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As filed with the Securities and Exchange Commission on March 5, 1996
Registration No. 33-63842
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-6
Post-Effective Amendment No. 3 to
Registration Statement Under
THE SECURITIES ACT OF 1933
----------------------
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
(Exact name of trust)
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
(Name of depositor)
JOHN HANCOCK PLACE
BOSTON, MASSACHUSETTS 02117
(Complete address of depositor's principal executive offices)
--------------------
FRANCIS C. CLEARY, JR., ESQ.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, 02117
(Name and complete address of agent for service)
--------------------
Copy to:
GARY O. COHEN, ESQ.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
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It is proposed that this filing become effective (check appropriate box)
/_/immediately upon filing pursuant to paragraph (b) of Rule 485
/X/on March 11, 1996 pursuant to paragraph (b) of Rule 485
/_/60 days after filing pursuant to paragraph (a)(1) of Rule 485
/_/on (date) pursuant to paragraph (a)(1) of Rule 485
If appropriate check the following box
/_/this post-effective amendment designates a new effective date for a
previously filed amendment
Pursuant to the provisions of Rule 24f-2, Registrant has registered an
indefinite amount of the securities being offered and filed its Notice for
fiscal year 1995 pursuant to Rule 24f-2 on February 22, 1996.
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CROSS-REFERENCE TABLE
Form N-8B-2 Item Caption in Prospectus
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1, 2 Cover, The Account and The Series
Funds, John Hancock
3 Inapplicable
4 Cover, Distribution of Policies
5,6 The Account and The Series Funds,
State Regulation
7, 8, 9 Inapplicable
10(a),(b),(c),(d),(e) Principal Policy Provisions
10(f) Voting Privileges
10(g),(h) Changes in Applicable
Law--Funding and Otherwise
10(i) Appendix--Other Policy
Provisions, The Account and
The Series Funds
11, 12 Summary, The Account and Series
Funds, Distribution of Policies
13 Charges and expenses,
Appendix--Illustration of Death
Benefits, Surrender Values and
Accumulated Premiums
14, 15 Summary, Distribution of
Policies, Premiums
16 The Account and The Series Funds
17 Summary, Principal Policy
Provisions
18 The Account and The Series Funds,
Tax Considerations
19 Reports
20 Changes in Applicable
Law--Funding and Otherwise
21 Principal Policy Provisions
22 Principal Policy Provisions
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23 Distribution of Policies
24 Not Applicable
25 John Hancock
26 Not Applicable
27,28,29,30 John Hancock, Board
of Directors and Executive
Officers of John Hancock
31,32,33,34 Not Applicable
35 John Hancock
37 Not Applicable
38,39,40,41(a) Distribution of Policies,
John Hancock,
Charges and Expenses
42, 43 Not Applicable
44 The Account and The Series Funds,
Principal Policy Provisions,
Appendix--Illustration of Death
Benefits, Surrender Values and
Accumulated Premiums
45 Not Applicable
46 The Account and The Series Funds,
Principal Policy Provisions,
Appendix--Illustration of Death
Benefits, Surrender Values and
Accumulated Premiums
47 Not Applicable
48,49,50 Not Applicable
51 Principal Policy Provisions,
Appendix--Other Policy
Provisions
52 The Account and The Series Funds,
Changes in Applicable
Law--Funding and Otherwise
53,54,55 Not Applicable
56,57,58,59 Not Applicable
<PAGE>
John Hancock Mutual Life
(ART) Insurance Company
(John Hancock)
SCHEDULED PREMIUM VARIABLE LIFE INSURANCE POLICY
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
LIFE AND ANNUITY SERVICES
P.O. BOX 111
BOSTON, MASSACHUSETTS 02117
TELEPHONE 1-800-REAL LIFE (1-800-732-5543) FAX 617-572-5410
PROSPECTUS MARCH 11, 1996
The scheduled premium variable life policy ("Policy") described in this
Prospectus can be funded, at the discretion of the Owner, by up to ten of the
variable subaccounts of John Hancock Mutual Variable Life Insurance Account UV
("Account"), by a fixed subaccount (the "Fixed Account"), or by a combination
of the Fixed Account and up to nine of the variable subaccounts (collectively,
"the subaccounts"). The assets of each variable subaccount will be invested in
a corresponding Portfolio of John Hancock Variable Series Trust I, a mutual
fund advised by John Hancock Mutual Life Insurance Company ("John Hancock") or
of M Fund, Inc., a mutual fund advised by M Financial Investment Advisers,
Inc. (collectively, the "Funds"). The assets of the Fixed Account will be
invested in the general account of John Hancock Mutual Life Insurance Company
("John Hancock").
The prospectuses for the Funds, which are attached to this Prospectus,
describe the investment objectives, policies and risks of investing in the
Portfolios of Variable Series Trust I: Stock, Select Stock, Bond, Money
Market, Managed, Real Estate Equity, International, Special Opportunities and
Short-Term U.S. Government and in the Portfolios of M Fund Inc.: Edinburgh
Overseas Equity, Turner Core Growth and Frontier Capital Appreciation.
Replacing existing insurance with a Policy described in this Prospectus may
not be to your advantage.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
IT IS NOT VALID UNLESS ATTACHED TO A CURRENT PROSPECTUS FOR THE FUND.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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TABLE OF CONTENTS
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Page
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SUMMARY.................................................................... 1
JOHN HANCOCK............................................................... 6
THE ACCOUNT AND THE SERIES FUNDS........................................... 6
THE FIXED ACCOUNT.......................................................... 9
POLICY PROVISIONS AND BENEFITS............................................. 9
Requirements for Issuance of Policy...................................... 9
Premiums................................................................. 10
Account Value and Surrender Value........................................ 13
Death Benefits........................................................... 13
Value Options............................................................ 14
Partial Withdrawal of Excess Value....................................... 15
Transfers Among Subaccounts.............................................. 16
Telephone Transfers and Policy Loans..................................... 16
Loan Provisions and Indebtedness......................................... 17
Default and Options on Lapse............................................. 17
Exchange Privilege....................................................... 18
CHARGES AND EXPENSES....................................................... 18
Charges Deducted from Premiums........................................... 18
Sales Charges............................................................ 19
Reduced Charges for Eligible Groups...................................... 20
Charges Deducted from Account Value...................................... 20
DISTRIBUTION OF POLICIES................................................... 23
TAX CONSIDERATIONS......................................................... 24
Policy Proceeds.......................................................... 24
Charge for John Hancock's Taxes.......................................... 24
Corporate and H.R. 10 Plans.............................................. 25
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JOHN HANCOCK.................. 26
REPORTS.................................................................... 27
VOTING PRIVILEGES.......................................................... 27
CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE........................... 28
STATE REGULATION........................................................... 28
LEGAL MATTERS.............................................................. 28
REGISTRATION STATEMENT..................................................... 28
EXPERTS.................................................................... 29
FINANCIAL STATEMENTS....................................................... 29
APPENDIX--OTHER POLICY PROVISIONS.......................................... 57
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, SURRENDER VALUES AND
ACCUMULATED PREMIUMS...................................................... 59
</TABLE>
THE POLICY DESCRIBED HEREIN IS AVAILABLE ONLY IN NEW YORK. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFERING IN ANY OTHER JURISDICTION. NO PERSON IS
AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS.
<PAGE>
INDEX OF DEFINED WORDS AND PHRASES
Below are listed certain words and phrases used in this Prospectus, together
with identification of the page on which each is defined or explained:
<TABLE>
<CAPTION>
PAGE
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Account Value....................................................... 13
Attained Age........................................................ 14
Basic Death Benefit................................................. 13
Basic Premium....................................................... 10
Benchmark Value..................................................... 14
Contingent Deferred Sales Charge.................................... 19
Current Death Benefit............................................... 14
Death Benefit Factor................................................ 14
Excess Value........................................................ 14
Experience Component................................................ 14
Extra Death Benefit................................................. 14
Fixed Account....................................................... 8
Grace Period........................................................ 18
Guaranteed Death Benefit............................................ 13
Home Office......................................................... 6
Indebtedness........................................................ 17
Investment Rule..................................................... 12
Issue Charge........................................................ 21
Level Schedule...................................................... 11
Loan Account........................................................ 17
Minimum First Premium............................................... 10
Modified Schedule................................................... 11
Premium Component................................................... 14
Premium Credit Factor............................................... 15
Premium Processing Charge........................................... 19
Premium Recalculation............................................... 10
Required Premium.................................................... 10
Subaccount.......................................................... Cover
Sum Insured at Issue................................................ 15
Surrender Value..................................................... 13
Valuation Date...................................................... 8
Value Option........................................................ 14
</TABLE>
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SUMMARY
WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?
John Hancock Mutual Life Insurance Company ("John Hancock") issues variable
life insurance Policies. The Policies described in this Prospectus are
scheduled annual premium policies that provide for additional premium
flexibilities. John Hancock also issues other forms of variable life insurance
policies. These other policies are offered by means of other prospectuses, but
use the same Account and underlying Fund.
As explained below, the death benefit and surrender value under the Policy
may increase or decrease daily. The Policies differ from ordinary fixed-
benefit life insurance in the way they work. However, the Policies are the
same as fixed-benefit life insurance in providing lifetime protection against
economic loss resulting from the death of the person insured. The Policies are
primarily insurance and not investments.
The Policies work generally as follows: the Owner periodically gives John
Hancock enough premium to meet the premium schedule selected. John Hancock
takes from each premium an amount for expenses, taxes, and sales load. John
Hancock then places the rest of the premium into as many as ten subaccounts as
directed by the Owner. The assets allocated to each variable subaccount are
invested in shares of the corresponding Portfolio of the Fund. The currently
available Portfolios are identified on the cover of this Prospectus. The
assets allocated to the Fixed Account are invested in the general account of
John Hancock. During the year, John Hancock takes charges from each subaccount
and credits or charges each subaccount with its respective investment
performance. The insurance charge, which is deducted from the invested assets
attributable to each Policy ("Account Value"), varies monthly with the then
attained age of the insured and with the amount of insurance provided at the
start of each month.
The death benefit may increase or decrease daily depending on the investment
experience of the subaccounts to which premiums are allocated. In general, the
Current Death Benefit equals the Account Value times a factor ("Death Benefit
Factor") which depends upon the sex and attained age of the insured. If the
Account Value increases, the Current Death Benefit will increase, and, if the
Account Value decreases, the Current Death Benefit will decrease. However,
John Hancock guarantees that, regardless of the investment experience, the
death benefit payable will never be less than the amount of insurance
originally purchased in the absence of a subsequent partial surrender
("Guaranteed Death Benefit"). At issue, the death benefit payable upon the
death of the insured will usually be the Guaranteed Death Benefit. This is
because the first premium payment generally will not result in a large enough
Account Value to cause the Current Death Benefit to exceed the Guaranteed
Death Benefit initially. Whether or not it reaches or exceeds the Guaranteed
Death Benefit depends upon the timing and amount of the premium payments, the
investment experience, the activity under the Policy with respect to Policy
loans, additional benefits and the like, the charges made against the Policy,
and the attained age of the insured. Once the Current Death Benefit reaches
the Guaranteed Death Benefit, the Owner bears the investment risk for any
amount above the Guaranteed Death Benefit, and John Hancock bears the
investment risk for the Guaranteed Death Benefit.
The initial Account Value is basically the sum of the amounts of the premium
that John Hancock, at the direction of the Owner, places in the Account and in
the Fixed Account. The Account Value increases or decreases daily depending on
the investment experience of the subaccounts to which the amounts are
allocated. John Hancock does not guarantee a minimum amount of Account Value.
Therefore, the Owner bears the investment risk for that portion of the Account
Value allocated to the variable subaccounts. The Owner may surrender a Policy
at any time while the insured is living. The Surrender Value is the Account
Value less the
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sum of any unpaid Issue Charge and any Contingent Deferred Sales Charge and
less any Indebtedness. If the Owner surrenders in the early policy years, the
amount of Surrender Value would be low (as compared with other investments
without sales charges) and, consequently, the insurance protection provided
prior to surrender would be costly.
The minimum initial death benefit that may be bought is $25,000 for insureds
less than 25 years of age at the time of issue of the Policy and $50,000 for
insureds with ages 25 through 75 at issue. All persons insured must meet
certain health and other criteria called "underwriting standards." The smoking
status of the insured is generally reflected in the insurance charges made. If
the minimum death benefit at issue is at least $100,000, the insured may be
eligible for the "preferred" class which has the lowest insurance charges for
this Policy. Policies issued in certain jurisdictions or in connection with
certain employee plans will not directly reflect the sex of the insured in
either the premium rates or the charges and values under the Policy.
WHAT IS THE AMOUNT OF THE PREMIUMS?
Premiums are determined under one of two premium schedules selected by the
Owner. Under the Level Schedule, premiums are fixed for the life of the
Policy. Under the Modified Schedule, a lower fixed premium is applicable which
does not vary until the Policy anniversary nearest the insured's 72nd
birthday. On this date, in the absence of an earlier election by the Owner,
the Policy premium is automatically shifted to the Level Schedule and a new
fixed annual premium becomes payable on a scheduled basis. The new premium
depends upon the Policy's Guaranteed Death Benefit and Account Value at the
time of the premium recalculation. The Owner may request that the premium
recalculation take place on any Policy anniversary prior to that nearest the
insured's 72nd birthday. In addition to the premium schedule chosen, the
amount of the premium for a Policy depends upon the Sum Insured at Issue and
the insured's age and sex (unless the Policy is sex-neutral). Premiums are
payable annually or more frequently over the insured's lifetime. Additional
premiums are charged for Policies in cases involving extra mortality risks and
for additional insurance benefits. There is a 61-day grace period in which to
make premium payments due after the Minimum First Premium is received.
Within limits, scheduled premiums may be paid in advance and more than the
scheduled premiums may be paid. If the Account Value under a Policy is
sufficiently high, a premium payment otherwise scheduled need not be paid.
(See "Premiums", Page 9.)
WHAT IS JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV?
The Account is a separate investment account of John Hancock, operated as a
unit investment trust, which supports benefits payable under the Policies.
Each variable subaccount within the Account is invested in a corresponding
Portfolio of John Hancock Variable Series Trust I, or of M Fund, Inc., each of
which is a "series" type of mutual fund. The Portfolios of the Fund which are
currently available are Stock, Select Stock, Bond, Money Market, Managed, Real
Estate Equity, International, Special Opportunities and Short-Term U.S.
Government, Edinburgh Overseas Equity, Turner Core Growth and Frontier Capital
Appreciation.
John Hancock receives a fee from John Hancock Variable Series Trust I for
providing investment management services with respect to the Stock, Bond and
Money Market Portfolios at an annual rate of .25% of the net assets with
respect to the Select Stock and Managed Portfolios, at an annual rate of .40%
of the first $500 million of the net assets and at lesser percentages for
amounts above $500 million; with respect to the Short-Term U.S. Government
Portfolio at an annual rate of .50% of the first $250 million of the average
daily net assets and, at lesser percentages for amounts above $250 million;
with respect to the Real Estate Equity Portfolio, at an annual rate of .60% of
the first $300 million of the net assets and at lesser percentages for amounts
above $300 million, and with respect to the International Portfolio, at an
annual rate of .60% of the first
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$250 million of the net assets and at lesser percentages for amounts above
$250 million; and with respect to the Special Opportunities Portfolio, at an
annual rate of .75% of the first $250 million of the average daily net assets
and at lesser percentages for amounts above $250 million.
M Financial Investment Advisers, Inc., receives a fee from M Fund, Inc. for
providing investment management services with respect to the Overseas Equity
Portfolio at an annual rate of 1.05% of the first $10 million of the average
daily net assets and at an annual rate of .90% of the next $15 million of the
average daily net assets and at lesser percentages for amounts above $25
million; with respect to the Core Growth Portfolio at an annual rate of .45%
of the average daily net assets; and with respect to the Capital Appreciation
Portfolio at an annual rate of .90% of the average daily net assets.
For a full description of the Funds, see the prospectuses for the Funds
attached to this Prospectus.
WHAT ARE THE CHARGES MADE BY JOHN HANCOCK?
Premium Processing Charge. A charge not to exceed $2 is deducted from each
premium payment.
State Premium Tax Charge. A charge equal to 2 1/2% of each premium payment
after deduction of the Premium Processing Charge.
Sales Charge Deduction from Premium. A charge equal to 5% of each premium
payment after deduction of the Premium Processing Charge.
Contingent Deferred Sales Charge. A charge deducted from Account Value if
the Policy lapses or is surrendered during the first 11 Policy years. The
amount of the charge depends upon the year in which lapse or surrender occurs.
The charge will never be higher than 15% of premiums paid to date. The total
charge for sales expenses over the lesser of 20 years or the life expectancy
of the insured will not exceed 9% of the premium payments under the Policy,
assuming all required premiums are paid, over that period.
Issue Charges. A charge deducted monthly from Account Value in 48 equal
installments totalling $240 per Policy and 48c per $1000 of Sum Insured at
Issue.
Maintenance Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $4 per Policy and 2c per $1000 of current Sum
Insured.
Insurance Charge. A charge based upon the amount at risk, the attained age
and risk classification of the insured and John Hancock's then current monthly
insurance rates (never to exceed rates based on the 1980 CSO Tables) deducted
monthly from Account Value.
Guaranteed Death Benefit Charges. A charge not to exceed 3c per $1000 of
current Sum Insured (currently 1c per $1000) deducted monthly from that
portion of Account Value not attributable to the Fixed Account allocations.
Upon any exercise of the Extra Death Benefit Option or the Basic Premium
Reduction Option, a one-time charge not to exceed 3% (currently 1 1/2%) of the
amount applied to exercise the option.
Charge for Mortality and Expense Risks. A charge made daily at an effective
annual rate of .60% of the assets of the Account.
Charges for Extra Mortality Risks. An additional premium, depending upon the
Sum Insured at Issue, age of the insured and the degree of additional
mortality risk, is required if the insured does not qualify for either the
preferred or standard underwriting class. This additional premium is collected
in two ways: up to 7 1/2% of each year's additional premium is deducted from
premiums when paid and 92 1/2% of each year's additional premium is deducted
monthly from Account Value in equal installments.
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Charges for Additional Insurance Benefits. An additional premium is required
if the Owner elects to purchase an additional insurance benefit. This
additional premium is collected in two ways: up to 7 1/2% of each year's
additional premium is deducted from premiums when paid and 92 1/2% of the
additional premium is deducted monthly from Account Value in equal
installments.
Charge for Partial Withdrawal. A charge equal to the lesser of $25 or 2% of
the amount withdrawn made against Account Value at the time of withdrawal.
See "Charges and Expenses", Page 19, for a full description of the charges
under the Policy.
IS THERE A CHARGE AGAINST THE ACCOUNT FOR FEDERAL INCOME TAX?
Currently no charge is made against any subaccount for Federal income taxes
but if John Hancock incurs, or expects to incur, income taxes attributable to
any subaccount or this class of Policies in future years, it reserves the
right to make a charge. John Hancock expects that it will continue to be taxed
as a life insurance company. (See "Charge for John Hancock's Taxes".)
WHAT IS THE RELATIONSHIP BETWEEN THE PREMIUM AND THE AMOUNT ALLOCATED TO THE
SUBACCOUNTS?
The initial net premium is allocated by John Hancock from its general
account to one or more of the subaccounts on the date of issue of the Policy.
The initial net premium is the gross premium less a processing charge, the
charges deducted for sales expenses and state premium taxes. These charges
also apply to subsequent premium payments. Net premiums derived from payments
received after the issue date are allocated, generally on the date of receipt,
to one or more of the subaccounts as elected by the Owner. (See "Charges and
Expenses", Page 19).
HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?
At issue and subsequently thereafter, the Owner will provide us with the
rule ("Investment Rule") we will follow to invest net premiums or other
amounts in any one but not more than ten of the subaccounts. The Owner may
change the Investment Rule under which John Hancock will allocate amounts to
subaccounts. (See "Investment Rule".)
WHAT COMMISSIONS ARE PAID TO AGENTS?
The Policies are sold through agents who are licensed by state authorities
to sell John Hancock's insurance policies. Commissions payable to agents are
described under "Distribution of Policies". Sales expenses in any year are not
equal to the deduction for sales load, including any Contingent Deferred Sales
Charge, in that year. Rather, total sales expenses under the Policies are
intended to be recovered over the lifetimes of the insureds covered by the
Policies.
WHAT IS THE DEATH BENEFIT?
The death benefit payable is the greater of the Guaranteed Death Benefit,
including any Extra Death Benefit Value Option which may have been exercised,
or the Current Death Benefit. Whenever the Current Death Benefit exceeds the
Guaranteed Death Benefit, the death benefit will increase whenever there is an
increase in the Policy's Account Value and it will decrease whenever there is
a decrease in the Policy's Account Value but never below the Guaranteed Death
Benefit. (See "Death Benefits".)
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HOW DOES THE ACCOUNT VALUE OF A POLICY VARY IN RELATION TO THE SUBACCOUNTS'
INVESTMENT EXPERIENCE?
In general, the Account Value for any day equals the Account Value for the
previous day, increased by any net premium placed in the subaccounts for the
Policy, decreased by any charges made against the Account Value, and increased
or decreased by the investment experience of the subaccounts. No minimum Account
Value for the Policy is guaranteed. (See "Surrender Value", Page 13.)
WHAT IS THE LOAN PROVISION AND HOW DOES A LOAN AFFECT THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE?
After the first Policy year the Owner may obtain a Policy loan. Assuming no
Indebtedness (see below), the maximum amount of any loan in Policy years two
and three is 75% of that portion of the Surrender Value attributable to
variable subaccount investments, plus 100% of that portion of the Surrender
Value attributable to Fixed Account investments; thereafter the maximum is 90%
of that portion of Surrender Value attributable to variable subaccount
investments, plus 100% of that portion of the Surrender Value attributable to
Fixed Account investments. Interest charged on any loan will accrue daily at
an annual rate determined by John Hancock at the start of each Policy Year.
This interest rate will not exceed the greater of (1) the "Published Monthly
Average" (see "Loan Provision and Indebtedness") for the calendar month ending
two months before the calendar month of the Policy anniversary or (2) 5%. A
loan plus accrued interest ("Indebtedness") may be repaid at the discretion of
the Owner in whole or in part in accordance with the terms of the Policy.
While a loan is outstanding, the rate of interest credited to the Account
Value because of the loan will usually be different than the net investment
experience of the subaccounts. Therefore, the Account Value, the Surrender
Value and any Death Benefit above the Guaranteed Death Benefit are permanently
affected by any loan.
IS THERE A SHORT-TERM CANCELLATION RIGHT?
The Owner may surrender a Policy by delivering or mailing it within 45 days
after the date of Part A of the application, or within 10 days after receipt
of the Policy by the Owner, or within 10 days after mailing by John Hancock of
the Notice of Withdrawal Right, whichever is latest, to John Hancock at
Boston, Massachusetts, or to the agent or agency office through which it was
delivered. Any premium paid on it will be refunded. If required by state law,
the refund will equal the Account Value at the end of the Valuation Period in
which the Policy is received plus all charges or deductions made against
premiums plus an amount reflecting charges against the subaccounts and the
investment management fee of the Funds.
WHAT IS THE EXCHANGE PRIVILEGE ALLOWED AN OWNER?
The Owner may transfer the entire Account Value in variable subaccounts
under a Policy to the Fixed Account at any time. The transfer will take effect
at the end of the Valuation Period in which John Hancock receives, at its Home
Office, notice satisfactory to John Hancock. (See "Exchange Privilege," Page
18.)
ARE THE BENEFITS UNDER A POLICY SUBJECT TO FEDERAL INCOME TAX?
There has been a determination by the Internal Revenue Service that death
benefits payable under variable life insurance policies (which appear to be
similar to those described in this Prospectus in all material respects) are
excludable from the beneficiary's gross income for Federal income tax
purposes. It is also believed that an
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Owner will not be deemed to be in constructive receipt of the cash values of
the Policy until values are actually received through withdrawal, surrender or
other distributions. The benefits under Policies described in this Prospectus
are expected to receive the same tax treatment under the Internal Revenue Code
of 1986 as benefits under traditional fixed-benefit life insurance policies.
Under recent Federal tax legislation, distributions from Policies entered
into after June 20, 1988 on which premiums greater than a "7-pay" premium
limit (as defined in the law) have been paid, will be subject to taxation. See
"Flexibility as to Premium Payments" for a discussion of how the "7-pay"
premium limit may be exceeded under a Policy. A distribution on such a Policy
(called by the law a "modified endowment contract") will be taxed to the
extent there is any income (gain) to the Owner and an additional tax may be
imposed on the taxable amount (See "Policy Proceeds" under "Tax
Considerations").
JOHN HANCOCK
John Hancock, a mutual life insurance company, is authorized to transact a
life insurance and annuity business in Massachusetts and all other states.
John Hancock is a company chartered in Massachusetts in 1862. Its Home
Office is at John Hancock Place, Boston, Massachusetts 02117. John Hancock's
assets are over $45 billion.
THE ACCOUNT AND THE SERIES FUNDS
The Account, a separate account established under Massachusetts law in 1993,
meets the definition of "separate account" under the Federal securities laws
and is registered as a unit investment trust under the Investment Company Act
of 1940 ("1940 Act").
The Account's assets are the property of John Hancock. Each Policy provides
that the portion of the Account's assets equal to the reserves and other
liabilities under the Policy shall not be chargeable with liabilities arising
out of any other business John Hancock may conduct. In addition to the assets
attributable to variable life policies, the Account's assets include assets
derived from charges made by John Hancock. From time to time these additional
assets may be transferred in cash by John Hancock to its general account.
Before making any such transfer, John Hancock will consider any possible
adverse impact the transfer might have on any subaccount. Additional premiums
are charged for Policies where the insured is classified as a substandard risk
and a portion of these premiums is allocated to the Account.
The Account is registered with the Securities and Exchange Commission (the
"Commission") under the 1940 Act. Such registration does not involve the
supervision by the Commission of the management or policies of the Account or
John Hancock.
The assets in the subaccounts of the Account are invested in corresponding
Portfolios of the Funds, but the assets of one variable subaccount are not
necessarily legally insulated from liabilities associated with another
variable subaccount. New variable subaccounts may be added or existing
variable subaccounts may be deleted as new Portfolios are added to or deleted
from the Funds and made available to Owners.
6
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THE SERIES FUNDS
Each Fund is a "series" type of mutual fund registered with the Commission
under the 1940 Act as an open-end diversified management investment company.
Each Fund serves as the investment medium for the Account and for other unit
investment trust separate accounts established for other variable life
insurance policies and for variable annuity contracts. (See the attached Fund
prospectuses for a description of a need to monitor for possible conflicts and
other consequences.) A very brief summary of the investment objectives of each
Portfolio is set forth below.
Stock Portfolio
The investment objective of this Portfolio is to achieve intermediate and
long-term growth of capital, with income as a secondary consideration. This
objective will be pursued by investments principally in common stocks (and in
securities convertible into or with rights to purchase common stocks) of
companies believed by management to offer growth potential over both the
intermediate and long-term.
Select Stock Portfolio
The investment objective of this Portfolio is to achieve above-average
capital appreciation through the ownership of common stocks of companies
believed by management to offer above-average capital appreciation
opportunities. Current income is not an objective of the Portfolio.
Bond Portfolio
The investment objective of this Portfolio is to provide as high a level of
long-term total rate of return as is consistent with prudent investment risk,
through investment in a diversified portfolio of freely marketable debt
securities. Total rate of return consists of current income, including
interest and discount accruals, and capital appreciation.
Money Market Portfolio
The investment objective of this Portfolio is to provide maximum current
income consistent with capital preservation and liquidity. It seeks to achieve
this objective by investing in a managed portfolio of high quality money
market instruments.
Managed Portfolio
The investment objective of this Portfolio is to achieve maximum long-term
total return consistent with prudent investment risk. Investments will be made
in common stocks, convertibles and other fixed income securities and in money
market instruments.
Real Estate Equity Portfolio
The investment objective of this Portfolio is to provide above-average
income and long-term growth of capital by investment principally in equity
securities of companies in the real estate and related industries.
International Portfolio. The investment objective of this Portfolio is to
achieve long-term growth of capital by investing primarily in foreign equity
securities.
Special Opportunities Portfolio. The investment objective of this Portfolio
is to achieve long-term capital appreciation by emphasizing investments in
equity securities of issuers in various economic sectors.
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<PAGE>
Short-Term U.S. Government Portfolio. The investment objective of this
Portfolio is to provide a high level of current income consistent with the
maintenance of principal, through investment in a portfolio of short-term U.S.
Treasury securities and U.S. Government agency securities.
John Hancock acts as the investment manager for the Portfolios described
above, and John Hancock's indirectly owned subsidiary, Independence Investment
Associates, Inc., with its principal place of business at 53 State Street,
Boston, Massachusetts, provides sub-investment advice with respect to the
Stock, Select Stock, Managed, Real Estate Equity and Short-Term U.S.
Government Portfolios. Another indirectly owned subsidiary, John Hancock
Advisers, Inc., located at 101 Huntington Avenue, Boston, Massachusetts, and
its subsidiary, John Hancock Advisers International, Limited, located at 34
Dover Street, London, England, provide sub-investment advice with respect to
the International Portfolio, and John Hancock Advisers, Inc. does likewise
with respect to the Bond and Special Opportunities Portfolios.
Edinburgh Overseas Equity Portfolio. Its investment objective is long-term
capital appreciation with reasonable investment risk through active management
and investment in common stock and common stock equivalents of foreign
issuers. Current income, if any, is incidental.
Turner Core Growth Portfolio. The investment objective of this Portfolio is
to seek long-term capital appreciation through a diversified portfolio of
common stocks that show strong earnings potential with reasonable market
prices.
Frontier Capital Appreciation Portfolio. This Portfolio seeks maximum
capital appreciation through investment in common stock of companies of all
sizes, with emphasis on stocks of small- to medium-capitalization companies.
Importance is placed on growth and price appreciation, rather than income.
M Financial Investment Advisers, Inc., acts as the investment manager for
the three Portfolios described above. Edinburgh Fund Managers PLC, provides
sub-investment advice to the Edinburgh Overseas Equity Portfolio; Turner
Investment Partners, Inc. provides sub-investment advice to the Turner Core
Growth Portfolio; and Frontier Capital Management Company, Inc., provides sub-
investment advice to the Frontier Capital Appreciation Portfolio.
John Hancock will purchase and redeem Fund shares for the Account at their
net asset value. Shares of the Fund represent an interest in one of the
Portfolios of the Fund which corresponds to the variable subaccount of the
Account. Any dividend or capital gains distributions received by the Account
will be reinvested in Fund shares at their net asset value as of the dates
paid.
On each Valuation Date, shares of each portfolio are purchased or redeemed
by John Hancock for each variable subaccount based on, among other things, the
amount of net premiums allocated to the variable subaccount, distributions
reinvested, transfers to, from and among variable subaccounts, all to be
effected as of that date. Such purchases and redemptions are effected at the
net asset value per Fund share for each Portfolio determined on that same
Valuation Date. A Valuation Date is any date on which the New York Stock
Exchange is open for trading and on which the Fund values its shares. A
Valuation Period is that period of time from the beginning of the day
following a Valuation Date to the end of the next following Valuation Date.
A full description of each Fund, its investment objectives, policies and
restrictions, its charges, expenses and all other aspects of its operation is
contained in the attached prospectuses and the statement of additional
information referred to therein, which should be read together with this
Prospectus.
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<PAGE>
THE FIXED ACCOUNT
An Owner may allocate premiums to the Fixed Account or transfer all or part
of the Account Value under a Policy to the Fixed Account. The amount so
allocated or transferred will become a part of John Hancock's general account
assets. John Hancock's general account consists of assets owned by John
Hancock other than those in the Account and in other separate accounts that
have been or may be established by John Hancock. Subject to applicable law,
John Hancock has sole discretion over the investment of assets of the general
account and Owners do not share in the investment experience of those assets.
Instead, John Hancock guarantees that the Account Value allocated to the Fixed
Account will accrue interest daily at an effective annual rate of at least 4%
without regard to the actual investment experience of the general account.
Consequently, if an Owner pays the scheduled premiums, allocates all net
premiums only to the Fixed Account, and makes no transfers, partial
withdrawals, or policy loans, the minimum amount and duration of the death
benefit will be determinable and guaranteed. Transfers from the Fixed Account
are subject to certain limitations (see "Transfers Among Subaccounts"), and
charges will vary somewhat for Account Value allocated to the Fixed Account.
See "Charges Deducted From Account Value".
The Account Value in the Fixed Account is equal to the portion of the net
premiums allocated to it, plus any amounts transferred to it and interest
credited to it, minus any charges deducted from it or partial withdrawals or
amounts transferred from it. John Hancock guarantees that interest credited to
the Account Value in the Fixed Account will not be less than an effective
annual rate of 4%. John Hancock may, in its sole discretion, credit a higher
rate although it is not obligated to do so. The Owner assumes the risk that
interest credited will not exceed 4% per year. Upon request and in the annual
statement, John Hancock will inform Owners of the then-applicable rate.
Because of exemptive and exclusionary provisions, interests in John
Hancock's general account have not been registered under the Securities Act of
1933 and the general account has not been registered as an investment company
under the 1940 Act. Accordingly, neither the general account nor any interests
therein are subject to the provisions of these Acts, and John Hancock has been
advised that the staff of the Securities and Exchange Commission has not
reviewed the disclosure in this prospectus relating to the Fixed Account.
Disclosure regarding the Fixed Account may, however, be subject to certain
generally-applicable provisions of the Federal securities laws relating to
accuracy and completeness of statements made in prospectuses.
POLICY PROVISIONS AND BENEFITS
The discussions which follow under "Death Benefits", "Account Value" and
"Surrender Value" assume that there has been no Policy loan. Benefits and
values are affected if premiums are not paid as scheduled or if a Policy loan
is made. For the effect of a default in payment of premiums, see "Default and
Options on Lapse", and of a loan, see "Loan Provision and Indebtedness".
REQUIREMENTS FOR ISSUANCE OF POLICY
The Policy is generally available with a minimum Sum Insured at Issue of
$25,000 for insureds less than 25 years of age at the time of issue of the
Policy and minimum Sum Insured at Issue of $50,000 for insureds with ages 25
through 75 at issue. All persons insured must meet certain health and other
criteria called "underwriting standards". The smoking status of the insured is
reflected in the insurance charges made. If the Sum Insured at Issue is at
least $100,000, the insured may be eligible for the "preferred" underwriting
class of this Policy, which has the lowest insurance charges. Policies issued
in connection with certain employee plans will not
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<PAGE>
directly reflect the sex of the insured in either the premium rates or the
charges or values under the Policy. Accordingly, the illustrations, factors
and premiums set forth in this Prospectus may differ for such Policies.
PREMIUMS
Payment Schedule
Premiums are scheduled and payable during the lifetime of the insured in
accordance with John Hancock's established rules and rates. Premiums are
payable at John Hancock's Home Office on or before the due date specified in
the Policy. All Policies operate under the same schedule of due dates.
After the payment of the Minimum First Premium (see "Minimum Premium
Requirements" below) there are three scheduled due dates in the first Policy
year. Due dates are the last Valuation Date in the third, sixth and ninth
Policy months. In the second Policy year, the scheduled due dates are the last
Valuation Date in the sixth and twelfth Policy months. In the third and all
later Policy years, the scheduled due date is the last Valuation Date of the
Policy year.
Minimum Premium Requirements
An amount of Required Premium (see "Amount of Required Premium" below) is
determined at the start of each Policy year. Generally, the full amount of
Required Premium must be paid by the last scheduled due date of the Policy
year. In the first and second Policy years, however, there are additional
requirements.
In the first Policy year, a Minimum First Premium must be received by John
Hancock at its Home Office before the Policy is in full force and effect. The
Minimum First Premium is equal to the greater of $150 or one-fourth of the
Required Premium. Also in the first Policy year, one-half of the Required
Premium must be received on or before the last Valuation Date in the third
Policy month and three-quarters of the Required Premium must be received on or
before the last Valuation Date in the sixth Policy month.
In the second Policy year, one-half of the Required Premium for the second
Policy year must be received on or before the last Valuation Date in the sixth
Policy month.
Premium requirements are met by premium payments on a cumulative basis. For
example, the premium requirement on all scheduled due dates of the first
Policy year would be met if the full Required Premium for the first Policy
year were paid at issue of the Policy.
Generally, all premiums received are counted by John Hancock when it
determines whether the premium requirement is met on a scheduled due date.
This cumulative amount of premiums received is reduced for this purpose by
amounts withdrawn from the Premium Component of Excess Value and amounts
applied from the Premium Component to any Value Option other than the
Accumulate Option. The premium requirement will also be deemed satisfied on
the last Valuation Date of the second or any later Policy year if any Excess
Value is available on the scheduled due date. See "Value Options".
Failure to satisfy a premium requirement on a scheduled due date may cause
the Policy to terminate. See "Default and Options on Lapse".
Amount of Required Premium
The Required Premium determined at the start of each Policy year equals an
amount for the Basic Death Benefit ("Basic Premium") or $300 if the annual
Basic Premium is less than $300, plus any additional premium
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because the insured is an extra mortality risk or because additional insurance
benefits have been purchased. The Basic Premium is a level amount that does
not change if the Level Schedule is selected. If the Modified Schedule is
selected, the Basic Premium does not change until the Premium Recalculation
occurs. See "Choice of Premium Schedule" and "Premium Recalculation".
If the Account Value on the Valuation Date immediately preceding the Policy
anniversary, when multiplied by the Death Benefit Factor on that Policy
anniversary , is equal to or greater than the Guaranteed Death Benefit, then
no Required Premium is applicable to the following Policy year. This means
that even if no premium is paid during the Policy year, the premium
requirement will be met on the scheduled due date at the end of the Policy
year. If applicable, Owners will be mailed a written notice by John Hancock
within 10 days after any Policy anniversary that no premium payment is
required in that Policy year.
Choice of Premium Schedule
At the time of application, the applicant can select either a Level Schedule
or a Modified Schedule as the basis for the Basic Premium on the Policy. The
Modified Schedule alternative is not available if the insured is over age 70
on the issue date of the Policy. If the Level Schedule is chosen, the Basic
Premium will never increase during the lifetime of the insured. With the Level
Schedule, the Basic Premium is completely insulated from any adverse
investment performance. If the Modified Schedule is chosen, the Basic Premium
is initially lower than under the Level Schedule. However, a Premium
Recalculation (described below) must occur no later than the Policy
anniversary nearest the insured's 72nd birthday. At the time of the Premium
Recalculation, John Hancock determines a new Basic Premium which is payable
through the remaining lifetime of the insured.
A comparison of the Basic Premiums at issue under the Level and Modified
Schedules for a Sum Insured at issue of $100,000 for a male is shown below:
<TABLE>
<CAPTION>
Issue
Age Level Modified
----- ----- --------
<S> <C> <C>
25 $1,113 $ 708
40 $ 954 $1,305
55 $3,869 $2,585
</TABLE>
Premium Recalculation (Modified Schedule Only)
The Premium Recalculation applicable to any Policy on a Modified Schedule
may be elected by the Owner at any time after the first Policy anniversary up
to the Policy anniversary nearest the insured's 72nd birthday. If elected, the
Premium Recalculation will be effected on the Policy anniversary next
following receipt by John Hancock at its Home Office of satisfactory written
notice. If not elected sooner, the Premium Recalculation will be effected by
John Hancock on the Policy anniversary nearest the insured's 72nd birthday.
The new Basic Premium resulting from a Premium Recalculation may be less
than, equal to or greater than the original Basic Premium but it will never
exceed the maximum Basic Premium shown in the Policy. The new Basic Premium
depends on the insured's sex and age, the Guaranteed Death Benefit under the
Policy and the Account Value on the Valuation Date immediately preceding the
date of the Premium Recalculation.
A charge will be made if the new Basic Premium is below the Basic Premium on
the Level Schedule for the insured's age at issue of the Policy. The charge
(currently 1 1/2%) will not exceed 3% of the amount of Account Value applied
by John Hancock to reduce the new Basic Premium to an amount below the Basic
Premium which would have been payable on the Level Schedule for the insured's
age at issue. See "Guaranteed Death Benefit Charges".
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Billing, Allocation of Premium Payments (Investment Rule)
The Owner may at any time elect to be billed by John Hancock for an amount
of premium greater than the Required Premium otherwise payable. The Owner may
also elect to be billed for premiums on an annual, semi-annual or quarterly
basis. An automatic check-writing program may be available to an Owner
interested in making monthly premium payments. A Premium Processing Charge,
not to exceed $2, is deducted from each premium payment. All premiums are
payable at John Hancock's Home Office.
Any premium payment will be processed by John Hancock as of the end of the
Valuation Period in which it is received, unless one of the three exceptions
noted below is applicable. Each premium payment will be reduced, first by the
Premium Processing Charge and then by the state premium tax charge and the
sales charge deducted from premiums. See "Charges and Expenses". The remainder
is the net premium.
The Owner at the time of application must elect an Investment Rule which
will allocate net premiums and any credits to any of the ten subaccounts. The
Owner must select allocation percentages in whole numbers, and the total
allocated must equal 100%. The Owner may thereafter change the Investment Rule
prospectively at any time. The change will be effective as to any net premiums
and credits applied after receipt at John Hancock's Home Office of notice
satisfactory to John Hancock.
There are three exceptions to the normal practice of processing a premium
payment as of the end of the Valuation Period in which it is received:
(1) A payment received prior to a Policy's issue date will be processed
as if received on the Valuation Date immediately preceding the
issue date.
(2) A payment made during a Policy's grace period will be processed as
of the scheduled due date to the extent it represents the amount of
premium in default; any excess will be processed as of the date of
receipt.
(3) If the Minimum First Premium is not received prior to the issue date,
each payment received thereafter will be processed as if received on the
Valuation Date immediately preceding the issue date until all of the
Minimum First Premium is received.
Flexibility as to Premium Payments
The Owner may pay more than the Required Premium during a Policy year and
may ask to be billed for an amount greater than any Required Premium. The
Owner may also pay amounts in addition to any billed amount. However, each
premium payment must be at least $25. John Hancock reserves the right to limit
premium payments above the amount of the cumulative Required Premiums due on
the Policy.
The ability to pay more than the Required Premium provides the Owner with
considerable payment flexibility in meeting the premium requirements of the
Policy. Consider a Policy with a $1,000 Required Premium and where the Owner
pays $1,250 in each of the first eight Policy years. If none of the additional
premium of $2,000 is applied under a Value Option (See "Value Options"), the
Policy will remain in force for at least ten years without any further premium
payments. During each of these ten years, the premium received ($1,250 a year
for eight years) at least equals the aggregate Required Premiums ($1,000 a
year for 10 years) on the scheduled due dates. In other words, the payment of
more than the Required Premium in a year can be relied upon to satisfy the
Required Premium requirements in later years. If, however, the Owner were to
apply $500 of the additional premium to a Value Option, then only $1,500 would
remain to meet Required Premiums. The Policy would remain in force for at
least 9 years but a payment of $500 may be necessary by the end of the tenth
Policy year to keep the Policy in force.
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Recent Federal legislation has modified the tax treatment of certain policy
distributions such as loans, surrenders, partial surrenders, and withdrawals.
The application of this modified treatment to any Owner depends upon whether
premiums have been paid that exceed a "7-pay' premium as defined in the law.
The "7-pay' premium is greater than the Required Premium on the Policy but is
generally less than the amount an Owner may choose to pay and John Hancock
will accept. If the total premium paid exceeds the 7-pay limitation, the Owner
will be subject to the new tax rules on any distributions made from the
Policy. A material change in the Policy will result in a new "7-pay"
limitation and test period. A reduction in death benefit within the seven year
period following issuance of, or a material change in, the Policy may also
result in the application of the modified endowment treatment. See "Policy
Proceeds" under "Tax Considerations."
ACCOUNT VALUE AND SURRENDER VALUE
Amount of Account Value. The Account Value increases or decreases depending
upon a number of factors, such as the applicable subaccount's investment
experience, the proportion of the Account Value invested in each subaccount
and the interest credited to any Loan Account. In general the Account Value
for any day equals the Account Value for the previous day, decreased by
charges against the Account Value, increased or decreased by the investment
experience of the subaccounts and increased by net premiums received. No
minimum amount of Account Value is guaranteed.
A Policy loan will not affect the total amount of Account Value at the time
the loan is made but will result in a different rate of return being credited
to the Loan Account portion of the Account Value.
Amount of Surrender Value. The Surrender Value will be the Account Value
less the sum of any unpaid Issue Charge and any Contingent Deferred Sales
Charge and less any Indebtedness.
The Contingent Deferred Sales Charge is deducted from the Account Value upon
surrender of the Policy during the first eleven Policy years after issue. The
amount of this charge is set forth in a schedule under "Sales Charges". The
total charge for sales expenses, including the Contingent Deferred Sales
Charge, over the lesser of 20 years or the life expectancy of the insured,
will not exceed 9% of the payments under the Policy over that period.
When Policy may be Surrendered. A Policy may be surrendered for its
Surrender Value at any time while the insured is living. Surrender takes
effect and the Surrender Value is determined as of the end of the Valuation
Period in which occurs the later of receipt at John Hancock's Home Office of a
signed request and the surrendered Policy.
When Part of Policy may be Surrendered. A Policy may be partially
surrendered upon submission of a written request satisfactory to John Hancock
in accordance with its rules. Currently, the Policy after partial surrender
must have a Sum Insured at least as large as the minimum amount for which John
Hancock would issue a Policy on the life of the insured. The Guaranteed Death
Benefit for the Policy will be adjusted to reflect the new Sum Insured. A pro-
rata portion of any Contingent Deferred Sales Charge will be deducted. A
possible alternative to the partial surrender of a Policy is the withdrawal of
Excess Value. See "Value Options".
DEATH BENEFITS
The death benefit payable is the greater of the Guaranteed Death Benefit,
including any Extra Death Benefit, or the Current Death Benefit.
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<PAGE>
Guaranteed Death Benefit. The Guaranteed Death Benefit at any time is the
sum of the Basic Death Benefit and any Extra Death Benefit. The Basic Death
Benefit at issue of the Policy is the same as the Sum Insured at Issue shown
in the Policy. Thereafter the Basic Death Benefit may be reduced by a partial
surrender on request of the Owner. John Hancock guarantees that, regardless of
the investment experience of the subaccounts, the death benefit will never be
less than the Guaranteed Death Benefit.
Extra Death Benefit. An Extra Death Benefit may be available from time to
time on Policy anniversaries. If the Owner exercises an Extra Death Benefit
Value Option on a Policy anniversary, the amount of Extra Death Benefit
produced under the Option becomes a Guaranteed Death Benefit. The amount of
any Extra Death Benefit depends upon the Account Value, Benchmark Value (see
"Value Options") and the sex and age of the Insured on the Policy anniversary
as of which the Option is exercised. See "Value Options". The insured's age on
a Policy anniversary is the age of the insured on his or her birthday nearest
that date.
Current Death Benefit. The Current Death Benefit on any date is the Account
Value at the end of the Valuation Period containing that date times the Death
Benefit Factor shown in the Policy. The Death Benefit Factor depends upon the
sex and the then attained age of the insured. The Death Benefit Factor
decreases from year to year as the attained age of the insured increases. For
example, the Death Benefit Factor for a male age 75 is 1.3546, for a male age
76 is 1.3325. (A complete list of Death Benefit Factors is set forth in the
Policy.) The Current Death Benefit is variable: it increases as the Account
Value increases and decreases as the Account Value decreases.
VALUE OPTIONS
As of the last Valuation Date in each Policy year, the Account Value of the
Policy will be compared against an amount (the Benchmark Value described
below) to determine if any Excess Value exists under the Policy. Any Excess
Value will be applied according to the election made in the application for
the Policy or in a written notice from the Owner after issue of the Policy.
The Benchmark Value depends upon the Policy's Guaranteed Death Benefit, the
Required Premium, any Indebtedness, the sex and attained age of the insured,
and any Surrender Charge. The formula describing precisely how Benchmark Value
is calculated on each Policy anniversary is set forth in the Policy under
"Excess Value". In general, the Benchmark Value increases as more guarantees
are provided in the Policy, either in the form of higher Guaranteed Death
Benefits or lower premiums. The Benchmark value is also not less than 110% of
any Indebtedness. The Benchmark Value generally increases as the attained age
of the insured increases.
Excess Value is any amount of Account Value greater than Benchmark Value.
Excess Value may arise from two sources. The Premium Component is Excess Value
up to the amount by which the cumulative premiums paid (excluding amounts from
this component previously withdrawn or applied under certain Value Options)
exceed the cumulative sum of Required Premiums. The Premium Component may be
zero. The Experience Component is any amount of Excess Value above the Premium
Component and arises out of favorable investment experience or lower than
maximum insurance and expense charges.
If Excess Value is available on a Policy anniversary, any Premium Component
and Experience Component will be applied under Value Options elected by the
Owner. Either component may be applied to any available Value Option except
that the Premium Component must be applied to the Accumulate Option until the
second Policy anniversary. The amounts to be applied will be determined in
accordance with the Owner's election and in accordance with the then current
John Hancock rules. A change in an election will be effective as of the Policy
anniversary next following its date of receipt in writing by John Hancock at
its Home Office or, if subject to
14
<PAGE>
underwriting rules, its date of approval. Any change in election does not
affect amounts previously applied under any Value Option.
The Policy includes three Value Options:
The Accumulate Option leaves any Excess Value in the Account Value and does
not affect the guarantees under the Policy. The Accumulate Option is available
on both Premium Schedules and no limit is placed on the amount that may be
applied from either the Premium Component or the Experience Component.
The Extra Death Benefit Option increases the amount of Guaranteed Death
Benefit. The Extra Death Benefit Option is available on both Premium
Schedules. No limit is placed on the amount that may be applied from the
Experience Component. The amount that may be applied from the Premium
Component is limited to an amount that depends upon the Sum Insured at Issue
and the insured's age at issue of the Policy. Amounts applied from the Premium
Component reduce the cumulative amount of premiums received under the Policy
for purposes of determining whether the Policy will continue to remain in
force. A Guaranteed Death Benefit Charge (see "Charges and Expenses") is made
against the Account Value to cover the risk assumed by John Hancock in
providing the increased Guaranteed Death Benefit. The Extra Death Benefit
Value Option may not be available if the insured is an extra mortality risk.
The increase in Guaranteed Death Benefit equals the amount applied less the
Guaranteed Death Benefit Charge times the Death Benefit Factor shown in the
Policy. An increase in the Guaranteed Death Benefit may increase the amount at
risk under the Policy which would increase the amount of the Insurance Charge.
See "Charges Deducted from Account Value". The Owner may decrease the amount
of any Extra Death Benefit on the Policy. Depending upon the amount of Account
Value under a Policy, a decrease may result in an amount of Excess Value which
may be taken by the Owner as a partial withdrawal. See "Partial Withdrawal of
Excess Value". Any decrease is effective at the end of the Valuation Period in
which John Hancock receives written notice of the request.
The Basic Premium Reduction Option permanently decreases the amount of the
Basic Premium that would otherwise have to be paid in a Policy year to avoid a
lapse at the end of the year. The Basic Premium Reduction Option is available
only on the Level Schedule. No limit is currently placed on the amount that
may be applied from either component except that the Basic Premium may not be
reduced below zero. Amounts applied from the Premium Component reduce the
cumulative amounts of premiums received under the Policy for purposes of
determining whether the Policy will continue to remain in force. A Guaranteed
Death Benefit Charge (see "Charges and Expenses") is made against the Account
Value to cover the risk assumed by John Hancock that the Guaranteed Death
Benefit will remain in effect notwithstanding the lower future premiums. The
reduction in Basic Premium equals the amount applied, less the Guaranteed
Death Benefit Charge, divided by the Premium Credit Factor shown in the
Policy. The Premium Credit Factor depends upon the sex and the then attained
age of the insured. The Premium Credit Factor decreases from year to year as
the attained age of the insured increases. For example, the Premium Credit
Factor for a female age 60 is 13.6798, for a female age 61 is 13.3382.
PARTIAL WITHDRAWAL OF EXCESS VALUE
Under John Hancock's current administrative rules, an Owner may withdraw
Excess Value from the Policy on or after the first Policy anniversary. This
privilege, which reduces the Account Value by the amount of the withdrawal and
the associated charge, may be exercised only once in a Policy year and will be
effective as of the end of the Valuation Period in which John Hancock receives
written notice satisfactory to it at its Home Office. The minimum amount that
may be withdrawn is $500. Unless the Current Death Benefit exceeds the
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<PAGE>
Guaranteed Death Benefit, a partial withdrawal will not affect the death
benefit payable. An amount equal to the lesser of $25 or 2% of the amount
withdrawn is charged against Account Value for each partial withdrawal.
An amount equal to the Excess Value withdrawn will be removed from each
subaccount in the same proportion as the Account Value is then allocated among
the subaccounts. A partial withdrawal is not a loan and, once made, cannot be
repaid. No Contingent Deferred Sales Charge is deducted upon a partial
withdrawal. Amounts withdrawn from the Premium Component reduce the cumulative
amount of premiums received for purposes of determining whether the premium
requirements of the Policy have been met. On a Modified Schedule, because the
Account Value is reduced by a partial withdrawal, the premium that results
from the Premium Recalculation will be higher because of the partial
withdrawal.
TRANSFERS AMONG SUBACCOUNTS
The Owner may reallocate the amounts held for the Policy in the subaccounts
up to twelve times in each Policy year with no charge. If any additional
transfers in a Policy year are permitted, John Hancock may impose a charge of
not more than $5 against Account Value for each additional transfer. The Owner
may either (1) use percentages (in whole numbers) to be transferred among
subaccounts or (2) designate the dollar amount of funds to be transferred
among subaccounts. The reallocation must be such that the total in the
subaccounts after reallocation equals 100% of Account Value. Transfers out of
a variable subaccount will be effective at the end of the Valuation Period in
which John Hancock receives at its Home Office notice satisfactory to John
Hancock.
Transfers out of the Fixed Account to the variable subaccounts are permitted
only once each Policy year and only during the 31-day period beginning on the
Policy anniversary. Transfers out of the Fixed Account may be requested from
60 days before to 30 days after the Policy anniversary. If received on or
before the Policy anniversary, requests for transfer out of the Fixed Account
will be processed on the Policy anniversary (or the next Valuation Date if the
Policy anniversary does not occur on a Valuation Date); if received after the
Policy anniversary, they will be processed at the end of the Valuation Period
in which John Hancock receives the request at its Home Office. (John Hancock
reserves the right to defer such Fixed Account transfers for six months.)
Transfers among variable subaccounts and transfers into the Fixed Account may
be requested at any time. A maximum of 20% of Fixed Account assets or, if
greater, $500 may be transferred out of the Fixed Account in any Policy year.
Currently, there is no minimum amount limit on transfers out of the Fixed
Account, but John Hancock reserves the right to impose such a limit in the
future.
If the Owner requests a reallocation which would result in amounts being
held in more than ten subaccounts, such reallocation will not be effective and
a revised reallocation may be chosen in order that amounts will be reallocated
to no more than ten subaccounts. If an Owner requests a transfer out of the
Fixed Account 61 days or more prior to the Policy anniversary, that portion of
the reallocation will not be processed and the Owner's confirmation statement
will not reflect a transfer out of the Fixed Account as to such request.
Telephone Transfers and Policy Loans. Once a written authorization is
completed by the Owner, the Owner may request a transfer or policy loan by
telephoning 1-800-732-5543. During periods of heavy telephone usage,
implementing a telephone transfer or policy loan may be difficult. If an Owner
is unable to reach John Hancock via the above number, the Owner should send a
written request via fax to 1-800-621-0448. (Any requests via fax are
considered telephone requests and are bound by the conditions in the Owner's
signed telephone authorization form.) Any fax request should include the
Owner's name, daytime telephone number, Policy number and, in the case of
transfers, the names of the subaccounts from which and to which money will be
transferred. The right to discontinue telephone transactions at any time
without notice to Owners is specifically reserved.
An owner who authorizes telephone transactions will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which John Hancock reasonably believes to be genuine.
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<PAGE>
John Hancock employs procedures which include requiring personal
identification, tape recording calls, and providing written confirmation to
the Owner. If John Hancock does not employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, it may be liable for
any loss due to unauthorized or fraudulent instruction.
LOAN PROVISIONS AND INDEBTEDNESS
Loan Provision. Loans may be made at any time a Loan Value is available
after the first Policy year. The Owner may borrow money, assigning the Policy
as the only security for the loan, by completion of a form satisfactory to
John Hancock or, if the telephone transaction authorization form has been
completed, by telephone. Assuming no outstanding Indebtedness in Policy years
two and three, the Loan Value will be 75% of that portion of the Surrender
Value attributable to the variable subaccount investments, plus 100% of that
portion of the Surrender Value attributable to Fixed Account investments and,
in later Policy years, 90% of that portion of the Surrender Value attributable
to variable subaccount investments, plus 100% of that portion of the Surrender
Value attributable to Fixed Account investments. Interest charged on any loan
will accrue daily at an annual rate determined by John Hancock at the start of
each Policy Year. This interest rate will not exceed the greater of (1) the
"Published Monthly Average" (defined below) for the calendar month ending 2
months before the calendar month of the Policy anniversary or (2) 5%. The
"Published Monthly Average" means Moody's Corporate Bond Yield Average--
Monthly Average Corporates, as published by Moody's Investors Service, Inc.,
or if the average is no longer published, a substantially similar average
established by the insurance regulator where the Policy is issued.
The amount of any outstanding loan plus accrued interest is called the
"Indebtedness". Except when used to pay premiums, a loan will not be permitted
unless it is at least $300. The Owner may repay all or a portion of any
Indebtedness while the insured is living and premiums are being duly paid.
When a loan is made, an amount equal to the loan proceeds will be transferred
out of the Account and the Fixed Account, as applicable. This amount is
allocated to the Loan Account, a portion of John Hancock's general account.
Each subaccount will be reduced in the same proportion as the Account Value is
then allocated among the subaccounts. Upon each loan repayment, the same
proportionate amount of the entire loan as was borrowed from the Fixed Account
will be repaid to the Fixed Account. The remainder of the loan repayment will
be allocated to the appropriate subaccounts as stipulated in the current
Investment Rule. For example, if the entire loan outstanding is $3000 of which
$1000 was borrrowed from the Fixed Account, then upon a repayment of $1500,
$500 would be allocated to the Fixed Account and the remaining $1000 would be
allocated to the appropriate subaccounts as stipulated in the current
Investment Rule.
Effect of Loan and Indebtedness. A loan does not directly affect the amount
of the Required Premium. While the Indebtedness is outstanding, that portion
of the Account Value that is in the Loan Account is credited interest at a
rate that is 1% less than the loan interest rate for the first 20 Policy years
and, thereafter, .5% less than the loan interest rate. This rate will usually
be different than the net return for the subaccounts. Since the Loan Account
and the remaining portion of the Account value will generally have different
rates of investment return, any Death Benefit above the Guaranteed Death
Benefit, the Account Value, and the Surrender Value are permanently affected
by an Indebtedness, whether or not repaid in whole or in part. The amount of
any Indebtedness is subtracted from the amount otherwise payable when the
Policy proceeds become payable.
Whenever the Indebtedness equals or exceeds the Surrender Value, the Policy
terminates 31 days after notice has been mailed by John Hancock to the Owner
and any assignee of record at their last known addresses, unless a repayment
of the excess Indebtedness is made within that period.
DEFAULT AND OPTIONS ON LAPSE
Premium Grace Period, Default and Lapse. Any amount of premium required to
keep the Policy in force is in default if not paid on or before its scheduled
due date, but the Policy provides a 61-day grace period for the
17
<PAGE>
payment of each such amount. (This grace period does not apply to the receipt
of the Minimum First Premium.) The insurance continues in full force during
the grace period but, if the insured dies during the grace period, the amount
in default is deducted from the death benefit otherwise payable.
Written notice will be furnished to the Owner at his or her last known
address, at least 31 days prior to the end of the grace period, specifying the
minimum amount which must be paid to continue the Policy in force on a premium
paying basis after the end of the grace period. If a payment at least equal to
the amount in default is not received by the end of the grace period, the
Policy will lapse. If payment by the Owner of an amount at least equal to the
amount in default is received prior to the end of the grace period, the Policy
will no longer be in default. The portion of the payment equal to the amount
in default will be processed as if it had been received the day it was due;
any excess payment will be processed as of the end of the Valuation Period in
which it is received. See "Premium Payments".
Options on Lapse. If a Policy lapses, the Surrender Value on the date of
lapse is applied under one of the following options for continued insurance
not requiring further payment of premiums. These options provide for Variable
or Fixed Paid-Up Insurance or Fixed Extended Term Insurance on the life of the
insured commencing on the date of lapse.
Both the Variable and Fixed Paid-Up Insurance options provide an amount of
paid-up whole life insurance, determined in accordance with the Policy, which
the Surrender Value will purchase. The amount of Variable Paid-Up Insurance
($5000 minimum) may then increase or decrease, subject to any guarantee, in
accordance with the investment experience of the subaccounts. The Fixed Paid-
Up Insurance option provides a fixed and level amount of insurance. The Fixed
Extended Term Insurance option provides a fixed amount of insurance determined
in accordance with the Policy, with the insurance coverage continuing for as
long a period as the available Policy values will purchase.
If no option has been elected before the end of the grace period, the Fixed
Extended Term Insurance option automatically applies unless the amount of
Fixed Paid-Up Insurance would equal or exceed the amount of Fixed Extended
Term Insurance or unless the insured is a substandard risk, in either of which
cases Fixed Paid-Up Insurance is provided.
EXCHANGE PRIVILEGE
The Owner may transfer the entire Account Value under the Policy to the
Fixed Account at any time, creating a non-variable policy. The exchange will
be effective at the end of the Valuation Period in which John Hancock receives
at its Home Office notice of the transfer satisfactory to John Hancock.
The foregoing description of Policy provisions is qualified by reference to
the specimen Policy which has been filed as an exhibit to the Registration
Statement.
CHARGES AND EXPENSES
CHARGES DEDUCTED FROM PREMIUMS
In addition to part of the sales charge (see "Sales Charges" below), the
following charges are deducted from premiums:
Premium Processing Charge. A charge, not to exceed $2, will be deducted from
each premium payment for collection and processing costs. Policyholders who
pay premiums annually will incur lower aggregate
18
<PAGE>
processing charges than those who pay premiums more frequently. The processing
charge is currently $2 but may be different for payments made under special
billing arrangements acceptable to John Hancock.
State Premium Tax Charge. A charge equal to 2 1/2% of each premium payment,
after the deduction of the Premium Processing Charge, will be deducted from
each premium payment except in any state where a lower charge is required.
Premium taxes vary from state to state. The 2 1/2% rate is the average rate
expected to be paid on premiums received in all states over the lifetimes of
the insureds covered by the Policies.
SALES CHARGES
Charges are made to compensate John Hancock for the cost of selling the
Policy. This cost includes agents' commissions, advertising, and the printing
of the prospectuses and sales literature. The amount of the charge in any
Policy year cannot be specifically related to sales expenses for that year.
John Hancock expects to recover its total sales expenses over the period the
Policies are in effect. To the extent that sales load charges are insufficient
to cover total sales expenses, the sales expenses may be recovered from other
sources, including gains from the charge for mortality and expense risks and
other gains with respect to the Policies, or from John Hancock's general
assets. See "Distribution of Policies."
Part of the sales charge is deducted from each premium payment received.
This amount is 5% of the premium, after deduction of the Premium Processing
Charge. John Hancock will waive the portion of the sales charge otherwise to
be deducted from each premium paid on a Policy with a current Sum Insured of
$250,000 or higher. The continuation of this waiver is not contractually
guaranteed and the waiver may be withdrawn or modified by John Hancock at some
future date.
The remainder of the sales charge will be deducted only if the Policy is
surrendered or stays in default past its grace period. This second part is the
Contingent Deferred Sales Charge. The Contingent Deferred Sales Charge,
however, will not be deducted for a Policy that lapses or is surrendered on or
after the Policy's eleventh anniversary, and it will be reduced for a Policy
that lapses or is surrendered between the end of the seventh Policy year and
the end of the eleventh Policy year.
The Contingent Deferred Sales Charge is a percentage of the lesser of (a)
the total amount of premiums paid before the date of surrender or lapse and
(b) the sum of the Modified Premiums or portions thereof due on or before the
date of surrender or lapse.
<TABLE>
<CAPTION>
Maximum Contingent Deferred Sales
Charge as a Percentage of Modified
Premiums Due Through Effective
For Surrenders or Lapses Effective During: Date of Surrender or Lapse*
------------------------------------------ ----------------------------------
<S> <C>
Policy Years 1-6......................... 15.00%
Policy Year 7............................ 14.17%
Policy Year 8............................ 10.86%
Policy Year 9............................ 7.13%
Policy Year 10........................... 4.22%
Policy Year 11........................... 1.90%
Policy Year 12 and later................. 0%
</TABLE>
- --------
* A slightly lower percentage than that shown applies in the last Valuation
Period of Policy years 6 through 11.
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<PAGE>
The amount of the Contingent Deferred Sales Charge is calculated on the
basis of the premium under the Modified Schedule for the age of the insured at
the time of issue of the Policy, regardless of whether the Policy uses the
Level Schedule or the Modified Schedule. At issue ages above 70, however,
where only the Level Schedule is available, the Contingent Deferred Sales
Charge depends on the premium under that schedule. Also, lower percentages
apply at higher issue ages.
The absence of any need to pay a Required Premium because of the adequacy of
the Account Value on a Policy anniversary does not impact the amount of
Modified Premiums deemed to have been due to date for purposes of the
Contingent Deferred Sales Charge. For example, if the size of the Account
Value is sufficiently large that the Required Premium for the fifth Policy
year otherwise payable need not be paid and the Owner surrenders the Policy at
the end of the Policy year, the Contingent Deferred Sales Charge would be
based on the sum of five Modified Premiums on the Policy (or, if less, the
total amount of premiums actually paid during all five Policy years.)
Similarly, if a premium recalculation is required or effected (i.e., from
Modified to Level Schedule) or a premium reduction is implemented, the amount
of premiums due to the date of any subsequent surrender or lapse for purposes
of calculating the Contingent Deferred Sales Charge will continue to be based
on the premium schedule in effect prior to such recalculation or reduction.
The Contingent Deferred Sales Charge reaches its maximum at the end of the
sixth Policy year and equals this amount for the entire seventh Policy year.
The Contingent Deferred Sales Charge is reduced in each Policy year after the
seventh. At issue ages higher than age 57, the maximum is reached at an
earlier Policy year, e.g., the end of the fifth Policy year at issue age 70,
and may be reduced to zero over a shorter number of years.
REDUCED CHARGES FOR ELIGIBLE GROUPS
The sales charges and Issue Charge (described below) otherwise applicable
may be reduced with respect to Policies issued to a class of associated
individuals or to a trustee, employer or similar entity where John Hancock
anticipates that the sales to the members of the class will result in lower
than normal sales and administrative expenses. These reductions will be made
in accordance with John Hancock's rules in effect at the time of the
application for a Policy. The factors considered by John Hancock in
determining the eligibility of a particular group for reduced charges, and the
level of the reduction, are as follows: the nature of the association and its
organizational framework; the method by which sales will be made to the
members of the class; the facility with which premiums will be collected from
the associated individuals and the association's capabilities with respect to
administrative tasks; the anticipated persistency of the policies, the size of
the class of associated individuals and the number of years it has been in
existence; and any other such circumstances which justify a reduction in sales
or administrative expenses. Any reduction will be reasonable and will apply
uniformly to all prospective Policy purchasers in the class and will not be
unfairly discriminatory to the interests of any Policyowner.
CHARGES DEDUCTED FROM ACCOUNT VALUE
In addition to the possible transfer charge discussed above under "Transfers
Among Subaccounts", the following charges are deducted from Account Value:
Issue Charge. John Hancock will deduct from Account Value a charge ($240 per
Policy and 48c per $1,000 of the Sum Insured at Issue) to compensate John
Hancock for expenses incurred in connection with the issuance of the Policy,
other than sales expenses. Such expenses include medical examinations,
insurance underwriting costs, and costs incurred in processing applications
and establishing permanent Policy records. For a Policy with a $50,000 Sum
Insured at Issue, the total Issue Charge would be $264.
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<PAGE>
This charge is fully assessed upon the issuance of the Policy, but will be
deducted from the Account Value in 48 equal monthly installments. On the Date
of Issue and on the first day of each subsequent Policy month, John Hancock
will deduct $5 per Policy and 1c per $1,000 of the Sum Insured at Issue. For
each month that John Hancock is unable to deduct the charge because there is
insufficient Account Value, the period over which John Hancock will make this
deduction will be extended by one month.
If a Policy lapses or is surrendered before the Issue Charge has been fully
recovered, the unpaid balance is part of the Surrender Charge. If a Policy
terminates by reason of the death of the insured, the unpaid balance will not
reduce the death benefit. The unpaid Issue Charge also reduces the amount that
may be borrowed through a Policy loan.
Maintenance Charge. John Hancock will deduct from the Account Value a charge
equal to $4 per Policy and 2c per $1,000 of the current Sum Insured. For a
Policy with a Sum Insured at Issue of $50,000 the maintenance charge deducted
during a Policy year would be $60.
This charge is to compensate John Hancock for administrative expenses,
including recordkeeping, processing death claims and surrenders, making Policy
changes, reporting and other communications to Owners and other similar
expense and overhead costs.
The maximum maintenance charge currently is $6.75 no matter how large a
Policy's current Sum Insured. Based on the current monthly charge, this
maximum will benefit all Policies which will have a current Sum Insured above
$137,500. Policies with a Sum Insured below this amount are not affected by
the maximum. This current maximum is not contractually guaranteed and may be
withdrawn or modified by John Hancock at some future date.
Insurance Charge. The insurance charge deducted monthly from Account Value
is based on the attained age of the insured and the amount at risk. The amount
at risk is the difference between the death benefit and the Account Value. The
amount of the insurance charge is determined by multiplying John Hancock's
then current monthly rate for insurance by the amount at risk.
Current monthly rates for insurance are based on the sex, age, and
underwriting class of the insured. John Hancock may change these rates from
time to time, but they will never be more than the guaranteed maximum rates
based on the 1980 Commissioners' Standard Ordinary Mortality Tables set forth
in the Policy.
Lower current insurance rates are offered at most ages for insureds who
qualify as non-smokers. To qualify, an insured must meet additional
requirements that relate to smoking habits and be age 20 or over. Insureds who
are under 20 years of age may ask us to review their current smoking habits
after they reach their 20th birthday.
John Hancock will also charge lower current insurance rates under a Policy
with a current Sum Insured of $250,000 or higher if the insured is over age 32
in the standard underwriting class or the insured is over age 34 in the
preferred underwriting class. These lower current insurance rates are not
contractually guaranteed and may be withdrawn or modified by John Hancock at
some future date.
Guaranteed Death Benefit Charges. John Hancock deducts a charge from that
portion of the Account Value attributable to the variable subaccounts for the
minimum death benefit that has been guaranteed. John Hancock guarantees that
the death benefit will never be less than the Sum Insured. In return for
making this guarantee, John Hancock currently makes a monthly charge of 1c per
$1000 of the current Sum Insured. This charge may be increased by John Hancock
but will never exceed 3c per $1000 of the current Sum Insured.
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<PAGE>
When an Extra Death Benefit Value Option is exercised, John Hancock
guarantees a higher Guaranteed Death Benefit. When a Basic Premium Reduction
Value Option is exercised, John Hancock provides the same Guaranteed Death
Benefit with less premiums. In either event, John Hancock makes a one-time
deduction from the amount applied as compensation for making the additional
guarantee. The current charge is 1 1/2% of the amount applied. This charge may
be increased by John Hancock but it will never exceed 3% of the amount
applied.
When a Premium Recalculation is effected on Policy on a Modified Schedule,
and the new Basic Premium is less than the Basic Premium on the Level Schedule
for the insured's age at issue of the Policy, a one-time deduction is made
from the amount applied as compensation for the additional guarantee. The
current charge is 1 1/2% of the amount applied to reduce the new Basic Premium
to an amount below the Basic Premium on the Level Schedule for the insured's
age at issue. This charge may be increased by John Hancock but it will never
exceed 3% of the amount applied.
Charge for Mortality and Expense Risks. A daily charge is made for mortality
and expense risks assumed by John Hancock at an effective annual rate of .60%
of the value of the Account's assets attributable to the Policies. This charge
begins when amounts under a Policy are first allocated to the Account. The
mortality risk assumed is that insureds may live for a shorter period of time
than estimated and, therefore, a greater amount of death benefits than
expected will be payable in relation to the amount of premiums received. The
expense risk assumed is that expenses incurred in issuing and administering
the Policies will be greater than estimated. John Hancock will realize a gain
from this charge to the extent it is not needed to provide for benefits and
expenses under the Policies.
Charges for Extra Mortality Risks. An insured who does not qualify for
either the preferred or standard underwriting class must pay an additional
Required Premium because of the extra mortality risk. This additional premium
is collected in two ways: up to 7 1/2% of the additional premiums deducted
from premiums when paid and 92 1/2% of the additional premium is deducted
monthly from Account Value in equal installments.
An insured who is charged an additional Required Premium because of the
extra mortality risk may not be eligible to exercise the Extra Death Benefit
Value Option.
Charges for Additional Insurance Benefits. An additional Required Premium
must be paid if the Owner elects to purchase an additional insurance benefit.
This additional premium is collected in two ways: up to 7 1/2% of the
additional premium is deducted from premiums when paid and 92 1/2% of the
additional premium is deducted monthly from Account Value in equal
installments.
Charges for Taxes. Currently no charge is made against Account Value for
John Hancock's Federal income taxes but if John Hancock incurs, or expects to
incur, income taxes attributable to the Account or this class of Policies in
future years, it reserves the right to make a charge and any charge would
effect what the subaccounts earn. Charges for other taxes, if any,
attributable to the subaccounts may also be made.
Charge for Partial Withdrawal. On or after the fifth Policy anniversary, the
Owner may withdraw all or part of any Excess Value in the Policy. The amount
to be withdrawn must be at least $500. An administrative charge equal to the
lesser of $25 or 2% of the amount withdrawn will be deducted from the Account
Value on the date of withdrawal.
Guarantee of Premiums and Certain Charges. The Policy's Basic Premium is
guaranteed not to increase, except that a larger Basic Premium may result from
the Premium Recalculation for a Modified Schedule Policy.
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<PAGE>
The state premium tax charge, sales charges, mortality and expense risk
charge, the charge for partial withdrawals and the Issue Charge are guaranteed
not to increase over the life of the Policy. Any charge for transfers among
subaccounts, the Premium Processing Charge, the maintenance charge, the
Guaranteed Death Benefit Charges and the insurance charge are guaranteed not
to exceed the maximums set forth in the Policy.
Fund Investment Management Fee. The Account purchases shares of the Funds at
net asset value, a value which reflects the deduction from the assets of each
Fund of its investment management fee which is described briefly in the
Summary of this prospectus and of certain non-advisory operating expenses. For
a full description of these deductions, see the attached prospectuses for the
Funds.
DISTRIBUTION OF POLICIES
Applications are solicited by agents who are registered representatives of
John Hancock and licensed by state insurance authorities to sell John
Hancock's Policies. John Hancock performs suitability and insurance
underwriting, determines whether to accept or reject the application for the
Policy and the insured's risk classification and acts as the principal
underwriter of the Policies. John Hancock will make the appropriate refund if
a Policy ultimately is not issued or is returned under the short-term
cancellation provision. Officers and employees of John Hancock are covered by
a blanket bond issued by a commercial carrier in the amount of $25 million.
Agents are compensated for sales of the Policies on a commission and service
fee basis by John Hancock, and for other direct and indirect expenses
(including agency expense allowances, general agent, district manager and
supervisor's compensation, agent's training allowances, deferred compensation
and insurance benefits of agents, general agents, district managers and
supervisors, agency office clerical expenses and advertising) actually
incurred in connection with the marketing and sale of the Policies.
The maximum commission payable to an agent for selling a Policy is 50% of
the premium that would be payable under a Modified Schedule in the first
Policy year, 10% of such premiums payable in the second, third and fourth
Policy years, and 3% of any other premiums received by John Hancock.
Agents with less than four years of service with John Hancock and agents
compensated on salary plus bonus or level commission programs may be paid on a
different basis. Agents who meet certain productivity and persistency
standards with respect to the sale of policies issued by John Hancock and its
affiliates will be eligible for additional compensation.
John Hancock is registered with the Commission under the Securities Exchange
Act of 1934 as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. John Hancock is not a member of the Securities
Investor Protection Corporation because it is exempt from membership in that
organization. The Policies may be sold through other registered broker-dealers
whose representatives are authorized by applicable law to sell variable life
insurance policies. The commissions which will be paid out by such broker-
dealers to their registered representatives will be in accordance with their
established rules. In addition, their qualified registered representatives may
be reimbursed by the broker-dealers under expense reimbursement allowance
programs in any year for approved voucherable expenses incurred.
John Hancock serves as principal underwriter for other separate accounts
registered under the 1940 Act: John Hancock Variable Annuity Accounts U, I and
V and John Hancock Variable Life Accounts U, V and S. John Hancock is also the
principal investment manager and principal underwriter for John Hancock
Variable Series Trust I.
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<PAGE>
TAX CONSIDERATIONS
POLICY PROCEEDS
Although the Policy contains provisions not found in fixed benefit life
insurance policies, John Hancock believes the Policy will nevertheless receive
the same Federal income and estate tax treatment. Section 7702 of the Internal
Revenue Code ("Code") defines life insurance for Federal tax purposes. If
certain standards are met at issue and over the life of the Policy, the Policy
will come within that definition. John Hancock will monitor compliance with
these standards.
John Hancock believes that the death benefit under the Policy will be
excludable from the beneficiary's gross income under Section 101 of the Code.
The Owner of a Policy is not deemed to be in constructive receipt of the cash
values until a withdrawal or surrender. A surrender, partial surrender or
withdrawal may have tax consequences. For example, the Owner will be taxed on
a surrender to the extent that the surrender value exceeds the net premiums
paid under the Policy, i.e., ignoring premiums paid for optional benefits and
riders. But under certain circumstances the Owner may be taxed on a withdrawal
of Policy values even if total withdrawals do not exceed total premiums paid.
John Hancock also believes that, except as noted below, loans received under
the Policy will be treated as indebtedness of an Owner and that no part of any
loan will constitute income to the Owner.
Distributions under Policies entered into after June 20, 1988, on which
premiums greater than the "7-pay' limit have been paid will be subject to
taxation based on recent Federal tax legislation. The Owner of such a Policy
will be taxed on distributions such as loans, surrenders, partial surrenders
and withdrawals to the extent of any income (gain) to the Owner (income-first
basis). Additionally, a 10% penalty tax may be imposed on income distributed
before the Owner attains age 59 1/2. Policies entered into prior to June 21,
1988, may also be subject to a tax on distributions if there is a material
change in the benefits or other terms of the Policy. All modified endowment
contracts issued by the same insurer (or affiliates) to the Owner during any
calendar year generally will be treated as one contract for the purpose of
applying these rules. Your tax advisor should be consulted if you have
questions regarding the possible impact of the recent tax law on your Policy.
Federal estate and state and local estate, inheritance and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Owner or beneficiary.
The above description of Federal tax consequences is only a brief summary
and is not intended as tax advice. For further information consult a qualified
tax advisor.
Federal and state tax laws can change from time to time and, as a result,
the tax consequences to the Owner and beneficiary may be altered.
CHARGE FOR JOHN HANCOCK'S TAXES
Currently John Hancock makes no charge against the Account for Federal
income taxes that may be attributable to this class of Policies. If John
Hancock incurs, or expects to incur, income taxes attributable to this class
of Policies or any subaccount in the future, it reserves the right to make a
charge for those taxes.
Under current laws, John Hancock may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are not
significant. If there is a material change in applicable state or local tax
laws, charges for such taxes may be made.
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<PAGE>
CORPORATE AND H.R. 10 PLANS
The Policy may be acquired in connection with the funding of retirement
plans satisfying the qualification requirements of Section 401 of the Code. If
so, the Code provisions relating to such plans and life insurance benefits
thereunder should be carefully scrutinized.
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<PAGE>
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF John Hancock
The Directors and Executive Officers of John Hancock and their principal
occupations during the past five years are as follows:
<TABLE>
<CAPTION>
Directors Principal Occupations
--------- ---------------------
<S> <C>
Samuel W. Bodman Chairman of the Board and Chief Execu-
tive Officer, Cabot Corporation (chemi-
cals)
Nelson S. Gifford Director, formerly Chairman of the
Board, Dennison Manufacturing Company,
Inc. (paper products).
William L. Boyan President and Chief Operating Officer,
John Hancock
Kathleen F. Feldstein President, Economics Studies Inc. (con-
sultant).
Lawrence K. Fish Chairman and Chief Executive Officer,
Citizens Financial Group (banking).
E. James Morton Director, formerly Chairman of the
Board, John Hancock
John F. Magee Chairman of the Board, Arthur D. Little,
Inc. (management consultant).
John M. Connors, Jr. President and Chief Executive Officer,
Hill, Holliday, Connors, Cosmopoulos,
Inc. (advertising).
Stephen L. Brown Chairman of the Board and Chief Execu-
tive Officer, John Hancock
Thomas L. Phillips Director, formerly Chairman of the
Board, Raytheon Company (electronics).
I. MacAllister Booth Chairman of the Board and Chief
Executive Officer, Polaroid Corporation
(photographic products)
C. Vincent Vappi Retired, formerly Chairman of the Board,
Vappi & Company, Inc. (construction).
Randolph W. Bromery Interim President, Springfield College.
Delbert C. Staley Retired; formerly Chairman of the Board,
NYNEX Corporation (telephone utility).
David F. D'Alessandro Senior Executive Vice President, John
Hancock
Joan T. Bok Chairman of the Board, New England Elec-
tric System (electric utility).
Robert E. Fast Partner, Hale and Dorr (law firm).
Foster L. Aborn Vice Chairman of the Board, John Hancock
Richard F. Syron Chairman of the Board and Chief Execu-
tive Officer, American Stock Exchange.
Michael C. Hawley President and Chief Operating Officer,
The Gillette Company (razors).
<CAPTION>
Executive Officers
------------------
<S> <C>
Diane M. Capstaff Executive Vice President
Thomas E. Moloney Executive Vice President
Richard S. Scipione General Counsel
Bruce E. Skrine Vice President and Secretary
</TABLE>
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<PAGE>
The business address of all Directors and officers of John Hancock is John
Hancock Place, Boston, Massachusetts 02117.
REPORTS
In each Policy year (except while the Policy is continued in effect under a
fixed option on lapse) a statement will be sent to the Owner setting forth the
amount of the Current and Guaranteed Death Benefits, the Account Value, the
portion of the Account Value in each subaccount, the Surrender Value, premiums
received and charges deducted from premium since the last report, and any
outstanding indebtedness (and interest charged for the preceding Policy year)
as of the last day of such year. Moreover, confirmations will be furnished to
Owners of transfers among subaccounts, Policy loans, partial withdrawals of
Excess Value and certain other Policy transactions. Premium payments not in
response to a billing notice are "unscheduled" and will be separately
confirmed. Therefore, an Owner who makes a premium payment that differs by
more than $25 from that billed will receive a separate confirmation of that
premium payment.
Owners will be sent semiannually a report containing the financial
statements of the Funds, including a list of securities held in each
Portfolio.
VOTING PRIVILEGES
All of the assets in the variable subaccounts of the Account are invested in
shares of the corresponding Portfolios of the Funds. John Hancock will vote
the shares of each of the Portfolios of the Funds which are deemed
attributable to the Policies at regular and special meetings of the Funds'
shareholders in accordance with instructions received from owners of all
policies funded through the Account's corresponding variable subaccount.
Shares of the Funds held in the Account which are not attributable to the
Policies and shares for which instructions from owners are not received will
be voted by John Hancock for and against each matter in the same proportions
as the votes based upon the instructions received from the owners of all
policies funded through the Account's corresponding variable subaccount.
The number of Fund shares held in each variable subaccount deemed
attributable to each Owner is determined by dividing the amount of a Policy's
Account Value held in the variable subaccount by the net asset value of one
share in the corresponding Fund Portfolio in which the assets of that variable
subaccount are invested. Fractional votes will be counted. The number of
shares as to which the Owner may give instructions will be determined as of
the record date for the Funds' meetings.
Owners of Policies may give instructions regarding the election of the Board
of Trustees of each Fund, ratification of the selection of independent
auditors, approval of the Fund's investment management agreement and other
matters requiring a vote under the 1940 Act. Owners will be furnished
information and forms by John Hancock in order that voting instructions may be
given.
John Hancock may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to change the investment objectives of the Portfolios of the Fund
or to approve or disapprove an investment advisory or underwriting contract
for the Funds. John Hancock also may disregard voting instructions in favor of
changes initiated by an Owner or a Fund's Board of Trustees in the investment
policy, investment adviser or principal underwriter of the Fund, if John
Hancock (i) reasonably disapproves of such changes and (ii) in the case of a
change of investment policy or investment adviser, makes a
27
<PAGE>
good-faith determination that the proposed change is contrary to state law or
prohibited by state regulatory authorities or that the change would be
inconsistent with a variable subaccount's investment objectives or would
result in the purchase of securities which vary from the general quality and
nature of investments and investment techniques utilized by other separate
accounts of John Hancock or of an affiliated life insurance company, which
separate accounts have investment objectives similar to those of the variable
subaccount. In the event John Hancock does disregard voting instructions, a
summary of that action and the reasons for such action will be included in the
next semi-annual report to Owners.
CHANGES IN APPLICABLE LAW--FUNDING AND OTHERWISE
The voting privileges described in this Prospectus are afforded based on
John Hancock's understanding of applicable Federal securities law
requirements. To the extent that applicable law, regulations or
interpretations change to eliminate or restrict the need for such voting
privileges, John Hancock reserves the right to proceed in accordance with any
such revised requirements. John Hancock also reserves the right, subject to
compliance with applicable law, including approval of Owners if so required,
(1) to transfer assets determined by John Hancock to be associated with the
class of policies to which the Policies belong from the Account to another
separate account or variable subaccount by withdrawing the same percentage of
each investment in the Account with appropriate adjustments to avoid odd lots
and fractions, (2) to operate the Account as a "management-type investment
company" under the 1940 Act, or in any other form permitted by law, the
investment adviser of which would be John Hancock or an affiliate and (3) to
deregister the Account under the 1940 Act. John Hancock would notify Owners of
any of the foregoing changes and, to the extent legally required, obtain
approval of Owners and any regulatory body prior thereto. Such notice and
approval, however, may not be legally required in all cases.
STATE REGULATION
John Hancock is subject to regulation and supervision by the Massachusetts
Commissioner of Insurance who periodically examines its affairs. It also is
subject to the applicable insurance laws and regulations of all jurisdictions
in which it is authorized to do business.
John Hancock is required to submit annual statements of its operations,
including financial statements, to the insurance departments of the various
jurisdictions in which it does business for purposes of determining solvency
and compliance with local insurance laws and regulations.
LEGAL MATTERS
Legal matters in connection with the Policies described in this Prospectus
have been passed on by Francis C. Cleary, Jr., Counsel for John Hancock.
Messrs. Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised John
Hancock on certain Federal securities law matters in connection with the
Policies.
REGISTRATION STATEMENT
This Prospectus omits certain information contained in the Registration
Statement which has been filed with the Commission. More details may be
obtained from the Securities and Exchange Commission upon payment of the
prescribed fee.
28
<PAGE>
EXPERTS
The financial statements of John Hancock and the Account included in this
Prospectus have been audited by Ernst & Young LLP, independent auditors, for
the periods indicated in their report thereon which appear elsewhere herein,
and have been included in reliance on their report given on their authority as
experts in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by Randi M.
Sterrn, F.S.A., an Actuary of John Hancock.
FINANCIAL STATEMENTS
The financial statements of John Hancock included herein should be
distinguished from the financial statements of the Account and should be
considered only as bearing upon the ability of John Hancock to meet its
obligations under the Policies.
29
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Short-Term
Select Money Real Special U.S.
Stock Bond International Market Estate Equity Opportunities Stock Government
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ----------- ------------- ----------- ------------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value........... $ 9,312,773 $46,330,265 $2,926,534 $18,732,426 $2,450,601 $952,172 $111,633,780 $79,674
Policy loans and
accrued interest
receivable...... 1,036,670 8,821,458 156,200 2,264,893 156,219 -- 19,832,901 --
Receivable from
John Hancock
Variable Series
Trust I......... 2,251 28,577 8,433 10,350 7,860 7,240 55,463 6
----------- ----------- ---------- ----------- ---------- -------- ------------ -------
Total assets.... 10,351,694 55,180,300 3,091,167 21,007,669 2,614,680 959,412 131,522,144 79,680
LIABILITIES
Payable to John
Hancock Variable
Series Trust I.. 1,763 26,061 8,290 9,344 7,738 7,194 49,440 2
Payable to John
Hancock Mutual
Life Insurance
Company.........
Asset charges
payable ........ 488 2,516 143 1,006 122 46 6,023 4
----------- ----------- ---------- ----------- ---------- -------- ------------ -------
Total
liabilities..... 2,251 28,577 8,433 10,350 7,860 7,240 55,463 6
----------- ----------- ---------- ----------- ---------- -------- ------------ -------
Net assets....... $10,349,443 $55,151,723 $3,082,734 $20,997,319 $2,606,820 $952,172 $131,466,681 $79,674
=========== =========== ========== =========== ========== ======== ============ =======
<CAPTION>
Managed
Subaccount
-----------
<S> <C>
ASSETS
Investment in
shares of
portfolios of
John Hancock
Variable Series
Trust I, at
value........... $62,301,402
Policy loans and
accrued interest
receivable...... 8,932,761
Receivable from
John Hancock
Variable Series
Trust I......... 54,142
-----------
Total assets.... 71,288,305
LIABILITIES
Payable to John
Hancock Variable
Series Trust I.. 50,846
Payable to John
Hancock Mutual
Life Insurance
Company.........
Asset charges
payable ........ 3,296
-----------
Total
liabilities..... 54,142
-----------
Net assets....... $71,234,163
===========
</TABLE>
See accompanying notes.
30
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Select Stock Bond
Subaccount Subaccount
----------------------------------------- -------------------------------------------
For the Period For the Period
from from
October 4, October 4,
1993 1993
(commencement (commencement
Year ended Year ended of operations) to Year ended Year ended of operations) to
December 31 December 31 December 31 December 31 December 31 December 31
1995 1994 1993 1995 1994 1993
----------- ----------- ----------------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Investment in-
come:
Distributions
received from
the portfolios
of John Hancock
Variable Series
Trust I......... $ 754,115 $ 288,656 $ 200,562 $3,504,747 $ 2,780,967 $ 686,594
Interest income
on policy loans. 67,279 54,175 28,819 641,677 622,042 429,402
---------- --------- --------- ---------- ----------- ----------
Total income.... 821,394 342,831 229,381 4,146,424 3,403,009 1,115,996
Expenses:
Mortality and
expense risks
and other
charges......... 48,056 31,565 6,281 286,349 257,251 61,758
---------- --------- --------- ---------- ----------- ----------
Net investment
income.......... 773,338 311,266 223,100 3,860,075 3,145,758 1,054,238
Net realized and
unrealized gain
(loss) on
investments:
Net realized
gain (loss) .... 23,090 (35,449) (45) (127,733) (215,268) (7,963)
Net unrealized
appreciation
(depreciation)
during the year. 1,225,784 (298,196) (152,267) 4,205,161 (3,583,940) (865,311)
---------- --------- --------- ---------- ----------- ----------
Net realized and
unrealized gain
(loss) on
investments..... 1,248,874 (333,645) (152,312) 4,077,428 (3,799,208) (873,274)
---------- --------- --------- ---------- ----------- ----------
Net increase
(decrease) in net
assets resulting
from operations.. $2,021,212 $ (22,379) $ 70,788 $7,937,503 $ (653,450) $ 180,964
========== ========= ========= ========== =========== ==========
<CAPTION>
International Money Market
Subaccount Subaccount
----------------------------------------- -----------------------------------------
For the Period For the Period
from from
October 4, October 4,
1993 1993
(commencement (commencement
Year ended Year ended of operations) to Year ended Year ended of operations) to
December 31 December 31 December 31 December 31 December 31 December 31
1995 1994 1993 1995 1994 1993
----------- ----------- ----------------- ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Investment in-
come:
Distributions
received from
the portfolios
of John Hancock
Variable Series
Trust I......... $ 29,692 $ 32,660 $19,111 $810,091 $284,469 $ 53,402
Interest income
on policy loans. 9,853 7,477 2,557 155,058 148,601 107,771
----------- ----------- ----------------- ----------- ----------- -----------------
Total income.... 39,545 40,137 21,668 965,149 433,070 161,173
Expenses:
Mortality and
expense risks
and other
charges......... 15,495 9,653 1,034 96,074 52,620 12,668
----------- ----------- ----------------- ----------- ----------- -----------------
Net investment
income.......... 24,050 30,484 20,634 869,075 380,450 148,505
Net realized and
unrealized gain
(loss) on
investments:
Net realized
gain (loss) .... 14,367 11,225 2,973 -- -- --
Net unrealized
appreciation
(depreciation)
during the year. 164,490 (159,108) 62,914 -- -- --
----------- ----------- ----------------- ----------- ----------- -----------------
Net realized and
unrealized gain
(loss) on
investments..... 178,857 (147,883) 65,887 -- -- --
----------- ----------- ----------------- ----------- ----------- -----------------
Net increase
(decrease) in net
assets resulting
from operations.. $202,907 $(117,399) $86,521 $869,075 $380,450 $148,505
=========== =========== ================= =========== =========== =================
</TABLE>
See accompanying notes.
31
<PAGE>
<TABLE>
<CAPTION>
Special
Real Estate Equity Opportunities
Subaccount Subaccount
----------------------------------------- -----------------------------
For the Period
from For the Period
October 4, from
1993 May 6, 1994
(commencement (commencement
Year ended Year ended of operations) to Year ended of operations) to
December 31 December 31 December 31 December 31 December 31
1995 1994 1993 1995 1994
----------- ----------- ----------------- ----------- -----------------
Investment in-
come:
<S> <C> <C> <C> <C> <C>
Distributions
received from
the portfolios
of John Hancock
Variable Series
Trust I......... $153,495 $ 99,568 $ 15,939 $ 22,718 $ 746
Interest income
on policy loans. 12,322 10,386 4,645 -- --
-------- -------- --------- -------- -------
Total income.... 165,817 109,954 20,584 22,718 746
Expenses:
Mortality and
expense risks
and other
charges......... 13,502 9,807 1,662 3,017 289
-------- -------- --------- -------- -------
Net investment
income.......... 152,315 100,147 18,922 19,701 457
Net realized and
unrealized gain
(loss) on
investments:
Net realized
gain (loss) .... (39,490) (17,561) (3,306) 9,743 77
Net unrealized
appreciation
(depreciation)
during the year. 155,992 (47,683) (63,670) 126,004 (1,412)
-------- -------- --------- -------- -------
Net realized and
unrealized gain
(loss) on
investments..... 116,502 (65,244) (66,976) 135,747 (1,335)
-------- -------- --------- -------- -------
Net increase
(decrease) in
net assets
resulting from
operations...... $268,817 $ 34,903 $(48,054) $155,448 $ (878)
======== ======== ========= ======== =======
<CAPTION>
Short-Term
U.S.
Government
Stock Subaccount Subaccount Managed Subaccount
------------------------------------------ ----------------------------- ---------------------------------------
For the Period
For the Period from
from For the Period October 4,
October 4, from 1993
1993 May 1, 1994 (commencement
(commencement (commencement of operations)
Year ended Year ended of operations) to Year ended of operations) to Year ended Year ended to
December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31
1995 1994 1993 1995 1994 1995 1994 1993
----------- ------------ ----------------- ----------- ----------------- ------------ ------------ -------------
Investment in-
come:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Distributions
received from
the portfolios
of John Hancock
Variable Series
Trust I......... $10,687,455 $ 5,320,942 $ 5,347,556 $2,749 $ 239 $ 5,946,035 $ 2,136,167 $ 2,133,124
Interest income
on policy loans. 1,397,618 1,289,505 844,843 -- -- 626,984 554,232 372,441
----------- ------------ ----------------- ----------- ----------------- ------------ ------------ -------------
Total income.... 12,085,073 6,610,447 6,192,399 2,749 239 6,573,019 2,690,399 2,505,565
Expenses:
Mortality and
expense risks
and other
charges......... 646,807 529,971 121,956 295 22 356,869 299,763 69,919
----------- ------------ ----------------- ----------- ----------------- ------------ ------------ -------------
Net investment
income.......... 11,438,266 6,080,476 6,070,443 2,454 217 6,216,150 2,390,636 2,435,646
Net realized and
unrealized gain
(loss) on
investments:
Net realized
gain (loss) .... 85,385 (249,230) 7,903 477 (6) (6,127) (182,296) (2,062)
Net unrealized
appreciation
(depreciation)
during the year. 17,351,805 (5,560,223) (3,787,331) 1,735 (282) 7,134,666 (2,984,103) (1,721,053)
----------- ------------ ----------------- ----------- ----------------- ------------ ------------ -------------
Net realized and
unrealized gain
(loss) on
investments..... 17,437,190 (5,809,453) (3,779,428) 2,212 (288) 7,128,539 (3,166,399) (1,723,115)
----------- ------------ ----------------- ----------- ----------------- ------------ ------------ -------------
Net increase
(decrease) in
net assets
resulting from
operations...... $28,875,456 $ 271,023 $ 2,291,015 $4,666 $ (71) $13,344,689 $ (775,763) $ 712,531
=========== ============ ================= =========== ================= ============ ============ =============
</TABLE>
See accompanying notes.
32
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Select Stock Bond
Subaccount Subaccount
------------------------------------------ ----------------------------------------
For the Period
For the Period from
from October 4,
October 4, 1993
1993 (commencement
(commencement of
Year ended Year ended ofoperations) to Year ended Year ended operations) to
December 31 December 31 December 31 December 31 December 31 December 31
1995 1994 1993 1995 1994 1993
----------- ----------- ---------------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(decrease) in
net assets from
operations:
Net investment
income.......... $ 773,338 $ 311,266 $ 223,100 $ 3,860,075 $ 3,145,758 $ 1,054,238
Net realized
gains (losses).. 23,090 (35,449) (45) (127,733) (215,268) (7,963)
Net unrealized
appreciation
(depreciation)
during the year. 1,225,784 (298,196) (152,267) 4,205,161 (3,583,940) (865,311)
----------- ---------- ---------- ----------- ----------- -----------
Net increase
(decrease) in
net assets
resulting from
operations...... 2,022,212 (22,379) 70,788 7,937,503 (653,450) 180,964
From policyholder
transactions:
Net contributions
from
policyholders... 3,921,962 3,110,357 774,582 8,741,178 9,292,171 2,130,456
Net benefits to
policyholders... (2,170,453) (1,704,646) 3,341,695 (8,117,059) (8,795,613) 35,919,978
Net increase in
policy loans.... 181,384 187,506 636,435 344,088 454,821 7,716,686
----------- ---------- ---------- ----------- ----------- -----------
Net increase in
net assets from
policyholder
transactions.... 1,932,893 1,593,217 4,752,712 968,207 951,379 45,767,120
----------- ---------- ---------- ----------- ----------- -----------
Net increase in
net assets..... 3,955,105 1,570,838 4,823,500 8,905,710 297,929 45,948,084
Net assets:
Beginning of
year............ 6,394,338 4,823,500 -- 46,246,013 45,948,084 --
----------- ---------- ---------- ----------- ----------- -----------
End of year...... $10,349,443 $6,394,338 $4,823,500 $55,151,723 $46,246,013 $45,948,084
=========== ========== ========== =========== =========== ===========
<CAPTION>
International Money Market
Subaccount Subaccount
---------------------------------------- ----------------------------------------
For the Period For the Period
from from
October 4, October 4,
1993 1993
(commencement (commencement
of of
Year ended Year ended operations) to Year ended Year ended operations) to
December 31 December 31 December 31 December 31 December 31 December 31
1995 1994 1993 1995 1994 1993
------------ ------------ -------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(decrease) in
net assets from
operations:
Net investment
income.......... $ 24,050 $ 30,484 $ 20,634 $ 869,075 $ 380,450 $ 148,505
Net realized
gains (losses).. 14,367 11,225 2,973 -- -- --
Net unrealized
appreciation
(depreciation)
during the year. 164,490 (159,108) 62,914 -- -- --
------------ ------------ -------------- ------------ ------------ --------------
Net increase
(decrease) in
net assets
resulting from
operations...... 202,907 (117,399) 86,521 869,075 380,450 148,505
From policyholder
transactions:
Net contributions
from
policyholders... 1,439,112 1,997,179 467,433 13,611,860 2,450,447 380,948
Net benefits to
policyholders... (927,937) (636,005) 418,803 (2,969,848) (2,597,488) 6,535,046
Net increase in
policy loans.... 27,649 54,609 69,862 149,842 25,104 2,013,388
------------ ------------ -------------- ------------ ------------ --------------
Net increase in
net assets from
policyholder
transactions.... 538,824 1,415,783 956,098 10,791,854 (121,937) 8,929,382
------------ ------------ -------------- ------------ ------------ --------------
Net increase in
net assets..... 741,731 1,298,384 1,042,619 11,660,929 258,513 9,077,887
Net assets:
Beginning of
year............ 2,341,003 1,042,619 -- 9,336,390 9,077,877 --
------------ ------------ -------------- ------------ ------------ --------------
End of year...... $3,082,734 $2,341,003 $1,042,619 $20,997,319 $9,336,390 $9,077,887
============ ============ ============== ============ ============ ==============
</TABLE>
See accompanying notes.
33
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED
<TABLE>
<CAPTION>
Special
Real Estate Equity Opportunities
Subaccount Subaccount
---------------------------------------- -----------------------------
For the Period
from
October 4, For the Period
1993 from
(commencement May 6, 1994
of (commencement
Year ended Year ended operations) to Year ended of operations) to
December 31 December 31 December 31 December 31 December 31
1995 1994 1993 1995 1994
----------- ----------- -------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Increase
(decrease) in
net assets from
operations:
Net investment
income.......... $ 152,315 $ 100,147 $ 18,922 $ 19,701 $ 457
Net realized
gains (losses).. (39,490) (17,561) (3,306) 9,743 77
Net unrealized
appreciation
(depreciation)
during the year. 155,992 (47,683) (63,670) 126,004 (1,412)
---------- ---------- ---------- -------- --------
Net increase
(decrease) in
net assets
resulting from
operations...... 268,817 34,903 (48,054) 155,448 (878)
From policyholder
transactions:
Net contributions
from
policyholders... 1,086,721 1,225,072 372,968 774,566 201,268
Net benefits to
policyholders... (814,812) (573,521) 904,219 (164,561) (13,671)
Net increase in
policy loans.... (13,207) 57,955 105,759 0 --
---------- ---------- ---------- -------- --------
Net increase in
net assets from
policyholder
transactions.... 258,702 709,506 1,382,946 610,005 187,597
---------- ---------- ---------- -------- --------
Net increase in
net assets..... 527,519 744,409 1,334,892 765,453 186,719
Net assets:
Beginning of
year............ 2,079,301 1,334,892 -- 186,719 --
---------- ---------- ---------- -------- --------
End of year...... $2,606,820 $2,079,301 $1,334,892 $952,172 $186,719
========== ========== ========== ======== ========
<CAPTION>
Short-Term
U.S.
Government
Stock Subaccount Subaccount Managed Subaccount
----------------------------------------- ----------------------------- ----------------------------------------
For the Period For the Period
from from
October 4, For the Period October 4,
1993 from 1993
(commencement May 1, 1994 (commencement
of (commencement of
Year ended Year ended operations) to Year ended of operations) to Year ended Year ended operations) to
December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31
1995 1994 1993 1995 1994 1995 1994 1993
------------- ------------ -------------- ----------- ----------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase
(decrease) in
net assets from
operations:
Net investment
income.......... $ 11,438,266 $ 6,080,476 $ 6,070,443 $ 2,454 $ 217 $ 6,216,150 $ 2,390,636 $ 2,435,646
Net realized
gains (losses).. 85,385 (249,230) 477 (6) (6,127) (182,296) (2,062)
Net unrealized
appreciation
(depreciation)
during the year. 17,351,805 (5,560,223) (3,787,331) 1,735 (282) 7,134,666 (2,984,103) (1,721,053)
------------- ------------ -------------- ----------- ----------------- ------------ ------------ --------------
Net increase
(decrease) in
net assets
resulting from
operations...... 28,875,456 271,023 2,291,015 4,666 (71) 13,344,689 (775,763) 712,531
From policyholder
transactions:
Net contributions
from
policyholders... 20,933,714 20,019,801 3,883,758 68,539 21,611 13,141,463 13,309,384 3,377,066
Net benefits to
policyholders... (16,972,544) (16,374,221) 69,401,930 (14,808) (263) (11,680,334) (10,118,793) 41,295,282
Net increase in
policy loans.... 1,898,826 1,394,155 15,843,768 0 -- 1,120,431 723,705 6,784,502
------------- ------------ -------------- ----------- ----------------- ------------ ------------ --------------
Net increase in
net assets from
policyholder
transactions.... 5,859,996 5,039,735 89,129,456 53,731 21,348 2,581,560 3,914,296 51,456,850
------------- ------------ -------------- ----------- ----------------- ------------ ------------ --------------
Net increase in
net assets..... 34,735,452 5,310,758 91,420,471 58,397 21,277 15,926,249 3,138,533 52,169,381
Net assets:
Beginning of
year............ 96,731,229 91,420,471 -- 21,277 -- 55,307,914 52,169,381 --
------------- ------------ -------------- ----------- ----------------- ------------ ------------ --------------
End of year...... $131,466,681 $96,731,229 $91,420,471 $79,674 $21,277 $71,234,163 $55,307,914 $52,169,381
============= ============ ============== =========== ================= ============ ============ ==============
</TABLE>
See accompanying notes.
34
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1. ORGANIZATION
John Hancock Mutual Variable Life Insurance Account UV (the Account) is a
separate investment account of John Hancock Mutual Life Insurance Company
(JHMLICO). The Account was created on August 16, 1993. The Account commenced
operations on October 4, 1993 as a result of a transfer of net assets from two
existing separate accounts, John Hancock Variable Life Account U (JHVLAU) and
John Hancock Variable Life Account V (JHVLAV). John Hancock Mutual Variable
Life Insurance Account UV was formed to fund variable life insurance policies
(Policies) issued by JHMLICO. The Account is operated as a unit investment
trust registered under the Investment Company Act of 1940, as amended, and
currently consists of nine subaccounts. The assets of each subaccount are
invested exclusively in shares of a corresponding portfolio of John Hancock
Variable Series Trust I (the Fund). New subaccounts may be added as new
portfolios are added to the Fund, or as other investment options are
developed, and made available to policyowners. The nine portfolios of the Fund
which are currently available are Select Stock, Bond, International, Money
Market, Real Estate Equity, Special Opportunities, Stock, Short-Term U.S.
Government and Managed. Each portfolio has a different investment objective.
The net assets of the Account may not be less than the amount required under
state insurance law to provide for death benefits (without regard to the
minimum death benefit guarantee) and other policy benefits. Additional assets
are held in JHMLICO'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 JHMLICO. The portion of the
Account's assets applicable to the policies may not be charged with
liabilities arising out of any other business JHMLICO may conduct.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments
Investment in shares of the Fund are valued at the reported net asset values
of the respective portfolios. Investment transactions are recorded on the
trade date. Dividend income is recognized on the ex-dividend date. Realized
gains and losses on sales of fund shares are determined on the basis of
identified cost.
Federal Income Taxes
The operations of the Account are included in the federal income tax return
of JHMLICO, which is taxed as a life insurance company under the Internal
Revenue Code. JHMLICO 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, JHMLICO
does not make a charge for income or other taxes. Charges for state and local
taxes, if any, attributable to the Account may also be made.
Expenses
JHMLICO assumes mortality and expense risks of the variable life insurance
policies for which asset charges are deducted at various rates ranging from
.525% to .625%, depending on the type of policy, of net assets (excluding
policy loans) of the Account. Additionally, a monthly charge at varying levels
for the cost of extra insurance is deducted from the net assets of the
Account.
35
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
JHMLICO makes certain deductions for administrative expenses and state
premium taxes from premium payments before amounts are transferred to the
Account.
Policy Loans
Policy loans represent outstanding loans plus accrued interest. Interest is
accrued (net of a charge for policy loan administration determined at an
annual rate of .75% of the aggregate amount of policyowner indebtedness) and
compounded daily.
NOTE 3. TRANSACTIONS WITH AFFILIATES
JHMLICO acts as the distributor, principal underwriter and investment
advisor for the Fund.
Certain officers of the Account are officers and directors of JHMLICO or the
Fund.
NOTE 4. DETAILS OF INVESTMENTS
The details of the shares owned and cost and value of investments in the
portfolios of the Fund at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
Portfolio Shares Owned Cost Value
--------- ------------ ----------- -----------
<S> <C> <C> <C>
Select Stock.............................. 536,192 $ 8,537,452 $ 9,312,773
Bond...................................... 4,574,603 46,574,355 46,330,265
International............................. 187,483 2,858,238 2,926,534
Money Market.............................. 1,873,372 18,773,711 18,732,426
Real Estate Equity........................ 209,521 2,405,959 2,450,601
Special Opportunities..................... 72,219 827,580 952,172
Stock..................................... 8,007,462 103,629,530 111,633,780
Short-Term U.S. Government................ 7,787 78,221 79,674
Managed................................... 4,538,676 59,872,578 62,301,402
</TABLE>
Purchases, including reinvestment of dividend distributions, and proceeds
from the sales of shares in the portfolios of the Fund during 1995, were as
follows:
<TABLE>
<CAPTION>
Portfolio Purchases Sales
--------- ---------- ---------
<S> <C> <C>
Select Stock.............................................. $2,998,468 $ 478,935
Bond...................................................... 6,586,137 2,116,423
International............................................. 935,730 401,257
Money Market.............................................. 13,092,516 1,587,249
Real Estate Equity........................................ 829,282 404,509
Special Opportunities..................................... 698,554 68,848
Stock..................................................... 19,241,967 3,915,114
Short-Term U.S. Government................................ 71,209 15,024
Managed................................................... 11,383,468 3,752,413
</TABLE>
36
<PAGE>
REPORTS OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Policyholders
John Hancock Mutual Variable Life Insurance Account UV
of John Hancock Mutual Life Insurance Company
We have audited the accompanying statement of assets and liabilities of John
Hancock Mutual Variable Life Insurance Account UV (the "Account") (comprising,
respectively, the Select Stock, Bond, International, Money Market, Real Estate
Equity, Special Opportunities, Stock, Short-Term U.S. Government, and Managed
Subaccounts) as of December 31, 1995, and the related statements of operations
and statements of changes in net assets for the periods indicated therein.
These financial statements are the responsibility of the Account's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Mutual Variable Life Insurance Account
UV at December 31, 1995, and the results of their operations and the changes
in their net assets for each of the periods indicated, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts
February 9, 1996
----------------
To the Directors and Policyholders John Hancock Mutual Life Insurance Company
We have audited the accompanying statements of financial position of John
Hancock Mutual Life Insurance Company as of December 31, 1995 and 1994, and
the related summary of operations and changes in policyholders' contingency
reserves and statements of 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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of John Hancock Mutual Life
Insurance Company at December 31, 1995 and 1994, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles for mutual life insurance companies
and with reporting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance.
ERNST & YOUNG LLP
Boston, Massachusetts
February 7, 1996
37
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
December 31
-------------------
1995 1994
--------- ---------
(In millions)
<S> <C> <C>
ASSETS
Bonds--Note 6............................................... $21,108.5 $19,884.0
Stocks:
Preferred................................................. 338.8 274.4
Common.................................................... 130.9 115.9
Investments in affiliates................................. 1,265.3 1,089.4
--------- ---------
1,735.0 1,479.7
Mortgage loans on real estate--Note 6....................... 8,801.5 8,274.2
Real estate:
Company occupied.......................................... 377.4 385.2
Investment properties..................................... 1,949.5 1,765.5
--------- ---------
2,326.9 2,150.7
Policy loans................................................ 1,621.3 1,669.2
Cash items:
Cash in banks and offices................................. 286.6 336.7
Temporary cash investments................................ 254.1 556.2
--------- ---------
540.7 892.9
Premiums due and deferred................................... 234.0 230.9
Investment income due and accrued........................... 597.5 578.2
Other general account assets................................ 883.0 979.4
Assets held in separate accounts............................ 12,928.2 10,712.5
--------- ---------
TOTAL ASSETS................................................ $50,776.6 $46,851.7
========= =========
Obligations and Policyholders' Contingency Reserves
OBLIGATIONS
Policy reserves........................................... $17,711.4 $16,817.9
Policyholders' and beneficiaries' funds................... 14,724.8 13,974.8
Dividends payable to policyholders........................ 378.6 377.6
Policy benefits in process of payment..................... 217.1 224.4
Other policy obligations.................................. 159.6 256.5
Asset valuation reserve--Note 1........................... 1,014.3 835.7
Federal income and other accrued taxes--Note 1............ 250.5 231.8
Other general account obligations......................... 873.2 1,120.7
Obligations related to separate accounts.................. 12,913.6 10,682.3
--------- ---------
TOTAL OBLIGATIONS........................................... 48,243.1 44,521.7
Policyholders' Contingency Reserves
Surplus notes--Note 2..................................... 450.0 450.0
Special contingency reserve for group insurance........... 193.1 191.7
General contingency reserve............................... 1,890.4 1,688.3
--------- ---------
TOTAL POLICYHOLDERS' CONTINGENCY RESERVES................... 2,533.5 2,330.0
--------- ---------
TOTAL OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY RESERVES... $50,776.6 $46,851.7
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
SUMMARY OF OPERATIONS AND CHANGES IN POLICYHOLDERS' CONTINGENCY RESERVES
<TABLE>
<CAPTION>
Year ended December 31
------------------------
1995 1994
----------- -----------
(In millions)
<S> <C> <C>
Income
Premiums, annuity considerations and pension fund
contributions..................................... $ 8,127.8 $ 7,617.4
Net investment income--Note 4...................... 2,678.5 2,557.8
Other, net......................................... 90.8 64.1
----------- -----------
10,897.1 10,239.3
Benefits and Expenses
Payments to policyholders and beneficiaries:
Death benefits................................... 787.4 817.6
Accident and health benefits..................... 321.3 350.2
Annuity benefits................................. 1,342.7 1,273.9
Surrender benefits and annuity fund withdrawals.. 5,243.6 4,759.3
Matured endowments............................... 19.8 20.8
----------- -----------
7,714.8 7,221.8
Additions to reserves to provide for future
payments to policyholders and beneficiaries....... 1,497.0 1,503.5
Expenses of providing service to policyholders and
obtaining new insurance:
Field sales compensation and expenses............ 277.4 303.2
Home office and general expenses................. 455.8 437.3
Cost of restructuring.............................. 0.0 57.8
Payroll, state premium and miscellaneous taxes..... 78.6 72.1
----------- -----------
10,023.6 9,595.7
----------- -----------
GAIN FROM OPERATIONS BEFORE DIVIDENDS TO
POLICYHOLDERS, FEDERAL INCOME TAXES AND NET
REALIZED CAPITAL GAINS (LOSSES)............... 873.5 643.6
Dividends to policyholders........................... 465.9 385.0
Federal income taxes--Note 1......................... 128.5 59.7
----------- -----------
594.4 444.7
----------- -----------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL GAINS (LOSSES)........................ 279.1 198.9
Net realized capital gains (losses)--Note 5.......... 21.2 (35.3)
----------- -----------
NET INCOME..................................... 300.3 163.6
Other increases (decreases) in policyholders' contin-
gency reserves:
Net unrealized capital losses and other adjust-
ments--Note 5..................................... (85.1) (118.2)
Valuation reserve changes--Note 1.................. 0.0 41.0
Net gain from separate accounts.................... 2.6 0.8
Issuance of surplus notes.......................... 0.0 450.0
Prior years' federal income taxes.................. (36.8) (26.2)
Other reserves and adjustments..................... 22.5 4.3
----------- -----------
NET INCREASE IN POLICYHOLDERS' CONTINGENCY
RESERVES...................................... 203.5 515.3
Policyholders' contingency reserves at beginning of
year................................................ 2,330.0 1,814.7
----------- -----------
POLICYHOLDERS' CONTINGENCY RESERVES AT END OF YEAR... $ 2,533.5 $ 2,330.0
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31
------------------------
1995 1994
----------- -----------
(In millions)
<S> <C> <C>
Cash Flows From Operating Activities:
Insurance premiums, annuity considerations and de-
posits............................................ $ 8,280.3 $ 7,827.5
Net investment income.............................. 2,756.9 2,560.0
Benefits to policyholders and beneficiaries........ (7,917.6) (7,417.0)
Dividends paid to policyholders.................... (464.9) (391.4)
Insurance expenses and taxes....................... (795.1) (801.0)
Net transfers (to) from separate accounts.......... 132.0 (548.4)
Other, net......................................... (154.7) (88.1)
----------- -----------
NET CASH PROVIDED FROM OPERATIONS................ 1,836.9 1,141.6
----------- -----------
Cash Flows Used In Investing Activities:
Bond purchases..................................... (6,456.9) (6,834.2)
Bond sales......................................... 2,874.9 2,530.2
Bond maturities and scheduled redemptions.......... 1,600.6 1,437.6
Bond prepayments................................... 795.9 620.8
Stock purchases.................................... (224.3) (282.7)
Proceeds from stock sales.......................... 131.4 70.8
Real estate purchases.............................. (375.1) (255.9)
Real estate sales.................................. 365.0 280.6
Other invested assets purchases.................... (46.5) (66.5)
Proceeds from the sale of other invested assets.... 251.1 169.3
Mortgage loans issued.............................. (2,041.6) (1,547.7)
Mortgage loan repayments........................... 1,277.9 1,391.8
Other, net......................................... (554.6) 845.3
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES............ (2,402.2) (1,640.6)
----------- -----------
Cash Flows From Financing Activities:
Issuance of surplus notes.......................... 0.0 450.0
Issuance of REMIC notes payable.................... 213.1 0.0
----------- -----------
NET CASH PROVIDED FROM FINANCING ACTIVITIES...... 213.1 450.0
----------- -----------
DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS...... (352.2) (49.0)
Cash and temporary cash investments at beginning of
year................................................ 892.9 941.9
----------- -----------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR... $ 540.7 $ 892.9
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES
John Hancock Mutual Life Insurance Company (the Company) provides a broad
range of financial services and insurance products. The Company's insurance
operations focus principally in three segments: the Retail Sector, which
encompasses the Company's individual life, annuity, and long-term care
operations; Business Insurance, its group life, health, and long-term care
operations including administrative services provided to group customers; and
Group Pension, which offers single premium annuity and guaranteed investment
contracts through both the general and separate accounts. In addition, through
its subsidiaries and affiliates, the Company also offers a wide range of
investment management and advisory services and other related products
including domestic property and casualty insurance, life insurance products
for the Canadian market, a full range of retail and institutional securities
brokerage services, investment management and advisory services, sponsorship
and distribution of mutual funds, real estate financing and management, and
various other financial services. Investments in these subsidiaries and other
affiliates are recorded on the statutory equity method.
The Company is licensed in all fifty of the United States, the District of
Columbia, Puerto Rico, Guam, the US Virgin Islands, and Canada. The Company
distributes its individual products in North America primarily through a
career agency system. The career agency system is composed of company owned,
unionized branch offices and independent general agencies. The Company also
distributes its individual products through several alternative distribution
channels.
The Company distributes its group benefit products through group
representatives, who are John Hancock employees or through intermediaries, in
key markets nationwide.
The Company markets pension and other investment-related products primarily to
sponsors of retirement and savings plans covering employees of private sector
companies, and plans covering public employees and collective bargaining
unions and non-profit organizations. Products are marketed and sold through a
combination of group pension field employee representatives, as well as
marketing personnel and investment professionals employed by the Company.
The preparation of the financial statements of insurance companies requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Such estimates and
assumptions could change in the future as more information becomes known,
which could impact the amounts reported and disclosed herein.
Basis of Presentation: The financial statements have been prepared on the
basis of accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance and in conformity with the practices of
the National Association of Insurance Commissioners, which are currently
considered generally accepted accounting principles for mutual life insurance
companies. However, in April 1993, the Financial Accounting Standard Board
(FASB) issued Interpretation 40, "Applicability of Generally Accepted
Accounting Principles to Mutual Life Insurance and Other Enterprises"
(Interpretation). The Interpretation, as amended, is effective for 1996 annual
financial statements and thereafter, and no longer will allow statutory-basis
financial statements to be described as being prepared in conformity with
generally accepted accounting principles (GAAP). Upon the effective date of
the Interpretation in order for their financial statements to be described as
being prepared in conformity with GAAP, mutual life insurance companies will
be required to adopt all
41
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
applicable authoritative GAAP pronouncements in any general-purpose financial
statements that they may issue. The Company has not quantified the effects of
the application of the Interpretation on its financial statements.
The Company has not yet determined whether for general purposes it will
continue to issue statutory-basis financial statements or statements adopting
all applicable authoritative GAAP pronouncements. If the Company decides that
its general purpose financial statements will be prepared in accordance with
GAAP rather than statutory accounting practices, the financial statements
included herein would have to be restated to reflect all applicable
authoritative GAAP pronouncements, including Statement of Financial Accounting
Standards (SFAS) Nos. 60, 97, and 113, and the American Institute of Certified
Public Accountants' Statement of Position 95-1, which addresses the accounting
for long-duration and short-duration insurance and reinsurance contracts,
including all participating business.
The significant accounting practices of the Company are as follows:
Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of
new business, are charged to operations as incurred and policyholder dividends
are provided as paid or accrued.
Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-
term, highly-liquid investments both readily convertible to known amounts of
cash and so near maturity that there is insignificant risk of changes in value
because of changes in interest rates.
Valuation of Assets: General account investments are carried at amounts
determined on the following bases:
Bond and stock values are carried as prescribed by the National Association
of Insurance Commissioners (NAIC): bonds generally at amortized amounts or
cost, preferred stocks generally at cost and common stocks at market. The
discount or premium on bonds is amortized using the interest method.
Investments in affiliates are included on the statutory equity method.
Mortgage loans are carried at outstanding principal balance or amortized
cost.
Investment and company occupied real estate is carried at depreciated cost,
less encumbrances. Depreciation on investment and company occupied real
estate is recorded on a straight-line basis.
Real estate acquired in satisfaction of debt and held for sale, which is
classified with investment properties, is carried at the lower of cost or
market as of the date of foreclosure.
Policy loans are carried at outstanding principal balance, not in excess of
policy cash surrender value.
Other invested assets, which are classified with other general account
assets, include real estate and energy joint ventures and limited
partnerships and are valued based on the Company's equity in the underlying
net assets.
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
42
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
of bonds, equity securities, mortgage loans, real estate and other invested
assets. The Company makes additional contributions to the AVR in excess of the
required amounts to account for potential losses and risks in the investment
portfolio when the Company believes such provisions are prudent. Changes to
the AVR are charged or credited directly to policyholders' contingency
reserves.
The Company also records the NAIC prescribed Interest Maintenance Reserve
(IMR) that represents that portion of the after tax net accumulated
unamortized realized capital gains and losses on sales of fixed income
securities, principally bonds and mortgage loans, attributable to changes in
the general level of interest rates. Such gains and losses are deferred and
amortized into income over the remaining expected lives of the investments
sold. At December 31, 1995, the IMR, net of 1995 amortization of $16.4
million, amounted to $69.5 million which is included in other policy
obligations. The corresponding 1994 amounts were $17.1 million and $52.7
million, respectively.
Property and Equipment: Data processing equipment, included in other general
account assets, is reported at depreciated cost, with depreciation recorded on
a straight-line basis. Nonadmitted furniture and equipment also is depreciated
on a straight-line basis. The useful lives of these assets range from three to
twenty years.
Separate Accounts: Separate account assets (valued at market) and obligations
are included as separate captions in the statements of financial position. The
change in separate account surplus is recognized through direct charges or
credits to policyholders' contingency reserves.
Fair Values of Financial Instruments: Statement of Financial Accounting
Standards (SFAS) No. 107, "Disclosure about Fair Value of Financial
Instruments," requires disclosure of fair value information about financial
instruments, whether or not recognized in the statement of financial position,
for which it is practicable to estimate the value. In situations where quoted
market prices are not available, fair values are based on estimates using
present value or other valuation techniques. SFAS No. 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements. Therefore, the aggregate fair value amounts presented do not
represent the underlying value of the Company.
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
subsidiary investments which are carried at equity values, are based on
quoted market prices.
The fair value for mortgage loans is estimated using discounted cash flow
analyses using interest rates adjusted to reflect the credit
characteristics of the underlying loans. Mortgage loans with similar
43
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
characteristics and credit risks are aggregated into qualitative categories
for purposes of the fair value calculations.
The carrying amounts in the statement of financial position for policy
loans approximates their fair value.
The fair value of interest rate swaps and currency rate swaps is estimated
using a discounted cash flow method adjusted for the difference between the
rate of the existing swap and the current swap market rate. Discounted cash
flows in foreign currencies are converted to U.S. dollars using current
exchange rates.
The fair value for 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,
1995. The fair value for commitments to purchase real estate approximates
the amount of the initial commitment.
Fair values for the Company's guaranteed investment contracts are estimated
using discounted cash flow calculations, based on interest rates currently
being offered for similar contracts with maturities consistent with those
remaining for the contracts being valued. The fair value for fixed-rate
deferred annuities is the cash surrender value, which represents the
account value less applicable surrender charges. Fair values for immediate
annuities without life contingencies and supplementary contracts without
life contingencies are estimated based on discounted cash flow calculations
using current market rates.
Capital Gains and Losses: Realized capital gains and losses, net of taxes and
amounts transferred to the IMR, are included in net income. Unrealized gains
and losses, which consist of market value and book value adjustments, are
shown as adjustments to policyholders' contingency reserves.
Interest Rate and Currency Rate Swap Contracts and Financial Futures
Contracts: The net interest effect of interest rate and currency rate swap
transactions is recorded as an adjustment of interest income as incurred.
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.
Foreign Exchange Gains and Losses: Foreign exchange gains and losses are
reflected as direct credits or charges to policyholders' contingency reserves
through unrealized capital gains and losses.
Policy Reserves: Reserves for traditional individual life insurance policies
are maintained using the 1941, 1958 and 1980 Commissioner's Standard Ordinary
and American Experience mortality tables, with assumed interest rates ranging
from 2 1/2% to 6%, and using principally the net level premium method for
policies issued prior to 1978 and a modified preliminary term method for
policies issued in 1979 and later. Annuity and supplementary contracts with
life contingency reserves are based principally on modifications of the 1937
Standard Annuity Table, the Group Annuity Mortality Tables for 1951, 1971 and
1983, the 1971 Individual Annuity Mortality Table and the a-1983 Individual
Annuity Mortality Table, with interest rates ranging from 2% to 11 1/4%.
Reserves for deposit administration funds and immediate participation
guarantee funds are based on accepted actuarial methods at various interest
rates. Accident and health policy reserves generally are calculated using
either the two-year preliminary term or the net level premium method based on
various morbidity tables.
44
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
The statement value and fair value for investment-type insurance contracts are
as follows:
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
------------------- -------------------
Statement Fair Statement Fair
Value Value Value Value
--------- --------- --------- ---------
(In millions)
<S> <C> <C> <C> <C>
Guaranteed investment contracts........ $12,014.3 $12,325.3 $11,333.3 $10,966.3
Fixed-rate deferred and immediate annu-
ities................................. 3,494.5 3,478.6 2,918.5 2,840.3
Supplementary contracts without life
contingencies......................... 39.6 40.7 36.5 35.4
--------- --------- --------- ---------
$15,548.4 $15,844.6 $14,288.3 $13,842.0
========= ========= ========= =========
</TABLE>
Federal Income Taxes: Federal income taxes are provided in the financial
statements based on amounts determined to be payable as a result of operations
within the current accounting period. The operations of the Company and its
subsidiaries and affiliates are combined in filing a consolidated federal
income tax return for the group. The federal income taxes of the Company are
determined on a separate return basis with certain adjustments.
Income before taxes differs from taxable income principally due to tax-exempt
investment income, dividends-received tax deductions, the limitation placed on
the tax deductibility of mutual companies' policyholder dividends, accelerated
depreciation, differences in policy and contract liabilities 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 prior years are charged or
credited directly to policyholders' contingency reserves. No provision is
generally recognized for timing differences that may exist between financial
reporting and taxable income.
At December 31, 1994, the Company's subsidiaries had total estimated tax loss
carryforwards for federal income tax purposes of $26.5 million expiring in
years 2003 to 2005. After the 1994 federal income tax return was filed on
September 15, 1995, the Company's subsidiaries remaining tax loss
carryforwards for federal income tax purposes totaled $9.9 million. It is
expected that these losses will be fully utilized in the 1995 federal income
tax return. Certain subsidiaries acquired by the Company have additional
potential tax loss carryforwards of $117.8 million expiring in years 1996 to
1998. These amounts also may be used in the consolidated tax return but only
to offset future taxable income related to those subsidiaries. The Company
made federal tax payments of $211.5 million in 1995 and $78.8 million in 1994.
Adjustments to Policy Reserves and Policyholders' and Beneficiaries'
Funds: From time to time, the Company finds it appropriate to modify certain
required policy reserves because of changes in actuarial assumptions or
increased benefits. Reserve modifications resulting from such determinations
are recorded directly to policyholders' contingency reserves. During 1994, the
Company refined certain actuarial assumptions inherent
45
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
in the calculation of preconversion yearly renewable term and gross premium
deficiency reserves resulting in a $41.0 million increase in policyholders'
contingency reserves at December 31, 1994.
Reinsurance: Premiums, commissions, expense reimbursements, benefits and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies issued and the terms
of the reinsurance contracts. Premiums ceded to other companies have been
reported as a reduction of premium income. Amounts applicable to reinsurance
ceded for future policy benefits, unearned premium reserves and claim
liabilities have been reported as reductions of these items.
Restructuring Charge: In 1994, the Company provided for restructuring charges
of $57.8 million in accordance with the Company's plan to reduce its cost
structure and consolidate operations. The restructuring charge includes
severance costs and facilities consolidation expenses. During 1995 and 1994,
the Company paid $32.9 million and $10.7 million, respectively, under its
restructuring plan. The remaining liability for restructuring charges at
December 31, 1995 was $14.2 million.
Reclassifications: Certain 1994 amounts have been reclassified to permit
comparison with the corresponding 1995 amounts.
NOTE 2--SURPLUS NOTES
On February 25, 1994, the Company issued $450 million of surplus notes that
bear interest at 7 3/8% and are scheduled to mature on February 15, 2024. The
issuance of the surplus notes was approved by the Massachusetts Division of
Insurance and any payment of interest on and principal of the notes may be
made only with the prior approval of the Commissioner of the Massachusetts
Division of Insurance. Surplus notes are reported as surplus rather than
liabilities. Interest paid on the notes during 1995 and 1994 were $33.2
million and $15.7 million, respectively.
NOTE 3--BORROWED MONEY
At December 31, 1995, the Company had a $500 million syndicated line of
credit. There are 29 banks who joined the syndicate of lenders under the
leadership of Morgan Guaranty Trust Company of New York. The banks will commit
when requested to loan funds for a period of two years at prevailing interest
rates as determined in accordance with the line of credit agreement. The
agreement does not contain a material adverse change clause. As of December
31, 1995, no amounts had been borrowed under this agreement.
In 1995 the Company issued $213.1 million of debt through a Real Estate
Mortgage Investment Conduit (REMIC). As collateral to the debt, the Company
pledged $1,065.8 million of commercial mortgages to the REMIC Trust. The debt
was issued in two notes of equal amounts with last scheduled payment dates on
March 25, 1997 and June 25, 1998, respectively. The interest rates on the two
notes are calculated on a floating basis, based on LIBOR rates, and were
6.1575% and 6.2075%, respectively, at December 31, 1995. The outstanding
balances of the Notes totaled $213.1 million at December 31, 1995 and are
included in other general account obligations.
46
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 4--NET INVESTMENT INCOME
Investment income has been reduced by the following amounts:
<TABLE>
<CAPTION>
1995 1994
------ ------
(In millions)
<S> <C> <C>
Investment expenses.............................................. $332.9 $291.2
Interest expense................................................. 38.3 19.8
Depreciation on real estate and other invested assets............ 62.7 54.7
Real estate and other investment taxes........................... 61.2 61.3
------ ------
$495.1 $427.0
====== ======
</TABLE>
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS
Net realized capital gains (losses) consist of the following items:
<TABLE>
<CAPTION>
1995 1994
------ ------
(In millions)
<S> <C> <C>
Gains (losses) from asset sales and foreclosures............... $118.6 $(41.5)
Capital gains tax.............................................. (64.2) (20.2)
Net capital (gains) losses transferred to the IMR.............. (33.2) 26.4
------ ------
Net Realized Capital Gains (Losses).......................... $ 21.2 $(35.3)
====== ======
</TABLE>
Net unrealized capital losses and other adjustments consist of the following
items:
<TABLE>
<CAPTION>
1995 1994
------ -------
(In millions)
<S> <C> <C>
Gains from changes in security values and book value adjust-
ments......................................................... $ 93.4 $ 36.4
Increase in asset valuation reserve............................ (178.5) (154.6)
------ -------
Net Unrealized Capital Losses and Other Adjustments.......... $(85.1) $(118.2)
====== =======
</TABLE>
47
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 6--INVESTMENTS
The statement value and fair value of bonds are shown below:
<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized
Value Gains Losses Fair Value
--------- ---------- ---------- ----------
(In millions)
Year ended December 31, 1995
----------------------------
<S> <C> <C> <C> <C>
U.S. treasury securities and
obligations of U.S. government
corporations and agencies............ $ 638.5 $ 42.5 $ 0.2 $ 680.8
Obligations of states and political
subdivisions......................... 194.1 20.6 0.1 214.6
Debt securities issued by foreign gov-
ernments............................. 297.7 42.2 0.0 339.9
Corporate securities.................. 18,358.6 1,818.3 73.9 20,103.0
Mortgage-backed securities............ 1,619.6 57.9 20.8 1,656.7
--------- -------- ------ ---------
Totals.............................. $21,108.5 $1,981.5 $ 95.0 $22,995.0
========= ======== ====== =========
<CAPTION>
Year ended December 31, 1994
----------------------------
<S> <C> <C> <C> <C>
U.S. treasury securities and
obligations of U.S. government
corporations and agencies............ $ 1,545.1 $ 1.8 $128.6 $ 1,418.3
Obligations of states and political
subdivisions......................... 170.6 4.5 1.7 173.4
Debt securities issued by foreign gov-
ernments............................. 143.5 9.8 0.5 152.8
Corporate securities.................. 16,208.9 471.1 401.8 16,278.2
Mortgage-backed securities............ 1,815.9 4.8 44.1 1,776.6
--------- -------- ------ ---------
Totals.............................. $19,884.0 $ 492.0 $576.7 $19,799.3
========= ======== ====== =========
</TABLE>
The statement value and fair value of bonds at December 31, 1995, by
contractual maturity, are shown below. Maturities will differ from contractual
maturities because eligible borrowers may exercise their right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Statement Value Fair Value
--------------- ----------
(In millions)
<S> <C> <C>
Due in one year or less.............................. $ 1,408.9 $ 1,456.4
Due after one year through five years................ 6,406.1 6,795.4
Due after five years through ten years............... 5,969.7 6,551.4
Due after ten years.................................. 5,704.2 6,535.1
--------- ---------
19,488.9 21,338.3
Mortgage-backed securities........................... 1,619.6 1,656.7
--------- ---------
$21,108.5 $22,995.0
========= =========
</TABLE>
Proceeds from sales of bonds during 1995 and 1994 were $2.9 billion and $2.5
billion, respectively. Gross gains of $69.7 million in 1995 and $16.6 million
in 1994 and gross losses of $44.3 million in 1995 and $99.3 million in 1994
were realized on these transactions.
The cost of common stocks was $78.1 million and $82.1 million at December 31,
1995 and 1994, respectively. At December 31, 1995, gross unrealized
appreciation on common stocks totaled $76.3 million, and gross
48
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 6--INVESTMENTS--CONTINUED
unrealized depreciation totaled $23.5 million. The fair value of preferred
stock totaled $338.8 million at December 31, 1995 and $281.6 million at
December 31, 1994.
Mortgage loans with outstanding principal balances of $115.5 million, bonds
with amortized cost of $32.8 million and real estate with depreciated cost of
$28.5 million were nonincome producing for the twelve months ended December
31, 1995.
Restructured commercial mortgage loans aggregated $466.0 million and $507.1
million as of December 31, 1995 and 1994, respectively. The expected gross
interest income that would have been recorded had the loans been current in
accordance with the original loan agreements and the actual interest income
recorded were as follows:
<TABLE>
<CAPTION>
Year ended
December 31
-------------
1995 1994
------ ------
(In millions)
<S> <C> <C>
Expected.................................................... $ 47.0 $ 54.5
Actual...................................................... $ 26.8 34.2
</TABLE>
Generally, the terms of the restructured mortgage loans call for the Company
to receive some form or combination of an equity participation in the
underlying collateral, excess cash flows or an effective yield at the maturity
of the loans sufficient to meet the original terms of the loans.
At December 31, 1995, the mortgage loan portfolio was diversified by
geographic region and specific collateral property type as displayed below.
The Company controls credit risk through credit approvals, limits and
monitoring procedures.
<TABLE>
<CAPTION>
Geographic
Concentration Statement Value
------------- ---------------
(In millions)
<S> <C>
East North Central....... $ 822.7
East South Central....... 178.2
Middle Atlantic.......... 1,861.1
Mountain................. 431.3
New England.............. 915.6
Pacific.................. 2,253.4
South Atlantic........... 1,611.7
West North Central....... 217.7
West South Central....... 447.4
Other.................... 62.4
--------
$8,801.5
========
</TABLE>
<TABLE>
<CAPTION>
Property
Type Statement Value
-------- ---------------
(In millions)
<S> <C>
Apartments................ $2,374.6
Hotels.................... 164.4
Industrial................ 780.4
Office buildings.......... 1,823.6
Retail.................... 1,545.1
1-4 Family................ 9.5
Agricultural.............. 1,607.0
Other..................... 496.9
--------
$8,801.5
========
</TABLE>
At December 31, 1995, the fair values of the commercial and agricultural
mortgage loan portfolios were $7.6 billion and $1.8 billion, respectively. The
corresponding amounts as of December 31, 1994 were approximately $6.5 billion
and $1.7 billion, respectively.
49
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 7--REINSURANCE
Premiums, benefits and reserves associated with reinsurance assumed in 1995
were $455.2 million, $276.7 million, and $12.7 million, respectively. The
corresponding amounts in 1994 were $385.9 million, $266.0 million, and $12.1
million, respectively.
The Company cedes business to reinsurers to share risks under life, health and
annuity contracts for the purpose of reducing exposure to large losses.
Premiums, benefits and reserves ceded to reinsurers in 1995 were $281.0
million, $217.0 million and $185.4 million, respectively. The corresponding
amounts in 1994 were $246.7 million, $203.2 million and $217.3 million,
respectively.
The Company has a coinsurance agreement with another insurer to cede 100% of
its individual disability business. Reserves ceded under this agreement,
included in the amount shown above, were $212.7 million at December 31, 1995
and $184.5 million at December 31, 1994.
To the extent that an assuming reinsurance company is unable to meet its
obligations under a reinsurance agreement, the Company remains liable as the
direct insurer on all risks reinsured.
NOTE 8--BENEFIT PLANS
The Company provides retirement benefits to substantially all employees and
general agency personnel. These benefits are provided through both defined
benefit and defined contribution pension plans. Pension benefits under the
defined benefit plans are based on years of service and average compensation
generally during the five years prior to retirement. The Company's funding
policy for qualified defined benefit plans is to contribute annually an amount
in excess of the minimum annual contribution required under the Employee
Retirement Income Security Act (ERISA). This amount is limited by the maximum
amount that can be deducted for federal income tax purposes. The funding
policy for nonqualified defined benefit plans is to contribute the amount of
the benefit payments made during the year. Plan assets consist principally of
listed equity securities, corporate obligations and U.S. government
securities.
Defined contribution plans include The Investment Incentive Plan (TIP) and the
Savings and Investment Plan (SIP). Employees are eligible to participate in
TIP after one year of service and may contribute up to the lesser of 15% of
their salary or $9,240 annually to the plan. The Company matches the first 2%
of pre-tax contributions and makes an additional annual profit sharing
contribution for employees who have completed at least two years of service.
Through SIP, marketing representatives, sales managers and agency managers are
eligible to contribute up to the lesser of 13% of their salary or $9,240. The
Company matches the first 3% of pretax contributions for marketing
representatives and the first 2% of pretax contributions for sales managers
and agency managers. The Company makes an annual profit sharing contribution
of up to 1% for sales managers and agency managers who have completed at least
two years of service.
The Company provides additional compensation to certain employees based on
achievement of annual and long-term corporate financial objectives.
50
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 8--BENEFIT PLANS--CONTINUED
Pension expense is summarized as follows:
<TABLE>
<CAPTION>
Year ended
December 31
----------------
1995 1994
------- -------
(In millions)
<S> <C> <C>
Defined benefit plans:
Service cost--benefits earned during the period............. $ 30.1 $ 46.5
Interest cost on the projected benefit obligation........... 103.5 96.1
Actual return on plan assets................................ (369.5) 29.4
Net amortization and deferral............................... 260.5 (144.7)
------- -------
24.6 27.3
Defined contribution plans.................................... 19.8 15.8
------- -------
Total pension expense..................................... $ 44.4 $ 43.1
======= =======
</TABLE>
Assumptions used in accounting for the defined benefit pension plans were as
follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Discount rate....................................................... 7.50% 8.00%
Weighted rate of increase in compensation levels.................... 5.10% 5.30%
Expected long-term rate of return on assets......................... 7.75% 8.25%
</TABLE>
The following table sets forth the funded status and actuarially determined
amounts related to the Company's defined benefit pension plans:
<TABLE>
<CAPTION>
Year ended December 31
------------------------
1995 1994
----------- -----------
(In millions)
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation.......................... $ (1,242.9) $ (1,108.9)
=========== ===========
Accumulated benefit obligation..................... $ (1,300.3) $ (1,151.0)
=========== ===========
Projected benefit obligation......................... $ (1,480.0) $ (1,350.2)
Plan assets fair value............................... 1,645.3 1,355.0
----------- -----------
Excess of plan assets over projected benefit obliga-
tion................................................ 165.3 4.8
Unrecognized net (gain) loss......................... (148.2) 36.3
Prior service cost not yet recognized in net periodic
pension cost........................................ 50.0 57.7
Unrecognized net asset, net of amortization.......... (112.4) (126.6)
----------- -----------
Net pension liability................................ $ (45.3) $ (27.8)
=========== ===========
</TABLE>
Since 1988, the Massachusetts Division of Insurance has provided the Company
with approval to recognize the pension plan prepaid expense, if any, in
accordance with the requirements of SFAS No. 87, "Employers' Accounting for
Pensions." The Company furnishes the Division of Insurance with an actuarial
certification of the prepaid expense computation on an annual basis.
51
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS
In addition to the Company's defined benefit pension plans, the Company has
employee welfare plans for medical, dental, and life insurance covering most
of its retired employees and general agency personnel. Substantially all
employees may become eligible for these benefits if they reach retirement age
while employed by the Company. The postretirement health care and dental
coverages are contributory based on service for post January 1, 1992 non-union
retirees. A small portion of pre-January 1, 1992 non-union retirees also
contribute. The applicable contributions are based on service.
In 1993, the Company changed its method of accounting for the costs of its
retiree benefit plans to the accrual method and elected to amortize its
transition liability for retirees and fully eligible or vested employees over
twenty years.
Since 1993, the Company funded a portion of the postretirement obligation. The
Company's policy is to fund postretirement benefits for non-union employees to
the maximum amount that can be deducted for federal income tax purposes and to
fund the benefits for union employees, which are fully tax qualified, at
sufficient amounts so that the total accrued liability related to
postretirement benefits is zero. As of December 31, 1995, plan assets related
to non-union employees were comprised of an irrevocable health insurance
contract to provide future health benefits to retirees while plan assets
related to union employees were comprised of approximately 60% equity
securities and 40% fixed income investments. The following table shows the
plans' combined funding status for vested benefits reconciled with the amounts
recognized in the Company's statements of financial position.
<TABLE>
<CAPTION>
December 31
-------------------------------------
1995 1994
------------------ ------------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
------- --------- ------- ---------
(In millions)
<S> <C> <C> <C> <C>
Accumulated postretirement benefit obli-
gation:
Retirees............................... $(236.5) $(89.2) $(239.2) $(76.5)
Fully eligible active plan partici-
pants................................. (42.9) (20.1) (51.3) (22.2)
------- ------ ------- ------
(279.4) (109.3) (290.5) (98.7)
Plan assets at fair value................ 96.9 0.0 59.9 0.0
------- ------ ------- ------
Accumulated postretirement benefit
obligation in excess of plan assets..... (182.5) (109.3) (230.6) (98.7)
Unrecognized prior service cost.......... 18.2 5.8 22.2 6.2
Unrecognized prior net gain.............. (84.2) (4.2) (63.9) (12.3)
Unrecognized transition obligation....... 272.9 83.3 288.9 88.2
------- ------ ------- ------
Accrued postretirement benefit cost...... $ 24.4 $(24.4) $ 16.6 $(16.6)
======= ====== ======= ======
</TABLE>
Net postretirement benefits costs for the years ended December 31, 1995 and
1994 were $50.2 million and $52.1 million, respectively, and include the
expected cost of such benefits for newly eligible or vested employees,
interest cost, and amortization of the transition liability.
52
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED
Net periodic postretirement benefits cost included the following components:
<TABLE>
<CAPTION>
December 31
------------------------------------
1995 1994
------------------ -----------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
------- --------- ------- ---------
(In millions)
<S> <C> <C> <C> <C>
Eligibility cost............................ $ 5.3 $ 1.5 $ 6.1 $ 2.3
Interest cost............................... 21.1 7.8 19.9 6.8
Actual return on plan assets................ (15.5) 0.0 (2.1) 0.0
Net amortization and deferral............... 25.0 5.0 14.4 4.7
------ ----- ----- -----
Net periodic postretirement benefit cost.... $ 35.9 $14.3 $38.3 $13.8
====== ===== ===== =====
</TABLE>
The discount rate used in determining the accumulated postretirement benefit
obligation at December 31, 1995 was 7.5% (8.0% for 1994). The annual assumed
rate of increase in the health care cost trend rate for the medical coverages
is 8.25% for 1996 (9.75% was assumed for 1995) and is assumed to decrease
gradually to 5.5% in 2001 and remain at that level thereafter. The health care
cost trend rate assumption has a significant effect on the amounts reported.
For example, increasing the assumed health care cost trend rates by one
percentage point in each year would increase the accumulated post retirement
benefit obligation for the medical coverages as of December 31, 1995 by $35.0
million and the aggregate of the eligibility and interest cost components of
net periodic postretirement benefit cost by $3.6 million for 1995 and $2.7
million for 1994.
Postretirement welfare benefits for non-vested employees are not reflected in
the above expenses or accumulated postretirement benefit obligations. As of
December 31, 1995, the accumulated postretirement benefit obligations for non-
vested employees amounted to $67.7 million for medical and dental plans and
$10.8 million for life insurance plans. The corresponding amounts as of
December 31, 1994 were $70.4 million and $9.1 million, respectively.
NOTE 10--AFFILIATES
The Company has subsidiaries and affiliates in a variety of industries
including domestic and foreign life insurance and domestic property casualty
insurance, real estate, mutual funds, investment brokerage and various other
financial services entities.
Total assets of unconsolidated affiliates amounted to $9.5 billion at December
31, 1995 and $7.8 billion at December 31, 1994; total liabilities amounted to
$8.3 billion at December 31, 1995 and $6.7 billion at December 31, 1994; and
total net income was $89.5 million in 1995 and $61.9 million in 1994.
The Company customarily engages in transactions with its unconsolidated
affiliates, including the cession and assumption of certain insurance business
under the terms of established reinsurance agreements. Various services are
performed by the Company for certain affiliates for which the Company is
reimbursed on the basis of cost. Certain affiliates have entered into various
financial arrangements relating to borrowings and capital maintenance under
which agreements the Company would be obligated in the event of nonperformance
by an affiliate (see Note 14).
53
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 10--AFFILIATES--CONTINUED
The Company received dividends of $9.7 million and $10.1 million in 1995 and
1994, respectively, from unconsolidated affiliates.
NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Company enters into interest rate swap contracts for the purpose of
converting the interest rate characteristics (fixed or variable) of certain
investments to match those of related insurance liabilities. Maturities of
current agreements range from 1996 to 2005. These swaps involve, to varying
degrees, interest rate risk in excess of amounts recognized in the statement
of financial position.
The Company enters into currency rate swap agreements to manage exposure to
foreign exchange rate fluctuations. Maturities of current agreements range
through 2009. Should the counterparty fail to meet the terms of the contract,
the Company's market risk is limited to the currency rate differential.
The Company enters into interest rate cap contracts to manage exposure on
underlying security values due to a rise in interest rates. Maturities of
current agreements range through 2001.
The Company also uses financial futures contracts to hedge risks associated
with interest rate fluctuations on sales of guaranteed investment contracts.
The Company is subject to the risks associated with changes in the value of
the underlying securities; however, such changes in value generally are offset
by opposite changes in the value of the hedged items. The contract or notional
amounts of the contracts represent the extent of the Company's involvement but
not the future cash requirements, as the Company intends to close the open
positions prior to settlement.
The contract or notional amount of the foregoing financial instruments, which
indicates the Company's involvement and, in certain instances, maximum credit
risk related to those instruments, is as follows:
<TABLE>
<CAPTION>
December 31
-----------------
1995 1994
-------- --------
(In millions)
<S> <C> <C>
Futures contracts to purchase securities.................... $ 62.2 $ 147.9
======== ========
Futures contracts to sell securities........................ $ 299.9 $ 98.1
======== ========
Notional amount of interest rate swaps, currency rate swaps,
and interest rate caps to:
Receive variable rates.................................... $1,735.0 $ 916.0
======== ========
Receive fixed rates....................................... $1,756.3 $1,365.2
======== ========
</TABLE>
The Company continually monitors its positions and the credit ratings of the
counterparties to these financial instruments. The Company believes the risk
of incurring losses due to nonperformance by its counterparties is remote and
that any such losses would be immaterial.
Based on market rates in effect at December 31, 1995, the Company's interest
rate swaps, currency rate swaps, and interest rate caps represented (assets)
liabilities to the Company with fair values of $37.0 million, $23.3 million
and $(0.3) million, respectively. The corresponding amounts as of December 31,
1994 were $12.0 million, $15.4 million, and $(1.5) million, respectively.
54
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 12--LEASES
The Company leases office space and furniture and equipment under various
operating leases. Rental expenses for all operating leases totaled $32.2
million in 1995 and $35.2 million in 1994. At December 31, 1995, future
minimum rental commitments under noncancellable operating leases for office
space and furniture and equipment totaled approximately $44.3 million.
NOTE 13--POLICYHOLDERS' RESERVES AND BENEFICIARIES' FUNDS
The Company's annuity reserves and deposit fund liabilities that are subject
to discretionary withdrawal (with adjustment), subject to discretionary
withdrawal (without adjustment), and not subject to discretionary withdrawal
provisions are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1995 Percent
----------------- -------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with adjust-
ment):
With market value adjustment....................... $ 2,517.0 7.3%
At book value less surrender charge................ 2,502.2 7.3
--------- -----
Total with adjustment.............................. 5,019.2 14.6
Subject to discretionary withdrawal (without ad-
justment) at book value........................... 594.8 1.7
Subject to discretionary withdrawal--separate ac-
counts............................................ 10,813.9 31.4
Not subject to discretionary withdrawal:
General account.................................... 16,634.4 48.3
Separate accounts.................................. 1,387.2 4.0
--------- -----
Total annuity reserves and deposit liabilities--be-
fore reinsurance.................................... 34,449.5 100.0%
=====
Less reinsurance ceded............................... (0.2)
---------
Net annuity reserves and deposit fund liabilities.... $34,449.3
=========
</TABLE>
Activity in the liability for accident and health unpaid claims is:
<TABLE>
<CAPTION>
1995 1994
------ ------
(In millions)
<S> <C> <C>
Balance at January 1............................................ $216.2 $210.6
Less reinsurance recoverables................................. (7.3) (4.6)
------ ------
Net balance at January 1........................................ 208.9 206.0
------ ------
Incurred related to:
Current year.................................................. 301.0 350.4
Prior years................................................... (25.2) (40.4)
------ ------
Total incurred.................................................. 275.8 310.0
------ ------
Paid related to:
Current year.................................................. 192.0 231.2
Prior years................................................... 89.0 75.9
------ ------
Total paid...................................................... 281.0 307.1
------ ------
Net balance at December 31...................................... 203.7 208.9
Plus reinsurance recoverable.................................. 4.0 7.3
------ ------
Balance at December 31.......................................... $207.7 $216.2
====== ======
</TABLE>
55
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 13--POLICYHOLDERS' RESERVES AND BENEFICIARIES' FUNDS--CONTINUED
As a result of favorable changes in claim estimates and a decline in fully
insured business, the liability for prior year claims decreased in 1995 and
1994.
NOTE 14--COMMITMENTS AND CONTINGENCIES
The Company has extended commitments to purchase long-term bonds, preferred
stocks, and real estate and issue real estate mortgages totaling $620.7
million, $19.1 million, $5.0 million and $396.6 million, respectively, at
December 31, 1995. If funded, loans related to real estate mortgages would be
fully collateralized by related properties. The Company monitors the credit
worthiness of borrowers under long-term bond commitments and requires
collateral as deemed necessary. The fair value of the commitments described
above is $1.1 billion at December 31, 1995. The majority of these commitments
expire in 1996.
During 1991, the Company entered into a credit support and collateral pledge
agreement with the Federal National Mortgage Association (FNMA). Under the
agreement, the Company sold $1.042 billion of multi-family loans and acquired
an equivalent amount of FNMA securities. FNMA is guarantying the full face
value of the bonds to the bondholders. However, the Company has agreed to
absorb the first 15% of original principal and interest losses (less buy-
backs) for the pool of loans involved, but is not required to commit
collateral to support this loss contingency. Historically, the Company has
experienced total losses as a percentage of its multi-family mortgage
portfolio of approximately 3%. Mortgage loan buy-backs required by FNMA in
1995 and 1994 amounted to $29.5 million and $12.7 million, respectively. There
were no losses associated with these buy-backs. At December 31, 1995, the
remaining pool of loans had an outstanding principal balance of $591.2
million.
The Company has a support agreement with JHVLICo under which the Company
agrees to continue directly or indirectly to own all of JHVLICo's common stock
and maintain JHVLICo's net worth at not less than $1 million.
The Company has a support agreement with John Hancock Capital Corporation
(JHCC) under which the Company agrees to continue directly or indirectly to
own all of JHCC's common stock and maintain JHCC's net worth at not less than
$1 million. JHCC's outstanding borrowings as of December 31, 1995 were $363.6
million for short-term borrowings and $142.7 million for notes payable.
The Company is subject to insurance guaranty fund laws in the states in which
it does business. These laws assess insurance companies amounts to be used to
pay benefits to policyholders and claimants of insolvent insurance companies.
Many states allow these assessments to be credited against future premium
taxes. The Company believes such assessments in excess of amounts accrued will
not materially affect its financial position.
In the normal course of its business operations, the Company is involved in
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 1995. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position of the Company.
56
<PAGE>
APPENDIX--OTHER POLICY PROVISIONS
SETTLEMENT PROVISIONS
In place of a single payment, an amount of $1,000 or more payable under the
Policy as a benefit or as the Surrender Value, if any, may be left with John
Hancock under the terms of a supplementary agreement. The agreement will be
issued when the proceeds are applied through the election of any one of the
options below.
The following options are subject to the restrictions and limitations stated
in the Policy.
Option 1--Interest Income at the declared rate but not less than 3 1/2% a
year on proceeds held on deposit.
Option 2A--Income of a Specified Amount, with payments each year totaling
at least 1/12th of the proceeds, until the proceeds, with interest credited
at the declared rate but not less than 3 1/2% a year on unpaid balances,
are fully paid.
Option 2B--Income for a Fixed Period, with each payment as declared.
Option 3--Life Income with Payments for a Guaranteed Period.
Option 4--Life Income without Refund at the death of the Payee of any
part of the proceeds applied. Only one payment is made if the Payee dies
before the second payment is due.
Option 5--Life Income with Cash Refund at the death of the Payee of the
amount, if any, equal to the proceeds applied less the sum of all income
payments made.
No election of an option may provide for income payments of less than $50.
Other options may be arranged with John Hancock's approval.
ADDITIONAL INSURANCE BENEFITS
On payment of an additional premium and subject to certain age and insurance
underwriting requirements, certain additional provisions, such as an
Accidental Death Benefit, which are subject to the restrictions and
limitations set forth therein, may be included in a Policy.
GENERAL PROVISIONS
BENEFICIARY. The Beneficiary will be as shown in the application for the
Policy, unless thereafter changed by the Owner in accordance with the terms of
the Policy. If the insured dies and there is no surviving Beneficiary, the
Owner will be the Beneficiary, but if the insured was the Owner, the Owner's
estate will be the Beneficiary.
ASSIGNMENT. The Owner's interest in the Policy may be assigned without the
consent of any revocable Beneficiary. John Hancock will not be on notice of
any assignment unless it is in writing and until a duplicate of the original
assignment has been filed at John Hancock's Home Office. John Hancock assumes
no responsibility for the validity or sufficiency of any assignment.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the insured has been
misstated, John Hancock will adjust the benefits payable to reflect the
correct age or sex.
57
<PAGE>
SUICIDE. If the insured commits suicide within 2 years from the issue date
shown in the Policy, John Hancock will pay in place of all other benefits an
amount equal to the premium paid less any Indebtedness on the date of death
and any withdrawals. If the suicide is more than 2 years from the issue date
but within 2 years of any increase in death benefit due to payment of any
premium in excess of the Required Premium, the benefits payable will not
include the increased benefit but will include the excess premium.
AVIATION ACTIVITY EXCLUSION. If the insured dies in an aviation accident
while a crew member on other than a commercial aircraft and the Policy
provides at the request of the Owner for a limited benefit in such situation,
John Hancock will pay in place of all other benefits an amount equal to the
greater of the premium paid or the Surrender Value, less any Indebtedness.
INCONTESTABILITY. The Policy, except for any provision for a disability
benefit or additional benefits provisions added after issue, shall be
incontestable other than for nonpayment of premiums after it has been in force
during the lifetime of the insured for 2 years from its issue date. If,
however, evidence of insurability is required with respect to any premium in
excess of the Required Premium, any increase in death benefit due to payment
of excess premium shall be incontestable after the increase has been in force
for 2 years from the increase date.
DEFERRAL OF DETERMINATION AND PAYMENTS. If the Policy is not on a fixed non-
forfeiture option, payment of any death, surrender, withdrawal or loan
proceeds will ordinarily be made within seven days after receipt at John
Hancock's Home Office of all documents required for any such payment.
Approximately two-thirds of the claims for death proceeds which are made
within two years after the date of issue of the Policy will be investigated to
determine whether the claim should be contested and payment of these claims
will therefore be delayed.
John Hancock may defer any transaction requiring a determination of Account
Value for any period during which: (1) the disposal or valuation of the
Account's assets is not reasonably practicable because the New York Stock
Exchange is closed or conditions are such that, under the Commission's rules
and regulations, trading is restricted or an emergency is deemed to exist or
(2) the Commission by order permits postponement of such actions for the
protection of John Hancock Owners.
Under a Policy being continued under a fixed non-forfeiture option, payment
of the cash value or loan proceeds may be deferred by John Hancock for up to
six months after receipt of a request therefor. Interest will be accrued at an
annual rate of 3 1/2% if such a deferment extends beyond 10 days.
The foregoing description of Policy provisions is qualified by reference to
the specimen Policy which has been filed as an exhibit to the Registration
Statement.
REINSTATEMENT. The Policy may be reinstated in accordance with its terms
(including evidence of insurability satisfactory to John Hancock and payment
of the required premium and charges) within 3 years after the beginning of the
grace period unless the Surrender Value has been paid or otherwise exhausted,
or the period of any Fixed Extended Term Insurance has expired.
58
<PAGE>
APPENDIX--ILLUSTRATION OF DEATH BENEFITS
SURRENDER VALUES AND ACCUMULATED PREMIUMS
The following tables illustrate the changes in death benefit and surrender
value of the Policy, disregarding any Policy loans. Each table separately
illustrates the operation of a Policy for an identified issue age, premium
schedule and Sum Insured at Issue and shows how the death benefit and
surrender value (reflecting the deduction of the surrender charge, if any) may
vary over an extended period of time assuming hypothetical rates of investment
return (i.e., investment income and capital gains and losses, realized or
unrealized) equivalent to constant gross annual rates of 0%, 6% and 12%. The
tables are based on given annual premiums paid at the beginning of each Policy
year and will assist in a comparison of the death benefit and surrender value
figures set forth in the tables with those under other variable life insurance
policies which may be issued by John Hancock or other companies. The death
benefit and surrender value for a Policy would be different from those shown
if premiums are paid in different amounts or at different times or if the
actual gross rates of investment return average 0%, 6% or 12% over a period of
years, but nevertheless fluctuated above or below the average for individual
Policy years.
The amounts shown for the death benefit and surrender value are as of the
end of each Policy year. The tables headed "Using Current Charges" assume that
the current rates for insurance and charges for expenses will be made in each
year illustrated. The tables headed "Using Maximum Charges" assume that the
maximum (guaranteed) charge will be made for insurance and for expense charges
in each year illustrated. The amounts shown in all tables reflect an average
asset charge for the daily investment advisory expense charges to the
Portfolios of the Fund (equivalent to an effective annual rate of .53%) and an
assumed average asset charge for the annual nonadvisory operating expenses of
each Portfolio of the Fund (equivalent to an effective annual rate of .15%).
For a description of expenses charged to the Portfolios, including the
reimbursement of any Portfolio for annual non-advisory operating expenses in
excess of an effective annual rate of .25%, a continuing obligation of the
Fund's investment adviser, see the attached prospectus for the Fund. The
charges for the daily investment management fee and the annual non-advisory
operating expenses are based on the hypothetical assumption that Policy values
are allocated equally among the nine variable subaccounts. The actual charges
and expenses associated with any Policy and will vary depending upon the
actual allocation of Policy values among subaccounts. During the first 11
Policy years, the surrender values for the base Policy are the Account Values
less the Contingent Deferred Sales Charge (and, during the first four years,
less any unpaid Issue Charge). Thereafter the Account Value will be equal to
the surrender value.
The tables reflect that no charge is currently made to the Accounts for
Federal income taxes. However, John Hancock reserves the right to make such a
charge in the future and any charge would require higher rates of investment
return in order to produce the same Policy values.
The second column of each table shows the amount to which the total premiums
paid to the end of a Policy year during the premium paying period would
accumulate if an amount equal to those premiums were invested to earn
interest, after taxes, at 5% compounded annually.
The amounts shown for the death benefit and surrender value reflect Excess
Value, if any, applied under the Accumulate Option.
John Hancock will furnish upon request a comparable illustration reflecting
the proposed insured's age, sex, underwriting risk classification and the Sum
Insured at Issue or premium amount requested, and assuming annual premiums and
that the proposed insured is not a substandard underwriting risk
classification.
59
<PAGE>
PLAN: SCHEDULE PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE--LEVEL
$1,113 BASIC PREMIUM (1)
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest --------------------------- ---------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,169 100,000 100,000 100,000 364 415 465
2 2,396 100,000 100,000 100,000 1,013 1,157 1,307
3 3,684 100,000 100,000 100,000 1,656 1,939 2,245
4 5,037 100,000 100,000 100,000 2,293 2,761 3,290
5 6,458 100,000 100,000 100,000 2,921 3,625 4,453
6 7,949 100,000 100,000 100,000 3,574 4,570 5,786
7 9,515 100,000 100,000 100,000 4,285 5,630 7,336
8 11,160 100,000 100,000 100,000 5,048 6,800 9,112
9 12,886 100,000 100,000 100,000 5,866 8,086 11,136
10 14,699 100,000 100,000 100,000 6,669 9,421 13,355
11 16,603 100,000 100,000 100,000 7,454 10,803 15,789
12 18,602 100,000 100,000 100,000 8,222 12,236 18,461
13 20,700 100,000 100,000 100,000 8,836 13,586 21,262
14 22,904 100,000 100,000 100,000 9,427 14,985 24,351
15 25,218 100,000 100,000 100,000 9,995 16,436 27,760
16 27,647 100,000 100,000 102,903 10,537 17,941 31,518
17 30,198 100,000 100,000 112,689 11,051 19,498 35,635
18 32,877 100,000 100,000 122,985 11,536 21,110 40,144
19 35,689 100,000 100,000 133,835 11,991 22,780 45,079
20 38,643 100,000 100,000 145,275 12,413 24,509 50,479
25 55,776 100,000 100,000 212,827 13,994 34,136 86,067
30 77,644 100,000 100,000 302,399 14,403 45,650 141,229
35 105,553 100,000 110,567 422,220 12,910 59,001 225,304
40 141,173 100,000 122,582 583,399 8,404 73,916 351,784
45 186,634 100,000 133,838 799,965 0 89,945 537,611
50 244,655 100,000 144,359 1,091,427 0 106,569 805,719
55 318,706 100,000 154,711 1,484,875 0 123,177 1,182,225
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$556.50 semiannually, $278.25 quarterly, or $92.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
60
<PAGE>
PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE AT ISSUE--MODIFIED
$708 INITIAL BASIC PREMIUM AT ISSUE (1)
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest --------------------------- ---------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 743 100,000 100,000 100,000 0 22 50
2 1,524 100,000 100,000 100,000 276 352 432
3 2,344 100,000 100,000 100,000 557 703 862
4 3,204 100,000 100,000 100,000 835 1,073 1,342
5 4,108 100,000 100,000 100,000 1,109 1,463 1,881
6 5,057 100,000 100,000 100,000 1,411 1,910 2,522
7 6,053 100,000 100,000 100,000 1,775 2,448 3,306
8 7,099 100,000 100,000 100,000 2,195 3,072 4,233
9 8,197 100,000 100,000 100,000 2,673 3,785 5,316
10 9,350 100,000 100,000 100,000 3,140 4,518 6,492
11 10,561 100,000 100,000 100,000 3,591 5,268 7,769
12 11,833 100,000 100,000 100,000 4,030 6,038 9,159
13 13,168 100,000 100,000 100,000 4,316 6,691 10,537
14 14,570 100,000 100,000 100,000 4,583 7,358 12,047
15 16,042 100,000 100,000 100,000 4,828 8,039 13,703
16 17,587 100,000 100,000 100,000 5,050 8,734 15,519
17 19,210 100,000 100,000 100,000 5,245 9,439 17,510
18 20,914 100,000 100,000 100,000 5,413 10,153 19,695
19 22,703 100,000 100,000 100,000 5,550 10,876 22,094
20 24,581 100,000 100,000 100,000 5,657 11,606 24,731
25 35,480 100,000 100,000 105,105 5,654 15,322 42,504
30 49,391 100,000 100,000 150,819 4,414 18,872 70,437
35 67,144 100,000 100,000 211,807 1,065 21,490 113,024
40 89,803 100,000 100,000 293,712 0 21,948 177,106
45 118,721 100,000 100,000 403,658 0 17,134 271,275
50 180,898 100,000 100,000 548,321 12,631 26,122 404,785
55 279,274 100,000 100,000 741,579 26,920 50,846 590,429
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$354.00 semiannually, $177.00 quarterly, or $59.00 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,973 for a hypothetical
gross investment return of 0%, $8,342 for a gross return of 6%, and $0 for
a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
61
<PAGE>
PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 40, PREFERRED UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE AT ISSUE--MODIFIED
$1,305 INITIAL BASIC PREMIUM AT ISSUE (1)
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest --------------------------- ---------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,370 100,000 100,000 100,000 461 522 584
2 2,809 100,000 100,000 100,000 1,186 1,363 1,547
3 4,320 100,000 100,000 100,000 1,890 2,238 2,615
4 5,906 100,000 100,000 100,000 2,571 3,146 3,797
5 7,571 100,000 100,000 100,000 3,230 4,095 5,110
6 9,320 100,000 100,000 100,000 3,919 5,137 6,625
7 11,157 100,000 100,000 100,000 4,718 6,355 8,435
8 13,085 100,000 100,000 100,000 5,600 7,723 10,534
9 15,109 100,000 100,000 100,000 6,580 9,259 12,953
10 17,235 100,000 100,000 100,000 7,515 10,822 15,573
11 19,467 100,000 100,000 100,000 8,407 12,414 18,417
12 21,810 100,000 100,000 100,000 9,268 14,049 21,524
13 24,271 100,000 100,000 100,000 9,840 15,472 24,666
14 26,855 100,000 100,000 100,000 10,370 16,932 28,124
15 29,568 100,000 100,000 100,000 10,847 18,422 31,926
16 32,417 100,000 100,000 100,000 11,272 19,944 36,116
17 35,408 100,000 100,000 100,000 11,635 21,492 40,734
18 38,548 100,000 100,000 100,000 11,935 23,068 45,833
19 41,846 100,000 100,000 100,000 12,162 24,666 51,470
20 45,309 100,000 100,000 108,053 12,316 26,290 57,659
25 65,398 100,000 100,000 117,689 11,779 34,762 98,314
30 91,038 100,000 100,000 127,959 7,327 43,066 160,273
35 132,470 100,000 100,000 138,914 20,617 59,636 249,800
40 191,905 100,000 100,000 150,597 45,831 87,413 380,902
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$652.50 semiannually, $326.25 quarterly, or $108.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,445 for a hypothetical
gross investment return of 0%, $3,936 for a gross return of 6%, and $0 for
a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
62
<PAGE>
PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 40, PREFERRED UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE--LEVEL
$1,954 BASIC PREMIUM (1)
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest --------------------------- ---------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,052 100,000 100,000 100,000 1,055 1,152 1,249
2 4,206 100,000 100,000 100,000 2,367 2,652 2,949
3 6,468 100,000 100,000 100,000 3,652 4,219 4,833
4 8,843 100,000 100,000 100,000 4,908 5,854 6,919
5 11,337 100,000 100,000 100,000 6,137 7,563 9,235
6 13,955 100,000 100,000 100,000 7,391 9,406 11,863
7 16,705 100,000 100,000 100,000 8,748 11,464 14,908
8 19,592 100,000 100,000 100,000 10,185 13,716 18,377
9 22,623 100,000 100,000 100,000 11,716 16,180 22,319
10 25,806 100,000 100,000 100,000 13,199 18,722 26,632
11 29,148 100,000 100,000 100,000 14,636 21,345 31,361
12 32,657 100,000 100,000 100,000 16,040 24,066 36,564
13 36,342 100,000 100,000 100,000 17,152 26,635 42,041
14 40,211 100,000 100,000 105,867 18,222 29,306 48,080
15 44,273 100,000 100,000 117,114 19,240 32,076 54,696
16 48,538 100,000 100,000 129,035 20,207 34,955 61,944
17 53,017 100,000 100,000 141,670 21,114 37,942 69,874
18 57,719 100,000 100,000 155,078 21,962 41,048 78,552
19 62,657 100,000 100,000 169,296 22,743 44,275 88,037
20 67,841 100,000 100,000 184,414 23,458 47,635 98,407
25 97,922 100,000 110,331 276,132 25,897 66,529 166,505
30 136,313 100,000 131,084 402,147 25,131 88,094 270,260
35 185,310 100,000 152,199 579,188 19,806 112,357 427,571
40 247,845 100,000 175,474 834,056 5,524 139,709 664,057
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.84 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
63
<PAGE>
PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT
ISSUE (GUARANTEED DEATH BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,113
BASIC PREMIUM (1) USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest --------------------------- ---------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,169 100,000 100,000 100,000 341 390 440
2 2,396 100,000 100,000 100,000 965 1,106 1,253
3 3,684 100,000 100,000 100,000 1,585 1,861 2,161
4 5,037 100,000 100,000 100,000 2,199 2,655 3,171
5 6,458 100,000 100,000 100,000 2,804 3,490 4,296
6 7,949 100,000 100,000 100,000 3,434 4,403 5,586
7 9,515 100,000 100,000 100,000 4,123 5,430 7,090
8 11,160 100,000 100,000 100,000 4,864 6,566 8,814
9 12,886 100,000 100,000 100,000 5,660 7,817 10,780
10 14,699 100,000 100,000 100,000 6,441 9,114 12,935
11 16,603 100,000 100,000 100,000 7,205 10,456 15,298
12 18,602 100,000 100,000 100,000 7,951 11,847 17,891
13 20,700 100,000 100,000 100,000 8,540 13,149 20,602
14 22,904 100,000 100,000 100,000 9,108 14,499 23,591
15 25,218 100,000 100,000 100,000 9,651 15,899 26,889
16 27,647 100,000 100,000 100,000 10,168 17,347 30,527
17 30,198 100,000 100,000 109,154 10,656 18,845 34,517
18 32,877 100,000 100,000 119,134 11,116 20,395 38,887
19 35,689 100,000 100,000 129,647 11,544 21,998 43,668
20 38,643 100,000 100,000 140,733 11,941 23,658 48,901
25 55,776 100,000 100,000 206,126 13,382 32,866 83,358
30 77,644 100,000 100,000 292,700 13,627 43,804 136,699
35 105,553 100,000 106,065 408,312 11,920 56,598 217,883
40 141,173 100,000 117,567 563,496 7,095 70,892 339,783
45 186,634 100,000 128,429 772,422 0 86,310 519,101
50 244,655 100,000 138,427 1,053,694 0 102,190 777,863
55 318,706 100,000 148,454 1,433,615 0 118,196 1,141,413
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$556.50 semiannually, $278.25 quarterly, or $92.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
64
<PAGE>
PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT
ISSUE (GUARANTEED DEATH BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--
MODIFIED $708 INITIAL BASIC PREMIUM AT ISSUE (1) USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest --------------------------- ---------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 743 100,000 100,000 100,000 0 0 25
2 1,524 100,000 100,000 100,000 228 302 379
3 2,344 100,000 100,000 100,000 486 625 777
4 3,204 100,000 100,000 100,000 741 967 1,223
5 4,108 100,000 100,000 100,000 992 1,327 1,724
6 5,057 100,000 100,000 100,000 1,272 1,743 2,323
7 6,053 100,000 100,000 100,000 1,614 2,249 3,060
8 7,099 100,000 100,000 100,000 2,011 2,838 3,935
9 8,197 100,000 100,000 100,000 2,468 3,515 4,960
10 9,350 100,000 100,000 100,000 2,913 4,210 6,072
11 10,561 100,000 100,000 100,000 3,343 4,921 7,279
12 11,833 100,000 100,000 100,000 3,759 5,648 8,589
13 13,168 100,000 100,000 100,000 4,021 6,254 9,876
14 14,570 100,000 100,000 100,000 4,263 6,872 11,286
15 16,042 100,000 100,000 100,000 4,484 7,501 12,830
16 17,587 100,000 100,000 100,000 4,680 8,139 14,520
17 19,210 100,000 100,000 100,000 4,849 8,783 16,371
18 20,914 100,000 100,000 100,000 4,991 9,435 18,401
19 22,703 100,000 100,000 100,000 5,102 10,090 20,626
20 24,581 100,000 100,000 100,000 5,183 10,750 23,071
25 35,480 100,000 100,000 100,000 5,037 14,036 39,511
30 49,391 100,000 100,000 140,309 3,626 16,987 65,528
35 67,144 100,000 100,000 197,034 50 18,730 105,141
40 89,803 100,000 100,000 273,034 0 17,822 164,637
45 118,721 100,000 100,000 375,238 0 10,861 252,176
50 184,148 100,000 100,000 509,400 12,554 19,232 376,052
55 289,119 100,000 100,000 688,711 26,666 44,565 548,337
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$354.00 semiannually, $177.00 quarterly, or $59.00 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,973 for a hypothetical
gross investment return of 0%, $9,324 for a gross return of 6%, and $0 for
a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
65
<PAGE>
PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 40, PREFERRED UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE--LEVEL
$1,954 BASIC PREMIUM (1)
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest --------------------------- ---------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,052 100,000 100,000 100,000 897 989 1,081
2 4,206 100,000 100,000 100,000 2,045 2,310 2,587
3 6,468 100,000 100,000 100,000 3,154 3,676 4,242
4 8,843 100,000 100,000 100,000 4,222 5,086 6,062
5 11,337 100,000 100,000 100,000 5,251 6,547 8,070
6 13,955 100,000 100,000 100,000 6,301 8,124 10,353
7 16,705 100,000 100,000 100,000 7,439 9,885 13,000
8 19,592 100,000 100,000 100,000 8,648 11,817 16,022
9 22,623 100,000 100,000 100,000 9,943 13,939 19,463
10 25,806 100,000 100,000 100,000 11,190 16,118 23,224
11 29,148 100,000 100,000 100,000 12,387 18,358 27,341
12 32,657 100,000 100,000 100,000 13,527 20,656 31,852
13 36,342 100,000 100,000 100,000 14,358 22,764 36,555
14 40,211 100,000 100,000 100,000 15,122 24,930 41,749
15 44,273 100,000 100,000 101,667 15,811 27,152 47,481
16 48,538 100,000 100,000 111,933 16,422 29,433 53,734
17 53,017 100,000 100,000 122,736 16,949 31,774 60,535
18 57,719 100,000 100,000 134,116 17,392 34,182 67,934
19 62,657 100,000 100,000 146,107 17,744 36,662 75,979
20 67,841 100,000 100,000 158,768 17,999 39,216 84,722
25 97,922 100,000 100,000 233,578 17,369 53,240 140,845
30 136,313 100,000 103,973 332,819 11,803 69,874 223,668
35 185,310 100,000 118,645 464,672 0 87,587 343,033
40 247,845 100,000 133,310 642,459 0 106,139 511,512
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.84 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments.
(2) The premium accumulated at 5% interest in Column 2 are those payable is
the gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
66
<PAGE>
PLAN:SCHEDULED PREMIUM VARIABLE WHOLE LIFE
MALE, ISSUE AGE 40, PREFERRED UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT) $100,000
PREMIUM SCHEDULE AT ISSUE--MODIFIED
$1,305 INITIAL BASIC PREMIUM AT ISSUE (1)
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- ---------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest --------------------------- ---------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,370 100,000 100,000 100,000 303 359 416
2 2,809 100,000 100,000 100,000 861 1,018 1,182
3 4,320 100,000 100,000 100,000 1,386 1,688 2,018
4 5,906 100,000 100,000 100,000 1,875 2,368 2,927
5 7,571 100,000 100,000 100,000 2,329 3,059 3,922
6 9,320 100,000 100,000 100,000 2,808 3,826 5,079
7 11,157 100,000 100,000 100,000 3,377 4,734 6,472
8 13,085 100,000 100,000 100,000 4,021 5,766 8,098
9 15,109 100,000 100,000 100,000 4,752 6,938 9,984
10 17,235 100,000 100,000 100,000 5,437 8,114 12,009
11 19,467 100,000 100,000 100,000 6,072 9,293 14,189
12 21,810 100,000 100,000 100,000 6,649 10,466 16,534
13 24,271 100,000 100,000 100,000 6,915 11,382 18,814
14 26,855 100,000 100,000 100,000 7,111 12,281 21,290
15 29,568 100,000 100,000 100,000 7,227 13,152 23,982
16 32,417 100,000 100,000 100,000 7,259 13,992 26,917
17 35,408 100,000 100,000 100,000 7,198 14,793 30,119
18 38,548 100,000 100,000 100,000 7,043 15,551 33,628
19 41,846 100,000 100,000 100,000 6,784 16,258 37,480
20 45,309 100,000 100,000 100,000 6,415 16,906 41,722
25 65,398 100,000 100,000 116,736 2,309 18,680 70,391
30 91,038 100,000 100,000 168,738 0 15,632 113,399
35 147,304 100,000 100,000 231,514 12,554 25,513 170,909
40 236,838 100,000 100,000 312,557 26,666 50,059 248,851
</TABLE>
- --------
(1) If premiums are paid more frequently than annually the payments would be
$652.50 semiannually, $326.25 quarterly, or $108.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by
the more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,973 for a hypothetical
gross investment return of 0%, $8,417 for a gross return of 6%, and $0 for
a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if
the gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
67
<PAGE>
[LOGO OF JOHN HANCOCK COMPANY APPEARS HERE]
POLICIES ISSUED BY JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, MASSACHUSETTS 02117
S8138UVNY 5/95
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that Section.
UNDERTAKING REGARDING INDEMNIFICATION
Pursuant to Article 9 of John Hancock's Bylaws and Section 67 of the
Massachusetts Business Corporation Law, John Hancock indemnifies each director,
former director, officer, and former officer, and his heirs and legal
representatives from liability incurred or imposed in connection with any legal
action in which he may be involved by reason of any alleged act or omission as
an officer or a director of John Hancock.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
Cross-Reference Table.
The prospectus consisting of 67 pages.
The undertaking to file reports.
<PAGE>
The undertaking regarding indemnification.
The signatures.
The following exhibits:
I.A. (1) John Hancock Board Resolution establishing the separate account.
(2) Not Applicable
(3) (a) Not Applicable.
(b) Specimen Variable Contracts Selling Agreement between John
Hancock and selling broker-dealers
(c) Schedule of sales commissions.
(4) Not Applicable
(5) Form of scheduled premium variable life insurance policy included in
the initial registration statement of this Account on this Form S-6,
filed June 3, 1993.
(6) Charter and By-Laws of John Hancock Mutual Life Insurance Company.
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Form of application for Policy included in the initial
registration statement of this Account on Form S-6, filed
June 3, 1993.
2. Included as exhibit 1.A(5) above
3. Opinion and consent of counsel as to securities being registered included in
the initial registration statement of this Account on this Form S-6, filed
filed June 3, 1993.
<PAGE>
4. Not Applicable
5. Not Applicable
6. Opinion and consent of actuary.
7. Consent of independent auditors.
8. Memorandum describing John Hancock's issuance, transfer and redemption
procedures for the policy pursuant to Rule 6e-2(b)(l2)(ii).
9. Powers of attorney for Bodman, Gifford, Boyan, Morton, Magee, Connors,
Brown, Phillips, Booth, Vappi, Bromery, Staley, D'Alessandro, Fast, Aborn,
Bok, Feldstein, Fish, Syron and Hawley.
10. Opinion of counsel as to eligibility of this Post-Effective Amendment
for filing pursuant to Rule 485(b).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the John
Hancock Mutual Life Insurance Company has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunder duly authorized, and its seal to be hereunto fixed and
attested, all in the City of Boston and Commonwealth of Massachusetts on the
29th day of February, 1996.
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
(SEAL)
By WILLIAM L. BOYAN
------------------------------
William L. Boyan
President
Attest: FRANCIS C. CLEARY, JR.
---------------------------------
Francis C. Cleary, Jr.
Counsel
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities with John Hancock Mutual Life Insurance
Company and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Executive Vice President
and Chief Financial Officer
(Principal Financial Officer
and Acting Principal
Accounting Officer)
THOMAS E. MOLONEY
- --------------------
Thomas E. Moloney February 29, 1996
Chairman of the Board and
Chief Executive Officer
STEPHEN L. BROWN (Principal Executive Officer)
- ----------------
Stephen L. Brown
for himself and as
Attorney-in-Fact February 29, 1996
<TABLE>
<CAPTION>
FOR: Foster L. Aborn Vice Chairman of the Board
William L. Boyan President, Chief Operating Officer & Director
David F. D'Alessandro Senior Executive Vice President & Director
<S> <C> <C> <C> <C>
Nelson S. Gifford Director E. James Morton Director
John F. Magee Director Thomas L. Phillips Director
John M. Connors Director Joan T. Bok Director
Delbert C. Staley Director Robert E. Fast Director
C. Vincent Vappi Director Samuel W. Bodman Director
Randolph W. Bromery Director Lawrence K. Fish Director
I. MacAllister Booth Director Kathleen F. Feldstein Director
Michael C. Hawley Director
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, John Hancock Mutual Variable Life Insurance Account UV, certifies
that it meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, and its seal to be
hereunto fixed and attested, all in the City of Boston and Commonwealth of
Massachusetts on the 29th day of February, 1996.
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
(Registrant)
By John Hancock Mutual Life Insurance Company
(Depositor)
(SEAL)
By WILLIAM L. BOYAN
----------------------------
William L. Boyan
President
Attest: FRANCIS C. CLEARY, JR.
--------------------------
Francis C. Cleary, Jr.
Counsel
<PAGE>
EXHIBIT 1.A. (1)
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
Boston, Massachusetts
VOTE OF BOARD OF DIRECTORS
Meeting of May 10, 1993
VOTED, with respect to separate investment accounts:
(a) To establish one or more separate investment accounts (the
"Account"), pursuant to Section 132 G of Chapter 175 of the Massachusetts
General Laws, as amended, for the funds attributable to individual life policies
on a variable basis to be issued by the Company. The Officers of the Company
may determine the designation of the Account and may from time to time change
its designation as they may deem necessary and appropriate.
(b) To allocate to the Account amounts to provide for life insurance
(including benefits incidental thereto) payable in fixed or variable amounts or
both and the income, gains and losses, realized or unrealized, attributable to
the Account shall be credited to or charged against the Account without regard
to the other income, gains or losses of the Company.
(c) To authorize the registration of the Account as an investment company
under the Investment Company Act of 1940 and the registration of the variable
life insurance policies issued in connection with the Account as securities
under the Securities Act of 1933, and to authorize and empower the Chairman of
the Board, the Vice Chairman, the President, any Executive Vice President or the
Secretary of the Company ("Officers of the Company") to take all action
necessary to comply with the Acts, including but not limited to the execution
and filing of registration statements and amendments thereto, applications for
exemptions from the provisions of the Act as may be necessary or desirable and
amendments thereto, and agreements for the administration of the Account and for
the distribution of variable life insurance policies carrying an interest in the
Account assets and any other actions necessary under all other applicable
federal and state laws and regulations.
(d) To authorize the Officers of the Company to take all actions
necessary to register the Account as a unit investment trust under the
Investment Company Act of 1940, and to take such related actions as they deem
necessary and appropriate to carry out the foregoing, including, without
limitation, the following: determining that the fundamental investment policy
of the Account shall be to invest or reinvest the assets in securities issued by
such investment companies registered under
<PAGE>
-2-
the Investment Company Act of 1940 as the Officers may designate pursuant to the
provisions of the variable life insurance products issued by the Company;
establishing one or more subaccounts within the Account to which net premiums
under the variable life policies will be allocated in accordance with
instructions received from policyowners, reserving to the officers the authority
to increase or decrease the number of subaccounts in the Account as they deem
necessary or appropriate; and investing each subaccount only in the shares of a
single mutual fund or a single portfolio of an investment company organized as a
series fund pursuant to the investment Company Act of 1940.
(e) To authorize the Officers of the Company to deposit such amount in
the Account or in each subaccount thereof as may be necessary or appropriate to
facilitate the Account's operations; to transfer funds from time to time between
the Company's general account and the Account as deemed appropriate and
consistent with the terms of the variable life insurance policies and applicable
laws; and to establish criteria by which the Company shall institute procedures
to provide for a pass-through of voting rights to the owners of variable life
insurance policies issued by the Company, as required by applicable laws, with
respect to the shares of any investment companies which are held in the Account.
(f) To appoint Francis C. Cleary, Jr., Counsel, as agent for service of
process or the like for the Company to receive notices and communications from
the Securities and Exchange Commission with respect to such Registration
Statements or exemptive applications and amendments thereto as may be filed on
behalf of the Company concerning the Account or the variable life insurance
policies, and to exercise the powers given to such agent in the rules and
regulations of the Securities and Exchange Commission under the Securities Act
of 1933, the Investment Company Act of 1940, or the Securities Exchange Act of
1934.
(g) To authorize the Officers of the Company to do or cause to be done
all things necessary or desirable, as may be advised by counsel, to comply with,
or obtain exemptions from, federal, state or local statutes or regulations that
may be applicable to the issuance and sale of variable life insurance products
by the Company.
(h) To authorize the Company to act as the depositor for the Account and
provide all administrative services in connection with the establishment and
maintenance of the Account and in connection with the issuance and sale of
variable life insurance policies, all on such terms and subject to such
modifications as the Officers deem necessary or appropriate to effectuate the
foregoing.
<PAGE>
-3-
(i) To authorize the Officers of the Company to contract with a suitable
investment company under the Investment Company Act of 1940, the shares of which
shall be purchased by the Company in order to serve as an investment vehicle for
the Account and, further, that the Officers are authorized to do all things as
they deem necessary and appropriate to carry out the foregoing.
(j) To empower the Management Committee to authorize the execution and
delivery of such instruments and such other action as it may deem necessary or
desirable in order to carry out the purpose and intent of this vote and to
comply with applicable federal or state laws and regulations.
RAEBURN B. HATHAWAY
-------------------
Raeburn B. Hathaway
Senior Vice President
and Secretary
<PAGE>
EXHIBIT 1.A.(3)(b)
VARIABLE CONTRACTS
SELLING AGREEMENT
John Hancock Mutual Life Insurance Company ("JHMLICO"), as the distributor and
principal underwriter, and ("the Broker/Dealer"), enter into this agreement
effective with its execution by the Broker/Dealer for the purpose of authorizing
the Broker/Dealer to solicit applications for variable life insurance and
annuity contracts ("Contracts") distributed by JHMLICO on its own behalf and on
behalf of John Hancock Variable Life Insurance Company ("JHVLICO"), a subsidiary
of JHMLICO. The parties represent as follows:
1. JHMLICO is engaged in the issuance of variable annuity contracts and
JHVLICO is engaged in the issuance of variable life insurance contracts,
both in accordance with Federal securities laws and the applicable laws of
those states in which the Contracts have been qualified for sale. The
Contracts are considered securities under the Securities Act of 1933;
therefore, distribution of the Contracts is made through JHMLICO as a
registered broker/dealer under the Securities Act of 1934 and as a member
of the National Association of Securities Dealers, Inc. ("NASD").
2. The Broker/Dealer certifies that it is a registered Broker/Dealer under the
Securities Exchange Act of 1934 and a member of the NASD. The
Broker/Dealer agrees to abide by all rules and regulations of the NASD,
including its Rules of Fair Practice, and to comply with all applicable
state and Federal laws and the rules and regulations of authorized
regulatory agencies affecting the sale of the Contracts.
3. The Broker/Dealer will select persons to be registered and supervised by it
who will be trained and qualified to solicit applications for the Contracts
in conformance with applicable state and Federal laws and regulations.
Persons so trained and qualified will be registered representatives of the
Broker/Dealer in accordance with the rules of the NASD and they will be
properly licensed to represent JHMLICO or JHVLICO or both in accordance
with the state insurance laws of those jurisdictions in which the Contracts
may lawfully be distributed and in which they solicit applications for such
Contracts.
4. The Broker/Dealer will take reasonable steps to ensure that its registered
representatives shall not make recommendations to applicants to purchase
Contracts in the absence of reasonable grounds to believe the purchase of
each Contract is suitable for the applicant. The procedure will include
review of all proposals and applications for Contracts for suitability and
completeness and correctness as to form as well as review and endorsement
on an internal record of the Broker/Dealer of
<PAGE>
-2-
the transactions. The Broker/Dealer will promptly forward to JHMLICO all
applications found suitable, together with any payments received with the
applications, without deduction or reduction. JHMLICO reserves the right
to reject any Contract application and return any payment made in
connection with an application which is rejected. Contracts issued on
applications accepted by JHMLICO or JHVLICO will be forwarded to the
registered representative of the Broker/Dealer for delivery to the Contract
owner.
5. The Broker/Dealer will perform the selling functions required by this
agreement only in accordance with the terms and conditions of the then
current prospectus applicable to the Contracts and will make no
representations not included in the prospectus or in any authorized
supplemental material. Any material prepared or used by the Broker/Dealer
or its registered representatives, which describes or must describe the
Contracts, or uses the name of JHVLICO, JHMLICO or the logos or Service
Marks of either must be approved by JHMLICO in writing prior to any such
use.
6. JHMLICO will provide Broker/Dealer with prospectuses, and any supplements
or amendments thereto, describing the Contracts subject to this Agreement.
JHMLICO is responsible for maintaining in effect in accordance with the
requirements of the Securities and Exchange Commission each Registration
Statement of which the prospectus is part. JHMLICO will immediately notify
Broker/Dealer of the issuance of any stop order or any Federal or state
regulatory proceeding which would prevent the sale of Contracts in any
state or jurisdiction.
7. Compensation payable on sales of the Contracts solicited by the
Broker/Dealer will be paid to the Broker/Dealer by JHMLICO in accordance
with the compensation schedules defined under the John Hancock Mutual Life
Insurance Company/M Financial Group Master Agreement dated December 5, 1991
and the Producer Agreements related thereto, as in effect at the time the
contract premiums or considerations are received by JHMLICO or JHVLICO.
Compensation to the registered representative for contracts solicited by
the registered representative will be governed by an agreement between the
Broker/Dealer and its registered representative. To the extent requested
by Broker/Dealer, registered representative compensation may be paid
directly to such registered representative by JHMLICO or JHVLICO. A
portion of the compensation otherwise payable to Broker/Dealer pursuant to
the compensation schedules applicable to the Contracts shall be payable to
Mutual Service Corporation (MSC) in accordance with the agreement in effect
between M Financial Group and MSC (currently 2% of first year commissions,
1% of renewal commissions). To the extent requested by Broker/Dealer and
its registered representative, registered representative compensation shall
be paid to JH Networking Insurance Agency ("NIA") for allocation to The
John Hancock/M Financial Group Deferred Commission Plan, as in effect at
the time the compensation becomes payable.
8. In the event of any surrender of a Contract within the 10 day "free look"
period or, in the case of a variable life insurance policy, within 10 days
after the mailing of the Notice of Withdrawal Right, any compensation
payable to Broker/Dealer or its registered representatives will not be
payable or will be refunded if priorly paid, in accordance with the terms
of the M Producer's Contract appended as Exhibit A to the Master Agreement.
<PAGE>
-3-
9. This agreement may not be assigned except by mutual consent and will
continue for an indefinite term, subject to the termination by either party
by ten days advance written notice to the other party, except that in the
event JHMLICO or the Broker/Dealer ceases to be a registered broker/dealer
or a member of the NASD, this agreement will immediately terminate. Upon
its termination, all authorizations, rights and obligations shall cease,
except the agreement in Section 11, the indemnifications in Section 12 and
the payment of any accrued but unpaid compensation to the Broker/Dealer.
10. For the purpose of compliance with any applicable Federal or state
securities laws or regulations, the Broker/Dealer acknowledges and agrees
that in performing the services covered by this agreement, it is acting in
the capacity of an independent "broker" or "dealer" as defined by the By-
Laws of the NASD and not as an agent or employee of either JHMLICO or
JHVLICO or any registered investment company. In furtherance of its
responsibilities as a broker or dealer, the Broker/Dealer acknowledges that
it is responsible for statutory and regulatory compliance in securities
transactions involving any business produced by its registered
representatives concerning the Contracts.
For the purpose of compliance with any applicable state insurance laws or
regulations, the Broker/Dealer acknowledges and agrees that only while
performing the insurance selling functions reflected by this agreement are
the Broker/Dealer's registered representatives acting as the licensed
insurance agents of JHMLICO or JHVLICO or both and in that capacity are
authorized only to solicit applications for the Contracts which will not
become effective until acceptance by JHMLICO or JHVLICO.
11. The Broker/Dealer and JHMLICO jointly agree to cooperate fully in any
insurance or securities regulatory investigation or proceeding or judicial
proceeding arising in connection with any Contract. Without limiting the
foregoing:
a. Broker/Dealer will be notified promptly of any customer complaint or
notice of any regulatory authority investigation or proceeding or
judicial proceeding received by JHMLICO with respect to any
Contract.
b. Broker/Dealer will promptly notify JHMLICO of any customer complaint
or notice of any regulatory authority investigation or proceeding or
judicial proceeding received by Broker/Dealer with respect to any
Contract.
12. (1) JHMLICO agrees to indemnify and hold harmless Broker/Dealer and each
person who controls or is associated with Broker/Dealer against any
losses, claims, damages or liabilities, joint or several, to which
Broker/Dealer or such controlling or associated person may become
subject under the 1933 Act or otherwise insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a
material fact required to be stated therein or necessary to make the
statements therein not misleading contained (i) in any Registration
Statement, any Prospectus or any document executed by JHMLICO or
JHVLICO specifically for the purpose of qualifying a Contract for sale
under the laws of any jurisdiction or (ii) in any written information
or sales material authorized for and supplied or furnished to
Broker/Dealer and its agents or representatives by
<PAGE>
-4-
JHMLICO, its employees or agents, in connection with the sale of the
Contract and JHMLICO will reimburse Broker/Dealer and each such
controlling person for legal or other expenses reasonably incurred by
Broker/Dealer or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action.
(2) Broker/Dealer agrees to indemnify and hold harmless such director or
officer may become subject under the 1933 Act and state JHMLICO and
each of its directors and officers against any insurance losses,
claims, damages or liabilities to which JHMLICO and any laws or
otherwise insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(a) any unauthorized use of sales materials or any verbal or written
misrepresentations or any unlawful sales practices concerning a
Contract by Broker/Dealer or
(b) claims by agents or representatives or employees of
Broker/Dealer for commissions or other compensation or
remuneration of any type or
(c) failure by agents, representatives or employees of Broker/Dealer
to comply with all applicable state insurance laws and
regulations including but not limited to state licensing
requirements, rebate statutes and replacement regulations, and
the provisions of this Agreement; and Broker will reimburse
JHMLICO and any director or officer for any legal or other
expenses reasonably incurred by JHMLICO or such director or
officer in connection with investigating or defending any such
loss, claim, damage, liability or action.
(3) After receipt by a party entitled to indemnification of notice of the
commencement of any action, if a claim in respect thereof is to be made
against any person obligated to provide indemnification, such
indemnified party will notify the indemnifying party in writing of the
commencement thereof as soon as practicable thereafter, and the
omission so to notify the indemnifying party will not relieve it from
any liability except to the extent that the omission results in a
failure of actual notice to the indemnifying party, and such
indemnifying party is damaged solely as a result of the failure to give
such notice.
13. All notices to JHMLICO should be mailed to:
Mr. Henry D. Shaw, Senior Vice President
John Hancock Mutual Life Insurance Company
John Hancock Place
P. O. Box 111
Boston, MA 02117
<PAGE>
-5-
All notices to the Broker/Dealer will be duly given if mailed to the
address shown below.
14. This agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
In reliance on the representations set forth and in consideration of the
undertakings described, the parties represented below do hereby contract
and agree.
John Hancock Mutual Life Broker-Dealer
Insurance Company
By: ____________________________ By: ________________________________
Title: _________________________ Title: _____________________________
Date of Execution Date of Execution __________________
<PAGE>
EXHIBIT 1.A.(3)(c)
SCHEDULE I
SCHEDULE OF PAYMENTS
- --------------------
1. Commissions payable in accordance with the terms of the agreement of which
this schedule is part shall be at the rates provided for in this schedule and
shall be subject to the following conditions.
A. POLICY RATINGS
--------------
Commissions and other compensation will not be paid on temporary
dollar ratings or on the excess over the corresponding class C
extra premium for better ratings classes D and higher. However,
when an extra premium is charged by reason of occupation or
aviation activities of the insured, first-year and renewal
commissions will be paid on such extra premium applicable to
such a provision at the same rates and for the same period as
are applicable to the regular premiums on the policy.
B. 10-YEAR RENEWABLE LEVEL TERM BENEFIT PROVISION AND CHILDREN'S
INSURANCE BENEFIT PROVISION
---------------------------
When any such provision is attached to a policy at its date of issue,
a first-year commission will be paid on the premium applicable
to such a provision at the same rate as is applicable to the
regular premium on the policy. When any such provision is added
after issue of the basic policy, a first-year commission will
be paid on the first yearly premium applicable to such a
provision at the same rate as that which would apply to the
regular premium of the policy to which it is attached if the
policy was being issued currently. The applicable commission
rate shall be based upon the original age at issue of the
policy to which it is attached.
Upon payment of premiums on the 10-year Renewable Level Term Benefit
Provision for the eleventh policy year and each tenth year
thereafter, the regular non-vested and nontransferable service
fee will be paid only on that
<PAGE>
portion of the premium equal to the premium for the prior
year's premium, subject to the condition that this agreement is
in force at the time the premium is collected.
Renewal commissions on renewal premiums paid under any of the above
provisions will be paid for the full renewal commission period
at the same rate as was applicable to such provision when it
was added to the policy.
C. DISABILITY BENEFIT PROVISION, ACCIDENTAL DEATH BENEFITS PROVISION,
APPLICANT DISABILITY BENEFIT PROVISION
--------------------------------------
When any such benefit provision is attached to a policy at issue or
added thereto during the first policy year, a first-year
commission will be payable at the same rate as is payable on
the regular premium of the policy to which it is attached. When
any such benefit provision is added to a policy after the first
policy year, no first-year commission will be paid. Renewal
commissions on renewal premiums on any such provision will be
at the same rate as is payable under the provisions of this
agreement on premiums on policies of the type to which the
benefit provision is attached. Renewal commissions will be paid
only until the end of the regular renewal commission period
provided for such policies. Commissions but not servicer fees
will be paid on any premium waived by the Company under a
disability benefit provision.
<PAGE>
D. SCHEDULE OF COMMISSION RATES APPLICABLE TO PREMIUM ON POLICIES PROCURED
--------
UNDER THE TERMS OF THIS AGREEMENT.
----------------------------------
<TABLE>
<CAPTION>
1ST THRU 5TH YEAR
FIRST 4TH YEAR RENEWALS
YEAR RENEWALS & THEREAFTER
------ --------- -------------
<S> <C> <C> <C>
COMMISSIONS
- -----------------------------------
Schedule Premium Variable
Whole Life
Rate Applicable to
Modified Premium
Rateable Ages 75 and Under
Standard - $25,000 to $249,999 50.0% 6.0% 3.0%
Preferred 45.0% 6.0% 3.0%
Standard - $250,000 and above 45.0% 6.0% 3.0%
Rate applicable to excess premium 3.0% 3.0% 3.0%
Yearly Renewable Term
Rateable Ages 20 to 65, incl.
Standard 35.0% 6.0% 3.0%
Preferred 30.0% 6.0% 3.0%
Rateable Ages 66 to 70, incl.
Standard 27.5% 6.0% 3.0%
Preferred 22.5% 6.0% 3.0%
Rateable Ages 71 and over
Standard 20.0% 6.0% 3.0%
Preferred 15.0% 6.0% 3.0%
</TABLE>
<PAGE>
D. EXPENSE REIMBURSEMENT ALLOWANCES AND PERSISTENCY BONUSES
--------------------------------------------------------
Expense reimbursement allowances and persistency bonuses will be
payable on policies procured under this agreement in accordance
with the terms of the Independent Producer's Commission
Agreement and the Independent Producers Expense Reimbursement
Allowance Agreement executed by and between the broker-dealer
and a general agent or district manager of Hancock.
E. POST-TERMINATION COMMISSIONS
----------------------------
In case this agreement shall terminate, JHVLICO will pay post-
termination commissions at rates not to exceed those shown in
Section 1 above on all premiums or installments thereof paid to
the Company on policies issued on applications procured under
this agreement, subject to the provisions of Section 1 hereof
and so long as such payments are not prohibited by NASD or
other applicable regulations.
<PAGE>
EXHIBIT I. A. (6)
CHAP. 125
COMMONWEALTH OF MASSACHUSETTS
IN THE YEAR ONE THOUSAND EIGHT HUNDRED AND SIXTY-TWO
AN ACT to incorporate the John Hancock Mutual Life Insurance Company,
Be it enacted by the Senate and House of Representatives in General Court
assembled, and by the authority of the same, as follows: Nathaniel Harris, James
P. Thorndike, Gerry W. Cochrane, their associates and successors, are hereby
made a corporation by the name of the John Hancock Mutual Life Insurance
Company, to be established and located in the City of Boston, for the purpose of
making insurance upon lives with all the powers and privileges, and subject to
the duties, liabilities and restrictions set forth in so much of the fifty-
eighth chapter of the General Statutes as related to mutual life insurance
companies, and all other acts which are or may be in force relative to such
companies.
House of Representatives, April 18, 1862
Passed to be enacted, Alex. H. Bullock, Speaker
<PAGE>
Exhibit I. A. (6)
BY-LAWS
JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
1. The Annual Meeting of the Company shall be held at its Home Office, on
the second Monday of April in each year, at twelve o'clock, noon. The order of
business shall be as follows:
(a) Reading the records of the previous meeting.
(b) Ballot for Directors.
(c) Report of the Directors to the policyholder.
(d) Other business, if any.
2. Special meetings of the Company may be called by vote or written request
of three-fourths of the Directors, and the Secretary shall give notice thereof,
by advertisement in some daily newspaper published in Boston, at least seven
days before the meeting.
3. Ten members shall constitute a quorum at any meeting of the Company, but
policyholders in arrears of premiums at the hour of meeting shall not be
entitled to vote or to be recognized as members.
4. The Board of Directors shall consist of not more than twenty-four
members nor less than sixteen members divided into classes of not less than four
nor more than six members each, one class to be elected at each Annual Meeting,
for a term of four years. The election shall be by ballot, and the presiding
officer of the meeting shall appoint a Committee to supervise the balloting and
the count thereof.
5. No person shall be eligible as a Director unless he be insured in the
Company to the amount of not less than one thousand dollars, and no person shall
be elected as a Director at any annual or special meeting of the Company unless
he shall have been nominated either by a majority of the Board of Directors or
by one-tenth of one percent of the members, by a writing filed with the
Secretary not more than six months nor less than ninety days before such
meeting. Such writing shall be on a form approved by the Secretary and the
signatures of the Directors or members' making such nominations shall be
authenticated or verified in such manner as he may prescribe. The Secretary
shall make available at his office, upon written request of any member, a copy
of such approved form and a list of any members then nominated for Director. A
three-quarters vote of qualified members voting shall be necessary to elect.
<PAGE>
6. The Directors shall have the control and management of the business and
affairs of the Company and the distribution of its surplus funds; they shall
present a report at every Annual Meeting with the full statement of condition of
the Company, its assets and liabilities. They shall meet after the Annual
Meeting and at such meeting or some adjournment thereof shall choose by ballot
from their own number a Chairman of the Board of Directors, a Vice Chairman of
the Board, a President, and at least one Vice President. They may also at such
meeting or any other regular or special meeting elect, from their own number or
not as they see fit, additional Vice Presidents, a Secretary, a Treasurer and
such other officers as they shall deem proper or advisable and fill vacancies
occurring in any office. The Chairman of the Board of Directors, or in his
absence the Vice Chairman of the Board, shall preside at all meetings of the
Board of Directors. The Directors shall fix the compensation and define the
other duties of the Chairman of the Board of Directors and may fix the
compensation and may define the duties of all other officers and may remove any
officer at any time.
At their meeting after the Annual Meeting or at any regular or special
meeting they shall choose by ballot from their own number a Committee of Finance
consisting of no fewer than six members which shall include the Chairman of the
Board of Directors and the President and one or more alternate members, any of
whom may " serve in the place of any member absent from a meeting. They may also
at such meeting or any regular or special meeting choose such other committees
as they shall deem proper or advisable, fix the compensation and define the
duties of the members of such committees, fill vacancies occurring in any such
committee and remove any member of any committee.
6a. The Directors may, subject to the limits and restrictions imposed by law
and subject to such rules and regulations consistent with law that they may
make, make contributions of such sums of money as they determine to be
reasonable for public welfare or for charitable, scientific or educational
purposes.
7. No person shall be eligible as an elective or appointed officer, who has
any interest in commissions or other compensation based on premiums or
considerations payable to the Company on any policy or contract, or on any
extension or conversion thereof, unless such policy, contract, extension, or
conversion was written and effective prior to his election or appointment.
8. Each officer elected by the Directors shall, unless removed, hold office
until the next Annual Meeting, and until a successor is elected. Vacancies in
the Board of Directors occurring by enlargement of the Board, by failure to
elect, or otherwise, may be filled by the Directors, or at any annual or special
meeting of the Company.
<PAGE>
8a. The Board of Directors may provide, notwithstanding other provisions of
these By-Laws, for filling vacancies in the Board in the event that due to act
of war or other disaster the number of Directors who are able and available to
act is less than a quorum.
9. Regular meetings of the Directors shall be held without call or formal
notice on the second Monday of each month. Special meetings may be called by the
Chairman, the Vice Chairman or any five Directors, and written or printed
notices of all special meetings shall be sent to the Directors by mail,
postpaid, or personal delivery by the Secretary. A waiver of such notice in
writing signed by the person or persons entitled to said notice, whether before
or after the time stated therein, shall be deemed equivalent to such notice. No
notice of any adjourned meeting of the Directors shall be required. In any case
it shall be deemed sufficient notice to a Director to send notice by mail at
least 48 hours or by personal delivery at least 24 hours before the meeting.
Five members of the Board shall constitute a quorum, but a lesser number may
adjourn any meeting from time to time. When a quorum is present at any meeting,
a majority of the Directors in attendance thereat shall, except where a larger
vote is required by law or these By-Laws, decide any question brought before
such meeting.
9a. The Company shall, except as hereinafter provided and subject to
limitations of law, indemnify each Director, former Director, officer and former
officer of the Company, and any such person and any employee or former employee
of the Company who serves at the request of the Company as a Director or officer
of any other organization in which the Company directly or indirectly owns
shares or of which it is a creditor, and his heirs and legal representatives,
against all loss, liability and expense, whether heretofore or hereafter imposed
upon or incurred by him in connection with any pending or future action, suit,
proceeding or claim in which he may be involved, or with which he may be
threatened, by reason of any alleged act or omission as such Director or officer
while so serving or by reason of such Director or officer concurrently holding
office as a director of another organization of which he was a director at the
time he first became such Director or officer. Such loss, liability and expense
shall include, but not be limited to, judgments, fines, court costs, reasonable
attorneys' fees and the cost of reasonable settlements. Such indemnification
shall not cover (a) loss, liability or expense imposed or incurred in connection
with any item or matter as to which such Director or officer shall be finally
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Company; or (b) loss, liability or
expense imposed or incurred in connection with any item or matter which shall be
settled without final adjudication unless such settlement shall have been
approved as in the best interests of the Company (1) by vote of the Board of
Directors at a meeting in which no Director participates against whom any suit
or proceeding on the same or similar grounds is then pending or threatened or
(2) by a vote of the
<PAGE>
policyholders. As part of such indemnification, the Company may pay expenses
incurred in defending any such action, suit, proceeding or claim in advance of
the final disposition thereof upon receipt of all undertakings by the person
indemnified to repay such payment if he should be determined not to be entitled
to indemnification hereunder. The foregoing rights of indemnification shall be
in addition to any rights to which any Director, former Director, officer,
former officer, employee or former employee, heirs or Iegal representatives may
otherwise be lawfully entitled.
10. The Chairman of the Board of Directors, or in his absence the Vice
Chairman of the Board, shall preside at all the meetings of the Company. In
their absence the Directors shall elect a Chairman pro tempore. Every presiding
officer shall have the power to require from all members, including those
represented by proxy, satisfactory evidence of their right to vote.
11. The President, Vice Presidents, Secretary and Assistant Secretaries,
Treasurer and Assistant Treasurers, shall each give bond, with sufficient
sureties, in such sums as the Directors may from time to time determine, for the
faithful performance of the duties of their respective offices. The Committee of
Finance shall approve these bonds and examine them in the month of March in each
year, and the Directors may require new bonds whenever they shall see fit. The
bonds of the President and Vice Presidents shall be in the custody of the
Committee of Finance; those of the other officers shall be kept by the
President.
12. These By-Laws may be by a three-quarters vote, altered, amended or added
to, at any meeting of the Company, provided, that a copy of the proposed changes
be placed before the Directors, in writing, at least thirty days before such
meeting, but no changes shall affect the tenure of office of any officer chosen
prior thereto.
February, 1987
<PAGE>
EXHIBIT I.A.(10)
APPLICATION FOR LIFE INSURANCE
This application is to: [ ] John Hancock Mutual Life Insurance Company or
[ ] John Hancock Variable Life Insurance Company,
which will sometimes hereinafter be referred to as
"the Company."
INSTRUCTIONS:
1. Please print all answers legibly in black ink.
2. Please complete only one "Page 2", depending on the plan applied for.
3. Any change or deletion must be initialed by the Proposed Insured or
Applicant.
4. Part B must be completed on all people proposed for coverage unless
they are to be medically examined.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Please indicate type of case, complete the necessary section, and enter/send application where indicated
- ----------------------------------------------------------------------------------------------------------------------------
Type of Application Complete These Sections Enter/Send Application
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[ ] New Life Insurance Part A
Policy Part B (if Nonmedical application) Enter case into ELUS
Agreement and Signatures (Date entered:__/__/__)
Replacement Authorization
Page 9 Send to Underwriting, C-5
Pension Trust Pages 10-14 (if applicable)
- ----------------------------------------------------------------------------------------------------------------------------
[ ] Term Conversion Part A (except Questions 4, 6, and 8 of Box A,
(of John Hancock term policies Box M, and Questions 1, 2 ,4, and 5 of Box N) Enter case into ELUS
and riders) Part B (if excess amount/riders applied for) (Date entered:__/__/__)
Agreement and Signatures
Authorization (if excess amounts/riders applied for) Send to Underwriting, C-5
Page 9
Pages 10-14 (if applicable)
- ----------------------------------------------------------------------------------------------------------------------------
[ ] Rider Addition Part A (Boxes A, D, I, J, M, N, O, and S only)
(to existing policy) Part B
Agreement and Signatures Send to Contract
Increases in Amount Authorization Services, C-7
(FlexV, MVL, UL) Page 9
Pages 10-14 (if applicable)
Option Change 1 to 2 Use Boxes I and J on Page 2
(FlexV, MVL, UL)
- ----------------------------------------------------------------------------------------------------------------------------
[ ] Change in Rating Part A (Box A and S only)
Part B
Agreement and Signatures Send to Contract
Authorization Services, C-7
Sales Credit
- ----------------------------------------------------------------------------------------------------------------------------
[ ] Contractual Changes Part A (Box S only)
(e.g., Exchange of Existing Policy, Part B (If changing to Lower Premium Plan)
Plan Changes, Amount Reductions) Agreement and Signatures Send to Contract
Option Change 2 to 1 Authorization (if underwriting required) Services, C-7
(FlexV, MVL, UL) Sales Credit
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Any person who, with intent to defraud or knowing that he is facilitating a
fraud against an insurer, submits an application or files a claim containing a
false or deceptive statement is guilty of insurance fraud.
Form 156-Comb-95 [LOGO OF JOHN HANCOCK APPEARS HERE]
Financial Services
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE]
Financial Services
POSITIVE ID REQUIRED
Underwriting Requirements
Please indicate which underwriting requirements have been ordered
<TABLE>
<CAPTION>
---------------------------------------
Proposed Insured Spouse
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paramedical or Medical Exam [_] [_]
- --------------------------------------------------------------------------------------------------------
APS in lieu of exam [_] [_]
- --------------------------------------------------------------------------------------------------------
APS [_] [_]
- --------------------------------------------------------------------------------------------------------
Blood Studies [_] [_]
- --------------------------------------------------------------------------------------------------------
Inspection Report [_] [_]
- --------------------------------------------------------------------------------------------------------
EKG [_] [_]
- --------------------------------------------------------------------------------------------------------
Urinalysis [_] [_]
- --------------------------------------------------------------------------------------------------------
Saliva Test [_] [_]
- --------------------------------------------------------------------------------------------------------
Other: [_] [_]
- --------------------------------------------------------------------------------------------------------
Other: [_] [_]
- --------------------------------------------------------------------------------------------------------
Other: [_] [_]
- --------------------------------------------------------------------------------------------------------
Other: [_] [_]
- --------------------------------------------------------------------------------------------------------
</TABLE>
1035 Exchange Checklist
This checklist is meant to serve as a quick reference for 1035 Exchanges.
For more detail, please refer to your IRC Section 1035 Marketing
Representative's Kit
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C>
1035 Internal Replacement
- ----------------------------------------------------------------------------------------------------------
Are the Replacement Forms required by the applicable state attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the original policy or policies being replaced attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the completed Surrender Form (Policyowner Service Request Form) attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the Order to Pay Form (one per policy) attached? [_]
- ----------------------------------------------------------------------------------------------------------
Have application questions 3a and 3b, Page 3, Box N been completed? [_]
- ----------------------------------------------------------------------------------------------------------
Is the Section 1035 Exchanged adjusted 7-pay premium calculation worksheet attached? [_]
- ----------------------------------------------------------------------------------------------------------
If the new policy is a Modified Endowment (MEC), has page 12 of the application been signed? [_]
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
1035 External Replacement *May Not Be Prepaid
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Are the Replacement Forms required by the applicable state attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the external policy or policies being replaced attached? [_]
- ----------------------------------------------------------------------------------------------------------
Is the 1035 Exchange Form 17010 attached? (One per policy) [_]
- ----------------------------------------------------------------------------------------------------------
Have application questions 3a and 3b, Page 3, Box N been completed? [_]
- ----------------------------------------------------------------------------------------------------------
Is the Section 1035 Exchange adjusted 7-pay premium calculation worksheet attached? [_]
- ----------------------------------------------------------------------------------------------------------
If the new policy is a Modified Endowment (MEC), has page 12 of the application been signed? [_]
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
A. PROPOSED INSURED
- --------------------------------------------------------------------------------
1. Name of Proposed Insured (please print):
First _________________________________ MI ________________
Last _______________________________________________________
2. Sex [_] Male [_] Female
3. Date of Birth ___/___/___
4. Place of Birth _____________________________________________
STATE COUNTRY, IF NOT U.S.A.
5. Soc. Sec. Number ___ - __ - ____
6. Height ______ft. ______in. 7. Weight __________ lbs.
8. Occupation _________________________________________________
Military Pay Grade (if applicable) __
9. Address ____________________________________________________
STREET ADDRESS
____________________________________________________________
CITY STATE ZIP
10. Home Phone (___)___ - ____
11. Work Phone (___)___ - ____
12. Best time and place for Underwriting to call (in Proposed Insured's local
time zone)__________________________________________________
13. Has the Proposed Insured smoked cigarettes or used any other tobacco
product, i.e., cigars, pipes, snuff, chewing tobacco, etc., in the past [12]
months?
[ ] Yes
[ ] No
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
B. BENEFICIARY OF PROCEEDS PAYABLE IN THE EVENT OF THE INSURED'S DEATH
- --------------------------------------------------------------------------------
Please indicate full name and relationship to the Proposed Insured.
(please print)
Proceeds at death of any person other than the Proposed Insured shall be paid as
provided in the applicable benefit provision.
The right is reserved to the owner to change the beneficiary as to any proceeds.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
C. COMPLETE THIS BOX ONLY IF OWNER IS NOT THE PROPOSED INSURED
- --------------------------------------------------------------------------------
1. Owner name (First, MI, Last) or name of trust or corp.
(If more space is needed, use Special Request box and check here [_])
____________________________________________________________
2. Soc. Sec. Number ___ - __ - ____
(or Tax ID Number ______ -_________________________________)
3. Occupation__________________________________________________
4. Relationship to Proposed Insured
------------------------------------------------------------
5. Date of birth ___/___/___
6. Address
____________________________________________________________
STREET ADDRESS
____________________________________________________________
CITY STATE ZIP
7a. (If PI is under age 15) Contingent Owner name and relationship to Proposed
Insured (If none, leave blank)
____________________________________________________________
7b. Contingent Owner age ______________________________________
- --------------------------------------------------------------------------------
D. COMPLETE THIS BOX ONLY IF SPOUSE, APPLICANT OWNER, OR CHILDREN'S RIDERS
DESIRED
- --------------------------------------------------------------------------------
1. Please give the following information for all (other than Proposed Insured)
being proposed for insurance, or Applicant Owner if Applicant Waiver applied
for. If Children's Insurance is applied for, give names of Proposed Insured's
children, adopted children, and stepchildren under age 15. If any child under
age 15 is omitted, give name and explain why in box S. on Page 4.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Date Height Weight Relationship to Present Total
First Name MI Last Name of Birth (ft./in.) (lbs.) Proposed Insured Life Insurance
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
/ /
- ---------------------------------------------------------------------------------------------------
/ /
- ---------------------------------------------------------------------------------------------------
/ /
- ---------------------------------------------------------------------------------------------------
/ /
- ---------------------------------------------------------------------------------------------------
</TABLE>
2a. Spouse's occupation ____________ Military Pay Grade (if applicable)___
2b. Spouse's Soc. Sec. Number __ - __ - ____
3. Has the Proposed Insured's spouse (if applying for insurance) smoked
cigarettes or used any other tobacco product, i.e., cigars, pipes, snuff,
chewing tobacco, etc., within the past [12] months? [ ] Yes [ ] No
- --------------------------------------------------------------------------------
Page 1
<PAGE>
<TABLE>
<CAPTION>
[Logo of John Hancock Financial Part A Statements to the Company's Agent
Services Appears Here]
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE COMPLETE THIS PAGE IF TRADITIONAL or TERM IS DESIRED
===================================================================================================================================
<S> <C>
E. PLAN
- ------------------------------------------------------------------------------------------------------------------------------------
[ ] Modified Premium Whole Life (Mod Plus) [ ] Indeterminate Premium Yearly Renewable Term:
[ ] Level Premium Whole Life (Level Plus) Decreasing
[ ] [10] Year Level Premium Term
[ ] Indeterminate Premium Yearly Renewable Interest Rate______%; Term______years
Term: Level
[ ] Other (specify)___________________________
====================================================================================================================================
F. SUM DESIRED
- -----------------------------------------------------------------------------------------------------------------------------------
$
---------------------------------------
===================================================================================================================================
G. PAYMENT DETAILS
- ------------------------------------------------------------------------------------------------------------------------------------
1. Premium billing interval 2. Do you elect to have overdue premiums
automatically paid, if and when applicable
[ ] Annual [ ] Semiannual and available, by:
[ ] Quarterly [ ] Monthly(premiumatic)
[ ] Monthly-Military Allotment a. Dividend values? [ ] Yes [ ] No
[ ] Employee Consultation (Case # __________) b. Policy value loan? [ ] Yes [ ] No
===================================================================================================================================
H. DIVIDEND OPTION ELECTION (Whole Life only. If AIP Rider is elected in Box below, do not choose a dividend option)
- -----------------------------------------------------------------------------------------------------------------------------------
Select one of the 15 options in this box.
[ ] A. Taken in cash [ ] BC. Applied to premium, balance left on
[ ] B. Applied to premium deposit
[ ] C. Left on deposit [ ] BD. Applied to premium, balance to buy
[ ] D. Buy paid-up insurance paid-up insurance
[ ] LA. Levelize premium, balance in cash [ ] BI. Applied to premium, balance to repay
[ ] LC. Levelize premium, balance left on loan and then buy paid-up insurance
deposit [ ] EA. Buy one-year term, balance in cash
[ ] LD. Levelize premium, balance to buy [ ] EB. Buy one-year term, balance to reduce
paid-up insurance premium
[ ] LI. Levelize premium, balance to repay [ ] EC. Buy one-year term, balance left on
loan and then buy paid-up insurance deposit
[ ] ED. Buy one-year term, balance to buy
paid-up insurance
===================================================================================================================================
I. RIDERS ON PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
[ ] Disability Waiver of Premiums [ ] Paid-Up Insurance (PUI)
[ ] Accidental Death Benefit $__________ [ ] Lump Sum Payment (Option 1) $_________
[ ] YRT Level Death Benefit $__________ [ ] Level Annual Premium (Option 2)
[ ] YRT Decreasing Death Benefit $________ $____________ per year for ______ years
Interest Rate_____%; Term______years [ ] Modified fill-in premium for 5 years
[ ] Additional Insurance Protection (AIP) (Option 3)
Premium $________ Face amount $_______ [ ] Living Care Benefit
Optional Lump Sum $__________ (Accelerated Death Benefit)
[ ] AIP Levelized Premium Option [ ] Insurance of Insurability,
[ ] AIP Cost Recovery Option;______years, ______% Purchase Limit $_______________
[ ] AIP Increase Option;_______years, ______% [ ] Other Available Riders (please specify)
__________________________________________
__________________________________________
__________________________________________
===================================================================================================================================
J. RIDERS ON OTHER THAN PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
(Please be sure info on any person proposed for insurance is on Page 1, Box D.)
[ ] Children's Insurance $_________________ [ ] Applicant's Disability Waiver of Premiums
[ ] YRT Level on Spouse $_________________ [ ] Other Available Riders (please specify)
[ ] YRT Decreasing on Spouse $________________ ___________________________________________
Interest Rate______%; Term ______years ___________________________________________
___________________________________________
===================================================================================================================================
Page 2 (Traditional/Term)
</TABLE>
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
PLEASE COMPLETE THIS PAGE IF Flex V or MVL IS DESIRED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
E. PLAN
[_] Scheduled Premium Variable Whole Life Insurance (Flex V)
[_] Medallion Variable Life Insurance (MVL)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
F. SUM INSURED
- --------------------------------------------------------------------------------
$______________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
H. DEATH BENEFIT OPTIONS
- --------------------------------------------------------------------------------
[_] Option 1: Level Death Benefit
(Guideline Premium Test)
[_] Option 2: Variable Death Benefit
(Guideline Premium Test)
[_] Option 3: Level Death Benefit with Greater Funding
(Cash Value Accumulation Test)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I. RIDERS ON OTHER THAN PROPOSED INSURED
- --------------------------------------------------------------------------------
(Please be sure information on any person for insurance
is completed on Page 1, Box D.)
[_] Children's Insurance $__________________________________
[_] YRT Level on spouse $__________________________________
[_] YRT Decreasing on Spouse $______________________________
Interest Rate____ %; Term ____ years
[_] Applicant's Disability Payment of Required Premiums
(Not available for MVL)
[_] Other Available Riders (please specify)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
K. SUBACCOUNT INVESTMENT OPTION
- --------------------------------------------------------------------------------
Equity Stock.............................. ____%
Select Stock....................... ____%
Special Opportunities.............. ____%
Real Estate Equity................. ____%
International...................... ____%
Bond and Money Market
Bond............................... ____%
Short-Term U.S. Government......... ____%
Money Market....................... ____%
Asset Allocation
Managed........................... ____%
Fixed
Fixed Account..................... ____%
- -------------------------------------------------------------
PERCENTAGES MUST BE WHOLE AND TOTAL 100%
- --------------------------------------------------------------------------------
Telephone Transfer and Loan Option
[_] Yes [_] Transfer Only [_] Loan Only [_] No
I direct the Company to act upon telephone instructions
from the owner (a trustee, if the owner is a trust; or an
authorized business official, if the owner is a business entity)
to change future payment allocations, transfer existing funds
among the investment options, and process policy loans,
subject to the provisions of the Contract.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
G. PAYMENT DETAILS
- --------------------------------------------------------------------------------
1. Premium billing interval (Choose One)
[_] Annual [_] Semiannual
[_] Quarterly [_] Monthly-(premiumatic)
[_] Monthly--Military Allotment (Not available for MVL)
[_] Employee Consultation (Case #___________)
2. Do you elect to have premiums paid [_] Yes [_] No
by automatic loan? (Not available for MVL)
3. Planned Premium $ ______ (Enter annual amount)
Optional: Annual increase at _____% OR $ _______ annually
for _____ years
4. Planned First Year Lump Sum $ _____________
(in addition to amount indicated in #3)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
J. RIDERS ON PROPOSED INSURED
- --------------------------------------------------------------------------------
[_] Disability Payment of Required Premiums
[_] Accidental Death Benefit $ ____________
[_] Living Care Benefit (Accelerated Death Benefit)
[_] Premium Cost Recovery (YRT Death Benefit)
Term _____ years
Interest Rate ____%(Optional)
[_] Renewal Term Riders $_______________
(Choose one of the following):
[_] YRT Level Death Benefit
[_] YRT Target Term
[_] YRT Increasing Death Benefit
Interest Rate ____% Term ____ years
[_] YRT Decreasing Death Benefit
Interest Rate ____% Term ____ years
[_] Other Available Riders (Please Specify)
--------------------------------------------------------------------
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
L. SUITABILITY (Applies to both the Proposed Insured and if different, the
Owner)
- --------------------------------------------------------------------------------
1. Have you received a prospectus for the policy applied for? [_] Yes [_] No
(If YES, Prospectus Date: ______________________________)
2. Do you understand that the amount above the initial
Death Benefit and the entire amount of the Account [_] Yes [_] No
Value may increase or decrease depending on investment
experience?
3. Is the policy and allocation of subaccounts in
accord with your insurance objectives and your [_] Yes [_] No
anticipated financial needs?
4. Have you received an illustration of benefits based [_] Yes [_] No
on your Planned Premium?
- --------------------------------------------------------------------------------
Page 2 (FlexV/MVL)
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE] Part A Statements to the Company's Agent
Financial Services
- --------------------------------------------------------------------------------
PLEASE COMPLETE THIS PAGE IF UNIVERSAL LIFE IS DESIRED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
E. PLAN
- --------------------------------------------------------------------------------
[_] Flexible Premium Adjustable Life (Universal Life)
[_] Other (specify) ____________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
F. SUM INSURED
- --------------------------------------------------------------------------------
$ ______________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
G. PAYMENT DETAILS
- --------------------------------------------------------------------------------
1. Premium billing interval
[_] Annual
[_] Quarterly
[_] Monthly-Military Allotment
[_] Employee Consultation (Case #_________)
[_] Planned Single Payment
[_] Semiannual
[_] Monthly (premiumatic)
2. Planned premium for interval $ ____________
3. Intended additional first year premium $ ____________
Limited and Single payment projections are based on variable assumptions and are
not guaranteed. Additional premiums may have to be paid to keep your insurance
in force.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
H. DEATH BENEFIT OPTION (check one)
- --------------------------------------------------------------------------------
[_] Option 1-Sum Insured
[_] Option 2-Sum Insured plus Policy Value
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I. RIDERS ON PROPOSED INSURED
- --------------------------------------------------------------------------------
[_] Disability Waiver of Monthly Charges
[_] Accidental Death Benefit
Initial Amount $_________________________________
[_] Insurance of Insurability (issue ages 37 and under)
Increase Limit $_________________________________
[_] Living Care Benefit (Accelerated Death Benefit)
[_] Other Available Riders (please specify)
____________________________________________________________________
____________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
J. RIDERS ON OTHER THAN PROPOSED INSURED
- --------------------------------------------------------------------------------
(Please be sure information on any person proposed for insurance is completed on
Page 1, Box D.)
[_] Children's Insurance $_______________________________
[_] YRT Level on Spouse $_______________________________
[_] Other Available Riders (please specify)
____________________________________________________________________
____________________________________________________________________
- --------------------------------------------------------------------------------
K. TELEPHONE LOAN OPTION
- --------------------------------------------------------------------------------
I direct the Company to act upon telephone instructions from the owner (a
trustee, if the owner is a trust, or an authorized business official, if the
owner is a business entity) to process policy loans, subject to the provisions
of the contract.
[_] Yes [_] No
- --------------------------------------------------------------------------------
Page 2 (Universal Life)
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
PLEASE COMPLETE THIS PAGE IF HIGH BAND UNIVERSAL LIVE IS DESIRED
- --------------------------------------------------------------------------------
E. PLAN
[_] Flexible Premium Adjustable Life - HBI
[_] Flexible Premium Adjustable Life - HB2
- --------------------------------------------------------------------------------
F. BENEFITS
- --------------------------------------------------------------------------------
1. Basic Sum Insured ______________________
2. Death Benefit Option (choose one)
[_] Option A - Sum Insured only
[_] Option B - Sum Insured plus Account Value
[_] Option M - Sum Insured, plus Optional Extra Death
Benefit with calculation beginning
[_] at Date of Issue or
[_] at policy year _______
3. [_] Additional Sum Insured (ASI) (check if desired)
a. Check no more than one of the following
[_] ASI of $________
[_] for life of policy or [_]________policy years.
[_] with Total Sum Insured increasing by
[_]____% or [_]$______per year for
[_] life of policy or [_]____policy years.
[_] Customized Schedule (list by policy year or years):
Policy Year(s) ASI Amount
-------------- ----------
______-_______ $ _______________ (1)
______-_______ $ _______________ (2)
______-_______ $ _______________ (3)
______-_______ $ _______________ (4)
______-_______ $ _______________ (5)
______-_______ $ _______________ (6)
______-_______ $ _______________ (7)
______-_______ $ _______________ (8)
______-_______ $ _______________ (9)
______-_______ $ _______________ (10)
(If more space needed, attach separate schedule)
b. [_] Premium Cost Recovery
[_] life of policy or [_]______ policy years
Optional: Recovery increase percentage___________%
Optional: Recovery increase years__________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
G. PAYMENT DETAILS
- --------------------------------------------------------------------------------
1. Premium Billing Interval
[_] Annual [_] Semiannual
[_] Quarterly [_] Monthly (premiumatic only)
[_] Employee Consultation (Case#__________)
2. Planned Premium (Check a or b, or Target Premium will be billed.)
a. [_] $______________annually for______years(s)
Optional: Annual Increase of______% OR
$____________annually for _____year(s)
Additional first year Planned Premium $_____________
b. [_] Customized Schedule (list by policy year or years):
Policy Year(s) Planned Premium Amount
-------------- ----------------------
______-_______ $ _______________ (1)
______-_______ $ _______________ (2)
______-_______ $ _______________ (3)
______-_______ $ _______________ (4)
______-_______ $ _______________ (5)
______-_______ $ _______________ (6)
______-_______ $ _______________ (7)
______-_______ $ _______________ (8)
______-_______ $ _______________ (9)
______-_______ $ _______________ (10)
(If more space needed, attach separate schedule)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
H. RIDERS ON PROPOSED INSURED
- --------------------------------------------------------------------------------
[_] Disability Waiver of Monthly Charges
[_] Living Care Benefit (Accelerated Death Benefit)
[_] Other Available Riders (please specify)
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I. LIFE INSURANCE DEFINITION
- --------------------------------------------------------------------------------
[_] Cash Value Accumulation Test [_] Guideline Premium Test
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
K. TELEPHONE LOAN OPTION
- --------------------------------------------------------------------------------
I direct the Company to act upon telephone instructions from the owner (a
trustee, if the owner is a trust or an authorized business official, if the
owner is a business entity) to process policy loans, subject to the provisions
of the contract.
[_] Yes [_] No
- --------------------------------------------------------------------------------
Page 2 (Universal Life HB1/HB2)
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
M. UNDERWRITING INFORMATION
("ANY PERSON" MEANS ANY PERSON BEING PROPOSED FOR INSURANCE ON THIS PART A.)
- --------------------------------------------------------------------------------
1. Has any person done in the past three years, or intend to do any:
a. flying except as a passenger on regularly
scheduled airlines? [ ] Yes [ ] No
(If yes, please complete aviation questionnaire.)
b. skin/scuba diving, parachuting, motorized racing,
or other hazardous sports? [ ] Yes [ ] No
(If yes, please complete avocation questionnaire.)
2. In the past three years has any person been convicted
of two or more motor vehicle moving violations or had
a driving license suspended or revoked? [ ] Yes [ ] No
3. In the past 10 years has any person been convicted of
or incarcerated for the violation of any criminal law
(unless later acquited), are any criminal charges now
pending against any person, or is any person currently
on probation? [ ] Yes [ ] No
4. Does any person intend to reside or travel outside
the U.S. or Canada? [ ] Yes [ ] No
If any of questions 2 - 4 are answered "yes", please explain:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
N. OTHER INSURANCE/REPLACEMENT INFORMATION
- --------------------------------------------------------------------------------
1. Give information indicated as to all insurance in force on any person
proposed for insurance, including term riders.
- --------------------------------------------------------------------------------
Company Issue Year Plan Amount ADB Amount Business Insurance?
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
[_] Yes [_] No
- --------------------------------------------------------------------------------
2. Is any other insurance application now pending or
contemplated on the life of any person proposed for
insurance? [ ] Yes [ ] No
If yes, which person(s)?
-----------------------------------------------------
What company(ies)/amounts?
---------------------------------------------------
3a. Is the insurance applied for intended to replace
or change any life insurance or annuity now in
force on any person proposed for insurance? (If
yes, give writing company of insurance being
replaced, policy number, and insurance amount.) [ ] Yes [ ] No
- --------------------------------------------------------------------------------
Company Policy # Amount Company Policy # Amount
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3b. Check this box if this case is a 1035 exchange [_]
(Please refer to inside front cover for 1035 Exchange Guidelines.)
4. Is Disability Insurance with Provident or Long Term Care Insurance with John
Hancock currently being applied for?
[_] No [_] Yes, DI (Date of application ____________ )
[_] Yes, LTC (Date of application ___________________ )
5. Has any application for life, disability, or health
insurance on any person being proposed for insurance
ever been declined, postponed, or modified? [ ] Yes [ ] No
(If "Yes," give most recent company, including John Hancock.)
----------------------------------------------------------------------------
COMPANY APPROXIMATE DATE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
O. PLEASE COMPLETE THIS BOX ONLY IF ADVANCE PAYMENT IS BEING MADE
- --------------------------------------------------------------------------------
1. How much advance payment is included with this Part A? $ ____________
(Write check to John Hancock Mutual Life or John Hancock Variable Life, as
appropriate. 1035 external replacements may not be prepaid.)
- --------------------------------------------------------------------------------
Page 3
<PAGE>
Part A Statements to the Company's Agent
- --------------------------------------------------------------------------------
P. CUSTOM DATING (OPTIONAL)
- --------------------------------------------------------------------------------
If no other date request is indicated, our regular dating practices will apply.
[_] Back date to save age [_] Issue date of ___ / ___ /___
(Generally, for FlexV and MVL the issue date may not be earlier than the Part A
date.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
R. CONVERSION DETAILS Note: Complete this box only for conversion of Term
Insurance. Children's Insurance, or Purchase Options (1 of 1, SPB, PPB)
- --------------------------------------------------------------------------------
1. [_] This is a [_] Full [_] Partial Term Conversion from:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
a. Policy Number Conversion Type Amount Converted Amount Remaining In Force
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Base Policy Amount
------------------------------------------------------------------------
# ___________ Rider
------------------------------------------------------------------------------------------------------
___________ Rider
------------------------------------------------------------------------------------------------------
b. Policy Number Conversion Type Amount Converted Amount Remaining In Force
------------------------------------------------------------------------------------------------------
Base Policy Amount
------------------------------------------------------------------------
# ___________ Rider
------------------------------------------------------------------------------------------------------
___________ Rider
------------------------------------------------------------------------------------------------------
</TABLE>
2. [_] Conversion of Children's Insurance from Policy # ________________________
3. [_] This is an election under [_] 1 of 1 [_] SPB [_]PPB from Policy #_______
[_] Regular Purchase Date, OR [_] Alternate Purchase Date because of ________
on ___ / ___ / ___
4. Is Insured now totally disabled, or is Insured receiving any payments for
sickness or injury? [_] Yes [_] No
(If yes, give details in Box S below.)
- --------------------------------------------------------------------------------
S. SPECIAL REQUESTS
- --------------------------------------------------------------------------------
[_] Please change Question ____ in Box ____ on Page ____ of this Part A to read:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
[_] Conversion - Benefits Carried Over [_] Conversion - Preferred Requested
[_] Contractual Change Request Please change Policy Number _______ as follows:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
[_] Change Planned Premium, if applicable, for above contractual change.
(FLEXV, MVL, UL only)
[_] Other special requests:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Page 4
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE] Part B Statements to the Company's Agent
Financial Services
- --------------------------------------------------------------------------------
COMPLETE FOR NON-MEDICAL APPLICATIONS ONLY
- --------------------------------------------------------------------------------
Please give full details below for every "Yes" answer to Questions 1 - 4 as
to each person proposed for insurance, who is referred to below as "any
person." BE SURE TO INCLUDE THE NAMES/ADDRESSES OF ANY TREATMENT PROVIDERS.
1. Has any person ever been treated for or had any known indication of disease
of the heart or blood vessels, chest pain or high blood pressure, stroke or
paralysis, diabetes, tumor or cancer, convulsions, kidney disease, gastro-
intestinal disease, mental or psychiatric disorder, lung or respiratory
disease, or blood disorder?
[ ] Yes [ ] No
2. Has any person had or ever been diagnosed or treated by a physician or other
medical practitioner for Human Immunodeficiency Virus III or Acquired Immune
Deficiency Syndrome (AIDS)?
[ ] Yes [ ] No
3. Within the past 5 years has any person received counseling or treatment
regarding the use of alcohol, drugs, illegal drugs, or used any illegal drug
or controlled substance?
[ ] Yes [ ] No
4. Other than the above, within the past 5 years has any person
a) been admitted to a hospital or other medical or rehabilitation
facility? [ ] Yes [ ] No
b) consulted or been treated by a physician, or had a medical exam or
checkup? [ ] Yes [ ] No
5. Is any person proposed for insurance currently taking any prescription drug?
[ ] Yes [ ] No
If yes, which person? _______________________________________________________
What drugs? How frequently? _________________________________________________
6. If the Proposed Insured has a personal physician, please enter name, address,
and details below. Otherwise leave blank.
_____________________________________________________________________________
FIRST NAME MI LAST NAME
_____________________________________________________________________________
STREET ADDRESS CITY STATE ZIP CODE
Date last seen____________________ Reason(s) last seen____________________
- --------------------------------------------------------------------------------
Details to "yes" answers.
Question No.___________________________________
Name of person_________________________________
Condition______________________________________
Date of onset_________ Last occurrence_________
Treatment/medication, if any___________________
Names/addresses of physicians/hospitals providing treatment
___________________________________________________________
___________________________________________________________
- --------------------------------------------------------------------------------
Question No.___________________________________
Name of person_________________________________
Condition______________________________________
Date of onset_________ Last occurrence_________
Treatment/medication, if any___________________
Names/addresses of physicians/hospitals providing treatment
___________________________________________________________
___________________________________________________________
___________________________________________________________
- --------------------------------------------------------------------------------
Question No.___________________________________
Name of person_________________________________
Condition______________________________________
Date of onset_________ Last occurrence_________
Treatment/medication, if any___________________
Names/addresses of physicians/hospitals providing treatment
___________________________________________________________
___________________________________________________________
___________________________________________________________
- --------------------------------------------------------------------------------
Question No.___________________________________
Name of person_________________________________
Condition______________________________________
Date of onset_________ Last occurrence_________
Treatment/medication, if any___________________
Names/addresses of physicians/hospitals providing treatment
___________________________________________________________
___________________________________________________________
___________________________________________________________
Please record any additional details on a separate piece of paper.
- --------------------------------------------------------------------------------
Page 5
<PAGE>
- --------------------------------------------------------------------------------
AGREEMENT AND SIGNATURES
- --------------------------------------------------------------------------------
A. The statements and answers on pages 1 through 5 of Part A and Part B of the
attached application are, to the best of my knowledge and belief, complete,
true, and correctly recorded. All statements and answers are representations
and not warranties, and with all Parts B of the attached application will
form the basis for and be a part of any new policy or additional benefit
provision issued on this application.
B. Coverage will take effect as provided in and subject to the terms and
conditions of Conditional Temporary Insurance Agreement Form 156-TIA-95
bearing the same date and number of this Part A if: (1) an advance payment of
at least the Minimum Temporary Insurance Premium is made with this Part A
which satisfies the requirements of such Conditional Temporary Insurance
Agreement; and (2) the amount applied for in this and all other applications
now pending in John Hancock Mutual Life Insurance Company and the John
Hancock Variable Life Insurance Company does not exceed $1,000,000 life
insurance.
C. If the applicant has a right to have the new policy issued as requested
without completing any Part B, the new policy will take effect as of its Date
of Issue, provided the initial payment has been made with this application.
D. In cases other than those described in B and C above, any new policy or
Benefit provision will take effect as of the Date of Issue of the policy,
but: (1) only on delivery to and receipt by the Applicant of the policy and
payment of the minimum initial premium thereon and (2) only if at the time of
such delivery and payment each person proposed for insurance in parts A and B
of this application is living and has not consulted or been examined or
treated by a physician or practitioner since the latest Part B pertaining to
such person was completed.
E. No agent or medical examiner is authorized to make or discharge contracts or
waive or change any of the conditions or provisions of any application,
policy, or receipt, or to accept risks or pass on insurability. Any such
unauthorized action is not notice to or knowledge of the company. A medical
examiner is not an agent of the Company.
Provisions F and G apply only if FlexV or MVL is applied for
F. All benefits, payments, and values, including the Death Benefit and Account
or Cash Value, under any policy issued which is based upon the investment
experience of a separate investment account may increase or decrease in
accordance with the investment experience of the separate investment account
and are not guaranteed as to fixed dollar amount. The Account Value or Cash
Value may even decrease to zero.
G. The registered representative's signature below certifies that a prospectus
for the policy applied for has been given to the Proposed Insured and/or to
the Applicant and that no written sales materials other than those approved
by JHVLICO have been used.
Provisions H, I, J, K, and L apply if the policy applied for is a term
conversion or purchase option
H. The new policy will be a new, separate contract. If the new policy is issued
in exchange for the original insurance, all liability of the Company under
the original insurance will cease when the new policy takes effect. Until the
new policy is issued, coverage will still be in force under the original
policy. Coverage under the new policy will take effect as indicated in
Paragraph C above.
I. The application for the original insurance, unless such insurance is now
incontestable, and the application for each additional benefit provision
which is to be retained as specified on page 2 of this Application, unless
such provision is now incontestable, will also form a basis for and be a part
of the new policy.
J. If the original policy or benefit provision is being exchanged and is subject
to an assignment, the new policy will be subject to the same assignment
unless it is discharged or, in the case of a policy loan assignment, unless
the indebtedness has been repaid.
K. If the new policy is issued in exchange for the original policy, any
nonforfeiture option election applicable to the original policy will be
applicable to the new policy, if available, unless otherwise requested in
writing.
L. Ownership and control of any policy issued on the attached application will
be determined by the terms of the new policy.
- --------------------------------------------------------------------------------
All statements and answers in this application are to the best of my
knowledge and belief, true and complete. They are representations and not
warranties. I assent to this application.
_______________________________________ _____________________________________
Signature of Proposed Insured, Applicant's Signature
if other than Applicant
and age 15 or over
_______________________________________ _____________________________________
Signature of Proposed Insured's Spouse, Witness (Agent must witness where
if proposed for insurance required by law)
_______________________________________ _____________________________________
Policyowner, Assignee or irrevocable City or Town State
Beneficiary (Signature required only for
exchange of policy or benefit provisions)
on__________________, 19_____
Date
Page 6
<PAGE>
This page is intentionally left blank
<PAGE>
- --------------------------------------------------------------------------------
TO BE COMPLETED IN EVERY CASE. DO NOT DETACH
- --------------------------------------------------------------------------------
Authorization and Acknowledgment
I hereby authorize any licensed physician, medical practitioner, hospital,
clinic, or other medical or medically related facility, insurance company, the
Medical Information Bureau or other organization, institution, or person that
has any records or knowledge regarding each of the undersigned and any children
of the undersigned if proposed for insurance to give to the John Hancock Company
or its affiliates and reinsurers any such information, including information
concerning every condition for which each has been under observation or
treatment, including if the information specified contains information related
to treatment for drug and/or alcohol abuse or for psychiatric and/or mental
conditions, the history obtained, physical and laboratory findings, diagnosis
and treatment. I hereby authorize the Company to release any records or other
information in their possession regarding each of the undersigned, and any
children of the undersigned if proposed for insurance, to the JH Networking
Insurance Agency, Inc. which may use this information in its efforts to secure
insurance coverage for substandard risks with other insurance companies, a list
of which is available upon request.
I acknowledge receipt of the Federal Fair Credit Reporting Act notice which
contains on the reverse side a notice concerning the Medical Information Bureau.
A copy of this authorization is as valid as the original. This
authorization is valid for 24 months from the date of the proposed Insured's
signature.
______________________________________ _____________________________________
Signature of Proposed Insured's Spouse, Signature of Proposed Insured, if age
if proposed for Insurance 15 or over, or Applicant if Proposed
Insured is under age 15
______________________________________ _________________________19__________
Name of Proposed Insured, if under 15 Date
(please print)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REFERRED LEADS: TO BE DETACHED IN AGENCY
- --------------------------------------------------------------------------------
____________________________________________________________
FIRST NAME MI LAST NAME
____________________________________________________________
STREET ADDRESS
____________________________________________________________
CITY STATE ZIP
Home Phone (____)____-______
Work Phone (____)____-______
____________________________________________________________
FIRST NAME MI LAST NAME
____________________________________________________________
STREET ADDRESS
____________________________________________________________
CITY STATE ZIP
Home Phone (____)____-______
Work Phone (____)____-______
MORE ON REVERSE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DETACH THIS SECTION AND GIVE TO CLIENT
- --------------------------------------------------------------------------------
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
Notice to Each Person Proposed for New or Changed Coverage
As required by the Federal Fair Credit Reporting Act, we wish to advise
that in connection with the insurance (or change in coverage) applied for, an
investigative consumer report may be requested by the Company with respect to
any person proposed for insurance or change in coverage. Such a report may
contain information as to character, general reputation, personal
characteristics and mode of living of such person, and is customarily obtained
through personal interviews with neighbors, friends, or associates of the
subject of the report. You have a right to make a written request for
information as to the nature and scope of any such report under the Act by
writing to us at:
John Hancock
P.O. Box 111 John Hancock Place
Underwriting - Federal Fair Credit Control C-5
Boston, Massachusetts 02117
For identification purposes, your request must include your full name,
birthdate, address, and any applicable policy number.
- --------------------------------------------------------------------------------
Page 7
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE]
Financial Services
- --------------------------------------------------------------------------------
REFERRED LEADS: TO BE DETACHED IN AGENCY
- --------------------------------------------------------------------------------
___________________________________________________________________________
FIRST NAME MI LAST NAME
___________________________________________________________________________
STREET ADDRESS
___________________________________________________________________________
CITY STATE ZIP
Home Phone(____)_____-_______
Work Phone(____)_____-_______
- --------------------------------------------------------------------------------
___________________________________________________________________________
FIRST NAME MI LAST NAME
___________________________________________________________________________
STREET ADDRESS
___________________________________________________________________________
CITY STATE ZIP
Home Phone(____)_____-_______
Work Phone(____)_____-_______
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DETACH THIS SECTION AND GIVE TO CLIENT
- --------------------------------------------------------------------------------
Information obtained about your insurability will be treated as
confidential. The Company may, however, make a brief report thereon to the
Medical Information Bureau, a non-profit membership organization of life
insurance companies which operates an information exchange on behalf of its
members. If you apply to another Bureau member company for life or health
insurance coverage, or a claim for benefits is submitted to such a company, the
Bureau, upon request, will supply such company with the information it may have
in its file.
Upon receipt of a request from you, the Bureau will arrange disclosure of
any information it may have in your file. If you question the accuracy of
information in the Bureau's file, you may contact the Bureau and seek a
correction in accordance with procedures similar to those set forth in the
Federal Fair Credit Reporting Act.
The address of the Bureau's information office is:
Medical Information Bureau
Post Office Box 105, Essex Station
Boston, Massachusetts 02112
Telephone (617) 426-3660
The Company may also release limited information in its file to other
properly authorized life insurance companies to which you may apply for life or
health insurance, or to which a claim for benefits may be submitted.
Information may be released to proper regulatory agencies on request and to
insurance companies in connection with reinsurance.
Underwriting actions are not reported to the Bureau, nor is the Company
informed through the Bureau of the underwriting actions of other companies to
whom you may have applied for life or health insurance.
- --------------------------------------------------------------------------------
Form 156-Comb-95
Page 8
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SALES CREDIT FOR APPLICATION
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
AGENCY NAME ORD. CODE CITY TAX GA/AM INITIALS
[_______________________] [_][_][_] [_][_][_][_] [_][_][_]
SALES/STAFF MGR. NAME NUMBER 1 MARKETING REP. NAME CONTRACT MARKTG REP. # MARKTG TERR. # %
[_______________________] [_][_][_][_][_][_] [_______________________] [_][_] [_][_][_][_][_][_] [_][_][_][_][_] [_][_][_]
SALES/STAFF MGR. NAME NUMBER 2 MARKETING REP. NAME CONTRACT MARKTG REP. # MARKTG TERR. # %
[_______________________] [_][_][_][_][_][_] [_______________________] [_][_] [_][_][_][_][_][_] [_][_][_][_][_] [_][_][_]
SALES/STAFF MGR. NAME NUMBER 3 MARKETING REP. NAME CONTRACT MARKTG REP. # MARKTG TERR. # %
[_______________________] [_][_][_][_][_][_] [_______________________] [_][_] [_][_][_][_][_][_] [_][_][_][_][_] [_][_][_]
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
SUPPLEMENTARY UNDERWRITING INFORMATION (REQUIRED FOR ALL CASES)
- --------------------------------------------------------------------------------
1. Please provide the Proposed Insured's addresses for the last two years.
Time at Residence Street Address City/Town State ZIP
See Part A, Page 1
___yrs. ___mos. ___________________________________________________________
___yrs. ___mos. ___________________________________________________________
___yrs. ___mos. ___________________________________________________________
2. Please provide the Proposed Insured's employment details for the last two
years.
Time Employed Employer Name Street Address City/Town State ZIP
___yrs. ___mos. ___________________________________________________________
___yrs. ___mos. ___________________________________________________________
___yrs. ___mos. ___________________________________________________________
3. Driver's License State__________ Number_____________
4. How long have you known the Proposed Insured? ______________
5. Are you related to the Proposed Insured? [_] Yes (relationship)_______ [_] No
6. Has Proposed Insured been known by any [_] Yes (what names)_________ [_] No
other names within the last ten years?
7. Check the ONE choice that best describes the Proposed Insured's marital
status (in case of juvenile insurance, the premium payor).
[_] a. Married with ONE spouse working full time for pay
[_] b. Married with BOTH spouses working full time for pay
[_] c. Retired married couple
[_] d. Never married
[_] e. Divorced
[_] f. Widowed
[_] g. Other____________________________
8. What is the approximate household income of the Proposed Insured?
[_] a. Less than $20,000
[_] b. $20,000 to $29,000
[_] c. $30,000 to $39,000
[_] d. $40,000 to $49,000
[_] e. $50,000 to $74,999
[_] f. $75,000 to $100,000
[_] g. More than $100,000
9. What is the approximate household income of the Policy Owner?
[_] a. Less than $20,000
[_] b. $20,000 to $29,000
[_] c. $30,000 to $39,000
[_] d. $40,000 to $49,000
[_] e. $50,000 to $74,999
[_] f. $75,000 to $100,000
[_] g. More than $100,000
10. (For contractual changes) To the best of your [_] Yes [_] No
knowledge, is the Insured now in good health?
- --------------------------------------------------------------------------------
From my knowledge and investigation, the proposed insured is of temperate
habits and good moral character, and I know nothing affecting the insurability
of the Proposed Insured not stated hereon, and I recommend his/her acceptance
without qualification.
Proposed Insured interviewed by me on ___/___/___.
The Federal Fair Credit Reporting Act notice has been delivered as required.
- --------------------------------------------------------------------------------
Sales Manager/Staff Manager/Marketing Representative
- -------AGENT--------------------------------------------------------------------
Is the insurance applied for a replacement according to John Hancock's current
replacement rules? [_] Yes [_] No
- --------------------------------------------------------------------------------
This application and report have been reviewed by me, and I recommend risk.
- --------------------------------------------------------------------------------
General Agent/Agency Manager
- --------------------------------------------------------------------------------
Page 9
<PAGE>
[lOGO OF JOHN HANCOCK APPEARS HERE]
Financial Services
- --------------------------------------------------------------------------------
AUTHORIZATION FOR PREMIUMATIC BILLING (DO NOT REMOVE FROM APPLICATION)
- --------------------------------------------------------------------------------
I authorize the John Hancock Company to deduct the monthly premiums for the
policy applied for on this application from the bank account listed below. I
understand that the deduction will take place on or about the third Friday of
each month.
Transit Routing Number__________________________
PC Control Number (If an existing account)_________
Bank Account Number__________________________________________
EFTS Transfer Code____
Name(s) of Depositor(s)__________________________
Signature(s) of Depositor(s)___________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE COMPLETE ANY SECTION BELOW THAT PERTAINS TO THIS CASE
- --------------------------------------------------------------------------------
I. COMPLETE FOR MILITARY CASES
1. Permanent U.S. Residence________________________________________________
2. Pay Grade____________________
3. Soc. Sec. or ID# of person entering allotment___________________________
4. Anticipated date of discharge or retirement__________month___________year
- --------------------------------------------------------------------------------
II. COMPLETE FOR JUVENILE OR CHILDREN'S INSURANCE
1. Did you see the Proposed Insured/Child?
[_]Yes [_]No (If not, explain on additional sheet of paper.)
2. With whom does Proposed Insured/Child reside?
Name_________________________________________________
Relationship to Proposed Insured/Child__________________________
3. Is Proposed Insured in school? [_]Yes (Grade_____) [_]No
4. Amount of life insurance in force or applied for on the:
Father $________________ Mother $________________
5. Are all siblings under age 15 insured for at least this amount?
[_]Yes [_]No (If not, explain on additional sheet of paper.)
- --------------------------------------------------------------------------------
III. COMPLETE FOR ALTERNATE PREMIUM PAYMENT PLAN POLICIES
1. Alternate premium payment payment plan testing should begin at year______
(Same year should be indicated on page 11.)
2. Has the Policyowner read and signed page 11 of this application?
[_]Yes [_]No
- --------------------------------------------------------------------------------
IV. COMPLETE FOR MODIFIED ENDOWMENTS
1. Does the sales illustration show that the policy applied for is a Modified
Endowment Contract (MEC)? [_]Yes [_]No
2. If yes, has the Policyowner signed the MEC Acknowledgment Form on Page 12?
[_]Yes [_]No
- --------------------------------------------------------------------------------
V. COMPLETE FOR BUSINESS INSURANCE
1. Authorized officer signing the application
Name___________________________ Title___________________________
2. Amount of business insurance already in force on Proposed Insured
$________________________
3. Proposed Insured's total compensation from the business for each of the
last two years.
Year_________ Compensation $______________
Year_________ Compensation $______________
4. Total book value of business $______________________
5. Total market value of business $______________________
6. Year founded or incorporated _________________________
7. % of business owned by Proposed Insured _____________%
- --------------------------------------------------------------------------------
VI. COMPLETE FOR ADVANCED SALES CASES
1. Does this insurance satisfy one of the estate and business needs listed
below? [_]Yes [_]No
If yes, check one need catagory and one sales concept, if applicable.
1 [_]Estate Conservation
a [_] Irrevocable Trust Owned
b [_] Adult Children Owned
2 [_]Business Continuation
c [_] Stock Redemption
d [_] Stock Purchase
3 [_]Qualified Retirement Plan (Pension, Profit Sharing, 401(k), HR-10)
4 [_]Individually Owned Insurance
e [_] Collateral Assignment Split Dollar
f [_] Executive Bonus
5 [_]Non-Qualified Retirement Plan
g [_] Salary Continuation
h [_] True Deferral
i [_] Death Benefit Only
j [_] Severance Benefit
6 [_]Corporate Owned Insurance
k [_] Endorsement Split Dollar
l [_] Key Person
m [_] Business Loan
7 [_]Charitable Insurance
- --------------------------------------------------------------------------------
VII. COMPLETE FOR COLLEGE SAVINGS PLUS
1. Is this insurance part of a College Savings Plus Plan? [_]Yes [_]No
- --------------------------------------------------------------------------------
Page 10
<PAGE>
- --------------------------------------------------------------------------------
REQUEST TO USE POLICY VALUES TO PAY PREMIUMS (TRADITIONAL ONLY)
- --------------------------------------------------------------------------------
I elect to have my policy premiums paid by non-guaranteed policy values, if
sufficient, beginning in the year selected below. This payment option is
possible only if future dividend and/or cash values are large enough to pay the
required premium which is due each year. Lower dividends, policy loans, or
withdrawals taken from the policy could cause additional premiums to be
required. John Hancock recommends that I review illustrations using various
dividend projections to understand how actual dividend experience may affect the
policy values and payment schedule.
- --------------------------------------------------------------------------------
ALTERNATE PREMIUM PAYMENT PLAN COMMENCEMENT
- --------------------------------------------------------------------------------
I elect to have the Alternate Premium Payment Plan begin in policy year______.
This year is based upon an illustration at issue assuming (circle one) CURRENT
or REDUCED dividend scale (Indicate reduction from current scale by ___%
interest).
At the beginning of the year indicated above, John Hancock will test my policy
using the dividend scale in effect at that time. If the test shows that
projected policy values are adequate to pay all future premiums based on that
current dividend scale, my premiums will be eligible to be paid from policy
values. If the test shows that projected policy values are not adequate to pay
all future premiums, the test will continue to be repeated each year. Policy
premiums will be eligible to be paid in the earliest year when values are shown
to be sufficient to pay all future premiums.
John Hancock will notify me in writing when my policy becomes eligible for this
payment option. At that time i may choose to allow the Alternate Premium Payment
Plan to begin, or I may choose to continue to pay premiums in cash to further
build my policy's values.
- --------------------------------------------------------------------------------
ALTERNATE PREMIUM PAYMENT PLAN MECHANICS
- --------------------------------------------------------------------------------
When I elect the Alternate Premium Payment Plan, policy values will be applied
in the following order to pay the premium amount due:
1. Dividends declared for payment on the policy anniversary;
2. Amounts accumulated, if any, of dividends on deposit;
3. Surrender value of any paid-up insurance.
- --------------------------------------------------------------------------------
CHANGES IN ALTERNATE PREMIUM PAYMENT PLAN STATUS
- --------------------------------------------------------------------------------
Any of the following may affect my future eligibility to begin or continue to
pay my premiums from policy values:
. Partial surrenders of paid-up additions or paid-up insurance;
. Policy loans;
. Actual dividends which are less than those projected (dividends are not
guaranteed);
. Changes in the dividend option;
. Any requested change to the policy that affects the premium.
John Hancock strongly recommends that I review policy illustrations using
various dividend assumptions to see the impact of lower than current dividend
scales and the impact on the Alternate Premium Payment Plan.
If at any time, policy values are not sufficient to pay the amount of premium
then required, no policy values will be applied to pay premiums, and billing for
the required premium will resume. I will be notified if that occurs.
- --------------------------------------------------------------------------------
ACKNOWLEDGMENT
- --------------------------------------------------------------------------------
I UNDERSTAND THAT I HAVE THE OPPORTUNITY TO USE NON-GUARANTEED POLICY VALUES TO
PAY REQUIRED PREMIUM PAYMENTS. I UNDERSTAND THAT THE YEAR INDICATED ABOVE
REPRESENTS THE YEAR TO BEGIN TESTING FOR THE ALTERNATE PREMIUM PAYMENT PLAN, AND
THAT THIS YEAR IS NOT GUARANTEED AND DEPENDENT ON POLICY VALUES ACTUALLY
AVAILABLE AT THE TIME OF THE TEST AND THE DIVIDEND SCALE THEN APPLICABLE TO MY
POLICY.
Policyowner Signature __________________________ Date ________________
- --------------------------------------------------------------------------------
Page 11
<PAGE>
- --------------------------------------------------------------------------------
NOTICE OF POTENTIAL INCOME TAX IMPLICATIONS FOR MODIFIED ENDOWMENT CONTRACTS
- --------------------------------------------------------------------------------
On November 10, 1988, the Technical and Miscellaneous Revenue Act of 1988
(TAMRA) was signed by President Reagan. This law changes the income taxation of
cash withdrawn from certain affected life insurance policies called Modified
Endowment Contracts, or MECs. Due to the amount of premium you plan to pay into
this policy, you will be affected by this law.
It is important for you to understand that all distributions made from your
policy as applied for, including policy loans, withdrawals, partial surrenders
and certain dividends, will be considered to be a distribution of any gain. This
means that if your policy is in a gain position when the withdrawal is made
(i.e., the value of your policy exceeds the amount you've paid into it), you
will owe ordinary income tax on the amount you withdraw. In addition, a 10%
penalty tax is imposed by the IRS on any taxable distribution made prior to age
59 1/2, except on disability or if taken in the form of an annuity.
The insurance proceeds payable to your beneficiary upon the death of the
Proposed Insured will continue to be income tax free under current legislation.
This notice is designed to inform you of the income taxation of life insurance
based upon our understanding of the information currently available. It is not
intended to provide you with legal advice, which neither John Hancock nor its
Representatives can give. Therefore, if you have questions as to the
applicability of any provision of the law, you should seek the advice of your
own tax and legal counsel.
If you wish to modify your planned premium payments to avoid creating a Modified
Endowment Contract, your Marketing Representative will assist you. Otherwise,
please sign the Acknowledgment below.
- --------------------------------------------------------------------------------
POLICYOWNER ACKNOWLEDGMENT AND SIGNATURE
- --------------------------------------------------------------------------------
I have read the above Notice of Potential Income Tax Implications. I understand
that my premium payments will cause the proposed policy to become a Modified
Endowment. I also understand the potential income tax effects of a distribution
from a Modified Endowment.
Policyowner Signature Date
---------------------------- -----------------------
________________________________________________________________________________
- --------------------------------------------------------------------------------
TAXPAYER IDENTIFICATION NUMBER CERTIFICATION
- --------------------------------------------------------------------------------
PART I.-TAXPAYER IDENTIFICATION NUMBER
Enter the Owner's taxpayer identification
number in the appropriate box. For most
individual taxpayers, this is the social
security number.
------------------------------------------
Social Security number
--- ---
------------------------------------------
OR
------------------------------------------
Employer identification number
---
------------------------------------------
PART 2.-BACKUP WITHHOLDING
Check the appropriate box.
(a) Owner is NOT subject to backup withholding
[_] under the provisions of section 3406(a)(l)(c) of
the Internal Revenue Code.
(b) Owner is subject to backup withholding
[_] under the provisions of section 3406(a)(l)(c) of
the Internal Revenue Code.
- --------------------------------------------------------------------------------
Certification: Under the penalties of perjury, I certify that the information
provided above is true, correct, and complete.
Signature_________________________________ Date_______________
- --------------------------------------------------------------------------------
Page 12
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR PREMIUMATIC BILLING: PLEASE SEND TO AUTOMATIC COLLECTIONS, C-8
- --------------------------------------------------------------------------------
Please make sure that the Premiumatic Authorization on Page 10 is completed and
signed.
Name of Insured ____________________ Policy Number ________________________
1. All cases: please check one of a or b
[_] a. This is a new Premiumatic account. Please attach either 1) a blank
voided check; 2) a copy of the Payor's check for the initial premium;
or 3) a copy of a cancelled check.
Note: Do not send voided check until policy is issued.
[_] b. This is an addition to an existing Premiumatic account.
Control Number_________________________________________________________
2. Required for FlexV, UL, MVL
Please place policy on Premiumatic effective _____ / _____.
3. If you have other comments, please check here: [_] and use reverse side.
Agency Name __________________________ Ord Code __________________________
Submitted by _________________________ Date ______________________________
- --------------------------------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- --------------------------------------------------------------------------------
RECEIPT AND CONDITIONAL TEMPORARY INSURANCE AGREEMENT
- --------------------------------------------------------------------------------
. This Receipt and Conditional Temporary Insurance Agreement is governed by
Agreement B of the application bearing the same number as this receipt.
. There is a TOTAL temporary insurance coverage limit of $250,000 on all
applications pending on each person proposed for insurance with John Hancock
Mutual Life Insurance Company and John Hancock Variable Life Insurance
Company, regardless of the number of applications, and the face amounts of the
policies applied for.
- --------------------------------------------------------------------------------
6861590
Proposed Insured ______________________ Application Number _______________
Plan ___________________________________ Date _____________________________
Received from________________ the sum of $_____________ paid with application
to John Hancock Company with the same date and number as this receipt. This
receipt is issued on the condition that any check, draft, or other order for
the payment of money is good and can be collected.
Please make all premium checks payable to the company under which your
application is being made (John Hancock Mutual Life or John Hancock Variable
Life), at John Hancock Place, Boston, MA. Do not make check payable to the
agent or leave the payee blank.
- --------------------------------------------------------------------------------
Conditions of Temporary Insurance Coverage. 1) The amount received must be at
least the Minimum Temporary Insurance Premium, 2) Parts A and B of the
application and any required medical examinations and tests must be completed,
and 3) The following questions are answered "NO."
a. In the past two years, has any person proposed for insurance consulted a
physician, been diagnosed with, or had treatment for heart disease,
stroke, or cancer?_______
b. Has any person proposed for insurance been hospitalized within the past 6
months or been advised by a physician that he or she needs hospitalization
for any reason (other than for normal pregnancy)?_______
c. Within the past 5 years has any person received counseling or treatment
regarding the use of alcohol, drugs, illegal drugs, or used any illegal
drug or controlled substance?_______
d. In the past 3 years has any person had a driving license suspended or
revoked?_______
Commencement of Temporary Insurance Coverage. If the above Conditions of
Temporary Insurance Coverage are met, coverage in accordance with the terms and
conditions of the policy applied for will take effect on the latest "Completion
Date" of all persons proposed for insurance. Each person's "Completion Date"
will be the date of completion of the latest of the Parts A and B of the
application and any medical examinations and tests required by the Company's
published initial underwriting requirements, according to the age and amount
applied for.
Amount of Temporary Insurance Coverage. The amount of Coverage will be the
lesser of: 1) the amount applied for on each person excluding the amount payable
under Option 1 of the Paid Up Insurance Rider, if applied for, unless the amount
received with the application is equal to or greater than (i) the Minimum
Temporary Insurance Premium plus (ii) the Lump Sum Payment shown on Page 2
(Traditional/Term) in Box 1; and 2) $250,000. However, the amount of coverage
will never exceed $250,000 LESS the total of all amounts payable under all
conditional temporary insurance agreements issued by John Hancock Mutual Life
Insurance Company or John Hancock Variable Life Insurance Company in connection
with any insurance application pending on the proposed insured as of the date of
this Receipt and Conditional Temporary Insurance Agreement. No benefit will be
paid under this Agreement if the Proposed Insured's death results, directly or
indirectly, or wholly or partially, from intentionally self-inflicted injury
while sane, or self-inflicted injury while insane.
(continued on reverse)
- --------------------------------------------------------------------------------
Page 13
<PAGE>
- --------------------------------------------------------------------------------
REQUEST FOR PREMIUMATIC BILLING (CONTINUED)
- --------------------------------------------------------------------------------
Special Premiumatic Requests:
- --------------------------------------------------------------------------------
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Receipt and Conditional Temporary Insurance Agreement (continued)
Fraud Warning. Any person who, with intent to defraud or knowing that he is
facilitating a fraud against an insurer, submits an application or files a claim
containing a false or deceptive statement is guilty of insurance fraud.
Termination of Temporary Insurance Coverage. The conditional temporary insurance
coverage provided by this Agreement will end on the earliest of:
1) The commencement of coverage under the policy issued on the basis of the
application.
2) The date the Applicant refuses to accept the policy as offered for delivery.
3) The date the application is declined or deemed declined (Policy is deemed
declined if not approved within 60 days of the latest Completion Date.).
Notice of any such declination will be furnished.
If termination occurs under 2) or 3) above, the amount paid will be returned on
surrender of this Receipt. In no event will coverage be in effect under both
this Conditional Temporary Insurance Agreement and any policy issued on the
basis of the application, and any amendment thereto, with the same date and
number as this Receipt and Conditional Temporary Insurance Agreement.
Commencement of Coverage Under the Policy. Coverage under any policy issued on
the basis of the application will replace the coverage provided by this
Agreement as of the policy Date of Issue but only if:
1) The policy is delivered to and accepted by the Applicant while all persons
proposed for insurance are living and within 60 days of the latest
"Completion Date," and
2) The balance of any premium required for the policy as delivered is paid
while all persons proposed for insurance are living and within 60 days after
the latest "Completion Date."
Minimum Temporary Insurance Premium. The Minimum Temporary Insurance Premium is
one month's proportionate part of the premium according to the Company's
published rates for the policy and premium interval applied for.
(check one) [ ] John Hancock Mutual Life Insurance Company
[ ] John Hancock Variable Life Insurance Company
- ------------------------------------ ------------------------------------
PROPOSED INSURED DATE MARKETING REPRESENTATIVE DATE
- --------------------------------------------------------------------------------
(To be used in event of refund of payment)
Received of the John Hancock Company, Boston, Massachusetts, the sum of $_____.
The amount mentioned in the receipt on the reverse side hereof.
Date _____________________________, 19______ _________________________________
- --------------------------------------------------------------------------------
Page 14
<PAGE>
EXHIBIT 6
February 22,1996
Board of Directors
John Hancock Mutual Life Insurance Company
Members of the Board:
This opinion is furnished in connection with this Post Effective Amendment to
the Registration Statement on Form S-6 by John Hancock Mutual Life Insurance
Company (JHMLICO) under the Securities Act of 1933, as amended, with respect to
the scheduled premium variable life insurance policy under which amounts will be
allocated by JHMLICO to one or more of the subaccounts of John Hancock Mutual
Life Insurance Account UV ("Account"). The scheduled premium policy is described
in the prospectus included in the amended Registration Statement.
The policy form was prepared under my direction, and I am familiar with the
Registration Statement and exhibits thereto. In my opinion:
1. Except to the extent that exemptive relief is applicable, the "sales load",
as defined in paragraph (c) (4) of Rule 6(e)-2 under the Investment Company
Act of 1940, shall not exceed 9 per centum of the payments to be made
thereon during the period equal to the lesser of 20 years or the anticipated
life expectancy of the insured named in the policy based on the 1980
Commissioners Standard Ordinary Mortality Tables. Such sales load during the
first two policy years will not exceed 30 per centum of payments made for the
first policy year plus 10 per centum of payments made for the second policy
year.
2. Except to the extent that exemptive relief is applicable, the proportionate
amount of sales load deducted from any payment during the policy period shall
not exceed the proportionate amount deducted from any prior payment during
the policy period.
<PAGE>
-2-
3. The illustrations of death benefit, surrender value, and accumulated premiums
shown in the appendix of the scheduled premium prospectus included in the
Registration Statement, based on the assumptions stated in the illustrations,
are consistent with the provisions of the policy. The rate structure of the
policies has not been designed so as to make the relationship between
premiums and benefits, as shown in the illustrations, appear more favorable
to a prospective purchaser of a policy for a standard risk nonsmoker male age
25 or a standard risk nonsmoker male age 40, than to prospective purchasers
of policies for a male at other ages or in another risk classification or for
a female.
4. The table of illustrative premium rates in the prospectus contains the
premium rates to be charged by JHMLICO for a male insured under the Level or
Modified Premium Schedule with the Sum Insured at Issue and issue ages shown
in the table.
5. The illustration of insurance coverage provided for the options on lapse in
the prospectus, based on the assumptions stated in the illustrations, is
consistent with the provisions of the policy.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name relating to actuarial matters under the
heading "Experts" in the prospectus contained in the Registration Statement.
/s/Randi M. Sterrn
-----------------
Randi M. Sterrn, FSA
Senior Associate Actuary
<PAGE>
EXHIBIT 7
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Prospectus and to the use of our reports dated February 9, 1996, with respect to
the financial statements of John Hancock Mutual Variable Life Insurance Account
UV and dated February 7, 1996 with respect to the financial statements of John
Hancock Mutual Life Insurance Company, included in this Post-Effective Amendment
No. 3 to the Registration Statement (Form S-6, No. 33-63842).
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Boston, Massachusetts
March 4, 1996
FCC0149.DOC
<PAGE>
EXHIBIT 8
June, 1993 (as amended January, 1994)
Description of JHMLICO's and JHVLICO's Issuance,
Transfer and Redemption Procedures for Policies
Pursuant to Rule 6e-2(b) (12) (ii)
and
Method of Effecting Conversion to Fixed Benefit Policies
Pursuant to Rule 6e-2(b) (13) (v) (B).
--------------------------------------
Set forth below is the information called for under Rule 6e-2(b) (12)
(ii) and Rule 6e-2(b) (13) (v) (B) under the Investment Company Act
1940 ("1940 Act") regarding certain procedures under John Hancock
Mutual Life Insurance Company's ("JHMLICO") and John Hancock Variable
Life Insurance Company's ("JHVLICO") Scheduled Premium Variable Life
Insurance Policies (hereinafter referred to individually as the
"Policy" and collectively as the "Policies").
Rule 6e-2(b) (12) (ii) provides an exemption for a variable life
insurance separate account, its sponsoring insurance company, its
investment adviser and its principal underwriter from Sections 22(d),
22(e) and 27(c) (1) of the 1940 Act and Rule 22c-1 thereunder for
issuance, transfer and redemption procedures under a variable life
insurance Policy to the extent necessary to assure compliance with
Rule 6e-2, state insurance law or established administrative
procedures of the life insurance company. The Rule requires, as a
condition for exemption, that such procedures be reasonable, fair and
nondiscriminatory, and be disclosed in the registration statement
filed with respect to such variable life insurance policies.
JHMLICO and JHVLICO represent that their procedures meet the foregoing
standards of Rule 6e-2(b) (12) (ii), based on the following facts and
circumstances:
1. Because of the insurance nature of the Policies and, in certain
instances, as a result of the requirements of the state insurance
laws, the procedures necessarily differ in significant respects from
the procedures for mutual funds and contractual plans for which the
1940 Act was designed.
<PAGE>
-2-
2. Many of the procedures have been adapted from those established and
utilized in connection with the administration of JHMLICO's fixed
benefit life insurance policies and earlier versions of variable life
insurance policies issued by its subsidiary, JHVLICO.
3. Certain procedures, including the 24-month conversion right to
fixed benefit policies, are required by Rule 6e-2.
4. JHMLICO and JHVLICO, in structuring their procedures to comply with
Rule 6e-2, state insurance laws, and their established administrative
procedures, have attempted to meet the intent of the 1940 Act to the
extent deemed feasible.
5. Generally speaking, the state insurance laws to which both JHMLICO
and JHVLICO are subject reflect the fundamental principle that the
procedures shall not be unfair, unreasonable or unjustly
discriminatory to any policyholder.
6. Because of the intricate insurance methodology underlying the
procedures, it is often difficult to determine, with certainty,
whether and to what extent a particular procedure, or a given step to
that procedure, deviates from a specific requirement of Section 22(d),
22(e) or 27(c) (1) of the 1940 Act or Rule 22c-1 thereunder.
Accordingly, the summary below includes the principal Policy
provisions and procedures that might be deemed to constitute, either
directly or indirectly, accommodation of the 1940 Act requirements and
insurance practices. Given the complexities of the Policies'
operations, the summary, although comprehensive, does not attempt to
treat each and every mechanical variation or permutation that might
occur and does not repeat every provision or procedure that is already
set forth in the registration statement or exhibits thereto. At the
same time, the summary, in order to provide a comprehensive view of
the procedures, includes certain procedural steps that do not
constitute a deviation from the Sections and Rule cited above.
Rule 6e-2(b) (13) (v) (B) grants an exemption for a variable life
insurance separate account, its sponsoring insurance company, its
investment adviser and its principal underwriter from Section 27(d) of
the 1940 Act for variable life insurance policies which allow the
policyholder to convert a variable life insurance policy into a fixed
benefit life insurance policy at any time during the first 24 months
after
<PAGE>
issuance. The Rule requires, as a condition for exemption, that
the method of computing any adjustments made in payments or cash
values to reflect variances between the payments and
-3-
cash values under the original policy and new policy be set out in an
exhibit to the registration statement filed with respect to the
variable life insurance Policy. JHMLICO's and JHVLICO's Policies
provide for such a conversion privilege. No adjustments in payments
and cash values are made upon exercise of that privilege, as described
below.
This memorandum divides the information called for by Rules 6e-2(b)
(12) (ii) and 6e-2(b) (13) (v) (B) into three parts. The first part
summarizes procedures under the policies which might be deemed to
involve, either directly or indirectly, a "redemption" within the
meaning of the 1940 Act. The second part summarizes procedures which
might be deemed to involve, either directly or indirectly, a
"purchase" transaction. The third part summarizes the procedures for
converting a Policy to a fixed benefit Policy.*/
-
Except as otherwise defined herein, capitalized terms used in this
memorandum have the same meaning as are defined in the prospectus
contained in the applicable registration statement.
_____________________
*/ If an Owner requests a "purchase" or "redemption" transaction which
-
is impossible (for example, allocation of a
<PAGE>
loan or partial surrender to subaccounts which have insufficient
assets to support said allocation) or impermissible (such as a
reduction in the Basic Death Benefit below the minimum required
amount), JHMLICO will notify the Policy Owner to determine what
action, if any, the Policy Owner wishes to take instead. This exhibit
refers to procedures as they affect the respective variable accounts
of JHMLICO and JHVLICO ("the Account") used in funding the Policies.
Except as otherwise stated herein, these procedures do not necessarily
reflect the Fixed Account under the Policies which is held in the
General Account of each insurer. Whenever reference is made herein to
JHMLICO it should also be read as JHVLICO, insofar as JHVLICO and its
Account are concerned, each insurer having adopted identical
procedures.
-4-
I. "Redemption" Procedures:
Surrender and Related Transactions
----------------------------------
JHMLICO's Policies provide for the payment of monies to a policyholder
("Owner") or beneficiary upon presentation to JHMLICO of a Policy.
Such presentation might be deemed to constitute, either directly or
indirectly, a "redemption" of the Owner's interest within the meaning
of the 1940 Act. Set forth below is a summary of the principal policy
provisions and procedures which might be viewed as involving such a
"redemption". The principal difference between such "redemptions" and
redemptions it the mutual fund or contractual plan context is that
under the Policies, the payee may be deemed not to receive a pro rata
or proportionate share of the assets in JHMLICO's account within the
meaning of the 1940 Act. The amount received by the payee will depend
upon the particular benefit for which the Policy is presented,
including, for example the Surrender Value or Death Benefit.
There are also certain Policy provisions -- such as options on lapse -
- under which the Policy will not be presented to JHMLICO but which
will affect the Owner's benefits and involve a transfer of the assets
supporting the Policy reserve out of the Account. Finally, state
insurance law may require that certain requirements be met before
JHMLICO is permitted to make payments to the payee.
A. SURRENDER VALUES
----------------
If the insured party under a Policy ("Insured") is alive, JHMLICO will
pay, within seven days, the Surrender Value next computed after
receipt, at its Home Office, of the Policy and a signed request for
surrender. Computations with respect to the investment experience of
the subaccounts will be made as
<PAGE>
of 4:00 p.m., New York City time, on each day during which the New
York Stock Exchange is open for trading and on which the fund values
its shares. This will enable JHMLICO to pay the Surrender Value based
on the next computed value after a request is received. While no
premium is in default, the Surrender Value is equal to the Account
Value less any indebtedness, less any Contingent Deferred Sales
Charges and less any Administrative Surrender Charge. In general, the
Account Value for any day equals the Policy Account Value for the
previous day, increased by any net premium and decreased by any
charges against the Account Value, accumulated at the subaccount's
rate of return after charges against the Account. The Contingent
Deferred Sales Charge is deducted from the Policy Account Value upon
surrender of the Policy during the first thirteen Policy years after
issue. (It is deducted for fewer than thirteen years at certain issue
ages).
The amount of this charge is calculated on the basis of the premium
under the Modified Schedule for the issue age of the Policy. Lower
percentages apply at higher issue ages. The total charge for sales
load, including the Contingent Deferred Sales Charge, over the lesser
of 20 years or the life expectancy of the insured, will not exceed 9%
of the Basic Premium at issue over that period. No minimum amount of
Policy Account Value is guaranteed. JHMLICO will make the payment of
the Surrender Value out of its General Account and
-5-
transfer assets from the Account to the General Account for the
amounts held for the Policy in the Account.
The Administrative Surrender Charge is deducted from a Policy's
Account Value upon its surrender or lapse in the first nine Policy
years after issue. The amount of this charge is determined as an
amount per thousand of Guaranteed Death Benefit. Currently the charge
is waived for a Policy with more than $250,000 of Guaranteed Death
Benefit at the time of surrender or lapse and is reduced for all other
Policies.
In lieu of payment of the Surrender Value upon surrender of a Policy
in a single sum, an election may be made to apply all or a portion of
the proceeds under one of the benefit settlement options described in
the Policy or, with the approval of JHMLICO, under other optional
methods of settlement available from JHMLICO. The election may be
made by the Owner during the Insured's lifetime, or, if no election is
in effect at death, by the beneficiary. The benefit settlement
options are subject to the restrictions and limitations set forth in
the Policy.
B. PARTIAL SURRENDER
-----------------
A Policy may be partially surrendered in accordance with Rule 6e-2(b)
(12) (ii). The Policy after the Partial Surrender
<PAGE>
must have aninitial Sum Insured at least as great as the minimum issue
size for that type or Policy.
When a Policy is partially surrendered, there is a proportionate
reduction in Death Benefit, Account Value, Surrender Value, Contingent
Deferred Sales Charge, Administrative Surrender Charge, Required
Premium Target, Loans, Rider/Rating Premium, and Basic Premium.
If there is an outstanding Policy loan on the Policy, the outstanding
indebtedness after the Partial Surrender can not exceed the then
current available Loan Value.
Partial Surrenders will be effected as of the end of the Valuation
Period in which all materials necessary to complete the Partial
Surrender (including a written request in proper form and the Policy)
are received at JHMLICO's Home Office. Similar to the surrender
transaction, JHMLICO will pay, within seven days, the resulting
Surrender Value computed.
-6-
C. DEATH CLAIMS
------------
JHMLICO will pay a death benefit to the beneficiary within seven days
after receipt at its Home Office of due proof of death of the Insured,
and all other requirements necessary 1/ to make payment. Provided the
-
Policy is in full force, 2/ the Death Benefit will be the greater of
-
(1) the Guaranteed Death Benefit (and Excess Value, if any, under the
variable death benefit option) plus all premiums received after the
last processing date prior to the Insured's date of death less any
indebtedness on the date of death, and (2) the Account Value at the
end of the Valuation Period in which death occurs multiplied by the
applicable Death Benefit Factor or Corridor Factor, as applicable,
less any indebtedness on the date of death. The Death Benefit is also
less any premium in default if death occurs during the 61 day grace
period. The Guaranteed Death Benefit is equal to the Basic Death
Benefit.
<PAGE>
The proceeds payable on death also reflect interest from the date of
death to the date of payment.
JHMLICO will make payment of the Death Benefit out of its General
Account, and will transfer assets from the Account to the General
Account in an amount equal to the amount held in the Account for the
Policy terminated by death. The excess of the Guaranteed Death
Benefit over the Current Death Benefit, if any, will be paid out of a
General Account reserve maintained for that purpose.
In lieu of payment of the Death Benefit in a single sum, a settlement
option may be selected as described in Section I.A, above.
- ---------------
1/State insurance laws impose various requirements, such as receipt of
-
a tax waiver before payment of the Death Benefit may be made. In
addition, payment of the Death Benefit is subject to the provisions of
the Policy regarding suicide and incontestability.
2/"In full force", means that the insurance under the Policy is being
-
continued for the greater of the Guaranteed Death Benefit and the
Current Death Benefit, and that no unpaid premium is more than 61 days
overdue.
-7-
D. DEFAULT AND OPTIONS ON LAPSE
----------------------------
On each applicable processing date, JHMLICO compares the Cumulative
Premium Balance under a Policy on the immediately preceding Valuation
Date with the Required Premium Target on such Valuation Date. If the
Cumulative Premium Balance is then less than the Required Premium
Target for the Policy, the Policy can be in default on that Processing
Date. The premium requirement will also be deemed satisfied on the
last Valuation Date of any Policy month if adequate Excess Value
(defined below) is available on the scheduled due date. If both of
the tests fail, the Policy is in default. The
<PAGE>
difference between the Cumulative Premium Balance and the Required
Premium Target is the amount in default.
The Policy provides that any amount in default may be paid within a
61-day grace period after the date of default. Written notice will be
furnished to the Owner at his or her last known address, at least 61
days prior to the end of the grace period, specifying the minimum
amount which must be paid to continue the Policy in force on a premium
paying basis after the end of the grace period. If a payment at least
equal to the amount in default is not received by the end of the grace
period the Policy will lapse. If payment by the Owner of an amount in
default is received prior to the end of the grace period, the Policy
will no longer be in default. The portion of the payment equal to the
amount in default will be processed as if it had been received on the
processing date of the Cumulative Premium Test; any excess payment
will be processed as of the date of receipt.
The insurance continues in full force during the grace period but, if
the insured dies during the grace period, the amount in default will
be deducted from the amount of Death Benefit otherwise payable.
If a Policy lapses, the Surrender Value under the Policy on the date
of lapse is applied under one of the following options for continued
insurance not requiring further payment of premiums. These options
provide for Variable or Fixed paid-Up Insurance or Fixed Extended Term
Insurance on the life of the insured commencing on the date of lapse.
Both the Variable and Fixed Paid-Up Insurance options provide an
amount of paid-up whole life insurance determined in accordance with
the Policy which the Surrender Value will purchase. The amount of
Variable Paid-Up Insurance may then increase or decrease, subject to
any guarantee, in accordance with the investment experience of the
subaccount. The Fixed Extended Term Insurance option provides a fixed
amount of insurance determined in accordance with the Policy, with the
insurance coverage continuing for as long a period as the available
Policy values will purchase.
If no option has been elected before the end of the grace period, the
Fixed Extended Term insurance option automatically applies unless the
amount of Fixed Paid-Up Insurance would equal or exceed the amount of
Fixed Extended Term Insurance or unless the insured is a substandard
risk, in either of which cases Fixed Paid-Up Insurance is provided.
-8-
The Variable Paid-Up Insurance option is not available unless the
initial amount of Variable Paid-Up Insurance is at least $5000.
<PAGE>
A Policy continued under any option may be surrendered for its
Surrender Value while the insured is living. Loans may be available
under the Variable and Fixed Paid-Up Insurance options.
E. POLICY LOAN
-----------
Loans may be made at any time a Loan Value is available after the
first Policy year. The Owner may borrow money on completion of a form
satisfactory to JHMLICO assigning the Policy as the only security for
the loan. Payment of the loan will be made from JHMLICO's Home
Office. The Loan Value will be 75% of the Surrender Value in Policy
years two and three and 90% of the Surrender Value in later Policy
years. Interest accrues and is compounded daily at an effective
annual rate determined by John Hancock at the start of each Policy
year. This interest rate will not exceed the greater of (1) the
"Published Monthly Average" (defined below) for the calendar month
ending 2 months before the calendar month of the Policy anniversary or
(2)5%. The "Published Monthly Average" means Moody's Corporate Bond
Yield Average-Monthly Average Corporate, as published by Moody's
Investors Service, Inc., or if the average is no longer published, a
substantially similar average established by the insurance regulator
where the Policy is issued.
The amount of any outstanding loan plus accrued interest is called the
"indebtedness". Except when used to pay premiums, a loan will not be
permitted unless its is at least $300. The Owner may repay all or a
portion of any indebtedness while the insured is living and premiums
are being duly paid. When a loan is made, shares are redeemed in an
aggregate equal to the amount of the loan and this aggregate value is
allocated to the Loan Account. The shares redeemed will be redeemed
in each subaccount in the same proportion as the Account Value is then
allocated among the subaccounts. Upon each loan repayment, the same
proportionate amount of the entire loan as was borrowed from the Fixed
Account will be repaid to the Fixed Account. The remainder of the
loan repayment will be allocated to the appropriate subaccounts as
stipulated in the current Investment Rule.
Loan interest which is not paid by a Policy anniversary will be added
to the loan principal by automatically effecting an additional Policy
loan. Amounts transferred to the Policy loan account are credited
with interest at 1% less than the loan interest rate per annum for the
first 20 Policy years and .50% less than the loan interest rate per
annum in years 21 and beyond, which interest is transferred to the
subaccount when the loan is repaid, according to the Investment Rule
then in affect.
A loan does not directly affect the amount of the Required Premium.
While the indebtedness is outstanding, that portion of the Account
Value that is in the Loan Account is credited with interest at a rate
of 1% less than the loan rate for the first 20 Policy years and .50%
less than the loan rate in years 21 and later, a rate which will
usually be different
<PAGE>
-9-
than the net return for the subaccounts. Since the Loan Account and
the remaining portion of the Account Value will generally have
different rates of investment return, any Death Benefit above the
Guaranteed Death Benefit, the Account Value, and the Surrender Value
are permanently affected by any indebtedness, whether or not repaid in
whole or in part. The amount of any outstanding indebtedness is
subtracted from the amount otherwise payable when the Policy proceeds
become payable.
Whenever the indebtedness equals or exceeds the Surrender Value, the
Policy terminates 31 days after notice has been mailed by JHMLICO to
the Owner and any assignee of record at their last known addresses,
unless a repayment of the excess indebtedness is made within that
period.
F. TRANSFERS AMONG VARIABLE SUBACCOUNTS
------------------------------------
The Owner may reallocate the amounts held for the Policy in the
variable subaccounts in each Policy year without charge. The Owner may
use either percentages (in whole numbers) or designate the dollar
amount of funds to be transferred between subaccounts. The
reallocation must be such that the total in the subaccounts after
reallocation equals 100%. The change will be effective at the end of
the Valuation Period in which JHMLICO receives at its Home Office
notice satisfactory to JHMLICO.
G. CONVERSION PRIVILEGE
--------------------
The conversion privilege provided in a accordance with Rule 6e-2(b)
(13) (v) (B) under the 1940 Act is discussed under III. below.
H. PARTIAL WITHDRAWAL OF EXCESS VALUE
----------------------------------
An Owner may withdraw Excess Value from the Policy on or after the
first Policy anniversary. This privilege, which reduces the Account
Value by the amount of the withdrawal and the associated charge, may
be exercised only once in a Policy year and will be effective as of
the end of the Valuation Period in which JHMLICO receives written
notice satisfactory to it at its Home Office. The minimum amount that
may be withdrawn is $500. Unless the Current Death Benefit exceeds
the Guaranteed Death Benefit, a partial withdrawal will not affect the
Death Benefit Payable. An amount equal to $25 is charged against
Account Value for each partial withdrawal. When a withdrawal of
Excess Value is made, the Premium Component, if any, is treated as
having been withdrawn first. Amounts withdrawn from the Premium
Component reduce the cumulative premium balance.
II. PURCHASE AND RELATED TRANSACTIONS
--------------------------------------
Set out below is a summary of the principal provisions of the Policies
and administrative procedures thereunder that might
<PAGE>
be deemed to constitute, either directly or indirectly, a "purchase"
transaction within the meaning of the 1940 Act. The summary shows
that, because of the insurance nature of the Policies, the procedures
involved necessarily differ in certain significant respects form the
purchase procedures for mutual funds and contractual plans. The chief
differences
-10-
revolve around the premium rate structure and the insurance
underwriting (i.e., evaluation of risk) process. There are also
certain Policy provisions -- such as reinstatement -- which do not
result in the issuance of a Policy but which required certain payments
by the Owner and involve a transfer of assets supporting the Policy
reserve into the Account.
A. PREMIUM SCHEDULES AND UNDERWRITING STANDARDS
--------------------------------------------
Premiums for JHMLICO's Policies will not be the same for all Owners.
The chief reason is that the principle of pooling and distribution of
mortality risks is based upon the assumption that each Owner pays a
premium commensurate with the Insured's mortality risk which is
actuarially determined based upon factors such as age, sex, smoking
status, health and occupation. In the context of life insurance as
contrasted with mutual funds, a uniform premium (or "public offering
price") for all Insured's would discriminate unfairly in favor of
those Insured's representing greater mortality risks to the
disadvantage of those representing lesser risks. Accordingly,
although there will be no uniform "Public offering price" for all
Insured's, there will be a single "price" for all Insured's in a given
actuarial category.
The Policies will be offered and sold pursuant to established premium
schedules 3/ and underwriting standards and in accordance with state
-
insurance laws. Such laws prohibit unfair discrimination among
Policyholders, but recognize that premiums may be based upon factors
such as age, sex, smoking status, health, and occupation. In a few
states, the premiums and values under the Policies will not directly
reflect the sex of the insured.
- ----------------
3/In accordance with industry practice, JHMLICO will establish
-
procedures to handle errors in initial and subsequent premium payments
to collect underpayments, except for de minimis amounts.
<PAGE>
-11
B. APPLICATION AND INITIAL PREMIUM PROCESSING
------------------------------------------
Upon receipt of a completed application from a proposed Owner, JHMLICO
will follow certain insurance underwriting (i.e., evaluation of risk)
procedures designed to determine whether the proposed Insured is
insurable. This process may involve such verification procedures as
medical examinations and may require that further information be
provided by the proposed Insured before a determination can be made.
A Policy cannot be issued, i.e., physically issued through JHMLICO's
computerized issue system until this underwriting procedure has been
completed.
The date on which a Policy is issued is referred to as the "date of
Issue". The date of issue coincides with the beginning of a Valuation
Period. It represents the commencement of the suicide and contestable
periods for purposes of the Policies. It is also the date as of which
the insurance age of the proposed Insured is determined. It
represents the first day of the Policy year and therefore determines
the Policy anniversary. It also marks the commencement of the
variability of benefits.
These processing procedures are designed to provide immediate benefits
to the proposed Owner in connection with payment of the initial
premium and will not dilute any benefit payable to an existing Owner.
Although a Policy cannot be issued until after the underwriting
process has been completed, the proposed Insured will receive
immediate insurance coverage, if he has paid his minimum first
premium, subject to the other terms and conditions of JHMLICO's
Receipt and Conditional Temporary Insurance Agreement. If the minimum
first premium is paid with the application and the Policy is issued as
applied for, the date of issue in general will be the last of the Part
A date or the Part B date of the application or the date of most
recent evidence of insurability, so that variability of benefits will
commence as of that date. If the minimum first premium is not paid
with the application, the date of issue will be the actual date the
application is processed for issue or the next valid issue date
provided the Owner pays the necessary premium. Except as referred to
above, no coverage will take effect with respect to a Policy until the
minimum first premium has been paid and the Policy is delivered to the
Owner while the insured is living and has not consulted, been
examined, or treated by a doctor since the latest Part B of the
application was completed. If coverage under a Policy never goes into
effect, any premium paid will be returned without interest.
JHMLICO will require that the Policy be delivered and the minimum
initial premium paid within a specific period to protect itself
against anti-selection by the proposed Owner resulting from
deterioration in the Insured's health. Generally, the period will not
exceed 60 days from the date
<PAGE>
of completion of the latest of Parts A and B of the application and
any required medical examination.
JHMLICO will transfer the appropriate amount from its general account
to the Account on the date the Policy is approved. The appropriate
amount will be calculated as though the net premium had in fact been
transferred from the General Account to the Account commencing on the
date the Policy is issued.
-12-
C. PREMIUM RECALCULATION
---------------------
The premium Recalculation applicable to any Policy on a Modified
Schedule may be elected by the Owner at any time up to the Policy
anniversary nearest the Insured's 70th birthday, or, if later, the
tenth Policy Anniversary. If elected, the Premium Recalculation will
be effected on the Policy anniversary next following receipt by
JHMLICO at its Home office of satisfactory written notice. If not
elected sooner, the Premium Recalculation will be effected by JHMLICO
on the Policy anniversary nearest the Insured's 70th birthday, or, if
later, the tenth Policy Anniversary.
The new Basic Premium resulting from a Premium Recalculation may be
less than, equal to or greater than the original Basic Premium but it
will never exceed the Guaranteed Maximum Recalculation Premium for the
attained age shown in the Policy. The new Basic Premium depends on
the Insured's sex, smoking status and age, the Guaranteed Death
Benefit under the Policy and the Account Value on the Valuation Date
immediately preceding the date of the premium Recalculation.
D. REINSTATEMENT PROVISION
-----------------------
The Policy may be reinstated within 3 years after the beginning of the
grace period unless the Surrender Value has been paid or otherwise
exhausted, or the period of any extended term insurance has expired.
A Policy will be reinstated upon receipt by JHMLICO of a written
application for reinstatement and production of evidence of
insurability satisfactory to JHMLICO and payment of an amount equal to
the sum of (a) and (b), each accumulated at an effective annual rate
of 6% to the date of reinstatement, where:
(a) is the difference between the Required Premium Target and the
Cumulative Premium Balance at the date of lapse, and
(b) is all Required Annual Premiums for the period between the date of
lapse and the date of reinstatement.
On the date of reinstatement the Policy will have (i) a Sum Insured as
if no lapse had occurred and (ii) indebtedness equal to any
indebtedness at the end of the day immediately preceding the date of
reinstatement.
The Account Value on the date of reinstatement will be the sum of (a)
through (c) less (d) through (f) where:
<PAGE>
(a) is the Surrender Value of the nonforfeiture option in effect on
the date of reinstatement plus any indebtedness on the date of
reinstatement;
(b) is the amount in Premium Payment above;
(c) is the deferred sales charge and administrative surrender charge
adjustment (as defined below);
(d) is the aggregate premium expense charges, i.e. sales charge,
premium tax charge and Federal DAC tax charge; and
-13-
(e) is the sum of all Maintenance Charges and charges for Riders and
ratings, if any, that would have been made from the date of lapse to
the date of reinstatement if the Policy had not lapsed, with interest
an effective annual rate of 6% to the date of reinstatement.
The deferred sales charge adjustment is the smaller of (a) and (b)
where:
(a) is the deferred sales charge and administrative surrender charge
applicable if the Policy were surrendered immediately after
reinstatement; and
(b) is the deferred sales charge and administrative surrender charge
made on the date of lapse.
In order to assist a lapsed Owner in making a considered judgment as
to whether to reinstate, JHMLICO may calculate the amount payable upon
reinstatement and "freeze" the amount for up to ten days.
F. REPAYMENT OF LOAN
-----------------
The Owner may repay all or a portion of any indebtedness while the
insured is living and premiums are duly paid. When a loan is made,
shares are redeemed in an aggregate value equal to the amount of the
loan and this aggregate value is transferred to the general account
and carried as a Loan Account. The shares redeemed will be redeemed
in each subaccount in the same proportion as the Account Value is then
allocated among the subaccounts. Upon each loan repayment, the same
proportionate amount of the entire loan as was borrowed from the Fixed
Account will be repaid to the Fixed Account. The remainder of the
loan repayment will be allocated to the appropriate subaccounts as
stipulated in the current Investment Rule.
While the indebtedness is outstanding, that portion of the Account
Value that is in the Loan Account is credited with interest at a rate
of at 1% less than the loan rate in the first 20 Policy years and .50%
less than the loan rate in
<PAGE>
years 21 and beyond, a rate which will usually be different than the
net return for the subaccounts. Since the Loan Account and the
remaining portion of the Account Value will generally have different
rates of investment return, any Death Benefit above the Guaranteed
Death Benefit, the Account Value, and the Surrender Value are
permanently affected by any indebtedness, whether or not repaid in
whole or in part. The amount of any outstanding indebtedness is
subtracted from the amount otherwise payable when the Policy proceeds
become payable.
G. CORRECTION OF MISSTATEMENT OF AGE OR SEX
----------------------------------------
If JHMLICO discovers that the age or sex of the Insured has been
misstated, JHMLICO will reconstruct the Policy by determining what
benefits the premium paid would have purchased at the correct age or
sex. Special adjustments may have to be made if the resultant face
amount is below JHMLICO's minimum size Policy.
-14-
Once the benefits are redetermined, JHMLICO will make the necessary
adjustment in the reserve assets in the Account to reflect the
redetermined benefits and the correct age and sex of the Insured.
III. CONVERSION OF POLICY
--------------------
JHMLICO's Policies, in accordance with Rule 6e-2(b) (v) (b) under the
1940 Act, provide that the Owner within 24 months of issue, or any
time after thereafter, may transfer the entire Account Value under the
Policy to the Fixed Account thus creating a non-variable or fixed
benefit life insurance Policy. This conversion privilege is designed
to permit an Owner to change his or her mind and to obtain a fixed
benefit Policy.
FCC0146.DOC
<PAGE>
Exhibit 9
John Hancock Variable Annuity and Variable Life Insurance Accounts
------------------------------------------------------------------
POWER OF ATTORNEY
The undersigned member of the Board of Directors of John Hancock Mutual
Life Insurance Company does hereby constitute and appoint Stephen L. Brown,
Foster L. Aborn, William L. Boyan, Richard S. Scipione and Bruce E. Skrine, and
each of them individually, with full power of substitution, his or her true and
lawful attorneys and agents to execute, in the name of, and on behalf of, the
undersigned as a member of said Board of Directors, the Registration Statements
under the Securities Act of 1933 and the Investment Company Act of 1940, and
each amendment to the Registration Statements, to be filed for John Hancock
Variable Annuity Account U, John Hancock Mutual Variable Life Insurance Account
UV and any other variable annuity or variable life insurance account of John
Hancock Mutual Life Insurance Company with the Securities and Exchange
Commission and to take any and all action and to execute in the name of, and on
behalf of, the undersigned as a member of said Board of Directors or otherwise
any and all instruments, including applications for exemptions from such Acts,
which said attorneys and agents deem necessary or advisable to enable any
variable annuity or variable life insurance account of John Hancock Mutual Life
Insurance Company to comply with the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and the rules, regulations and
requirements of the Securities and Exchange Commission in respect thereof; and
the undersigned hereby ratifies and confirms as his or her own act and deed all
that each of said attorneys and agents shall do or cause to have done by virtue
hereof. Each of said attorneys and agents shall have, and may exercise, all of
the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand on
the date shown.
<TABLE>
<CAPTION>
Date Director Date Director
<S> <C> <C> <C>
May 10, 1993 s/Stephen L. Brown May 10, 1993 s/Nelson S. Gifford
May 10, 1993 s/William L. Boyan May 10, 1993 s/Delbert C. Staley
May 10, 1993 s/Foster L. Aborn May 10, 1993 s/I. McAllister Booth
May 10, 1993 s/Thomas L. Phillips May 10, 1993 s/Robert E. Fast
May 10, 1993 s/Samuel W. Bodman May 10, 1993 s/E. James Morton
May 10, 1993 s/John M. Connors, Jr. May 10, 1993 s/John F. Magee
May 10, 1993 s/Joan T. Bok July 9, 1993 s/Lawrence K. Fish
May 11, 1993 s/David F. D'Alessandro September 3, 1993 s/Kathleen F. Feldstein
May 10, 1993 s/Randolph W. Bromery March 1, 1995 s/Richard E. Syron
May 10, 1993 s/Vincent Vappi September 30, 1995 s/Michael C. Hawley
</TABLE>
FCC0144.DOC
<PAGE>
EXHIBIT 10
February 29, 1996
United States Securities
and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
This opinion is being furnished with respect to the filing of this post-
effective amendment of the Registrant's Registration Statement with the
Securities and Exchange Commission as required by Rule 485 under the Securities
Act of 1933.
We have acted as counsel to Registrant for the purpose of preparing this
post-effective amendment which is being filed pursuant to paragraph (b) of Rule
485 and hereby represent to the Commission that in our opinion this post-
effective amendment does not contain disclosures which would render it
ineligible to become effective pursuant to paragraph (b).
We hereby consent to the filing of this opinion with and as a part of this
post-effective amendment to Registrant's Registration Statement with the
Commission.
Very truly yours,
/s/ Francis C. Cleary Jr.
Francis C. Cleary, Jr.
Vice President and Counsel
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> SELECT STOCK SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 8,537,452
<INVESTMENTS-AT-VALUE> 9,312,773
<RECEIVABLES> 1,038,921
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 10,351,694
<PAYABLE-FOR-SECURITIES> 1,763
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 488
<TOTAL-LIABILITIES> 2,251
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 10,349,443
<DIVIDEND-INCOME> 754,115
<INTEREST-INCOME> 67,279
<OTHER-INCOME> 0
<EXPENSES-NET> 48,056
<NET-INVESTMENT-INCOME> 773,338
<REALIZED-GAINS-CURRENT> 23,090
<APPREC-INCREASE-CURRENT> 1,225,784
<NET-CHANGE-FROM-OPS> 2,022,212
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,998,468
<NUMBER-OF-SHARES-REDEEMED> 478,935
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,955,106
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 48,056
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> BONO SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 46,574,355
<INVESTMENTS-AT-VALUE> 46,330,265
<RECEIVABLES> 8,850,035
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 55,180,300
<PAYABLE-FOR-SECURITIES> 26,061
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,516
<TOTAL-LIABILITIES> 28,577
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 55,151,723
<DIVIDEND-INCOME> 3,504,747
<INTEREST-INCOME> 641,677
<OTHER-INCOME> 0
<EXPENSES-NET> 286,349
<NET-INVESTMENT-INCOME> 3,860,075
<REALIZED-GAINS-CURRENT> (127,733)
<APPREC-INCREASE-CURRENT> 4,205,161
<NET-CHANGE-FROM-OPS> 7,937,503
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,586,137
<NUMBER-OF-SHARES-REDEEMED> 2,116,423
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8,905,710
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 286,349
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> INTERNATIONAL SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2,858,238
<INVESTMENTS-AT-VALUE> 2,926,534
<RECEIVABLES> 164,633
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,091,167
<PAYABLE-FOR-SECURITIES> 8,290
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 143
<TOTAL-LIABILITIES> 8,433
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,082,734
<DIVIDEND-INCOME> 29,692
<INTEREST-INCOME> 9,853
<OTHER-INCOME> 0
<EXPENSES-NET> 15,495
<NET-INVESTMENT-INCOME> 24,050
<REALIZED-GAINS-CURRENT> 14,367
<APPREC-INCREASE-CURRENT> 164,490
<NET-CHANGE-FROM-OPS> 202,907
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 935,730
<NUMBER-OF-SHARES-REDEEMED> 401,257
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 741,731
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,495
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> MONEY MARKET SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 18,773,711
<INVESTMENTS-AT-VALUE> 18,732,426
<RECEIVABLES> 2,275,243
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,007,669
<PAYABLE-FOR-SECURITIES> 9,344
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,006
<TOTAL-LIABILITIES> 10,350
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 20,997,319
<DIVIDEND-INCOME> 810,091
<INTEREST-INCOME> 155,058
<OTHER-INCOME> 0
<EXPENSES-NET> 96,074
<NET-INVESTMENT-INCOME> 869,075
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 380,450
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,092,516
<NUMBER-OF-SHARES-REDEEMED> 1,587,249
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,660,929
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 96,074
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> REAL ESTATE EQUITY SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2,405,959
<INVESTMENTS-AT-VALUE> 2,450,601
<RECEIVABLES> 164,079
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,614,680
<PAYABLE-FOR-SECURITIES> 7,738
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 122
<TOTAL-LIABILITIES> 7,860
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,606,820
<DIVIDEND-INCOME> 153,495
<INTEREST-INCOME> 12,322
<OTHER-INCOME> 0
<EXPENSES-NET> 13,502
<NET-INVESTMENT-INCOME> 152,315
<REALIZED-GAINS-CURRENT> (39,490)
<APPREC-INCREASE-CURRENT> 155,992
<NET-CHANGE-FROM-OPS> 268,817
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 879,282
<NUMBER-OF-SHARES-REDEEMED> 404,509
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 527,519
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 13,502
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> SPECIAL OPPORTUNITIES SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 827,580
<INVESTMENTS-AT-VALUE> 952,172
<RECEIVABLES> 7,240
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 959,412
<PAYABLE-FOR-SECURITIES> 7,194
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46
<TOTAL-LIABILITIES> 7,240
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 952,172
<DIVIDEND-INCOME> 22,718
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 3,017
<NET-INVESTMENT-INCOME> 19,701
<REALIZED-GAINS-CURRENT> 9,743
<APPREC-INCREASE-CURRENT> 126,004
<NET-CHANGE-FROM-OPS> 155,448
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 698,554
<NUMBER-OF-SHARES-REDEEMED> 68,848
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 765,453
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,017
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> STOCK SUBACCOUNT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 103,629,530
<INVESTMENTS-AT-VALUE> 111,633,780
<RECEIVABLES> 19,888,364
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 131,522,144
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55,463
<TOTAL-LIABILITIES> 55,463
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 131,466,681
<DIVIDEND-INCOME> 10,687,455
<INTEREST-INCOME> 1,397,618
<OTHER-INCOME> 0
<EXPENSES-NET> 646,807
<NET-INVESTMENT-INCOME> 11,438,266
<REALIZED-GAINS-CURRENT> 85,385
<APPREC-INCREASE-CURRENT> 17,351,805
<NET-CHANGE-FROM-OPS> 28,875,456
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19,241,967
<NUMBER-OF-SHARES-REDEEMED> 3,915,114
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 34,735,452
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> MANAGED SUBACCOUNT
<S> <C>
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> SHORT-TERM U.S. GOVERNMENT SUBACCOUNT
<S> <C>
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