669 77,780
19 62,657 100,000 100,000 167,459 22,571 43,821 87,082
20 67,841 100,000 100,000 182,224 23,263 47,098 97,238
25 97,922 100,000 108,571 271,383 25,570 65,467 163,642
30 136,313 100,000 128,414 392,979 24,649 86,300 264,099
35 185,310 100,000 148,729 563,012 19,152 109,796 415,630
40 247,845 100,000 170,615 805,780 4,677 135,840 641,544
</TABLE>

(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.83 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%.

<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 1,370 100,000 100,000 100,000 466 528 589
2 2,809 100,000 100,000 100,000 1,195 1,373 1,558
3 4,320 100,000 100,000 100,000 1,901 2,250 2,629
4 5,906 100,000 100,000 100,000 2,583 3,160 3,813
5 7,571 100,000 100,000 100,000 3,242 4,108 5,127
6 9,320 100,000 100,000 100,000 3,866 5,084 6,575
7 11,157 100,000 100,000 100,000 4,466 6,102 8,185
8 13,085 100,000 100,000 100,000 5,097 7,217 10,028
9 15,109 100,000 100,000 100,000 5,694 8,367 12,058
10 17,235 100,000 100,000 100,000 6,377 9,672 14,414
11 19,467 100,000 100,000 100,000 7,236 11,225 17,211
12 21,810 100,000 100,000 100,000 8,194 12,950 20,395
13 24,271 100,000 100,000 100,000 9,111 14,707 23,855
14 26,855 100,000 100,000 100,000 9,985 16,499 27,622
15 29,568 100,000 100,000 100,000 10,805 18,317 31,723
16 32,417 100,000 100,000 100,000 11,221 19,812 35,848
17 35,408 100,000 100,000 100,000 11,573 21,328 40,388
18 38,548 100,000 100,000 100,000 11,863 22,869 45,393
19 41,846 100,000 100,000 100,000 12,079 24,427 50,917
20 45,309 100,000 100,000 106,786 12,221 26,006 56,983
25 65,398 100,000 100,000 160,286 11,628 34,168 96,651
30 91,038 100,000 100,000 233,139 7,127 41,949 156,679
35 133,083 100,000 100,000 328,662 20,548 58,251 242,627
40 193,761 100,000 108,040 461,510 45,865 86,019 367,444
</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%.

<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 1,263
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 2,668 3,186
5 6,458 100,000 100,000 100,000 2,816 3,503 4,312
6 7,949 100,000 100,000 100,000 3,410 4,380 5,566
7 9,515 100,000 100,000 100,000 3,991 5,298 6,960
8 11,160 100,000 100,000 100,000 4,595 6,295 8,544
9 12,886 100,000 100,000 100,000 5,182 7,335 10,296
10 14,699 100,000 100,000 100,000 5,825 8,489 12,305
11 16,603 100,000 100,000 100,000 6,569 9,807 14,637
12 18,602 100,000 100,000 100,000 7,366 11,242 17,266
13 20,700 100,000 100,000 100,000 8,140 12,721 20,140
14 22,904 100,000 100,000 100,000 8,891 14,245 23,286
15 25,218 100,000 100,000 100,000 9,617 15,815 26,732
16 27,647 100,000 100,000 100,000 10,125 17,240 30,317
17 30,198 100,000 100,000 108,300 10,604 18,712 34,247
18 32,877 100,000 100,000 118,083 11,054 20,232 38,544
19 35,689 100,000 100,000 128,374 11,471 21,801 43,240
20 38,643 100,000 100,000 139,208 11,857 23,422 48,371
25 55,776 100,000 100,000 202,803 13,237 32,365 82,013
30 77,644 100,000 100,000 286,349 13,414 42,871 133,733
35 105,553 100,000 103,245 397,090 11,642 55,093 211,895
40 141,173 100,000 113,917 544,656 6,763 68,691 328,422
45 186,634 100,000 123,846 741,913 0 83,230 498,598
50 244,655 100,000 133,196 1,006,039 0 98,329 742,683
55 318,706 100,000 142,107 1,359,906 0 113,143 1,082,728
</TABLE>

<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 1,524 100,000 100,000 100,000 234 307 385
3 2,344 100,000 100,000 100,000 493 633 786
4 3,204 100,000 100,000 100,000 750 977 1,235
5 4,108 100,000 100,000 100,000 1,002 1,338 1,737
6 5,057 100,000 100,000 100,000 1,246 1,720 2,302
7 6,053 100,000 100,000 100,000 1,482 2,119 2,933
8 7,099 100,000 100,000 100,000 1,745 2,573 3,673
9 8,197 100,000 100,000 100,000 1,995 3,043 4,490
10 9,350 100,000 100,000 100,000 2,304 3,601 5,465
11 10,561 100,000 100,000 100,000 2,719 4,294 6,651
12 11,833 100,000 100,000 100,000 3,189 5,074 8,011
13 13,168 100,000 100,000 100,000 3,640 5,865 9,479
14 14,570 100,000 100,000 100,000 4,070 6,667 11,067
15 16,042 100,000 100,000 100,000 4,479 7,480 12,785
16 17,587 100,000 100,000 100,000 4,672 8,108 14,454
17 19,210 100,000 100,000 100,000 4,837 8,742 16,280
18 20,914 100,000 100,000 100,000 4,975 9,381 18,278
19 22,703 100,000 100,000 100,000 5,082 10,023 20,466
20 24,581 100,000 100,000 100,000 5,159 10,668 22,865
25 35,480 100,000 100,000 100,000 4,993 13,849 38,918
30 49,391 100,000 100,000 137,447 3,568 16,635 64,191
35 67,144 100,000 100,000 191,904 0 18,132 102,404
40 89,803 100,000 100,000 264,330 0 16,862 159,389
45 118,721 100,000 100,000 361,032 0 9,351 242,629
50 184,931 100,000 100,000 486,854 12,667 17,697 359,408
55 291,490 100,000 100,000 653,735 26,927 43,349 520,490
</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%.

<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 2,052 100,000 100,000 100,000 905 997 1,090
2 4,206 100,000 100,000 100,000 2,058 2,324 2,602
3 6,468 100,000 100,000 100,000 3,171 3,694 4,263
4 8,843 100,000 100,000 100,000 4,241 5,107 6,087
5 11,337 100,000 100,000 100,000 5,270 6,568 8,096
6 13,955 100,000 100,000 100,000 6,254 8,077 10,311
7 16,705 100,000 100,000 100,000 7,192 9,637 12,756
8 19,592 100,000 100,000 100,000 8,150 11,314 15,519
9 22,623 100,000 100,000 100,000 9,060 13,046 18,565
10 25,806 100,000 100,000 100,000 10,052 14,963 22,055
11 29,148 100,000 100,000 100,000 11,214 17,159 26,116
12 32,657 100,000 100,000 100,000 12,448 19,540 30,691
13 36,342 100,000 100,000 100,000 13,620 21,974 35,695
14 40,211 100,000 100,000 100,000 14,724 24,462 41,177
15 44,273 100,000 100,000 101,034 15,752 27,000 47,186
16 48,538 100,000 100,000 111,131 16,350 29,240 53,349
17 53,017 100,000 100,000 121,739 16,862 31,534 60,044
18 57,719 100,000 100,000 132,897 17,289 33,889 67,317
19 62,657 100,000 100,000 144,636 17,624 36,307 75,214
20 67,841 100,000 100,000 157,011 17,862 38,794 83,784
25 97,922 100,000 100,000 229,781 17,143 52,325 138,556
30 136,313 100,000 101,508 325,589 11,491 68,218 218,810
35 185,310 100,000 116,053 452,712 0 85,673 334,204
40 247,845 100,000 129,808 622,142 0 103,351 495,336
</TABLE>

(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.83 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%.

<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 1,370 100,000 100,000 100,000 308 365 421
2 2,809 100,000 100,000 100,000 870 1,028 1,193
3 4,320 100,000 100,000 100,000 1,399 1,702 2,033
4 5,906 100,000 100,000 100,000 1,890 2,384 2,945
5 7,571 100,000 100,000 100,000 2,345 3,077 3,943
6 9,320 100,000 100,000 100,000 2,759 3,779 5,035
7 11,157 100,000 100,000 100,000 3,132 4,489 6,232
8 13,085 100,000 100,000 100,000 3,527 5,272 7,607
9 15,109 100,000 100,000 100,000 3,878 6,061 9,108
10 17,235 100,000 100,000 100,000 4,311 6,984 10,877
11 19,467 100,000 100,000 100,000 4,917 8,129 13,018
12 21,810 100,000 100,000 100,000 5,595 9,398 15,451
13 24,271 100,000 100,000 100,000 6,210 10,656 18,060
14 26,855 100,000 100,000 100,000 6,754 11,894 20,861
15 29,568 100,000 100,000 100,000 7,218 13,103 23,871
16 32,417 100,000 100,000 100,000 7,245 13,926 26,762
17 35,408 100,000 100,000 100,000 7,180 14,708 29,913
18 38,548 100,000 100,000 100,000 7,020 15,445 33,357
19 41,846 100,000 100,000 100,000 6,758 16,129 37,133
20 45,309 100,000 100,000 100,000 6,384 16,751 41,283
25 65,398 100,000 100,000 114,811 2,273 18,349 69,230
30 91,038 100,000 100,000 165,093 0 15,031 110,950
35 147,624 100,000 100,000 225,067 12,667 24,888 166,150
40 237,807 100,000 100,000 301,772 26,927 49,482 240,265
</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%.

<PAGE>

[JOHN HANCOCK LOGO APPEARS HERE]

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

S8138-M 5/98
<PAGE>

[JOHN HANCOCK LOGO APPEARS HERE]

John Hancock Variable Life
Insurance Company
(JHVLICO)

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

John Hancock Place Boston, Massachusetts 02117

JOHN HANCOCK SERVICING OFFICE:
P.O. Box 111 Boston, Massachusetts 02117

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

PROSPECTUS MAY 1, 1998

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 "series" type
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: Managed, Growth & Income, Equity Index, Large Cap Value, Large Cap
Growth, Mid Cap Value, Mid Cap Growth, Diversified Mid Cap Growth (formerly,
Special Opportunities), Real Estate Equity, Small/Mid Cap CORE, Small Cap Value,
Small Cap Growth, Global Equity, International Balanced, International Equity
Index (formerly, International Equities), International Opportunities, Emerging
Markets Equity, Short-Term Bond (formerly, Short-Term U.S. Government), Bond
Index, Sovereign Bond, Strategic Bond, High Yield Bond, and Money Market. (The
Small/Mid Cap CORE, Global Equity, Emerging Markets Equity, Bond Index, and High
Yield Bond Portfolios are not currently available to Owners but are expected to
be made available later in 1998.) 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 . . . . . . . . . . . . . . . . . . . . 7
THE FIXED ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . 10
POLICY PROVISIONS AND BENEFITS . . . . . . . . . . . . . . . . . . . 10
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 . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Reduced Charges for Eligible Groups . . . . . . . . . . . . . . . 22
Charges Deducted from Account Value . . . . . . . . . . . . . . . 22
DISTRIBUTION OF POLICIES . . . . . . . . . . . . . . . . . . . . . . 25
TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 26
Policy Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 26
Charge for JHVLICO's Taxes . . . . . . . . . . . . . . . . . . . . 27
Corporate and H.R. 10 Plans . . . . . . . . . . . . . . . . . . . 27
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO . . . . . . . . 28
REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
VOTING PRIVILEGES . . . . . . . . . . . . . . . . . . . . . . . . . 29
CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE . . . . . . . . . . 29
STATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . 30
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . 30
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 30
APPENDIX--OTHER POLICY PROVISIONS . . . . . . . . . . . . . . . . . 60
APPENDIX--IMPACT OF YEAR 2000. . . . . . . . . . . . . . . . . . . .
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, SURRENDER VALUES AND
ACCUMULATED PREMIUMS . . . . . . . . . . . . . . . . . . . . . . . 63
</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 . . . . . . . . . . . . . . . . . . . . 16
Basic Death Benefit . . . . . . . . . . . . . . . . 15
Basic Premium . . . . . . . . . . . . . . . . . . . 12
Benchmark Value . . . . . . . . . . . . . . . . . . 16
Contingent Deferred Sales Charge . . . . . . . . . . 21
Current Death Benefit . . . . . . . . . . . . . . . 15
Death Benefit Factor . . . . . . . . . . . . . . . . 15
Excess Value . . . . . . . . . . . . . . . . . . . . 16
Experience Component . . . . . . . . . . . . . . . . 16
Extra Death Benefit . . . . . . . . . . . . . . . . 15
Fixed Account . . . . . . . . . . . . . . . . . . . 10
Grace Period . . . . . . . . . . . . . . . . . . . . 19
Guaranteed Death Benefit . . . . . . . . . . . . . . 15
Indebtedness . . . . . . . . . . . . . . . . . . . . 19
Investment Rule . . . . . . . . . . . . . . . . . . 13
Issue Charge . . . . . . . . . . . . . . . . . . . . 23
Level Schedule . . . . . . . . . . . . . . . . . . . 12
Loan Assets . . . . . . . . . . . . . . . . . . . . 19
Minimum First Premium . . . . . . . . . . . . . . . 11
Modified Schedule . . . . . . . . . . . . . . . . . 12
Premium Component . . . . . . . . . . . . . . . . . 16
Premium Credit Factor . . . . . . . . . . . . . . . 16
Premium Processing Charge . . . . . . . . . . . . . 21
Premium Recalculation . . . . . . . . . . . . . . . 12
Required Premium . . . . . . . . . . . . . . . . . . 11
Servicing Office . . . . . . . . . . . . . . . . . . 6
Subaccount
Cover
Sum Insured at Issue . . . . . . . . . . . . . . . . 15
Surrender Value . . . . . . . . . . . . . . . . . . 15
Valuation Date . . . . . . . . . . . . . . . . . . . 9
Value Option . . . . . . . . . . . . . . . . . . . . 15
Variable Subaccount . . . . . . . . . . . . . . . . 2
</TABLE>

<PAGE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?

The Policies work generally as follows: Premium payments are periodically made
to JHVLICO in amounts sufficient 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 of the Policy (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.

<PAGE>

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. The
Account is divided into a number of variable Subaccounts, each of which
corresponds to one of the Portfolios of the Fund. The assets of each variable
Subaccount are invested in the corresponding Portfolio of the Fund. The current
Portfolios of the Fund are: Managed, Growth & Income, Equity Index, Large Cap
Value, Large Cap Growth, Mid Cap Value, Mid Cap Growth, Diversified Mid Cap
Growth, Real Estate Equity, Small/Mid Cap CORE, Small Cap Value, Small Cap
Growth, Global Equity, International Balanced, International Equity Index,
International Opportunities, Emerging Markets Equity, Short-Term Bond, Bond
Index, Sovereign Bond, Strategic Bond, High Yield Bond, and Money Market.

<PAGE>

- ---------

* John Hancock reimburses a Portfolio when the Portfolio's other fund expenses
exceed 0.25% of the Portfolio's average daily net assets.

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

WHAT ARE THE CHARGES MADE BY JHVLICO?

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

State Premium Tax Charge. A charge equal to2 1/2% of each premium payment
after deduction of the Premium Processing Charge.

Sales Charge Deduction from Premium. A charge equal to4 1/2% of each premium
payment after deduction of the Premium Processing Charge.

<PAGE>

Issue Charges. A charge deducted monthly from Account Value in 48 equal
installments totalling $240 plus 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 plus 2c per $1000 of current Sum Insured.

Charge for Mortality and Expense Risks. A charge made daily from the variable
Subaccounts at an effective annual rate of .60% of the assets of each variable
Subaccount.

Charge for Partial Withdrawal. A charge equal to the lesser of $25 or 2% of
the amount withdrawn deducted from 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?

<PAGE>

HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?

WHAT COMMISSIONS ARE PAID TO AGENTS?

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?

<PAGE>

IS THERE A SHORT-TERM CANCELLATION RIGHT?

WHAT IS THE EXCHANGE PRIVILEGE ALLOWED AN OWNER?

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

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

<PAGE>

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 SERIES FUND

The assets in the variable Subaccounts are invested in the corresponding
Portfolio 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.

Managed Portfolio

Growth & Income Portfolio

<PAGE>

Equity Index Portfolio

Large Cap Value Portfolio

Large Cap Growth Portfolio

Mid Cap Value Portfolio

Mid Cap Growth Portfolio

The investment objective of this Portfolio is to provide long-term growth of
capital through a non-diversified portfolio investing primarily in common stocks
of medium capitalization companies.

Diversified Mid Cap Growth Portfolio

The investment objective of this Portfolio is to provide long-term growth of
capital through a diversified portfolio investing primarily in common stocks of
medium capitalization growth companies.

Real Estate Equity Portfolio

Small/Mid Cap CORE Portfolio

Small Cap Value Portfolio

<PAGE>

Small Cap Growth Portfolio

Global Equity Portfolio

International Balanced Portfolio

International Equity Index Portfolio

International Opportunities Portfolio

The investment objective of this Portfolio is to provide capital appreciation
through investments in common stocks of primarily well-established, non-United
States companies.

Emerging Markets Equity Portfolio

Short-Term Bond Portfolio

Bond Index Portfolio

Sovereign Bond Portfolio

<PAGE>

Strategic Bond Portfolio

High Yield Bond Portfolio

Money Market Portfolio

The investment objective of this Portfolio is to provide maximum current
income consistent with capital preservation and liquidity, through investment in
high quality money market instruments.

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, MA 02109, provides
sub-investment advice with respect to the Managed, Growth & Income, Large Cap
Growth, Real Estate Equity, and Short-Term Bond Portfolios. Independence
International Associates, Inc., a subsidiary of IIA located at the same address
as IIA, is a sub-investment adviser to the International Equity Index Portfolio.

State Street Bank & Trust, N.A., at Two International Place, Boston, MA 02110,
is the sub-investment adviser to the Equity Index Portfolio. INVESCO Management
& Research located at 101 Federal Street, Boston, MA 02110, is the
sub-investment adviser to the Small Cap Value Portfolio. Janus Capital
Corporation, 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 & Berman, LLC 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
sub-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.

<PAGE>

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

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 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".

<PAGE>

POLICY PROVISIONS AND BENEFITS

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. Amounts of coverage that
JHVLICO will accept under the Policy may be limited by JHVLICO's underwriting
and reinsurance procedures as in effect from time to time.

PREMIUMS

Payment Schedule

Minimum Premium Requirements

<PAGE>

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

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:

<PAGE>

<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 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.

Billing, Allocation of Premium Payments (Investment Rule)

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.

<PAGE>

Flexibility as to Premium Payments

7-Pay Premium Limitation

Federal tax law modifies the tax treatment of certain policy distributions
such as loans, surrenders, partial surrenders, and withdrawals. The application
of this modified treatment to any Owner depends upon whether premiums have been
paid 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." If John Hancock
receives any premium payment that will cause a Policy to become a modified
endowment, the excess portion of that premium will not be accepted unless the
Owner signs an acknowledgement of that fact. When it identifies such excess
premium, John Hancock sends the Owner immediate notice and refunds the excess
premium if it has not received the acknowledgement by the time the premium
payment check has had a reasonable time to clear the banking system, but in no
case longer than two weeks.

ACCOUNT VALUE AND SURRENDER VALUE

<PAGE>

Account Value and by any partial withdrawal of Excess Value, increased or
decreased by the investment experience of the Subaccounts and increased by net
premiums received. No minimum amount of Account Value is guaranteed.

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

DEATH BENEFITS

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

<PAGE>

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

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.

The Policy includes three Value Options:

<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

TRANSFERS AMONG SUBACCOUNTS

<PAGE>

No transfers among Subaccounts may be made while the Policy is in a grace
period.

LOAN PROVISIONS AND INDEBTEDNESS

<PAGE>

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 a
portion of JHVLICO's general account called "Loan Assets". Each Subaccount will
be reduced in the same proportion as the Account Value is then allocated among
the Subaccounts. Upon each loan repayment, the same proportionate amount of the
entire loan as was borrowed from the Fixed Account will be repaid to the Fixed
Account. The remainder of the loan repayment will be allocated to the
appropriate Subaccounts as stipulated in the then 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 then current Investment Rule.

DEFAULT AND OPTIONS ON LAPSE

<PAGE>

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

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:

<PAGE>

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.

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."

<TABLE>
<CAPTION>
Maximum Contingent Deferred Sales
Charge as a Percentage of Modified
For Surrenders or Lapses Effective Premiums Due Through 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>

<PAGE>

- ---------
* A slightly lower percentage than that shown applies in the last Valuation
Period of Policy years 8 through 14.

REDUCED CHARGES FOR ELIGIBLE GROUPS

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:

<PAGE>

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.

<PAGE>

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.

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.

<PAGE>

Fund Investment Management Fees and Other Fund Expenses. 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 fees and certain other
non-advisory Fund operating expenses, which are described briefly in the Summary
of this Prospectus. For a full description of these deductions, see the attached
prospectus for the Fund.

DISTRIBUTION OF 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.

26
<PAGE>

Distributors' representatives. In addition, their qualified registered
representatives may be reimbursed by the broker-dealers under expense
reimbursement allowance programs in any year for approved voucherable expenses
incurred. Distributors will compensate the broker-dealers as provided in the
selling agreements, and JHVLICO will reimburse Distributors for such amounts and
for certain other direct expenses in connection with marketing the Policies
through other broker-dealers. In addition, these representatives may earn
"credits" toward qualification for attendance at certain business meetings
sponsored by John Hancock.

TAX CONSIDERATIONS

POLICY PROCEEDS

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 Federal tax law. 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
age59 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.

<PAGE>

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

<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 Executive Officer of
JHVLICO; President and Chief Operating Officer, John
Hancock Mutual Life Insurance Company.
Henry D. Shaw Vice Chairman of the Board and President of JHVLICO;
Senior Vice President, John Hancock Mutual Life
Insurance Company.
Thomas J. Lee Director of JHVLICO; Vice President, John Hancock
Mutual Life Insurance Company.
Robert R. Reitano Director of JHVLICO; Vice President, John Hancock
Mutual Life Insurance Company.
Ronald J. Bocage Director, Vice President, and Counsel of JHVLICO; Vice
President and Counsel, John Hancock Mutual Life
Insurance Company.
Joseph A. Tomlinson Director and Vice President of JHVLICO; Vice President,
John Hancock Mutual Life Insurance Company.
Michele G. Van Leer Director of JHVLICO; Senior Vice President, John
Hancock Mutual Life Insurance Company.
Robert S. Paster Director of JHVLICO; Second Vice President, John
Hancock Mutual Life Insurance Company.
Barbara L. Luddy Director and Actuary of JHVLICO; Second Vice President,
John Hancock Mutual Life Insurance Company.
Daniel L. Ouellette Vice President, Marketing, of JHVLICO; Vice President,
John Hancock Mutual Life Insurance Company.
Patrick F. Smith Controller of JHVLICO; Assistant Controller, John
Hancock Mutual Life Insurance Company.
</TABLE>

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

REPORTS

<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 qualifying variable life insurance
policies and variable annuity contracts at regular and special meetings of the
Fund's shareholders in accordance with instructions received from owners of such
policies and contracts. Shares of the Fund held in the Account which are not
attributable to such policies or contracts and shares for which instructions
from owners are not received will be represented by JHVLICO at the meeting and
will be voted for and against each matter in the same proportions as the votes
based upon the instructions received from the owners of all such policies and
contracts.

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

<PAGE>

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

LEGAL MATTERS

REGISTRATION STATEMENT

EXPERTS

Actuarial matters included in this Prospectus have been examined by Malcolm
Cheung, F.S.A., an Actuary of JHVLICO.

FINANCIAL STATEMENTS

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1997

<TABLE>
<CAPTION>
Large Cap Sovereign International Small Cap International Mid Cap
Growth Bond Equities Growth Balanced Growth
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
------------ ----------- ------------- ---------- ------------- ----------
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of portfolios of
John Hancock Variable Series Trust I,
at value . . . . . . . . . . . . . . $220,404,877 $77,364,479 $41,970,969 $8,388,753 $1,157,805 $4,786,962
Investments in shares of portfolios of
M Fund Inc., at value . . . . . . . -- -- -- -- -- --
Receivable from:
John Hancock Variable Series Trust I 136,286 346,734 1,409,104 66,139 502 5,059
M Fund Inc. . . . . . . . . . . . . -- -- -- -- -- --
------------ ----------- ----------- ---------- ---------- ----------
TOTAL ASSETS . . . . . . . . . . . . 220,541,163 77,711,213 43,380,073 8,454,892 1,158,307 4,792,021
LIABILITIES
Payable to:
John Hancock Variable Life Insurance
Company . . . . . . . . . . . . . . 132,686 345,471 1,408,454 66,005 483 4,981
M Fund Inc. . . . . . . . . . . . . -- -- -- -- -- --
Asset charges payable . . . . . . . . 3,600 1,263 650 134 19 78
------------ ----------- ----------- ---------- ---------- ----------
TOTAL LIABILITIES . . . . . . . . . . 136,286 346,734 1,409,104 66,139 502 5,059
------------ ----------- ----------- ---------- ---------- ----------
NET ASSETS . . . . . . . . . . . . . $220,404,877 $77,364,479 $41,970,969 $8,388,753 $1,157,805 $4,786,962
============ =========== =========== ========== ========== ==========
<CAPTION>
Large Cap Money Mid Cap Special Real Estate
Value Market Value Opportunities Equity
Subaccount Subaccount Subaccount Subaccount Subaccount
---------- ----------- ----------- ------------- -------------
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of portfolios of $6,535,144 $16,502,852 $13,182,435 $51,834,969 $42,559,352
John Hancock Variable Series Trust I,
at value . . . . . . . . . . . . . .
Investments in shares of portfolios of -- -- -- -- --
M Fund Inc., at value . . . . . . .
Receivable from:
John Hancock Variable Series Trust I 45,146 242,747 52,975 1,256,884 11,157
M Fund Inc. . . . . . . . . . . . . -- -- -- -- --
---------- ----------- ----------- ----------- -----------
TOTAL ASSETS . . . . . . . . . . . . 6,580,290 16,745,599 13,235,410 53,091,853 42,570,509
LIABILITIES
Payable to:
John Hancock Variable Life Insurance 45,040 242,480 52,761 1,256,074 10,480
Company . . . . . . . . . . . . . .
M Fund Inc. . . . . . . . . . . . . -- -- -- -- --
Asset charges payable . . . . . . . . 106 267 214 810 677
---------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES . . . . . . . . . . 45,146 242,747 52,975 1,256,884 11,157
---------- ----------- ----------- ----------- -----------
NET ASSETS . . . . . . . . . . . . . $6,535,144 $16,502,852 $13,182,435 $51,834,969 $42,559,352
========== =========== =========== =========== ===========
</TABLE>

- ---------
See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 1997

<TABLE>
<CAPTION>
Short-Term
Growth & U.S. Small Cap International
Income Managed Government Value Opportunities
Subaccount Subaccount Subaccount Subaccount Subaccount
------------ ------------ ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of portfolios of John Hancock
Variable Series Trust I, at value . . . . . . . . . . $415,058,955 $370,265,102 $4,477,991 $7,081,141 $6,510,024
Investments in shares of portfolios of M Fund Inc., at
value . . . . . . . . . . . . . . . . . . . . . . . . -- -- -- -- --
Receivable from:
John Hancock Variable Series Trust I . . . . . . . . 1,579,180 67,783 8,610 30,094 33,701
M Fund Inc. . . . . . . . . . . . . . . . . . . . . . -- -- -- -- --
------------ ------------ ---------- ---------- ----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . 416,638,135 370,332,885 4,486,601 7,111,235 6,543,725
LIABILITIES
Payable to:
John Hancock Variable Life Insurance Company . . . . 1,572,407 61,715 8,547 29,979 33,594
M Fund Inc. . . . . . . . . . . . . . . . . . . . . . -- -- -- -- --
Asset charges payable . . . . . . . . . . . . . . . . 6,773 6,068 63 115 107
------------ ------------ ---------- ---------- ----------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . 1,579,180 67,783 8,610 30,094 33,701
------------ ------------ ---------- ---------- ----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . $415,058,955 $370,265,102 $4,477,991 $7,081,141 $6,510,024
============ ============ ========== ========== ==========
<CAPTION>
Turner Edinburgh Frontier
Equity Strategic Core International Capital
Index Bond Growth Equity Appreciation
Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ---------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of portfolios of John Hancock $10,430,076 $2,627,808 $ -- $ -- $ --
Variable Series Trust I, at value . . . . . . . . . .
Investments in shares of portfolios of M Fund Inc., at -- -- 244,835 794,869 2,536,602
value . . . . . . . . . . . . . . . . . . . . . . . .
Receivable from:
John Hancock Variable Series Trust I . . . . . . . . 10,685 1,304 -- -- --
M Fund Inc. . . . . . . . . . . . . . . . . . . . . . -- -- 4 13 41
----------- ---------- -------- -------- ----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . 10,440,761 2,629,112 244,839 794,882 2,536,643
LIABILITIES
Payable to:
John Hancock Variable Life Insurance Company . . . . 10,514 1,261 -- -- --
M Fund Inc. . . . . . . . . . . . . . . . . . . . . . -- -- -- -- --
Asset charges payable . . . . . . . . . . . . . . . . 171 43 4 13 41
----------- ---------- -------- -------- ----------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . 10,685 1,304 4 13 41
----------- ---------- -------- -------- ----------
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . $10,430,076 $2,627,808 $244,835 $794,869 $2,536,602
=========== ========== ======== ======== ==========
</TABLE>

- ---------
See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Large Cap Growth Subaccount Sovereign Bond Subaccount
-------------------------------------- -------------------------------------
1997 1996 1995 1997 1996 1995
----------- ------------ ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I $19,906,569 $22,706,338 $ 9,127,019 $5,517,405 $ 4,518,056 $3,997,055
M Fund Inc. . . . . . . . . . . . . -- -- -- -- -- --
----------- ----------- ----------- ---------- ----------- ----------
Total investment income . . . . . . . 19,906,569 22,706,338 9,127,019 5,517,405 4,518,056 3,997,055
Expenses:
Mortality and expense risks . . . . 1,152,388 789,368 527,639 417,812 352,330 288,879
----------- ----------- ----------- ---------- ----------- ----------
Net investment income (loss) . . . . 18,754,181 21,916,970 8,599,380 5,099,593 4,165,726 3,708,176
Net realized and unrealized gain
(loss) on investments:
Net realized gain
(loss) . . . . . . . . . . . . . . 5,377,678 2,555,654 839,997 (316,608) (136,401) 63,373
Net unrealized appreciation
(depreciation) during the period . 24,886,516 (2,922,417) 13,485,769 1,592,275 (1,537,488) 4,386,358
----------- ----------- ----------- ---------- ----------- ----------
Net realized and unrealized gain
(loss) on investments . . . . . . . 30,264,194 (366,763) 14,325,766 1,275,667 (1,673,889) 4,449,731
----------- ----------- ----------- ---------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations . . . . . $49,018,375 $21,550,207 $22,925,146 $6,375,260 $ 2,491,837 $8,157,907
=========== =========== =========== ========== =========== ==========
<CAPTION>
International Small Cap International
Equities Growth Balanced
Subaccount Subaccount Subaccount
------------------------------------ -------------------- ------------------
1997 1996 1995 1997 1996* 1997 1996*
------------ ---------- ---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I $ 2,032,258 $ 460,651 $ 313,290 $ 3,380 $ 1,404 $ 62,258 $11,409
M Fund Inc. . . . . . . . . . . . . -- -- -- -- -- -- --
----------- ---------- ---------- -------- --------- -------- -------
Total investment income . . . . . . . 2,032,258 460,651 313,290 3,380 1,404 62,258 11,409
Expenses:
Mortality and expense risks . . . . 249,823 209,866 158,467 33,986 6,704 6,972 1,311
----------- ---------- ---------- -------- --------- -------- -------
Net investment income (loss) . . . . 1,782,435 250,785 154,823 (30,606) (5,300) 55,286 10,098
Net realized and unrealized gain
(loss) on investments:
Net realized gain 958,182 156,348 709,715 116,210 (210,939) 29,092 1,642
(loss) . . . . . . . . . . . . . .
Net unrealized appreciation
(depreciation) during the period . (4,981,747) 2,539,023 1,169,158 732,330 (86,846) (68,785) 18,954
----------- ---------- ---------- -------- --------- -------- -------
Net realized and unrealized gain
(loss) on investments . . . . . . . (4,023,565) 2,695,371 1,878,873 848,540 (297,785) (39,693) 20,596
----------- ---------- ---------- -------- --------- -------- -------
Net increase (decrease) in net assets
resulting from operations . . . . . $(2,241,130) $2,946,156 $2,033,696 $817,934 $(303,085) $ 15,593 $30,694
=========== ========== ========== ======== ========= ======== =======
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

- ---------
* From May 1, 1996 (commencement of operations).

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

1. ORGANIZATION

2. SIGNIFICANT ACCOUNTING POLICIES

ESTIMATES

VALUATION OF INVESTMENTS

FEDERAL INCOME TAXES

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED

EXPENSES

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

3. TRANSACTIONS WITH AFFILIATES

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

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED
4. DETAILS OF INVESTMENTS

The details of the shares owned and cost and value of investments in the
Portfolios of the Fund and of M Fund at December 31, 1997 were as follows:

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED

5. IMPACT OF YEAR 2000 (UNAUDITED)

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--CONTINUED

5. IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED
The Account expects the project to be substantially complete by early 1999.
This completion target was derived utilizing numerous assumptions of future
events, including availability of certain resources and other factors. However,
there can be no guarantee that this completion target will be achieved.

<PAGE>

REPORT 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
Large Cap Growth, Sovereign Bond, International Equities, Small Cap Growth,
International Balanced, Mid Cap Growth, Large Cap Value, Money Market, Mid Cap
Value, Special Opportunities, Real Estate Equity, Growth & Income, Managed,
Short-Term U.S. Government, Small Cap Value, International Opportunities, Equity
Index, Strategic Bond, Turner Core Growth, Edinburgh International Equity and
Frontier Capital Appreciation Subaccounts) as of December 31, 1997, and the
related statements of operations, and changes in net assets for each of the
periods indicated therein. These financial statements are the responsibility of
the Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

Ernst & Young LLP

Boston, Massachusetts
February 6, 1998

47
<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Directors and Policyholders
John Hancock Variable Life Insurance Company

Ernst & Young LLP

Boston, Massachusetts
February 18, 1998

48
<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES

The significant accounting practices of the Company are as follows:

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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.

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.

Accumulated amortization was $8.8 million and $6.7 million at December 31, 1997
and 1996, respectively.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--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.

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 2--ACQUISITION

NOTE 3--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

<TABLE>
<CAPTION>
1997 1996
---- ----
(In millions)
<S> <C> <C>
Investment expenses . . . . . . . . . . . . . . . . . . . . $5.0 $7.0
Interest expense . . . . . . . . . . . . . . . . . . . . . . 0.7 0.0
Depreciation expense . . . . . . . . . . . . . . . . . . . . 1.1 0.9
Investment taxes . . . . . . . . . . . . . . . . . . . . . . 0.4 0.5
---- ----
$7.2 $8.4
==== ====
</TABLE>

NOTE 4--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS

Net realized capital losses consist of the following items:

<TABLE>
<CAPTION>
1997 1996
---- ----
(In millions)
<S> <C> <C>
Net gains (losses) from asset sales . . . . . . . . . . . . $ 0.8 $(0.2)
Capital gains tax . . . . . . . . . . . . . . . . . . . . . (0.7) (1.0)
Net capital gains transferred to IMR . . . . . . . . . . . . (3.1) (0.3)
----- -----
Realized Capital Losses . . . . . . . . . . . . . . . . . . $(3.0) $(1.5)
===== =====
</TABLE>

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 4--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS--CONTINUED
Net unrealized capital gains and other adjustments consist of the following
items:

NOTE 5--TRANSACTIONS WITH PARENT

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 6--INVESTMENTS

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

<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized Fair
Year ended December 31, 1996 Value Gains Losses Value
- ---------------------------- --------- ---------- ---------- -----
(In millions)
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies . . . $ 44.4 $ 0.2 $0.2 $ 44.4
Obligations of states and
political subdivisions . . . . . 12.6 0.4 0.0 13.0
Debt securities issued by foreign
governments. . . . . . . . . . . 0.8 0.1 0.0 0.9
Corporate securities . . . . . . 623.2 29.8 3.4 649.6
Mortgage-backed securities . . . 72.5 10.2 0.1 82.6
------ ----- ---- ------
Total bonds . . . . . . . . . . . $753.5 $40.7 $3.7 $790.5
====== ===== ==== ======
</TABLE>

Gross gains of $1.1 million in 1997 and $1.3 million in 1996 and gross losses of
$4.5 million in 1997 and $2.1 million in 1996 were realized from the sale of
bonds.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED
At December 31, 1997, bonds with an admitted asset value of $3.6 million were on
deposit with state insurance departments to satisfy regulatory requirements.

Bonds with amortized cost of $2.0 million were nonincome producing for the
twelve months ended December 31, 1997.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--REINSURANCE

Neither the Company, nor any of its related parties, control, either directly or
indirectly, any external reinsurers with which the Company conducts business. No
policies issued by the Company have been reinsured with a foreign company which
is controlled, either directly or indirectly, by a party not primarily engaged
in the business of insurance.

NOTE 8--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The Company enters into interest rate cap contracts to manage exposure on
underlying security values due to a rise in interest rates. Maturities of
current agreements range through 2007.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform according to the terms of the contract. The Company
continually monitors its positions and the credit ratings of the counterparties
to these financial instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency agreements, the Company enters into
master netting agreements with its counterparties. The Company believes the risk
of incurring losses due to nonperformance by its counterparties is remote and
that such losses, if any, would not be material.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 9--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND OBLIGATIONS
RELATED TO SEPARATE ACCOUNTS

The Company's annuity reserves and deposit fund liabilities that are subject to
discretionary withdrawal, with and without adjustment, are summarized as
follows:

NOTE 10--COMMITMENTS AND CONTINGENCIES

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 11--FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and fair values of the
Company's financial instruments:

NOTE 12--IMPACT OF YEAR 2000 (UNAUDITED)

The Company relies on John Hancock, its parent company, for information
processing services. John Hancock has developed a plan to modify or replace
significant portions of its computer information and automated technologies so
that its systems, including those relied upon by the Company, will function
properly with respect to the dates in the year 2000 and thereafter. The Company,
along with John Hancock, presently believes that with modifications to existing
systems and conversions to new technologies, the year 2000 will not pose
significant operational problems for the computer systems upon which the Company
relies. However, if certain modifications and conversions are not made, or are
not completed timely, the year 2000 issue could have an adverse impact on the
operations of the Company.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 12--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED
John Hancock expects the project to be substantially complete by early 1999.
This completion target was derived utilizing numerous assumptions of future
events, including availability of certain resources and other factors. However,
there can be no guarantee that this completion target will be achieved.