HANCOCK JOHN VARIABLE LIFE ACCOUNT V, 497, 1999-06-07

HANCOCK JOHN VARIABLE LIFE ACCOUNT V
497, 1999-06-07

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<PAGE>

PROSPECTUS DATED MAY 3, 1999

FLEXV2

a scheduled premium variable life insurance policy
issued by

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

("JHVLICO")

JHVLICO LIFE SERVICING OFFICE
-----------------------------

U.S. MAIL
---------
P.O. Box 111
Boston, MA 02117

EXPRESS DELIVERY
----------------
529 Main Street (X-4)
Charlestown, MA 02129

PHONE: 1-800-732-5543 / FAX: 1-617-886-3048

The policy provides an investment option with fixed rates of return declared
by JHVLICO and the following 23 variable investment options:

<TABLE>
<CAPTION>
VARIABLE INVESTMENT OPTION MANAGED BY
-------------------------- ----------
<S> <C>
Managed ............................................... Independence Investment Associates, Inc.
Growth & Income ....................................... Independence Investment Associates, Inc.
Equity Index .......................................... State Street Global Advisors
Large Cap Value ....................................... T. Rowe Price Associates, Inc.
Large Cap Growth ...................................... Independence Investment Associates, Inc.
Mid Cap Value ......................................... Neuberger Berman, LLC
Mid Cap Growth ........................................ Janus Capital Corporation
Real Estate Equity .................................... Independence Investment Associates, Inc.
Small/Mid Cap Growth .................................. Wellington Management Company, LLP
Small/Mid Cap CORE .................................... Goldman Sachs Asset Management
Small Cap Value ....................................... INVESCO Management & Research, Inc.
Small Cap Growth ...................................... John Hancock Advisers, Inc.
Global Equity ......................................... Scudder Kemper Investments, Inc.
International Balanced ................................ Brinson Partners, Inc.
International Equity Index ............................ Independence International Associates, Inc.
International Opportunities ........................... Rowe Price-Fleming International, Inc.
Emerging Markets Equity ............................... Montgomery Asset Management, LLC
Short-Term Bond ....................................... Independence Investment Associates, Inc.
Bond Index ............................................ Mellon Bond Associates, LLP
Sovereign Bond ........................................ John Hancock Advisers, Inc.
Global Bond ........................................... J.P. Morgan Investment Management, Inc.
High Yield Bond ....................................... Wellington Management Company, LLP
Money Market .......................................... John Hancock Mutual Life Insurance Company
</TABLE>

We may add or delete variable investment options in the future.

<PAGE>

When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of the John Hancock
Variable Series Trust I (the "Trust"). The Trust is a mutual fund that offers a
number of different investment options (which are called "funds"). The
investment results of each variable investment option you select will depend on
those of the corresponding fund of the Trust. Attached to this prospectus is a
prospectus for the Trust that contains detailed information about each fund
offered under the policy. Be sure to read the prospectus for the Trust before
selecting any of the variable investment options shown on page 1.

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
policy or exercise any of your rights under the policy. However, please keep in
mind that this is a prospectus - - it is not the policy. The prospectus
simplifies many policy provisions to better communicate the policy's essential
features. Your rights and obligations under the policy will be determined by the
language of the policy itself. When you receive your policy, read it carefully.

This prospectus is arranged in the following way:

. The section which follows is called "Basic Information". It is in a
question and answer format. We suggest you read the Basic Information
section before reading any other section of the prospectus.

. Behind the Basic Information section are illustrations of hypothetical
policy benefits that help clarify how the policy works. These start on
page 21.

. Behind the illustrations is a section called "Additional Information" that
gives more details about the policy. It generally does not --- repeat
information that is in the Basic Information section. A table of contents
for the Additional Information section appears on page 28.

. Behind the Additional Information section are the financial statements for
JHVLICO and Separate Account V. These start on page 42.

. Finally, there is an Alphabetical Index of Key Words and Phrases at the
back of the prospectus on page 80.

After the Alphabetical Index of Key Words and Phrases, this prospectus ends and
the Trust prospectus begins.

**********

Please note that the Securities and Exchange Commission ("SEC") has not approved
or disapproved these securities, or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.

<PAGE>

BASIC INFORMATION

This part of the prospectus provides answers to commonly asked questions about
the policy. Here are the page numbers where the question and answers appear:

<TABLE>
<CAPTION>
Question Pages to See
- -------- ------------
<S> <C>
.What is the policy? .......................................... 4
.Who owns the policy? ......................................... 4
.How can I invest money in the policy? ........................ 4-5
.Is there a minimum amount I must invest? ..................... 5-9
.How will the value of my investment in the policy change over
time? ........................................................ 9
.What charges will JHVLICO deduct from my investment in the
policy? ...................................................... 10-12
.What charges will the Trust deduct from my investment in the
policy? ...................................................... 12-13
.What other charges could JHVLICO impose in the future? ....... 13
.How can I change my policy's investment allocations? ......... 14
.How can I access my investment in the policy? ................ 15-16
.How much will JHVLICO pay when the insured person dies? ...... 16-17
.How can I change my policy's insurance coverage? ............. 17
.Can I cancel my policy after it's issued? .................... 17-18
.Can I choose the form in which JHVLICO pays out policy
proceeds? .................................................... 18
.To what extent can JHVLICO vary the terms and conditions of
its policies in particular cases? ............................ 19
.How will my policy be treated for income tax purposes? ....... 19
.How do I communicate with JHVLICO? ........................... 19-20
</TABLE>

<PAGE>

WHAT IS THE POLICY?

The policy's primary purpose is to provide lifetime protection against
economic loss due to the death of the insured person. The value of the amount
you have invested under the policy may increase or decrease daily based upon the
investment results of the variable investment options that you choose. The
amount we pay to the policy's beneficiary if the insured person dies (we call
this the "death benefit") may be similarly affected.

While the insured person is alive, you will have a number of options under the
policy. Here are some major ones:

. Determine when and how much you invest in the various investment options

. Borrow amounts you have in the investment options

. Withdraw any amount we consider to be "Excess Value" in your policy

. Change the beneficiary who will receive the death benefit

. Turn in (i.e., "surrender") the policy for the full amount of its
surrender value

. Reduce the amount of insurance by surrendering part of the policy

. Choose the form in which we will pay out the death benefit or other
proceeds

Most of these options are subject to limits that are explained later in this
prospectus.

WHO OWNS THE POLICY?

That's up to the person who applies for the policy. The owner of the policy is
the person who can exercise most of the rights under the policy, such as the
right to choose the investment options or the right to surrender the policy. In
many cases, the person buying the policy is also the person who will be the
owner. However, the application for a policy can name another person or entity
(such as a trust) as owner. Whenever we've used the term "you" in this
prospectus, we've assumed that the reader is the person who has whatever right
or privilege is being discussed. There may be tax consequences if the owner and
the insured person are different, so you should discuss this issue with your tax
adviser.

HOW CAN I INVEST MONEY IN THE POLICY?

Premium Payments

We call the investments you make in the policy "premiums" or "premium
payments". We require that your first premium at least equal your first
-----
"Required Premium" (discussed below). Except as noted below, you can make any
other premium payments you wish at any time. You can request that we bill you
for amounts of premiums that exceed your Required Premium payments and you can
subsequently request that we change the amount that we bill.

<PAGE>

Maximum premium payments

If you have chosen the Option 1 or Option 2 death benefit (see "How much will
JHVLICO pay when the insured person dies?"), Federal tax law limits the amount
of premium payments you can make relative to the amount of your policy's
insurance coverage. We will not knowingly accept any amount by which a premium
payment exceeds the maximum. If you exceed certain other limits, the law may
impose a penalty on amounts you take out of your policy. We'll monitor your
premium payments and let you know if you're about to exceed this limit. More
discussion of these tax law requirements begins on page 35.

Also, we may refuse to accept any amount of an additional premium if:

. that amount of premium would increase our insurance risk exposure, and the
insured person doesn't provide us with adequate evidence that he or she
continues to meet our requirements for issuing insurance, or

. that amount of premium would cause the cumulative premiums you have paid
to date to exceed the cumulative scheduled premiums due to date under the
policy.

In no event, however, will we refuse to accept any premium necessary to prevent
the policy from terminating.

Ways to pay premiums

If you pay premiums by check or money order, they must be drawn on a U.S. bank
in U.S. dollars and made payable to "John Hancock Variable Life Insurance
Company." Premiums after the first must be sent to the JHVLICO Life Servicing
Office at the appropriate address shown on page 1 of this prospectus.

We will also accept premiums:

. by wire or by exchange from another insurance company,

. via an electronic funds transfer program (any owner interested in making
monthly premium payments must use this method), or
-------

. if we agree to it, through a salary deduction plan with your employer.

You can obtain information on these other methods of premium payment by
contacting your JHVLICO representative or by contacting the JHVLICO Life
Servicing Office.

IS THERE A MINIMUM AMOUNT I MUST INVEST?

Required Premiums

The Policy Specifications page of your policy will show the "Required Premium"
for the policy. In the policy application, you will choose one of the following
"modes" of premium

<PAGE>

payment -- annual, semi-annual, quarterly or monthly. We make no additional
charge for any of these choices of payment mode. You can request that we change
your payment mode at any time.

The scheduled date on which such a payment is "due" is referred to in the
policy as a "modal processing date." Premiums are scheduled to be paid for the
whole of the insured person's lifetime. If, on any modal processing date, the
cumulative amount of all premium payments you have made does not equal or exceed
the cumulative amount of all Required Premiums due through that date, your
policy will enter a grace period, unless your policy has Excess Value as of that
date. For purposes of determining whether enough premiums have been paid as of
any modal processing date, we reduce the amount of premiums you have paid by the
amount of any withdrawals you have taken from what we consider to be the
"premium component" of any Excess Value in your policy (see below).

Excess Value and its components

As of the last business day in each policy month, we compare the account value
of the policy against the "Basic Account Value" (described below) to determine
if any "Excess Value" exists under the policy. Excess Value is any amount of
account value greater than the Basic Account Value.

The policy statements that we send you (see "Reports that you will receive" on
page 37) will specify the amount of any Excess Value at the end of the reporting
period. If you wish this information at any other time, you may contact your
JHVLICO representative or telephone us at 1-800-732-5543.

The Basic Account Value generally increases over the life of the policy, as
the attained age of the insured person increases. Basic Account Value can be
thought of as what the guaranteed cash value would be under an otherwise
comparable non-variable whole life policy. It is the amount we deem necessary to
support your policy's benefits at any time based on accepted actuarial methods
and assumptions. See "How we calculate Basic Account Value" below for further
details.

Excess Value may arise from two sources. The "premium component" is that
portion of Excess Value up to the amount by which the cumulative premiums paid
(excluding amounts from this component previously withdrawn) exceed the
cumulative amount of Required Premiums due to date. The "experience component"
is that portion of Excess Value above the premium component and arises out of
favorable investment experience or lower than maximum insurance and expense
charges.

Lapse

If your policy enters a grace period, we will notify you of how much you will
need to pay to keep the policy in force. You will have a "grace period" of at
least 31 days after we mail the notice to make that payment. If you don't pay at
least the required amount by the end of the grace period, your policy will
terminate (i.e., lapse). If the insured person dies during the grace period, we
will deduct any unpaid monthly charges from the death benefit. During the grace
period, you cannot make transfers among investment options or make a partial
withdrawal or policy loan.

<PAGE>

Options on Lapse

If a policy lapses, we apply the surrender value on the date of lapse to one
of three options for continued insurance that does not require further payment
of premium: Variable Paid-Up Insurance, Fixed Paid-Up Insurance or Fixed
Extended Term Insurance on the life of the insured person, 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 response to the
investment experience of the variable investment options. 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 surrender value will purchase.

The Variable Paid-Up Insurance option is not available unless its initial
amount is at least $5,000. If you have elected no option 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 person is a substandard
risk. In either of the latter cases, Fixed Paid-Up Insurance is provided.

You may surrender a policy that is being continued under any of these options
for the option's surrender value while the insured person is living. Loans may
be available under the Variable and Fixed Paid-Up Insurance options.

Reinstatement

You can still reactivate (i.e., "reinstate") a lapsed policy within 3 years
from the beginning of the grace period, unless the surrender value has been paid
out or otherwise exhausted or the period of any Fixed Extended Term Insurance
has expired. You will have to provide evidence that the insured person still
meets our requirements for issuing coverage. You will also have to pay a minimum
amount of premium and be subject to the other terms and conditions applicable to
reinstatements, as specified in the policy.

Amount of Required Premiums

We initially determine the amount of your scheduled premium at the time your
policy is issued, in accordance with our established rules and rates. It
consists of a "base policy premium" plus certain additional amounts if the
insured person presents an extra mortality risk to us or if you have purchased
certain additional insurance benefits. These amounts will be set forth in the
"Policy Specifications" section of your policy as the components of your
Required Premium.

The "base policy premium" is the amount of the Required Premium for an insured
person in the "standard" underwriting risk class who has not purchased any
additional insurance benefits by rider. The base policy premium will not change
until the Required Premium recalculation discussed below, or until such time as
you partially surrender the policy.

<PAGE>

Premium recalculation

You may make a one-time request that we recalculate your base policy premium
at any time not later than the policy anniversary nearest the insured person's
69th birthday (or, if later, the ninth policy anniversary). The base policy
premium that results from the recalculation will apply to all periods subsequent
to the recalculation. That resulting base policy premium may be higher or lower
than, or the same as, the previous base policy premium. This, in turn, will
determine whether the Required Premium will be higher, lower or stay the same
for those subsequent periods. If your right to request a premium recalculation
expires without your having exercised it, we will automatically perform the
premium recalculation at the next policy anniversary.

The premium recalculation feature makes it possible for us to set a lower base
policy premium (and thus a lower Required Premium) at the time the policy is
issued than would be possible without this feature. If you wish to "lock in" a
base policy premium (and Required Premium) at any time prior to the feature's
expiration, you can do so by requesting a premium recalculation.

The amount of the new base policy premium after a premium recalculation
depends on the insured person's sex, smoking status, attained age, the
guaranteed death benefit under the policy and the account value at the close of
the business day that precedes the recalculation. The new base policy premium
will never exceed the policy's "guaranteed maximum recalculation premium" based
on the insured person's attained age at the time of the recalculation. The
guaranteed maximum recalculation premium for each attained age will appear in
the "Policy Specifications" section of your policy.

The guaranteed maximum recalculation premium increases as the insured person's
attained age increases. Accordingly, by delaying the premium recalculation, you
assume the risk that the base policy premium following the recalculation will be
higher than it would have been had the recalculation been performed at an
earlier date. The longer the delay and the lower the policy's account value, the
greater the risk. On the other hand, by postponing the premium recalculation,
you may benefit from (1) a lower base policy premium prior to the recalculation
and (2) a longer period to accumulate enough account value to reduce the
possibility (or amount) of an increase in the base policy premium at the time of
the recalculation.

If your policy has any Excess Value at the time of the premium recalculation,
the base policy premium will be less following the recalculation than it would
have been had the recalculation been performed at the earliest possible date
(i.e., at the time of policy issuance). Otherwise it will be more.

As an example, consider the policy illustrated on page 22 of this prospectus
(Death Benefit Option 1 in the amount of $100,000, assuming current charge
rates, for a male standard risk non-smoker age 35 at issue). If no premium
recalculation is made at policy issuance, the base policy premium for the policy
would be $900 until such time as the premium recalculation is made. Assuming
that amount of premium is paid annually until the premium recalculation, and
assuming constant gross annual investment returns at the rates set forth below,
the following table illustrates what the base policy premium would be following
a recalculation on the dates shown.

<PAGE>

<TABLE>
<CAPTION>
Base Policy Premium Following
Recalculation Assuming Hypothetical Gross
Annual Rate of Return of:
Policy Anniversary of ------------------------------------------
Premium Recalculation 0% 6% 12%
- --------------------- ------------- ------------- ------------
<S> <C> <C> <C>
0 (Issue Date) . . . . . . . . $1,414.00 $1,414.00 $1,414.00
5 . . . . . . . . . . . . . . $1,607.99 $1,581.92 $1,551.41
10 . . . . . . . . . . . . . . $1,900.30 $1,791.31 $1,635.15
15 . . . . . . . . . . . . . . $2,334.72 $2,058.15 $1,566.76
20 . . . . . . . . . . . . . . $3,008.11 $2,433.77 $1,151.92
25 . . . . . . . . . . . . . . $4,077.27 $2,998.48 $ 0.00
30 . . . . . . . . . . . . . . $5,845.15 $3,914.46 $ 0.00
35* . . . . . . . . . . . . . . $8,404.00 $5,561.76 $ 0.00
</TABLE>

* Mandatory premium recalculation if you do not choose earlier date.

We will make a one-time charge if the new base policy premium is less than the
guaranteed maximum recalculation premium that would have applied had the
recalculation been done at the time the policy was issued. The charge will not
exceed 3% (currently1 1/2%) of the policy's Excess Value exceeds at the time of
the premium recalculation. See "Guaranteed death benefit charge" on page 11.

The amount of any account value that is considered Excess Value under your
policy may increase or decrease as a result of a premium recalculation. See
"Excess Value and its components" above.

HOW WILL THE VALUE OF MY INVESTMENT IN THE POLICY CHANGE OVER TIME?

From each premium payment you make, we deduct the charges described under
"Deductions from premium payments" below. We invest the rest in the investment
options you've elected.

Over time, the amount you've invested in any variable investment option will
--------
increase or decrease the same as if you had invested the same amount directly in
the corresponding fund of the Trust and had reinvested all fund dividends and
distributions in additional fund shares; except that we will deduct certain
additional charges which will reduce your account value. We describe these
charges under "What charges will JHVLICO deduct from my investment in the
policy?" below.

The amount you've invested in the fixed investment option will earn interest
-----
at a rate we declare from time to time. We guarantee that this rate will be at
least 4%. If you want to know what the current declared rate is, just call or
write to us. The current declared rate will also appear in the annual statement
we will send you. Amounts you invest in the fixed investment option will not be
---
subject to the mortality and expense risk charge or the guaranteed death benefit
charge described on page 8. Otherwise, the charges applicable to the fixed
investment option are the same as those applicable to the variable investment
options.

At any time, the "account value" of your policy is equal to:

. the amount you invested,

<PAGE>

. plus or minus the investment experience of the investment options you've
chosen,

. minus all charges we deduct, and

. minus all withdrawals you have made.

If you take a loan on the policy, however, your account value will be computed
somewhat differently. This is discussed beginning on page 15.

WHAT CHARGES WILL JHVLICO DEDUCT FROM MY INVESTMENT IN THE POLICY?

Deductions from premium payments

. Premium tax charge - A charge to cover state premium taxes we currently
------------------
expect to pay, on average. This charge is currently 2.35% of each premium.

. DAC tax charge - A charge to cover the increased Federal income tax
--------------
burden that we currently expect will result from receipt of premiums. This
charge is currently 1.25% of each premium.

. Premium sales charge - A charge to help defray our sales costs. The
--------------------
charge is 5% of the premiums you pay each policy year that do not total more
than the Required Premium for that policy year. We currently waive 30% of this
charge for policies with a Guaranteed Death Benefit of $250,000 or higher, but
continuation of that waiver is not guaranteed. Also, we currently intend to
stop making this charge on premiums received after the 10th policy year, but
this is not guaranteed either. Because policies of this type were first
offered for sale in 1994, no termination of this charge has yet occurred.

Deductions from account value

. Issue charge - A monthly charge to help defray our administrative costs.
------------
This is a flat dollar charge of $20 and is deducted only during the first
policy year.

. Maintenance charge - A monthly charge to help defray our administrative
------------------
costs. This is a flat dollar charge of up to $8 (currently $6).

. Insurance charge - A monthly charge for the cost of insurance. To
----------------
determine the charge, we multiply the amount of insurance for which we are at
risk by a cost of insurance rate. The rate is derived from an actuarial table.
The table in your policy will show the maximum cost of insurance rates.
-------
The cost of insurance rates that we currently apply are generally less than
the maximum rates. We will review the cost of insurance rates at least every 5
years and may change them from time to time. However, those rates will never
be more than rates based on the 1980 Commissioners' Standard Ordinary
Mortality Tables. The table of rates we use will depend on the insurance risk
characteristics and (usually) gender of the insured person, the Guaranteed
Death Benefit and the length of time the policy has been in effect. Regardless
of the table used, cost of insurance rates generally increase each year that
you own your policy, as the insured person's attained age increases. (The
insured person's "attained age" on any date is his or her age on the birthday
nearest that date.)

<PAGE>

If the Guaranteed Death Benefit at issue is $100,000 or more, the insured
person may be eligible for the "preferred" underwriting class, which has the
lowest cost of insurance charges for policies of this type. In addition, we
currently apply a lower insurance charge for policies with a Guaranteed Death
Benefit of $250,000 or higher, but continuation of that practice is not
guaranteed. Also, it is our current intention to reduce the insurance charge
in the 10th policy year and thereafter below what it otherwise would be, but
such a reduction is not guaranteed either. Because policies of this type were
first offered for sale in 1994, no reductions have yet been made.

. Guaranteed death benefit charge - A monthly charge for our guarantee that
-------------------------------
the death benefit will never be less than the Guaranteed Death Benefit. This
charge is currently 1c per $1,000 of the Guaranteed Death Benefit at the time
the charge is deducted. We guarantee that this charge will never exceed 3c per
$1,000 of the Guaranteed Death Benefit at the time the charge is deducted.

. Extra mortality risk charge - An insured person who does not qualify for
---------------------------
either the preferred or standard underwriting class must pay an additional
Required Premium because of the extra mortality risk. We collect this
additional premium in two ways: up to 8.6% of the additional premium is
deducted from premiums when paid and the remainder of the additional premium
is deducted monthly from your policy's account value in equal installments.

. M &E charge - A daily charge for mortality and expense risks we assume.
-----------
This charge is deducted from the variable investment options. It does not
apply to the fixed investment option. The current charge is at an effective
annual rate of .60% of the value of the assets in each variable investment
option. We guarantee that this charge will never exceed an effective annual
rate of .90%.

. Optional insurance benefits charges - An additional Required premium must
-----------------------------------
be paid if you elect to purchase any optional additional insurance benefit
that is added to the policy by means of a rider. We collect this additional
premium in two ways: up to 8.6% of the additional premium is deducted from
premiums when paid and the remainder of the additional premium is deducted
monthly from your policy's account value in equal installments.

. Premium recalculation charge - When we perform any recalculation as
----------------------------
described in the subsection titled "Premium recalculation" on page 8, we
deduct a one-time charge in the amount described in that subsection.

. Administrative surrender charge - A charge we deduct if the policy lapses
-------------------------------
or is surrendered in the first 9 policy years. We deduct this charge to
compensate us for administrative expenses that we would otherwise not recover
in the event of early lapse or surrender. The amount of the charge depends
upon the policy year in which lapse or surrender occurs and the policy's
Guaranteed Death Benefit at that time. The maximum charge is $5 per $1,000 of
the policy's Guaranteed Death benefit in policy years 1 through 6, $4 per
$1,000 in policy year 8 and $3 per $1,000 in policy year 9. For insured
persons age 24 or less at issue, this charge will never be more than $200 and
will be charged only in the first four policy years. Currently a policy with a
Guaranteed Death Benefit at time of surrender or lapse of $250,000 or more is
not charged. A policy of less than $250,000 Guaranteed Death Benefit at time
of surrender

<PAGE>

or lapse is not currently charged if the surrender or lapse is after the
fourth policy year and is charged no more than $300 if the surrender or lapse
is in the first four policy years. We may withdraw or modify these lower
current charges at any time.

. Contingent deferred sales charge ("CDSC") - A charge we deduct if the policy
-----------------------------------------
lapses or is surrendered within the first thirteen policy years. We deduct
this charge to compensate us for sales expenses that we would otherwise not
recover in the event of early lapse or surrender. The CDSC is a percentage of
the lesser of (a) the total amount of premiums you have actually paid before
the date of surrender or lapse and (b) the sum of the base policy premiums due
(whether or not actually paid) on or before the date of surrender or lapse.
(For this purpose base policy premiums are pro-rated through the end of the
policy month in which the surrender or lapse occurs).

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

The amount of the CDSC is calculated on the basis of the base policy premium
for the attained age of the insured person at the time the policy is issued.
The base policy premium that we use to compute the CDSC is not affected by (1)
any recalculation of the type referred to under "Premium recalculation" on
page 8, or (2) the non-mandatory character of any Required Premium due to
Excess Value in the policy on that premium's due date. The CDSC, as reflected
in the above table, reaches its maximum at the end of the sixth policy year
and is reduced in each policy year thereafter until it reaches zero in policy
year 14. At issue ages higher than 54, the maximum is reached at an earlier
policy year and may be reduced to zero over a shorter number of years.

. Partial withdrawal charge - A charge of $20 for each partial withdrawal of
-------------------------
Excess Value to compensate us for the administrative expenses of processing
the withdrawal.

WHAT CHARGES WILL THE TRUST DEDUCT FROM MY INVESTMENT IN THE POLICY?

The Trust must pay investment management fees and other operating expenses.
These fees and expenses are different for each fund of the Trust and reduce the
investment return of each fund. Therefore, they also indirectly reduce the
return you will earn on any variable investment options you select. The figures
in the following chart are expressed as percentages of each fund's average daily
net assets for 1998 (rounded to two decimal places). The percentages reflect the
investment management fees that were payable for1998 and the 1998 other
operating expenses that would have been allocated to the funds under the
allocation rules currently in effect.

<PAGE>

<TABLE>
<CAPTION>
Other Total Fund Other Operating
Investment Operating Operating Expenses
Fund Name Management Fee Expenses Expenses Absent Reimbursement*
- --------- -------------- ---------- ----------- -----------------------
<S> <C> <C> <C> <C>
Managed 0.32% 0.05% 0.37% 0.05%
Growth & Income 0.25% 0.05% 0.30% 0.05%
Equity Index 0.14% 0.08% 0.22% 0.08%
Large Cap Value 0.74% 0.07% 0.81% 0.07%
Large Cap Growth 0.37% 0.05% 0.42% 0.05%
Mid Cap Value 0.80% 0.05% 0.85% 0.05%
Mid Cap Growth 0.85% 0.08% 0.93% 0.08%
Real Estate Equity 0.60% 0.05% 0.65% 0.05%
Small/Mid Cap Growth** 0.75% 0.05% 0.80% 0.05%
Small/Mid Cap CORE 0.80% 0.10% 0.90% 0.23%
Small Cap Value 0.80% 0.07% 0.87% 0.07%
Small Cap Growth 0.75% 0.08% 0.83% 0.08%
Global Equity 0.90% 0.10% 1.00% 0.50%
International Balanced 0.85% 0.10% 0.95% 0.64%
International Equity
Index 0.17% 0.10% 0.27% 0.23%
International
Opportunities 0.87% 0.10% 0.97% 0.32%
Emerging Markets
Equity 1.30% 0.10% 1.40% 0.68%
Short-Term Bond 0.30% 0.05% 0.35% 0.05%
Bond Index 0.15% 0.05% 0.20% 0.05%
Sovereign Bond 0.25% 0.05% 0.30% 0.05%
Global Bond** 0.69% 0.06% 0.75% 0.06%
High Yield Bond 0.65% 0.07% 0.72% 0.07%
Money Market 0.25% 0.05% 0.30% 0.05%
</TABLE>

* John Hancock reimburses a fund when the fund's other operating expenses exceed
0.10% of the fund's average daily net assets.
**Small/Mid Cap Growth was formerly "Diversified Mid Cap Growth" and Global
Bond was formerly "Strategic Bond."

WHAT OTHER CHARGES COULD JHVLICO IMPOSE IN THE FUTURE?

We currently make no charge against account value for our Federal income
taxes, but if we incur, or expect to incur, income taxes attributable to any
subaccount of the Account or this class of policies in future years, we reserve
the right to make such a charge. Any such charge would reduce what you earn on
any affected investment options. However, we expect that no such charge will be
necessary.

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

We also reserve the right to increase the premium tax charge and the DAC tax
charge in order to correspond, respectively, with changes in the state premium
tax levels and with changes in the Federal income tax treatment of the deferred
acquisition costs for this type of policy.

<PAGE>

HOW CAN I CHANGE MY POLICY'S INVESTMENT ALLOCATIONS?

Future premium payments

At any time, you may change the investment options in which future premium
payments will be invested. You make the original allocation in the application
for the policy. The percentages you select must be in whole numbers and must
equal 100% in total.

Transfers of existing account value

You may also transfer your existing account value from one investment option
to another. To do so, you must tell us how much to transfer, either as a whole
number percentage or as a specific dollar amount.

Under our current rules, you can make transfers out of any variable investment
--------
option anytime you wish. However, transfers out of the fixed investment option
-----
are currently subject to the following restrictions:

. You can only make such a transfer once a year and only during the 31 day
period following your policy anniversary.

. We must receive the request for such a transfer during the period beginning 60
days prior to the policy anniversary and ending 30 days after it.

. The most you can transfer at any one time is the greater of $500 or 20% of the
assets in your fixed investment option.

We reserve the right to impose a minimum amount limit on transfers out of the
fixed investment option.

Limitation on number of investment options

Whether through the allocation of premium or through the transfer of existing
account value, you can never be invested in more than ten investment options at
any one time.

Dollar cost averaging

This is a program of automatic monthly transfers out of the Money Market
investment option into one or more of the other variable investment options. You
choose the investment options and the dollar amount and timing of the transfers.
The program is designed to reduce the risks that result from market
fluctuations. It does this by spreading out the allocation of your money to
investment options over a longer period of time. This allows you to reduce the
risk of investing most of your money at a time when market prices are high.
Obviously, the success of this strategy depends on market trends and is not
guaranteed.

<PAGE>

HOW CAN I ACCESS MY INVESTMENT IN THE POLICY?

Full surrender

You may surrender your policy in full at any time. If you do, we will pay you
the account value, less any policy loans and less any CDSC and administrative
surrender charge that then applies. This is called your "surrender value." You
must return your policy when you request a full surrender.

Partial withdrawals of Excess Value

Under our current administrative rules, you may make a partial withdrawal of
your policy's Excess Value, if any, at any time after the first policy year (see
"Excess Value and its components" on page 6). Each partial withdrawal must be at
least $1,000. There is a $20 charge for each partial withdrawal. We will
automatically reduce the account value of your policy by the amount of the
withdrawal and the related charge. Each investment option will be reduced in the
same proportion as the account value is then allocated among them.

Policy loans

You may borrow from your policy at any time after it has been in effect for 1
year by completing a form satisfactory to us or, if the telephone transaction
authorization form has been completed, by telephone. The maximum amount you can
borrow is equal to 100% of that portion of your surrender value that is
attributable to the fixed investment option plus one of the following:

. In policy years 2 and 3 - - 75% of that portion of your surrender value
that is attributable to the variable investment options

. In all later policy years - - 90% of that portion of your surrender value
that is attributable to the variable investment options

The minimum amount of each loan is $300, unless the loan is used to pay
premiums. The interest charged on any loan is an effective annual rate of 5.0%.
Accrued interest will be added to the loan daily and will bear interest at the
same rate as the original loan amount. The amount of the loan is deducted from
the investment options in the same proportion as the account value is then
allocated among them and is placed in a special loan account. This special loan
account will earn interest at an effective annual rate of 4.0% for the first 20
policy years and 4.5% thereafter. However, if we determine that a loan will be
treated as a taxable distribution because of the differential between the loan
interest rate and the rate being credited on the special loan account, we
reserve the right to decrease the rate credited on the special loan account to a
rate that would, in our reasonable judgement, result in the transaction being
treated as a loan under Federal tax law.

You can repay all or part of a loan at any time. Each repayment will be
allocated among the investment options as follows:

<PAGE>

. The same proportionate part of the loan as was borrowed from the fixed
investment option will be repaid to the fixed investment option.

. The remainder of the repayment will be allocated among the investment
options in the same way a new premium payment would be allocated.

If you want a payment to be used as a loan repayment, you must include
instructions to that effect. Otherwise, all payments will be assumed to be
premium payments.

HOW MUCH WILL JHVLICO PAY WHEN THE INSURED PERSON DIES?

In your application for the policy, you will tell us how much life insurance
coverage you want on the life of the insured person. This is called your
"Guaranteed Death Benefit". In the policy, this may also be referred to as the
"Sum Insured."

When the insured person dies, we will pay the death benefit minus any
outstanding loans. There are 3 ways of calculating the death benefit. You choose
which one you want in the application. The three death benefit options are:

. Option 1 - The death benefit will equal the greater of (1) the Guaranteed
Death Benefit or (2) the minimum insurance amount under the "guideline
premium and cash value corridor test" (as described below).

. Option 2 - The death benefit will equal the greater of (1) the Guaranteed
Death Benefit plus your policy's Excess Value (if any) on the date of
death, or (2) the minimum insurance amount under the "guideline premium
and cash value corridor test".

. Option 3 - The death benefit will equal the greater of (1) the Guaranteed
Death Benefit or (2) the minimum insurance amount under the "cash value
accumulation test" (as described below).

For the same premium payments, the death benefit under Option 2 will tend to
be higher than the death benefit under Options 1 or 3. On the other hand, the
monthly insurance charge will be higher under Option 2 to compensate us for the
additional insurance risk. Because of that, the account value will tend to be
higher under Options 1 or 3 than under Option 2 for the same premium payments.

The minimum insurance amount

<PAGE>

corridor factor starts out at 2.50 for ages at or below 40 and decreases as
attained age increases, reaching a low of 1.0 at age 95. A table showing the
factor for each age will appear in the policy. For Option 3, we compute the
minimum insurance amount each business day by multiplying the account value on
that date by the so-called "death benefit factor" applicable on that date. The
death benefit factors are derived by applying the "cash value accumulation
test." The death benefit factor decreases as attained age increases. A table
showing the factor for each age will appear in the policy.

HOW CAN I CHANGE MY POLICY'S INSURANCE COVERAGE?

Change of death benefit option

At any time, you may change your coverage from death benefit Option 1 to
Option 2 or vice-versa. However, if you change from Option 1 to Option 2, we
will require evidence that the insured person still meets our requirements for
issuing coverage. This is because such a change increases our insurance risk
exposure. If you have chosen death benefit Option 3, you can never change to
either Option 1 or Option 2.

Partial surrenders

You may partially surrender your policy upon submission of a written request
satisfactory to us in accordance with our rules. Currently, the policy after
partial surrender must have a Guaranteed Death Benefit at least as large as the
minimum amount for which we would issue a policy on the life of the insured
person. The Required Premium for the policy will be adjusted to prospectively
reflect the new Guaranteed Death Benefit. A pro-rata portion of the account
value will be paid to you and a pro-rata portion of any contingent deferred
sales charge and any administrative surrender charge will be deducted. Possible
alternatives to the partial surrender of the policy would be withdrawal of some
or all of your Excess Value or taking a policy loan.

Tax consequences

Please read "Tax considerations" starting on page 35 to learn about possible
tax consequences of changing your insurance coverage under the policy.

CAN I CANCEL MY POLICY AFTER IT'S ISSUED?

You have the right to cancel your policy within the latest of the following
periods:

. 10 days after you receive it (this period may be longer in some states);

. 10 days after mailing by JHVLICO of the Notice of Withdrawal Right; or

. 45 days after the date Part A of the application has been completed.

This is often referred to as the "free look" period. To cancel your policy,
simply deliver or mail the policy to us at one of the addresses shown on page 1,
or to the JHVLICO representative who delivered the policy to you.

<PAGE>

In most states, you will receive a refund of any premiums you've paid. In some
states, the refund will be your account value on the date of cancellation plus
all charges deducted by JHVLICO or the Trust prior to that date. The date of
cancellation will be the date of such mailing or delivery.

CAN I CHOOSE THE FORM IN WHICH JHVLICO PAYS OUT POLICY PROCEEDS?

Choosing a payment option

You may choose to receive proceeds from the policy as a single sum. This
includes proceeds that become payable because of death or full surrender.
Alternatively, you can elect to have proceeds of $1,000 or more applied to any
of a number of other payment options, including the following:

. Option 1 - Proceeds left with us to accumulate with interest

. Option 2A - Equal monthly payments of a specified amount until all
proceeds are paid out

. Option 2B - Equal monthly payments for a specified period of time

. Option 3 - Equal monthly payments for life, but with payments guaranteed
for a specific number of years

. Option 4 - Equal monthly payments for life with no refund

. Option 5 - Equal monthly payments for life with a refund if all of the
proceeds haven't been paid out

You cannot choose an option if the monthly payments under the option would be
less than $50. We will issue a supplementary agreement when the proceeds are
applied to any alternative payment option. That agreement will spell out the
terms of the option in full. We will credit interest on each of the above
options. For Options 1 and 2A, the interest will be at least an effective annual
rate of 3 1/2%.

Changing a payment option

You can change the payment option at any time before the proceeds are payable.
If you haven't made a choice, the payee of the proceeds has a prescribed period
in which he or she can make that choice.

Tax impact

There may be tax consequences to you or your beneficiary depending upon which
payment option is chosen. You should consult with a qualified tax adviser before
making that choice.

<PAGE>

TO WHAT EXTENT CAN JHVLICO VARY THE TERMS AND CONDITIONS OF ITS POLICIES IN
PARTICULAR CASES?

Listed below are some variations we can make in the terms of our policies. Any
variation will be made only in accordance with uniform rules that we apply
fairly to all of our customers.

State law insurance requirements

Insurance laws and regulations apply to JHVLICO in every state in which its
policies are sold. As a result, various terms and conditions described in the
prospectus may vary depending upon where you reside. These variations will be
reflected in your policy or in endorsements attached to your policy.

Variations in expenses or risks

We may vary the charges and other terms of our policies where special
circumstances result in sales or administrative expenses, mortality risks or
other risks that are different from those normally associated with the policies.
These include the type of variations discussed under "Reduced charges for
eligible classes" on page 34. No variation in any charge will exceed any maximum
stated in this prospectus with respect to that charge.

HOW WILL MY POLICY BE TREATED FOR INCOME TAX PURPOSES?

Generally, death benefits paid under policies such as yours are not subject to
income tax. Earnings on your account value are not subject to income tax as long
as we don't pay them out to you. If we do pay out any amount of your account
value upon surrender or partial withdrawal, all or part of that distribution
should generally be treated as a return of the premiums you've paid and should
not be subject to income tax. Amounts you borrow are generally not taxable to
you.

However, some of the tax rules change if your policy is found to be a
"modified endowment contract." This can happen if you've paid more than a
certain amount of premiums that is prescribed by the tax laws. Additional taxes
and penalties may be payable for policy distributions of any kind.

For further information about the tax consequences of owning a policy, please
read "Tax considerations" beginning of page 35.

HOW DO I COMMUNICATE WITH JHVLICO?

General Rules

You should mail or express all checks and money orders for premium payments
and loan repayments to the JHVLICO Life Servicing Office at the appropriate
address shown on page 1.

Certain requests must be made in writing and be signed and dated by you,
except as discussed below under "Telephone Transactions.". They include the
following:

. loans, surrenders (including partial surrenders) or partial withdrawals

<PAGE>

. transfers of account value among investment options

. change of allocation among investment options for new premium payments

. change of death benefit option

. change of beneficiary

. election of payment option for policy proceeds

. tax withholding elections

. election of telephone transaction privilege

You should mail or express these requests to the JHVLICO Life Servicing Office
at the appropriate address shown on page 1. You should also send notice of the
insured person's death and related documentation to the JHVLICO Life Servicing
Office. We don't consider that we've "received" any communication until such
time as it has arrived at the proper place and in the proper and complete form.

We have special forms that should be used for a number of the requests
mentioned above. You can obtain these forms from the JHVLICO Life Servicing
Office or your JHVLICO representative. Each communication to us must include
your name, your policy number and the name of the insured person. We cannot
process any request that doesn't include this required information. Any
communication that arrives after the close of our business day, or on a day that
is not a business day, will be considered "received" by us on the next following
business day. Our business day currently closes at 4:00 p.m. Eastern Standard
Time, but special circumstances (such as suspension of trading on a major
exchange) may dictate an earlier closing time.

Telephone Transactions

If you complete a special authorization form, you can request loans, transfers
among investment options and changes of allocation among investment options
simply by telephoning us at 1-800-732-5543 or by faxing us at 1-617-886-3048.
Any fax request should include your name, daytime telephone number, policy
number and, in the case of transfers and changes of allocation, the names of the
investment options involved. We will honor telephone instructions from anyone
who provides the correct identifying information, so there is a risk of loss to
you if this service is used by an unauthorized person. However, you will receive
written confirmation of all telephone transactions. There is also a risk that
you will be unable to place your request due to equipment malfunction or heavy
phone line usage. If this occurs, you should submit your request in writing.

The policies are not designed for professional market timing organizations or
other entities that use programmed and frequent transfers among investment
options. For reasons such as that, we reserve the right to change our telephone
transaction policies or procedures at any time. We also reserve the right to
suspend or terminate the privilege altogether.

<PAGE>

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

The following tables illustrate the changes in death benefit, account value
and surrender value of the policy under certain hypothetical circumstances that
we assume solely for this purpose. Each table separately illustrates the
operation of a policy for a specified issue age, premium payment schedule and
Guaranteed Death Benefit. The amounts shown are for the end of each policy year
and assume that all of the account value is invested in funds that achieve
investment returns at constant annual rates of 0%, 6% and 12% before any fees or
expenses. (Investment return reflects investment income and all realized and
unrealized capital gains and losses.) The tables assume annual Required Premiums
that are paid at the beginning of each policy year for an insured person who is
a 35 year old male standard non-smoker underwriting risk when the policy is
issued.

Tables are provided for each of the three death benefit options. The tables
headed "Current Charges" assume that the current rates for all charges deducted
by JHVLICO will apply in each year illustrated, including the reduction in the
monthly insurance charge after the ninth policy year and the waiver after the
tenth policy year of the sales charge deducted from premiums. The tables headed
"Maximum Charges" are the same, except that the maximum permitted rates for all
years are used for all charges. The tables do not reflect any charge that we
reserve the right to make but are not currently making.

With respect to fees and expenses deducted from Trust assets, the amounts
shown in all tables reflect (1) investment management fees equivalent to an
effective annual rate of .59%, and (2) an assumed average asset charge for all
other Trust operating expenses equivalent to an effective annual rate of .07%.
These rates are the arithmetic average for all funds of the Trust. In other
words, they are based on the hypothetical assumption that policy account values
are allocated equally among the variable investment options. The actual rates
associated with any policy will vary depending upon the actual allocation of
policy values among the investment options.

The second column of each table shows the amount you would have at the end of
each Policy year if an amount equal to the assumed Required Premiums were
invested to earn interest, after taxes, at 5% compounded annually. This is not a
policy value. It is included for comparison purposes only.

Because your circumstances will no doubt differ from those in the
illustrations that follow, values under your policy will differ, in most cases
substantially. Upon request, we will furnish you with a comparable illustration
reflecting your proposed insured person's issue age, sex and underwriting risk
classification, and the Guaranteed Death Benefit and annual Required Premium
amount requested.

<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 324 $ 357 $ 390 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 875 969 1,068 305 399 498
3 2,979 100,000 100,000 100,000 1,409 1,600 1,807 704 895 1,102
4 4,073 100,000 100,000 100,000 1,926 2,250 2,614 1,086 1,410 1,774
5 5,222 100,000 100,000 100,000 2,423 2,917 3,493 1,748 2,242 2,818
6 6,428 100,000 100,000 100,000 2,901 3,602 4,453 2,091 2,792 3,643
7 7,694 100,000 100,000 100,000 3,357 4,304 5,499 2,547 3,494 4,689
8 9,024 100,000 100,000 100,000 3,792 5,022 6,642 3,072 4,302 5,922
9 10,420 100,000 100,000 100,000 4,202 5,756 7,887 3,572 5,126 7,257
10 11,886 100,000 100,000 100,000 4,598 6,519 9,268 4,058 5,979 8,728
11 13,425 100,000 100,000 100,000 5,014 7,349 10,832 4,564 6,899 10,382
12 15,042 100,000 100,000 100,000 5,406 8,201 12,550 5,091 7,886 12,235
13 16,739 100,000 100,000 100,000 5,772 9,075 14,439 5,592 8,895 14,259
14 18,521 100,000 100,000 100,000 6,112 9,972 16,520 6,112 9,972 16,520
15 20,392 100,000 100,000 100,000 6,423 10,891 18,812 6,423 10,891 18,812
16 22,356 100,000 100,000 100,000 6,703 11,832 21,339 6,703 11,832 21,339
17 24,419 100,000 100,000 100,000 6,944 12,788 24,124 6,944 12,788 24,124
18 26,585 100,000 100,000 100,000 7,140 13,755 27,191 7,140 13,755 27,191
19 28,859 100,000 100,000 100,000 7,285 14,728 30,573 7,285 14,728 30,573
20 31,247 100,000 100,000 100,000 7,372 15,704 34,307 7,372 15,704 34,307
25 45,102 100,000 100,000 100,000 6,731 20,453 59,974 6,731 20,453 59,974
30 62,785 100,000 100,000 124,862 3,365 24,304 104,052 3,365 24,304 104,052
35 85,353 100,000 100,000 203,651 0 25,256 177,087 0 25,256 177,087
40 142,637 100,000 100,000 306,183 0 42,278 291,602 0 42,278 291,602
45 215,749 100,000 100,000 507,452 0 39,196 483,287 0 39,196 483,287
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $5,809 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,809 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

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

<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- --------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 308 $ 340 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 780 868 961 10 98 191
3 2,979 100,000 100,000 100,000 1,267 1,445 1,638 362 540 733
4 4,073 100,000 100,000 100,000 1,738 2,038 2,375 698 998 1,335
5 5,222 100,000 100,000 100,000 2,189 2,645 3,178 1,014 1,470 2,003
6 6,428 100,000 100,000 100,000 2,622 3,268 4,053 1,312 1,958 2,743
7 7,694 100,000 100,000 100,000 3,034 3,904 5,005 1,824 2,694 3,795
8 9,024 100,000 100,000 100,000 3,424 4,553 6,043 2,304 3,433 4,923
9 10,420 100,000 100,000 100,000 3,789 5,214 7,172 2,859 4,284 6,242
10 11,886 100,000 100,000 100,000 4,132 5,888 8,405 3,592 5,348 7,865
11 13,425 100,000 100,000 100,000 4,447 6,572 9,748 3,997 6,122 9,298
12 15,042 100,000 100,000 100,000 4,734 7,263 11,213 4,419 6,948 10,898
13 16,739 100,000 100,000 100,000 4,991 7,963 12,812 4,811 7,783 12,632
14 18,521 100,000 100,000 100,000 5,216 8,669 14,559 5,216 8,669 14,559
15 20,392 100,000 100,000 100,000 5,407 9,378 16,468 5,407 9,378 16,468
16 22,356 100,000 100,000 100,000 5,562 10,090 18,557 5,562 10,090 18,557
17 24,419 100,000 100,000 100,000 5,674 10,799 20,841 5,674 10,799 20,841
18 26,585 100,000 100,000 100,000 5,737 11,497 23,338 5,737 11,497 23,338
19 28,859 100,000 100,000 100,000 5,747 12,182 26,071 5,747 12,182 26,071
20 31,247 100,000 100,000 100,000 5,694 12,843 29,061 5,694 12,843 29,061
25 45,102 100,000 100,000 100,000 4,271 15,564 49,062 4,271 15,564 49,062
30 62,785 100,000 100,000 100,000 0 16,240 82,359 0 16,240 82,359
35 85,353 100,000 100,000 158,422 0 11,911 137,758 0 11,911 137,758
40 150,870 100,000 100,000 232,170 0 17,896 221,114 0 17,896 221,114
45 234,489 100,000 100,000 376,071 0 0 358,163 0 0 358,163
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,228 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,228 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 324 $ 357 $ 390 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 875 969 1,068 305 399 498
3 2,979 100,000 100,000 100,000 1,409 1,600 1,807 704 895 1,102
4 4,073 100,000 100,000 100,000 1,926 2,250 2,614 1,086 1,410 1,774
5 5,222 100,000 100,000 100,000 2,423 2,917 3,493 1,748 2,242 2,818
6 6,428 100,000 100,000 100,000 2,901 3,602 4,453 2,091 2,792 3,643
7 7,694 100,000 100,000 100,000 3,357 4,304 5,499 2,547 3,494 4,689
8 9,024 100,000 100,000 100,000 3,792 5,022 6,642 3,072 4,302 5,922
9 10,420 100,000 100,000 100,000 4,202 5,756 7,887 3,572 5,126 7,257
10 11,886 100,000 100,000 100,000 4,598 6,519 9,268 4,058 5,979 8,728
11 13,425 100,000 100,000 100,000 5,014 7,349 10,832 4,564 6,899 10,382
12 15,042 100,000 100,000 100,000 5,406 8,201 12,550 5,091 7,886 12,235
13 16,739 100,000 100,000 100,000 5,772 9,075 14,439 5,592 8,895 14,259
14 18,521 100,000 100,000 100,000 6,112 9,972 16,520 6,112 9,972 16,520
15 20,392 100,000 100,000 100,000 6,423 10,891 18,812 6,423 10,891 18,812
16 22,356 100,000 100,000 100,472 6,703 11,832 21,339 6,703 11,832 21,339
17 24,419 100,000 100,000 101,634 6,944 12,788 24,119 6,944 12,788 24,119
18 26,585 100,000 100,000 103,036 7,140 13,755 27,173 7,140 13,755 27,173
19 28,859 100,000 100,000 104,709 7,285 14,728 30,530 7,285 14,728 30,530
20 31,247 100,000 100,000 106,686 7,372 15,704 34,219 7,372 15,704 34,219
25 45,102 100,000 100,000 122,519 6,731 20,453 59,018 6,731 20,453 59,018
30 62,785 100,000 100,000 153,398 3,365 24,304 99,346 3,365 24,304 99,346
35 85,353 100,000 100,000 209,816 0 25,256 165,244 0 25,256 165,244
40 142,637 100,000 105,868 296,681 0 40,590 269,737 0 40,590 269,737
45 215,749 100,000 100,000 466,543 0 35,890 444,327 0 35,890 444,327
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $5,809 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,809 at 6% and $0 at 12%, subject to any maximum required to
maintain the Policy's status for federal income tax purposes.

<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 308 $ 340 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 780 868 961 10 98 191
3 2,979 100,000 100,000 100,000 1,267 1,445 1,638 362 540 733
4 4,073 100,000 100,000 100,000 1,738 2,038 2,375 698 998 1,335
5 5,222 100,000 100,000 100,000 2,189 2,645 3,178 1,014 1,470 2,003
6 6,428 100,000 100,000 100,000 2,622 3,268 4,053 1,312 1,958 2,743
7 7,694 100,000 100,000 100,000 3,034 3,904 5,005 1,824 2,694 3,795
8 9,024 100,000 100,000 100,000 3,424 4,553 6,043 2,304 3,433 4,923
9 10,420 100,000 100,000 100,000 3,789 5,214 7,172 2,859 4,284 6,242
10 11,886 100,000 100,000 100,000 4,132 5,888 8,405 3,592 5,348 7,865
11 13,425 100,000 100,000 100,000 4,447 6,572 9,748 3,997 6,122 9,298
12 15,042 100,000 100,000 100,000 4,734 7,263 11,213 4,419 6,948 10,898
13 16,739 100,000 100,000 100,000 4,991 7,963 12,812 4,811 7,783 12,632
14 18,521 100,000 100,000 100,000 5,216 8,669 14,559 5,216 8,669 14,559
15 20,392 100,000 100,000 100,000 5,407 9,378 16,468 5,407 9,378 16,468
16 22,356 100,000 100,000 100,000 5,562 10,090 18,557 5,562 10,090 18,557
17 24,419 100,000 100,000 100,000 5,674 10,799 20,841 5,674 10,799 20,841
18 26,585 100,000 100,000 100,000 5,737 11,497 23,338 5,737 11,497 23,338
19 28,859 100,000 100,000 100,250 5,747 12,182 26,070 5,747 12,182 26,070
20 31,247 100,000 100,000 101,523 5,694 12,843 29,056 5,694 12,843 29,056
25 45,102 100,000 100,000 112,185 4,271 15,564 48,684 4,271 15,564 48,684
30 62,785 100,000 100,000 133,502 0 16,240 79,451 0 16,240 79,451
35 85,353 100,000 100,000 172,558 0 11,911 127,986 0 11,911 127,986
40 150,870 100,000 100,000 228,267 0 17,300 201,323 0 17,300 201,323
45 234,489 100,000 100,000 341,661 0 0 320,863 0 0 320,863
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,228 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,228 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 324 $ 357 $ 390 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 875 969 1,068 305 399 498
3 2,979 100,000 100,000 100,000 1,409 1,600 1,807 704 895 1,102
4 4,073 100,000 100,000 100,000 1,926 2,250 2,614 1,086 1,410 1,774
5 5,222 100,000 100,000 100,000 2,423 2,917 3,493 1,748 2,242 2,818
6 6,428 100,000 100,000 100,000 2,901 3,602 4,453 2,091 2,792 3,643
7 7,694 100,000 100,000 100,000 3,357 4,304 5,499 2,547 3,494 4,689
8 9,024 100,000 100,000 100,000 3,792 5,022 6,642 3,072 4,302 5,922
9 10,420 100,000 100,000 100,000 4,202 5,756 7,887 3,572 5,126 7,257
10 11,886 100,000 100,000 100,000 4,598 6,519 9,268 4,058 5,979 8,728
11 13,425 100,000 100,000 100,000 5,014 7,349 10,832 4,564 6,899 10,382
12 15,042 100,000 100,000 100,000 5,406 8,201 12,550 5,091 7,886 12,235
13 16,739 100,000 100,000 100,000 5,772 9,075 14,439 5,592 8,895 14,259
14 18,521 100,000 100,000 100,000 6,112 9,972 16,520 6,112 9,972 16,520
15 20,392 100,000 100,000 100,000 6,423 10,891 18,812 6,423 10,891 18,812
16 22,356 100,000 100,000 100,000 6,703 11,832 21,339 6,703 11,832 21,339
17 24,419 100,000 100,000 100,000 6,944 12,788 24,124 6,944 12,788 24,124
18 26,585 100,000 100,000 100,000 7,140 13,755 27,191 7,140 13,755 27,191
19 28,859 100,000 100,000 100,000 7,285 14,728 30,573 7,285 14,728 30,573
20 31,247 100,000 100,000 100,000 7,372 15,704 34,307 7,372 15,704 34,307
25 45,102 100,000 100,000 116,102 6,731 20,453 59,751 6,731 20,453 59,751
30 62,785 100,000 100,000 170,009 3,365 24,304 99,888 3,365 24,304 99,888
35 85,353 100,000 100,000 244,065 0 25,256 161,248 0 25,256 161,248
40 142,637 100,000 100,000 339,114 16,484 49,974 247,745 16,484 49,974 247,745
45 215,749 100,000 104,887 473,255 31,517 83,072 374,826 31,517 83,072 374,826
</TABLE>

<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 308 $ 340 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 780 868 961 10 98 191
3 2,979 100,000 100,000 100,000 1,267 1,445 1,638 362 540 733
4 4,073 100,000 100,000 100,000 1,738 2,038 2,375 698 998 1,335
5 5,222 100,000 100,000 100,000 2,189 2,645 3,178 1,014 1,470 2,003
6 6,428 100,000 100,000 100,000 2,622 3,268 4,053 1,312 1,958 2,743
7 7,694 100,000 100,000 100,000 3,034 3,904 5,005 1,824 2,694 3,795
8 9,024 100,000 100,000 100,000 3,424 4,553 6,043 2,304 3,433 4,923
9 10,420 100,000 100,000 100,000 3,789 5,214 7,172 2,859 4,284 6,242
10 11,886 100,000 100,000 100,000 4,132 5,888 8,405 3,592 5,348 7,865
11 13,425 100,000 100,000 100,000 4,447 6,572 9,748 3,997 6,122 9,298
12 15,042 100,000 100,000 100,000 4,734 7,263 11,213 4,419 6,948 10,898
13 16,739 100,000 100,000 100,000 4,991 7,963 12,812 4,811 7,783 12,632
14 18,521 100,000 100,000 100,000 5,216 8,669 14,559 5,216 8,669 14,559
15 20,392 100,000 100,000 100,000 5,407 9,378 16,468 5,407 9,378 16,468
16 22,356 100,000 100,000 100,000 5,562 10,090 18,557 5,562 10,090 18,557
17 24,419 100,000 100,000 100,000 5,674 10,799 20,841 5,674 10,799 20,841
18 26,585 100,000 100,000 100,000 5,737 11,497 23,338 5,737 11,497 23,338
19 28,859 100,000 100,000 100,000 5,747 12,182 26,071 5,747 12,182 26,071
20 31,247 100,000 100,000 100,000 5,694 12,843 29,061 5,694 12,843 29,061
25 45,102 100,000 100,000 100,000 4,271 15,564 49,062 4,271 15,564 49,062
30 62,785 100,000 100,000 137,111 0 16,240 80,559 0 16,240 80,559
35 85,353 100,000 100,000 192,810 0 11,911 127,385 0 11,911 127,385
40 150,870 100,000 100,000 259,444 6,596 33,426 189,541 6,596 33,426 189,541
45 234,489 100,000 100,000 350,475 11,568 57,281 277,582 11,568 57,281 277,582
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,228 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,228 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

<PAGE>

ADDITIONAL INFORMATION

This section of the prospectus provides additional detailed information that
is not contained in the Basic Information section on pages 3 through 20.

<TABLE>
<CAPTION>
CONTENTS OF THIS SECTION PAGES TO SEE
- ------------------------ ------------
<S> <C>
Description of JHVLICO ...................................... 29
How we support the policy and investment options ............ 29-30
Procedures for issuance of a policy ......................... 30-31
Commencement of investment performance ...................... 31
How we process certain policy transactions .................. 31-33
Effects of policy loans ..................................... 33
How we calculate "basic policy value" ....................... 33
Additional information about how certain policy charges work 33-34
How we market the policies .................................. 34-35
Tax considerations .......................................... 35-37
Reports that you will receive ............................... 37
Voting privileges that you will have ........................ 37-38
Changes that JHVLICO can make as to your policy ............. 38
Adjustments we make to death benefits ....................... 38
When we pay policy proceeds ................................. 39
Other details about exercising rights and paying benefits ... 39
Year 2000 Issues ............................................ 39-40
Legal matters ............................................... 40
Registration statement filed with the SEC ................... 40
Accounting and actuarial experts ............................ 40
Financial statements of JHVLICO and the Account ............. 40
List of Directors and Executive Officers of JHVLICO ......... 41
</TABLE>

<PAGE>

DESCRIPTION OF JHVLICO

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

We are regulated and supervised by the Massachusetts Commissioner of
Insurance, who periodically examines our affairs. We also are subject to the
applicable insurance laws and regulations of all jurisdictions in which we are
authorized to do business. We are required to submit annual statements of our
operations, including financial statements, to the insurance departments of the
various jurisdictions in which we do business for purposes of determining
solvency and compliance with local insurance laws and regulations. The
regulation to which we are subject, however, does not provide a guarantee as to
such matters.

We are a wholly-owned subsidiary of John Hancock Mutual Life Insurance Company
("John Hancock"), a company chartered in Massachusetts in 1862. John Hancock's
home office is at John Hancock Place, Boston, Massachusetts 02117. John
Hancock's assets are approximately $67 billion and it has invested over $380
million in JHVLICO in connection with our organization and operation. It is
anticipated that John Hancock will from time to time make additional capital
contributions to JHVLICO to enable us to meet our reserve requirements and
expenses in connection with our business. John Hancock is committed to make
additional capital contributions if necessary to ensure that we maintain a
positive net worth.

HOW WE SUPPORT THE POLICY AND INVESTMENT OPTIONS

Separate Account V

The variable investment options shown on page 1 are in fact subaccounts of
Separate Account V (the "Account"), a separate account established by us under
Massachusetts law. The Account meets the definition of "separate account" under
the Federal securities laws and is registered as a unit investment trust under
the Investment Company Act of 1940 ("1940 Act"). Such registration does not
involve supervision by the SEC of the management of the Account or JHVLICO.

The Account's assets are the property of JHVLICO. Each policy provides that
amounts we hold in the Account pursuant to the policies cannot be reached by any
other persons who may have claims against us.

The assets in each subaccount are invested in the corresponding fund of the
Trust, but the assets of one subaccount are not necessarily legally insulated
from liabilities associated with another subaccount. New subaccounts may be
added as new funds are added to the Trust and made available to policy owners.
Existing subaccounts may be deleted if existing funds are deleted from the
Trust.

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

On each business day, shares of each fund are purchased or redeemed by us for
each subaccount based on, among other things, the amount of net premiums
allocated to the subaccount, distributions reinvested, and transfers to, from
and among subaccounts, all to be effected as of that date. Such purchases and
redemptions are effected at each fund's net asset value per share determined for
that same date. A "business day" is any date on which the New York Stock
Exchange is open for trading. We compute policy values for each business day as
of the close of that day (usually 4:00 p.m. Eastern Standard Time).

<PAGE>

Our general account

Our obligations under the policy's fixed investment option are backed by our
general account assets. Our general account consists of assets owned by us other
than those in the Account and in other separate accounts that we may establish.
Subject to applicable law, we have sole discretion over the investment of assets
of the general account and policy owners do not share in the investment
experience of, or have any preferential claim on, those assets. Instead, we
guarantee that the account value allocated to the fixed investment option will
accrue interest daily at an effective annual rate of at least 4% without regard
to the actual investment experience of the general account.

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

PROCEDURES FOR ISSUANCE OF A POLICY

Generally, the policy is available with a minimum Guaranteed Death Benefit at
issue of $50,000. At the time of issue, the insured person must have an attained
age of 75 or less. All insured persons must meet certain health and other
insurance risk criteria called "underwriting standards".

Policies issued in Montana or in connection with certain employee plans will
not directly reflect the sex of the insured person in either the premium rates
or the charges or values under the policy. The illustrations set forth in this
prospectus are sex-distinct and, therefore, may not reflect the rates, charges,
or values that would apply to such policies.

Commencement of insurance coverage

After you apply for a policy, it can sometimes take up to several weeks for us
to gather and evaluate all the information we need to decide whether to issue a
policy to you and, if so, what the insured person's rate class should be. After
we approve an application for a policy and assign an appropriate insurance rate
class, we will prepare the policy for delivery. We will not pay a death benefit
under a policy unless the policy is in effect when the insured person dies
(except for the circumstances described under "Temporary insurance coverage
prior to policy delivery" on page 31).

The policy will take effect only if all of the following conditions are
satisfied:

. The policy is delivered to and received by the applicant.

. At least the first Required Premium is received by us.

. Each insured person is living and still meets our health criteria for issuing
insurance.

If all of the above conditions are satisfied, the policy will take effect on the
date shown in the policy as the "date of issue." That is the date on which we
begin to deduct monthly charges. Policy months, policy years and policy
anniversaries are all measured from the date of issue.

Backdating

In order to preserve a younger age at issue for the insured person, we can
designate a date of issue that is up to 60 days earlier than the date that would
otherwise apply. This is referred to as "backdating" and is allowed under state
insurance laws. Backdating can also be used in certain corporate-owned life
insurance cases involving multiple policies to retain a common monthly deduction
date.

<PAGE>

The conditions for coverage described above under "Commencement of insurance
coverage" must still be satisfied, but in a backdating situation the policy
takes effect retroactively. Backdating results in a lower insurance charge
(because of the insured person's younger age at issue), but monthly charges
begin earlier than would otherwise be the case. Those monthly charges will be
deducted as soon as we receive premiums sufficient to pay them.

Temporary coverage prior to policy delivery

If a specified amount of premium is paid with the application for a policy and
other conditions are met, we will provide temporary term life insurance coverage
on the insured person for a period prior to the time coverage under the policy
takes effect. Such temporary term coverage will be subject to the terms and
conditions described in the application for the policy, including limits on
amount and duration of coverage.

Monthly deduction dates

Each charge that we deduct monthly is assessed against your account value or
the subaccounts at the close of business on the date of issue and at the close
of the first business day in each subsequent policy month.

COMMENCEMENT OF INVESTMENT PERFORMANCE

All premium payments will be allocated among the investment options on the
date as of which they are processed (as discussed below).

HOW WE PROCESS CERTAIN POLICY TRANSACTIONS

Premium payments

We will process any premium payment as of the day we receive it, unless one of
the following exceptions applies:

(1) We will process a payment received prior to a policy's date of issue as if
received on the business day that first precedes the date of issue.

(2) If you pay a sufficient premium to take your policy out of a grace period,
the portion of such premium that equals the overdue Required Premium will be
processed as of that Required Premium's due date.

(3) If the first Required Premium is not received prior to the date of issue,
we will process each premium payment received thereafter as if received on the
business day immediately preceding the date of issue until all of the first
Required Premium is received.

(4) We will process the portion of any premium payment for which we require
evidence of the insured person's continued insurability only after we have
received such evidence and found it satisfactory to us.

(5) If we receive any premium payment that will cause a policy to become a
modified endowment or will cause a policy to lose its status as life insurance
under the tax laws, we will not accept the excess portion of that premium
payment and will immediately notify the owner. We will refund the excess premium
when the premium payment check has had time to clear the banking system (but in
no case more than two weeks after receipt), except in the following
circumstances:

. The tax problem resolves itself prior to the date the refund is to be made; or

. The tax problem relates to modified endowment status and we receive a signed
acknowledgment from the owner prior to the refund date instructing us to
process the premium notwithstanding the tax issues involved.

In the above cases, we will treat the excess premium as having been received on
the date the tax problem resolves itself or the date we receive the signed
acknowledgment. We will then process it accordingly.

(6) If a premium payment is received or is otherwise scheduled to be processed
(as specified above) on a date that is not a business day, the

<PAGE>

premium payment will be processed on the business day next following that date.

Transfers among investment options

Any reallocation among investment options must be such that the total in all
investment options after reallocation equals 100% of account value. Transfers
out of a variable investment option will be effective at the end of the business
day in which we receive at our Life Servicing Office notice satisfactory to us.

If received on or before the policy anniversary, requests for transfer out of
the fixed investment option will be processed on the policy anniversary (or the
next business day if the policy anniversary does not occur on a business day).
If received after the policy anniversary, such a request will be processed at
the end of the business day in which we receive the request at our Life
Servicing Office. If you request a transfer out of the fixed investment option
61 days or more prior to the policy anniversary, we will not process that
portion of the reallocation, and your confirmation statement will not reflect a
transfer out of the fixed investment option as to such request. Currently, there
is no minimum amount limit on transfers into the fixed investment option, but we
reserve the right to impose such a limit in the future. We have the right to
defer transfers of amounts out of the fixed investment option for up to six
months.

Dollar cost averaging

Scheduled transfers under this option may be made from the Money Market
investment option to not more than nine other variable investment options.
However, the amount transferred to any one investment option must be at least
$100.

Once we receive the election in form satisfactory to us at our Life Servicing
Office, transfers will begin on the second monthly deduction date following its
receipt. If you have any questions with respect to this provision, call
1-800-732-5543.

Once elected, the scheduled monthly transfer option will remain in effect for
so long as you have at least $2,500 of your account value in the Money Market
investment option, or until we receive written notice from you of cancellation
of the option or notice of the death of the insured person. We reserve the right
to modify, terminate or suspend the dollar cost averaging program at any time.

Telephone transfers and policy loans

Once you have completed a written authorization, you may request a transfer or
policy loan by telephone or by fax. If the fax request option becomes
unavailable, another means of telecommunication will be substituted.

If you authorize telephone transactions, you will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which we reasonably believe to be genuine, unless such loss,
expense or cost is the result of our mistake or negligence. We employ procedures
which provide safeguards against the execution of unauthorized transactions, and
which are reasonably designed to confirm that instructions received by telephone
are genuine. These procedures include requiring personal identification, tape
recording calls, and providing written confirmation to the owner. If we do not
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine, we may be liable for any loss due to unauthorized or
fraudulent instructions.

Effective date of other policy transactions

The following transactions take effect on the monthly deduction date on or
next following the date we approve your request:

. Reinstatements of lapsed policies

. Change of death benefit Option from 1 to 2

A change from Option 2 to Option 1 is effective on the monthly deduction date on
or next following the date we receive the request.

<PAGE>

We process loans, surrenders, partial withdrawals, partial surrenders and loan
repayments as of the day we receive such request or repayment.

EFFECTS OF POLICY LOANS

The account value, the surrender value, and any death benefit above the
Guaranteed Death Benefit are permanently affected by any loan, whether or not it
is repaid in whole or in part. This is because the amount of the loan is
deducted from the investment options and placed in a special loan account. The
investment options and the special loan account will generally have different
rates of investment return.

The amount of the outstanding loan (which includes accrued and unpaid
interest) is subtracted from the amount otherwise payable when the policy
proceeds become payable.

Whenever the outstanding loan exceeds the surrender value of the policy, the
policy will terminate 31 days after we have mailed notice of termination to you
(and to any assignee of record at such assignee's last known address), unless a
repayment of such excess is made within that period.

HOW WE CALCULATE BASIC ACCOUNT VALUE

"Basic account value" is discussed generally under "Is there a minimum amount
I must invest?" beginning on page 5. More specifically, the basic account value
at any time is what the policy's account value would have been at that time if
(1) level annual premiums (and no additional premiums) had been paid in the
amount of the guaranteed maximum recalculation premium at issue and earned a
constant net return of 4% per annum and (2) the cost of insurance charges had
been deducted at the maximum rates set forth in the policy, and no other
charges. The guaranteed maximum recalculation premium at issue is described
under "Premium recalculation" on page 8 and its amount is specified in each
policy.

Notwithstanding the foregoing, if there is a policy loan outstanding, the
basic account value will not be less than 110% of the outstanding loan. Also, in
all cases where optional rider benefits have been selected, or the insured
person is in a substandard risk category, an additional amount will be added in
computing the basic account value to cover these items through the end of the
then-current policy year.

ADDITIONAL INFORMATION ABOUT HOW CERTAIN POLICY CHARGES WORK

Sales expenses and related charges

The sales charges (i.e., the premium sales charge and the CDSC) help to
compensate us for the cost of selling our policies. (See "What charges will
JHVLICO deduct from my investment in the policy?" in the Basic Information
section of this prospectus.) The amount of the charges in any policy year does
not specifically correspond to sales expenses for that year. We expect to
recover our total sales expenses over the life of the policies. To the extent
that the sales charges do not cover total sales expenses, the sales expenses may
be recovered from other sources, including gains from the charge for mortality
and expense risks and other gains with respect to the policies, or from our
general assets. (See "How we market the policies" on page 34.)

Effect of premium payment pattern

You may structure the timing and amount of premium payments to minimize the
sales charges, although doing so involves certain risks. Paying more than one
Required Premium in any policy year could reduce your total sales charges. For
example, if you paid a Required Premium of $1,000 in each of the first two
policy years, you would pay total premium sales charges of $100. If instead you
paid $2,000 (i.e., two times the Required Premium amount) in the first policy
year, you would pay total premium sales charges of only $50. Accelerating the
payment of Required Premiums to earlier policy years could result in a larger
CDSC and/or cause aggregate premiums paid to exceed the policy's 7-pay premium
limit and, as a result, cause the policy to become a modified endowment, with
adverse tax consequences

<PAGE>

to you upon receipt of policy distributions. (See "Tax considerations" beginning
on page 35.) On the other hand, to pay less than the amount of Required Premiums
by their due dates runs the risk that the policy will lapse, resulting in loss
of coverage and additional charges.

Monthly charges

We deduct the monthly charges described in the Basic Information section from
your policy's investment options in proportion to the amount of account value
you have in each. For each month that we cannot deduct any charge because of
insufficient account value, the uncollected charges will accumulate and be
deducted when and if sufficient account value becomes available.

The insurance under the policy continues in full force during any grace period
but, if the insured person dies during the policy grace period, the amount of
unpaid monthly charges is deducted from the death benefit otherwise payable.

Reduced charges for eligible classes

The charges otherwise applicable may be reduced with respect to policies
issued to a class of associated individuals or to a trustee, employer or similar
entity where we anticipate that the sales to the members of the class will
result in lower than normal sales or administrative expenses, lower taxes or
lower risks to us. We will make these reductions in accordance with our rules in
effect at the time of the application for a policy. The factors we consider in
determining the eligibility of a particular group for reduced charges, and the
level of the reduction, are as follows: the nature of the association and its
organizational framework; the method by which sales will be made to the members
of the class; the facility with which premiums will be collected from the
associated individuals and the association's capabilities with respect to
administrative tasks; the anticipated lapse and surrender rates of the policies;
the size of the class of associated individuals and the number of years it has
been in existence; and any other such circumstances which result in a reduction
in sales or administrative expenses, lower taxes or lower risks. Any reduction
in charges will be reasonable and will apply uniformly to all prospective policy
purchasers in the class and will not unfairly discriminate against any owner.

HOW WE MARKET THE POLICIES

Signator Investors, Inc. ("Signator"), an indirect wholly-owned subsidiary of
John Hancock located at 197 Clarendon Street, Boston, MA 02117, is registered as
a broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. and the Securities Investor
Protection Corporation. Signator acts as principal underwriter and principal
distributor of the policies pursuant to a sales agreement among John Hancock,
Signator, JHVLICO, and the Account. Signator also serves as principal
underwriter for John Hancock Variable Annuity Accounts U, I and V, John Hancock
Mutual Variable Life Insurance Account UV and John Hancock Variable Life
Accounts V and S, all of which are registered under the 1940 Act. Signator is
also the principal underwriter for John Hancock Variable Series Trust I.

Applications for policies are solicited by agents who are licensed by state
insurance authorities to sell JHVLICO's policies and who are also registered
representatives ("representatives") of Signator or other broker-dealer firms, as
discussed below. John Hancock performs insurance underwriting and determines
whether to accept or reject the application for a policy and each insured
person's risk classification. JHVLICO will make the appropriate refund if a
policy ultimately is not issued or is returned under the "free look" provision.
Officers and employees of John Hancock and JHVLICO are covered by a blanket bond
by a commercial carrier in the amount of $25 million.

Signator's representatives are compensated for sales of the policies on a
commission and service fee basis by Signator, and JHVLICO reimburses

<PAGE>

Signator for such compensation and for other direct and indirect expenses
(including agency expense allowances, general agent, district manager and
supervisor's compensation, agent's training allowances, deferred compensation
and insurance benefits of agents, general agents, district managers and
supervisors, agency office clerical expenses and advertising) actually incurred
in connection with the marketing and sale of the policies.

The maximum commission payable to a Signator representative for selling a
policy is 50% of the base policy premiums (prior to any premium recalculation)
that would be payable in the first policy year, 8% of the such premiums payable
in the second through fourth policy years, and 3% of any such premiums received
by us in each policy year thereafter. The maximum commission on any premium paid
in any policy year in excess of such base policy premium is 3%.

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

The policies are also sold through other registered broker-dealers that have
entered into selling agreements with Signator and whose representatives are
authorized by applicable law to sell variable life insurance policies. The
commissions which will be paid by such broker-dealers to their representatives
will be in accordance with their established rules. The commission rates may be
more or less than those set forth above for Signator's representatives. In
addition, their qualified registered representatives may be reimbursed by the
broker-dealers under expense reimbursement allowance programs in any year for
approved voucherable expenses incurred. Signator will compensate the
broker-dealers as provided in the selling agreements, and JHVLICO will reimburse
Signator for such amounts and for certain other direct expenses in connection
with marketing the policies through other broker-dealers.

Representatives of Signator and the other broker-dealers mentioned above may
also earn "credits" toward qualification for attendance at certain business
meetings sponsored by John Hancock.

The offering of the policies is intended to be continuous, but neither JHVLICO
nor Signator is obligated to sell any particular amount of policies.

TAX CONSIDERATIONS

This description of federal income tax consequences is only a brief summary
and is not intended as tax advice. Tax consequences will vary based on your own
particular circumstances, and for further information you should consult a
qualified tax advisor. Federal, state and local tax laws, regulations and
interpretations can change from time to time. As a result, the tax consequences
to you and the beneficiary may be altered, in some cases retroactively.

Policy proceeds

We believe the policy will receive the same federal income and estate tax
treatment as fixed benefit life insurance policies. Section 7702 of the Internal
Revenue Code (the "Code") defines life insurance for federal tax purposes. If
certain standards are met at issue and over the life of the policy, the policy
will satisfy that definition. We will monitor compliance with these standards.

If the policy complies with the definition of life insurance, we believe the
death benefit under the policy will be excludable from the beneficiary's gross
income under the Code. In addition, increases in account value as a result of
interest or investment experience will not be subject to federal income tax
unless and until values are actually received through distributions.
Distributions for tax purposes can include amounts received upon full or partial
surrender or partial withdrawals. You may also be

<PAGE>

deemed to have received a distribution for tax purposes if you assign all or
part of your policy rights or change your policy's ownership.

In general, the owner will be taxed on the amount of distributions that exceed
the premiums paid under the policy. But under certain circumstances within the
first 15 policy years, the owner may be taxed on a distribution even if total
withdrawals do not exceed total premiums paid. Any taxable distribution will be
ordinary income to the owner (rather than capital gains).

We also believe that, except as noted below, loans received under the policy
will be treated as indebtedness of an owner and that no part of any loan will
constitute income to the owner. However, the amount of any outstanding loan that
was not previously considered income (as discussed below) will be treated as if
it had been distributed to the owner if the policy terminates for any reason.

It is possible that, despite our monitoring, a policy might fail to qualify as
life insurance under Section 7702 of the Code. This could happen, for example,
if we inadvertently failed to return to you any premium payments that were in
excess of permitted amounts, or if the Trust failed to meet certain investment
diversification or other requirements of the Code. If this were to occur, you
would be subject to income tax on the income and gains under the policy for the
period of the disqualification and for subsequent periods and the death benefit
proceeds would lose their non-taxable status.

In the past, the United States Treasury Department has stated that it
anticipated issuing guidelines prescribing circumstances in which the ability of
a policy owner to direct his or her investment to particular funds may cause the
policy owner, rather than the insurance company, to be treated as the owner of
the shares of those funds. In that case, any income and gains attributable to
those shares would be included in your current gross income for federal income
tax purposes. Under current law, however, we believe that we, and not the owner
of a policy, would be considered the owner of the fund's shares for tax
purposes.

Tax consequences of ownership or receipt of policy proceeds under federal,
state and local estate, inheritance, gift and other tax laws depend on the
circumstances of each owner or beneficiary.

Because there may be unfavorable tax consequences (including recognition of
taxable income and the loss of income tax-free treatment for any death benefit
payable to the beneficiary), you should consult a qualified tax adviser prior to
changing the policy's ownership or making any assignment of ownership interests.

7-pay premium limit

At the time of policy issuance, we will determine whether the premium payments
for which we will bill you will exceed the 7-pay limit discussed below. If so,
our standard procedures prohibit issuance of the policy unless you sign a form
acknowledging that fact.

The 7-pay limit is the total of net level premiums that would have been
payable at any time for a comparable fixed policy to be fully "paid-up" after
the payment of 7 equal annual premiums. "Paid-up" means that no further premiums
would be required to continue the coverage in force indefinitely, based on
certain prescribed assumptions. If the total premiums paid at any time during
the first 7 policy years exceed the 7-pay limit, the policy will be treated as a
"modified endowment", which can have adverse tax consequences.

The owner will be taxed on distributions and loans from a "modified endowment"
to the extent of any income (gain) to the owner (on an income-first basis). The
distributions and loans affected will be those made on or after, and within the
two year period prior to, the time the policy becomes a modified endowment.
Additionally, a 10% penalty tax may be

<PAGE>

imposed on taxable portions of such distributions or loans that are made before
the owner attains age 59 1/2.

Furthermore, any time there is a "material change" in a policy (such as a
Guaranteed Death Benefit increase, the addition of certain other policy benefits
after issue, a change in death benefit option, or reinstatement of a lapsed
policy), the policy will have a new 7-pay limit as if it were a newly-issued
policy. If a prescribed portion of the policy's then account value, plus all
other premiums paid within 7 years after the material change, at any time exceed
the new 7-pay limit, the policy will become a modified endowment.

Moreover, if benefits under a policy are reduced (such as a partial surrender,
a reduction in the Guaranteed Death Benefit, or the reduction or cancellation of
certain rider benefits) during the 7 years in which a 7-pay test is being
applied, the 7-pay limit will be recalculated based on the reduced benefits. If
the premiums paid to date are greater than the recalculated 7-pay limit, the
policy will become a modified endowment.

All modified endowments issued by the same insurer (or its affiliates) to the
owner during any calendar year generally will be treated as one contract for the
purpose of applying the modified endowment rules. A policy received in exchange
for a modified endowment will itself also be a modified endowment. You should
consult your tax advisor if you have questions regarding the possible impact of
the 7-pay limit on your policy.

Corporate and H.R. 10 plans

The policy may be acquired in connection with the funding of retirement plans
satisfying the qualification requirements of Section 401 of the Code. If so, the
Code provisions relating to such plans and life insurance benefits thereunder
should be carefully scrutinized. We are not responsible for compliance with the
terms of any such plan or with the requirements of applicable provisions of the
Code.

REPORTS THAT YOU WILL RECEIVE

At least annually, we will send you a statement setting forth at least the
following information as of the end of the most recent reporting period: the
Guaranteed Death Benefit, the account value, the portion of the account value in
each investment option, the surrender value, premiums received and charges
deducted from premiums since the last report, and any outstanding policy loan
(and interest charged for the preceding policy year). Moreover, you also will
receive confirmations of transfers among investment options, policy loans,
partial withdrawals and certain other policy transactions. Premium payments not
in response to a billing notice are "unscheduled" and will be separately
confirmed. Therefore, if you make a premium payment that differs by more than
$25 from that billed, you will receive a separate confirmation of that premium
payment.

Semiannually we will send you a report containing the financial statements of
the Trust, including a list of securities held in each fund.

VOTING PRIVILEGES THAT YOU WILL HAVE

All of the assets in the subaccounts of the Account are invested in shares of
the corresponding funds of the Trust. We will vote the shares of each of the
funds of the Trust which are deemed attributable to variable life insurance
policies at regular and special meetings of the Trust's shareholders in
accordance with instructions received from owners of such policies. Shares of
the Trust held in the Account which are not attributable to such policies, as
well as shares for which instructions from owners are not received, will be
represented by us at the meeting. We will vote such shares for and against each
matter in the same proportions as the votes based upon the instructions received
from the owners of such policies.

We determine the number of a fund's shares held in a subaccount attributable
to each owner by dividing the amount of a policy's account value held

<PAGE>

in the subaccount by the net asset value of one share in the fund. Fractional
votes will be counted. We determine the number of shares as to which the owner
may give instructions as of the record date for the Trust's meeting. Owners of
policies may give instructions regarding the election of the Board of Trustees
of the Trust, ratification of the selection of independent auditors, approval of
Trust investment advisory agreements and other matters requiring a shareholder
vote. We will furnish owners with information and forms to enable owners to give
voting instructions.

However, we may, in certain limited circumstances permitted by the SEC's
rules, disregard voting instructions. If we do disregard voting instructions,
you will receive a summary of that action and the reasons for it in the next
semi-annual report to owners.

CHANGES THAT JHVLICO CAN MAKE AS TO YOUR POLICY

Changes relating to the Trust or the Account

The voting privileges described in this prospectus reflect our understanding
of applicable Federal securities law requirements. To the extent that applicable
law, regulations or interpretations change to eliminate or restrict the need for
such voting privileges, we reserve the right to proceed in accordance with any
such revised requirements. We also reserve the right, subject to compliance with
applicable law, including approval of owners if so required, (1) to transfer
assets determined by JHVLICO to be associated with the class of policies to
which your policy belongs from the Account to another separate account or
subaccount, (2) to operate the Account as a "management-type investment company"
under the 1940 Act, or in any other form permitted by law, the investment
adviser of which would be JHVLICO, an affiliate or John Hancock, (3) to
deregister the Account under the 1940 Act, (4) to substitute for the fund shares
held by a subaccount any other investment permitted by law, and (5) to take any
action necessary to comply with or obtain any exemptions from the 1940 Act. We
would notify owners of any of the foregoing changes and, to the extent legally
required, obtain approval of owners and any regulatory body prior thereto. Such
notice and approval, however, may not be legally required in all cases.

Other permissible changes

We reserve the right to make any changes in the policy necessary to ensure the
policy is within the definition of life insurance under the Federal tax laws and
is in compliance with any changes in Federal or state tax laws.

In our policies, we reserve the right to make certain changes if they would
serve the best interests of policy owners or would be appropriate in carrying
out the purposes of the policies. Such changes include the following:

. Changes necessary to comply with or obtain or continue exemptions under the
federal securities laws

. Combining or removing investment options

. Changes in the form of organization of any separate account

Any such changes will be made only to the extent permitted by applicable laws
and only in the manner permitted by such laws. When required by law, we will
obtain your approval of the changes and the approval of any appropriate
regulatory authority.

ADJUSTMENTS WE MAKE TO DEATH BENEFITS

If the insured person commits suicide within certain time periods, the amount
of death benefit we pay will be limited as described in the policy. Also, if an
application misstated the age or gender of the insured person, we will adjust
the amount of any death benefit as described in the policy.

<PAGE>

WHEN WE PAY POLICY PROCEEDS

General

We will pay any death benefit, withdrawal, surrender value or loan within 7
days after we receive the last required form or request (and, with respect to
the death benefit, any other documentation that may be required). If we don't
have information about the desired manner of payment within 7 days after the
date we receive notification of the insured person's death, we will pay the
proceeds as a single sum, normally within 7 days thereafter.

Delay to challenge coverage

We may challenge the validity of your insurance policy based on any material
misstatements made to us in the application for the policy. We cannot make such
a challenge, however, beyond certain time limits that are specified in the
policy.

Delay for check clearance

We reserve the right to defer payment of that portion of your account value
that is attributable to a premium payment made by check for a reasonable period
of time (not to exceed 15 days) to allow the check to clear the banking system.

Delay of separate account proceeds

We reserve the right to defer payment of any death benefit, loan or other
distribution that is derived from a variable investment option if (a) the New
York Stock Exchange is closed (other than customary weekend and holiday
closings) or trading on the New York Stock Exchange is restricted; (b) an
emergency exists, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to fairly determine the account
value; or (c) the SEC by order permits the delay for the protection of owners.
Transfers and allocations of account value among the investment options may also
be postponed under these circumstances. If we need to defer calculation of
separate account values for any of the foregoing reasons, all delayed
transactions will be processed at the next values that we do compute.

OTHER DETAILS ABOUT EXERCISING RIGHTS AND PAYING BENEFITS

Joint ownership

If more than one person owns a policy, all owners must join in most requests
to exercise rights under the policy.

Assigning your policy

You may assign your rights in the policy to someone else as collateral for a
loan or for some other reason. Assignments do not require the consent of any
revocable beneficiary. A copy of the assignment must be forwarded to us. We are
not responsible for any payment we make or any action we take before we receive
notice of the assignment in good order. Nor are we responsible for the validity
of the assignment. An absolute assignment is a change of ownership. All
collateral assignees of record must consent to any full surrender, partial
withdrawal or loan from the policy.

Your beneficiary

You name your beneficiary when you apply for the policy. The beneficiary is
entitled to the proceeds we pay following the insured person's death. You may
change the beneficiary during the insured person's lifetime. Such a change
requires the consent of any irrevocable named beneficiary. A new beneficiary
designation is effective as of the date you sign it, but will not affect any
payments we make before we receive it. If no beneficiary is living when the
insured person dies, we will pay the insurance proceeds to the owner or the
owner's estate.

YEAR 2000 ISSUES

The advent of the Year 2000 presents a technological challenge to JHVLICO. In
close cooperation with John Hancock Mutual Life Insurance Company, its parent,
JHVLICO has

<PAGE>

developed and is executing 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 has substantially completed the process of remediating its systems and
expects the compliance testing component of the project to be substantially
complete by June, 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. For more information about the impact
of year 2000, please refer to Note 12 of the Notes to Statutory-Basis Financial
Statements of John Hancock Variable Life Insurance Company included in this
prospectus.

LEGAL MATTERS

The legal validity of the policies described in this prospectus has been
passed on by Ronald J. Bocage, Vice President and Counsel for JHVLICO. Messrs.
Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised us on certain
Federal securities law matters in connection with the policies.

REGISTRATION STATEMENT FILED WITH THE SEC

This prospectus omits certain information contained in the Registration
Statement which has been filed with the SEC. More details may be obtained from
the SEC upon payment of the prescribed fee.

ACCOUNTING AND ACTUARIAL EXPERTS

The financial statements of JHVLICO 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 Malcolm Cheung, F.S.A.,an Actuary of JHVLICO
and Second Vice President of John Hancock.

FINANCIAL STATEMENTS OF JHVLICO AND THE ACCOUNT

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

<PAGE>

LIST 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 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.

Michele G. Van Leer Vice Chairman of the Board and President of JHVLICO;
Senior Vice President, John Hancock Mutual Life
Insurance Company.

Joseph A. Tomlinson Director and Vice President of JHVLICO; Vice President,
John Hancock Mutual Life Insurance Company.

Ronald J. Bocage Director, Vice President and Counsel of JHVLICO; Vice
President and Counsel, 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.

Malcolm Cheung Director of JHVLICO; Second 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>

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, 1998
and 1997, and the related statutory-basis statements of operations and
unassigned deficit and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

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

In our 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, 1998 and 1997, or the results of its operations or its cash flows for the
years then ended.

Also, in our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of John Hancock
Variable Life Insurance Company at December 31, 1998 and 1997, 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 19, 1999

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
December 31
--------------------
1998 1997
--------- ---------
(In millions)
<S> <C> <C>
ASSETS
Bonds--Note 6 . . . . . . . . . . . . . . . . . . . . $1,185.8 $1,092.7
Preferred stocks . . . . . . . . . . . . . . . . . . . 36.5 17.2
Common stocks . . . . . . . . . . . . . . . . . . . . 3.1 2.3
Investment in affiliates . . . . . . . . . . . . . . . 81.7 79.1
Mortgage loans on real estate--Note 6 . . . . . . . . 388.1 273.9
Real estate . . . . . . . . . . . . . . . . . . . . . 41.0 39.9
Policy loans . . . . . . . . . . . . . . . . . . . . . 137.7 106.8
Cash items:
Cash in banks . . . . . . . . . . . . . . . . . . . 11.4 83.1
Temporary cash investments . . . . . . . . . . . . . 8.5 60.1
-------- --------
19.9 143.2
Premiums due and deferred . . . . . . . . . . . . . . 32.7 33.8
Investment income due and accrued . . . . . . . . . . 29.8 24.7
Other general account assets . . . . . . . . . . . . . 47.5 16.8
Assets held in separate accounts . . . . . . . . . . . 6,595.2 4,691.1
-------- --------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $8,599.0 $6,521.5
======== ========
OBLIGATIONS AND STOCKHOLDER'S EQUITY
OBLIGATIONS
Policy reserves . . . . . . . . . . . . . . . . . . $1,652.0 $1,124.3
Federal income and other taxes payable--Note 1 . . . 44.3 36.1
Other general account obligations . . . . . . . . . 150.9 481.9
Transfers from separate accounts, net . . . . . . . (190.3) (146.8)
Asset valuation reserve--Note 1 . . . . . . . . . . 21.9 18.6
Obligations related to separate accounts . . . . . . 6,589.4 4,685.7
-------- --------
TOTAL OBLIGATIONS . . . . . . . . . . . . . . . . . . 8,268.2 6,199.8
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 . . . . . . . . . . . . . . . . . (49.2) (58.3)
-------- --------
TOTAL STOCKHOLDER'S EQUITY . . . . . . . . . . . . . . 330.8 321.7
-------- --------
TOTAL OBLIGATIONS AND STOCKHOLDER'S EQUITY . . . . . . $8,599.0 $6,521.5
======== ========
</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
-----------------------
1998 1997
----------- -----------
(In millions)
<S> <C> <C>
INCOME
Premiums . . . . . . . . . . . . . . . . . . . . $1,272.3 $ 872.7
Net investment income--Note 3 . . . . . . . . . 122.8 89.7
Other, net . . . . . . . . . . . . . . . . . . . 618.1 449.1
-------- --------
2,013.2 1,411.5
BENEFITS AND EXPENSES
Payments to policyholders and beneficiaries . . 301.4 264.0
Additions to reserves to provide for future
payments to policyholders and beneficiaries . 1,360.2 826.2
Expenses of providing service to policyholders
and obtaining new insurance
--Note 5 . . . . . . . . . . . . . . . . . . . 274.2 233.2
State and miscellaneous taxes . . . . . . . . . 28.1 19.1
-------- --------
1,963.9 1,342.5
-------- --------
GAIN FROM OPERATIONS BEFORE FEDERAL INCOME
TAXES AND NET REALIZED CAPITAL LOSSES . . . 49.3 69.0
Federal income taxes--Note 1 . . . . . . . . . . . 33.1 38.5
-------- --------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL
LOSSES . . . . . . . . . . . . . . . . . . . 16.2 30.5
Net realized capital losses--Note 4 . . . . . . . (0.6) (3.0)
-------- --------
NET INCOME . . . . . . . . . . . . . . . . . 15.6 27.5
Unassigned deficit at beginning of year . . . . . (58.3) (96.9)
Net unrealized capital (losses) gains and other
adjustments--Note 4 . . . . . . . . . . . . . . . (6.0) 5.0
Other reserves and adjustments . . . . . . . . . . (0.5) 6.1
-------- --------
UNASSIGNED DEFICIT AT END OF YEAR . . . . . . . . $ (49.2) $ (58.3)
======== ========
</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
-----------------------
1998 1997
----------- ----------
(In millions)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Insurance premiums . . . . . . . . . . . . . . . $1,275.3 $ 877.0
Net investment income . . . . . . . . . . . . . . 118.2 89.9
Benefits to policyholders and beneficiaries . . . (275.5) (245.2)
Dividends paid to policyholders . . . . . . . . . (22.3) (18.7)
Insurance expenses and taxes . . . . . . . . . . (296.9) (267.2)
Net transfers to separate accounts . . . . . . . (874.4) (715.2)
Other, net . . . . . . . . . . . . . . . . . . . 551.3 408.9
-------- -------
NET CASH PROVIDED FROM OPERATIONS . . . . . . 475.7 129.5
-------- -------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Bond purchases . . . . . . . . . . . . . . . . . (618.8) (621.6)
Bond sales . . . . . . . . . . . . . . . . . . . 340.7 197.3
Bond maturities and scheduled redemptions . . . . 111.8 34.1
Bond prepayments . . . . . . . . . . . . . . . . 76.5 51.6
Stock purchases . . . . . . . . . . . . . . . . . (23.4) (15.7)
Proceeds from stock sales . . . . . . . . . . . . 1.9 6.7
Real estate purchases . . . . . . . . . . . . . . (4.2) (1.3)
Real estate sales . . . . . . . . . . . . . . . . 2.1 0.4
Other invested assets purchases . . . . . . . . . 0.0 (1.0)
Proceeds from the sale of other invested assets . 0.0 0.3
Mortgage loans issued . . . . . . . . . . . . . . (145.5) (94.5)
Mortgage loan repayments . . . . . . . . . . . . 33.2 32.4
Other, net . . . . . . . . . . . . . . . . . . . (435.2) 393.1
-------- -------
NET CASH USED IN INVESTING ACTIVITIES . . . . (660.9) (18.2)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in short-term note payable . . . . . 61.9 0.0
-------- -------
NET CASH PROVIDED FROM FINANCING ACTIVITIES . 61.9 0.0
-------- -------
(DECREASE) INCREASE IN CASH AND TEMPORARY CASH
INVESTMENTS. . . . . . . . . . . . . . . . . . . . (123.3) 111.3
Cash and temporary cash investments at beginning of
year . . . . . . . . . . . . . . . . . . . . . . . 143.2 31.9
-------- -------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR $ 19.9 $ 143.2
======== =======
</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, 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: During March 1998, the NAIC adopted the
codification of statutory accounting practices, which is effective in 2001.
Codification 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. Codification will
require adoption by the various states before it becomes the prescribed
statutory basis of accounting for insurance companies domesticated within those
states. Accordingly, before codification becomes effective for the Company, the
Massachusetts Division of Insurance must adopt codification as the prescribed
basis of accounting on which domestic insurers must report their statutory-basis
results to the Division of Insurance. The impact of any such changes on the
Company's unassigned deficit is not expected to be material.

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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.

Loan-backed bonds and structured securities are valued at amortized cost using
the interest method including anticipated prepayments. Prepayment assumptions
are obtained from broker dealer surveys or internal estimates and are based on
the current interest rate and economic environment. The retrospective
adjustment method is used to value all such securities except for
interest-only securities, which are valued using the prospective method.

The net interest effect of interest rate and currency rate swap transactions
is recorded as an adjustment of interest income as incurred. The initial cost
of interest rate cap agreements is amortized to net investment income over the
life of the related agreement. Gains and losses on financial futures contracts
used as hedges against interest rate fluctuations are deferred and recognized
in income over the period being hedged.

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 $3.0 million in 1998 and $2.1 million in
1997.

Real estate acquired in satisfaction of debt and real estate held for sale are
carried at the lower of cost or fair value.

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, 1998, the IMR, net of 1998 amortization of $2.4 million, amounted to $10.7
million, which is included in policy reserves. The corresponding 1997 amounts
were $1.2 million and $7.8 million, respectively.

Goodwill: The excess of cost over the statutory book value of the net assets of
life insurance business acquired was $11.4 million and $13.1 million at December
31, 1998 and 1997, respectively, and generally is amortized over a ten-year
period using a straight-line method.

<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.

Fair values for futures contracts are based on quoted market prices. Fair
values for interest rate swap, cap agreements, and currency swap agreements
are based on current settlement values. The current settlement values are
based on brokerage quotes that utilize pricing models or formulas using
current assumptions.

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, 1998.

Capital Gains and Losses: Realized capital gains and losses are determined using
the specific identification method. 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.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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 and4 1/2% for policies issued on or
thereafter. Reserves for single premium policies are determined by the net
single premium method using the 1958 CSO mortality table, with an assumed
interest rate of 4%. Reserves for universal life policies issued prior to 1985
are equal to the gross account value which at all times exceeds minimum
statutory requirements. Reserves for universal life policies issued from 1985
through 1988 are maintained at the greater of the Commissioner's Reserve
Valuation Method (CRVM) using the 1958 CSO mortality table, with 4 1/2% interest
or the cash surrender value. Reserves for universal life policies issued after
1988 and for flexible variable policies are maintained using the greater of the
cash surrender value or the CRVM method with the 1980 CSO mortality table and5
1/2% interest for policies issued from 1988 through 1992; 5% interest for
policies issued in 1993 and 1994; and4 1/2% interest for policies issued in 1995
through 1998.

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 basis 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 $38.2 million in 1998 and $29.6 million in 1997.

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.

Amounts for disputed tax issues relating to the prior years are charged or
credited directly to policyholders' contingency reserve.

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. Reserve modifications resulting from such determinations
are recorded directly to stockholder's equity. During 1997, the Company refined
certain actuarial assumptions inherent in the calculation of reserves related to
AIDS claims under individual life insurance policies resulting in a $6.4 million
increase in stockholder's equity at December 31, 1997. No additional refinements
were made during 1998.

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.

Reclassification: Certain 1997 amounts have been reclassified to conform to the
1998 presentation.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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 1998 and 1997.

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 was subsequently renamed Investors Partner Life Company
(IPL) on March 5, 1998. IPL 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>
1998 1997
---- ----
(In millions)
<S> <C> <C>
Investment expenses . . . . . . . . . . . . . . . . . . . . $ 8.3 $5.0
Interest expense . . . . . . . . . . . . . . . . . . . . . 2.4 0.7
Depreciation expense . . . . . . . . . . . . . . . . . . . 0.8 1.1
Investment taxes . . . . . . . . . . . . . . . . . . . . . 0.7 0.4
----- ----
$12.2 $7.2
===== ====
</TABLE>

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

Net realized capital gains (losses) consist of the following items:

<TABLE>
<CAPTION>
1998 1997
---- ----
(In millions)
<S> <C> <C>
Net gains from asset sales . . . . . . . . . . . . . . . . . $ 7.6 $ 0.8
Capital gains tax . . . . . . . . . . . . . . . . . . . . . (2.9) (0.7)
Net capital gains transferred to IMR . . . . . . . . . . . . (5.3) (3.1)
----- -----
Net Realized Capital Losses . . . . . . . . . . . . . . . $(0.6) $(3.0)
===== =====
</TABLE>

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

<TABLE>
<CAPTION>
1998 1997
---- ----
(In millions)
<S> <C> <C>
Net (losses) gains from changes in security values
and book value adjustments . . . . . . . . . . . . $(2.7) $ 7.0
Increase in asset valuation reserve . . . . . . . . (3.3) (2.0)
----- -----
Net Unrealized Capital (Losses) Gains and Other
Adjustments . . . . . . . . . . . . . . . . . . $(6.0) $ 5.0
===== =====
</TABLE>

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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 1998 and 1997 to reflect continuing changes in
the Company's operations. The amount of the service fee charged to the Company
was $157.5 million and $123.6 million in 1998 and 1997, 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 $0.7 million and
$0.9 million in 1998 and 1997, 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 1998 issues of flexible premium variable life insurance and
scheduled premium variable life insurance policies. In connection with this
agreement, John Hancock transferred $4.9 million and $22.0 million of cash for
tax, commission, and expense allowances to the Company, which increased the
Company's net gain from operations by $22.2 million and $10.1 million in 1998
and 1997, respectively.

The Company also has a modified coinsurance agreement with John Hancock to
reinsure 50% of 1995 through 1998 issues of certain retail annuity contracts
(Independence Preferred and Declaration). In connection with this agreement, the
Company received a net cash payment of $12.7 million in 1998 and made a net cash
payment of $1.1 million in 1997 for surrender benefits, tax, reserve increase,
commission, expense allowances and premium. This agreement increased the
Company's net gain from operations by $8.4 million and $9.8 million in 1998 and
1997, 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 1998 and 1997 for all policies that are not reinsured under
any other indemnity agreement. In connection with the agreement, John Hancock
received $1.0 million in 1998 and transferred $2.4 million in 1997 of cash for
mortality claims to the Company, which decreased by $0.5 million and increased
by $1.3 million the Company's net gain from operations in 1998 and 1997,
respectively.

At December 31, 1998, the Company had outstanding a short-term note of $61.9
million payable to an affiliate at a variable rate of interest. The note is part
of a revolving line of credit. Interest paid in 1998 was $2.9 million. The note
is included in other general account obligations.

<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
December 31, 1998 Value Gains Losses Value
----------------- --------- ---------- ---------- ----------
(In millions)
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies . . $ 5.1 $ 0.1 $ 0.0 $ 5.2
Obligations of states and
political subdivisions . . . . 3.2 0.3 0.0 3.5
Corporate securities . . . . . 925.2 50.4 15.0 960.6
Mortgage-backed securities . . 252.3 10.0 0.1 262.2
-------- ----- ----- --------
Total bonds . . . . . . . . . $1,185.8 $60.8 $15.1 $1,231.5
======== ===== ===== ========

<CAPTION>
December 31, 1997
-----------------
<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 . . . . . . . . . $ 1092.7 $48.6 $ 2.8 $1,138.5
======== ===== ===== ========
</TABLE>

The statement value and fair value of bonds at December 31, 1998, 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 . . . . . . . . . . . . . . . . $ 57.3 $ 59.1
Due after one year through five years . . . . . . . . . 283.4 294.1
Due after five years through ten years . . . . . . . . 374.9 388.7
Due after ten years . . . . . . . . . . . . . . . . . . 217.9 227.4
-------- --------
933.5 969.3
Mortgage-backed securities . . . . . . . . . . . . . . 252.3 262.2
-------- --------
$1,185.8 $1,231.5
======== ========
</TABLE>

Gross gains of $3.4 million in 1998 and $1.1 million in 1997 and gross losses of
$0.7 million in 1998 and $4.5 million in 1997 were realized from the sale of
bonds.

At December 31, 1998, bonds with an admitted asset value of $8.6 million were on
deposit with state insurance departments to satisfy regulatory requirements.

The cost of common stocks was $2.1 million and $0.0 million at December 31, 1998
and 1997, respectively. At December 31, 1998, gross unrealized appreciation on
common stocks totaled $1.3 million, and gross unrealized

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED

depreciation totaled $0.3 million. The fair value of preferred stock totaled
$36.5 million at December 31, 1998 and $17.2 million at December 31, 1997.

Bonds with amortized cost of $0.9 million were non-income producing for the
twelve months ended December 31, 1998.

At December 31, 1998, 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 . . . . . $106.4 East North Central . $ 56.4
Hotels . . . . . . . 9.6 East South Central . 0.9
Industrial . . . . . 71.9 Middle Atlantic . . . 26.2
Office buildings . . 78.2 Mountain . . . . . . 27.5
Retail . . . . . . . 29.6 New England . . . . . 36.9
Agricultural . . . . 71.5 Pacific . . . . . . . 96.4
Other . . . . . . . . 20.9 South Atlantic . . . 83.8
West North Central . 13.1
West South Central . 43.3
Other . . . . . . . . 3.6
------ ------
$388.1 $388.1
====== ======
</TABLE>

At December 31, 1998, the fair values of the commercial and agricultural
mortgage loans portfolios were $331.3 million and $70.0 million, respectively.
The corresponding amounts as of December 31, 1997 were approximately $243.8
million and $42.0 million, respectively.

The maximum and minimum lending rates for mortgage loans during 1998 were 9.19%
and 6.82% for agricultural loans and 8.88% and 6.56% 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.

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 1998 were $590.2 million, $21.5 million, and $8.2 million,
respectively. The corresponding amounts in 1997 were $427.4 million, $18.3
million, and $10.1 million, respectively.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 7--REINSURANCE--CONTINUED

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, 1998 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 notional amounts, carrying values and estimated fair values of the Company's
derivative instruments were as follows at December 31:

<TABLE>
<CAPTION>
Assets (Liabilities)
Number of Contracts/ ---------------------------------------
Notional Amounts 1998 1997
--------------------- --------------------- ----------------
Carrying Fair Carrying Fair
1998 1997 Value Value Value Value
---------- ---------- ---------- --------- -------- ------
($ In millions)
<S> <C> <C> <C> <C> <C> <C>
Futures contracts to
sell securities . . 947 367 $(0.5) $ (0.5) $(0.4) $(0.4)
Interest rate swap
agreements . . . . . $365.0 $245.0 -- (17.7) -- (7.8)
Interest rate cap
agreements . . . . . 89.4 89.4 3.1 3.1 1.4 1.4
Currency rate swap
agreements . . . . . 15.8 14.3 -- (3.3) -- (2.1)
</TABLE>

The Company uses futures contracts, interest rate swap, cap agreements, and
currency rate swap agreements for other than trading purposes to hedge and
manage its exposure to changes in interest rate levels, foreign exchange rate
fluctuations and to manage duration mismatch of assets and liabilities.

The futures contracts expire in 1999. The interest rate swap agreements expire
in 1999 to 2009. The interest rate cap agreements expire in 2006 to 2007. The
currency rate swap agreements expire in 2006 to 2009.

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform to the terms of the contract. The Company continually
monitors its position and the credit ratings of the counterparties to these
derivative instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency swap 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 be immaterial. Futures contracts trade on
organized exchanges and, therefore, have minimal credit risk.

<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, 1998 Percent
----------------- -------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with
adjustment)
With market value adjustment . . . . . . . . . $ 0.9 0.1%
At book value less surrender charge . . . . . 1,677.9 88.8
-------- -----
Total with adjustment . . . . . . . . . . . 1,678.8 88.9
Subject to discretionary withdrawal at book value
(without adjustment) . . . . . . . . . . . . . 203.6 10.8
Not subject to discretionary withdrawal--general
account . . . . . . . . . . . . . . . . . . . . 6.5 0.3
-------- -----
Total annuity reserves and deposit
liabilities. . . . . . . . . . . . . . . . $1,888.9 100.0%
======== =====
</TABLE>

NOTE 10--COMMITMENTS AND CONTINGENCIES

The Company has extended commitments to purchase long-term bonds and issue real
estate mortgages totaling $5.9 million and $24.8 million, respectively, at
December 31, 1998. 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 $32.1 million at December 31, 1998. The majority of these commitments
expire in 1999.

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, 1998. 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
---------------------------------------------
1998 1997
----------------------- -------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
----------- ----------- --------- --------
(In millions)
<S> <C> <C> <C> <C>
Assets
Bonds--Note 6 . . . . . . $1,185.8 $1,231.5 $1,092.7 $1,138.5
Preferred stocks--Note 6 . 36.5 36.5 17.2 17.2
Common stocks--Note 6 . . 3.1 3.1 2.3 2.3
Mortgage loans on real
estate--Note 6 . . . . . 388.1 401.3 273.9 285.8
Policy loans--Note 1 . . . 137.7 137.7 106.8 106.8
Cash and cash
equivalents--Note 1 . . 19.9 19.9 143.2 143.2
Derivatives assets
(liabilities) relating
to:--Note 8
Futures contracts . . . . (0.5) (0.5) (0.4) (0.4)
Interest rate swaps . . . -- (17.7) -- (7.8)
Currency rate swaps . . . -- (3.3) -- (2.1)
Interest rate caps . . . . 3.1 3.1 1.4 1.4
Liabilities
Commitments--Note 10 . . . -- 32.1 -- 194.5
</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 is executing its plan to address the impact of
the Year 2000 issues that result from computer programs being written using two
digits to reflect the year rather than four to define the applicable year and
century. Historically, the first two digits were hardcoded to save memory. Many
of John Hancock's computer programs that have date-sensitive software, including
those relied upon by the Company, may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in an information technology
(IT) system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices or engage in similar normal business activities. In addition,
non-IT systems including, but not limited to, security alarms, elevators and
telephones are subject to malfunction due to their dependence on embedded
technology such as microcontrollers for proper operation. As described, the Year
2000 project presents a number of challenges for financial institutions since
the correction of Year 2000 issues in IT and non-IT systems will be complex and
costly for the entire industry.

John Hancock began to address the Year 2000 project as early as 1994. John
Hancock's plan to address the Year 2000 Project includes an awareness campaign,
an assessment period, a renovation stage, validation work and an implementation
of Company solutions.

The continuous awareness campaign serves several purposes: defining the problem,
gaining executive level support and sponsorship, establishing a team and overall
strategy, and assessing existing information system management resources.
Additionally, the awareness campaign establishes an education process to ensure
that all employees are aware of the Year 2000 issue and knowledgeable of their
role in securing solutions.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 12--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

The assessment phase, which was completed for both IT and non-IT systems as of
April 1998, included the identification, inventory, analysis, and prioritization
of IT and non-IT systems and processes to determine their conversion or
replacement.

The renovation stage reflects the conversion, validation, replacement, or
elimination of selected platforms, applications, databases and utilities,
including the modification of applicable interfaces. Additionally, the
renovation stage includes performance, functionality, and regression testing and
implementation. As of December 31, 1998, the renovation phase was substantially
complete for computer applications, systems and desktops. For all remaining
components, the renovation phase is underway and will be complete before the end
of the second quarter of 1999.

The validation phase consists of the compliance testing of renovated systems.
The validation phase is expected to be complete by mid 1999, after renovation is
accomplished. Testing facilities will be used through the remainder of 1999 to
perform special functional testing. Special functional testing includes testing,
as required, with material third parties and industry groups and performing
reviews of "dry runs" of year-end activities. Scheduled testing of material
relationships with third parties, including those impacting the Company, is
underway. It is anticipated that testing with material business partners will
continue through much of 1999.

Finally, the implementation phase involves the actual implementation of
converted or replaced platforms, applications, databases, utilities, interfaces,
and contingency planning. Implementation is being performed concurrently during
the renovation phase and is expected to be completed before the end of the
second quarter of 1999.

The costs of the Year 2000 project consist of internal IT personnel and external
costs such as consultants, programmers, replacement software, and hardware. The
costs of the Year 2000 project are expensed as incurred. The project is funded
partially through a reallocation of resources from discretionary projects.
Through December 31, 1998, John Hancock has incurred and expensed approximately
$9.8 million in related payroll costs for its internal IT personnel on the
project. The estimated range of remaining internal IT personnel costs of the
project is approximately $8 to $9 million. Through December 31, 1998, John
Hancock has incurred and expensed approximately $36.4 million in external costs
for the project. The estimated range of remaining external costs of the project
is approximately $35 to $36 million. The total costs of the Year 2000 project to
John Hancock, based on management's best estimates, include approximately $18
million in internal IT personnel, $7.4 million in the external modification of
software, $34.2 million for external solution providers, $19.4 million in
replacement costs of non-compliant IT systems and $12.6 million in oversight,
test facilities and other expenses. Accordingly, the estimated range of total
costs of the Year 2000 project to John Hancock, internal and external, is
approximately $90 to $95 million. However, there can be no guarantee that these
estimates will be achieved and actual results could materially differ from those
plans. Specific factors that might cause such material differences include, but
are not limited to, the availability and cost of personnel trained in this area,
the ability to locate and correct all relevant computer codes, and similar
uncertainties.

<PAGE>

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 12--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

John Hancock's total Year 2000 project costs include the estimated impact of
external solution providers and are based on presently available information.
However, there is no guarantee that the systems of other companies that John
Hancock's systems rely on will be timely converted, or that a failure to convert
by another company, or a conversion that is incompatible with John Hancock's
systems, including those upon which the Company relies, would not have material
adverse effect on John Hancock or the Company. It is documented in trade
publications that companies in foreign countries are not acting as intensively
as domestic companies to remediate Year 2000 issues. Accordingly, it is expected
that Company facilities based outside the United States face higher degrees of
risks from data exchanges with material business partners. In addition, the
Company has numerous customers that hold products of the Company. Nearly all
products sold by the Company contain date sensitive data, examples of which are
policy expiration dates, birth dates and premium payment dates. Finally, the
regulated nature of the Company's industry exposes it to potential supervisory
or enforcement actions relating to Year 2000 issues.

John Hancock's contingency planning initiative related to the Year 2000 project
is underway. The plan is addressing John Hancock's readiness as well as that of
material business partners on whom John Hancock and the Company depend. John
Hancock's contingency plans are being designed to keep each subsidiary's
operations functioning in the event of a failure or delay due to the Year 2000
record format and date calculation changes. Contingency plans are being
constructed based on the foundation of extensive business resumption plans that
John Hancock has maintained and updated periodically, which outline responses to
situations that may affect critical business functions. These plans also provide
emergency operations guidance, which defines a documented order of actions to
respond to problems. These extensive business resumption plans are being
enhanced to cover Year 2000 situations.

<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, Emerging Markets Equity, International Equity
Index (formerly, International Equities), Global Equity, Small Cap Growth,
International Balanced, Mid Cap Growth, Large Cap Value, Money Market, Mid Cap
Value, Diversified Mid Cap Growth (formerly, Special Opportunities), Bond Index,
Small/Mid Cap CORE, Real Estate Equity, Growth & Income, Managed, Short-Term
Bond (formerly, Short-Term U.S. Government), Small Cap Value, International
Opportunities, Equity Index, High Yield Bond, Strategic Bond, Turner Core
Growth, Brandes International Equity (formerly, Edinburgh International Equity),
and Frontier Capital Appreciation Subaccounts) as of December 31, 1998, 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.

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,
1998, 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 10, 1999

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1998

<TABLE>
<CAPTION>
LARGE CAP SOVEREIGN EMERGING INTERNATIONAL
GROWTH BOND MARKETS EQUITY EQUITY INDEX
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------ ----------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Investment in shares
of portfolios of John
Hancock Variable
Series Trust I,
at value . . . . . . $318,056,515 $85,780,562 $ 1,689 $44,324,924
Investments in shares
of portfolios of M
Fund Inc., at value -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I . . 18,077 4,200 -- 7,865
M Fund Inc. . . . .
------------ ----------- ---------- -----------
Total assets . . . . 318,074,592 85,784,762 1,689 44,332,789
LIABILITIES
Payable to:
John Hancock Variable
Life Insurance
Company . . . . . . 12,873 2,791 -- 7,160
M Fund Inc. . . . . -- -- -- --
Asset charges payable 5,204 1,410 -- 705
------------ ----------- ---------- -----------
Total liabilities . . 18,077 4,201 -- 7,865
------------ ----------- ---------- -----------
Net assets . . . . . $318,056,515 $85,780,561 $ 1,689 $44,324,924
============ =========== ========== ===========
</TABLE>

<TABLE>
<CAPTION>
GLOBAL SMALL CAP INTERNATIONAL MID CAP
EQUITY GROWTH BALANCED GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Investment in shares of
portfolios of John
Hancock Variable Series
Trust I,
at value . . . . . . . $1,885 $13,486,064 $1,731,100 $11,219,643
Investments in shares of
portfolios of M Fund
Inc., at value . . . . -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I . . . -- 4,459 2,752 3,110
M Fund Inc. . . . . .
------ ----------- ---------- -----------
Total assets . . . . . 1,885 13,490,523 1,733,852 11,222,753
LIABILITIES
Payable to:
John Hancock Variable
Life Insurance Company
. . . . . . . . . . -- 4,242 2,723 2,932
M Fund Inc. . . . . . -- -- -- --
Asset charges payable . -- 216 28 178
------ ----------- ---------- -----------
Total liabilities . . . -- 4,458 2,751 3,110
------ ----------- ---------- -----------
Net assets . . . . . . $1,885 $13,486,065 $1,731,101 $11,219,643
====== =========== ========== ===========
</TABLE>

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 1998

<TABLE>
<CAPTION>
DIVERSIFIED MID
LARGE CAP MONEY CAP BOND SMALL/
VALUE MARKET MID CAP VALUE GROWTH INDEX MID CAP CORE
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 .................................. $10,716,976 $ 21,026,260 $ 16,254,342 $45,483,238 $ 4,190 $ 56,040
Investments in shares of portfolios of M
Fund Inc., at value .................... -- -- -- -- -- --
Receivable from:
John Hancock Variable Series Trust I ... 6,475 80,158 22,469 5,483 -- 1
M Fund Inc ............................. -- -- -- -- -- --
----------- ------------ ------------ ----------- ------------ -------------
Total assets ............................ 10,723,451 21,106,418 16,276,811 45,488,721 4,190 56,041
LIABILITIES
Payable to:
John Hancock Variable Life Insurance
Company ............................... 6,300 79,813 22,206 4,773 -- --
M Fund Inc ............................. -- -- -- -- -- --
Asset charges payable ................... 176 344 263 711 -- 1
----------- ------------ ------------ ----------- ------------ -------------
Total liabilities ....................... 6,476 80,157 22,469 5,484 -- 1
----------- ------------ ------------ ----------- ------------ -------------
Net assets .............................. $10,716,975 $ 21,026,261 $ 16,254,342 $45,483,237 $ 4,190 $ 56,040
=========== ============ ============ =========== ============ =============
</TABLE>

<TABLE>
<CAPTION>
REAL ESTATE GROWTH & SHORT-TERM SMALL CAP INTERNATIONAL
EQUITY INCOME MANAGED BOND VALUE OPPORTUNITIES
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 ...... $34,249,612 $552,313,331 $450,747,024 $6,046,092 $9,873,799 $17,088,499
Investments in shares of portfolios of M Fund
Inc., at value ................................. -- -- -- -- -- --
Receivable from:
John Hancock Variable Series Trust I ........... 16,722 87,919 418,038 1,234 5,346 5,154
M Fund Inc. .................................... -- -- -- -- -- --
----------- ------------ ------------ ---------- ---------- -----------
Total assets .................................... 34,266,334 552,401,250 451,165,062 6,047,326 9,879,245 17,093,653
LIABILITIES
Payable to:
John Hancock Variable Life Insurance Company ... 16,186 78,844 410,639 1,145 5,188 4,874
M Fund Inc. .................................... -- -- -- -- -- --
Asset charges payable ........................... 536 9,075 7,398 89 158 280
----------- ------------ ------------ ---------- ---------- -----------
Total liabilities ............................... 16,722 87,919 418,037 1,234 5,346 5,154
----------- ------------ ------------ ---------- ---------- -----------
Net assets ...................................... $34,249,612 $552,313,331 $450,747,025 $6,046,092 $9,873,799 $17,088,499
=========== ============ ============ ========== ========== ===========
</TABLE>

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 1998

<TABLE>
<CAPTION>
TURNER BRANDES FRONTIER
EQUITY HIGH YIELD CORE INTERNATIONAL CAPITAL
INDEX BOND STRATEGIC BOND GROWTH EQUITY APPRECIATION
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 . $26,799,569 $1,765 $4,608,410 $2,774,457 $1,355,068 $7,229,794
Investments in shares of portfolios of M Fund
Inc., at value . . . . . . . . . . . . . . . -- -- -- -- -- --
Receivable from:
John Hancock Variable Series Trust I . . . . 76,155 -- 3,774 235 22 272
M Fund Inc. . . . . . . . . . . . . . . . . -- -- -- -- -- --
----------- ------ ---------- ---------- ---------- ----------
Total assets . . . . . . . . . . . . . . . . 26,875,724 1,765 4,612,184 2,774,692 1,355,090 7,230,066
LIABILITIES
Payable to:
John Hancock Variable Life Insurance
Company . . . . . . . . . . . . . . . . . . 75,715 -- 3,698 190 -- 156
M Fund Inc. . . . . . . . . . . . . . . . . -- -- -- -- -- --
Asset charges payable . . . . . . . . . . . . 440 -- 76 45 22 116
----------- ------ ---------- ---------- ---------- ----------
Total liabilities . . . . . . . . . . . . . . 76,155 -- 3,774 235 22 272
----------- ------ ---------- ---------- ---------- ----------
Net assets . . . . . . . . . . . . . . . . . $26,799,569 $1,765 $4,608,410 $2,774,457 $1,355,068 $7,229,794
=========== ====== ========== ========== ========== ==========
</TABLE>

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
LARGE CAP GROWTH SUBACCOUNT SOVEREIGN BOND SUBACCOUNT
------------------------------------- -------------------------------------
1998 1997 1996 1998 1997 1996
----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . . . . $31,074,914 $19,906,569 $22,706,338 $6,701,784 $5,517,405 $ 4,518,056
M Fund Inc. . . . . . . . . . . . . . . . . . . -- -- -- -- -- --
----------- ----------- ----------- ---------- ---------- -----------
Total investment income . . . . . . . . . . . . 31,074,914 19,906,569 22,706,338 6,701,784 5,517,405 4,518,056
Expenses:
Mortality and expense risks . . . . . . . . . . 1,577,321 1,152,388 789,368 486,757 417,812 352,330
----------- ----------- ----------- ---------- ---------- -----------
Net investment income . . . . . . . . . . . . . 29,497,593 18,754,181 21,916,970 6,215,027 5,099,593 4,165,726
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . . . 7,477,359 5,377,678 2,555,654 125,377 (316,608) (136,401)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 50,180,004 24,886,516 (2,922,417) (432,666) 1,592,275 (1,537,488)
----------- ----------- ----------- ---------- ---------- -----------
Net realized and unrealized gain (loss) on
investments . . . . . . . . . . . . . . . . . . 57,657,363 30,264,194 (366,763) (307,289) 1,275,667 (1,673,889)
----------- ----------- ----------- ---------- ---------- -----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . $87,154,956 $49,018,375 $21,550,207 $5,907,738 $6,375,260 $ 2,491,837
=========== =========== =========== ========== ========== ===========
</TABLE>

<TABLE>
<CAPTION>
EMERGING GLOBAL
MARKETS EQUITY EQUITY
SUBACCOUNT INTERNATIONAL EQUITY INDEX SUBACCOUNT SUBACCOUNT
-------------- -------------------------------------- ------------
1998** 1998 1997 1996 1998**
-------------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I ......... $ 1 $6,864,977 $ 2,032,258 $ 460,651 $ 2
M Fund Inc. ............. -- -- -- -- --
--- ---------- ----------- ---------- ---
Total investment
income .................. 1 6,864,977 2,032,258 460,651 2
Expenses:
Mortality and expense
risks .................. 258,595 249,823 209,866 1
--- ---------- ----------- ---------- ---
Net investment income .... 1 6,606,382 1,782,435 250,785 1
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss) ................. (1) 1,270,070 958,182 156,348 --
Net unrealized
appreciation
(depreciation)
during the period ...... (4) 23,662 (4,981,747) 2,539,023 69
--- ---------- ----------- ---------- ---
Net realized and
unrealized gain
(loss) on investments
......................... (5) 1,293,732 (4,023,565) 2,695,371 69
--- ---------- ----------- ---------- ---
Net increase
(decrease) in net
assets resulting from
operations .............. $(4) $7,900,114 $(2,241,130) $2,946,156 $70
=== ========== =========== ========== ===
</TABLE>

- ---------
** From May 1, 1998 (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>
SMALL CAP GROWTH SUBACCOUNT INTERNATIONAL BALANCED SUBACCOUNT
--------------------------------- -------------------------------------------
1998 1997 1996* 1998 1997 1996*
----------- --------- ---------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . . . . $ -- $ 3,380 $ 1,404 $ 111,976 $ 62,258 $ 11,409
M Fund Inc. . . . . . . . . . . . . . . . . . -- -- -- -- -- --
---------- -------- --------- --------- -------------- ---------------
Total investment income . . . . . . . . . . . . -- 3,380 1,404 111,976 62,258 11,409
Expenses:
Mortality and expense risks . . . . . . . . . 57,076 33,986 6,704 8,831 6,972 1,311
---------- -------- --------- --------- -------------- ---------------
Net investment income (loss) . . . . . . . . . (57,076) (30,606) (5,300) 103,145 55,286 10,098
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . . . 157,975 116,210 (210,939) 20,527 29,092 1,642
Net unrealized appreciation (depreciation)
during the period . .. . . . . . . . . . . . 1,605,647 732,330 (86,846) 108,042 (68,785) 18,954
---------- -------- --------- --------- -------------- ---------------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . . . 1,763,622 848,540 (297,785) 128,569 (39,693) 20,596
---------- -------- --------- --------- -------------- ---------------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . $1,706,546 $817,934 $(303,085) $ 231,714 $ 15,593 $ 30,694
========== ======== ========= ========= ============== ===============
</TABLE>

<TABLE>
<CAPTION>
MID CAP GROWTH SUBACCOUNT LARGE CAP VALUE SUBACCOUNT
------------------------------ ------------------------------
1998 1997 1996* 1998 1997 1996*
---------- --------- ------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 993,504 $ -- $ 7,102 $ 560,242 $259,192 $ 36,343
M Fund Inc. . . . . -- -- -- -- -- --
---------- -------- ------- --------- -------- --------
Total investment
income . . . . . . . 993,504 7,102 560,242 259,192 36,343
Expenses:
Mortality and expense
risks . . . . . . . 42,815 20,278 4,054 54,311 23,604 3,072
---------- -------- ------- --------- -------- --------
Net investment income
(loss) . . . . . . . 950,689 (20,278) 3,048 505,931 235,588 33,271
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain . 338,131 64,078 168 364,328 147,209 3,072
Net unrealized
appreciation
(depreciation)
during the
period . . . . . . 1,477,149 567,677 38,250 (186,805) 547,716 87,225
---------- -------- ------- --------- -------- --------
Net realized and
unrealized gain on
investments. . . . . 1,815,280 631,755 38,418 177,523 694,925 90,297
---------- -------- ------- --------- -------- --------
Net increase in net
assets resulting from
operations . . . . . $2,765,969 $611,477 $41,466 $ 683,454 $930,513 $123,568
========== ======== ======= ========= ======== ========
</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>
MONEY MARKET SUBACCOUNT MID CAP VALUE SUBACCOUNT
------------------------------ ----------------------------------
1998 1997 1996 1998 1997 1996*
---------- -------- -------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $1,110,309 $895,867 $918,057 $ 142,246 $ 972,249 $ 28,018
M Fund Inc. . . . . -- -- -- -- --
---------- -------- -------- ----------- ---------- --------
Total investment
income . . . . . . . 1,110,309 895,867 918,057 142,246 972,249 28,018
Expenses:
Mortality and expense
risks . . . . . . . 125,891 101,168 105,920 95,456 36,967 2,232
---------- -------- -------- ----------- ---------- --------
Net investment income 984,418 794,699 812,137 46,790 935,282 25,786
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain. . -- -- -- 470,277 148,954 2,034
Net unrealized
appreciation
(depreciation)
during the
period . . . . . . -- -- -- (2,496,498) 58,693 102,527
---------- -------- -------- ----------- ---------- --------
Net realized and
unrealized gain
(loss) on investments -- -- -- (2,026,221) 207,647 104,561
---------- -------- -------- ----------- ---------- --------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ 984,418 $794,699 $812,137 $(1,979,431) $1,142,929 $130,347
========== ======== ======== =========== ========== ========
</TABLE>

<TABLE>
<CAPTION>
SMALL/MID CAP
DIVERSIFIED MID CAP BOND INDEX CORE
GROWTH SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------------ ---------- ---------------
1998 1997 1996 1998** 1998**
---------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 863,342 $ 5,058,010 $1,789,171 $ 62 $ --
M Fund Inc. . . . . -- -- -- -- --
---------- ----------- ---------- ---- ------
Total investment
income . . . . . . . 863,342 5,058,010 1,789,171 62
Expenses:
Mortality and expense
risks . . . . . . . 281,235 296,759 188,016 1 14
---------- ----------- ---------- ---- ------
Net investment income
(loss) . . . . . . . 582,107 4,761,251 1,601,155 61 (14)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain . 1,879,057 4,458,015 1,418,069 -- --
Net unrealized
appreciation
(depreciation)
during the period . 3,090 (7,254,086) 4,977,778 (88) 4,448
---------- ----------- ---------- ---- ------
Net realized and
unrealized gain
(loss) on investments 1,882,147 (2,796,071) 6,395,847 (88) 4,448
---------- ----------- ---------- ---- ------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $2,464,254 $ 1,965,180 $7,997,002 $(27) $4,434
========== =========== ========== ==== ======
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).
** From May 1, 1998 (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,

<CAPTION>
GROWTH & INCOME
SUBACCOUNT
--------------------------------------
1998 1997 1996
------------ ----------- -----------
<S> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . . . . $ 54,199,315 $52,442,930 $37,254,741
M Fund Inc. . . . . . . . . . . . . . . . . . -- -- --
------------ ----------- -----------
Total investment income . . . . . . . . . . . . 54,199,315 52,442,930 37,254,741
Expenses:
Mortality and expense risks . . . . . . . . . 2,856,645 2,178,739 1,542,729
------------ ----------- -----------
Net investment income . . . . . . . . . . . . . 51,342,670 50,264,191 35,712,012
Net realized and unrealized gain (loss) on
investments:
Net realized gain . . . . . . . . . . . . . . 12,465,262 7,351,086 3,938,033
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 60,549,503 32,872,184 6,429,197
------------ ----------- -----------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . . . 73,014,765 40,223,270 10,367,230
------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . $124,357,435 $90,487,461 $46,079,242
============ =========== ===========
</TABLE>

<TABLE>
<CAPTION>
MANAGED SHORT-TERM BOND
SUBACCOUNT SUBACCOUNT
-------------------------------------- --------------------------------
1998 1997 1996 1998 1997 1996
----------- ----------- ------------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $42,558,328 $34,981,042 $ 37,205,797 $ 318,055 $ 216,077 $140,926
M Fund Inc. . . . . -- -- -- -- -- --
----------- ----------- ------------ --------- --------- --------
Total investment
income . . . . . . . 42,558,328 34,981,042 37,205,797 318,055 216,077 140,926
Expenses:
Mortality and expense
risks . . . . . . . 2,438,618 2,035,959 1,678,618 27,623 17,975 12,366
----------- ----------- ------------ --------- --------- --------
Net investment income 40,119,710 32,945,083 35,527,179 290,432 198,102 128,560
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 5,216,094 3,754,808 3,555,551 13,933 (12,481) 20,920
Net unrealized
appreciation
(depreciation)
during the period . 28,230,322 19,460,056 (11,690,944) (45,745) 24,408 (69,771)
----------- ----------- ------------ --------- --------- --------
Net realized and
unrealized gain
(loss) on investments 33,446,416 23,214,864 (8,135,393) (31,8120) 11,927 (48,851)
----------- ----------- ------------ --------- --------- --------
Net increase in net
assets resulting from
operations . . . . . $73,566,126 $56,159,947 $ 27,391,786 $ 258,620 $ 210,029 $ 79,709
=========== =========== ============ ========= ========= ========
</TABLE>

See accompanying notes.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
SMALL CAP VALUE INTERNATIONAL OPPORTUNITIES
SUBACCOUNT SUBACCOUNT
------------------------------ --------------------------------
1998 1997 1996* 1998 1997 1996*
---------- --------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 54,320 $537,451 $32,693 $ 85,655 $ 85,488 $ 5,631
M Fund Inc. . . . . -- -- -- -- -- --
--------- -------- ------- ---------- --------- --------
Total investment
income . . . . . . . 54,320 537,451 32,693 85,655 85,488 5,631
Expenses:
Mortality and expense
risks . . . . . . . 51,961 21,374 2,395 64,058 27,161 3,818
--------- -------- ------- ---------- --------- --------
Net investment income 2,359 516,077 30,298 21,597 58,327 1,813
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 254,157 179,065 (1,418) 196,024 104,001 2,596
Net unrealized
appreciation
(depreciation)
during the period . (813,644) (60,841) 66,350 1,366,734 (279,934) 98,849
--------- -------- ------- ---------- --------- --------
Net realized and
unrealized gain
(loss) on investments (559,487) 118,224 64,932 1,562,758 (175,933) 101,445
--------- -------- ------- ---------- --------- --------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $(557,128) $634,301 $95,230 $1,584,355 $(117,606) $103,258
========= ======== ======= ========== ========= ========
</TABLE>

<TABLE>
<CAPTION>
EQUITY INDEX HIGH YIELD BOND STRATEGIC BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------- --------------- ---------------------------
1998 1997 1996* 1998** 1998 1997 1996*
---------- ---------- ------- --------------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . . $ 700,367 $ 289,092 $27,780 $12 $217,011 $155,751 $13,269
M Fund Inc. . . . . . . . . . . . . . . . -- -- -- -- -- -- --
---------- ---------- ------- --- -------- -------- -------
Total investment income . . . . . . . . . . 700,367 289,092 27,780 12 217,011 155,751 13,269
Expenses:
Mortality and expense risks . . . . . . . 108,231 33,761 2,194 1 23,315 10,483 675
---------- ---------- ------- --- -------- -------- -------
Net investment income . . . . . . . . . . . 592,136 255,331 25,586 11 193,696 145,268 12,594
Net realized and unrealized gain (loss) on
investments:
Net realized gain . . . . . . . . . . . . 997,526 72,875 4,690 -- 25,425 4,242 1,272
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . 2,882,597 973,872 58,797 (9) 91,397 7,679 (2,250)
---------- ---------- ------- --- -------- -------- -------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 3,880,123 1,046,747 63,487 (9) 116,822 11,921 (978)
---------- ---------- ------- --- -------- -------- -------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $4,472,259 $1,302,078 $89,073 $ 2 $310,518 $157,189 $11,616
========== ========== ======= === ======== ======== =======
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).
** From May 1, 1998 (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>
BRANDES FRONTIER
TURNER CORE GROWTH INTERNATIONAL EQUITY CAPITAL APPRECIATION
SUBACCOUNT SUBACCOUNT SUBACCOUNT
--------------------------- -------------------------- -----------------------------
1998 1997 1996* 1998 1997 1996* 1998 1997 1996*
-------- ------- --------- -------- --------- ----- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I . . . . . . . . . . . . . . $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
M Fund Inc. . . . . . . . . . . . . 48,858 22,593 91 76,526 11,174 362 14,932 59,777 --
-------- ------- -------- -------- -------- ---- -------- ------- ---------
Total investment income . . . . . . . 48,858 22,593 91 76,526 11,174 362 14,932 59,777 --
Expenses:
Mortality and expense risks . . . . 4,430 828 1,556 6,543 2,688 74 24,050 7,104 1,628
-------- ------- -------- -------- -------- ---- -------- ------- ---------
Net investment income (loss) . . . . 44,428 21,765 (1,465) 69,983 8,486 288 (9,118) 52,673 (1,628)
Net realized and unrealized gain
(loss) on investments:
Net realized gain (loss) . . . . . . 38,125 1,020 (75,788) 8,487 371 (30) 89,974 10,828 (130,154)
Net unrealized appreciation
(depreciation) during the period . 318,448 17,720 -- 101,256 (32,110) 220 524,011 28,386 1,432
-------- ------- -------- -------- -------- ---- -------- ------- ---------
Net realized and unrealized gain
(loss) on investments . . . . . . . 356,573 18,740 (75,788) 109,743 (31,739) 190 613,985 39,214 (128,722)
-------- ------- -------- -------- -------- ---- -------- ------- ---------
Net increase (decrease) in net assets
resulting from operations . . . . . $401,001 $40,505 $(77,253) $179,726 $(23,253) $478 $604,867 $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,

<TABLE>
<CAPTION>
LARGE CAP GROWTH SOVEREIGN BOND
SUBACCOUNT SUBACCOUNT
------------------------------------------ ------------------------------------------
1998 1997 1996 1998 1997 1996
------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . $ 29,497,593 $ 18,754,181 $ 21,916,970 $ 6,215,027 $ 5,099,593 $ 4,165,726
Net realized gains (losses) . . . . . 7,477,359 5,377,678 2,555,654 125,377 (316,608) (136,401)
Net unrealized appreciation
(depreciation) during the period . . 50,180,004 24,886,516 (2,922,417) (432,666) 1,592,275 (1,537,488)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations . . . . . . . . . . . 87,154,956 49,018,375 21,550,207 5,907,738 6,375,260 2,491,837
From policyholder transactions:
Net premiums from policyholders . . . 50,518,731 50,870,640 51,040,008 17,861,340 21,348,125 20,848,505
Net benefits to policyholders . . . . (40,022,049) (32,643,981) (33,079,850) (15,352,996) (14,778,316) (15,298,035)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from policyholder transactions . . . 10,496,682 18,226,659 17,960,158 2,508,344 6,569,809 5,550,470
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets . . . . . . 97,651,638 67,245,034 39,510,365 8,416,082 12,945,069 8,042,307
Net assets at beginning of period . . 220,404,877 153,159,843 113,649,478 77,364,479 64,419,410 56,377,103
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of period . . . . . $318,056,515 $220,404,877 $153,159,843 $ 85,780,561 $ 77,364,479 $ 64,419,410
============ ============ ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
EMERGING
MARKETS GLOBAL
EQUITY INTERNATIONAL EQUITY EQUITY
SUBACCOUNT INDEX SUBACCOUNT SUBACCOUNT
---------- ------------------------------------------ ------------
1998** 1998 1997 1996 1998**
---------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 1 $ 6,606,382 $ 1,782,435 $ 250,785 $ 1
Net realized gains
(losses). . . . . . (1) 1,270,070 958,182 156,348 --
Net unrealized
appreciation
(depreciation)
during the period . (4) 23,662 (4,981,747) 2,539,023 69
------ ------------ ------------ ------------ ------
Net increase
(decrease) in net
assets resulting from
operations . . . . . (4) 7,900,114 (2,241,130) 2,946,156 70
From policyholder
transactions:
Net premiums from
policyholders . . . 1,730 11,092,106 17,654,531 17,279,404 1,850
Net benefits to
policyholders . . . (37) (16,638,267) (12,889,618) (11,711,164) (35)
------ ------------ ------------ ------------ ------
Net increase
(decrease) in net
assets resulting from
policyholder
transactions . . . . 1,691 (5,546,159) 4,764,913 5,568,240 1,815
------ ------------ ------------ ------------ ------
Net increase in net
assets . . . . . . . 1,689 2,353,955 2,523,783 8,514,396 1,885
Net assets at
beginning of period 0 41,970,969 39,447,186 30,932,790 0
------ ------------ ------------ ------------ ------
Net assets at end of
period . . . . . . . $1,689 $ 44,324,924 $ 41,970,969 $ 39,447,186 $1,885
====== ============ ============ ============ ======
</TABLE>

- ---------
** From May 1, 1998 (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>
SMALL CAP INTERNATIONAL BALANCED
GROWTH SUBACCOUNT SUBACCOUNT
--------------------------------------- ----------------------------------------
1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . $ (57,076) $ (30,606) $ (5,300) $ 103,145 $ 55,286 $ 10,098
Net realized gains (losses) . . . . . . . 157,975 116,210 (210,939) 20,527 29,092 1,642
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . 1,605,647 732,330 (86,846) 108,042 (68,785) 18,954
----------- ----------- ----------- ----------- ----------- ------------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . 1,706,546 817,934 (303,085) 231,714 15,593 30,694
From policyholder transactions:
Net premiums from policyholders . . . . . 6,942,071 7,111,430 5,020,648 775,469 1,210,054 777,316
Net benefits to policyholders . . . . . . (3,551,395) (2,474,024) (1,784,150) (433,887) (811,533) (64,319)
----------- ----------- ----------- ----------- ----------- ------------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . 3,390,766 4,637,406 3,236,498 341,582 398,521 712,997
----------- ----------- ----------- ----------- ----------- ------------
Net increase in net assets . . . . . . . . 5,097,312 5,455,340 2,933,413 573,296 414,114 743,691
Net assets at beginning of period . . . . . 8,388,753 2,933,413 0 1,157,805 743,691 0
----------- ----------- ----------- ----------- ----------- ------------
Net assets at end of period . . . . . . . . $13,486,065 $ 8,388,753 $ 2,933,413 $ 1,731,101 $ 1,157,805 $ 743,691
=========== =========== =========== =========== =========== ============
</TABLE>

<TABLE>
<CAPTION>
MID CAP GROWTH LARGE CAP VALUE
SUBACCOUNT SUBACCOUNT
-------------------------------------- --------------------------------------
1998 1997 1996* 1998 1997 1996*
------------ ------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . $ 950,689 $ (20,278) $ 3,048 $ 505,931 $ 235,588 $ 33,271
Net realized gains . . . . . . . . . . . . . 338,131 64,078 168 364,328 147,209 3,072
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . 1,477,149 567,677 38,250 (186,805) 547,716 87,225
----------- ----------- ---------- ----------- ----------- ----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . 2,765,969 611,477 41,466 683,454 930,513 123,568
From policyholder transactions:
Net premiums from policyholders . . . . . . . 6,310,992 3,564,986 2,413,439 6,344,623 5,175,373 1,814,755
Net benefits to policyholders . . . . . . . . (2,644,280) (1,603,972) (240,434) (2,846,246) (1,416,071) (92,994)
----------- ----------- ---------- ----------- ----------- ----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 3,666,712 1,961,014 2,173,005 3,498,377 3,759,302 1,721,761
----------- ----------- ---------- ----------- ----------- ----------
Net increase in net assets . . . . . . . . . . 6,432,681 2,572,491 2,214,471 4,181,831 4,689,815 1,845,329
Net assets at beginning of period . . . . . . 4,786,962 2,214,471 0 6,535,144 1,845,329 0
----------- ----------- ---------- ----------- ----------- ----------
Net assets at end of period . . . . . . . . . $11,219,643 $ 4,786,962 $2,214,471 $10,716,975 $ 6,535,144 $1,845,329
=========== =========== ========== =========== =========== ==========
</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>
MONEY MARKET MID CAP VALUE
SUBACCOUNT SUBACCOUNT
------------------------------------------ --------------------------------------
1998 1997 1996 1998 1997 1996*
------------- ------------- ------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . . . $ 984,418 $ 794,699 $ 812,137 $ 46,790 $ 935,282 $ 25,786
Net realized gains . . . . . . . . . . . -- -- -- 470,277 148,954 2,034
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . -- -- -- (2,496,498) 58,693 102,527
------------ ------------ ------------ ----------- ----------- ----------
Net increase in net assets resulting from
operations. . . . . . . . . . . . . . . . 984,418 794,699 812,137 (1,979,431) 1,142,929 130,347
From policyholder transactions:
Net premiums from policyholders . . . . . 29,578,379 19,719,031 24,680,961 12,176,727 12,224,626 1,258,509
Net benefits to policyholders . . . . . . (26,039,389) (21,386,542) (27,801,448) (7,125,389) (1,523,046) (50,930)
------------ ------------ ------------ ----------- ----------- ----------
Net increase (decrease) in net assets
resulting from policyholder transactions 3,538,991 (1,667,511) (3,120,487) 5,051,338 10,701,580 1,207,579
------------ ------------ ------------ ----------- ----------- ----------
Net increase (decrease) in net assets . . 4,523,409 (872,812) (2,308,350) 3,071,907 11,844,509 1,337,926
Net assets at beginning of period . . . . 16,502,852 17,375,664 19,684,014 13,182,435 1,337,926 0
------------ ------------ ------------ ----------- ----------- ----------
Net assets at end of period . . . . . . . $ 21,026,261 $ 16,502,852 $ 17,375,664 $16,254,342 $13,182,435 $1,337,926
============ ============ ============ =========== =========== ==========
</TABLE>

<TABLE>
<CAPTION>
SMALL/MID CAP
DIVERSIFIED MID CAP GROWTH BOND INDEX CORE
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------------------ ---------- ---------------
1998 1997 1996 1998** 1998**
------------- ------------- ------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss). . . . . . . $ 582,107 $ 4,761,251 $ 1,601,155 $ 61 $ (14)
Net realized gains . 1,879,057 4,458,015 1,418,069 -- --
Net unrealized
appreciation
(depreciation)
during the
period . . . . . . 3,090 (7,254,086) 4,977,778 (88) 4,448
------------ ------------ ------------ ------ -------
Net increase
(decrease) in net
assets resulting from
operations . . . . . 2,464,254 1,965,180 7,997,002 (27) 4,434
From policyholder
transactions:
Net premiums from
policyholders . . . 15,336,392 26,820,224 30,839,359 4,217 51,606
Net benefits to
policyholders . . . (24,152,376) (23,391,073) (12,562,876) -- --
------------ ------------ ------------ ------ -------
Net increase
(decrease) in net
assets resulting from
policyholder
transactions . . . . (8,815,986) 3,429,151 18,276,483 4,217 51,606
------------ ------------ ------------ ------ -------
Net increase
(decrease) in net
assets . . . . . . . (6,351,732) 5,394,331 26,273,485 4,190 56,040
Net assets at
beginning of period 51,834,969 46,440,638 20,167,153 0 0
------------ ------------ ------------ ------ -------
Net assets at end of
period . . . . . . . $ 45,483,237 $ 51,834,969 $ 46,440,638 $4,190 $56,040
============ ============ ============ ====== =======
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).
** From May 1, 1998 (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>
REAL ESTATE EQUITY GROWTH & INCOME
SUBACCOUNT SUBACCOUNT
------------------------------------------ ------------------------------------------
1998 1997 1996 1998 1997 1996
------------- ------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . $ 2,061,547 $ 2,722,495 $ 1,465,662 $ 51,342,670 $ 50,264,191 $ 35,712,012
Net realized gains . . . . . . . . . 903,492 751,985 184,058 12,465,262 7,351,086 3,938,033
Net unrealized appreciation
(depreciation) during the period . . (10,193,226) 2,343,294 5,976,712 60,549,503 32,872,184 6,429,197
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations . . . . . . (7,228,187) 5,817,774 7,626,432 124,357,435 90,487,461 46,079,242
From policyholder transactions:
Net premiums from policyholders . . . 9,200,146 13,842,210 10,025,714 92,202,780 94,961,660 93,961,136
Net benefits to policyholders . . . . (10,281,699) (8,886,892) (8,112,734) (79,305,839) (70,387,297) (57,300,211)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder
transactions. . . . . . . . . . . . . (1,081,553) 4,955,318 1,912,980 12,896,941 24,574,363 36,660,925
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets (8,309,740) 10,773,092 9,539,412 137,254,376 115,061,824 82,740,167
Net assets at beginning of period . . 42,559,352 31,786,260 22,246,848 415,058,955 299,997,131 217,256,964
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of period . . . . . $ 34,249,612 $ 42,559,352 $ 31,786,260 $552,313,331 $415,058,955 $299,997,131
============ ============ ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
MANAGED SHORT-TERM BOND
SUBACCOUNT SUBACCOUNT
------------------------------------------ ---------------------------------------
1998 1997 1996 1998 1997 1996
------------- ------------- ------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . . $ 40,119,710 $ 32,945,083 $ 35,527,179 $ 290,432 $ 198,102 $ 128,560
Net realized gains (losses) . . . . . . 5,216,094 3,754,808 3,555,551 13,933 (12,481) 20,920
Net unrealized appreciation
(depreciation) during the period . . . 28,230,322 19,460,056 (11,690,944) (45,745) 24,408 (69,771)
------------ ------------ ------------ ----------- ----------- -----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . 73,566,126 56,159,947 27,391,786 258,620 210,029 79,709
From policyholder transactions:
Net premiums from policyholders . . . . 67,707,213 71,811,719 71,167,775 3,006,341 3,042,915 2,675,105
Net benefits to policyholders . . . . . (60,791,416) (61,937,355) (56,734,361) (1,696,858) (1,790,137) (2,206,096)
------------ ------------ ------------ ----------- ----------- -----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . 6,915,797 9,874,364 14,433,414 1,309,481 1,252,778 469,009
------------ ------------ ------------ ----------- ----------- -----------
Net increase in net assets . . . . . . . 80,481,923 66,034,311 41,825,200 1,568,101 1,462,806 548,718
Net assets at beginning of period . . . . 370,265,102 304,230,791 262,405,591 4,477,991 3,015,184 2,466,466
------------ ------------ ------------ ----------- ----------- -----------
Net assets at end of period . . . . . . . $450,747,025 $370,265,102 $304,230,791 $ 6,046,092 $ 4,477,991 $ 3,015,184
============ ============ ============ =========== =========== ===========
</TABLE>

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>
SMALL CAP VALUE INTERNATIONAL OPPORTUNITIES
SUBACCOUNT SUBACCOUNT
-------------------------------------- --------------------------------------
1998 1997 1996* 1998 1997 1996*
------------ ------------ ----------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . . . . . $ 2,359 $ 516,077 $ 30,298 $ 21,597 $ 58,327 $ 1,813
Net realized gains (losses) . . . . . . . . . 254,157 179,065 (1,418) 196,024 104,001 2,596
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . (813,644) (60,841) 66,350 1,366,734 (279,934) 98,849
----------- ----------- ---------- ----------- ----------- ----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . (557,128) 634,301 95,230 1,584,355 (117,606) 103,258
From policyholder transactions:
Net premiums from policyholders . . . . . . . 7,056,456 6,430,967 1,344,453 11,422,860 6,249,522 2,395,587
Net benefits to policyholders . . . . . . . . (3,706,669) (1,313,921) (109,889) (2,428,740) (1,882,431) (238,306)
----------- ----------- ---------- ----------- ----------- ----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 3,349,786 5,117,046 1,234,564 8,994,120 4,367,091 2,157,281
----------- ----------- ---------- ----------- ----------- ----------
Net increase in net assets . . . . . . . . . . 2,792,658 5,751,347 1,329,794 10,578,475 4,249,485 2,260,539
Net assets at beginning of period . . . . . . 7,081,141 1,329,794 0 6,510,024 2,260,539 0
----------- ----------- ---------- ----------- ----------- ----------
Net assets at end of period . . . . . . . . . $ 9,873,799 $ 7,081,141 $1,329,794 $17,088,499 $ 6,510,024 $2,260,539
=========== =========== ========== =========== =========== ==========
</TABLE>

<TABLE>
<CAPTION>
HIGH YIELD
EQUITY INDEX BOND
SUBACCOUNT SUBACCOUNT
-------------------------------------- ------------
1998 1997 1996* 1998**
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 592,136 $ 255,331 $ 25,586 $ 11
Net realized gains . . 997,526 72,875 4,690 --
Net unrealized
appreciation
(depreciation) during
the period . . . . . 2,882,597 973,872 58,797 (9)
----------- ----------- ---------- ------
Net increase in net
assets resulting from
operations . . . . . . 4,472,259 1,302,078 89,073 2
From policyholder
transactions:
Net premiums from
policyholders . . . . 18,349,859 9,373,895 1,242,668 1,791
Net benefits to
policyholders . . . . (6,452,625) (1,445,089) (132,549) (28)
----------- ----------- ---------- ------
Net increase in net
assets resulting from
policyholder
transactions . . . . . 11,897,234 7,928,806 1,110,119 1,763
----------- ----------- ---------- ------
Net increase in net
assets . . . . . . . . 16,369,493 9,230,884 1,199,192 1,765
Net assets at beginning
of period . . . . . . 10,430,076 1,199,192 0 0
----------- ----------- ---------- ------
Net assets at end of
period . . . . . . . . $26,799,569 $10,430,076 $1,199,192 $1,765
=========== =========== ========== ======
</TABLE>

- ---------
* From May 1, 1996 (commencement of operations).
** From May 1, 1998 (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>
STRATEGIC BOND TURNER CORE
SUBACCOUNT GROWTH SUBACCOUNT
---------------------------------- ---------------------------------------
1998 1997 1996* 1998 1997 1996*
----------- ----------- --------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss). . . . . . . $ 193,696 $ 145,268 $ 12,594 $ 44,428 $ 21,765 $ (1,465)
Net realized gains
(losses). . . . . . 25,425 4,242 1,272 38,125 1,020 (75,788)
Net unrealized
appreciation
(depreciation)
during the period . 91,397 7,679 (2,250) 318,448 17,720 --
---------- ---------- -------- ---------- ------------ -----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . 310,518 157,189 11,616 401,001 40,505 (77,253)
From policyholder
transactions:
Net premiums from
policyholders . . . 2,562,718 2,575,091 495,203 2,940,093 209,202 1,525,222
Net benefits to
policyholders . . . (892,634) (522,585) (88,706) (811,472) (7,612) (1,445,229)
---------- ---------- -------- ---------- ------------ -----------
Net increase in net
assets resulting from
policyholder
transactions . . . . 1,670,084 2,052,506 406,497 2,128,621 201,590 79,993
---------- ---------- -------- ---------- ------------ -----------
Net increase in net
assets . . . . . . . 1,980,602 2,209,695 418,113 2,529,622 242,095 2,740
Net assets at
beginning of period 2,627,808 418,113 0 244,835 2,740 0
---------- ---------- -------- ---------- ------------ -----------
Net assets at end of
period . . . . . . . $4,608,410 $2,627,808 $418,113 $2,774,457 $ 244,835 $ 2,740
========== ========== ======== ========== ============ ===========
</TABLE>

<TABLE>
<CAPTION>
BRANDES FRONTIER CAPITAL
INTERNATIONAL EQUITY APPRECIATION
SUBACCOUNT SUBACCOUNT
------------------------------- --------------------------------------
1998 1997 1996* 1998 1997 1996*
----------- --------- -------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss). . . . . . . $ 69,983 $ 8,486 $ 288 $ (9,118) $ 52,673 $ (1,628)
Net realized gains
(losses). . . . . . 8,487 371 (30) 89,974 10,828 (130,154)
Net unrealized
appreciation
(depreciation)
during the period . 101,256 (32,110) 220 524,011 28,386 1,432
---------- -------- ------- ----------- ---------- -----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . 179,726 (23,253) 478 604,867 91,887 (130,350)
From policyholder
transactions:
Net premiums from
policyholders . . . 457,393 764,978 64,120 5,165,104 2,429,648 1,568,562
Net benefits to
policyholders . . . (76,919) (10,047) (1,407) (1,076,779) (47,057) (1,376,088)
---------- -------- ------- ----------- ---------- -----------
Net increase in net
assets resulting from
policyholder
transactions . . . . 380,473 754,931 62,713 4,088,325 2,382,591 192,474
---------- -------- ------- ----------- ---------- -----------
Net increase in net
assets . . . . . . . 560,199 731,678 63,191 4,693,192 2,474,478 62,124
Net assets at
beginning of period 794,869 63,191 0 2,536,602 62,124 0
---------- -------- ------- ----------- ---------- -----------
Net assets at end of
period . . . . . . . $1,355,068 $794,869 $63,191 $ 7,229,794 $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, 1998

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-six 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-six Portfolios of the Fund and M Fund which are currently available are
the Large Cap Growth, Sovereign Bond, Emerging Markets Equity, International
Equity Index (formerly, International Equities), Global Equity, Small Cap
Growth, International Balanced, Mid Cap Growth, Large Cap Value, Money Market,
Mid Cap Value, Diversified Mid Cap Growth (formerly, Special Opportunities),
Bond Index, Small/Mid Cap CORE, Real Estate Equity, Growth & Income, Managed,
Short-Term Bond (formerly, Short-Term U.S. Government), Small Cap Value,
International Opportunities, Equity Index, High Yield Bond, Strategic Bond,
Turner Core Growth, Brandes International Equity (formerly, 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 underlying Portfolio shares are determined
on the basis of identified cost.

Federal Income Taxes

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

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Expenses

JHVLICO assumes mortality and expense risks of the variable life insurance
policies for which asset charges are deducted at an annual rate of .60% of net
assets 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.

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, 1998 were as follows:

<TABLE>
<CAPTION>
SUBACCOUNT SHARES OWNED COST VALUE
---------- ------------ ------------ --------------
<S> <C> <C> <C>
Large Cap Growth ............. 12,142,245 $235,402,483 $318,056,515
Sovereign Bond ............... 8,645,835 84,807,507 85,780,562
Emerging Markets Equity ...... 238 1,694 1,689
International Equity Index ... 2,848,543 45,974,251 44,324,924
Global Equity ................ 191 1,816 1,885
Small Cap Growth ............. 1,038,384 11,234,932 13,486,064
International Balanced ....... 155,612 1,672,887 1,731,100
Mid Cap Growth ............... 742,261 9,136,569 11,219,643
Large Cap Value .............. 764,391 10,268,840 10,716,976
Money Market ................. 2,102,626 21,026,261 21,026,260
Mid Cap Value ................ 1,334,115 18,589,620 16,254,342
Diversified Mid Cap Growth ... 2,853,472 45,109,983 45,483,238
Bond Index ................... 411 4,278 4,190
Small/Mid Cap CORE ........... 6,214 51,592 56,040
Real Estate Equity ........... 2,748,812 35,643,163 34,249,612
Growth & Income .............. 28,334,899 432,637,528 552,313,331
Managed ...................... 28,827,116 396,549,399 450,747,024
Short-Term Bond .............. 601,695 6,083,594 6,046,092
Small Cap Value .............. 852,010 10,681,936 9,873,899
International Opportunities .. 1,399,021 15,902,850 17,088,499
Equity Index ................. 1,513,867 22,884,303 26,799,569
High Yield Bond .............. 191 1,774 1,765
Strategic Bond ............... 434,780 4,511,586 4,608,410
Turner Core Growth ........... 155,520 2,438,293 2,774,457
Brandes International Equity . 125,006 1,285,922 1,355,068
Frontier Capital Appreciation 479,112 6,677,398 7,229,794
</TABLE>

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Purchases, including reinvestment of dividend distributions and proceeds from
sales of shares in the Portfolios of the Fund and of M Fund during 1998, were as
follows:

<TABLE>
<CAPTION>
SUBACCOUNT PURCHASES SALES
---------- ------------ -------------
<S> <C> <C>
Large Cap Growth . . . . . . . . . . $ 60,056,615 $20,062,340
Sovereign Bond . . . . . . . . . . . 17,193,357 8,469,956
Emerging Markets Equity . . . . . . 1,738 45
International Equity Index . . . . . 13,298,411 12,238,188
Global Equity . . . . . . . . . . . 1,830 14
Small Cap Growth . . . . . . . . . . 5,212,634 1,878,945
International Balanced . . . . . . . 891,556 446,831
Mid Cap Growth . . . . . . . . . . . 6,196,277 1,578,875
Large Cap Value . . . . . . . . . . 5,544,671 1,540,362
Money Market . . . . . . . . . . . . 24,150,417 19,627,008
Mid Cap Value . . . . . . . . . . . 10,174,189 5,076,062
Diversified Mid Cap Growth . . . . . 8,870,815 17,104,694
Bond Index . . . . . . . . . . . . . 4,279 1
Small/Mid Cap CORE . . . . . . . . . 51,605 13
Real Estate Equity . . . . . . . . . 6,973,005 5,993,011
Growth & Income . . . . . . . . . . 101,104,853 36,865,243
Managed . . . . . . . . . . . . . . 76,770,686 29,735,180
Short-Term Bond . . . . . . . . . . 3,072,537 1,472,622
Small Cap Value . . . . . . . . . . 5,794,840 2,442,693
International Opportunities . . . . 10,647,007 1,631,290
Equity Index . . . . . . . . . . . . 16,107,138 3,617,768
High Yield Bond . . . . . . . . . . 1,802 28
Strategic Bond . . . . . . . . . . . 2,667,370 803,590
Turner Core Growth . . . . . . . . . 3,052,385 879,335
Brandes International Equity . . . . 530,820 80,364
Frontier Capital Appreciation . . . 5,113,856 1,034,648
</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), is executing
its plan to address the impact of the Year 2000 issues that result from computer
programs being written using two digits to reflect the year rather than four to
define the applicable year and century. Historically, the first two digits were
hardcoded to save memory. Many of the John Hancock's computer programs that have
date-sensitive software may recognize a date using ''00'' as the year 1900
rather than the year 2000. This could result in an information technology (IT)
system failure or miscalculations causing disruptions of operations, including,
among other things, a temporary inability to process transactions, send invoices
or engage in similar normal business activities. In addition, non-IT systems
including, but not limited to, security alarms, elevators and telephones are
subject to malfunction due to their dependence on embedded technology such as
microcontrollers for proper operation. As described, the Year 2000 project
presents a number of challenges for financial institutions since the correction
of Year 2000 issues in IT and non-IT systems will be complex and costly for the
entire industry.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The continuous awareness campaign serves several purposes: defining the
problem, gaining executive level support and sponsorship, establishing a team
and overall strategy, and assessing existing information system management
resources. Additionally, the awareness campaign establishes an education process
to ensure that all employees are aware of the Year 2000 issue and knowledgeable
of their role in securing solutions.

The renovation stage reflects the conversion, validation, replacement, or
elimination of selected platforms, applications, databases and utilities,
including the modification of applicable interfaces. Additionally, the
renovation stage includes performance, functionality, and regression testing and
implementation. As of December 31, 1998, the renovation phase was substantially
complete for computer applications, systems and desktops. For all remaining
components the renovation phase is underway and will be complete before the end
of the second quarter of 1999.

The validation phase consists of the compliance testing of renovated systems.
The validation phase is expected to be complete by mid 1999, after renovation is
accomplished. John Hancock will use its testing facilities through the remainder
of 1999 to perform special functional testing. Special functional testing
includes testing, as required, with material third parties and industry groups
and to perform reviews of "dry run" of year-end activities. Scheduled testing of
John Hancock's material relationships with third parties is underway. It is
anticipated that testing with material business partners will continue through
much of 1999.

Finally, the implementation phase involves the actual implementation of
converted or replaced platforms, applications, databases, utilities, interfaces,
and contingency planning. John Hancock is concurrently performing implementation
during the renovation phase and plans to complete this phase before the end of
the second quarter of 1999.

The costs of the Year 2000 project consist of internal IT personnel, and
external costs such as consultants, programmers, replacement software, and
hardware. The costs of the Year 2000 project are expensed as incurred. The
project is funded partially through a reallocation of resources from
discretionary projects. Through December 31, 1998, John Hancock has incurred and
expensed approximately $9.8 million in related payroll costs for its internal IT
personnel on the project. The estimated range of remaining internal IT personnel
costs of the project is approximately $8 to $9 million. Through December 31,
1998, John Hancock has incurred and expensed approximately $36.4 million in
external costs for the project. The estimated range of remaining external costs
of the project is approximately $35 to $36 million. The total costs of the Year
2000 project, based on management's best estimates, include approximately $18
million in internal IT personnel, $7.4 million in the external modification of
software, $34.2 million for external solution providers, $19.4 million in
replacement costs of non-compliant IT systems and $12.6 million in oversight,
test facilities and other expenses. Accordingly, the estimated range of total
costs of the Year 2000 project, internal and external, is approximately $90 to
$95 million. However, there can be no guarantee that these estimates will be
achieved and actual results could materially differ from those plans. Specific
factors that might cause such material differences include, but are not limited
to, the availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes, and similar uncertainties.

<PAGE>

JOHN HANCOCK VARIABLE LIFE ACCOUNT V

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

John Hancock's total Year 2000 project costs include the estimated impact of
external solution providers and are based on presently available information.
However, there is no guarantee that the systems of other companies that John
Hancock's systems rely on will be timely converted, or that a failure to convert
by another company, or a conversion that is incompatible with John Hancock's
systems, would not have material adverse effect on John Hancock. It is
documented in trade publications that companies in foreign countries are not
acting as intensively as domestic companies to remediate Year 2000 issues.
Accordingly, it is expected that Company facilities based outside the United
States face higher degrees of risks from data exchanges with material business
partners. In addition, John Hancock has thousands of individual and business
customers that hold insurance policies, annuities and other financial products
of John Hancock. Nearly all products sold by John Hancock contain date sensitive
data, examples of which are policy expiration dates, birth dates, premium
payment dates. Finally, the regulated nature of John Hancock's industry exposes
it to potential supervisory or enforcement actions relating to Year 2000 issues.

John Hancock's contingency planning initiative related to the Year 2000
project is underway. The plan is addressing John Hancock's readiness as well as
that of material business partners on whom John Hancock depends. John Hancock's
contingency plans are being designed to keep each business unit's operations
functioning in the event of a failure or delay due to the Year 2000 record
format and date calculation changes. Contingency plans are being constructed
based on the foundation of extensive business resumption plans that John Hancock
has maintained and updated periodically, which outline responses to situations
that may affect critical business functions. These plans also provide emergency
operations guidance, which defines a documented order of actions to respond to
problems. These extensive business resumption plans are being enhanced to cover
Year 2000 situations.

<PAGE>

ALPHABETICAL INDEX OF KEY WORDS AND PHRASES

This index should help you locate more information about many of the important
concepts in this prospectus.

<TABLE>
<CAPTION>
KEY WORD OR PHRASE PAGE KEY WORD OR PHRASE PAGE
<S> <C> <C> <C>
Account ................. 29 monthly deduction date ................ 31
account value ........... 9 mortality and expense risk charge ..... 11
attained age ............ 10 Option 1; Option 2; Option 3 .......... 16
base policy premium ..... 7 optional benefits ..................... 11
basic account value ..... 33 owner ................................. 4
beneficiary ............. 39 partial surrender ..................... 17
business day ............ 20 partial withdrawal .................... 15
changing Option 1 or 2 .. 17 partial withdrawal charge ............. 12
charges ................. 10 payment options ....................... 18
Code .................... 35 policy anniversary .................... 30
cost of insurance rates . 10 policy year ........................... 30
date of issue ........... 30 premium; premium payment .............. 4
death benefit ........... 4 premium recalculation ................. 8
deductions .............. 10 prospectus ............................ 2
dollar cost averaging ... 14 receiver receipt ...................... 20
Excess Value ............ 6 reinstate; reinstatement .............. 7
expenses of the Trust ... 12 Required Premium ...................... 5
fixed investment option . 30 SEC ................................... 2
full surrender .......... 15 Separate Account V .................... 29
fund .................... 2 Servicing Office ...................... 1
grace period ............ 6 special loan account .................. 15
Guaranteed Death subaccount ............................ 29
Benefit ................ 16 Sum Insured ........................... 16
guaranteed maximum surrender ............................. 15
recalculation premium .. 8 surrender charge ...................... 15
insurance charge ........ 10 surrender value ....................... 15
insured person .......... 4 tax considerations .................... 35
investment options ...... 1 telephone transfers ................... 20
JHVLICO ................. 29 transfers of account value ............ 14
John Hancock Variable variable investment options ........... 1
Series Trust ........... 2 we; us ................................ 29
lapse ................... 6 withdrawal ............................ 15
loan .................... 15 withdrawal charges .................... 12
loan interest ........... 15 you; your ............................. 4
maximum premiums ........ 5
minimum insurance
amount ................. 16
minimum premiums ........ 5
modified endowment
contract ............... 36
</TABLE>

80
<PAGE>

[LOGO] JOHN HANCOCK(R)

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

S8144-FI 5/99
<PAGE>

PROSPECTUS DATED MAY 3, 1999

FLEXV2

a scheduled premium variable life insurance policy
issued by

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY ("JHVLICO")

JHVLICO LIFE SERVICING OFFICE
-----------------------------

EXPRESS DELIVERY U.S. MAIL
---------------- ---------
529 Main Street (X-4) P.O. Box 111
Charlestown, MA 02129 Boston, MA 02117

PHONE: 1-800-732-5543 / FAX: 1-617-886-3048

The policy provides an investment option with fixed rates of return declared
by JHVLICO and the following 27 variable investment options:

<TABLE>
<CAPTION>
VARIABLE INVESTMENT OPTION MANAGED BY
-------------------------- ----------
<S> <C>
Managed................................................ Independence Investment Associates, Inc.
Growth & Income........................................ Independence Investment Associates, Inc.
Equity Index ........................................... State Street Global Advisors
Large Cap Value........................................ T. Rowe Price Associates, Inc.
Large Cap Growth ....................................... Independence Investment Associates, Inc.
Mid Cap Value........................................... Neuberger Berman, LLC
Mid Cap Growth ........................................ Janus Capital Corporation
Real Estate Equity .................................... Independence Investment Associates, Inc.
Small/Mid Cap Growth.................................... Wellington Management Company, LLP
Small/Mid Cap CORE .................................... Goldman Sachs Asset Management
Small Cap Value........................................ INVESCO Management & Research, Inc.
Small Cap Growth ....................................... John Hancock Advisers, Inc.
Global Equity........................................... Scudder Kemper Investments, Inc.
International Balanced ................................ Brinson Partners, Inc.
International Equity Index ............................ Independence International Associates, Inc.
International Opportunities............................ Rowe Price-Fleming International, Inc.
Emerging Markets Equity................................ Montgomery Asset Management, LLC
Short-Term Bond........................................ Independence Investment Associates, Inc.
Bond Index ............................................ Mellon Bond Associates, LLP
Sovereign Bond ........................................ John Hancock Advisers, Inc.
Global Bond............................................ J.P. Morgan Investment Management, Inc.
High Yield Bond........................................ Wellington Management Company, LLP
Money Market............................................ John Hancock Mutual Life Insurance Company
Brandes International Equity............................ Brandes Investment Partners, L.P.
Turner Core Growth..................................... Turner Investment Partners, Inc.
Frontier Capital Appreciation........................... Frontier Capital management Company, Inc.
Enhanced U.S. Equity.................................... Franklin Portfolio Associates, LLC
</TABLE>

We may add or delete variable investment options in the future.
<PAGE>

When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of the John Hancock
Variable Series Trust I (the "Trust") or of M Fund, Inc. (together, the Trust
and M Fund, Inc. are referred to as the "Series Funds"). The Series Funds are
mutual funds that offer a number of different investment options (which are
called "funds"). The investment results of each variable investment option you
select will depend on those of the corresponding fund of one of the Series
Funds. Attached to this prospectus are prospectuses for the Series Funds that
contain detailed information about each fund offered under the policy. Be sure
to read the prospectuses for the Series Funds before selecting any of the
variable investment options shown on page 1.

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
policy or exercise any of your rights under the policy. However, please keep in
mind that this is a prospectus - - it is not the policy. The prospectus
---
simplifies many policy provisions to better communicate the policy's essential
features. Your rights and obligations under the policy will be determined by the
language of the policy itself. When you receive your policy, read it carefully.

This prospectus is arranged in the following way:

. The section which follows is called "Basic Information". It is in a
question and answer format. We suggest you read the Basic Information
section before reading any other section of the prospectus.

. Behind the Basic Information section are illustrations of hypothetical
policy benefits that help clarify how the policy works. These start on
page 22.

. Behind the illustrations is a section called "Additional Information"
that gives more details about the policy. It generally does not
---
repeat information that is in the Basic Information section. A table
of contents for the Additional Information section appears on page 29.

. Behind the Additional Information section are the financial statements
for JHVLICO and Separate Account V. These start on page 43.

. Finally, there is an Alphabetical Index of Key Words and Phrases at the
back of the prospectus on page 81.

After the Alphabetical Index of Key Words and Phrases, this prospectus ends and
the prospectuses for the Series Funds begin.

2
<PAGE>

BASIC INFORMATION

This part of the prospectus provides answers to commonly asked questions about
the policy. Here are the page numbers where the questions and answers appear:

<TABLE>
<CAPTION>
Question Pages to See
- -------- ------------
<S> <C>
.What is the policy? .................................................... 4
.Who owns the policy? ................................................... 4
.How can I invest money in the policy? .................................. 4-5
.Is there a minimum amount I must invest? ............................... 5-9
.How will the value of my investment in the policy change over time? .... 9-10
.What charges will JHVLICO deduct from my investment in the policy? ..... 10-12
.What charges will the Series Funds deduct from my investment in the
policy? ................................................................. 12-13
.What other charges could JHVLICO impose in the future? ................. 14
.How can I change my policy's investment allocations? ................... 14-15
.How can I access my investment in the policy? .......................... 15-16
.How much will JHVLICO pay when the insured person dies? ................ 16-17
.How can I change my policy's insurance coverage? ....................... 17
.Can I cancel my policy after it's issued? .............................. 17-18
.Can I choose the form in which JHVLICO pays out policy proceeds? ....... 18-19
.To what extent can JHVLICO vary the terms and conditions of
its policies in particular cases? ...................................... 19
.How will my policy be treated for income tax purposes? ................. 19
.How do I communicate with JHVLICO? ..................................... 20-21
</TABLE>

3
<PAGE>

WHAT IS THE POLICY?

While the insured person is alive, you will have a number of options under the
policy. Here are some major ones:

. Determine when and how much you invest in the various investment options

. Borrow amounts you have in the investment options

. Withdraw any amount we consider to be "Excess Value" in your policy

. Change the beneficiary who will receive the death benefit

. Turn in (i.e., "surrender") the policy for the full amount of its
surrender value

. Reduce the amount of insurance by surrendering part of the policy

. Choose the form in which we will pay out the death benefit or other
proceeds

Most of these options are subject to limits that are explained later in this
prospectus.

WHO OWNS THE POLICY?

HOW CAN I INVEST MONEY IN THE POLICY?

Premium Payments

4
<PAGE>

Maximum premium payments

Also, we may refuse to accept any amount of an additional premium if:

. that amount of premium would increase our insurance risk exposure, and
the insured person doesn't provide us with adequate evidence that he or
she continues to meet our requirements for issuing insurance, or

. that amount of premium would cause the cumulative premiums you have paid
to date to exceed the cumulative scheduled premiums due to date under the
policy.

In no event, however, will we refuse to accept any premium necessary to prevent
the policy from terminating.

Ways to pay premiums

We will also accept premiums:

. by wire or by exchange from another insurance company,

. via an electronic funds transfer program (any owner interested in making
monthly premium payments must use this method), or
-------

. if we agree to it, through a salary deduction plan with your employer.

You can obtain information on these other methods of premium payment by
contacting your JHVLICO representative or by contacting the JHVLICO Life
Servicing Office.

IS THERE A MINIMUM AMOUNT I MUST INVEST?

Required Premiums

The Policy Specifications page of your policy will show the "Required Premium"
for the policy. In the policy application, you will choose one of the following
"modes" of premium

5
<PAGE>

payment -- annual, semi-annual, quarterly or monthly. We make no additional
charge for any of these choices of payment mode. You can request that we change
your payment mode at any time.

Excess Value and its components

The policy statements that we send you (see "Reports that you will receive" on
page 38) will specify the amount of any Excess Value at the end of the reporting
period. If you wish this information at any other time, you may contact your
JHVLICO representative or telephone us at 1-800-732-5543.

Lapse

6
<PAGE>

Options on Lapse

Reinstatement

Amount of Required Premiums

7
<PAGE>

Premium recalculation

As an example, consider the policy illustrated on page 23 of this prospectus
(Death Benefit Option 1 in the amount of $100,000, assuming current charge
rates, for a male standard risk non-smoker age 35 at issue). If no premium
recalculation is made at policy issuance, the base policy premium for the policy
would be $900 until such time as the premium recalculation is made. Assuming
that amount of premium is paid annually until the premium recalculation, and
assuming constant gross annual investment returns at the rates set forth below,
the following table illustrates what the base policy premium would be following
a recalculation on the dates shown.

8
<PAGE>

<TABLE>
<CAPTION>
Base Policy Premium Following
Recalculation Assuming Hypothetical Gross
Annual Rate of Return of:
Policy Anniversary of ------------------------------------------
Premium Recalculation 0% 6% 12%
- --------------------- ------------- ------------- ---------------
<S> <C> <C> <C>
0 (Issue Date)................ $1,414.00 $1,414.00 $1,414.00
5 ............................ $1,607.99 $1,581.92 $1,551.41
10 ............................ $1,900.30 $1,791.31 $1,635.15
15 ............................ $2,334.72 $2,058.15 $1,566.76
20 ............................ $3,008.11 $2,433.77 $1,151.92
25 ............................ $4,077.27 $2,998.48 $ 0.00
30 ............................ $5,845.15 $3,914.46 $ 0.00
35*............................ $8,404.00 $5,561.76 $ 0.00
</TABLE>

* Mandatory premium recalculation if you do not choose earlier date.

The amount of any account value that is considered Excess Value under your
policy may increase or decrease as a result of a premium recalculation. See
"Excess Value and its components" above.

HOW WILL THE VALUE OF MY INVESTMENT IN THE POLICY CHANGE OVER TIME?

From each premium payment you make, we deduct the charges described under
"Deductions from premium payments" below. We invest the rest in the investment
options you've elected.

Over time, the amount you've invested in any variable investment option will
--------
increase or decrease the same as if you had invested the same amount directly in
the corresponding fund of one of the Series Funds and had reinvested all fund
dividends and distributions in additional fund shares; except that we will
deduct certain additional charges which will reduce your account value. We
describe these charges under "What charges will JHVLICO deduct from my
investment in the policy?" below.

The amount you've invested in the fixed investment option will earn interest
-----

at a rate we declare from time to time. We guarantee that this rate will be at
least 4%. If you want to know what the current declared rate is, just call or
write to us. The current declared rate will also appear in the annual statement
we will send you. Amounts you invest in the fixed investment option will not be
---
subject to the mortality and expense risk charge or the guaranteed death benefit
charge described on page 8. Otherwise, the charges applicable to the fixed
investment option are the same as those applicable to the variable investment
options.

At any time, the "account value" of your policy is equal to:

. the amount you invested,

9
<PAGE>

. plus or minus the investment experience of the investment options you've
chosen,

. minus all charges we deduct, and

. minus all withdrawals you have made.

If you take a loan on the policy, however, your account value will be computed
somewhat differently. This is discussed beginning on page 15.

WHAT CHARGES WILL JHVLICO DEDUCT FROM MY INVESTMENT IN THE POLICY?

Deductions from premium payments

. Premium tax charge - A charge to cover state premium taxes we currently
------------------
expect to pay, on average. This charge is currently 2.35% of each premium.

Deductions from account value

. Issue charge - A monthly charge to help defray our administrative costs.
------------
This is a flat dollar charge of $20 and is deducted only during the first
policy year.

. Maintenance charge - A monthly charge to help defray our administrative
------------------
costs. This is a flat dollar charge of up to $8 (currently $6).

. Insurance charge - A monthly charge for the cost of insurance. To
----------------
determine the charge, we multiply the amount of insurance for which we are at
risk by a cost of insurance rate. The rate is derived from an actuarial table.
The table in your policy will show the maximum cost of insurance
-------
rates. The cost of insurance rates that we currently apply are generally less
than the maximum rates. We will review the cost of insurance rates at least
every 5 years and may change them from time to time. However, those rates will
never be more than rates based on the 1980 Commissioners' Standard Ordinary
Mortality Tables. The table of rates we use will depend on the insurance risk
characteristics and (usually) gender of the insured person, the Guaranteed
Death Benefit and the length of time the policy has been in effect. Regardless
of the table used, cost of insurance rates generally increase each year that
you own your policy, as the insured person's attained age increases. (The
insured person's "attained age" on any date is his or her age on the birthday
nearest that date.)

10
<PAGE>

11
<PAGE>

. Contingent deferred sales charge ("CDSC") - A charge we deduct if the
-----------------------------------------
policy lapses or is surrendered within the first thirteen policy years. We
deduct this charge to compensate us for sales expenses that we would otherwise
not recover in the event of early lapse or surrender. The CDSC is a percentage
of the lesser of (a) the total amount of premiums you have actually paid
before the date of surrender or lapse and (b) the sum of the base policy
premiums due (whether or not actually paid) on or before the date of surrender
or lapse. (For this purpose base policy premiums are pro-rated through the end
of the policy month in which the surrender or lapse occurs).

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

. Partial withdrawal charge - A charge of $20 for each partial withdrawal
-------------------------
of Excess Value to compensate us for the administrative expenses of processing
the withdrawal.

WHAT CHARGES WILL THE SERIES FUNDS DEDUCT FROM MY INVESTMENT IN THE POLICY?

The Series Funds must pay investment management fees and other operating
expenses. These fees and expenses are different for each fund of the Series
Funds and reduce the investment return of each fund. Therefore, they also
indirectly reduce the return you will earn on any variable investment options
you select.

The figures in the following chart for the funds of the Trust are expressed as
percentages of each fund's average daily net assets for 1998 (rounded to two
decimal places). The percentages

12
<PAGE>

reflect the investment management fees that were payable for1998 and the 1998
other operating expenses that would have been allocated to the funds under the
allocation rules currently in effect.

<TABLE>
<CAPTION>
Other Total Fund Other Operating
Investment Operating Operating Expenses
Fund Name Management Fee Expenses Expenses Absent Reimbursement*
- --------- -------------- --------- ---------- -----------------------
<S> <C> <C> <C> <C>
Managed............... 0.32% 0.05% 0.37% 0.05%
Growth & Income....... 0.25% 0.05% 0.30% 0.05%
Equity Index......... 0.14% 0.08% 0.22% 0.08%
Large Cap Value....... 0.74% 0.07% 0.81% 0.07%
Large Cap Growth..... 0.37% 0.05% 0.42% 0.05%
Mid Cap Value........ 0.80% 0.05% 0.85% 0.05%
Mid Cap Growth........ 0.85% 0.08% 0.93% 0.08%
Real Estate Equity.... 0.60% 0.05% 0.65% 0.05%
Small/Mid Cap Growth** 0.75% 0.05% 0.80% 0.05%
Small/Mid Cap CORE.... 0.80% 0.10% 0.90% 0.23%
Small Cap Value....... 0.80% 0.07% 0.87% 0.07%
Small Cap Growth..... 0.75% 0.08% 0.83% 0.08%
Global Equity........ 0.90% 0.10% 1.00% 0.50%
International Balanced 0.85% 0.10% 0.95% 0.64%
International Equity
Index................ 0.17% 0.10% 0.27% 0.23%
International
Opportunities........ 0.87% 0.10% 0.97% 0.32%
Emerging Markets
Equity............... 1.30% 0.10% 1.40% 0.68%
Short-Term Bond....... 0.30% 0.05% 0.35% 0.05%
Bond Index............ 0.15% 0.05% 0.20% 0.05%
Sovereign Bond........ 0.25% 0.05% 0.30% 0.05%
Global Bond**........ 0.69% 0.06% 0.75% 0.06%
High Yield Bond....... 0.65% 0.07% 0.72% 0.07%
Money Market......... 0.25% 0.05% 0.30% 0.05%
</TABLE>

* John Hancock reimburses a fund when the fund's other operating expenses exceed
0.10% of the fund's average daily net assets.
** Small/Mid Cap Growth was formerly "Diversified Mid Cap Growth" and Global
Bond was formerly "Strategic Bond."

The figures in the following chart for the funds of M Fund, Inc. are expressed
as percentages of each fund's average daily net assets for 1998 (rounded to two
decimal places). The percentages reflect the investment management fees
currently payable and the 1998 other operating expenses allocated to M Fund,
Inc.

<TABLE>
<CAPTION>
Other Operating
Other Total Fund Expenses
Investment Operating Operating Absent
Fund Name Management Fee Expenses Expenses Reimbursement*
- --------- -------------- --------- ---------- -----------------
<S> <C> <C> <C> <C>
Brandes International Equity** .............. 1.02% 0.25% 1.27% 2.52%
Turner Core Growth .......................... 0.45% 0.25% 0.70% 2.97%
Frontier Capital Appreciation................ 0.90% 0.25% 1.15% 0.85%
Enhanced U.S. Equity......................... 0.55% 0.25% 0.80% 1.79%
</TABLE>

* M Financial Investment Advisers, Inc. reimburses a fund when the fund's other
operating expenses exceed 0.25% of the fund's average daily net assets.
** Brandes International Equity was formerly "Edinburgh Overseas Equity."

13
<PAGE>

WHAT OTHER CHARGES COULD JHVLICO IMPOSE IN THE FUTURE?

HOW CAN I CHANGE MY POLICY'S INVESTMENT ALLOCATIONS?

Future premium payments

Transfers of existing account value

. You can only make such a transfer once a year and only during the 31 day
period following your policy anniversary.

. We must receive the request for such a transfer during the period beginning 60
days prior to the policy anniversary and ending 30 days after it.

. The most you can transfer at any one time is the greater of $500 or 20% of the
assets in your fixed investment option.

We reserve the right to impose a minimum amount limit on transfers out of the
fixed investment option.

Limitation on number of investment options

Whether through the allocation of premium or through the transfer of existing
account value, you can never be invested in more than ten investment options at
any one time.

14
<PAGE>

Dollar cost averaging

HOW CAN I ACCESS MY INVESTMENT IN THE POLICY?

Full surrender

Partial withdrawals of Excess Value

Policy loans

. In policy years 2 and 3 - - 75% of that portion of your surrender value
that is attributable to the variable investment options

. In all later policy years - - 90% of that portion of your surrender value
that is attributable to the variable investment options

15
<PAGE>

will earn interest at an effective annual rate of 4.0% for the first 20 policy
years and 4.5% thereafter. However, if we determine that a loan will be treated
as a taxable distribution because of the differential between the loan interest
rate and the rate being credited on the special loan account, we reserve the
right to decrease the rate credited on the special loan account to a rate that
would, in our reasonable judgement, result in the transaction being treated as a
loan under Federal tax law.

You can repay all or part of a loan at any time. Each repayment will be
allocated among the investment options as follows:

. The same proportionate part of the loan as was borrowed from the fixed
investment option will be repaid to the fixed investment option.

. The remainder of the repayment will be allocated among the investment
options in the same way a new premium payment would be allocated.

If you want a payment to be used as a loan repayment, you must include
instructions to that effect. Otherwise, all payments will be assumed to be
premium payments.

HOW MUCH WILL JHVLICO PAY WHEN THE INSURED PERSON DIES?

. Option 3 - The death benefit will equal the greater of (1) the Guaranteed
Death Benefit or (2) the minimum insurance amount under the "cash value
accumulation test" (as described below).

16
<PAGE>

The minimum insurance amount

In order for a policy to qualify as life insurance under Federal tax law,
there has to be a minimum amount of insurance in relation to account value.
There are two tests that can be applied under Federal tax law. Death benefit
Options 1 and 2 use the "guideline premium and cash value corridor test" while
Option 3 uses the "cash value accumulation test." For Options 1 and 2, we
compute the minimum insurance amount each business day by multiplying the
account value on that date by the so-called "corridor factor" applicable on that
date. The corridor factors are derived by applying the "guideline premium and
cash value corridor test." The corridor factor starts out at 2.50 for ages at or
below 40 and decreases as attained age increases, reaching a low of 1.0 at age
95. A table showing the factor for each age will appear in the policy. For
Option 3, we compute the minimum insurance amount each business day by
multiplying the account value on that date by the so-called "death benefit
factor" applicable on that date. The death benefit factors are derived by
applying the "cash value accumulation test." The death benefit factor decreases
as attained age increases. A table showing the factor for each age will appear
in the policy.

HOW CAN I CHANGE MY POLICY'S INSURANCE COVERAGE?

Change of death benefit option

Partial surrenders

Tax consequences

Please read "Tax considerations" starting on page 36 to learn about possible
tax consequences of changing your insurance coverage under the policy.

CAN I CANCEL MY POLICY AFTER IT'S ISSUED?

You have the right to cancel your policy within the latest of the following
periods:

. 10 days after you receive it (this period may be longer in some states);

17
<PAGE>

. 10 days after mailing by JHVLICO of the Notice of Withdrawal Right; or

. 45 days after the date Part A of the application has been completed.

In most states, you will receive a refund of any premiums you've paid. In some
states, the refund will be your account value on the date of cancellation plus
all charges deducted by JHVLICO or the Series Funds prior to that date. The date
of cancellation will be the date of such mailing or delivery.

CAN I CHOOSE THE FORM IN WHICH JHVLICO PAYS OUT POLICY PROCEEDS?

Choosing a payment option

. Option 1 - Proceeds left with us to accumulate with interest

. Option 2A - Equal monthly payments of a specified amount until all
proceeds are paid out

. Option 2B - Equal monthly payments for a specified period of time

. Option 3 - Equal monthly payments for life, but with payments guaranteed
for a specific number of years

. Option 4 - Equal monthly payments for life with no refund

. Option 5 - Equal monthly payments for life with a refund if all of the
proceeds haven't been paid out

18
<PAGE>

Changing a payment option

You can change the payment option at any time before the proceeds are payable.
If you haven't made a choice, the payee of the proceeds has a prescribed period
in which he or she can make that choice.

Tax impact

There may be tax consequences to you or your beneficiary depending upon which
payment option is chosen. You should consult with a qualified tax adviser before
making that choice.

TO WHAT EXTENT CAN JHVLICO VARY THE TERMS AND CONDITIONS OF ITS POLICIES IN
PARTICULAR CASES?

Listed below are some variations we can make in the terms of our policies. Any
variation will be made only in accordance with uniform rules that we apply
fairly to all of our customers.

State law insurance requirements

Variations in expenses or risks

We may vary the charges and other terms of our policies where special
circumstances result in sales or administrative expenses, mortality risks or
other risks that are different from those normally associated with the policies.
These include the type of variations discussed under "Reduced charges for
eligible classes" on page 35. No variation in any charge will exceed any maximum
stated in this prospectus with respect to that charge.

HOW WILL MY POLICY BE TREATED FOR INCOME TAX PURPOSES?

For further information about the tax consequences of owning a policy, please
read "Tax considerations" beginning of page 36.

19
<PAGE>

HOW DO I COMMUNICATE WITH JHVLICO?

General Rules

You should mail or express all checks and money orders for premium payments
and loan repayments to the JHVLICO Life Servicing Office at the appropriate
address shown on page 1.

Certain requests must be made in writing and be signed and dated by you,
except as discussed below under "Telephone Transactions.". They include the
following:

. loans, surrenders (including partial surrenders) or partial withdrawals

. transfers of account value among investment options

. change of allocation among investment options for new premium payments

. change of death benefit option

. change of beneficiary

. election of payment option for policy proceeds

. tax withholding elections

. election of telephone transaction privilege

Telephone Transactions

20
<PAGE>

allocation, the names of the investment options involved. We will honor
telephone instructions from anyone who provides the correct identifying
information, so there is a risk of loss to you if this service is used by an
unauthorized person. However, you will receive written confirmation of all
telephone transactions. There is also a risk that you will be unable to place
your request due to equipment malfunction or heavy phone line usage. If this
occurs, you should submit your request in writing.

21
<PAGE>

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

With respect to fees and expenses deducted from Series Fund assets, the
amounts shown in all tables reflect (1) investment management fees equivalent to
an effective annual rate of .61%, and (2) an assumed average asset charge for
all other Series Fund operating expenses equivalent to an effective annual rate
of .10%. These rates are the arithmetic average for all funds of the Series
Funds. In other words, they are based on the hypothetical assumption that policy
account values are allocated equally among the variable investment options. The
actual rates associated with any policy will vary depending upon the actual
allocation of policy values among the investment options.

22
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 324 $ 357 $ 390 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 874 968 1,067 304 398 497
3 2,979 100,000 100,000 100,000 1,407 1,598 1,805 702 893 1,100
4 4,073 100,000 100,000 100,000 1,923 2,247 2,611 1,083 1,407 1,771
5 5,222 100,000 100,000 100,000 2,420 2,912 3,488 1,745 2,237 2,813
6 6,428 100,000 100,000 100,000 2,897 3,596 4,445 2,087 2,786 3,635
7 7,694 100,000 100,000 100,000 3,352 4,295 5,488 2,542 3,485 4,678
8 9,024 100,000 100,000 100,000 3,785 5,010 6,626 3,065 4,290 5,906
9 10,420 100,000 100,000 100,000 4,193 5,740 7,866 3,563 5,110 7,236
10 11,886 100,000 100,000 100,000 4,587 6,500 9,240 4,047 5,960 8,700
11 13,425 100,000 100,000 100,000 5,002 7,326 10,796 4,552 6,876 10,346
12 15,042 100,000 100,000 100,000 5,391 8,172 12,505 5,076 7,857 12,190
13 16,739 100,000 100,000 100,000 5,755 9,040 14,382 5,575 8,860 14,202
14 18,521 100,000 100,000 100,000 6,092 9,930 16,449 6,092 9,930 16,449
15 20,392 100,000 100,000 100,000 6,400 10,842 18,724 6,400 10,842 18,724
16 22,356 100,000 100,000 100,000 6,678 11,775 21,232 6,678 11,775 21,232
17 24,419 100,000 100,000 100,000 6,917 12,721 23,993 6,917 12,721 23,993
18 26,585 100,000 100,000 100,000 7,109 13,677 27,033 7,109 13,677 27,033
19 28,859 100,000 100,000 100,000 7,251 14,639 30,383 7,251 14,639 30,383
20 31,247 100,000 100,000 100,000 7,336 15,602 34,079 7,336 15,602 34,079
25 45,102 100,000 100,000 100,000 6,679 20,266 59,437 6,679 20,266 59,437
30 62,785 100,000 100,000 123,471 3,300 23,982 102,892 3,300 23,982 102,892
35 85,353 100,000 100,000 201,000 0 24,717 174,782 0 24,717 174,782
40 142,835 100,000 100,000 301,502 0 41,360 287,145 0 41,360 287,145
45 216,198 100,000 100,000 498,557 0 37,409 474,816 0 37,409 474,816
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.
(2) Assumes payment of recalculated annual premium amounts of $5,843 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,843 6% and $0 at 12%, subject to any maximums required to
maintain the Policy's status for federal income tax purposes.

23
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ------------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ------------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- --------- --------- ---------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 307 $ 339 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 779 867 960 9 97 190
3 2,979 100,000 100,000 100,000 1,266 1,443 1,636 361 538 731
4 4,073 100,000 100,000 100,000 1,736 2,035 2,372 696 995 1,332
5 5,222 100,000 100,000 100,000 2,186 2,641 3,173 1,011 1,466 1,998
6 6,428 100,000 100,000 100,000 2,618 3,262 4,046 1,308 1,952 2,736
7 7,694 100,000 100,000 100,000 3,028 3,896 4,995 1,818 2,686 3,785
8 9,024 100,000 100,000 100,000 3,417 4,542 6,029 2,297 3,422 4,909
9 10,420 100,000 100,000 100,000 3,781 5,200 7,153 2,851 4,270 6,223
10 11,886 100,000 100,000 100,000 4,122 5,871 8,380 3,582 5,331 7,840
11 13,425 100,000 100,000 100,000 4,436 6,550 9,716 3,986 6,100 9,266
12 15,042 100,000 100,000 100,000 4,720 7,237 11,172 4,405 6,922 10,857
13 16,739 100,000 100,000 100,000 4,975 7,931 12,760 4,795 7,751 12,580
14 18,521 100,000 100,000 100,000 5,198 8,631 14,495 5,198 8,631 14,495
15 20,392 100,000 100,000 100,000 5,387 9,334 16,389 5,387 9,334 16,389
16 22,356 100,000 100,000 100,000 5,540 10,039 18,461 5,540 10,039 18,461
17 24,419 100,000 100,000 100,000 5,650 10,739 20,724 5,650 10,739 20,724
18 26,585 100,000 100,000 100,000 5,710 11,429 23,197 5,710 11,429 23,197
19 28,859 100,000 100,000 100,000 5,718 12,104 25,902 5,718 12,104 25,902
20 31,247 100,000 100,000 100,000 5,663 12,755 28,861 5,663 12,755 28,861
25 45,102 100,000 100,000 100,000 4,229 15,408 48,601 4,229 15,408 48,601
30 62,785 100,000 100,000 100,000 0 15,982 81,342 0 15,982 81,342
35 85,353 100,000 100,000 156,178 0 11,499 135,807 0 11,499 135,807
40 151,015 100,000 100,000 228,341 0 17,203 217,468 0 17,203 217,468
45 234,819 100,000 100,000 369,017 0 0 351,445 0 0 351,445
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,253 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,253 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

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

24
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 324 $ 357 $ 390 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 874 968 1,067 304 398 497
3 2,979 100,000 100,000 100,000 1,407 1,598 1,805 702 893 1,100
4 4,073 100,000 100,000 100,000 1,923 2,247 2,611 1,083 1,407 1,771
5 5,222 100,000 100,000 100,000 2,420 2,912 3,488 1,745 2,237 2,813
6 6,428 100,000 100,000 100,000 2,897 3,596 4,445 2,087 2,786 3,635
7 7,694 100,000 100,000 100,000 3,352 4,295 5,488 2,542 3,485 4,678
8 9,024 100,000 100,000 100,000 3,785 5,010 6,626 3,065 4,290 5,906
9 10,420 100,000 100,000 100,000 4,193 5,740 7,866 3,563 5,110 7,236
10 11,886 100,000 100,000 100,000 4,587 6,500 9,240 4,047 5,960 8,700
11 13,425 100,000 100,000 100,000 5,002 7,326 10,796 4,552 6,876 10,346
12 15,042 100,000 100,000 100,000 5,391 8,172 12,505 5,076 7,857 12,190
13 16,739 100,000 100,000 100,000 5,755 9,040 14,382 5,575 8,860 14,202
14 18,521 100,000 100,000 100,000 6,092 9,930 16,449 6,092 9,930 16,449
15 20,392 100,000 100,000 100,000 6,400 10,842 18,724 6,400 10,842 18,724
16 22,356 100,000 100,000 100,365 6,678 11,775 21,232 6,678 11,775 21,232
17 24,419 100,000 100,000 101,505 6,917 12,721 23,989 6,917 12,721 23,989
18 26,585 100,000 100,000 102,880 7,109 13,677 27,017 7,109 13,677 27,017
19 28,859 100,000 100,000 104,522 7,251 14,639 30,343 7,251 14,639 30,343
20 31,247 100,000 100,000 106,463 7,336 15,602 33,996 7,336 15,602 33,996
25 45,102 100,000 100,000 122,012 6,679 20,266 58,511 6,679 20,266 58,511
30 62,785 100,000 100,000 152,318 3,300 23,982 98,267 3,300 23,982 98,267
35 85,353 100,000 100,000 207,621 0 24,717 163,050 0 24,717 163,050
40 142,835 100,000 105,400 292,367 0 39,722 265,424 0 39,722 265,424
45 216,198 100,000 100,000 457,866 0 34,256 436,063 0 34,256 436,063
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.
(2) Assumes payment of recalculated annual premium amounts of $5,843 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,843 at 6% and $0 at 12%, subject to any maximum required
to maintain the Policy's status for federal income tax purposes.

25
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 307 $ 339 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 779 867 960 9 97 190
3 2,979 100,000 100,000 100,000 1,266 1,443 1,636 361 538 731
4 4,073 100,000 100,000 100,000 1,736 2,035 2,372 696 995 1,332
5 5,222 100,000 100,000 100,000 2,186 2,641 3,173 1,011 1,466 1,998
6 6,428 100,000 100,000 100,000 2,618 3,262 4,046 1,308 1,952 2,736
7 7,694 100,000 100,000 100,000 3,028 3,896 4,995 1,818 2,686 3,785
8 9,024 100,000 100,000 100,000 3,417 4,542 6,029 2,297 3,422 4,909
9 10,420 100,000 100,000 100,000 3,781 5,200 7,153 2,851 4,270 6,223
10 11,886 100,000 100,000 100,000 4,122 5,871 8,380 3,582 5,331 7,840
11 13,425 100,000 100,000 100,000 4,436 6,550 9,716 3,986 6,100 9,266
12 15,042 100,000 100,000 100,000 4,720 7,237 11,172 4,405 6,922 10,857
13 16,739 100,000 100,000 100,000 4,975 7,931 12,760 4,795 7,751 12,580
14 18,521 100,000 100,000 100,000 5,198 8,631 14,495 5,198 8,631 14,495
15 20,392 100,000 100,000 100,000 5,387 9,334 16,389 5,387 9,334 16,389
16 22,356 100,000 100,000 100,000 5,540 10,039 18,461 5,540 10,039 18,461
17 24,419 100,000 100,000 100,000 5,650 10,739 20,724 5,650 10,739 20,724
18 26,585 100,000 100,000 100,000 5,710 11,429 23,197 5,710 11,429 23,197
19 28,859 100,000 100,000 100,082 5,718 12,104 25,902 5,718 12,104 25,902
20 31,247 100,000 100,000 101,324 5,663 12,755 28,857 5,663 12,755 28,857
25 45,102 100,000 100,000 111,745 4,229 15,408 48,245 4,229 15,408 48,245
30 62,785 100,000 100,000 132,595 0 15,982 78,543 0 15,982 78,543
35 85,353 100,000 100,000 170,766 0 11,499 126,195 0 11,499 126,195
40 151,015 100,000 100,000 224,845 0 16,623 197,902 0 16,623 197,902
45 234,819 100,000 100,000 335,277 0 0 314,479 0 0 314,479
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,253 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,253 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

26
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 324 $ 357 $ 390 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 874 968 1,067 304 398 497
3 2,979 100,000 100,000 100,000 1,407 1,598 1,805 702 893 1,100
4 4,073 100,000 100,000 100,000 1,923 2,247 2,611 1,083 1,407 1,771
5 5,222 100,000 100,000 100,000 2,420 2,912 3,488 1,745 2,237 2,813
6 6,428 100,000 100,000 100,000 2,897 3,596 4,445 2,087 2,786 3,635
7 7,694 100,000 100,000 100,000 3,352 4,295 5,488 2,542 3,485 4,678
8 9,024 100,000 100,000 100,000 3,785 5,010 6,626 3,065 4,290 5,906
9 10,420 100,000 100,000 100,000 4,193 5,740 7,866 3,563 5,110 7,236
10 11,886 100,000 100,000 100,000 4,587 6,500 9,240 4,047 5,960 8,700
11 13,425 100,000 100,000 100,000 5,002 7,326 10,796 4,552 6,876 10,346
12 15,042 100,000 100,000 100,000 5,391 8,172 12,505 5,076 7,857 12,190
13 16,739 100,000 100,000 100,000 5,755 9,040 14,382 5,575 8,860 14,202
14 18,521 100,000 100,000 100,000 6,092 9,930 16,449 6,092 9,930 16,449
15 20,392 100,000 100,000 100,000 6,400 10,842 18,724 6,400 10,842 18,724
16 22,356 100,000 100,000 100,000 6,678 11,775 21,232 6,678 11,775 21,232
17 24,419 100,000 100,000 100,000 6,917 12,721 23,993 6,917 12,721 23,993
18 26,585 100,000 100,000 100,000 7,109 13,677 27,033 7,109 13,677 27,033
19 28,859 100,000 100,000 100,000 7,251 14,639 30,383 7,251 14,639 30,383
20 31,247 100,000 100,000 100,000 7,336 15,602 34,079 7,336 15,602 34,079
25 45,102 100,000 100,000 115,101 6,679 20,266 59,236 6,679 20,266 59,236
30 62,785 100,000 100,000 168,245 3,300 23,982 98,852 3,300 23,982 98,852
35 85,353 100,000 100,000 241,076 0 24,717 159,273 0 24,717 159,273
40 142,835 100,000 100,000 334,189 16,380 49,388 244,147 16,380 49,388 244,147
45 216,198 100,000 103,913 465,318 31,311 82,301 368,539 31,311 82,301 368,539
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently than annually, the above
values shown would be affected.
(2) Assumes payment of recalculated annual premium amounts of $5,843 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,843 at 6% and $0 at 12%.

27
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 307 $ 339 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 779 867 960 9 97 190
3 2,979 100,000 100,000 100,000 1,266 1,443 1,636 361 538 731
4 4,073 100,000 100,000 100,000 1,736 2,035 2,372 696 995 1,332
5 5,222 100,000 100,000 100,000 2,186 2,641 3,173 1,011 1,466 1,998
6 6,428 100,000 100,000 100,000 2,618 3,262 4,046 1,308 1,952 2,736
7 7,694 100,000 100,000 100,000 3,028 3,896 4,995 1,818 2,686 3,785
8 9,024 100,000 100,000 100,000 3,417 4,542 6,029 2,297 3,422 4,909
9 10,420 100,000 100,000 100,000 3,781 5,200 7,153 2,851 4,270 6,223
10 11,886 100,000 100,000 100,000 4,122 5,871 8,380 3,582 5,331 7,840
11 13,425 100,000 100,000 100,000 4,436 6,550 9,716 3,986 6,100 9,266
12 15,042 100,000 100,000 100,000 4,720 7,237 11,172 4,405 6,922 10,857
13 16,739 100,000 100,000 100,000 4,975 7,931 12,760 4,795 7,751 12,580
14 18,521 100,000 100,000 100,000 5,198 8,631 14,495 5,198 8,631 14,495
15 20,392 100,000 100,000 100,000 5,387 9,334 16,389 5,387 9,334 16,389
16 22,356 100,000 100,000 100,000 5,540 10,039 18,461 5,540 10,039 18,461
17 24,419 100,000 100,000 100,000 5,650 10,739 20,724 5,650 10,739 20,724
18 26,585 100,000 100,000 100,000 5,710 11,429 23,197 5,710 11,429 23,197
19 28,859 100,000 100,000 100,000 5,718 12,104 25,902 5,718 12,104 25,902
20 31,247 100,000 100,000 100,000 5,663 12,755 28,861 5,663 12,755 28,861
25 45,102 100,000 100,000 100,000 4,229 15,408 48,601 4,229 15,408 48,601
30 62,785 100,000 100,000 135,580 0 15,982 79,659 0 15,982 79,659
35 85,353 100,000 100,000 190,309 0 11,499 125,733 0 11,499 125,733
40 151,015 100,000 100,000 255,474 6,534 32,979 186,641 6,534 32,979 186,641
45 234,819 100,000 100,000 344,316 11,450 56,616 272,704 11,450 56,616 272,704
</TABLE>

(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts
thereafter. If premiums are paid more frequently that annually, the above
values shown would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,253 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,253 at 6% and $0 at 12%.

28
<PAGE>

ADDITIONAL INFORMATION

This section of the prospectus provides additional detailed information that
is not contained in the Basic Information section on pages 3 through 21.

<TABLE>
<CAPTION>
CONTENTS OF THIS SECTION PAGES TO SEE
- ------------------------ ------------
<S> <C>
Description of JHVLICO ..................................... 30
How we support the policy and investment options............ 30-31
Procedures for issuance of a policy......................... 31-32
Commencement of investment performance...................... 32
How we process certain policy transactions.................. 32-34
Effects of policy loans..................................... 34
How we calculate "basic policy value" ...................... 34
Additional information about how certain policy charges work 34-35
How we market the policies.................................. 35-36
Tax considerations.......................................... 36-38
Reports that you will receive............................... 38
Voting privileges that you will have........................ 38-39
Changes that JHVLICO can make as to your policy............. 39-40
Adjustments we make to death benefits....................... 40
When we pay policy proceeds................................. 40
Other details about exercising rights and paying benefits... 40-41
Year 2000 Issues ........................................... 41
Legal matters............................................... 41
Registration statement filed with the SEC................... 41
Accounting and actuarial experts............................ 41
Financial statements of JHVLICO and the Account............. 41
List of Directors and Executive Officers of JHVLICO ........ 42
</TABLE>

29
<PAGE>

DESCRIPTION OF JHVLICO

HOW WE SUPPORT THE POLICY AND INVESTMENT OPTIONS

Separate Account V

The assets in each subaccount are invested in the corresponding fund of one of
the Series Funds, but the assets of one subaccount are not necessarily legally
insulated from liabilities associated with another subaccount. New subaccounts
may be added as new funds are added to the Series Funds and made available to
policy owners. Existing subaccounts may be deleted if existing funds are deleted
from the Series Funds.

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

30
<PAGE>

close of that day (usually 4:00 p.m. Eastern Standard Time).

Our general account

PROCEDURES FOR ISSUANCE OF A POLICY

Commencement of insurance coverage

The policy will take effect only if all of the following conditions are
satisfied:

. The policy is delivered to and received by the applicant.

. At least the first Required Premium is received by us.

. Each insured person is living and still meets our health criteria for issuing
insurance.

If all of the above conditions are satisfied, the policy will take effect on
the date shown in the policy as the "date of issue." That is the date on which
we begin to deduct monthly charges. Policy months, policy years and policy
anniversaries are all measured from the date of issue.

Backdating

31
<PAGE>

and is allowed under state insurance laws. Backdating can also be used in
certain corporate-owned life insurance cases involving multiple policies to
retain a common monthly deduction date.

Temporary coverage prior to policy delivery

Monthly deduction dates

COMMENCEMENT OF INVESTMENT PERFORMANCE

All premium payments will be allocated among the investment options on the
date as of which they are processed (as discussed below).

HOW WE PROCESS CERTAIN POLICY TRANSACTIONS

Premium payments

We will process any premium payment as of the day we receive it, unless one of
the following exceptions applies:

(1) We will process a payment received prior to a policy's date of issue as if
received on the business day that first precedes the date of issue.

. The tax problem resolves itself prior to the date the refund is to be made; or

. The tax problem relates to modified endowment status and we receive a signed
acknowledgment from the owner prior to the refund date instructing us to
process the

32
<PAGE>

premium notwithstanding the tax issues involved.

In the above cases, we will treat the excess premium as having been received
on the date the tax problem resolves itself or the date we receive the signed
acknowledgment. We will then process it accordingly.

(6) If a premium payment is received or is otherwise scheduled to be processed
(as specified above) on a date that is not a business day, the premium payment
will be processed on the business day next following that date.

Transfers among investment options

Dollar cost averaging

Telephone transfers and policy loans

33
<PAGE>

Effective date of other policy transactions

The following transactions take effect on the monthly deduction date on or
next following the date we approve your request:

. Reinstatements of lapsed policies

. Change of death benefit Option from 1 to 2

A change from Option 2 to Option 1 is effective on the monthly deduction date
on or next following the date we receive the request.

We process loans, surrenders, partial withdrawals, partial surrenders and loan
repayments as of the day we receive such request or repayment.

EFFECTS OF POLICY LOANS

The amount of the outstanding loan (which includes accrued and unpaid
interest) is subtracted from the amount otherwise payable when the policy
proceeds become payable.

HOW WE CALCULATE BASIC ACCOUNT VALUE

ADDITIONAL INFORMATION ABOUT HOW CERTAIN POLICY CHARGES WORK

Sales expenses and related charges

Effect of premium payment pattern

You may structure the timing and amount of premium payments to minimize the
sales charges, although doing so involves certain risks. Paying more

<PAGE>

than one Required Premium in any policy year could reduce your total sales
charges. For example, if you paid a Required Premium of $1,000 in each of the
first two policy years, you would pay total premium sales charges of $100. If
instead you paid $2,000 (i.e., two times the Required Premium amount) in the
first policy year, you would pay total premium sales charges of only $50.
Accelerating the payment of Required Premiums to earlier policy years could
result in a larger CDSC and/or cause aggregate premiums paid to exceed the
policy's 7-pay premium limit and, as a result, cause the policy to become a
modified endowment, with adverse tax consequences to you upon receipt of policy
distributions. (See "Tax considerations" beginning on page 36.) On the other
hand, to pay less than the amount of Required Premiums by their due dates runs
the risk that the policy will lapse, resulting in loss of coverage and
additional charges.

Monthly charges

Reduced charges for eligible classes

HOW WE MARKET THE POLICIES

35
<PAGE>

Hancock performs insurance underwriting and determines whether to accept or
reject the application for a policy and each insured person's risk
classification. JHVLICO will make the appropriate refund if a policy ultimately
is not issued or is returned under the "free look" provision. Officers and
employees of John Hancock and JHVLICO are covered by a blanket bond by a
commercial carrier in the amount of $25 million.

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

The maximum commission payable to a Signator representative for selling a
policy is 45% of the base policy premiums (prior to any premium recalculation)
that would be payable in the first policy year, 7.5% of the such premiums
payable in the second policy year, and 5% of any such premiums received by us in
each policy year thereafter. The maximum commission on any premium paid in any
policy year in excess of such base policy premium is 3%.

Representatives of Signator and the other broker-dealers mentioned above may
also earn "credits" toward qualification for attendance at certain business
meetings sponsored by John Hancock.

The offering of the policies is intended to be continuous, but neither JHVLICO
nor Signator is obligated to sell any particular amount of policies.

TAX CONSIDERATIONS

Policy proceeds

36
<PAGE>

standards are met at issue and over the life of the policy, the policy will
satisfy that definition. We will monitor compliance with these standards.

It is possible that, despite our monitoring, a policy might fail to qualify as
life insurance under Section 7702 of the Code. This could happen, for example,
if we inadvertently failed to return to you any premium payments that were in
excess of permitted amounts, or if a Series Fund failed to meet certain
investment diversification or other requirements of the Code. If this were to
occur, you would be subject to income tax on the income and gains under the
policy for the period of the disqualification and for subsequent periods and the
death benefit proceeds would lose their non-taxable status.

Tax consequences of ownership or receipt of policy proceeds under federal,
state and local estate, inheritance, gift and other tax laws depend on the
circumstances of each owner or beneficiary.

7-pay premium limit

37
<PAGE>

certain prescribed assumptions. If the total premiums paid at any time during
the first 7 policy years exceed the 7-pay limit, the policy will be treated as a
"modified endowment", which can have adverse tax consequences.

Corporate and H.R. 10 plans

REPORTS THAT YOU WILL RECEIVE

Semiannually we will send you a report containing the financial statements of
each Series Fund, including a list of securities held in each fund.

VOTING PRIVILEGES THAT YOU WILL HAVE

All of the assets in the subaccounts of the Account are invested in shares of
the corresponding funds of the Series Funds. We will vote the shares of each of
the funds of the Series Funds which are deemed attributable to variable life
insurance policies

38
<PAGE>

at regular and special meetings of the Series Funds' shareholders in accordance
with instructions received from owners of such policies. Shares of the Series
Funds held in the Account which are not attributable to such policies, as well
as shares for which instructions from owners are not received, will be
represented by us at the meeting. We will vote such shares for and against each
matter in the same proportions as the votes based upon the instructions received
from the owners of such policies.

We determine the number of a fund's shares held in a subaccount attributable
to each owner by dividing the amount of a policy's account value held in the
subaccount by the net asset value of one share in the fund. Fractional votes
will be counted. We determine the number of shares as to which the owner may
give instructions as of the record date for the Series Fund's meeting. Owners of
policies may give instructions regarding the election of the Board of Trustees
or Board of Directors of the Series Fund, ratification of the selection of
independent auditors, approval of Series Fund investment advisory agreements and
other matters requiring a shareholder vote. We will furnish owners with
information and forms to enable owners to give voting instructions.

CHANGES THAT JHVLICO CAN MAKE AS TO YOUR POLICY

Changes relating to a Series Fund or the Account

Other permissible changes

. Changes necessary to comply with or obtain or continue exemptions under the
federal securities laws

. Combining or removing investment options

. Changes in the form of organization of any separate account

Any such changes will be made only to the extent permitted by applicable laws
and only in the manner permitted by such laws. When required by law, we

39
<PAGE>

will obtain your approval of the changes and the approval of any appropriate
regulatory authority.

ADJUSTMENTS WE MAKE TO DEATH BENEFITS

WHEN WE PAY POLICY PROCEEDS

General

Delay to challenge coverage

Delay for check clearance

Delay of separate account proceeds

OTHER DETAILS ABOUT EXERCISING RIGHTS AND PAYING BENEFITS

Joint ownership

If more than one person owns a policy, all owners must join in most requests
to exercise rights under the policy.

Assigning your policy

Your beneficiary

40
<PAGE>

beneficiary designation is effective as of the date you sign it, but will not
affect any payments we make before we receive it. If no beneficiary is living
when the insured person dies, we will pay the insurance proceeds to the owner or
the owner's estate.

YEAR 2000 ISSUES

The advent of the Year 2000 presents a technological challenge to JHVLICO. In
close cooperation with John Hancock Mutual Life Insurance Company, its parent,
JHVLICO has developed and is executing 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.

LEGAL MATTERS

REGISTRATION STATEMENT FILED WITH THE SEC

This prospectus omits certain information contained in the Registration
Statement which has been filed with the SEC. More details may be obtained from
the SEC upon payment of the prescribed fee.

ACCOUNTING AND ACTUARIAL EXPERTS

FINANCIAL STATEMENTS OF JHVLICO AND THE ACCOUNT

41
<PAGE>