HANCOCK JOHN MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV, 485BPOS, 1998-05-01

HANCOCK JOHN MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
485BPOS, 1998-05-01

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<PAGE>

As filed with the Securities and Exchange Commission on April 29, 1998

Registration No. 33-76662
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM S-6
Post-Effective Amendment No. 5 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)

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

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

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

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

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

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

/ /immediately upon filing pursuant to paragraph (b) of Rule 485
--
/X/on May 1, 1998 pursuant to paragraph (b) of Rule 485
--
/ /60 days after filing pursuant to paragraph (a)(1) of Rule 485
--
/ /on (date) pursuant to paragraph (a)(1) of Rule 485
--

If appropriate check the following box

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

Pursuant to the provisions of Rule 24f-2, Registrant has registered an
indefinite amount of the securities being offered and filed its Notice for
fiscal year 1997 pursuant to Rule 24f-2 on February 26, 1998.
<PAGE>

CROSS-REFERENCE TABLE

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

1, 2 Cover, The Account and Series
Fund, and John Hancock

3 Inapplicable

4 Cover, Distribution of Policies

5,6 The Account and Series Fund,
State Regulation

7, 8, 9 Inapplicable

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

10(f) Voting Privileges

10(g),(h) Changes that John Hancock
Can Make

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

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

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

14, 15 Summary, Distribution of
Policies, Premiums

16 The Account and Series Fund

17 Summary, Policy
Provisions and Benefits

18 The Account and Series Fund,
Tax Considerations

19 Reports

20 Changes that John Hancock
Can Make

21 Policy Provisions and Benefits

22 Policy Provisions and Benefits
<PAGE>

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

45 Not Applicable

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

47 Not Applicable

48,49,50 Not Applicable

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

52 The Account and Series Fund,
Changes that John Hancock
Can Make

53,54,55 Not Applicable

56,57,58,59 Not Applicable

<PAGE>

[LOGO OF JOHN HANCOCK APPEARS HERE]

Mutual Life Insurance Company
(John Hancock)

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY JOHN HANCOCK MUTUAL VARIABLE
LIFE INSURANCE ACCOUNT UV

John Hancock Place Boston, Massachusetts 02117

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

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

PROSPECTUS MAY 1, 1998

The flexible 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
(the "Account"), by a fixed subaccount (the "Fixed Account"), or by any
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 investment portfolio ("Portfolio") of John
Hancock Variable Series Trust I (the "Fund"), a "series" type mutual fund
advised by John Hancock Mutual Life Insurance Company ("John Hancock"). The
assets of the Fixed Account will be invested in the general account of John
Hancock Mutual Life Insurance Company ("John Hancock").

The Prospectus for the Fund, which is attached to this Prospectus, describes
the investment objectives, policies and risks of investing in the Portfolios of
the Fund: Managed, Growth & Income, Equity Index, Large Cap Value, Large Cap
Growth, Mid Cap Value, Mid Cap Growth, Diversified Mid Cap Growth (formerly,
Special Opportunities), Real Estate Equity, Small/Mid Cap CORE, Small Cap Value,
Small Cap Growth, Global Equity, International Balanced, International Equity
Index (formerly, International Equities), International Opportunities, Emerging
Markets Equity, Short-Term Bond (formerly, Short-Term U.S. Government), Bond
Index, Sovereign Bond, Strategic Bond, High Yield Bond, and Money Market. (The
Small/Mid Cap CORE, Global Equity, Emerging Markets Equity, Bond Index, and High
Yield Bond Portfolios are not currently available to Owners but are expected to
be made available later in 1998.) Other variable Subaccounts and Portfolios may
be added in the future.

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

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

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
JOHN HANCOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
THE ACCOUNT AND SERIES FUND . . . . . . . . . . . . . . . . . . . . . 7
The Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Series Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
THE FIXED ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . 10
POLICY PROVISIONS AND BENEFITS . . . . . . . . . . . . . . . . . . . . 10
Requirements for Issuance of Policy . . . . . . . . . . . . . . . . 10
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Account Value and Surrender Value . . . . . . . . . . . . . . . . . 13
Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Transfers Among Subaccounts . . . . . . . . . . . . . . . . . . . . 15
Loan Provisions and Indebtedness . . . . . . . . . . . . . . . . . . 17
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . . 18
CHARGES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 19
Charges Deducted from Premiums . . . . . . . . . . . . . . . . . . . 19
Sales Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Administrative Surrender Charge . . . . . . . . . . . . . . . . . . 21
Reduced Charges for Eligible Groups . . . . . . . . . . . . . . . . 21
Charges Deducted from Account Value or Assets . . . . . . . . . . . 21
Guarantee of Premiums and Certain Charges . . . . . . . . . . . . . 23
DISTRIBUTION OF POLICIES . . . . . . . . . . . . . . . . . . . . . . . 24
TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Policy Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Charge for John Hancock's Taxes . . . . . . . . . . . . . . . . . . 26
Corporate and H.R. 10 Plans . . . . . . . . . . . . . . . . . . . . 26
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JOHN HANCOCK . . . . . . 27
REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
VOTING PRIVILEGES . . . . . . . . . . . . . . . . . . . . . . . . . . 28
CHANGES THAT JOHN HANCOCK CAN MAKE . . . . . . . . . . . . . . . . . . 29
STATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . 29
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 30
APPENDIX--OTHER POLICY PROVISIONS . . . . . . . . . . . . . . . . . . 72
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER
VALUES AND ACCUMULATED PREMIUMS . . . . . . . . . . . . . . . . . . . 74
</TABLE>

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

INDEX OF DEFINED WORDS AND PHRASES

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

<TABLE>
<CAPTION>
Page
<S> <C>
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Account Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Base Policy Target Premium . . . . . . . . . . . . . . . . . . . . . 18
DAC Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Fixed Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Front Cover
Guaranteed Death Benefit . . . . . . . . . . . . . . . . . . . . . . 10
Guaranteed Death Benefit Grace Period . . . . . . . . . . . . . . . . 10
Guaranteed Death Benefit Premium . . . . . . . . . . . . . . . . . . 10
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Investment Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Loan Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Minimum First Premium . . . . . . . . . . . . . . . . . . . . . . . . 10
Modal Processing Date . . . . . . . . . . . . . . . . . . . . . . . . 10
Planned Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Policy Anniversary . . . . . . . . . . . . . . . . . . . . . . . . . 58
Policy Grace Period . . . . . . . . . . . . . . . . . . . . . . . . . 10
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . Front Cover
Servicing Office . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . . Front Cover
Sum Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Surrender Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Target Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Valuation Period . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Variable Subaccounts . . . . . . . . . . . . . . . . . . . . . . . . 2
7-Pay Premium Limit . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
<PAGE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY OFFERED?

John Hancock issues variable life insurance policies. The Policies described
in this Prospectus are flexible premium policies. John Hancock issues other
variable life insurance policies. These other policies are offered by means of
other Prospectuses, but use the same 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 like fixed-benefit
life insurance in providing lifetime protection against economic loss resulting
from the death of the insured. The Policies are primarily insurance and not
investments.

The Policies work generally as follows. A premium payment is periodically made
to John Hancock. John Hancock takes from each premium an amount for taxes and,
from certain premiums, sales expenses. John Hancock then places the rest of the
premium into as many as ten Subaccounts as directed by the owner of the Policy
(the "Owner"). The assets allocated to each variable Subaccount are invested in
shares of the corresponding Portfolio of the Fund. The currently available
Portfolios are identified on the cover of this Prospectus. The assets allocated
to the Fixed Account are invested in the general account of 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 Policy provides for payment of death benefit proceeds when the insured
dies. The death benefit proceeds will equal the death benefit, plus any
additional benefit included by rider and then due, minus any Indebtedness. The
death benefit may be either level or variable as elected by the Owner. The level
death benefit provides a death benefit that generally remains fixed in amount
and an Account Value that varies daily. Two versions of the level death benefit
are available. The variable death benefit provides for a death benefit and
Account Value that may vary daily. The Policy also increases the death benefit
if necessary to ensure that the Policy will continue to qualify as life
insurance under the Federal tax laws.

The initial Account Value is the amount of the premium that John Hancock
credits to the Policy, after deduction of the initial charges. The Account Value
increases or decreases daily depending on the investment experience of the
Subaccounts to which the amounts are allocated at the direction of the Owner.
John Hancock does not guarantee a minimum amount of Account Value. The Owner
bears the investment risk for that portion of the Account Value allocated to the
variable Subaccounts. The Owner may surrender a Policy at any time while the
insured is living. The Surrender Value is the Account Value less the sum of any
Administrative Surrender Charge, any Contingent Deferred Sales Charge and any
Indebtedness. The Owner may also make partial withdrawals from a Policy, subject
to certain restrictions and an administrative charge. 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 Sum Insured at issue is $100,000. All persons insured must be
between ages 20 and 75 years at issue and meet certain health and other criteria
called "underwriting standards." An insured may be eligible for the "preferred"
class, which has the lowest insurance charges. The smoking status of the insured
is generally reflected in the insurance charges made. Policies issued 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.

1
<PAGE>

The Owner of a Policy issued on a standard or preferred underwriting basis may
be eligible for the Guaranteed Death Benefit feature if he or she satisfies
certain other underwriting standards relating to health and occupation. This
provision is applicable at no additional cost only in the first five Policy
years and cannot be extended. Under this provision, the Policy will be
guaranteed not to lapse during the first five Policy years, regardless of
adverse investment performance, if the Owner pays the Guaranteed Death Benefit
Premiums on a cumulative basis over that period.

WHAT IS THE AMOUNT OF THE PREMIUMS?

Premiums are flexible and the Owner may choose the amount and frequency of
premium payments.

The minimum amount of premium required at the time of Policy issue is three
months of Guaranteed Death Benefit Premium. One year's Guaranteed Death Benefit
Premium equals the "Target Premium" of a Policy. Unless the Guaranteed Death
Benefit is in effect, if the Account Value at the beginning of any Policy month
is insufficient to pay the monthly Policy charges then due, John Hancock will
estimate the amount of additional premiums necessary to keep the Policy in force
for three months. The Owner will have a 61 day grace period to pay at least that
amount or the Policy will lapse.

The Target Premium is equal to the annual Guaranteed Death Benefit Premium.
The Target Premium is the sum of Base Policy Target Premium, an amount set forth
in the Policy at issue, plus any rider premium.

At the time of Policy issue, the Owner may designate the amount and frequency
of Planned Premium payments. The Owner may pay premiums other than the Planned
Premium payments, subject to certain limitations.

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

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

2
<PAGE>

<TABLE>
<CAPTION>
Other
Fund
Other Fund Total Expenses
Expenses Fund Absent
Management After Expense Operating Expense
Fund Name Fee Reimbursement Expenses Reimbursement/*/
--------- ---------- ------------- --------- ----------------
<S> <C> <C> <C> <C>
Managed . . . . . . . 0.33% 0.04% 0.37% N/A
Growth & Income . . . 0.25% 0.03% 0.28% N/A
Equity Index. . . . . 0.15% 0.25% 0.40% 0.40%
Large Cap Value . . . 0.75% 0.25% 1.00% 0.31%
Large Cap Growth. . . 0.39% 0.05% 0.44% N/A
Mid Cap Value . . . . 0.80% 0.25% 1.05% 0.34%
Mid Cap Growth. . . . 0.85% 0.25% 1.10% 0.57%
Diversified Mid Cap
Growth . . . . . . . 0.75% 0.10% 0.85% N/A
Real Estate Equity. . 0.60% 0.09% 0.69% N/A
Small/Mid Cap CORE. . 0.80% 0.25% 1.05% N/A
Small Cap Value . . . 0.80% 0.25% 1.05% 0.50%
Small Cap Growth. . . 0.75% 0.25% 1.00% 0.37%
Global Equity . . . . 0.90% 0.25% 1.15% N/A
International Balanced 0.85% 0.25% 1.10% 0.71%
International Equity
Index. . . . . . . . 0.18% 0.19% 0.37% N/A
International
Opportunities. . . . 0.97% 0.25% 1.22% 0.60%
Emerging Markets
Equity . . . . . . . 1.30% 0.25% 1.55% N/A
Short-Term Bond . . . 0.30% 0.21% 0.51% N/A
Bond Index. . . . . . 0.15% 0.25% 0.40% N/A
Sovereign Bond. . . . 0.25% 0.06% 0.31% N/A
Strategic Bond. . . . 0.75% 0.25% 1.00% 0.57%
High Yield Bond . . . 0.65% 0.25% 0.90% N/A
Money Market. . . . . 0.25% 0.08% 0.33% N/A
</TABLE>

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

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

WHAT ARE THE CHARGES MADE BY JOHN HANCOCK?

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

Sales Charge Deduction from Premium. A charge deducted from premium payments
equal to no more than 4% of the Target Premium received in any Policy year. John
Hancock currently intends to waive this deduction from premiums received after
the first 10 Policy years.

Contingent Deferred Sales Charge. A charge deducted from Account Value if the
Policy lapses or is surrendered during the first 12 Policy years. The amount of
the charge depends upon the Policy year in which lapse or surrender occurs. The
charge will never be higher than 26% of Base Policy Target Premiums paid to
date. The total charges for sales expenses over the lesser of 20 years or the
life expectancy of the insured will not exceed 9% of the Target Premium payments
under the Policy; assuming all Target Premiums are paid.

3
<PAGE>

Administrative Surrender Charge. A charge deducted from Account Value if the
Policy lapses or is surrendered in the first 9 Policy years. The amount of the
charge depends upon the Policy year in which lapse or surrender occurs and the
Policy's Sum Insured at that time. The maximum charge is $5 per $1,000 of
current Sum Insured.

Issue Charge. A charge deducted monthly from Account Value at the rate of $20
per month for the first 12 Policy months.

Maintenance Charge. A charge deducted monthly from Account Value in an amount
equal to no more than $8 (currently $6) for all Policy years.

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

Charge for Mortality and Expense Risks. A charge deducted daily from the
variable Subaccounts at a maximum effective annual rate of .90% (currently .60%)
of the assets of each variable Subaccount.

Charge for Extra Mortality Risks. An additional charge, depending upon the age
of the insured and the degree of additional mortality risk, required if the
insured does not qualify for the standard or preferred underwriting class. This
additional charge is deducted monthly from Account Value.

Charge for Optional Rider Benefits. An additional charge required if the Owner
elects to purchase any optional insurance benefits by rider. Any such additional
charge is deducted monthly from Account Value.

Charge for Partial Withdrawal. A charge of $20 deducted from Account Value at
the time of withdrawal.

See "Charges and Expenses", for a fuller 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 its Subaccounts on the date of issue of the Policy. The
initial net premium is the gross premium less the sales charge deducted from
certain premium payments and less the charges deducted from all premiums for
state premium taxes and the Federal DAC Tax charge. 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.

4
<PAGE>

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.

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

WHAT IS THE DEATH BENEFIT?

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

Option 1: Level Death Benefit. A level death benefit equal to the Sum Insured
or, if greater, the Account Value multiplied by the applicable Corridor Factor.

Option 2: Variable Death Benefit. A variable death benefit equal to the Sum
Insured plus any Account Value, or, if greater, the Account Value multiplied by
the applicable Corridor Factor.

If neither of the above Options meets the objectives of the Owner, a third
Option may be elected and an endorsement to the Policy will be issued. This
third Option is described below.

Option 3: Level Death Benefit With Greater Funding. A level death benefit
equal to the Sum Insured, or, if greater, the Account Value multiplied by the
applicable Death Benefit Factor. It differs from the level death benefit option
described above in that a greater amount of premium payments can generally be
made by the Owner.

Under each of the Options, an alternative death benefit is computed that is
equal to the Account Value multiplied by a Corridor Factor or a Death Benefit
Factor to increase the death benefit if necessary to ensure that the Policy will
continue to qualify as life insurance under the Federal tax law. See "Death
Benefits", "Definition of Life Insurance" and "Tax Considerations".

Under the Guaranteed Death Benefit provision, the Policy is guaranteed not to
lapse during the first 5 Policy years, provided that, on each Modal Processing
Date, the amount of cumulative premiums paid, minus any withdrawals, is at least
equal to the cumulative amount of Guaranteed Death Benefit Premiums due to date.
This provision applies only if the insured is in the preferred or standard
underwriting risk class and satisfies certain other underwriting standards
relating to health and occupation.

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

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

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<PAGE>

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

After the first Policy year the Owner may obtain a Policy loan. Assuming no
Indebtedness (see below), the maximum amount of any loan in Policy years two and
three is 75% of that portion of the Surrender Value attributable to variable
Subaccount investments, plus 100% of that portion of the Surrender Value
attributable to Fixed Account investments; thereafter the maximum is 90% of that
portion of Surrender Value attributable to variable Subaccount investments, plus
100% of that portion of the Surrender Value attributable to Fixed Account
investments. Interest charged on any loan will accrue and compound daily at an
effective annual rate determined by 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 current Sum Insured 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 Part A of the application has been completed or within 10 days
after receipt of the Policy by the Owner, or within 10 days after mailing by
John Hancock of a Notice of Withdrawal Right, whichever is latest, to John
Hancock's Servicing Office, or to the agent or agency office through which it
was delivered. Coverage under the Policy will be canceled immediately as of the
date of such mailing or delivery. Any premium paid on it will be refunded. If
required by state law, the refund will equal the Account Value at the end of the
Valuation Period in which the Policy is received plus all charges or deductions
made against premiums plus an amount reflecting charges against the Subaccounts
and the investment management fee of the Fund.

WHAT INVESTMENT TRANSFERS ARE ALLOWED AN OWNER?

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

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

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

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

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<PAGE>

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
approximately $59 billion.

THE ACCOUNT AND SERIES FUND

THE ACCOUNT

The Account, a separate account established under Massachusetts law, 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.

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

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

SERIES FUND

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

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

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<PAGE>

Growth & Income Portfolio

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

Equity Index Portfolio

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

Large Cap Value Portfolio

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

Large Cap Growth Portfolio

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

Mid Cap Value Portfolio

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

Mid Cap Growth Portfolio

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

Diversified Mid Cap Growth Portfolio

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

Real Estate Equity Portfolio

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

Small/Mid Cap CORE Portfolio

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

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<PAGE>

Small Cap Value Portfolio

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

Small Cap Growth Portfolio

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

Global Equity Portfolio

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

International Balanced Portfolio

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

International Equity Index Portfolio

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

International Opportunities Portfolio

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

Emerging Markets Equity Portfolio

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

Short-Term Bond Portfolio

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

Bond Index Portfolio

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

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<PAGE>

Sovereign Bond Portfolio

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

Strategic Bond Portfolio

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

High Yield Bond Portfolio

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

Money Market Portfolio

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

John Hancock acts as the investment manager for the Fund, and John Hancock's
indirectly owned subsidiary, Independence Investment Associates, Inc., with its
principal place of business at 53 State Street, Boston, MA 02109, provides
sub-investment advice with respect to the Managed, Growth & Income, Large Cap
Growth, Real Estate Equity, and Short-Term Bond Portfolios. Independence
International Associates, Inc., a subsidiary of IIA located at the same address
as IIA, is a sub-investment adviser to the International Equity Index Portfolio.

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

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

State Street Bank & Trust, N.A., at Two International Place, Boston, MA 02110,
is sub-investment adviser to the Equity Index Portfolio. INVESCO Management and
Research located at 101 Federal Street, Boston, MA 02110, is the sub-investment
adviser to the Small Cap Value Portfolio. Janus Capital Corporation, with its
principal place of business at 100 Filmore Street, Denver, CO 80206, is the
sub-investment adviser to the Mid Cap Growth Portfolio. Neuberger & Berman, LLC,
of 605 Third Avenue, New York, NY 10158, provides sub-investment advice to the
Mid Cap Value Portfolio. J.P. Morgan Investment Management Inc., located at 522
Fifth Avenue, New York, NY 10036, provides sub-investment advice with respect to
the Strategic Bond Portfolio and Brinson Partners, Inc., of 209 S. LaSalle
Street, Chicago, IL 60604, does likewise with respect to the International
Balanced Portfolio.
Goldman Sachs & Company, located at One New York Plaza, New York, New York
10004, is sub-investment adviser to the Small/Mid Cap CORE Portfolio. Scudder
Kemper Investments, Inc., located at 345 Park Avenue, New York, New York 10154,
is the sub-investment adviser to the Global Equity Portfolio. Montgomery Asset

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<PAGE>

Management, LLC, located at 101 California Street, San Francisco, California
94111, is the sub-investment adviser to the Emerging Markets Equity Portfolio.
Mellon Bond Associates, located at One Mellon Bank Center, Suite 4135,
Pittsburgh, Pennsylvania 15258, is the sub-investment adviser to the Bond Index
Portfolio. Wellington Management Company, LLC, located at 75 State Street,
Boston, Massachusetts 02109, is the sub-investment adviser to the High Yield
Bond Portfolio.

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

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

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

THE FIXED ACCOUNT

An Owner may allocate premiums to the Fixed Account or transfer all or a part
of the Account Value under a Policy to the Fixed Account. The amount so
allocated or transferred will become a part of 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. 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 higher rates
although it is not obligated to do so. The Owner assumes the risk that interest
credited will not exceed 4% per year. Upon request and in the annual statement,
John Hancock will inform Owners of the then-applicable rates.

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<PAGE>

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

REQUIREMENTS FOR ISSUANCE OF POLICY

The Policy is generally available with a minimum Sum Insured at issue of
$100,000. At the time of issue, the insured must be age 20 through 75. All
persons insured must meet certain health and other criteria called "underwriting
standards". The smoking status of each insured is reflected in the insurance
charges made.

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

PREMIUMS

Payment Flexibility. Premiums are flexible. The Owner may choose the amount
and frequency of premium payments, so long as each premium payment meets the
requirements described below.

Minimum First Premium. The amount of premium required at the time of issue is
determined by John Hancock, and depends on the age, sex, smoking status, and
underwriting class of the insured at issue, the Policy's Sum Insured at issue,
and any additional benefits selected. The Minimum First Premium must be received
by John Hancock at its Servicing Office in order for the Policy to be in full
force and effect. See "Death Benefits". There is no grace period for the payment
of the Minimum First Premium. The minimum amount of premium required at the time
of Policy issue is three months of Guaranteed Death Benefit Premium. However, an
automatic check writing program ("premiumatic") may be available to an Owner
interested in making monthly premium payments and, if utilized by an Owner, only
one month of Guaranteed Death Benefit Premium need be paid to satisfy the
minimum amount.

Minimum Premiums. If the Policy's Surrender Value at the beginning of any
Policy month is insufficient to pay the monthly Policy charges then due, John
Hancock will notify the Owner and the Policy will enter a Policy grace period,
unless the Guaranteed Death Benefit is in effect. If premiums sufficient to pay
at least three months' estimated charges are not paid by the end of the grace
period, the Policy will lapse. The estimated charges will equal three times the
monthly Policy charges then due. See "Default".

Planned Premium Schedule. At the time of issue, the Owner may designate a
Planned Premium schedule for the amount and frequency of premium payments. John
Hancock will send billing statements for the amount chosen, at the frequency
chosen whether quarterly, monthly, semi-annually or annually. The Owner may
change the Planned Premium after issue. The Owner may also pay a premium in
excess of the Planned Premium, subject to the limitations described below. At
the time of Policy issuance, John Hancock will determine whether the Planned
Premium schedule will exceed the 7-Pay limit discussed below. If so, John
Hancock's standard procedures prohibit issuance of the Policy unless the Owner
signs a form acknowledging that fact.

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<PAGE>

Account Value to increase to such an extent that an increase in death benefit is
necessary to satisfy Federal tax law requirements, John Hancock has the right to
not accept the excess portion of that premium payment, or to require evidence of
insurability before that portion is accepted. In no event, however, will John
Hancock refuse to accept any premium necessary to prevent the Policy from
lapsing. Also, if an Owner has elected to use the "guideline premium and cash
value corridor" test for Federal income tax purposes, John Hancock will not
accept the portion of any premium that exceeds the maximum amount prescribed
under that test.

Guaranteed Death Benefit Premiums. A Guaranteed Death Benefit feature may
apply during the first five Policy years. See "Death Benefits". The Guaranteed
Death Benefit Premiums required to maintain this benefit in force depend on the
issue age, sex, smoking status, and underwriting class of the insured at issue,
the Sum Insured at issue and any additional benefits selected. This premium will
equal 1/12th of the Target Premium for Owners electing a monthly premium payment
mode; 1/4 of the Target Premium for Owners electing the quarterly mode; 1/2 of
the Target Premium for owners electing the semi-annual mode; and the Target
Premium for Owners electing the annual mode. The due date for each premium is
referred to as the Modal processing date. To keep the Guaranteed Death Benefit
in effect, the amount of actual premiums paid minus any withdrawals must at each
Modal processing date be at least equal to the Guaranteed Death Benefit Premiums
due to date. If this test is not satisfied on any Modal processing date, John
Hancock will notify the Owner of the shortfall immediately and a Guaranteed
Death Benefit grace period will commence as of that anniversary. The Guaranteed
Death Benefit grace period will end on the second monthly processing date after
the determination of the shortfall. This notice will be mailed to the Owner's
last-known address at least 31 days prior to the end of the Guaranteed Death
Benefit grace period. If John Hancock does not receive payment for the amount of
the deficiency by the end of the Guaranteed Death Benefit grace period, the
Guaranteed Death Benefit feature will permanently lapse with no possibility of
restoration. The Guaranteed Death Benefit is only available if the insured's
underwriting class is standard or preferred and the insured meets certain other
underwriting standards relating to health and occupation.

Billing, Allocation of Premium Payments (Investment Rule). The Owner may at
any time elect to be billed by John Hancock for a Planned Premium other than the
Guaranteed Death Benefit Premium. The Owner may also elect to be billed for
premiums on an annual, semi-annual, quarterly or monthly basis. An automatic
check-writing program ("premiumatic") may be available to an Owner interested in
making monthly premium payments. All premiums are payable at John Hancock's
Servicing 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 by the state
premium tax charge, any sales charge, and the Federal DAC Tax charge. See
"Charges and Expenses". The remainder is the net premium.

The Owner at the time of application must elect an Investment Rule which will
allocate net premiums and any credits to as many as ten of the Subaccounts. The
Owner must select allocation percentages in whole numbers, and the total
allocated must equal 100%. The Owner may thereafter change the Investment Rule
prospectively at any time. The change will be effective as to any net premiums
and credits applied after receipt at John Hancock's Servicing 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 date of issue will be processed
as if received on the Valuation Date immediately preceding the date of
issue.

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<PAGE>

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

(3)That portion of any premium that we delay accepting as described under
"Other Premium Limitations" above, or "7-Pay Premium Limit" below, will
be processed as of the end of the Valuation Period in which we accept
that amount.

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

ACCOUNT VALUE AND SURRENDER VALUE

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

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

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

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

A portion of the Contingent Deferred Sales Charge, equal to 20% of premiums
paid in the second Policy year up to one Base Policy Target Premium, will be
waived in calculating the second Policy year's Surrender Value.

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<PAGE>

Partial Withdrawal of Surrender Value. The Owner may request withdrawal of
part of the Surrender Value in accordance with John Hancock's rules then in
effect. Any withdrawal must be at least $1,000 and is subject to an
administrative charge of $20.

An Owner may request a partial withdrawal of Surrender Value at any time
provided that the Policy is not in a Policy grace period. This privilege, which
reduces the Account Value by the amount of the withdrawal and the associated
charge, may not be used to reduce the Account Value below the amount John
Hancock estimates will be required to pay three months' charges under the Policy
as they fall due. The withdrawal will be effective as of the end of the
Valuation Period in which John Hancock receives written notice satisfactory to
it at its Servicing Office.

An amount equal to the Account Value withdrawn will be removed from each
Subaccount in the same proportion as the Account Value is then allocated among
the Subaccounts. A withdrawal is not a loan and, once made, cannot be repaid.

The effect of a withdrawal, including its associated charge, upon the death
benefit depends upon the death benefit option in effect.

Option 1. Level Death Benefit. Any withdrawal will first be deducted from
Account Value until the Account Value, multiplied by the appropriate Corridor
Factor, is no higher than the Sum Insured. Thereafter, both the Sum Insured and
the Account Value will be reduced by the remaining amount of the withdrawal. If
the Account Value multiplied by the appropriate Corridor Factor does not exceed
the Sum Insured at the time of the withdrawal, the withdrawal will reduce both
the Sum Insured and the Account Value.

Option 2. Variable Death Benefit. Any withdrawal will be deducted from Account
Value and will not affect the Sum Insured. Nonetheless, because Account Value
will be reduced, the death benefit under this option also will be reduced.

Option 3. Level Death Benefit with Greater Funding. Any withdrawal will first
be deducted from Account Value until the Account Value, multiplied by the
appropriate Death Benefit Factor, is no higher than the Sum Insured. Thereafter,
both the Sum Insured and the Account Value will be reduced by any remaining
amount of the withdrawal. If the Account Value multiplied by the appropriate
Death Benefit Factor does not exceed the Sum Insured at the time of the
withdrawal, the withdrawal will reduce both the Sum Insured and the Account
Value.

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

John Hancock reserves the right to refuse any withdrawal request that would
cause the Policy's Sum Insured to fall below $100,000.

DEATH BENEFITS

The death benefit proceeds will equal the death benefit of the Policy, plus
any additional rider benefits then due, minus any Indebtedness. If the insured
dies during a Policy grace period, John Hancock will also deduct any overdue
monthly deductions.

The death benefit payable depends on the current Sum Insured and the death
benefit option selected by the Owner. At the time of application for a Policy,
the Owner must select from among three death benefit options. After issue of the
Policy the Owner may change the selection from Option 1 to Option 2 or vice
versa, subject to such evidence of insurability as John Hancock may require. The
three options are:

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<PAGE>

Option 1: Level Death Benefit: Under this option, the death benefit will equal
the Sum Insured, unless the Account Value multiplied by the Corridor Factor
produces a higher death benefit. The Corridor Factor depends upon the attained
age of the insured. The Corridor Factor decreases slightly (or remains the same
at older and younger ages) from year to year as the attained age of the insured
increases. A complete list of Corridor Factors is set forth in the Policy. The
Policy will be subject under this option to the "guideline premium and cash
value corridor" test as defined by Internal Revenue Code ("Code") Section 7702.
This option will offer the best opportunity for the Account Value under a Policy
to increase without increasing the death benefit as quickly as it might under
the other options. When the Account Value multiplied by the Corridor Factor
exceeds the Sum Insured, the death benefit will increase whenever there is an
increase in the Account Value and will decrease whenever there is a decrease in
the Account Value, but never below the Sum Insured.

Option 2: Variable Death Benefit: Under this option, the death benefit will
equal the Sum Insured plus any Account Value, unless the Account Value
multiplied by the Corridor Factor produces a higher death benefit. The Corridor
Factor depends upon the then attained age of the insured. The Corridor Factor
decreases slightly (or remains the same at older and younger ages) from year to
year as the attained age of the insured increases. A complete list of Corridor
Factors is set forth in the Policy. Under this option the Policy will be subject
to the "guideline premium and cash value corridor" test as defined by Code
Section 7702. This option will offer the best opportunity for the Owner who
would like to have an increasing death benefit as early as possible. The death
benefit will increase whenever there is an increase in the Account Value and
will decrease whenever there is a decrease in the Account Value, but never below
the Sum Insured.

If neither of the above Options meets the objectives of the Owner, a third
Option may be elected and an endorsement to the Policy will be issued. This
third Option is described below.

Option 3: Level Death Benefit With Greater Funding: Under this option, the
death benefit will equal the Sum Insured, unless the Account Value, multiplied
by the Death Benefit Factor, gives a higher death benefit. The Death Benefit
Factor depends upon the sex, smoking status and then attained age of the
insured. The Death Benefit Factor decreases slightly from year to year as the
attained age of the insured increases. A complete list of Death Benefit Factors
is set forth in the Policy. Under this option, the death benefit will be subject
to the "cash value accumulation" test as defined by Code Section 7702. This
option will offer the best opportunity for the Owner who is looking for an
increasing death benefit in later Policy years and/or would like to fund the
policy at the "7-pay" limit for the full 7 years. When the Account Value
multiplied by the Death Benefit Factor exceeds the Sum Insured, the death
benefit will increase whenever there is an increase in the Account Value and
will decrease whenever there is a decrease in the Account Value, but never below
the Sum Insured.

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

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

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

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<PAGE>

automatically by multiplying the Account Value by a "Death Benefit Factor"
computed in compliance with the Code.

Guaranteed Death Benefit. During the first 5 Policy years the Policy is
guaranteed not to lapse, provided that (1) the amount of premiums paid through
each Modal Processing Date minus any withdrawals is at least equal to the sum of
the cumulative Guaranteed Death Benefit Premiums due to date and (2) the insured
is in the standard or preferred underwriting class and satisfies certain other
underwriting standards relating to health and occupation. At any time when this
feature is not in force, the death benefit of the Policy is not guaranteed and
the Policy may lapse if the Account Value falls to a low level.

TRANSFERS AMONG SUBACCOUNTS

The Owner may reallocate the amounts held for the Policy in the Subaccounts
with no charge at any time, except as noted below. 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 Servicing 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 Servicing Office. (John Hancock
reserves the right to defer such Fixed Account transfers for six months.) 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. Transfers among variable Subaccounts and transfers
into the Fixed Account may be requested at any time. A maximum of 25% 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. No transfers among Subaccounts may be made while the Policy is in
a grace period.

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.

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

Eligibility for this option is limited to an Owner who has $2500 or more in
the Money Market Subaccount on the day the transfer is scheduled to begin.
Scheduled transfers may be made to one or more of any other variable Subaccounts
but the amount to be transferred monthly to any Subaccount must be $100 or more.

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<PAGE>

Once the written election is received in form satisfactory to John Hancock at
its Servicing Office, transfers will begin on the second monthly processing date
following its receipt. To request an election form or if you have any questions
with respect to this provision, call 1-800-732-5543.

Once elected, the scheduled monthly transfer option will remain in effect
until the receipt of written notice from the Owner by John Hancock at its
Servicing Office of cancellation of the option or receipt of notice of the death
of the insured, whichever first occurs.

Telephone Transfers and Policy Loans. Once a written authorization is
completed by the Owner, the Owner may request a transfer or policy loan by
telephoning 1-800-732-5543 or by sending a written request via fax to
1-800-621-0448. Any fax request should include the Owner's name, daytime
telephone number, Policy number and, in the case of transfers, the names of the
Subaccounts from which and to which money will be transferred. The right to
discontinue telephone transactions at any time without notice to Owners is
specifically reserved. If the fax request option becomes unavailable, another
means of telecommunication will be substituted.

An Owner who authorizes telephone transactions will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
transactions instructions which John Hancock reasonably believes to be genuine,
unless such loss, expense or cost is the result of John Hancock's mistake or
negligence. John Hancock employs procedures which provide safeguards against the
execution of unauthorized transactions, and which are reasonably designed to
confirm that instructions received by telephone are genuine. These procedures
include requiring personal identification, tape recording calls, and providing
written confirmation to the Owner. If 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 instructions.

LOAN PROVISIONS AND INDEBTEDNESS

Loan Provision. Loans may be made at any time a Loan Value is available after
the first Policy year. The Owner may borrow money, assigning the Policy as the
only security for the loan, by completion of a form satisfactory to 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 and compound daily at an effective annual rate of 5% in the first 20
Policy years and 4.5% thereafter.

The amount of any outstanding loan plus accrued interest is called the
"Indebtedness", a loan will not be permitted unless it is at least $300. The
Owner may repay all or a portion of any Indebtedness while the insured is living
and the Policy is not in a grace period. When a loan is made, an amount equal to
the loan proceeds will be transferred out of the Account and the Fixed Account,
as applicable. This amount is allocated to a portion of JHVLICO's general
account called "Loan Assets." Each Subaccount will be reduced in the same
proportion as the Account Value is then allocated among the Subaccounts. Upon
each loan repayment, the same proportionate amount of the entire loan as was
borrowed from the Fixed Account will be repaid to the Fixed Account. The
remainder of the loan repayment will be allocated to the appropriate Subaccounts
as stipulated in the then current Investment Rule. For example, if the entire
loan outstanding is $3,000 of which $1,000 was borrowed from the Fixed Account,
then upon a repayment of $1,500, $500 would be allocated to the Fixed Account
and the remaining $1,000 would be allocated to the appropriate Subaccounts as
stipulated in the then current Investment Rule. If an

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<PAGE>

Owner wishes any payment to constitute a loan repayment (rather than a premium
payment), the Owner must so specify.

Effect of Loan and Indebtedness. While the Indebtedness is outstanding, that
portion of the Account Value that is in the Loan Assets 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 Assets and the
remaining portion of the Account Value will generally have different rates of
investment return, the Account Value, the Surrender Value and any death benefit
above the Sum Insured are permanently affected by any Indebtedness, whether or
not it is repaid in whole or in part. The amount of any Indebtedness is
subtracted from the amount otherwise payable when the Policy proceeds become
payable.

Whenever the Indebtedness equals or exceeds the Surrender Value, the Policy
terminates 31 days after notice has been mailed by 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.

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

DEFAULT

Grace Period, Default and Lapse. Unless the 5 Year Guaranteed Death Benefit is
in force, at the beginning of each Policy month John Hancock determines whether
the Account Value, net of any Indebtedness, is sufficient to pay all monthly
charges then due under the Policy. If not, the Policy is in default and John
Hancock will notify the Owner of the amount estimated to be necessary to pay
three months' deductions, and a Policy grace period will be in effect until 61
days after the date the notice was mailed. If John Hancock does not receive
payment of at least this amount by the end of the Policy grace period, the
Policy will lapse, and any remaining amount owed to the Owner as of the date of
lapse will be paid to the Owner.

Lapse can have significant tax consequences. See "Tax Considerations--Policy
Proceeds". If the Guaranteed Death Benefit has been in effect and lapses at the
end of a Guaranteed Death Benefit grace period (as described in
"Premiums--Guaranteed Death Benefit Premiums"), the usual default, Policy grace
period and lapse procedures described in the preceding paragraph will be applied
commencing with the first day of the Policy month in which the lapse of the
Guaranteed Death Benefit occurs.

The insurance under the Policy continues in full force during any grace period
but, if the insured dies during the Policy 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 any grace period. If in the Policy
grace period, the notice will specify the minimum amount which must be paid to
continue the Policy in force on a premium paying basis after the end of the
Policy grace period. If in the Guaranteed Death Benefit grace period, the notice
will specify the amount which must be paid to continue the Guaranteed Death
Benefit feature in force.

Reinstatement. A lapsed Policy may be reinstated in accordance with the
Policy's terms. Evidence of insurability satisfactory to John Hancock will be
required and payment of the required premium and charges. The request must be
received at John Hancock's Servicing Office within 1 year after the beginning of
the applicable grace period. A reinstatement of the Policy may be treated as a
material change for Federal income tax purposes. See "Premiums--7-Pay Premium
Limit" and "Tax Considerations".

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<PAGE>

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

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<PAGE>

CHARGES AND EXPENSES

CHARGES DEDUCTED FROM PREMIUMS

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

State Premium Tax Charge. A charge currently equal to 2.35% of each premium
payment will be deducted from each premium payment. The 2.35% rate is the
average rate currently expected to be paid on premiums received in all states
over the lifetimes of the insureds covered by the Policies. John Hancock will
not increase this charge under outstanding Policies, but reserves the right to
change this charge for Policies not yet issued in order to correspond with
changes in the state premium tax levels.

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

SALES CHARGES

Charges are made to compensate John Hancock for the cost of selling the
Policy. This cost includes agents' commissions, commission overrides,
advertising, and the printing of 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 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".

From Premiums. Part of the sales charge is deducted from premiums received.
The amount is 4% of the premiums received in any Policy year that do not exceed
that year's total Target Premium. The Target Premium is established at issue and
is the sum of Base Policy Target Premium and any rider premium. The Base Policy
Target Premium is set forth in the Policy. Target Premiums will vary based on
the issue age, sex, smoking status and underwriting class of the insured. John
Hancock currently intends to make this deduction only in the first 10 Policy
years, but this is not contractually guaranteed and the right is reserved to
continue deductions over a longer period. Because the Policies were first
offered for sale in 1994, no Policies have yet been outstanding for more than 10
years.

John Hancock will waive a portion of the sales charge (it is currently waiving
a portion equal to 2% of all premiums from which sales charges are deducted)
otherwise to be deducted from premiums under 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 in the
future.

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

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<PAGE>

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

The Contingent Deferred Sales Charge is computed as a percentage of Base
Policy Target Premiums paid in accordance with the following schedule:

<TABLE>
<CAPTION>
For Surrenders or Lapses Effective Maximum Contingent
During: Deferred Sales Charge
---------------------------------- ---------------------
<S> <C>
Policy Year 1 26% of premiums received in
Policy Year 1 up to 1 Base
Policy Target Premium*
Policy Year 2 26% of premiums received in
Policy Years 1 and 2 up to 1
Base Policy Target Premium in
each year
Policy Years 3-7 26% of premiums received in
Policy Years 1, 2 and 3 up to 1
Base Policy Target Premium in
each year
Policy Year 8 83.33% of the Maximum Contingent
Deferred Sales Charge for
Policy Year 7
Policy Year 9 66.67% of the Maximum Contingent
Deferred Sales Charge for
Policy Year 7
Policy Year 10 50% of the Maximum Contingent
Deferred Sales Charge for
Policy Year 7
Policy Year 11 33.33% of the Maximum Contingent
Deferred Sales Charge for
Policy Year 7
Policy Year 12 16.67% of the Maximum Contingent
Deferred Sales Charge for
Policy Year 7
Policy Year 13 and later 0
</TABLE>

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

The Contingent Deferred Sales Charge reaches its maximum at the end of the
third Policy year, stays level through the seventh Policy year, and is reduced
by an equal amount at the beginning of each Policy year thereafter until it
reaches zero in Policy year 13. At issue ages higher than age 54, the maximum is
reached at an earlier Policy year, and may be reduced to zero over a shorter
number of years.

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<PAGE>

Effect of Premium Payment Pattern. An Owner may structure the timing and
amount of premium payments to minimize the sales charges, although doing so
involves certain risks. Paying less than one Target Premium in the first Policy
year or paying more than one Target Premium in any Policy year could reduce the
Owner's total sales charges over time. For example, an Owner, paying ten Target
Premiums of $1,000 each would pay total premium sales charges of $400 and be
subject to a maximum Contingent Deferred Sales Charge of $780 if he paid $1,000
in each of the first ten Policy years, but would pay only a $200 premium sales
charge and $520 Contingent Deferred Sales Charge if he paid $2,000 (i.e., two
times the Target Premium amount) in every other Policy year up to the tenth
Policy year. However, delaying the payment of Target Premiums to later Policy
years could increase the risk that the Account Value will be insufficient to pay
monthly Policy charges as they come due and that, as a result, the Policy will
lapse and eventually terminate. See "Default". Conversely, accelerating the
payment of Target Premiums to earlier Policy years could cause aggregate
premiums paid to exceed the Policy's 7-pay premium limit and, as a result, cause
the Policy to become a modified endowment, with adverse tax consequences to the
Owner upon receipt of Policy distributions. See "Premiums--7-Pay Premium Limit".

ADMINISTRATIVE SURRENDER CHARGE

A charge is made if the Policy is surrendered or lapses in the first nine
Policy years to recover administrative expenses relating to the Policy which
would not otherwise be recouped. The maximum charge in Policy years 1 through 7
is $5 per $1,000 of current Sum Insured, in Policy year 8 is $4 per $1,000 of
current Sum Insured and in Policy year 9 is $3 per $1,000 of current Sum
Insured.

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

REDUCED CHARGES FOR ELIGIBLE GROUPS

The sales charges, Administrative Surrender Charge and Issue Charge (described
below) otherwise applicable may be reduced with respect to Policies issued to a
class of associated individuals or to a trustee, employer or similar entity
where John Hancock anticipates that the sales to the members of the class will
result in lower than normal sales or 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 owner.

CHARGES DEDUCTED FROM ACCOUNT VALUE OR ASSETS

The following charges are deducted from Account Value or assets:

Issue Charge. John Hancock will deduct monthly from Account Value an Issue
Charge equal to $20 per month for the first 12 Policy months 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.

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<PAGE>

Maintenance Charge. John Hancock will deduct from the Account Value a monthly
charge not to exceed $8 for all Policy years. The current monthly charge is $6.

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.

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 current 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, smoking status
and underwriting class of the insured and the length of time the Policy has been
in effect. John Hancock will review these rates at least every 5 years, and may
change these rates from time to time based on John Hancock's expectations of
future experience. However, these rates will never be more than the guaranteed
maximum rates based on the 1980 Commissioners' Standard Ordinary Mortality
Tables set forth in the Policy.

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

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

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

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

Lower current insurance rates are offered at most ages for insureds who are
eligible for the preferred underwriting class of the Policy.

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

Charge for Mortality and Expense Risks. A daily charge is deducted from the
variable Subaccounts for mortality and expense risks assumed by John Hancock at
a maximum effective annual rate of .90% of the value of the assets of each
variable Subaccount attributable to the Policy. The current charge is at an
effective annual rate of .60%. This charge begins when amounts under a Policy
are first allocated to the Account. The mortality risk assumed is that insureds
may live for a shorter period of time than estimated and, therefore, a greater
amount of death benefit than expected will be payable in relation to the amount
of premiums received. The expense risk assumed is that expenses incurred in
issuing and administering the Policies will be greater than estimated. John

24
<PAGE>

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 the
standard or preferred underwriting class must pay an additional charge because
of the extra mortality risk. The level of the charge depends upon the age of the
insured and the degree of extra mortality risk. This additional charge is
deducted monthly from Account Value. Alternatively, the charge may take the form
of an additional insurance charge as described above.

Charges for Optional Rider Benefits. An additional charge must be paid if the
Owner elects to purchase any optional insurance benefit by Policy rider. Any
such additional charge is deducted monthly from Account Value.

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 affect what
the Subaccounts earn. Charges for other taxes, if any, attributable to the
Subaccounts may also be made.

Charge for Partial Withdrawal. John Hancock will deduct a charge in the amount
of $20 on a partial withdrawal of Surrender Value, as described under "Account
Value and Surrender Value". The charge will be deducted from Account Value. The
charge is to compensate John Hancock for the administrative expenses of
effecting the withdrawal.

Fund Investment Management Fee and Other Fund Expenses. The Account purchases
shares of the Fund at net asset value, a value which reflects the deduction from
the assets of the Fund of its investment management fees and certain
non-Advisory Fund operating expenses, which are described in the Summary of this
Prospectus. For a full description of these deductions, see the attached
Prospectus for the Fund.

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

GUARANTEE OF PREMIUMS AND CERTAIN CHARGES

The Policy's Guaranteed Death Benefit Premium is guaranteed not to increase.
The state premium tax charge, the Federal DAC Tax charge, the Administrative
Surrender Charge, the Issue Charge and the charge for partial withdrawals are
guaranteed not to increase over the life of the Policy. The maintenance charge,
the sales charges, the mortality and expense risk charge, and the insurance
charge are guaranteed not to exceed the maximums set forth in the Policy.

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<PAGE>

DISTRIBUTION OF POLICIES

Applications are solicited by agents who are licensed by state insurance
authorities to sell John Hancock's Policies and who are also registered
representatives ("representatives") of John Hancock Distributors, Inc.
("Distributors"), an indirect wholly-owned subsidiary of John Hancock located at
197 Clarendon Street, Boston, MA 02117, or other broker-dealer firms, as
discussed below. John Hancock performs insurance underwriting, and determines
whether to accept or reject the application for a Policy and each insured's risk
classification. Pursuant to a sales agreement among John Hancock, Distributors,
and the Account, Distributors acts as the principal underwriter of the Policies.
The sales agreement will remain in effect until terminated upon sixty days'
written notice by any party. 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
by a commercial carrier in the amount of $25 million.

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

The maximum commission payable to a Distributors representative for selling a
Policy is 50% of the Target Premium paid in the first Policy year, 6% of the
Target Premium paid in the second through fourth Policy years, and 3% of the
Target Premium paid in each year thereafter. The maximum commission on any
premium paid in any year in excess of the Target Premium is 3%.

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

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

Distributors serves as principal underwriter for other separate accounts
registered under the 1940 Act: John Hancock Variable Annuity Accounts U, I and V
and John Hancock Variable Life Accounts U, V and S. Distributor is also
principal underwriter for the Fund.

26
<PAGE>

TAX CONSIDERATIONS

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

POLICY PROCEEDS

Although the Policy contains provisions not found in fixed benefit life
insurance policies, John Hancock believes the Policy will receive the same
Federal income and estate tax treatment. Section 7702 of the Internal Revenue
Code ("Code") defines life insurance for Federal tax purposes. See "Death
Benefits--Definition of Life Insurance". 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. Furthermore, John
Hancock reserves the right to make any changes in the Policy necessary to ensure
the Policy is within the definition of life insurance.

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

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

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. However, the amount of any loan
outstanding will be taxed to the Owner if a Policy lapses.

Distributions under Policies on which premiums greater than the "7-pay" limit
(see "Premiums--7-Pay Premium Limit") have been paid will be treated as
distributions from a "modified endowment," which are subject to special taxation
based on Federal tax law. The Owner of such a Policy will be taxed on
distributions such as loans, surrenders and partial withdrawals to the extent of
any income (gain) to the Owner (income-first basis). The distributions affected
will be those made on or after, and within the two year period prior to, the
time the Policy becomes a modified endowment. Additionally, a 10% penalty tax
may be imposed on affected income distributed before the Owner attains age59
1/2.

Furthermore, any time there is a "material change" in a Policy (such as the
addition of certain other Policy benefits after issue, or reinstatement of a
lapsed Policy), the Policy will be subject to a new "7-pay" test, with the
possibility of a tax on distributions if it were subsequently to become a
modified endowment. Moreover, if benefits under a Policy are reduced (such as a
reduction in the Sum Insured or death benefit or the reduction or cancellation
of certain rider benefits, or Policy termination) during the 7 years in which
the 7-pay test is being applied, the 7-pay limit will be recalculated based on
the reduced benefits. If the premiums paid to date are greater than the
recalculated 7-pay limit, the Policy will become a modified endowment.

All modified endowments 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 the modified endowment rules. Your tax advisor should be
consulted if you have questions regarding the possible impact of the 7-pay limit
on your Policy.

27
<PAGE>

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

CHARGE FOR JOHN HANCOCK'S TAXES

Except for the DAC Tax charge, John Hancock currently makes no charge 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.

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.

28
<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 Executive Officer,
Cabot Corporation (chemicals)
Nelson S. Gifford Principal, Fleetwing Capital Management (financial
services)
William L. Boyan Vice Chairman of the Board, John Hancock
E. James Morton Director, formerly Chairman of the Board, John
Hancock
John F. Magee Chairman, Arthur D. Little, Inc. (industrial
research and consultant).
John M. Connors, Jr. Chief Executive Officer and Director, Hill,
Holliday, Connors, Cosmopoulos, Inc. (advertising).
Stephen L. Brown Chairman of the Board and Chief Executive Officer,
John Hancock
I. MacAllister Booth Retired Chairman of the Board and Chief Executive
Officer, Polaroid Corporation (photographic
products)
C. Vincent Vappi Former President and Chief Executive Officer, Vappi
& Company, Inc. (construction).
Robert J. Tarr, Jr. Former President, Chief Executive Officer and Chief
Operations Officer, Harcourt, General, Inc.
(publishing)
David F. D'Alessandro President and Chief Operating Officer, JohnHancock
Joan T. Bok Chairman of the Board, New England Electric System
(electricutility).
Robert E. Fast Senior Partner, Hale and Dorr (law firm).
Foster L. Aborn Vice Chairman of the Board, John Hancock
Lawrence K. Fish Chairman, President, and Chief Executive Officer,
Citizens Financial Group, Inc.(banking).
Richard F. Syron Chairman and Chief Executive Officer, American Stock
Exchange.
Kathleen F. Feldstein President, Economic Studies Inc. (economic
consulting).
Michael C. Hawley President and Chief Operating Officer, The Gillette
Company (razors, etc.).
Wayne A. Budd Group President, Bell Atlantic - New England
(telecommunications)
</TABLE>

<TABLE>
<CAPTION>
<S> <C>
Executive Officers
------------------
Diane M. Capstaff Executive Vice President
Thomas E. Moloney Executive Vice President
Richard S. Scipione General Counsel
Barry J. Rubenstein Vice President, Counsel and Secretary
</TABLE>

29
<PAGE>

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

REPORTS

At least once each Policy year a statement will be sent to the Owner setting
forth the amount of the death benefit, Account Value, the portion of the Account
Value in each Subaccount, Surrender Value, premiums received and charges
deducted from premiums since the last report, and any outstanding Policy loan
(and interest charged for the preceding Policy year) as of the last day of such
year. Moreover, confirmations will be furnished to Owners of premium payments,
transfers among Subaccounts, Policy loans, partial withdrawals and certain other
Policy transactions.

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

VOTING PRIVILEGES

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

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

Owners of Policies may give instructions regarding the election of the Board
of Trustees of the Fund, ratification of the selection of independent auditors,
approval of Fund investment advisory agreements and other matters requiring a
vote under the 1940 Act. Owners will be furnished information and forms by 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
Fund. John Hancock also may disregard voting instructions in favor of changes
initiated by an owner or the Fund's Board of Trustees in an 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 good-faith determination that
the proposed change is contrary to state law or prohibited by state regulatory

30
<PAGE>

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 THAT JOHN HANCOCK CAN MAKE

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, (3) to deregister the Account under the 1940 Act, (4)
to substitute for the Portfolio shares held by a Subaccount any other investment
permitted by law, and (5) to take any action necessary to comply with or obtain
any exemptions from the 1940 Act. 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

The legal validity of the Policies described in this Prospectus has been
passed on by Ronald J. Bocage, Vice President and 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.

31
<PAGE>

REGISTRATION STATEMENT

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

EXPERTS

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

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

32
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

33
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1997

<TABLE>
<CAPTION>
Large Cap Sovereign International Small Cap International Mid Cap Large Cap
Growth Bond Equities Growth Balanced Growth Value
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ----------- ------------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
portfolios of John Hancock
Variable Series Trust I, at
value. . . . . . . . . . . $18,634,480 $60,032,856 $3,944,730 $962,215 $85,312 $567,830 $1,678,123
Investments in shares of
portfolios of M Fund Inc.,
at value . . . . . . . . . -- -- -- -- -- -- --
Policy loans and accrued
interest receivable . . . 1,557,636 9,680,029 219,946 -- -- -- --
Receivable from:
John Hancock Variable
Series Trust 1 . . . . . 10,716 14,482 1,331 1,452 100 2,261 2,449
M Fund Inc. . . . . . . . -- -- -- -- -- -- --
----------- ----------- ---------- -------- ------- -------- ----------
TOTAL ASSETS . . . . . . . 20,202,832 69,727,367 4,166,007 963,667 85,412 570,091 1,680,572
LIABILITIES
Payable to John Hancock
Mutual Variable Life
Insurance Company . . . . 10,398 13,408 1,266 1,436 99 2,252 2,421
Asset charges payable . . . 318 1,074 65 16 1 9 28
----------- ----------- ---------- -------- ------- -------- ----------
TOTAL LIABILITIES . . . . . 10,716 14,482 1,331 1,452 100 2,261 2,449
----------- ----------- ---------- -------- ------- -------- ----------
NET ASSETS . . . . . . . . $20,192,116 $69,712,885 $4,164,676 $962,215 $85,312 $567,830 $1,678,123
=========== =========== ========== ======== ======= ======== ==========
<CAPTION>
Money Mid Cap Special Real Estate
Market Value Opportunities Equity
Subaccount Subaccount Subaccount Subaccount
----------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS
Investments in shares of $12,254,998 $2,036,158 $4,091,961 $4,649,139
portfolios of John Hancock
Variable Series Trust I, at
value. . . . . . . . . . .
Investments in shares of -- -- -- --
portfolios of M Fund Inc.,
at value . . . . . . . . .
Policy loans and accrued 2,230,242 -- -- 225,571
interest receivable . . .
Receivable from:
John Hancock Variable 386,526 15,188 1,935 1,502
Series Trust 1 . . . . .
M Fund Inc. . . . . . . . -- -- -- --
----------- ---------- ---------- ----------
TOTAL ASSETS . . . . . . . 14,871,766 2,051,346 4,093,896 4,876,212
LIABILITIES
Payable to John Hancock 386,304 15,155 1,868 1,425
Mutual Variable Life
Insurance Company . . . .
Asset charges payable . . . 222 33 67 77
----------- ---------- ---------- ----------
TOTAL LIABILITIES . . . . . 386,526 15,188 1,935 1,502
----------- ---------- ---------- ----------
NET ASSETS . . . . . . . . $14,485,240 $2,036,158 $4,091,961 $4,874,710
=========== ========== ========== ==========
</TABLE>

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

34
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES--CONTINUED

DECEMBER 31, 1997

<TABLE>
<CAPTION>
Short-Term Turner
Growth & U.S. Small Cap International Equity Strategic Core
Income Managed Government Value Opportunities Index Bond Growth
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
------------ ----------- ---------- ---------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . $199,623,682 $83,078,514 $127,103 $1,251,673 $389,007 $2,123,595 $147,317 $ --
Investments in shares
of portfolios of M
Fund Inc., at value -- -- -- -- -- -- -- 68,640
Policy loans and
accrued interest
receivable . . . . . 25,360,369 10,979,401 -- -- -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I . . 67,248 38,235 4,076 1,152 68 5,000 10 --
M Fund Inc. . . . . -- -- -- -- -- -- -- 1
------------ ----------- -------- ---------- -------- ---------- -------- -------
TOTAL ASSETS . . . . 225,051,299 94,096,150 131,179 1,252,825 389,075 2,128,595 147,327 68,641
LIABILITIES . . . . .
Payable to John
Hancock Mutual
Variable Life
Insurance Company . 63,785 36,775 4,074 1,132 62 4,965 8 --
Asset charges payable 3,463 1,460 2 20 6 35 2 1
------------ ----------- -------- ---------- -------- ---------- -------- -------
TOTAL LIABILITIES . . 67,248 38,235 4,076 1,152 68 5,000 10 1
------------ ----------- -------- ---------- -------- ---------- -------- -------
NET ASSETS . . . . . $224,984,051 $94,057,915 $127,103 $1,251,673 $389,007 $2,123,595 $147,317 $68,640
============ =========== ======== ========== ======== ========== ======== =======
<CAPTION>
Edinburgh Frontier
International Capital
Equity Appreciation
Subaccount Subaccount
------------- --------------
<S> <C> <C>
ASSETS
Investments in shares $ -- $ --
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . .
Investments in shares 126,339 273,608
of portfolios of M
Fund Inc., at value
Policy loans and -- --
accrued interest
receivable . . . . .
Receivable from:
John Hancock Variable -- --
Series Trust I . .
M Fund Inc. . . . . 2 4
-------- --------
TOTAL ASSETS . . . . 126,341 273,612
LIABILITIES . . . . .
Payable to John -- --
Hancock Mutual
Variable Life
Insurance Company .
Asset charges payable 2 4
-------- --------
TOTAL LIABILITIES . . 2 4
-------- --------
NET ASSETS . . . . . $126,339 $273,608
======== ========
</TABLE>

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

35
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Large Cap Growth Subaccount Sovereign Bond Subaccount
---------------------------------- -------------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I . . . . . . . . . . . . . . . . . . $1,686,429 $1,905,476 $ 754,115 $4,454,173 $ 3,765,421 $3,504,747
M Fund Inc. . . . . . . . . . . . . . . . . . -- -- -- -- -- --
Interest income on policy loans . . . . . . . 103,747 83,974 67,279 696,074 678,580 641,677
---------- ---------- ---------- ---------- ----------- ----------
Total investment income . . . . . . . . . . . . 1,790,176 1,989,450 821,394 5,150,247 4,444,001 4,146,424
Expenses:
Mortality and expense risks . . . . . . . . . 99,710 69,829 48,056 370,612 325,346 286,349
---------- ---------- ---------- ---------- ----------- ----------
Net investment income (loss) . . . . . . . . . 1,690,466 1,919,621 773,338 4,779,635 4,118,655 3,860,075
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . . . 292,430 145,304 23,090 (230,607) (169,158) (127,733)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 2,142,494 3,756 1,225,784 1,277,686 (1,418,707) 4,205,161
---------- ---------- ---------- ---------- ----------- ----------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . . . 2,434,924 149,060 1,248,874 1,047,079 (1,587,865) 4,077,428
---------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . $4,125,390 $2,068,681 $2,022,212 $5,826,714 $ 2,530,790 $7,937,503
========== ========== ========== ========== =========== ==========
<CAPTION>
Small Cap International
International Equities Subaccount Growth Subaccount Balanced Subaccount
---------------------------------- ------------------ --------------------
1997 1996 1995 1997 1996* 1997 1996*
------------ ---------- ---------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series $ 195,240 $ 42,110 $ 29,692 $ 436 $ 160 $ 3,972 $ 734
Trust I . . . . . . . . . . . . . . . . . .
M Fund Inc. . . . . . . . . . . . . . . . . . -- -- -- -- -- -- --
Interest income on policy loans . . . . . . . 15,746 13,158 9,853 -- -- -- --
--------- -------- -------- ------- ------- ------- ------
Total investment income . . . . . . . . . . . . 210,986 55,268 39,545 436 160 3,972 734
Expenses:
Mortality and expense risks . . . . . . . . . 24,261 19,834 15,495 4,231 538 392 81
--------- -------- -------- ------- ------- ------- ------
Net investment income (loss) . . . . . . . . . 186,725 35,434 24,050 (3,795) (378) 3,580 653
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . . . 50,829 25,854 14,367 6,475 (690) 429 9
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . (463,778) 217,574 164,490 92,108 (5,174) (4,312) 899
--------- -------- -------- ------- ------- ------- ------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . . . (412,949) 243,428 178,857 98,583 (5,864) (3,883) 908
--------- -------- -------- ------- ------- ------- ------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . $(226,224) $278,862 $202,907 $94,788 $(6,242) $ (303) $1,561
========= ======== ======== ======= ======= ======= ======
</TABLE>

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

See accompanying notes.

36
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS--CONTINUED

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
Mid Cap Growth Large Cap Value Mid Cap Value
Subaccount Subaccount Money Market Subaccount Subaccount
---------------- ---------------- ------------------------------ -----------------
1997 1996* 1997 1996* 1997 1996 1995 1997 1996*
-------- ------- -------- ------ -------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I . . . . . $ -- $ 411 $ 57,265 $2,056 $641,356 $1,073,915 $810,091 $150,951 $ 5,010
M Fund Inc. . . . . -- -- -- -- -- -- -- -- --
Interest income on
policy loans . . . -- -- -- -- 148,802 160,206 155,058 -- --
------- ------ -------- ------ -------- ---------- -------- -------- -------
Total investment
income . . . . . . . -- 411 57,265 2,056 790,158 1,234,121 965,149 150,951 5,010
Expenses:
Mortality and expense
risks . . . . . . . 2,164 292 3,303 218 81,437 134,461 96,074 7,632 572
------- ------ -------- ------ -------- ---------- -------- -------- -------
Net investment income
(loss) . . . . . . . (2,164) 119 53,962 1,838 708,721 1,099,660 869,075 143,319 4,438
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 5,866 (17) 17,858 588 -- -- -- 10,646 8,413
Net unrealized
appreciation
(depreciation)
during the period . 66,874 1,684 80,036 4,787 -- -- -- 145,409 14,211
------- ------ -------- ------ -------- ---------- -------- -------- -------
Net realized and
unrealized gain
(loss) on investments 72,740 1,667 97,894 5,375 -- -- -- 156,055 22,624
------- ------ -------- ------ -------- ---------- -------- -------- -------
Net increase in net
assets resulting from
operations . . . . . $70,576 $1,786 $151,856 $7,213 $708,721 $1,099,660 $869,075 $299,374 $27,062
======= ====== ======== ====== ======== ========== ======== ======== =======
<CAPTION>

Special Opportunities Subaccount
---------------------------------
1997 1996 1995
----------- --------- -----------
<S> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock $ 407,765 $114,600 $ 22,718
Variable Series
Trust I . . . . .
M Fund Inc. . . . . -- -- --
Interest income on
policy loans . . . -- -- --
--------- -------- --------
Total investment 407,765 114,600 22,718
income . . . . . . .
Expenses:
Mortality and expense
risks . . . . . . . 22,030 10,841 3,017
--------- -------- --------
Net investment income 385,735 103,759 19,701
(loss) . . . . . . .
Net realized and unrealized gain (loss) on investments:
Net realized gain 276,956 81,916 9,743
(loss). . . . . . .
Net unrealized
appreciation (477,912) 264,010 126,004
(depreciation) --------- -------- --------
during the period .
Net realized and
unrealized gain (200,956)
(loss) on investments --------- 345,926 135,747
-------- --------
Net increase in net
assets resulting from $ 184,779
operations . . . . . ========= $449,685 $155,448
======== ========
</TABLE>

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

See accompanying notes.

37
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS--CONTINUED

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Real Estate Equity Subaccount Growth & Income Subaccount
------------------------------ -------------------------------------
1997 1996 1995 1997 1996 1995
--------- --------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . $330,296 $177,243 $153,495 $25,377,474 $18,406,284 $10,687,455
M Fund Inc. . . . . . . . . . . . . . . . -- -- -- -- -- --
Interest income on policy loans . . . . . 15,261 13,041 12,322 1,728,054 1,562,266 1,397,618
-------- -------- -------- ----------- ----------- -----------
Total investment income . . . . . . . . . . 345,557 190,284 165,817 27,105,528 19,968,550 12,085,073
Expenses:
Mortality and expense risks . . . . . . . 25,420 16,931 13,502 1,136,268 842,055 646,807
-------- -------- -------- ----------- ----------- -----------
Net investment income . . . . . . . . . . . 320,137 173,353 152,315 25,969,260 19,126,495 11,438,266
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . 181,015 39,891 (39,490) 1,982,518 820,430 85,385
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . 165,392 637,301 155,992 18,247,212 4,555,481 17,351,805
-------- -------- -------- ----------- ----------- -----------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 346,407 677,192 116,502 20,229,730 5,375,911 17,437,190
-------- -------- -------- ----------- ----------- -----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $666,544 $850,545 $268,817 $46,198,990 $24,502,406 $28,875,456
======== ======== ======== =========== =========== ===========
<CAPTION>
Short-Term U.S.
Managed Subaccount Government Subaccount
-------------------------------------- -----------------------------
1997 1996 1995 1997 1996 1995
----------- ------------ ------------ ----------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . $ 7,891,222 $ 8,705,892 $ 5,946,035 $1,036,747 $201,830 $2,749
M Fund Inc. . . . . . . . . . . . . . . . -- -- -- -- -- --
Interest income on policy loans . . . . . 768,231 705,413 626,984 -- -- --
----------- ----------- ----------- ---------- -------- ------
Total investment income . . . . . . . . . . 8,659,453 9,411,305 6,573,019 1,036,747 201,830 2,749
Expenses:
Mortality and expense risks . . . . . . . 497,030 426,946 356,869 121,572 15,305 295
----------- ----------- ----------- ---------- -------- ------
Net investment income . . . . . . . . . . . 8,162,423 8,984,359 6,216,150 915,175 186,525 2,454
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . 437,661 230,806 (6,127) (27,616) 577 477
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . 4,941,061 (2,103,918) 7,134,666 226,435 225,129 1,735
----------- ----------- ----------- ---------- -------- ------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 5,378,722 (1,873,112) 7,128,539 198,819 225,706 2,212
----------- ----------- ----------- ---------- -------- ------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $13,541,145 $ 7,111,247 $13,344,689 $1,113,994 $412,231 $4,666
=========== =========== =========== ========== ======== ======
<CAPTION>
Small Cap Value
Subaccount
-----------------
1997 1996*
--------- --------
<S> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . $ 95,844 $1,653
M Fund Inc. . . . . . . . . . . . . . . . -- --
Interest income on policy loans . . . . . -- --
-------- ------
Total investment income . . . . . . . . . . 95,844 1,653
Expenses:
Mortality and expense risks . . . . . . . 3,270 128
-------- ------
Net investment income . . . . . . . . . . . 92,574 1,525
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . 19,812 11
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . (12,804) 2,702
-------- ------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 7,008 2,713
-------- ------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $ 99,582 $4,238
======== ======
</TABLE>

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

See accompanying notes.

38
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS--CONTINUED

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
International Edinburgh
Opportunities Equity Index Strategic Bond Turner Core Growth International Equity
Subaccount Subaccount Subaccount Subaccount Subaccount
----------------- ----------------- --------------- ------------------- ---------------------
1997 1996* 1997 1996* 1997 1996* 1997 1996* 1997 1996*
--------- ------ -------- ------- -------- ------ --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I . . . . . $ 5,284 $ 482 $ 54,601 $ 4,958 $ 9,400 $539 $ -- $ -- $ -- $ --
M Fund Inc. . . . . -- -- -- -- -- -- 6,373 958 1,796 510
Interest income on
policy loans . . . -- -- -- -- -- -- -- -- -- --
-------- ------ -------- ------- ------- ---- ------- ------ ------- -------
Total investment
income . . . . . . . 5,284 482 54,601 4,958 9,400 539 6,373 958 1,796 510
Expenses:
Mortality and expense
risks . . . . . . . 1,697 295 5,346 287 658 30 301 83 684 173
-------- ------ -------- ------- ------- ---- ------- ------ ------- -------
Net investment income
(loss) . . . . . . . 3,587 187 49,255 4,671 8,742 509 6,072 875 1,112 337
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 3,191 57 14,525 620 348 36 839 48 888 (91)
Net unrealized
appreciation
(depreciation)
during the period . (12,223) 7,271 146,714 6,278 1,260 8 6,487 784 (1,473) (1,056)
-------- ------ -------- ------- ------- ---- ------- ------ ------- -------
Net realized and
unrealized gain
(loss) on investments (9,032) 7,328 161,239 6,898 1,608 44 7,326 832 (585) (1,147)
-------- ------ -------- ------- ------- ---- ------- ------ ------- -------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ (5,445) $7,515 $210,494 $11,569 $10,350 $553 $13,398 $1,707 $ 527 $ (810)
======== ====== ======== ======= ======= ==== ======= ====== ======= =======
<CAPTION>
Frontier
Capital Appreciation
Subaccount
---------------------
1997 1996*
---------- ------------
<S> <C> <C>
Investment income:
Distributions
received from:
John Hancock $ -- $ --
Variable Series
Trust I . . . . .
M Fund Inc. . . . . 6,463 --
Interest income on
policy loans . . . -- --
------- ------
Total investment 6,463 --
income . . . . . . .
Expenses:
Mortality and expense
risks . . . . . . . 1,409 477
------- ------
Net investment income 5,054 (477)
(loss) . . . . . . .
Net realized and unrealized gain (loss) on investments:
Net realized gain 8,970 6,683
(loss). . . . . . .
Net unrealized
appreciation 32,469 1,317
(depreciation) ------- ------
during the period .
Net realized and
unrealized gain 41,439
(loss) on investments ------- 8,000
------
Net increase
(decrease) in net $46,493 $7,523
assets resulting from ======= ======
operations . . . . .
</TABLE>

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

See accompanying notes.

39
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Large Cap Growth Subaccount
---------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . $ 1,690,466 $ 1,919,621 $ 773,338
Net realized gain (loss) . . . . . . . . . . . 292,430 145,304 23,090
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 2,142,494 3,756 1,225,784
----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . 4,125,390 2,068,681 2,022,212
From policyholder transactions:
Net premiums from policyholders . . . . . . . 5,387,401 4,588,842 3,921,962
Net benefits to policyholders . . . . . . . . (3,728,476) (3,100,493) (2,170,453)
Net increase in policy loans . . . . . . . . . 326,883 174,445 181,384
----------- ----------- -----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 1,985,808 1,662,794 1,932,893
----------- ----------- -----------
Net increase in net assets . . . . . . . . . . 6,111,198 3,731,475 3,955,105
Net assets at beginning of period . . . . . . . 14,080,918 10,349,443 6,394,338
----------- ----------- -----------
Net assets at end of period . . . . . . . . . . $20,192,116 $14,080,918 $10,349,443
=========== =========== ===========
<CAPTION>

Sovereign Bond Subaccount
---------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . $ 4,779,635 $ 4,118,655 $ 3,860,075
Net realized gain (loss) . . . . . . . . . . . (230,607) (169,158) (127,733)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 1,277,686 (1,418,707) 4,205,161
----------- ----------- -----------
Net increase (decrease) in net assets resulting 5,826,714 2,530,790 7,937,503
from operations . . . . . . . . . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . . . . 10,001,325 12,282,665 8,741,178
Net benefits to policyholders . . . . . . . . (8,526,521) (8,373,358) (8,117,059)
Net increase in policy loans . . . . . . . . . 474,983 344,564 344,088
----------- ----------- -----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 1,949,787 4,253,871 968,207
----------- ----------- -----------
Net increase in net assets . . . . . . . . . . 7,776,501 6,784,661 8,905,710
Net assets at beginning of period . . . . . . . 61,936,384 55,151,723 46,246,013
----------- ----------- -----------
Net assets at end of period . . . . . . . . . . $69,712,885 $61,936,384 $55,151,723
=========== =========== ===========
<CAPTION>
Small Cap Growth
International Equities Subaccount Subaccount
-------------------------------------- --------------------
1997 1996 1995 1997 1996*
------------ ------------ ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . $ 186,725 $ 35,434 $ 24,050 $ (3,795) $ (378)
Net realized gain (loss) . . . . . . . . . . . 50,829 25,854 14,367 6,475 (690)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . (463,778) 217,574 164,490 92,108 (5,174)
----------- ----------- ---------- --------- --------
Net increase (decrease) in net assets resulting (226,224) 278,862 202,907 94,788 (6,242)
from operations . . . . . . . . . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . . . . 1,504,962 1,691,043 1,439,112 809,492 276,720
Net benefits to policyholders . . . . . . . . (1,091,126) (1,137,159) (927,937) (199,118) (13,425)
Net increase in policy loans . . . . . . . . . 13,761 47,823 27,649 -- --
----------- ----------- ---------- --------- --------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 427,597 601,707 538,824 610,374 263,295
----------- ----------- ---------- --------- --------
Net increase in net assets . . . . . . . . . . 201,373 880,569 741,731 705,162 257,053
Net assets at beginning of period . . . . . . . 3,963,303 3,082,734 2,341,003 257,053 --
----------- ----------- ---------- --------- --------
Net assets at end of period . . . . . . . . . . $ 4,164,676 $ 3,963,303 $3,082,734 $ 962,215 $257,053
=========== =========== ========== ========= ========
<CAPTION>
International Balanced
Subaccount
-----------------------
1997 1996*
----------- -------------
<S> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . $ 3,580 $ 653
Net realized gain (loss) . . . . . . . . . . . 429 9
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . (4,312) 899
------- -------
Net increase (decrease) in net assets resulting (303) 1,561
from operations . . . . . . . . . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . . . . 62,380 32,725
Net benefits to policyholders . . . . . . . . (9,531) (1,520)
Net increase in policy loans . . . . . . . . . -- --
------- -------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 52,849 31,205
------- -------
Net increase in net assets . . . . . . . . . . 52,546 32,766
Net assets at beginning of period . . . . . . . 32,766 --
------- -------
Net assets at end of period . . . . . . . . . . $85,312 $32,766
======= =======
</TABLE>

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

See accompanying notes.

40
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
Mid Cap Growth Large Cap Value
Subaccount Subaccount
-------------------- ---------------------
1997 1996* 1997 1996*
---------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . $ (2,164) $ 119 $ 53,962 $ 1,838
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . 5,866 (17) 17,858 588
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,874 1,684 80,036 4,787
--------- -------- ---------- --------
Net increase in net assets resulting from operations . . . . . . 70,576 1,786 151,856 7,213
From policyholder transactions:
Net premiums from policyholders . . . . . . . . . . . . . . . . 457,341 172,848 1,506,756 107,940
Net benefits to policyholders . . . . . . . . . . . . . . . . . (125,239) (9,482) (85,021) (10,621)
Net increase (decrease) in policy loans . . . . . . . . . . . . -- -- -- --
--------- -------- ---------- --------
Net increase (decrease) in net assets resulting from policyholder
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 332,102 163,366 1,421,735 97,319
--------- -------- ---------- --------
Net increase (decrease) in net assets . . . . . . . . . . . . . . 402,678 165,152 1,573,591 104,532
Net assets at beginning of period . . . . . . . . . . . . . . . . 165,152 -- 104,532 --
--------- -------- ---------- --------
Net assets at end of period . . . . . . . . . . . . . . . . . . . $ 567,830 $165,152 $1,678,123 $104,532
========= ======== ========== ========
<CAPTION>

Money Market Subaccount
----------------------------------------
1997 1996 1995
------------ ------------- ------------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . $ 708,721 $ 1,099,660 $ 869,075
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . -- -- --
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- --
----------- ------------ -----------
Net increase in net assets resulting from operations . . . . . . 708,721 1,099,660 869,075
From policyholder transactions:
Net premiums from policyholders . . . . . . . . . . . . . . . . 11,210,536 34,216,886 13,611,860
Net benefits to policyholders . . . . . . . . . . . . . . . . . (9,620,370) (44,096,427) (2,969,848)
Net increase (decrease) in policy loans . . . . . . . . . . . . 103,247 (134,332) 149,842
----------- ------------ -----------
Net increase (decrease) in net assets resulting from policyholder
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 1,693,413 (10,013,873) 10,791,854
----------- ------------ -----------
Net increase (decrease) in net assets . . . . . . . . . . . . . . 2,402,134 (8,914,213) 11,660,929
Net assets at beginning of period . . . . . . . . . . . . . . . . 12,083,106 20,997,319 9,336,390
----------- ------------ -----------
Net assets at end of period . . . . . . . . . . . . . . . . . . . $14,485,240 $ 12,083,106 $20,997,319
=========== ============ ===========
<CAPTION>
Mid Cap Value
Subaccount Special Opportunities Subaccount
--------------------- ------------------------------------
1997 1996* 1997 1996 1995
----------- --------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . $ 143,319 $ 4,438 $ 385,735 $ 103,759 $ 19,701
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . 10,646 8,413 276,956 81,916 9,743
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,409 14,211 (477,912) 264,010 126,004
---------- -------- ----------- ---------- ---------
Net increase in net assets resulting from operations . . . . . . 299,374 27,062 184,779 449,685 155,448
From policyholder transactions:
Net premiums from policyholders . . . . . . . . . . . . . . . . 1,620,752 284,225 2,554,133 2,077,582 774,566
Net benefits to policyholders . . . . . . . . . . . . . . . . . (112,395) (82,860) (1,628,677) (497,713) (164,561)
Net increase (decrease) in policy loans . . . . . . . . . . . . -- -- -- -- --
---------- -------- ----------- ---------- ---------
Net increase (decrease) in net assets resulting from policyholder
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 1,508,357 201,365 925,456 1,579,869 610,005
---------- -------- ----------- ---------- ---------
Net increase (decrease) in net assets . . . . . . . . . . . . . . 1,807,731 228,427 1,110,235 2,029,554 765,453
Net assets at beginning of period . . . . . . . . . . . . . . . . 228,427 -- 2,981,726 952,172 186,719
---------- -------- ----------- ---------- ---------
Net assets at end of period . . . . . . . . . . . . . . . . . . . $2,036,158 $228,427 $ 4,091,961 $2,981,726 $ 952,172
========== ======== =========== ========== =========
</TABLE>

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

See accompanying notes.

41
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Real Estate Equity Subaccount
--------------------------------------
1997 1996 1995
------------ ------------ -----------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income . . . . . . . . . . . . $ 320,137 $ 173,353 $ 152,315
Net realized gain (loss) . . . . . . . . . . . 181,015 39,891 (39,490)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 165,392 637,301 155,992
----------- ----------- ----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . 666,544 850,545 268,817
From policyholder transactions:
Net premiums from policyholders . . . . . . . 1,748,132 1,161,434 1,086,721
Net benefits to policyholders . . . . . . . . (1,218,783) (1,008,266) (814,812)
Net increase (decrease) in policy loans . . . 34,311 33,973 (13,207)
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . 563,660 187,141 258,702
----------- ----------- ----------
Net increase (decrease) in net assets . . . . . 1,230,204 1,037,686 527,519
Net assets at beginning of period . . . . . . . 3,644,506 2,606,820 2,079,301
----------- ----------- ----------
Net assets at end of period . . . . . . . . . . $ 4,874,710 $ 3,644,506 $2,606,820
=========== =========== ==========
<CAPTION>

Growth & Income Subaccount
------------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income . . . . . . . . . . . . $ 25,969,260 $ 19,126,495 $ 11,438,266
Net realized gain (loss) . . . . . . . . . . . 1,982,518 820,430 85,385
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 18,247,212 4,555,481 17,351,805
------------ ------------ ------------
Net increase in net assets resulting from 46,198,990 24,502,406 28,875,456
operations . . . . . . . . . . . . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . . . . 30,351,780 32,903,369 20,933,714
Net benefits to policyholders . . . . . . . . (24,619,851) (21,130,764) (16,972,544)
Net increase (decrease) in policy loans . . . 3,346,307 1,965,133 1,898,826
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . 9,078,236 13,737,738 5,859,996
------------ ------------ ------------
Net increase (decrease) in net assets . . . . . 55,277,226 38,240,144 34,735,452
Net assets at beginning of period . . . . . . . 169,706,825 131,466,681 96,731,229
------------ ------------ ------------
Net assets at end of period . . . . . . . . . . $224,984,051 $169,706,825 $131,466,681
============ ============ ============
<CAPTION>

Managed Subaccount
------------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income . . . . . . . . . . . . $ 8,162,423 $ 8,984,359 $ 6,216,150
Net realized gain (loss) . . . . . . . . . . . 437,661 230,806 (6,127)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 4,941,061 (2,103,918) 7,134,666
------------ ------------ ------------
Net increase in net assets resulting from 13,541,145 7,111,247 13,344,689
operations . . . . . . . . . . . . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . . . . 13,194,907 14,481,195 13,141,463
Net benefits to policyholders . . . . . . . . (14,539,295) (12,942,967) (11,680,334)
Net increase (decrease) in policy loans . . . 1,257,640 719,880 1,120,431
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . (86,748) 2,258,108 2,581,560
------------ ------------ ------------
Net increase (decrease) in net assets . . . . . 13,454,397 9,369,355 15,926,249
Net assets at beginning of period . . . . . . . 80,603,518 71,234,163 55,307,914
------------ ------------ ------------
Net assets at end of period . . . . . . . . . . $ 94,057,915 $ 80,603,518 $ 71,234,163
============ ============ ============
<CAPTION>
Short-Term U.S.
Government Subaccount
-------------------------------------
1997 1996 1995
------------- ------------ -----------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income . . . . . . . . . . . . $ 915,175 $ 186,525 $ 2,454
Net realized gain (loss) . . . . . . . . . . . (27,616) 577 477
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 226,435 225,129 1,735
------------ ----------- --------
Net increase in net assets resulting from 1,113,994 412,231 4,666
operations . . . . . . . . . . . . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . . . . 116,602 24,721,092 68,539
Net benefits to policyholders . . . . . . . . (26,168,835) (147,655) (14,808)
Net increase (decrease) in policy loans . . . -- -- --
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . (26,052,233) 24,573,437 53,731
------------ ----------- --------
Net increase (decrease) in net assets . . . . . (24,938,239) 24,985,668 58,397
Net assets at beginning of period . . . . . . . 25,065,342 79,674 21,277
------------ ----------- --------
Net assets at end of period . . . . . . . . . . $ 127,103 $25,065,342 $ 79,674
============ =========== ========
</TABLE>

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

42
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Small Cap Value International Opportunities Equity Index
Subaccount Subaccount Subaccount
-------------------- ---------------------------- ---------------------
1997 1996* 1997 1996* 1997 1996*
----------- -------- ------------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
from operations:
Net investment income
(loss) . . . . . . . . . . . . $ 92,574 $ 1,525 $ 3,587 $ 187 $ 49,255 $ 4,671
Net realized gain (loss) . . . . 19,812 11 3,191 57 14,525 620
Net unrealized appreciation
(depreciation) during the period (12,804) 2,702 (12,223) 7,271 146,714 6,278
---------- ------- -------- -------- ---------- --------
Net increase (decrease) in net
assets resulting from operations 99,582 4,238 (5,445) 7,515 210,494 11,569
From policyholder transactions:
Net premiums from policyholders 1,224,547 63,825 295,915 141,907 1,827,052 234,122
Net benefits to
policyholders . . . . . . . . . (137,364) (3,155) (46,736) (4,149) (149,826) (9,816)
Net increase in policy
loans . . . . . . . . . . . . . -- -- -- -- -- --
---------- ------- -------- -------- ---------- --------
Net increase in net assets
resulting from policyholder
transactions . . . . . . . . . . 1,087,183 60,670 249,179 137,758 1,677,226 224,306
---------- ------- -------- -------- ---------- --------
Net increase in net assets . . . 1,186,765 64,908 243,734 145,273 1,887,720 235,875
Net assets at beginning of
period . . . . . . . . . . . . . 64,908 -- 145,273 -- 235,875 --
---------- ------- -------- -------- ---------- --------
Net assets at end of period . . . $1,251,673 $64,908 $389,007 $145,273 $2,123,595 $235,875
========== ======= ======== ======== ========== ========
<CAPTION>
Edinburgh Frontier Capital
Strategic Bond Turner Core International Appreciation
Subaccount Growth Subaccount Equity Subaccount Subaccount
------------------ ------------------ ------------------ -------------------
1997 1996* 1997 1996* 1997 1996* 1997 1996*
--------- -------- -------- -------- --------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
from operations:
Net investment income $ 8,742 $ 509 $ 6,072 $ 875 $ 1,112 $ 337 $ 5,054 $ (477)
(loss) . . . . . . . . . . . .
Net realized gain (loss) . . . . 348 36 839 48 888 (91) 8,970 6,683
Net unrealized appreciation
(depreciation) during the period 1,260 8 6,487 784 (1,473) (1,056) 32,469 1,317
-------- ------- ------- ------- -------- ------- -------- --------
Net increase (decrease) in net 10,350 553 13,398 1,707 527 (810) 46,493 7,523
assets resulting from operations
From policyholder transactions:
Net premiums from policyholders 161,548 13,347 33,658 28,147 82,259 91,573 138,553 230,461
Net benefits to (37,799) (682) (7,208) (1,062) (45,350) (1,860) (70,647) (78,775)
policyholders . . . . . . . . .
Net increase in policy
loans . . . . . . . . . . . . . -- -- -- -- -- -- -- --
-------- ------- ------- ------- -------- ------- -------- --------
Net increase in net assets
resulting from policyholder 123,749
transactions . . . . . . . . . . -------- 12,665 26,450 27,085 36,909 89,713 67,906 151,686
------- ------- ------- -------- ------- -------- --------
Net increase in net assets . . . 134,099 13,218 39,848 28,792 37,436 88,903 114,399 159,209
Net assets at beginning of
period . . . . . . . . . . . . . 13,218 -- 28,792 -- 88,903 -- 159,209 --
-------- ------- ------- ------- -------- ------- -------- --------
Net assets at end of period . . . $147,317 $13,218 $68,640 $28,792 $126,339 $88,903 $273,608 $159,209
======== ======= ======= ======= ======== ======= ======== ========
</TABLE>

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

See accompanying notes.

43
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

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

The net assets of the Account may not be less than the amount required under
state insurance law to provide for death benefits (without regard to the minimum
death benefit guarantee) and other policy benefits. Additional assets are held
in 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.

2. SIGNIFICANT ACCOUNTING POLICIES

ESTIMATES

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

VALUATION OF INVESTMENTS

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

FEDERAL INCOME TAXES

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

44
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--CONTINUED

2. SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
income taxes, or provision for federal income taxes, attributable to the
operations of the Account or to the Policies funded in the Account. Currently,
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 .50%
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.

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 policyholder indebtedness) and
compounded daily.

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.

45
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

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

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

<TABLE>
<CAPTION>
Subaccount Shares Owned Cost Value
- ---------- ------------ ---- -----
<S> <C> <C> <C>
Large Cap Growth . . . . . . . 895,075 $ 15,892,909 $ 18,634,480
Sovereign Bond . . . . . . . . 6,034,072 60,417,965 60,032,856
International Equities . . . . 259,525 4,122,639 3,944,730
Small Cap Growth . . . . . . . 84,822 875,281 962,215
International Balanced . . . . 8,438 88,725 85,312
Mid Cap Growth . . . . . . . . 47,615 499,272 567,830
Large Cap Value . . . . . . . . 123,668 1,593,299 1,678,123
Money Market . . . . . . . . . 1,225,500 12,254,998 12,254,998
Mid Cap Value . . . . . . . . . 146,845 1,876,539 2,036,158
Special Opportunities . . . . . 265,969 4,181,272 4,091,961
Real Estate Equity . . . . . . 292,206 3,801,801 4,649,139
Growth & Income . . . . . . . . 12,021,535 168,816,740 199,623,682
Managed . . . . . . . . . . . . 5,789,690 77,812,548 83,078,514
Short-Term U.S. Government . . 12,605 127,250 127,103
Small Cap Value . . . . . . . . 100,931 1,261,774 1,251,673
International Opportunities . . 36,605 393,990 389,007
Equity Index . . . . . . . . . 149,410 1,970,603 2,123,595
Strategic Bond . . . . . . . . 14,383 146,050 147,317
Turner Core Growth . . . . . . 5,084 61,369 68,640
Edinburgh International Equity 12,685 128,867 126,339
Frontier Capital Appreciation . 18,338 239,823 273,608
</TABLE>

46
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

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

Purchases, including reinvestment of dividend distributions and proceeds from
the sales of shares in the Portfolios of the Fund and of M Fund during 1997,
were as follows:

<TABLE>
<CAPTION>
Subaccount Purchases Sales
- ---------- --------- -----
<S> <C> <C>
Large Cap Growth . . . . . . . . . . . . . . . $ 4,736,825 $ 1,400,399
Sovereign Bond . . . . . . . . . . . . . . . . 10,368,825 4,136,318
International Equities . . . . . . . . . . . . 1,118,754 518,717
Small Cap Growth . . . . . . . . . . . . . . . 722,061 115,483
International Balanced . . . . . . . . . . . . 65,555 9,126
Mid Cap Growth . . . . . . . . . . . . . . . . 402,499 72,561
Large Cap Value . . . . . . . . . . . . . . . 1,570,481 94,785
Money Market . . . . . . . . . . . . . . . . . 10,270,729 7,975,918
Mid Cap Value . . . . . . . . . . . . . . . . 1,700,997 49,320
Special Opportunities . . . . . . . . . . . . 2,282,246 971,054
Real Estate Equity . . . . . . . . . . . . . . 1,690,164 840,607
Growth & Income . . . . . . . . . . . . . . . 40,552,905 8,979,442
Managed . . . . . . . . . . . . . . . . . . . 14,242,930 7,470,857
Short-Term U.S. Government . . . . . . . . . . 1,111,536 26,248,593
Small Cap Value . . . . . . . . . . . . . . . 1,278,340 98,584
International Opportunities . . . . . . . . . 291,672 38,875
Equity Index . . . . . . . . . . . . . . . . . 1,806,826 80,346
Strategic Bond . . . . . . . . . . . . . . . . 165,467 32,975
Turner Core Growth . . . . . . . . . . . . . . 346,070 7,548
Edinburgh International Equity . . . . . . . . 73,973 35,953
Frontier Capital Appreciation . . . . . . . . 137,628 71,165
</TABLE>

5. IMPACT OF YEAR 2000 (UNAUDITED)

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

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

47
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

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

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

48
<PAGE>

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

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Mutual Variable Life Insurance Account UV
at December 31, 1997, the results of their operations and changes in their net
assets for each of the periods indicated, in conformity with generally accepted
accounting principles.

February 6, 1998

49
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Directors and Policyholders
John Hancock Mutual Life Insurance Company

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

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

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

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

February 18, 1998

50
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
December 31
--------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
ASSETS
Bonds--Note 6 . . . . . . . . . . . . . . . . . . . . $22,986.0 $22,467.0
Stocks:
Preferred . . . . . . . . . . . . . . . . . . . . . 640.6 416.2
Common . . . . . . . . . . . . . . . . . . . . . . . 256.9 249.8
Investments in affiliates . . . . . . . . . . . . . 1,442.0 1,268.9
--------- ---------
2,339.5 1,934.9
Mortgage loans on real estate--Note 6 . . . . . . . . 7,851.2 7,964.0
Real estate:
Company occupied . . . . . . . . . . . . . . . . . . 375.1 372.1
Investment properties . . . . . . . . . . . . . . . 1,893.4 2,042.3
--------- ---------
2,268.5 2,414.4
Policy loans . . . . . . . . . . . . . . . . . . . . . 1,577.3 1,589.3
Cash items:
Cash in banks and offices . . . . . . . . . . . . . 176.0 348.4
Temporary cash investments . . . . . . . . . . . . . 548.8 1,068.3
--------- ---------
724.8 1,416.7
Premiums due and deferred . . . . . . . . . . . . . . 222.3 278.4
Investment income due and accrued . . . . . . . . . . 505.8 547.8
Other general account assets . . . . . . . . . . . . . 948.6 1,009.9
Assets held in separate accounts . . . . . . . . . . . 16,021.7 13,969.1
--------- ---------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $55,445.7 $53,591.5
========= =========
OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY RESERVES
OBLIGATIONS
Policy reserves . . . . . . . . . . . . . . . . . . $19,206.6 $18,544.0
Policyholders' and beneficiaries' funds . . . . . . 13,985.1 14,679.3
Dividends payable to policyholders . . . . . . . . . 399.7 395.5
Policy benefits in process of payment . . . . . . . 115.5 236.3
Other policy obligations . . . . . . . . . . . . . . 214.8 210.5
Asset valuation reserve--Note 1 . . . . . . . . . . 1,165.7 1,064.8
Federal income and other accrued taxes--Note 1 . . . 96.9 125.1
Other general account obligations . . . . . . . . . 1,084.5 1,521.7
Obligations related to separate accounts . . . . . . 16,019.1 13,958.2
--------- ---------
TOTAL OBLIGATIONS . . . . . . . . . . . . . . . . . . 52,287.9 50,735.4
POLICYHOLDERS' CONTINGENCY RESERVES
Surplus notes--Note 2 . . . . . . . . . . . . . . . 450.0 450.0
Special contingency reserve for group insurance . . 151.8 194.8
General contingency reserve . . . . . . . . . . . . 2,556.0 2,211.3
--------- ---------
TOTAL POLICYHOLDERS' CONTINGENCY RESERVES . . . . . . 3,157.8 2,856.1
--------- ---------
TOTAL OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY
RESERVES. . . . . . . . . . . . . . . . . . . . . . . $55,445.7 $53,591.5
========= =========
</TABLE>

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

51
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF OPERATIONS AND CHANGES IN POLICYHOLDERS'
CONTINGENCY RESERVES

<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
INCOME
Premiums, annuity considerations and pension fund
contributions. . . . . . . . . . . . . . . . . $ 7,371.6 $ 8,003.1
Net investment income--Note 4 . . . . . . . . . 2,856.1 2,803.1
Other, net . . . . . . . . . . . . . . . . . . . 119.0 68.6
--------- ---------
10,346.7 10,874.8
BENEFITS AND EXPENSES
Payments to policyholders and beneficiaries:
Death benefits . . . . . . . . . . . . . . . 737.4 886.8
Accident and health benefits . . . . . . . . 121.4 300.9
Annuity benefits . . . . . . . . . . . . . . 1,668.2 1,539.4
Surrender benefits and annuity fund
withdrawals. . . . . . . . . . . . . . . . . 6,293.1 5,565.4
Matured endowments . . . . . . . . . . . . . 21.0 20.6
--------- ---------
8,841.1 8,313.1
Additions to reserves to provide for future
payments to policyholders and beneficiaries . (186.7) 880.5
Expenses of providing service to policyholders
and obtaining new insurance:
Field sales compensation and expenses . . . . 278.3 275.0
Home office and general expenses . . . . . . 479.7 514.8
Payroll, state premium and miscellaneous taxes . 49.9 70.9
--------- ---------
9,462.3 10,054.3
GAIN FROM OPERATIONS BEFORE DIVIDENDS TO
POLICYHOLDERS, FEDERAL INCOME TAXES AND
NET REALIZED CAPITAL LOSSES . . . . . . . 884.4 820.5
Dividends to policyholders . . . . . . . . . . . . 398.2 399.4
Federal income taxes--Note 1 . . . . . . . . . . . 18.9 107.1
--------- ---------
417.1 506.5
--------- ---------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL LOSSES . . . . . . . . . . . . . 467.3 314.0
Net realized capital losses--Note 5 . . . . . . . (89.8) (43.6)
--------- ---------
NET INCOME . . . . . . . . . . . . . . . . 377.5 270.4
OTHER INCREASES (DECREASES) IN POLICYHOLDERS'
CONTINGENCY RESERVES:
Net unrealized capital gains and other
adjustments--Note 5 . . . . . . . . . . . . . $ 58.6 $ 191.7
Valuation reserve changes--Note 1 . . . . . . . 1.4 (27.5)
Prior years' federal income taxes . . . . . . . (35.6) (28.9)
Other reserves and adjustments, net . . . . . . (100.2) (83.1)
--------- ---------
NET INCREASE IN POLICYHOLDERS' CONTINGENCY
RESERVES. . . . . . . . . . . . . . . . . 301.7 322.6
Policyholders' contingency reserves at beginning of
year. . . . . . . . . . . . . . . . . . . . . . . 2,856.1 2,533.5
--------- ---------
POLICYHOLDERS' CONTINGENCY RESERVES AT END
OF YEAR . . . . . . . . . . . . . . . . . $ 3,157.8 $ 2,856.1
========= =========
</TABLE>

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

52
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Insurance premiums, annuity considerations and
deposits. . . . . . . . . . . . . . . . . . . . $ 7,518.8 $ 8,120.4
Net investment income . . . . . . . . . . . . . . 2,988.7 2,965.5
Benefits to policyholders and beneficiaries . . . (9,030.3) (8,476.6)
Dividends paid to policyholders . . . . . . . . . (394.0) (382.6)
Insurance expenses and taxes . . . . . . . . . . (815.3) (884.1)
Net transfers from separate accounts . . . . . . 896.8 198.2
Other, net . . . . . . . . . . . . . . . . . . . (798.3) (602.7)
---------- ---------
NET CASH PROVIDED FROM OPERATIONS . . . . . . 366.4 938.1
---------- ---------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Bond purchases . . . . . . . . . . . . . . . . . (18,003.6) (7,590.7)
Bond sales . . . . . . . . . . . . . . . . . . . 13,541.1 2,812.4
Bond maturities and scheduled redemptions . . . . 2,927.6 2,241.0
Bond prepayments . . . . . . . . . . . . . . . . 1,096.3 1,223.2
Stock purchases . . . . . . . . . . . . . . . . . (1,125.7) (391.2)
Proceeds from stock sales . . . . . . . . . . . . 921.7 573.2
Real estate purchases . . . . . . . . . . . . . . (243.0) (447.7)
Real estate sales . . . . . . . . . . . . . . . . 444.5 382.1
Other invested assets purchases . . . . . . . . . (171.1) (214.7)
Proceeds from the sale of other invested assets . 109.3 183.6
Mortgage loans issued . . . . . . . . . . . . . . (1,165.8) (1,582.7)
Mortgage loan repayments . . . . . . . . . . . . 1,176.9 2,247.3
Other, net . . . . . . . . . . . . . . . . . . . (333.8) 205.3
---------- ---------
NET CASH USED IN INVESTING ACTIVITIES . . . . (825.6) (358.9)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in short-term note payable (16.4) 90.0
Issuance of REMIC notes payable . . . . . . . . . 0.0 292.0
Repayment of REMIC notes payable . . . . . . . . (216.3) (85.2)
---------- ---------
NET CASH (USED IN) PROVIDED FROM FINANCING
ACTIVITIES. . . . . . . . . . . . . . . . . . (232.7) 296.8
---------- ---------
(DECREASE) INCREASE IN CASH AND TEMPORARY CASH
INVESTMENTS. . . . . . . . . . . . . . . . . . . . (691.9) 876.0
Cash and temporary cash investments at beginning of
year . . . . . . . . . . . . . . . . . . . . . . . 1,416.7 540.7
---------- ---------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR $ 724.8 $ 1,416.7
========== =========
</TABLE>

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

53
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS 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; Group
Pension, which offers single premium annuity and guaranteed investment contracts
through both the general and separate accounts; and Business Insurance, its
group life, health, and long-term care operations including administrative
services provided to group customers. 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 life insurance products
for the Canadian market, 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.

On February 28, 1997, the Company sold its group accident and health business
and related group life business to UNICARE Life & Health Insurance Company
(UNICARE), a wholly-owned subsidiary of WellPoint Health Networks Inc. The
Company retained its group long-term care operations. Assets equal to
liabilities of approximately $562.4 million at February 28, 1997, subject to the
completion of a closing audit, were transferred to UNICARE in connection with
the sale. The corresponding amount of assets and liabilities at December 31,
1996 was $559.4 million. The gain from operations in both periods was not
significant. The insurance business sold was transferred to UNICARE through a
100% coinsurance agreement. The Company remains liable to its policyholders to
the extent that UNICARE does not meet its contractual obligations under the
coinsurance agreement. As a result, the Company has secured a $397 million
letter of credit facility with a group of banks led by Morgan Guaranty Trust
Company of New York. The banks have agreed to issue a letter of credit to the
Company pursuant to which the Company may draw up to $397 million for any claims
not satisfied by UNICARE under the coinsurance agreement after the Company has
incurred the first $113 million of losses from such claims. The amount available
pursuant to the letter of credit agreement and any letter of credit issued
thereunder will be automatically reduced on a scheduled basis consistent with
the anticipated runoff of liabilities related to the business reinsured under
the coinsurance agreement. The letter of credit agreement and any letter of
credit issued thereunder are scheduled to expire on March 1, 2002.

The Company is domiciled in the Commonwealth of Massachusetts and 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, including banks, brokers/ dealers and
direct marketing efforts.

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.

54
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED The
Company distributes its group benefit products through group representatives,
who are John Hancock employees or through intermediaries, in key markets
nationwide.

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

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

The significant differences from GAAP include: (1) policy acquisition costs are
charged to expense as incurred rather than deferred and amortized over the
related premium-paying period; (2) policy reserves are based on statutory
mortality, morbidity, and interest requirements without consideration of
withdrawals and Company experience; (3) certain assets designated as
"nonadmitted assets" are excluded from the balance sheet by direct charges to
surplus; (4) reinsurance recoverables are netted against reserves and claim
liabilities rather than reflected as an asset; (5) bonds held as available for
sale are recorded at amortized cost or market value as determined by the NAIC
rather than at fair value; (6) an Asset Valuation Reserve and Interest
Maintenance Reserve as prescribed by the NAIC are not calculated under GAAP.
Under GAAP, realized capital gains and losses are reported in the income
statement on a pretax basis as incurred and investment valuation allowances are
provided when there has been a decline in value deemed other than temporary; (7)
investments in affiliates are carried at their net equity value with changes in
value being recorded directly to policyholders' contingency reserves rather than
consolidated in the financial statements; (8) no provision is made for the
deferred income tax effects of temporary differences between book and tax basis
reporting; (9) certain items, including modifications to required policy
reserves resulting from changes in actuarial assumptions or increased benefits,
are recorded directly to policyholders' contingency reserves rather than being
reflected in income; and (10) surplus notes are reported as surplus rather than
as liabilities. The effects of the foregoing variances from GAAP have not been
determined, but are presumed to be material.

The significant accounting practices of the Company are as follows:

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

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

55
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-term,
highly-liquid investments both readily convertible to known amounts of cash and
so near maturity that there is insignificant risk of changes in value because of
changes in interest rates.

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

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

Investments in affiliates are included on the statutory equity method.

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

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

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

Investment 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. Accumulated depreciation amounted to
$470.5 million and $393.5 million at December 31, 1997 and 1996, respectively.

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 fair
value 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
generally 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 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.

56
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED The
Company also records the NAIC prescribed Interest Maintenance Reserve (IMR) that
represents that portion of the after tax net accumulated unamortized realized
capital gains and losses on sales of fixed income securities, principally bonds
and mortgage loans, attributable to changes in the general level of interest
rates. Such gains and losses are deferred and amortized into income over the
remaining expected lives of the investments sold. At December 31, 1997, the IMR,
net of 1997 amortization of $25.2 million, amounted to $165.6 million which is
included in other policy obligations. The corresponding 1996 amounts were $18.9
million and $121.7 million, respectively.

Property and Equipment: Data processing equipment, which amounted to $30.0
million in 1997 and $41.6 million in 1996 and is 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. Depreciation expense was $21.8 million in 1997 and $31.0 million
in 1996.

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

Fair Value Disclosure of Financial Instruments: Statement of Financial
Accounting Standards (SFAS) No. 107, "Disclosure about Fair Value of Financial
Instruments," requires disclosure of fair value information about certain
financial instruments, whether or not recognized in the statement of financial
position, for which it is practicable to estimate the value. In situations where
quoted market prices are not available, fair values are based on estimates using
present value or other valuation techniques. SFAS No. 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements. Therefore, the aggregate fair value amounts presented do not
represent the underlying value of the Company. See Note 15.

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.

57
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED The
fair value for mortgage loans is estimated using discounted cash flow analyses
using interest rates adjusted to reflect the credit characteristics of the
underlying loans. Mortgage loans with similar characteristics and credit risks
are aggregated into qualitative categories for purposes of the fair value
calculations.

The carrying 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, 1997. 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 are determined using
the specific identification basis. Realized capital gains and losses, net of
taxes and amounts transferred to the IMR, are included in net income. Unrealized
gains and losses, which consist of market value and book value adjustments, are
shown as adjustments to policyholders' contingency reserves.

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: Life, annuity, and accident and health benefit reserves are
developed by actuarial methods and are determined based on published tables
using statutorily specified interest rates and valuation methods that will
provide, in the aggregate, reserves that are greater than or equal to the
minimum or guaranteed policy cash values or the amounts required by the
Commonwealth of Massachusetts Division of Insurance. Reserves for 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 from2 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 generally
ranging from 2% to8 3/4%.

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.

58
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS 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, 1997 December 31, 1996
-------------------- --------------------
Statement Fair Statement Fair
Value Value Value Value
--------- ----- --------- -----
(In millions)
<S> <C> <C> <C> <C>
Guaranteed investment contracts $11,499.4 $11,516.8 $11,921.6 $11,943.2
Fixed-rate deferred and immediate
annuities . . . . . . . . . . . 4,289.1 4,290.4 3,909.3 3,886.1
Supplementary contracts without
life contingencies . . . . . . 40.9 42.1 45.6 46.0
--------- --------- --------- ---------
$15,829.4 $15,849.3 $15,876.5 $15,875.3
========= ========= ========= =========
</TABLE>

Federal Income Taxes: Federal income taxes are reported in the financial
statements based on amounts determined to be payable as a result of operations
within the current accounting period. The operations of the Company 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.

When determining its consolidated federal income tax expense, the Company uses a
number of estimated amounts that may change when the actual tax return is
completed. In addition, the Company must also use an estimated differential
earnings rate (DER) to compute the equity tax portion of its federal income tax
expense. Because the DER is set by the Internal Revenue Service after completion
of the financial statements, a true-up adjustment (i.e., effect of the
difference between the estimated and final DER) is necessary.

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

Certain subsidiaries acquired by the Company have potential tax loss
carryforwards of $14.3 million expiring in 1998. These amounts 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 $146.4 million in
1997 and $309.9 million in 1996.

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 1997, the Company refined certain
actuarial assumptions inherent in the calculation of reserves related to
guaranteed investment contracts and AIDS claims under individual insurance
policies resulting in a net $1.4 million increase in policyholders' contingency
reserves at December 31, 1997. Similar refinements to the actuarial assumptions
inherent in the calculation of reserves related to guaranteed

59
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
investment contracts were made in 1996 resulting in a $27.5 million decrease in
policyholders' contingency reserves at December 31, 1996.

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.

Guaranty Fund Assessments: Guaranty fund assessments are accrued when the
Company receives notice that an amount is payable to a guaranty fund.

NOTE 2--SURPLUS NOTES

On February 25, 1994, the Company issued $450 million of surplus notes that bear
interest at7 3/8% and are scheduled to mature on February 15, 2024. The issuance
of the surplus notes was approved by the Commonwealth of 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 Commonwealth of
Massachusetts Division of Insurance. Surplus notes are reported as part of
policyholders' contingency reserves rather than liabilities. Interest of $33.2
million was paid on the notes during each of 1997 and 1996.

NOTE 3--BORROWED MONEY

At December 31, 1997, the Company had a $500 million syndicated line of credit.
There are 26 banks who are part of the syndicate which is under the leadership
of Morgan Guaranty Trust Company of New York. The banks will commit, when
requested, to loan funds at prevailing interest rates as determined in
accordance with the line of credit agreement, which terminates on June 30, 2001.
The agreement does not contain a material adverse change clause. Under the terms
of the agreement, the Company is required to maintain certain minimum levels of
net worth and comply with certain other covenants. As of December 31, 1997,
these covenants were met; however, 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. In
addition, the Company has guaranteed the timely payment of principal and
interest on the debt. The debt was issued in two notes of equal amounts. The
interest rates on the class A1 and A2 notes are calculated on a floating basis,
based on the monthly LIBOR rates plus 22 and 27 basis points, respectively. The
LIBOR rates were 5.72% and 5.50%, respectively, at December 31, 1997 and 1996.
The class A1 notes were fully repaid on March 25, 1997 and the class A2 notes
have a last scheduled payment date of June 25, 1998. The outstanding balances of
the notes totaled $42.6 million and $127.9 million at December 31, 1997 and
1996, respectively, and are included in other general account obligations.

In 1996, the Company issued $292.0 million of additional debt through a REMIC
(REMIC II). As collateral to the debt, the Company pledged $1,455.4 million of
commercial mortgages to the REMIC II Trust. The debt was issued

60
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 3--BORROWED MONEY--CONTINUED
in two notes. The interest rates on the class A1 and A2 notes are calculated on
a floating basis, based on the monthly LIBOR rate plus 5 and 19 basis points,
respectively. The class A1 notes were fully repaid on December 26, 1997 and the
class A2 notes have a last scheduled payment date of July 26, 1999. The
outstanding balances of the notes totaled $161.0 million and $292.0 million at
December 31, 1997 and 1996, respectively, and are included in other general
account obligations.

On December 31, 1997, the Company had outstanding a short-term note of $75.0
million payable to an affiliate at a variable rate of interest. The note, which
is included in other general account obligations, was repaid on January 5, 1998.

Interest paid on borrowed money was $19.3 million and $10.4 million during 1997
and 1996, respectively.

NOTE 4--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

<TABLE>
<CAPTION>
1997 1996
---- ----
(In millions)
<S> <C> <C>
Investment expenses . . . . . . . . . . . . . . . . . . . $339.6 $333.8
Interest expense . . . . . . . . . . . . . . . . . . . . . 57.9 48.1
Depreciation on real estate and other invested assets . . 76.6 73.3
Real estate and other investment taxes . . . . . . . . . . 61.5 65.2
------ ------
$535.6 $520.4
====== ======
</TABLE>

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

Net realized capital losses consist of the following items:

<TABLE>
<CAPTION>
1997 1996
---- ----
(In millions)
<S> <C> <C>
Net gains from asset sales and foreclosures . . . . . . . . $ 63.4 $ 81.2
Capital gains tax . . . . . . . . . . . . . . . . . . . . . (84.1) (53.7)
Net capital gains transferred to the IMR . . . . . . . . . (69.1) (71.1)
------ ------
Net Realized Capital Losses . . . . . . . . . . . . . . . . $(89.8) $(43.6)
====== ======
</TABLE>

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

<TABLE>
<CAPTION>
1997 1996
---- ----
(In millions)
<S> <C> <C>
Net gains from changes in security values and book value
adjustments. . . . . . . . . . . . . . . . . . . . . . . $ 159.5 $242.2
Increase in asset valuation reserve . . . . . . . . . . . (100.9) (50.5)
------- ------
Net Unrealized Capital Gains and Other Adjustments . . . $ 58.6 $191.7
======= ======
</TABLE>

61
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

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

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

<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized Fair
Year ended December 31, 1997 Value Gains Losses Value
- ---------------------------- --------- ---------- ---------- -----
(In millions)
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies . . $ 258.9 $ 9.3 $ 0.0 $ 268.2
Obligations of states and
political subdivisions . . . 149.6 16.3 0.0 165.9
Debt securities issued by
foreign governments . . . . . 259.7 53.2 0.1 312.8
Corporate securities . . . . . 17,336.1 1,485.9 113.4 18,708.6
Mortgage-backed securities . . 4,981.7 115.9 28.3 5,069.3
--------- -------- ------ ---------
Total bonds . . . . . . . . . $22,986.0 $1,680.6 $141.8 $24,524.8
========= ======== ====== =========
</TABLE>

<TABLE>
<CAPTION>
Year ended December 31, 1996
- ----------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies . . . . . $ 430.2 $ 8.8 $ 4.2 $ 434.8
Obligations of states and political
subdivisions. . . . . . . . . . . . 175.2 8.8 3.9 180.1
Debt securities issued by foreign
governments . . . . . . . . . . . . 203.5 30.1 0.0 233.6
Corporate securities . . . . . . . . 16,902.1 1,083.2 112.6 17,872.7
Mortgage-backed securities . . . . . 4,756.0 116.3 54.5 4,817.8
--------- -------- ------ ---------
Total bonds . . . . . . . . . . . . $22,467.0 $1,247.2 $175.2 $23,539.0
========= ======== ====== =========
</TABLE>

The statement value and fair value of bonds at December 31, 1997, by contractual
maturity, are shown below. Maturities will differ from contractual maturities
because eligible borrowers may exercise their right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Statement Fair
Value Value
--------- -----
(In millions)
<S> <C> <C>

Due in one year or less . . . . . . . . . . . . . $ 1,386.4 $ 1,426.6
Due after one year through five years . . . . . . 5,809.6 6,079.2
Due after five years through ten years . . . . . 5,465.5 5,867.1
Due after ten years . . . . . . . . . . . . . . . 5,342.8 6,082.6
--------- ---------
18,004.3 19,455.5
Mortgage-backed securities . . . . . . . . . . . 4,981.7 5,069.3
--------- ---------
$22,986.0 $24,524.8
========= =========
</TABLE>

Gross gains of $61.5 million in 1997 and $43.8 million in 1996 and gross losses
of $86.6 million in 1997 and $27.6 million in 1996 were realized from the sale
of bonds.

62
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED
At December 31, 1997, bonds with an admitted asset value of $19.2 million were
on deposit with state insurance departments to satisfy regulatory requirements.

The cost of common stocks was $148.0 million and $136.1 million at December 31,
1997 and 1996, respectively. At December 31, 1997, gross unrealized appreciation
on common stocks totaled $139.3 million, and gross unrealized depreciation
totaled $30.4 million. The fair value of preferred stock totaled $695.8 million
at December 31, 1997 and $451.0 million at December 31, 1996.

The Company participates in a security lending program for the purpose of
enhancing income on securities held. At December 31, 1997 and 1996, $217.0
million and $540.5 million, respectively, of the Company's bonds and stocks were
on loan to various brokers/dealers, but were fully collateralized by cash and
U.S. government securities in an account held in trust for the Company. Such
assets reflect the extent of the Company's involvement in securities lending,
not the Company's risk of loss.

Mortgage loans with outstanding principal balances of $71.7 million, bonds with
amortized cost of $98.9 million and real estate with depreciated cost of $18.0
million were nonincome producing for the twelve months ended December 31, 1997.

Restructured commercial mortgage loans aggregated $314.3 million and $385.8
million as of December 31, 1997 and 1996, 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
-----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Expected . . . . . . . . . . . . . . . . . . . . . $33.8 $46.3
Actual . . . . . . . . . . . . . . . . . . . . . . 24.9 29.1
</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.

63
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED
At December 31, 1997, the mortgage loan portfolio was diversified by geographic
region and specific collateral property type as displayed below. The Company
controls credit risk through credit approvals, limits and monitoring procedures.

<TABLE>
<CAPTION>
Statement Geographic Statement
Property Type Value Concentration Value
------------- --------- ------------- ---------
(In millions) (In millions)
<S> <C> <C> <C>
Apartments . . . . . $1,677.7 East North Central . . $ 891.5
Hotels . . . . . . . 186.7 East South Central . . 163.4
Industrial . . . . . 858.1 Middle Atlantic . . . 1,410.2
Office buildings . . 1,748.7 Mountain . . . . . . . 362.2
Retail . . . . . . . 1,609.4 New England . . . . . 836.9
1-4 Family . . . . . 6.0 Pacific . . . . . . . 1,770.6
Agricultural . . . . 1,426.5 South Atlantic . . . . 1,475.4
Other . . . . . . . . 338.1 West North Central . . 260.1
West South Central . . 613.1
Other . . . . . . . . 67.8
-------- --------
$7,851.2 $7,851.2
======== ========
</TABLE>

At December 31, 1997, the fair values of the commercial and agricultural
mortgage loan portfolios were $6.7 billion and $1.5 billion, respectively. The
corresponding amounts as of December 31, 1996 were approximately $6.6 billion
and $1.8 billion, respectively.

The maximum and minimum lending rates for mortgage loans during 1997 were 18.0%
and 7.66% for agricultural loans, 10.0% and 7.19% for other properties, and
7.27% and 7.25% for purchase money mortgages. Generally, the percentage of any
loan to the value of security at the time of the loan, exclusive of insured,
guaranteed or purchase money mortgages, is 75%. For city mortgages, fire
insurance is carried on all commercial and residential properties at least equal
to the excess of the loan over the maximum loan which would be permitted by law
on the land without the building, except as permitted by regulations of the
Federal Housing Commission on loans fully insured under the provisions of the
National Housing Act. For agricultural mortgage loans, fire insurance is not
normally required on land based loans except in those instances where a building
is critical to the farming operation. Fire insurance is required on all
agri-business facilities in an aggregate amount equal to the loan balance.

NOTE 7--REINSURANCE

Premiums, benefits and reserves associated with reinsurance assumed in 1997 were
$787.1 million, $386.6 million, and $7.5 million, respectively. The
corresponding amounts in 1996 were $742.0 million, $317.8 million, and $14.2
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 1997 were $801.8 million,
$767.9 million and $594.9 million, respectively. The corresponding amounts in
1996 were $304.0 million, $217.0 million and $251.2 million, respectively.

64
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 7--REINSURANCE--CONTINUED
Premiums, benefits, and reserves ceded related to the business sold in 1997,
included in the amounts above, were $487.4 million, $503.3 million, and $247.9
million, respectively, at December 31, 1997.

Amounts recoverable on paid claims and funds withheld from reinsurers were as
follows:

<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Reinsurance recoverables . . . . . . . . . . . . . $12.5 $26.5
Funds withheld from reinsurers . . . . . . . . . . 35.1 23.4
</TABLE>

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 $236.3 million at December 31, 1997 and $226.4
million at December 31, 1996.

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

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

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

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

65
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 7--REINSURANCE--CONTINUED
company which is controlled, either directly or indirectly, by a party not
primarily engaged in the business of insurance.

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

NOTE 8--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. Benefits related to the
Company's defined benefit pension plans paid to employees and retirees covered
by annuity contracts issued by the Company amounted to $89.7 million in 1997 and
$84.4 million in 1996. 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 $9,500 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 $9,500. 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 employees based on achievement
of annual and long-term corporate financial objectives.

66
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFIT PLANS--CONTINUED Pension (benefit) expense is summarized as
follows:

<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Defined benefit plans:
Service cost--benefits earned during the period $ 30.7 $ 32.4
Interest cost on the projected benefit obligation 109.3 107.4
Actual return on plan assets . . . . . . . . . . (177.7) (225.1)
Net amortization and deferral . . . . . . . . . 23.7 85.0
------- -------
(14.0) (0.3)
Defined contribution plans . . . . . . . . . . . . 6.2 21.4
------- -------
Total pension (benefit) expense . . . . . . . . . $ (7.8) $ 21.1
======= =======
</TABLE>

Assumptions used in accounting for the defined benefit pension plans were as
follows:

<TABLE>
<CAPTION>
1997 1996
------ --------
<S> <C> <C>
Discount rate . . . . . . . . . . . . . . . . . . . . . . 7.00% 7.25%
Weighted rate of increase in compensation levels . . . . 4.80% 4.80%
Expected long-term rate of return on assets . . . . . . . 8.50% 8.50%
</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
-----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation . . . . . . . . . . . $(1,462.2) $(1,344.8)
========= =========
Accumulated benefit obligation . . . . . . . . . $(1,507.6) $(1,387.7)
========= =========
Projected benefit obligation . . . . . . . . . . . $(1,704.0) $(1,582.4)
Plan assets fair value . . . . . . . . . . . . . . 1,877.7 1,787.6
--------- ---------
Excess of plan assets over projected benefit
obligation. . . . . . . . . . . . . . . . . . . . 173.7 205.2
Unrecognized net gain . . . . . . . . . . . . . . (101.7) (176.1)
Prior service cost not yet recognized in net
periodic pension cost . . . . . . . . . . . . . . 29.6 42.8
Unrecognized net asset, net of amortization . . . (93.2) (95.9)
--------- ---------
Net pension asset (liability) . . . . . . . . . . $ 8.4 $ (24.0)
========= =========
</TABLE>

67
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFIT PLANS--CONTINUED
Accounting for Pensions." The Company furnishes the Division of Insurance with
an actuarial certification of the prepaid expense computation on an annual
basis.

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, 1997, 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 70% equity securities and 30% fixed income
investments.

68
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED
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
----------------------------------------
1997 1996
------------------- -------------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
------- --------- ------- ---------
(In millions)
<S> <C> <C> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees . . . . . . . . . . . . $(228.8) $ (95.7) $(234.2) $(100.6)
Fully eligible active plan
participants . . . . . . . . . (38.7) (17.9) (46.4) (19.4)
------- ------- ------- -------
(267.5) (113.6) (280.6) (120.0)
Plan assets at fair value . . . . 172.7 0.0 132.4 0.0
------- ------- ------- -------
Accumulated postretirement benefit
obligation in excess of plan
assets. . . . . . . . . . . . . . (94.8) (113.6) (148.2) (120.0)
Unrecognized prior service cost . 14.9 4.8 16.7 5.3
Unrecognized prior net gain . . . (122.8) (4.2) (93.0) 4.0
Unrecognized transition obligation 240.7 75.0 256.8 78.4
------- ------- ------- -------
Accrued postretirement benefit cost $ 38.0 $ (38.0) $ 32.3 $ (32.3)
======= ======= ======= =======
</TABLE>

Net postretirement benefits costs for the years ended December 31, 1997 and 1996
were $40.8 million and $47.4 million, respectively, and include the expected
cost of such benefits for newly eligible or vested employees, interest cost, and
amortization of the transition liability.

Net periodic postretirement benefits cost included the following components:

<TABLE>
<CAPTION>
December 31
--------------------------------------
1997 1996
------------------ ------------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
------- --------- ------- ---------
(In millions)
<S> <C> <C> <C> <C>
Eligibility cost . . . . . . . . . . $ 6.9 $ 1.6 $ 7.1 $ 1.8
Interest cost . . . . . . . . . . . 17.8 7.6 19.8 8.3
Actual return on plan assets . . . . (31.0) 0.0 (15.9) 0.0
Net amortization and deferral . . . 32.8 5.1 20.9 5.4
------ ----- ------ -----
Net periodic postretirement benefit
cost. . . . . . . . . . . . . . . . $ 26.5 $14.3 $ 31.9 $15.5
====== ===== ====== =====
</TABLE>

The discount rate used in determining the accumulated postretirement benefit
obligation at December 31, 1997 was 7.0% (7.25% for 1996). The expected
long-term rates of return on plan assets were 8.5% and 7.0% at December 31, 1997
and 1996, respectively. The annual assumed rate of increase in the health care
cost trend rate for the medical

69
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED coverages is 5.75% for
1998 (8.0% was assumed for 1997) and is assumed to decrease gradually to 5.00%
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, 1997 by $26.2 million and the aggregate
of the eligibility and interest cost components of net periodic postretirement
benefit cost by $3.0 million for 1997 and $2.9 million for 1996.

Postretirement welfare benefits for non-vested employees are not reflected in
the above expenses or accumulated postretirement benefit obligations. As of
December 31, 1997, the accumulated postretirement benefit obligations for
non-vested employees amounted to $49.5 million for medical and dental plans and
$10.4 million for life insurance plans. The corresponding amounts as of December
31, 1996 were $69.4 million and $10.7 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 $12.4 billion at December
31, 1997 and $9.6 billion at December 31, 1996; total liabilities amounted to
$11.1 billion at December 31, 1997 and $8.5 billion at December 31, 1996; and
total net income was $184.8 million in 1997 and $193.0 million in 1996.

During 1996, the Company sold certain of its affiliates including its ongoing
property and casualty business and its broker-dealer operations to realign its
business objectives.

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).

The Company received dividends of $65.9 million and $9.4 million in 1997 and
1996, respectively, from unconsolidated affiliates.

NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

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

70
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK--CONTINUED 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 1998 to 2026. These swaps involve, to varying degrees, interest rate
risk in excess of amounts recognized in the statements of financial position.

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

The Company also uses financial futures contracts to hedge 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. Net deferred losses on future contracts were $6.4
million and $0.5 million at December 31, 1997 and 1996, respectively.

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

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

<TABLE>
<CAPTION>
December 31
------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Futures contracts to purchase securities . . . . . . . . $ 154.0 $ 117.6
======== ========
Futures contracts to sell securities . . . . . . . . . . $ 414.2 $ 136.4
======== ========
Notional amount of interest rate swaps, interest rate swaptions, currency rate
swaps, interest rate caps and interest rate floors to:
Receive variable rates . . . . . . . . . . . . . . . . $5,043.7 $3,822.8
======== ========
Receive fixed rates . . . . . . . . . . . . . . . . . $2,596.7 $2,912.5
======== ========
</TABLE>

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

Based on market rates in effect at December 31, 1997, the Company's interest
rate swaps, currency rate swaps, interest rate caps, and interest rate floors
represented (assets) liabilities to the Company with fair values of $58.3

71
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK--CONTINUED million,
$9.7 million, $(0.6) million and $(0.4) million, respectively. The corresponding
amounts as of December 31, 1996 were $16.4 million, $41.1 million, $(0.6)
million and $(0.1) million, respectively. The fair values of the swap agreements
are not recognized in the financial statements.

NOTE 12--LEASES

The Company leases office space and furniture and equipment under various
operating leases including furniture and equipment leased under a series of
sales-leaseback agreements with a nonaffiliated organization. Rental expense for
all operating leases totaled $27.4 million in 1997 and $32.1 million in 1996.
Future minimum rental commitments under noncancellable operating leases for
office space and furniture and equipment are as follows:

<TABLE>
<CAPTION>
December 31, 1997
-------------------
(In millions)
<S> <C>
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . $19.5
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . 17.0
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . 14.5
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1
Thereafter . . . . . . . . . . . . . . . . . . . . . . . 12.2
-----
Total minimum payments . . . . . . . . . . . . . . . . . $82.8
=====
</TABLE>

72
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 13--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND
OBLIGATIONS RELATED TO SEPARATE ACCOUNTS

The Company's annuity reserves and deposit fund liabilities and related separate
account 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, 1997 Percent
----------------- ---------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with
adjustment):
With market value adjustment . . . . . . . . . $ 3,881.6 10.5%
At book value less surrender charge . . . . . 2,881.4 7.8
--------- -----
Total with adjustment . . . . . . . . . . . . 6,763.0 18.3
Subject to discretionary withdrawal (without
adjustment) at book value . . . . . . . . . 3,574.2 9.6
Subject to discretionary withdrawal--separate
accounts . . . . . . . . . . . . . . . . . . 13,455.3 36.3
Not subject to discretionary withdrawal:
General account . . . . . . . . . . . . . . . 11,996.1 32.4
Separate accounts . . . . . . . . . . . . . . 1,274.1 3.4
--------- -----
Total annuity reserves, deposit fund liabilities
and separate accounts--before reinsurance . . . 37,062.7 100.0%
=====
Less reinsurance ceded . . . . . . . . . . . . . 0.0
---------
Net annuity reserves, deposit fund liabilities
and separate accounts . . . . . . . . . . . . . $37,062.7
=========
</TABLE>

Any liquidation costs associated with the $13.5 billion of separate accounts
subject to discretionary withdrawal are sustained by the separate account
contractholders and not by the general account.

NOTE 14--COMMITMENTS AND CONTINGENCIES

The Company has extended commitments to purchase long-term bonds, preferred and
common stocks, and real estate and issue real estate mortgages totaling $693.6
million, $27.6 million, $122.3 million and $467.2 million, respectively, at
December 31, 1997. 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 estimated fair value of the commitments described above
is $1.3 billion at December 31, 1997. The majority of these commitments expire
in 1998.

The Company has contingent liabilities, pursuant to guarantee agreements issued
in connection with real estate joint ventures, in the amount of $43.3 million.

During 1996, the Company entered into a credit support and collateral pledge
agreement with the Federal National Mortgage Association (FNMA). Under the
agreement, the Company sold $532.8 million of commercial mortgage loans and
acquired an equivalent amount of FNMA securities. The Company completed similar
transactions with FNMA in 1991 for $1.042 billion and in 1993 for $71.9 million.
FNMA is guarantying the full face value of the bonds of the three transactions
to the bondholders. However, the Company has agreed to absorb the first 12.25%
of the principal and interest losses (less buy-backs) for the pools of loans
involved in the three transactions, based on

73
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 14--COMMITMENTS AND CONTINGENCIES--CONTINUED
the total outstanding principal balance of $1.036 billion as of July 1, 1996,
but is not required to commit collateral to support this loss contingency. At
December 31, 1997, the aggregate outstanding principal balance of all the
remaining pools of loans from 1991, 1993, and 1996 is $672.0 million.

Historically, the Company has experienced losses of less than one percent on its
multi-family mortgage portfolio. Mortgage loan buy-backs required by the FNMA in
1997 and 1996 amounted to $4.1 million and $3.4 million, respectively.

During 1996, the Company entered into a credit support and collateral pledge
agreement with the Federal Home Loan Mortgage Corporation (FHLMC). Under the
agreement, the Company sold $535.3 million of multi-family loans and acquired an
equivalent amount of FHLMC securities. FHLMC is guarantying the full face value
of the bonds to the bondholders. However, the Company has agreed to absorb the
first 10.5% 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 of less
than one percent on its multi-family loan portfolio. At December 31, 1997, the
aggregate outstanding principal balance of the pools of loans was $500.8
million. There were no mortgage loans buy-backs in 1997 and 1996.

The Company has a support agreement with Variable Life under which the Company
agrees to continue directly or indirectly to own all of Variable Life's common
stock and maintain Variable Life's net worth at not less than $1 million.

The Company has a support agreement with John Hancock Capital Corporation
(JHCC), a non-consolidated wholly-owned subsidiary, 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, 1997 were $351.1 million for short-term borrowings
and $163.2 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 with
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of December 31, 1997. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.

During 1997, the Company entered into a court approved settlement relating to a
class action lawsuit involving certain individual life insurance policies sold
from 1979 through 1996. In entering into the settlement, the Company
specifically denied any wrongdoing. The Company has established a litigation
reserve in connection with the settlement to provide for relief to class members
and for legal and administrative costs associated with the settlement. The
reserve has been charged, net of the related tax effect, directly to
policyholders' contingency reserves of the Company. Given the uncertainties
associated with estimating the reserve, it is possible that the final cost of
the settlement could be different from the amounts presently provided for by the
Company. However, the

74
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 14--COMMITMENTS AND CONTINGENCIES--CONTINUED
Company does not believe that the ultimate resolution of the settlement will
have a material adverse effect on the Company's financial position.

NOTE 15--FAIR VALUE OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
Year ended December 31
---------------------------------------------
1997 1996
----------------------- --------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ----- -------- -----
(In millions)
<S> <C> <C> <C> <C>
Assets
Bonds--Note 6 . . . . . . $22,986.0 $24,524.8 $22,467.0 $23,539.0
Preferred stocks--Note 6 . 640.6 695.8 416.2 451.0
Common stocks--Note 6 . . 256.9 256.9 249.8 249.8
Mortgage loans on real
estate--Note 6 . . . . . 7,851.2 8,215.9 7,964.0 8,400.2
Policy loans--Note 1 . . . 1,577.3 1,577.3 1,589.3 1,589.3
Cash and cash
equivalents--Note 1 . . 724.8 724.8 1,416.7 1,416.7
Liabilities
Guaranteed investment
contracts--Note 1 . . . 11,499.4 11,516.8 11,921.6 11,943.2
Fixed rate deferred and
immediate annuities--Note
1. . . . . . . . . . . . 4,289.1 4,290.4 3,909.3 3,886.1
Supplementary contracts
without life
contingencies--Note 1 . 40.9 42.1 45.6 46.0
Derivatives liabilities
relating to:--Note 11
Interest rate swaps . . -- 58.3 -- 16.4
Currency rate swaps . . -- 9.7 -- 41.1
Interest rate caps . . -- (0.6) -- (0.6)
Interest rate floors . -- (0.4) -- (0.1)
Commitments--Note 14 . . . -- 1,332.3 -- 1,095.7
</TABLE>

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

NOTE 16--IMPACT OF YEAR 2000 (UNAUDITED)

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

75
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 16--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED
The Company as early as 1994 had begun assessing, modifying and converting the
software related to its significant systems and has initiated formal
communications with its significant business partners and customers to determine
the extent to which the Company's interface systems are vulnerable to those
third parties' failure to remediate their own year 2000 issues. While the
Company is developing alternative third party processing arrangements as it
deems appropriate, there is no guarantee that the systems of other companies on
which the Company's systems rely will be converted timely or will not have an
adverse effect on the Company's systems.

The Company expects the project to be substantially complete by early 1999 and
expects the incremental cost to be between $35 million and $45 million. The cost
of the project and the date on which the Company believes it will complete the
year 2000 modifications are based on management's best estimates, which were
derived utilizing numerous assumptions of future events, including availability
of certain resources and other factors. However, there can be no guarantee that
these estimates will be achieved and actual results may differ materially from
those anticipated.

76
<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 than3 1/2% a
year on proceeds held on deposit.

Option 2A--Income of a Specified Amount, with payments each year totaling
at least 1/12th of the proceeds, until the proceeds, with interest credited at
the declared rate but not less than3 1/2% a year on unpaid balances, are fully
paid.

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

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

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

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

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

Other options may be arranged with John Hancock's approval.

ADDITIONAL INSURANCE BENEFITS

On payment of an additional charge 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 by rider.

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. In general, 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.

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

77
<PAGE>

SUICIDE. If the insured commits suicide within 2 years (except where state law
requires a shorter period) from the date of issue shown in the Policy, the
Policy will terminate and 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 less any withdrawals. If the suicide is within 2 years (except where state
law requires a shorter period) from the date of any Policy change that increases
the death benefit, or the payment of any premium requiring evidence of
insurability, the death benefit will not include the increased benefit but will
include the excess premium.

AGE, POLICY ANNIVERSARIES AND MONTHLY PROCESSING DATE. For purpose of the
Policy, an insured's "age" is his or her age on his or her nearest birthday.
Policy months, Policy years and Policy anniversaries are calculated from the
date of issue. The monthly processing date is on or about the first Valuation
Date in each Policy month.

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 shall be incontestable, other than for nonpayment
of premiums, after it has been in force during the lifetime of the insured for 2
years from its issue date. If, however, evidence of insurability is required
with respect to any increase in death benefit, such increase shall be
incontestable after the increase has been in force during the lifetime of the
insured for 2 years from the increase date.

DEFERRAL OF DETERMINATIONS AND PAYMENTS. Payment of any death, surrender,
partial withdrawal or loan proceeds will ordinarily be made within seven days
after receipt at John Hancock's Servicing Office of all documents required for
any such payment. Approximately two-thirds of the claims for death proceeds
which are made within two years after the date of issue of the Policy will be
investigated to determine whether the claim should be contested and payment of
these claims will therefore be delayed.

John Hancock may defer any transaction requiring a determination of Account
Value in any variable Subaccount 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 Owners.
The foregoing description of Policy provisions is qualified by reference to
the specimen Policy which has been filed as an exhibit to the Registration
Statement and to any variations in Policy provisions required by the regulatory
authorities of the state that has approved the Policy for issue.

78
<PAGE>

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

The following tables illustrate the changes in death benefit, Account Value
and Surrender Value of the Policy, disregarding any Policy loans. Each table
separately illustrates the operation of a Policy for an identified issue age,
Planned Premium schedule and Sum Insured and shows how the death benefit,
Account Value and Surrender Value 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 Planned
Premiums paid at the beginning of each Policy year and will assist in a
comparison of the values set forth in the tables with those under other variable
life insurance policies which may be issued by John Hancock or other companies.
Tables are provided for each of the three available death benefit options. The
values for a Policy would be different from those shown if premiums are paid in
different amounts or at different times or if the actual gross rates of
investment return average 0%, 6% or 12% over a period of years, but nevertheless
fluctuate above or below the average for individual Policy years, or if the
Policy were issued in a state in which no distinctions are made based on the
gender of the insureds.

The amounts shown for the death benefit, Account Value and Surrender Value are
as of the end of each Policy year. The tables headed "Using Current Charges"
assume that the current rates for insurance, sales, risk, and expense charges
(including John Hancock's intended waiver after ten Policy years of the sales
charges deducted from certain premiums and its intended reduction in the tenth
Policy year in the insurance charge deducted monthly from Account Value) will
apply in each year illustrated. The tables headed "Using Maximum Charges"
assumes that the maximum (guaranteed) insurance, sales, risk, and expense
charges will be made 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
.58%) 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 .18%). 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 Portfolio
charges and expenses associated with any Policy will vary depending upon the
actual allocation of Policy values among Subaccounts.

The tables reflect that no charge is currently made to the Account for Federal
income taxes. However, 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. All of the tables do, however, reflect
the imposition of a Federal DAC Tax charge in the amount of 1.25% of all
premiums paid and a premium tax charge in the amount of 2.35% of all premiums
paid.

The tables assume that the Guaranteed Death Benefit feature was in effect the
first 5 Policy years.

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.

John Hancock will furnish upon request a comparable illustration reflecting
the proposed insureds' ages, sexes, underwriting risk classifications and the
Sum Insured at issue and Planned Premium amount requested, and assuming annual
Planned Premiums.

79
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE:
$100,000 $760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 244 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 814 0 0 71
3 2,516 100,000 100,000 100,000 1,091 1,241 1,405 0 149 312
4 3,439 100,000 100,000 100,000 1,504 1,758 2,046 411 666 953
5 4,409 100,000 100,000 100,000 1,897 2,285 2,741 804 1,193 1,648
6 5,428 100,000 100,000 100,000 2,272 2,823 3,495 1,179 1,730 2,402
7 6,497 100,000 100,000 100,000 2,625 3,369 4,312 1,532 2,276 3,219
8 7,620 100,000 100,000 100,000 2,957 3,923 5,198 2,063 3,029 4,304
9 8,799 100,000 100,000 100,000 3,265 4,484 6,160 2,570 3,789 5,465
10 10,037 100,000 100,000 100,000 3,558 5,061 7,219 3,261 4,765 6,922
11 11,337 100,000 100,000 100,000 3,854 5,676 8,404 3,656 5,479 8,207
12 12,702 100,000 100,000 100,000 4,127 6,302 9,701 4,029 6,203 9,602
13 14,135 100,000 100,000 100,000 4,375 6,937 11,119 4,375 6,937 11,119
14 15,640 100,000 100,000 100,000 4,596 7,580 12,670 4,596 7,580 12,670
15 17,220 100,000 100,000 100,000 4,787 8,228 14,369 4,787 8,228 14,369
16 18,879 100,000 100,000 100,000 4,948 8,883 16,232 4,948 8,883 16,232
17 20,621 100,000 100,000 100,000 5,069 9,534 18,270 5,069 9,534 18,270
18 22,450 100,000 100,000 100,000 5,143 10,176 20,499 5,143 10,176 20,499
19 24,370 100,000 100,000 100,000 5,166 10,803 22,938 5,166 10,803 22,938
20 26,387 100,000 100,000 100,000 5,131 11,409 25,609 5,131 11,409 25,609
25 38,086 100,000 100,000 100,000 3,846 13,872 43,500 3,846 13,872 43,500
30 53,018 ** 100,000 100,000 ** 14,354 73,356 ** 14,354 73,356
35 72,076 ** 100,000 143,268 ** 9,914 124,581 ** 9,914 124,581
40 96,398 ** ** 219,421 ** ** 208,973 ** ** 208,973
45 127,441 ** ** 366,521 ** ** 349,067 ** ** 349,067
</TABLE>

- ---------
*If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

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

80
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE:
$100,000 $760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 609 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,010 1,153 1,307 0 60 214
4 3,439 100,000 100,000 100,000 1,394 1,634 1,905 301 541 812
5 4,409 100,000 100,000 100,000 1,758 2,123 2,550 665 1,030 1,457
6 5,428 100,000 100,000 100,000 2,102 2,619 3,247 1,009 1,526 2,154
7 6,497 100,000 100,000 100,000 2,424 3,119 3,999 1,332 2,026 2,906
8 7,620 100,000 100,000 100,000 2,725 3,624 4,810 1,831 2,730 3,916
9 8,799 100,000 100,000 100,000 3,000 4,131 5,684 2,305 3,435 4,989
10 10,037 100,000 100,000 100,000 3,259 4,650 6,644 2,963 4,354 6,347
11 11,337 100,000 100,000 100,000 3,491 5,170 7,682 3,294 4,972 7,484
12 12,702 100,000 100,000 100,000 3,695 5,689 8,805 3,596 5,590 8,706
13 14,135 100,000 100,000 100,000 3,870 6,206 10,023 3,870 6,206 10,023
14 15,640 100,000 100,000 100,000 4,013 6,720 11,345 4,013 6,720 11,345
15 17,220 100,000 100,000 100,000 4,123 7,226 12,779 4,123 7,226 12,779
16 18,879 100,000 100,000 100,000 4,196 7,723 14,337 4,196 7,723 14,337
17 20,621 100,000 100,000 100,000 4,228 8,204 16,027 4,228 8,204 16,027
18 22,450 100,000 100,000 100,000 4,211 8,662 17,861 4,211 8,662 17,861
19 24,370 100,000 100,000 100,000 4,141 9,093 19,852 4,141 9,093 19,852
20 26,387 100,000 100,000 100,000 4,008 9,484 22,011 4,008 9,484 22,011
25 38,086 100,000 100,000 100,000 2,175 10,570 36,037 2,175 10,570 36,037
30 53,018 ** 100,000 100,000 ** 8,905 58,283 ** 8,905 58,283
35 72,076 ** 100,000 110,566 ** 853 96,145 ** 853 96,145
40 96,398 ** ** 167,230 ** ** 159,266 ** ** 159,266
45 127,441 ** ** 275,482 ** ** 262,363 ** ** 262,363
</TABLE>

- ---------
*If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

81
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE:
$100,000 $760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,217 100,243 100,269 217 243 269 0 0 0
2 1,636 100,660 100,734 100,812 660 734 812 0 0 68
3 2,516 101,087 101,237 101,399 1,087 1,237 1,399 0 144 306
4 3,439 101,496 101,749 102,035 1,496 1,749 2,035 403 657 942
5 4,409 101,885 102,271 102,723 1,885 2,271 2,723 792 1,178 1,630
6 5,428 102,255 102,801 103,467 2,255 2,801 3,467 1,162 1,709 2,374
7 6,497 102,601 103,337 104,270 2,601 3,337 4,270 1,509 2,245 3,177
8 7,620 102,925 103,879 105,138 2,925 3,879 5,138 2,031 2,985 4,244
9 8,799 103,225 104,425 106,075 3,225 4,425 6,075 2,530 3,730 5,380
10 10,037 103,506 104,984 107,102 3,506 4,984 7,102 3,210 4,687 6,806
11 11,337 103,789 105,575 108,247 3,789 5,575 8,247 3,592 5,378 8,049
12 12,702 104,049 106,174 109,492 4,049 6,174 9,492 3,950 6,075 9,393
13 14,135 104,280 106,776 110,845 4,280 6,776 10,845 4,280 6,776 10,845
14 15,640 104,482 107,379 112,315 4,482 7,379 12,315 4,482 7,379 12,315
15 17,220 104,653 107,981 113,912 4,653 7,981 13,912 4,653 7,981 13,912
16 18,879 104,791 108,581 115,649 4,791 8,581 15,649 4,791 8,581 15,649
17 20,621 104,887 109,168 117,530 4,887 9,168 17,530 4,887 9,168 17,530
18 22,450 104,933 109,734 119,564 4,933 9,734 19,564 4,933 9,734 19,564
19 24,370 104,925 110,271 121,760 4,925 10,271 21,760 4,925 10,271 21,760
20 26,387 104,855 110,772 124,129 4,855 10,772 24,129 4,855 10,772 24,129
25 38,086 103,365 112,395 139,032 3,365 12,395 39,032 3,365 12,395 39,032
30 53,018 ** 111,247 160,376 ** 11,247 60,376 ** 11,247 60,376
35 72,076 ** 104,150 189,745 ** 4,150 89,745 ** 4,150 89,745
40 96,398 ** ** 229,025 ** ** 129,025 ** ** 129,025
45 127,441 ** ** 277,606 ** ** 177,606 ** ** 177,606
</TABLE>

- ---------
*If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

82
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE:
$100,000 $760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,190 100,216 100,241 190 216 241 0 0 0
2 1,636 100,607 100,678 100,751 607 678 751 0 0 8
3 2,516 101,006 101,148 101,302 1,006 1,148 1,302 0 55 209
4 3,439 101,387 101,626 101,895 1,387 1,626 1,895 294 533 802
5 4,409 101,747 102,109 102,533 1,747 2,109 2,533 654 1,016 1,440
6 5,428 102,086 102,598 103,221 2,086 2,598 3,221 993 1,505 2,128
7 6,497 102,402 103,089 103,959 2,402 3,089 3,959 1,309 1,997 2,866
8 7,620 102,695 103,583 104,753 2,695 3,583 4,753 1,801 2,689 3,859
9 8,799 102,962 104,076 105,605 2,962 4,076 5,605 2,267 3,380 4,910
10 10,037 103,211 104,578 106,535 3,211 4,578 6,535 2,915 4,281 6,239
11 11,337 103,432 105,077 107,536 3,432 5,077 7,536 3,234 4,879 7,338
12 12,702 103,622 105,571 108,612 3,622 5,571 8,612 3,524 5,472 8,513
13 14,135 103,782 106,058 109,770 3,782 6,058 9,770 3,782 6,058 9,770
14 15,640 103,909 106,535 111,017 3,909 6,535 11,017 3,909 6,535 11,017
15 17,220 104,000 106,999 112,358 4,000 6,999 12,358 4,000 6,999 12,358
16 18,879 104,054 107,447 113,800 4,054 7,447 13,800 4,054 7,447 13,800
17 20,621 104,063 107,870 115,348 4,063 7,870 15,348 4,063 7,870 15,348
18 22,450 104,022 108,261 117,004 4,022 8,261 17,004 4,022 8,261 17,004
19 24,370 103,925 108,612 118,775 3,925 8,612 18,775 3,925 8,612 18,775
20 26,387 103,764 108,912 120,663 3,764 8,912 20,663 3,764 8,912 20,663
25 38,086 101,785 109,294 132,058 1,785 9,294 32,058 1,785 9,294 32,058
30 53,018 ** 106,403 147,055 ** 6,403 47,055 ** 6,403 47,055
35 72,076 ** ** 165,101 ** ** 65,101 ** ** 65,101
40 96,398 ** ** 183,601 ** ** 83,601 ** ** 83,601
45 127,441 ** ** 194,816 ** ** 94,816 ** ** 94,816
</TABLE>

- ---------
*If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

83
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE:
$100,000 $760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 244 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 814 0 0 71
3 2,516 100,000 100,000 100,000 1,091 1,241 1,405 0 149 312
4 3,439 100,000 100,000 100,000 1,504 1,758 2,046 411 666 953
5 4,409 100,000 100,000 100,000 1,897 2,285 2,741 804 1,193 1,648
6 5,428 100,000 100,000 100,000 2,272 2,823 3,495 1,179 1,730 2,402
7 6,497 100,000 100,000 100,000 2,625 3,369 4,312 1,532 2,276 3,219
8 7,620 100,000 100,000 100,000 2,957 3,923 5,198 2,063 3,029 4,304
9 8,799 100,000 100,000 100,000 3,265 4,484 6,160 2,570 3,789 5,465
10 10,037 100,000 100,000 100,000 3,558 5,061 7,219 3,261 4,765 6,922
11 11,337 100,000 100,000 100,000 3,854 5,676 8,404 3,656 5,479 8,207
12 12,702 100,000 100,000 100,000 4,127 6,302 9,701 4,029 6,203 9,602
13 14,135 100,000 100,000 100,000 4,375 6,937 11,119 4,375 6,937 11,119
14 15,640 100,000 100,000 100,000 4,596 7,580 12,670 4,596 7,580 12,670
15 17,220 100,000 100,000 100,000 4,787 8,228 14,369 4,787 8,228 14,369
16 18,879 100,000 100,000 100,000 4,948 8,883 16,232 4,948 8,883 16,232
17 20,621 100,000 100,000 100,000 5,069 9,534 18,270 5,069 9,534 18,270
18 22,450 100,000 100,000 100,000 5,143 10,176 20,499 5,143 10,176 20,499
19 24,370 100,000 100,000 100,000 5,166 10,803 22,938 5,166 10,803 22,938
20 26,387 100,000 100,000 100,000 5,131 11,409 25,609 5,131 11,409 25,609
25 38,086 100,000 100,000 100,000 3,846 13,872 43,500 3,846 13,872 43,500
30 53,018 ** 100,000 123,596 ** 14,354 72,618 ** 14,354 72,618
35 72,076 ** 100,000 177,234 ** 9,914 117,094 ** 9,914 117,094
40 96,398 ** ** 251,422 ** ** 183,680 ** ** 183,680
45 127,441 ** ** 354,524 ** ** 280,789 ** ** 280,789
</TABLE>

- ---------
*If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

84
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK SUM INSURED AT ISSUE:
$100,000 $760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------ -------------- -------- --------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 609 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,010 1,153 1,307 0 60 214
4 3,439 100,000 100,000 100,000 1,394 1,634 1,905 301 541 812
5 4,409 100,000 100,000 100,000 1,758 2,123 2,550 665 1,030 1,457
6 5,428 100,000 100,000 100,000 2,102 2,619 3,247 1,009 1,526 2,154
7 6,497 100,000 100,000 100,000 2,424 3,119 3,999 1,332 2,026 2,906
8 7,620 100,000 100,000 100,000 2,725 3,624 4,810 1,831 2,730 3,916
9 8,799 100,000 100,000 100,000 3,000 4,131 5,684 2,305 3,435 4,989
10 10,037 100,000 100,000 100,000 3,259 4,650 6,644 2,963 4,354 6,347
11 11,337 100,000 100,000 100,000 3,491 5,170 7,682 3,294 4,972 7,484
12 12,702 100,000 100,000 100,000 3,695 5,689 8,805 3,596 5,590 8,706
13 14,135 100,000 100,000 100,000 3,870 6,206 10,023 3,870 6,206 10,023
14 15,640 100,000 100,000 100,000 4,013 6,720 11,345 4,013 6,720 11,345
15 17,220 100,000 100,000 100,000 4,123 7,226 12,779 4,123 7,226 12,779
16 18,879 100,000 100,000 100,000 4,196 7,723 14,337 4,196 7,723 14,337
17 20,621 100,000 100,000 100,000 4,228 8,204 16,027 4,228 8,204 16,027
18 22,450 100,000 100,000 100,000 4,211 8,662 17,861 4,211 8,662 17,861
19 24,370 100,000 100,000 100,000 4,141 9,093 19,852 4,141 9,093 19,852
20 26,387 100,000 100,000 100,000 4,008 9,484 22,011 4,008 9,484 22,011
25 38,086 100,000 100,000 100,000 2,175 10,570 36,037 2,175 10,570 36,037
30 53,018 ** 100,000 100,000 ** 8,905 58,280 ** 8,905 58,280
35 72,076 ** 100,000 140,350 ** 853 92,726 ** 853 92,726
40 96,398 ** ** 195,353 ** ** 142,718 ** ** 142,718
45 127,441 ** ** 269,174 ** ** 213,190 ** ** 213,190
</TABLE>

- ---------
*If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

85
<PAGE>

[LOGO OF JOHN HANCOCK APPEARS HERE]

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

S8143 5/98
<PAGE>

[LOGO OF JOHN HANCOCK APPEARS HERE]

Mutual Life
Insurance Company
(John Hancock)

FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

John Hancock Place
Boston, Massachusetts 02117

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

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

PROSPECTUS MAY 1, 1998

The flexible 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
(the "Account"), by a fixed subaccount (the "Fixed Account"), or by any
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 investment portfolio ("Portfolio") of John
Hancock Variable Series Trust I, a "series" type mutual fund advised by John
Hancock Mutual Life Insurance Company ("John Hancock") or of M Fund, Inc., a
"series" type mutual fund advised by M Financial Investment Advisers, Inc.
(collectively, the "Funds"). The assets of the Fixed Account will be invested in
the general account of John Hancock 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 the Funds: Managed, Growth & Income, Equity Index, Large Cap
Value, Large Cap Growth, Mid Cap Value, Mid Cap Growth, Diversified Mid Cap
Growth (formerly, Special Opportunities), Real Estate Equity, Small/Mid Cap
CORE, Small Cap Value, Small Cap Growth, Global Equity, International Balanced,
International Equity Index (formerly, International Equities), International
Opportunities, Emerging Markets Equity, Short-Term Bond (formerly, Short-Term
U.S. Government), Bond Index, Sovereign Bond, Strategic Bond, High Yield Bond,
Money Market, Edinburgh Overseas Equity, Turner Core Growth, Frontier Capital
Appreciation, and Enhanced U.S. Equity. (The Small/Mid Cap CORE, Global Equity,
Emerging Markets Equity, Bond Index, High Yield Bond, and Enhanced U.S. Equity
Portfolios are not currently available to Owners but are expected to be made
available later in 1998.) Other variable Subaccounts and Portfolios may be added
in the future.

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

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON5THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>

INDEX OF DEFINED WORDS AND PHRASES

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

<TABLE>
<CAPTION>
Page
<S> <C>
Account . . . . . . . . . . . . . . . . . . . . . 7
Account Value . . . . . . . . . . . . . . . . . . 1
Age . . . . . . . . . . . . . . . . . . . . . . . 71
Base Policy Target Premium . . . . . . . . . . . . 20
DAC Tax . . . . . . . . . . . . . . . . . . . . . 20
Death Benefit . . . . . . . . . . . . . . . . . . 15
Fixed Account . . . . . . . . . . . . . . . . . . 10
Funds . . . . . . . . . . . . . . . . . . . . . . Front Cover
Guaranteed Death Benefit . . . . . . . . . . . . . 12
Guaranteed Death Benefit Grace Period . . . . . . 12
Guaranteed Death Benefit Premium . . . . . . . . . 12
Indebtedness . . . . . . . . . . . . . . . . . . . 18
Investment Rule . . . . . . . . . . . . . . . . . 12
Loan Assets . . . . . . . . . . . . . . . . . . . 18
Minimum First Premium . . . . . . . . . . . . . . 11
Modal Processing Date . . . . . . . . . . . . . . 12
Planned Premium . . . . . . . . . . . . . . . . . 12
Policy Anniversary . . . . . . . . . . . . . . . . 72
Policy Grace Period . . . . . . . . . . . . . . . 12
Portfolio . . . . . . . . . . . . . . . . . . . . Front Cover
Servicing Office . . . . . . . . . . . . . . . . . Front Cover
Subaccount . . . . . . . . . . . . . . . . . . . . Front Cover
Sum Insured . . . . . . . . . . . . . . . . . . . 5
Surrender Value . . . . . . . . . . . . . . . . . 13
Target Premium . . . . . . . . . . . . . . . . . . 20
Valuation Date . . . . . . . . . . . . . . . . . . 10
Valuation Period . . . . . . . . . . . . . . . . . 10
Variable Subaccounts . . . . . . . . . . . . . . . 2
7-Pay Premium Limit . . . . . . . . . . . . . . . 13
</TABLE>

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
JOHN HANCOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
THE ACCOUNT AND SERIES FUNDS . . . . . . . . . . . . . . . . . . . . . 7
The Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Series Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
THE FIXED ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . 11
POLICY PROVISIONS AND BENEFITS . . . . . . . . . . . . . . . . . . . . 11
Requirements for Issuance of Policy . . . . . . . . . . . . . . . . 11
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Account Value and Surrender Value . . . . . . . . . . . . . . . . . 14
Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Transfers Among Subaccounts . . . . . . . . . . . . . . . . . . . . 16
Telephone Transfers and Policy Loans . . . . . . . . . . . . . . . . 17
Loan Provisions and Indebtedness . . . . . . . . . . . . . . . . . . 17
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . . 19
CHARGES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 19
Charges Deducted from Premiums . . . . . . . . . . . . . . . . . . . 19
Sales Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Administrative Surrender Charge . . . . . . . . . . . . . . . . . . 22
Reduced Charges for Eligible Groups . . . . . . . . . . . . . . . . 22
Charges Deducted from Account Value or Assets . . . . . . . . . . . 22
Guarantee of Premiums and Certain Charges . . . . . . . . . . . . . 24
DISTRIBUTION OF POLICIES . . . . . . . . . . . . . . . . . . . . . . . 24
TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Policy Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Charge for John Hancock's Taxes . . . . . . . . . . . . . . . . . . 26
Corporate and H.R. 10 Plans . . . . . . . . . . . . . . . . . . . . 26
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JOHN HANCOCK . . . . . . 27
REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
VOTING PRIVILEGES . . . . . . . . . . . . . . . . . . . . . . . . . . 28
CHANGES THAT JOHN HANCOCK CAN MAKE . . . . . . . . . . . . . . . . . . 29
STATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . 29
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 30
APPENDIX--OTHER POLICY PROVISIONS . . . . . . . . . . . . . . . . . . 72
APPENDIX--IMPACT OF YEAR 2000. . . . . . . . . . . . . . . . . . . . . 74
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER
VALUES AND ACCUMULATED PREMIUMS . . . . . . . . . . . . . . . . . . . 75
</TABLE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY OFFERED?

The Policies work generally as follows. A premium payment is periodically made
to John Hancock. John Hancock takes from each premium an amount for taxes and,
from certain premiums, sales expenses. John Hancock then places the rest of the
premium into as many as ten Subaccounts as directed by the owner of the Policy
(the "Owner"). The assets allocated to each variable Subaccount are invested in
shares of the corresponding Portfolio of the Funds. The currently available
Portfolios are identified on the cover of this Prospectus. The assets allocated
to the Fixed Account are invested in the general account of 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.

<PAGE>

WHAT IS THE AMOUNT OF THE PREMIUMS?

Premiums are flexible and the Owner may choose the amount and frequency of
premium payments.

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. The
Account is subdivided into a number of variable Subaccounts each of which
corresponds to one of the Portfolios of the Funds. The assets of each variable
Subaccount within the Account are invested in a corresponding Portfolio of the
Funds. The Portfolios of the Funds which are currently available are Growth &
Income, Large Cap Growth, Sovereign Bond, Money Market, Managed, Real Estate
Equity, International Equities, Short-Term U.S. Government, Special
Opportunities, Small Cap Growth, Small Cap Value, Mid Cap Growth, Mid Cap Value,
International Balanced, International Opportunities, Large Cap Value, Strategic
Bond, Equity Index, Edinburgh Overseas Equity, Turner Core Growth and Frontier
Capital Appreciation. The Enhanced U.S. Equity Portfolio is expected to be made
available sometime in the future.

<PAGE>

<TABLE>
<CAPTION>
Other
Fund
Other Fund Total Expenses
Expenses Fund Absent
Management After Expense Operating Expense
Fund Name Fee Reimbursement Expenses Reimbursement*
--------- ---------- ------------- --------- ----------------
<S> <C> <C> <C> <C>
Managed . . . . . . . 0.33% 0.04% 0.37% N/A
Growth & Income . . . 0.25% 0.03% 0.28% N/A
Equity Index. . . . . 0.15% 0.25% 0.40% 0.40%
Large Cap Value . . . 0.75% 0.25% 1.00% 0.31%
Large Cap Growth. . . 0.39% 0.05% 0.44% N/A
Mid Cap Value . . . . 0.80% 0.25% 1.05% 0.34%
Mid Cap Growth. . . . 0.85% 0.25% 1.10% 0.57%
Diversified Mid Cap
Growth . . . . . . . 0.75% 0.10% 0.85% N/A
Real Estate Equity. . 0.60% 0.09% 0.69% N/A
Small/Mid Cap CORE. . 0.80% 0.25% 1.05% N/A
Small Cap Value . . . 0.80% 0.25% 1.05% 0.50%
Small Cap Growth. . . 0.75% 0.25% 1.00% 0.37%
Global Equity . . . . 0.90% 0.25% 1.15% N/A
International Balanced 0.85% 0.25% 1.10% 0.71%
International Equity
Index. . . . . . . . 0.18% 0.19% 0.37% N/A
International
Opportunities. . . . 0.97% 0.25% 1.22% 0.60%
Emerging Markets
Equity . . . . . . . 1.30% 0.25% 1.55% N/A
Short-Term Bond . . . 0.30% 0.21% 0.51% N/A
Bond Index. . . . . . 0.15% 0.25% 0.40% N/A
Sovereign Bond. . . . 0.25% 0.06% 0.31% N/A
Strategic Bond. . . . 0.75% 0.25% 1.00% 0.57%
High Yield Bond . . . 0.65% 0.25% 0.90% N/A
Money Market. . . . . 0.25% 0.08% 0.33% N/A
</TABLE>

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

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

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

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

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

<PAGE>

WHAT ARE THE CHARGES MADE BY JOHN HANCOCK?

Issue Charge. A charge deducted monthly from Account Value at the rate of $20
per month for the first 12 Policy months.

Maintenance Charge. A charge deducted monthly from Account Value in an amount
equal to no more than $8 (currently $6) for all Policy years.

Charge for Mortality and Expense Risks. A charge deducted daily from the
variable Subaccounts at a maximum effective annual rate of .90% (currently .60%)
of the assets of each variable Subaccount.

Charge for Partial Withdrawal. A charge of $20 deducted from Account Value at
the time of withdrawal.

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

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

<PAGE>

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?

HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?

WHAT COMMISSIONS ARE PAID TO AGENTS?

WHAT IS THE DEATH BENEFIT?

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

Option 1: Level Death Benefit. A level death benefit equal to the Sum Insured
or, if greater, the Account Value multiplied by the applicable Corridor Factor.

Option 2: Variable Death Benefit. A variable death benefit equal to the Sum
Insured plus any Account Value, or, if greater, the Account Value multiplied by
the applicable Corridor Factor.

If neither of the above Options meets the objectives of the Owner, a third
Option may be elected and an endorsement to the Policy will be issued. This
third Option is described below.

<PAGE>

withdrawals, is at least equal to the cumulative amount of Guaranteed Death
Benefit Premiums due to date. This provision applies only if the insured is in
the preferred or standard underwriting risk class and satisfies certain other
underwriting standards relating to health and occupation.

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

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

IS THERE A SHORT-TERM CANCELLATION RIGHT?

WHAT INVESTMENT TRANSFERS ARE ALLOWED AN OWNER?

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

<PAGE>

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

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
approximately $59 billion.

THE ACCOUNT AND SERIES FUNDS

THE ACCOUNT

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

<PAGE>

SERIES FUNDS

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

Managed Portfolio

Growth & Income Portfolio

Equity Index Portfolio

Large Cap Value Portfolio

Large Cap Growth Portfolio

Mid Cap Value Portfolio

Mid Cap Growth Portfolio

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

<PAGE>

Diversified Mid Cap Growth Portfolio

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

Real Estate Equity Portfolio

Small/Mid Cap CORE Portfolio

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

Small Cap Value Portfolio

Small Cap Growth Portfolio

Global Equity Portfolio

International Balanced Portfolio

International Equity Index Portfolio

International Opportunities Portfolio

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

Emerging Markets Equity Portfolio

<PAGE>

Short-Term Bond Portfolio

Bond Index Portfolio

Sovereign Bond Portfolio

Strategic Bond Portfolio

High Yield Bond Portfolio

Money Market Portfolio

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

John Hancock acts as the investment manager for the Portfolios described
above, and John Hancock's indirectly owned subsidiary, Independence Investment
Associates, Inc., with its principal place of business at 53 State Street,
Boston, MA 02109, provides sub-investment advice with respect to the Managed,
Growth & Income, Large Cap Growth, Real Estate Equity, and Short-Term Bond
Portfolios. Independence International Associates, Inc., a subsidiary of IIA
located at the same address as IIA, is a sub-investment adviser to the
International Equity Index Portfolio.

<PAGE>

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

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

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

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

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

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

11
<PAGE>

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

THE FIXED ACCOUNT

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 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.

12
<PAGE>

POLICY PROVISIONS AND BENEFITS

REQUIREMENTS FOR ISSUANCE OF POLICY

PREMIUMS

Payment Flexibility. Premiums are flexible. The Owner may choose the amount
and frequency of premium payments, so long as each premium payment meets the
requirements described below.

Other Premium Limitations. Federal tax law requires a minimum death benefit in
relation to Account Value. See "Death Benefits--Definition of Life Insurance".
The death benefit of the Policy will be increased if necessary to ensure that
the Policy will continue to satisfy this requirement. If the payment of a given
premium will cause the Account Value to increase to such an extent that an
increase in death benefit is necessary to satisfy Federal tax law requirements,
John Hancock has the right to not accept the excess portion of that premium
payment, or to require evidence of insurability before that portion is accepted.
In no event, however, will John Hancock refuse to accept any premium necessary
to prevent the Policy from lapsing. Also, if an Owner has elected to use the
"guideline

13
<PAGE>

premium and cash value corridor" test for Federal income tax purposes, John
Hancock will not accept the portion of any premium that exceeds the maximum
amount prescribed under that test.

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 date of issue will be processed
as if received on the Valuation Date immediately preceding the date of
issue.

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

<PAGE>

(3) That portion of any premium that we delay accepting as described under
"Other Premium Limitations" above, or "7-Pay Premium Limit" below, will
be processed as of the end of the Valuation Period in which we accept
that amount.

ACCOUNT VALUE AND SURRENDER VALUE

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

15
<PAGE>

The effect of a withdrawal, including its associated charge, upon the death
benefit depends upon the death benefit option in effect.

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

John Hancock reserves the right to refuse any withdrawal request that would
cause the Policy's Sum Insured to fall below $100,000.

DEATH BENEFITS

Option 1: Level Death Benefit. Under this option, the death benefit will equal
the Sum Insured, unless the Account Value multiplied by the Corridor Factor
produces a higher death benefit. The Corridor Factor depends upon the attained
age of the insured. The Corridor Factor decreases slightly (or remains the same
at older and younger ages) from year to year as the attained age of the insured
increases. A complete list of Corridor Factors is

16
<PAGE>

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

Option 2: Variable Death Benefit. Under this option, the death benefit will
equal the Sum Insured plus any Account Value, unless the Account Value
multiplied by the Corridor Factor produces a higher death benefit. The Corridor
Factor depends upon the then attained age of the insured. The Corridor Factor
decreases slightly (or remains the same at older and younger ages) from year to
year as the attained age of the insured increases. A complete list of Corridor
Factors is set forth in the Policy. Under this option the Policy will be subject
to the "guideline premium and cash value corridor" test as defined by Code
Section 7702. This option will offer the best opportunity for the Owner who
would like to have an increasing death benefit as early as possible. The death
benefit will increase whenever there is an increase in the Account Value and
will decrease whenever there is a decrease in the Account Value, but never below
the Sum Insured.

If neither of the above Options meets the objectives of the Owner, a third
Option may be elected and an endorsement to the Policy will be issued. This
third Option is described below.

Option 3: Level Death Benefit With Greater Funding. Under this option, the
death benefit will equal the Sum Insured, unless the Account Value, multiplied
by the Death Benefit Factor, gives a higher death benefit. The Death Benefit
Factor depends upon the sex, smoking status and then attained age of the
insured. The Death Benefit Factor decreases slightly from year to year as the
attained age of the insured increases. A complete list of Death Benefit Factors
is set forth in the Policy. Under this option, the death benefit will be subject
to the "cash value accumulation" test as defined by Code Section 7702. This
option will offer the best opportunity for the Owner who is looking for an
increasing death benefit in later Policy years and/or would like to fund the
policy at the "7-pay" limit for the full 7 years. When the Account Value
multiplied by the Death Benefit Factor exceeds the Sum Insured, the death
benefit will increase whenever there is an increase in the Account Value and
will decrease whenever there is a decrease in the Account Value, but never below
the Sum Insured.

17
<PAGE>

TRANSFERS AMONG SUBACCOUNTS

18
<PAGE>

LOAN PROVISIONS AND INDEBTEDNESS

The amount of any outstanding loan plus accrued interest is called the
"Indebtedness", a loan will not be permitted unless it is at least $300. The
Owner may repay all or a portion of any Indebtedness while the insured is living
and the Policy is not in a grace period. When a loan is made, an amount equal to
the loan proceeds will be transferred out of the Account and the Fixed Account,
as applicable. This amount is allocated to a portion of JHVLICO's general
account called "Loan Assets". Each Subaccount will be reduced in the same
proportion as the Account Value is then allocated among the Subaccounts. Upon
each loan repayment, the same proportionate amount of the entire loan as was
borrowed from the Fixed Account will be repaid to the Fixed Account. The
remainder of the loan repayment will be allocated to the appropriate Subaccounts
as stipulated in the then current Investment Rule. For example, if the entire
loan outstanding is $3,000 of which $1,000 was borrowed from the Fixed Account,
then upon a repayment of $1,500, $500 would be allocated to the Fixed Account
and the remaining $1,000 would be allocated to the appropriate Subaccounts as
stipulated in the then current Investment Rule. If an Owner wishes any payment
to constitute a loan repayment (rather than a premium payment), the Owner must
so specify.

19
<PAGE>

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
Assets and the remaining portion of the Account Value will generally have
different rates of investment return, the Account Value, the Surrender Value and
any death benefit above the Sum Insured are permanently affected by any
Indebtedness, whether or not it is repaid in whole or in part. The amount of any
Indebtedness is subtracted from the amount otherwise payable when the Policy
proceeds become payable.

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

DEFAULT

20
<PAGE>

EXCHANGE PRIVILEGE

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

CHARGES AND EXPENSES

CHARGES DEDUCTED FROM PREMIUMS

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

SALES CHARGES

21
<PAGE>

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

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

22
<PAGE>

The Contingent Deferred Sales Charge is computed as a percentage of Base
Policy Target Premiums paid in accordance with the following schedule:

Maximum Contingent
For Surrenders or Lapses Effective During: Deferred Sales Charge
------------------------------------------ ----------------------
<S> <C>
Policy Year 1 26% of premiums received in Policy Year 1 up to 1 Base
Policy Target Premium*
Policy Year 2 26% of premiums received in Policy Years 1 and 2 up to 1
Base Policy Target Premium in each year
Policy Years 3-7 26% of premiums received in Policy Years 1, 2 and 3 up to 1
Base Policy Target Premium in each year
Policy Year 8 83.33% of the Maximum Contingent Deferred Sales Charge for
Policy Year 7
Policy Year 9 66.67% of the Maximum Contingent Deferred Sales Charge for
Policy Year 7
Policy Year 10 50% of the Maximum Contingent Deferred Sales Charge for
Policy Year 7
Policy Year 11 33.33% of the Maximum Contingent Deferred Sales Charge for
Policy Year 7
Policy Year 12 16.67% of the Maximum Contingent Deferred Sales Charge for
Policy Year 7
Policy Year 13 and later 0
</TABLE>

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

23
<PAGE>

and, as a result, cause the Policy to become a modified endowment, with adverse
tax consequences to the Owner upon receipt of Policy distributions. See
"Premiums--7-Pay Premium Limit".

ADMINISTRATIVE SURRENDER CHARGE

REDUCED CHARGES FOR ELIGIBLE GROUPS

CHARGES DEDUCTED FROM ACCOUNT VALUE OR ASSETS

The following charges are deducted from Account Value or assets:

Maintenance Charge. John Hancock will deduct from the Account Value a monthly
charge not to exceed $8 for all Policy years. The current monthly charge is $6.

24
<PAGE>

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

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

Lower current insurance rates are offered at most ages for insureds who are
eligible for the preferred underwriting class of the Policy.

25
<PAGE>

Fund Investment Management Fees and Other Fund Expenses. The Account purchases
shares of the Funds at net asset value, a value which reflects the deduction
from the assets of each Fund of its investment management fees and certain
non-Advisory Fund operating expenses, which are described in the Summary of this
Prospectus. For a full description of these deductions, see the attached
Prospectuses for the Funds.

GUARANTEE OF PREMIUMS AND CERTAIN CHARGES

DISTRIBUTION OF POLICIES

26
<PAGE>

managers and supervisors, agency office clerical expenses and advertising)
actually incurred in connection with the marketing and sale of the Policies.

TAX CONSIDERATIONS

POLICY PROCEEDS

27
<PAGE>

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

CHARGE FOR JOHN HANCOCK'S TAXES

CORPORATE AND H.R. 10 PLANS

28
<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 Executive Officer,
Cabot Corporation (chemicals)

Nelson S. Gifford Principal, Fleetwing Capital Management (financial
services)

William L. Boyan Vice Chairman of the Board, John Hancock

E. James Morton Director, formerly Chairman of the Board, John
Hancock

John F. Magee Chairman, Arthur D. Little, Inc. (industrial
research and consultant).

John M. Connors, Jr. Chief Executive Officer and Director, Hill,
Holliday, Connors, Cosmopoulos, Inc. (advertising).

Stephen L. Brown Chairman of the Board and Chief Executive Officer,
John Hancock

I. MacAllister Booth Retired Chairman of the Board and Chief Executive
Officer, Polaroid Corporation (photographic
products)

C. Vincent Vappi Former President and Chief Executive Officer, Vappi
& Company, Inc. (construction).

Robert J. Tarr, Jr. Former President, Chief Executive Officer and Chief
Operations Officer, Harcourt, General, Inc.
(publishing)

David F. D'Alessandro President and Chief Operating Officer, John Hancock

Joan T. Bok Chairman of the Board, New England Electric System
(electricutility).

Robert E. Fast Senior Partner, Hale and Dorr (law firm).

Foster L. Aborn Vice Chairman of the Board, John Hancock

Lawrence K. Fish Chairman, President, and Chief Executive Officer,
Citizens Financial Group, Inc.(banking).

Richard F. Syron Chairman and Chief Executive Officer, American Stock
Exchange.

Kathleen F. Feldstein President, Economic Studies Inc. (economic
consulting).

Michael C. Hawley President and Chief Operating Officer, The Gillette
Company (razors, etc.).

Wayne A. Budd Group President, Bell Atlantic - New England
(telecommunications)

Executive Officers
------------------
<S> <C>
Diane M. Capstaff Executive Vice President
Thomas E. Moloney Executive Vice President
Richard S. Scipione General Counsel
Barry J. Rubenstein Vice President, Counsel and Secretary
</TABLE>

29
<PAGE>

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

REPORTS

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

VOTING PRIVILEGES

All of the assets in the variable Subaccounts of the Account are invested in
shares of the corresponding Portfolios of the Funds. John Hancock will vote the
shares of each of the Portfolios of the Funds which are deemed attributable to
qualifying variable life insurance policies and variable annuity contracts at
regular and special meetings of the Funds' shareholders in accordance with
instructions received from Owners of such policies or contracts. Shares of the
Funds held in the Account which are not attributable to such policies or
contracts and shares for which instructions from owners are not received will be
represented by John Hancock at the meeting and will be voted for and against
each matter in the same proportions as the votes based upon the instructions
received from the owners of all such policies and contracts.

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 or to approve
or disapprove an investment advisory or underwriting contract for a Fund. John
Hancock also may disregard voting instructions in favor of changes initiated by
an owner or a Fund's Board of Trustees in an investment policy, investment
adviser or principal underwriter of the Fund, if John Hancock (i) reasonably
disapproves of such changes and (ii) in the case of a change of investment
policy or investment adviser, makes a good-faith determination that the proposed
change is contrary to state law or prohibited by state regulatory authorities or
that the change would be inconsistent with a variable Subaccount's investment
objectives or would result in the purchase of securities which vary from the
general quality and nature of investments and investment

30
<PAGE>

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 THAT JOHN HANCOCK CAN MAKE

STATE REGULATION

LEGAL MATTERS

REGISTRATION STATEMENT

31
<PAGE>

EXPERTS

Actuarial matters included in this Prospectus have been examined by Deborah A.
Poppel, F.S.A., an Actuary of John Hancock.

FINANCIAL STATEMENTS

32
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]

33
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1997

<TABLE>
<CAPTION>
Large Cap Sovereign International Small Cap International Mid Cap Large Cap
Growth Bond Equities Growth Balanced Growth Value
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
----------- ----------- ------------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
portfolios of John Hancock
Variable Series Trust I, at
value. . . . . . . . . . . $18,634,480 $60,032,856 $3,944,730 $962,215 $85,312 $567,830 $1,678,123
Investments in shares of
portfolios of M Fund Inc.,
at value . . . . . . . . . -- -- -- -- -- -- --
Policy loans and accrued
interest receivable . . . 1,557,636 9,680,029 219,946 -- -- -- --
Receivable from:
John Hancock Variable
Series Trust 1 . . . . . 10,716 14,482 1,331 1,452 100 2,261 2,449
M Fund Inc. . . . . . . . -- -- -- -- -- -- --
----------- ----------- ---------- -------- ------- -------- ----------
TOTAL ASSETS . . . . . . . 20,202,832 69,727,367 4,166,007 963,667 85,412 570,091 1,680,572
LIABILITIES
Payable to John Hancock
Mutual Variable Life
Insurance Company . . . . 10,398 13,408 1,266 1,436 99 2,252 2,421
Asset charges payable . . . 318 1,074 65 16 1 9 28
----------- ----------- ---------- -------- ------- -------- ----------
TOTAL LIABILITIES . . . . . 10,716 14,482 1,331 1,452 100 2,261 2,449
----------- ----------- ---------- -------- ------- -------- ----------
NET ASSETS . . . . . . . . $20,192,116 $69,712,885 $4,164,676 $962,215 $85,312 $567,830 $1,678,123
=========== =========== ========== ======== ======= ======== ==========
<CAPTION>
Money Mid Cap Special Real Estate
Market Value Opportunities Equity
Subaccount Subaccount Subaccount Subaccount
----------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS
Investments in shares of
portfolios of John Hancock
Variable Series Trust I, at
value. . . . . . . . . . . $12,254,998 $2,036,158 $4,091,961 $4,649,139
Investments in shares of
portfolios of M Fund Inc.,
at value . . . . . . . . . -- -- -- --
Policy loans and accrued
interest receivable . . . 2,230,242 -- -- 225,571
Receivable from:
John Hancock Variable
Series Trust 1 . . . . . 386,526 15,188 1,935 1,502
M Fund Inc. . . . . . . . -- -- -- --
----------- ---------- ---------- ----------
TOTAL ASSETS . . . . . . . 14,871,766 2,051,346 4,093,896 4,876,212
LIABILITIES
Payable to John Hancock
Mutual Variable Life
Insurance Company . . . . 386,304 15,155 1,868 1,425
Asset charges payable . . . 222 33 67 77
----------- ---------- ---------- ----------
TOTAL LIABILITIES . . . . . 386,526 15,188 1,935 1,502
----------- ---------- ---------- ----------
NET ASSETS . . . . . . . . $14,485,240 $2,036,158 $4,091,961 $4,874,710
=========== ========== ========== ==========
</TABLE>

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

34
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 1997

<TABLE>
<CAPTION>
Short-Term Turner
Growth & U.S. Small Cap International Equity Strategic Core
Income Managed Government Value Opportunities Index Bond Growth
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
------------ ----------- ---------- ---------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . $199,623,682 $83,078,514 $127,103 $1,251,673 $389,007 $2,123,595 $147,317 $ --
Investments in shares
of portfolios of M
Fund Inc., at value -- -- -- -- -- -- -- 68,640
Policy loans and
accrued interest
receivable . . . . . 25,360,369 10,979,401 -- -- -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I . . 67,248 38,235 4,076 1,152 68 5,000 10 --
M Fund Inc. . . . . -- -- -- -- -- -- -- 1
------------ ----------- -------- ---------- -------- ---------- -------- -------
TOTAL ASSETS . . . . 225,051,299 94,096,150 131,179 1,252,825 389,075 2,128,595 147,327 68,641
LIABILITIES . . . . .
Payable to John
Hancock Mutual
Variable Life
Insurance Company . 63,785 36,775 4,074 1,132 62 4,965 8 --
Asset charges payable 3,463 1,460 2 20 6 35 2 1
------------ ----------- -------- ---------- -------- ---------- -------- -------
TOTAL LIABILITIES . . 67,248 38,235 4,076 1,152 68 5,000 10 1
------------ ----------- -------- ---------- -------- ---------- -------- -------
NET ASSETS . . . . . $224,984,051 $94,057,915 $127,103 $1,251,673 $389,007 $2,123,595 $147,317 $68,640
============ =========== ======== ========== ======== ========== ======== =======
<CAPTION>
Edinburgh Frontier
International Capital
Equity Appreciation
Subaccount Subaccount
------------- --------------
<S> <C> <C>
ASSETS
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . $ -- $ --
Investments in shares
of portfolios of M
Fund Inc., at value 126,339 273,608
Policy loans and
accrued interest
receivable . . . . . -- --
Receivable from:
John Hancock Variable
Series Trust I . . -- --
M Fund Inc. . . . . 2 4
-------- --------
TOTAL ASSETS . . . . 126,341 273,612
LIABILITIES . . . . .
Payable to John
Hancock Mutual
Variable Life
Insurance Company . -- --
Asset charges payable 2 4
-------- --------
TOTAL LIABILITIES . . 2 4
-------- --------
NET ASSETS . . . . . $126,339 $273,608
======== ========
</TABLE>

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

<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Large Cap Growth Subaccount Sovereign Bond Subaccount
---------------------------------- --------------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I . . . . . . . . . . . . . . . . . . $1,686,429 $1,905,476 $ 754,115 $4,454,173 $ 3,765,421 $3,504,747
M Fund Inc. . . . . . . . . . . . . . . . . . -- -- -- -- -- --
Interest income on policy loans . . . . . . . 103,747 83,974 67,279 696,074 678,580 641,677
---------- ---------- ---------- ---------- ----------- ----------
Total investment income . . . . . . . . . . . . 1,790,176 1,989,450 821,394 5,150,247 4,444,001 4,146,424
Expenses:
Mortality and expense risks . . . . . . . . . 99,710 69,829 48,056 370,612 325,346 286,349
---------- ---------- ---------- ---------- ----------- ----------
Net investment income (loss) . . . . . . . . . 1,690,466 1,919,621 773,338 4,779,635 4,118,655 3,860,075
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . . . 292,430 145,304 23,090 (230,607) (169,158) (127,733)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 2,142,494 3,756 1,225,784 1,277,686 (1,418,707) 4,205,161
---------- ---------- ---------- ---------- ----------- ----------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . . . 2,434,924 149,060 1,248,874 1,047,079 (1,587,865) 4,077,428
---------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . $4,125,390 $2,068,681 $2,022,212 $5,826,714 $ 2,530,790 $7,937,503
========== ========== ========== ========== =========== ==========
<CAPTION>
Small Cap International
International Equities Subaccount Growth Subaccount Balanced Subaccount
------------------------------------ ------------------ ----------------------
1997 1996 1995 1997 1996* 1997 1996*
------------ ---------- ---------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I . . . . . . . . . . . . . . . . . . $ 195,240 $ 42,110 $ 29,692 $ 436 $ 160 $ 3,972 $ 734
M Fund Inc. . . . . . . . . . . . . . . . . . -- -- -- -- -- -- --
Interest income on policy loans . . . . . . . 15,746 13,158 9,853 -- -- -- --
--------- -------- -------- ------- ------- ------- ------
Total investment income . . . . . . . . . . . . 210,986 55,268 39,545 436 160 3,972 734
Expenses:
Mortality and expense risks . . . . . . . . . 24,261 19,834 15,495 4,231 538 392 81
--------- -------- -------- ------- ------- ------- ------
Net investment income (loss) . . . . . . . . . 186,725 35,434 24,050 (3,795) (378) 3,580 653
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . . . 50,829 25,854 14,367 6,475 (690) 429 9
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . (463,778) 217,574 164,490 92,108 (5,174) (4,312) 899
--------- -------- -------- ------- ------- ------- ------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . . . (412,949) 243,428 178,857 98,583 (5,864) (3,883) 908
--------- -------- -------- ------- ------- ------- ------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . $(226,224) $278,862 $202,907 $94,788 $(6,242) $ (303) $1,561
========= ======== ======== ======= ======= ======= ======
</TABLE>

- ---------

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

See accompanying notes.

36
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
Mid Cap Growth Large Cap Value Mid Cap Value
Subaccount Subaccount Money Market Subaccount Subaccount
----------------- ---------------- ------------------------------ -----------------
1997 1996* 1997 1996* 1997 1996 1995 1997 1996*
-------- ------- -------- ------ -------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I . . . . . $ -- $ 411 $ 57,265 $2,056 $641,356 $1,073,915 $810,091 $150,951 $ 5,010
M Fund Inc. . . . . -- -- -- -- -- -- -- -- --
Interest income on
policy loans . . . -- -- -- -- 148,802 160,206 155,058 -- --
------- ------ -------- ------ -------- ---------- -------- -------- -------
Total investment
income . . . . . . . -- 411 57,265 2,056 790,158 1,234,121 965,149 150,951 5,010
Expenses:
Mortality and expense
risks . . . . . . . 2,164 292 3,303 218 81,437 134,461 96,074 7,632 572
------- ------ -------- ------ -------- ---------- -------- -------- -------
Net investment income
(loss) . . . . . . . (2,164) 119 53,962 1,838 708,721 1,099,660 869,075 143,319 4,438
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 5,866 (17) 17,858 588 -- -- -- 10,646 8,413
Net unrealized
appreciation
(depreciation)
during the period . 66,874 1,684 80,036 4,787 -- -- -- 145,409 14,211
------- ------ -------- ------ -------- ---------- -------- -------- -------
Net realized and
unrealized gain
(loss) on investments 72,740 1,667 97,894 5,375 -- -- -- 156,055 22,624
------- ------ -------- ------ -------- ---------- -------- -------- -------
Net increase in net
assets resulting from
operations . . . . . $70,576 $1,786 $151,856 $7,213 $708,721 $1,099,660 $869,075 $299,374 $27,062
======= ====== ======== ====== ======== ========== ======== ======== =======
<CAPTION>

Special Opportunities Subaccount
-----------------------------------
1997 1996 1995
----------- --------- -----------
<S> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I . . . . . $ 407,765 $114,600 $ 22,718
M Fund Inc. . . . . -- -- --
Interest income on
policy loans . . . -- -- --
--------- -------- --------
Total investment
income . . . . . . . 407,765 114,600 22,718
Expenses:
Mortality and expense
risks . . . . . . . 22,030 10,841 3,017
--------- -------- --------
Net investment income
(loss) . . . . . . . 385,735 103,759 19,701
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 276,956 81,916 9,743
Net unrealized
appreciation
(depreciation)
during the period . (477,912) 264,010 126,004
Net realized and --------- -------- --------
unrealized gain
(loss) on investments (200,956) 345,926 135,747
--------- -------- --------
Net increase in net
assets resulting from
operations . . . . . $ 184,779 $449,685 $155,448
========= ======== ========
</TABLE>

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

See accompanying notes.

37
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Real Estate Equity Subaccount Growth & Income Subaccount
-------------------------------- -------------------------------------
1997 1996 1995 1997 1996 1995
--------- --------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . $330,296 $177,243 $153,495 $25,377,474 $18,406,284 $10,687,455
M Fund Inc. . . . . . . . . . . . . . . . -- -- -- -- -- --
Interest income on policy loans . . . . . 15,261 13,041 12,322 1,728,054 1,562,266 1,397,618
-------- -------- -------- ----------- ----------- -----------
Total investment income . . . . . . . . . . 345,557 190,284 165,817 27,105,528 19,968,550 12,085,073
Expenses:
Mortality and expense risks . . . . . . . 25,420 16,931 13,502 1,136,268 842,055 646,807
-------- -------- -------- ----------- ----------- -----------
Net investment income . . . . . . . . . . . 320,137 173,353 152,315 25,969,260 19,126,495 11,438,266
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . 181,015 39,891 (39,490) 1,982,518 820,430 85,385
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . 165,392 637,301 155,992 18,247,212 4,555,481 17,351,805
-------- -------- -------- ----------- ----------- -----------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 346,407 677,192 116,502 20,229,730 5,375,911 17,437,190
-------- -------- -------- ----------- ----------- -----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $666,544 $850,545 $268,817 $46,198,990 $24,502,406 $28,875,456
======== ======== ======== =========== =========== ===========
<CAPTION>
Short-Term U.S.
Managed Subaccount Government Subaccount
--------------------------------------- -----------------------------
1997 1996 1995 1997 1996 1995
----------- ------------ ------------ ----------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . $ 7,891,222 $ 8,705,892 $ 5,946,035 $1,036,747 $201,830 $2,749
M Fund Inc. . . . . . . . . . . . . . . . -- -- -- -- -- --
Interest income on policy loans . . . . . 768,231 705,413 626,984 -- -- --
----------- ----------- ----------- ---------- -------- ------
Total investment income . . . . . . . . . . 8,659,453 9,411,305 6,573,019 1,036,747 201,830 2,749
Expenses:
Mortality and expense risks . . . . . . . 497,030 426,946 356,869 121,572 15,305 295
----------- ----------- ----------- ---------- -------- ------
Net investment income . . . . . . . . . . . 8,162,423 8,984,359 6,216,150 915,175 186,525 2,454
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . 437,661 230,806 (6,127) (27,616) 577 477
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . 4,941,061 (2,103,918) 7,134,666 226,435 225,129 1,735
----------- ----------- ----------- ---------- -------- ------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 5,378,722 (1,873,112) 7,128,539 198,819 225,706 2,212
----------- ----------- ----------- ---------- -------- ------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $13,541,145 $ 7,111,247 $13,344,689 $1,113,994 $412,231 $4,666
=========== =========== =========== ========== ======== ======
<CAPTION>
Small Cap Value
Subaccount
-------------------
1997 1996*
--------- --------
<S> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . $ 95,844 $1,653
M Fund Inc. . . . . . . . . . . . . . . . -- --
Interest income on policy loans . . . . . -- --
-------- ------
Total investment income . . . . . . . . . . 95,844 1,653
Expenses:
Mortality and expense risks . . . . . . . 3,270 128
-------- ------
Net investment income . . . . . . . . . . . 92,574 1,525
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . 19,812 11
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . (12,804) 2,702
-------- ------
Net realized and unrealized gain (loss) on
investments. . . . . . . . . . . . . . . . 7,008 2,713
-------- ------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . $ 99,582 $4,238
======== ======
</TABLE>

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

See accompanying notes.

38
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
International Edinburgh
Opportunities Equity Index Strategic Bond Turner Core Growth International Equity
Subaccount Subaccount Subaccount Subaccount Subaccount
----------------- ----------------- ---------------- ------------------- ----------------------
1997 1996* 1997 1996* 1997 1996* 1997 1996* 1997 1996*
--------- ------ -------- ------- -------- ------ --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I . . . . . $ 5,284 $ 482 $ 54,601 $ 4,958 $ 9,400 $539 $ -- $ -- $ -- $ --
M Fund Inc. . . . . -- -- -- -- -- -- 6,373 958 1,796 510
Interest income on
policy loans . . . -- -- -- -- -- -- -- -- -- --
-------- ------ -------- ------- ------- ---- ------- ------ ------- -------
Total investment
income . . . . . . . 5,284 482 54,601 4,958 9,400 539 6,373 958 1,796 510
Expenses:
Mortality and expense
risks . . . . . . . 1,697 295 5,346 287 658 30 301 83 684 173
-------- ------ -------- ------- ------- ---- ------- ------ ------- -------
Net investment income
(loss) . . . . . . . 3,587 187 49,255 4,671 8,742 509 6,072 875 1,112 337
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 3,191 57 14,525 620 348 36 839 48 888 (91)
Net unrealized
appreciation
(depreciation)
during the period . (12,223) 7,271 146,714 6,278 1,260 8 6,487 784 (1,473) (1,056)
-------- ------ -------- ------- ------- ---- ------- ------ ------- -------
Net realized and
unrealized gain
(loss) on investments (9,032) 7,328 161,239 6,898 1,608 44 7,326 832 (585) (1,147)
-------- ------ -------- ------- ------- ---- ------- ------ ------- -------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ (5,445) $7,515 $210,494 $11,569 $10,350 $553 $13,398 $1,707 $ 527 $ (810)
======== ====== ======== ======= ======= ==== ======= ====== ======= =======
<CAPTION>
Frontier
Capital Appreciation
Subaccount
------------------------
1997 1996*
---------- ------------
<S> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I . . . . . $ -- $ --
M Fund Inc. . . . . 6,463 --
Interest income on
policy loans . . . -- --
------- ------
Total investment
income . . . . . . . 6,463 --
Expenses:
Mortality and expense
risks . . . . . . . 1,409 477
------- ------
Net investment income
(loss) . . . . . . . 5,054 (477)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 8,970 6,683
Net unrealized
appreciation
(depreciation)
during the period . 32,469 1,317
Net realized and ------- ------
unrealized gain
(loss) on investments 41,439 8,000
------- ------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $46,493 $7,523
======= ======
</TABLE>

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

See accompanying notes.

39
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Large Cap Growth Subaccount
----------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . $ 1,690,466 $ 1,919,621 $ 773,338
Net realized gain (loss) . . . . . . . . . . . 292,430 145,304 23,090
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 2,142,494 3,756 1,225,784
----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . 4,125,390 2,068,681 2,022,212
From policyholder transactions:
Net premiums from policyholders . . . . . . . 5,387,401 4,588,842 3,921,962
Net benefits to policyholders . . . . . . . . (3,728,476) (3,100,493) (2,170,453)
Net increase in policy loans . . . . . . . . . 326,883 174,445 181,384
----------- ----------- -----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 1,985,808 1,662,794 1,932,893
----------- ----------- -----------
Net increase in net assets . . . . . . . . . . 6,111,198 3,731,475 3,955,105
Net assets at beginning of period . . . . . . . 14,080,918 10,349,443 6,394,338
----------- ----------- -----------
Net assets at end of period . . . . . . . . . . $20,192,116 $14,080,918 $10,349,443
=========== =========== ===========
<CAPTION>

Sovereign Bond Subaccount
----------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . $ 4,779,635 $ 4,118,655 $ 3,860,075
Net realized gain (loss) . . . . . . . . . . . (230,607) (169,158) (127,733)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 1,277,686 (1,418,707) 4,205,161
----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . 5,826,714 2,530,790 7,937,503
From policyholder transactions:
Net premiums from policyholders . . . . . . . 10,001,325 12,282,665 8,741,178
Net benefits to policyholders . . . . . . . . (8,526,521) (8,373,358) (8,117,059)
Net increase in policy loans . . . . . . . . . 474,983 344,564 344,088
----------- ----------- -----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 1,949,787 4,253,871 968,207
----------- ----------- -----------
Net increase in net assets . . . . . . . . . . 7,776,501 6,784,661 8,905,710
Net assets at beginning of period . . . . . . . 61,936,384 55,151,723 46,246,013
----------- ----------- -----------
Net assets at end of period . . . . . . . . . . $69,712,885 $61,936,384 $55,151,723
=========== =========== ===========
<CAPTION>
Small Cap Growth
International Equities Subaccount Subaccount
--------------------------------------- ---------------------
1997 1996 1995 1997 1996*
------------ ------------ ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . $ 186,725 $ 35,434 $ 24,050 $ (3,795) $ (378)
Net realized gain (loss) . . . . . . . . . . . 50,829 25,854 14,367 6,475 (690)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . (463,778) 217,574 164,490 92,108 (5,174)
----------- ----------- ---------- --------- --------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . (226,224) 278,862 202,907 94,788 (6,242)
From policyholder transactions:
Net premiums from policyholders . . . . . . . 1,504,962 1,691,043 1,439,112 809,492 276,720
Net benefits to policyholders . . . . . . . . (1,091,126) (1,137,159) (927,937) (199,118) (13,425)
Net increase in policy loans . . . . . . . . . 13,761 47,823 27,649 -- --
----------- ----------- ---------- --------- --------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 427,597 601,707 538,824 610,374 263,295
----------- ----------- ---------- --------- --------
Net increase in net assets . . . . . . . . . . 201,373 880,569 741,731 705,162 257,053
Net assets at beginning of period . . . . . . . 3,963,303 3,082,734 2,341,003 257,053 --
----------- ----------- ---------- --------- --------
Net assets at end of period . . . . . . . . . . $ 4,164,676 $ 3,963,303 $3,082,734 $ 962,215 $257,053
=========== =========== ========== ========= ========
<CAPTION>
International Balanced
Subaccount
--------------------------
1997 1996*
----------- -------------
<S> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . . . $ 3,580 $ 653
Net realized gain (loss) . . . . . . . . . . . 429 9
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . (4,312) 899
------- -------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . (303) 1,561
From policyholder transactions:
Net premiums from policyholders . . . . . . . 62,380 32,725
Net benefits to policyholders . . . . . . . . (9,531) (1,520)
Net increase in policy loans . . . . . . . . . -- --
------- -------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . . 52,849 31,205
------- -------
Net increase in net assets . . . . . . . . . . 52,546 32,766
Net assets at beginning of period . . . . . . . 32,766 --
------- -------
Net assets at end of period . . . . . . . . . . $85,312 $32,766
======= =======
</TABLE>

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

See accompanying notes.

40
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
Mid Cap Growth Large Cap Value
Subaccount Subaccount
--------------------- ----------------------
1997 1996* 1997 1996*
---------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . $ (2,164) $ 119 $ 53,962 $ 1,838
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . 5,866 (17) 17,858 588
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,874 1,684 80,036 4,787
--------- -------- ---------- --------
Net increase in net assets resulting from operations . . . . . . 70,576 1,786 151,856 7,213
From policyholder transactions:
Net premiums from policyholders . . . . . . . . . . . . . . . . 457,341 172,848 1,506,756 107,940
Net benefits to policyholders . . . . . . . . . . . . . . . . . (125,239) (9,482) (85,021) (10,621)
Net increase (decrease) in policy loans . . . . . . . . . . . . -- -- -- --
--------- -------- ---------- --------
Net increase (decrease) in net assets resulting from policyholder
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 332,102 163,366 1,421,735 97,319
--------- -------- ---------- --------
Net increase (decrease) in net assets . . . . . . . . . . . . . . 402,678 165,152 1,573,591 104,532
Net assets at beginning of period . . . . . . . . . . . . . . . . 165,152 -- 104,532 --
--------- -------- ---------- --------
Net assets at end of period . . . . . . . . . . . . . . . . . . . $ 567,830 $165,152 $1,678,123 $104,532
========= ======== ========== ========
<CAPTION>

Money Market Subaccount
-----------------------------------------
1997 1996 1995
------------ ------------- ------------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . $ 708,721 $ 1,099,660 $ 869,075
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . -- -- --
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- --
----------- ------------ -----------
Net increase in net assets resulting from operations . . . . . . 708,721 1,099,660 869,075
From policyholder transactions:
Net premiums from policyholders . . . . . . . . . . . . . . . . 11,210,536 34,216,886 13,611,860
Net benefits to policyholders . . . . . . . . . . . . . . . . . (9,620,370) (44,096,427) (2,969,848)
Net increase (decrease) in policy loans . . . . . . . . . . . . 103,247 (134,332) 149,842
----------- ------------ -----------
Net increase (decrease) in net assets resulting from policyholder
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 1,693,413 (10,013,873) 10,791,854
----------- ------------ -----------
Net increase (decrease) in net assets . . . . . . . . . . . . . . 2,402,134 (8,914,213) 11,660,929
Net assets at beginning of period . . . . . . . . . . . . . . . . 12,083,106 20,997,319 9,336,390
----------- ------------ -----------
Net assets at end of period . . . . . . . . . . . . . . . . . . . $14,485,240 $ 12,083,106 $20,997,319
=========== ============ ===========
<CAPTION>
Mid Cap Value
Subaccount Special Opportunities Subaccount
---------------------- ---------------------------------------
1997 1996* 1997 1996 1995
----------- --------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . $ 143,319 $ 4,438 $ 385,735 $ 103,759 $ 19,701
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . 10,646 8,413 276,956 81,916 9,743
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,409 14,211 (477,912) 264,010 126,004
---------- -------- ----------- ---------- ---------
Net increase in net assets resulting from operations . . . . . . 299,374 27,062 184,779 449,685 155,448
From policyholder transactions:
Net premiums from policyholders . . . . . . . . . . . . . . . . 1,620,752 284,225 2,554,133 2,077,582 774,566
Net benefits to policyholders . . . . . . . . . . . . . . . . . (112,395) (82,860) (1,628,677) (497,713) (164,561)
Net increase (decrease) in policy loans . . . . . . . . . . . . -- -- -- -- --
---------- -------- ----------- ---------- ---------
Net increase (decrease) in net assets resulting from policyholder
transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 1,508,357 201,365 925,456 1,579,869 610,005
---------- -------- ----------- ---------- ---------
Net increase (decrease) in net assets . . . . . . . . . . . . . . 1,807,731 228,427 1,110,235 2,029,554 765,453
Net assets at beginning of period . . . . . . . . . . . . . . . . 228,427 -- 2,981,726 952,172 186,719
---------- -------- ----------- ---------- ---------
Net assets at end of period . . . . . . . . . . . . . . . . . . . $2,036,158 $228,427 $ 4,091,961 $2,981,726 $ 952,172
========== ======== =========== ========== =========
</TABLE>

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

See accompanying notes.

41
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Real Estate Equity Subaccount
---------------------------------------
1997 1996 1995
------------ ------------ -----------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income . . . . . . . . . . . . $ 320,137 $ 173,353 $ 152,315
Net realized gain (loss) . . . . . . . . . . . 181,015 39,891 (39,490)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 165,392 637,301 155,992
----------- ----------- ----------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . 666,544 850,545 268,817
From policyholder transactions:
Net premiums from policyholders . . . . . . . 1,748,132 1,161,434 1,086,721
Net benefits to policyholders . . . . . . . . (1,218,783) (1,008,266) (814,812)
Net increase (decrease) in policy loans . . . 34,311 33,973 (13,207)
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . 563,660 187,141 258,702
----------- ----------- ----------
Net increase (decrease) in net assets . . . . . 1,230,204 1,037,686 527,519
Net assets at beginning of period . . . . . . . 3,644,506 2,606,820 2,079,301
----------- ----------- ----------
Net assets at end of period . . . . . . . . . . $ 4,874,710 $ 3,644,506 $2,606,820
=========== =========== ==========
<CAPTION>

Growth & Income Subaccount
-------------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income . . . . . . . . . . . . $ 25,969,260 $ 19,126,495 $ 11,438,266
Net realized gain (loss) . . . . . . . . . . . 1,982,518 820,430 85,385
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 18,247,212 4,555,481 17,351,805
------------ ------------ ------------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . 46,198,990 24,502,406 28,875,456
From policyholder transactions:
Net premiums from policyholders . . . . . . . 30,351,780 32,903,369 20,933,714
Net benefits to policyholders . . . . . . . . (24,619,851) (21,130,764) (16,972,544)
Net increase (decrease) in policy loans . . . 3,346,307 1,965,133 1,898,826
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . 9,078,236 13,737,738 5,859,996
------------ ------------ ------------
Net increase (decrease) in net assets . . . . . 55,277,226 38,240,144 34,735,452
Net assets at beginning of period . . . . . . . 169,706,825 131,466,681 96,731,229
------------ ------------ ------------
Net assets at end of period . . . . . . . . . . $224,984,051 $169,706,825 $131,466,681
============ ============ ============
<CAPTION>

Managed Subaccount
-------------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income . . . . . . . . . . . . $ 8,162,423 $ 8,984,359 $ 6,216,150
Net realized gain (loss) . . . . . . . . . . . 437,661 230,806 (6,127)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 4,941,061 (2,103,918) 7,134,666
------------ ------------ ------------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . 13,541,145 7,111,247 13,344,689
From policyholder transactions:
Net premiums from policyholders . . . . . . . 13,194,907 14,481,195 13,141,463
Net benefits to policyholders . . . . . . . . (14,539,295) (12,942,967) (11,680,334)
Net increase (decrease) in policy loans . . . 1,257,640 719,880 1,120,431
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . (86,748) 2,258,108 2,581,560
------------ ------------ ------------
Net increase (decrease) in net assets . . . . . 13,454,397 9,369,355 15,926,249
Net assets at beginning of period . . . . . . . 80,603,518 71,234,163 55,307,914
------------ ------------ ------------
Net assets at end of period . . . . . . . . . . $ 94,057,915 $ 80,603,518 $ 71,234,163
============ ============ ============
<CAPTION>
Short-Term U.S.
Government Subaccount
----------------------------------------
1997 1996 1995
------------- ------------ -----------
<S> <C> <C> <C>
Increase in net assets from operations:
Net investment income . . . . . . . . . . . . $ 915,175 $ 186,525 $ 2,454
Net realized gain (loss) . . . . . . . . . . . (27,616) 577 477
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . 226,435 225,129 1,735
------------ ----------- --------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . . 1,113,994 412,231 4,666
From policyholder transactions:
Net premiums from policyholders . . . . . . . 116,602 24,721,092 68,539
Net benefits to policyholders . . . . . . . . (26,168,835) (147,655) (14,808)
Net increase (decrease) in policy loans . . . -- -- --
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . (26,052,233) 24,573,437 53,731
------------ ----------- --------
Net increase (decrease) in net assets . . . . . (24,938,239) 24,985,668 58,397
Net assets at beginning of period . . . . . . . 25,065,342 79,674 21,277
------------ ----------- --------
Net assets at end of period . . . . . . . . . . $ 127,103 $25,065,342 $ 79,674
============ =========== ========
</TABLE>

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

42
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

Small Cap Value International Opportunities Equity Index
Subaccount Subaccount Subaccount
--------------------- ---------------------------- ----------------------
1997 1996* 1997 1996* 1997 1996*
----------- -------- ------------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
from operations:
Net investment income
(loss) . . . . . . . . . . . . $ 92,574 $ 1,525 $ 3,587 $ 187 $ 49,255 $ 4,671
Net realized gain (loss) . . . . 19,812 11 3,191 57 14,525 620
Net unrealized appreciation
(depreciation) during the period (12,804) 2,702 (12,223) 7,271 146,714 6,278
---------- ------- -------- -------- ---------- --------
Net increase (decrease) in net
assets resulting from operations 99,582 4,238 (5,445) 7,515 210,494 11,569
From policyholder transactions:
Net premiums from policyholders 1,224,547 63,825 295,915 141,907 1,827,052 234,122
Net benefits to
policyholders . . . . . . . . . (137,364) (3,155) (46,736) (4,149) (149,826) (9,816)
Net increase in policy
loans . . . . . . . . . . . . . -- -- -- -- -- --
---------- ------- -------- -------- ---------- --------
Net increase in net assets
resulting from policyholder
transactions . . . . . . . . . . 1,087,183 60,670 249,179 137,758 1,677,226 224,306
---------- ------- -------- -------- ---------- --------
Net increase in net assets . . . 1,186,765 64,908 243,734 145,273 1,887,720 235,875
Net assets at beginning of
period . . . . . . . . . . . . . 64,908 -- 145,273 -- 235,875 --
---------- ------- -------- -------- ---------- --------
Net assets at end of period . . . $1,251,673 $64,908 $389,007 $145,273 $2,123,595 $235,875
========== ======= ======== ======== ========== ========
<CAPTION>
Edinburgh Frontier Capital
Strategic Bond Turner Core International Appreciation
Subaccount Growth Subaccount Equity Subaccount Subaccount
------------------- ------------------ ------------------- ----------------------
1997 1996* 1997 1996* 1997 1996* 1997 1996*
--------- -------- -------- -------- --------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
from operations:
Net investment income
(loss) . . . . . . . . . . . . $ 8,742 $ 509 $ 6,072 $ 875 $ 1,112 $ 337 $ 5,054 $ (477)
Net realized gain (loss) . . . . 348 36 839 48 888 (91) 8,970 6,683
Net unrealized appreciation
(depreciation) during the period 1,260 8 6,487 784 (1,473) (1,056) 32,469 1,317
-------- ------- ------- ------- -------- ------- -------- --------
Net increase (decrease) in net
assets resulting from operations 10,350 553 13,398 1,707 527 (810) 46,493 7,523
From policyholder transactions:
Net premiums from policyholders 161,548 13,347 33,658 28,147 82,259 91,573 138,553 230,461
Net benefits to
policyholders . . . . . . . . . (37,799) (682) (7,208) (1,062) (45,350) (1,860) (70,647) (78,775)
Net increase in policy
loans . . . . . . . . . . . . . -- -- -- -- -- -- -- --
-------- ------- ------- ------- -------- ------- -------- --------
Net increase in net assets
resulting from policyholder
transactions . . . . . . . . . . 123,749 12,665 26,450 27,085 36,909 89,713 67,906 151,686
-------- ------- ------- ------- -------- ------- -------- --------
Net increase in net assets . . . 134,099 13,218 39,848 28,792 37,436 88,903 114,399 159,209
Net assets at beginning of
period . . . . . . . . . . . . . 13,218 -- 28,792 -- 88,903 -- 159,209 --
-------- ------- ------- ------- -------- ------- -------- --------
Net assets at end of period . . . $147,317 $13,218 $68,640 $28,792 $126,339 $88,903 $273,608 $159,209
======== ======= ======= ======= ======== ======= ======== ========
</TABLE>

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

See accompanying notes.

43
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1997

1. ORGANIZATION

2. SIGNIFICANT ACCOUNTING POLICIES

ESTIMATES

VALUATION OF INVESTMENTS

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

44
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--CONTINUED

2. SIGNIFICANT ACCOUNTING POLICIES--CONTINUED

income taxes, or provision for federal income taxes, attributable to the
operations of the Account or to the Policies funded in the Account. Currently,
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 makes certain deductions for administrative expenses and state
premium taxes from premium payments before amounts are transferred to the
Account.

POLICY LOANS

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.

45
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--CONTINUED

4. DETAILS OF INVESTMENTS

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

Subaccount Shares Owned Cost Value
- ---------- ------------ ---- -----
<S> <C> <C> <C>
Large Cap Growth . . . . . . . 895,075 $ 15,892,909 $ 18,634,480
Sovereign Bond . . . . . . . . 6,034,072 60,417,965 60,032,856
International Equities . . . . 259,525 4,122,639 3,944,730
Small Cap Growth . . . . . . . 84,822 875,281 962,215
International Balanced . . . . 8,438 88,725 85,312
Mid Cap Growth . . . . . . . . 47,615 499,272 567,830
Large Cap Value . . . . . . . . 123,668 1,593,299 1,678,123
Money Market . . . . . . . . . 1,225,500 12,254,998 12,254,998
Mid Cap Value . . . . . . . . . 146,845 1,876,539 2,036,158
Special Opportunities . . . . . 265,969 4,181,272 4,091,961
Real Estate Equity . . . . . . 292,206 3,801,801 4,649,139
Growth & Income . . . . . . . . 12,021,535 168,816,740 199,623,682
Managed . . . . . . . . . . . . 5,789,690 77,812,548 83,078,514
Short-Term U.S. Government . . 12,605 127,250 127,103
Small Cap Value . . . . . . . . 100,931 1,261,774 1,251,673
International Opportunities . . 36,605 393,990 389,007
Equity Index . . . . . . . . . 149,410 1,970,603 2,123,595
Strategic Bond . . . . . . . . 14,383 146,050 147,317
Turner Core Growth . . . . . . 5,084 61,369 68,640
Edinburgh International Equity. 12,685 128,867 126,339
Frontier Capital Appreciation . 18,338 239,823 273,608
</TABLE>

46
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--CONTINUED

4. DETAILS OF INVESTMENTS--CONTINUED

Purchases, including reinvestment of dividend distributions and proceeds from
the sales of shares in the Portfolios of the Fund and of M Fund during 1997,
were as follows:

Subaccount Purchases Sales
- ---------- --------- -----
<S> <C> <C>
Large Cap Growth . . . . . . . . . . . . . . . $ 4,736,825 $ 1,400,399
Sovereign Bond . . . . . . . . . . . . . . . . 10,368,825 4,136,318
International Equities . . . . . . . . . . . . 1,118,754 518,717
Small Cap Growth . . . . . . . . . . . . . . . 722,061 115,483
International Balanced . . . . . . . . . . . . 65,555 9,126
Mid Cap Growth . . . . . . . . . . . . . . . . 402,499 72,561
Large Cap Value . . . . . . . . . . . . . . . 1,570,481 94,785
Money Market . . . . . . . . . . . . . . . . . 10,270,729 7,975,918
Mid Cap Value . . . . . . . . . . . . . . . . 1,700,997 49,320
Special Opportunities . . . . . . . . . . . . 2,282,246 971,054
Real Estate Equity . . . . . . . . . . . . . . 1,690,164 840,607
Growth & Income . . . . . . . . . . . . . . . 40,552,905 8,979,442
Managed . . . . . . . . . . . . . . . . . . . 14,242,930 7,470,857
Short-Term U.S. Government . . . . . . . . . . 1,111,536 26,248,593
Small Cap Value . . . . . . . . . . . . . . . 1,278,340 98,584
International Opportunities . . . . . . . . . 291,672 38,875
Equity Index . . . . . . . . . . . . . . . . . 1,806,826 80,346
Strategic Bond . . . . . . . . . . . . . . . . 165,467 32,975
Turner Core Growth . . . . . . . . . . . . . . 346,070 7,548
Edinburgh International Equity . . . . . . . . 73,973 35,953
Frontier Capital Appreciation . . . . . . . . 137,628 71,165
</TABLE>

5. IMPACT OF YEAR 2000 (UNAUDITED)

47
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--CONTINUED

5. IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

48
<PAGE>

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

Ernst & Young LLP

Boston, Massachusetts
February 6, 1998

49
<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Directors and Policyholders
John Hancock Mutual Life Insurance Company

Ernst & Young LLP

Boston, Massachusetts
February 18, 1998

50
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
December 31
---------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
ASSETS
Bonds--Note 6 . . . . . . . . . . . . . . . . . . . . $22,986.0 $22,467.0
Stocks:
Preferred . . . . . . . . . . . . . . . . . . . . . 640.6 416.2
Common . . . . . . . . . . . . . . . . . . . . . . . 256.9 249.8
Investments in affiliates . . . . . . . . . . . . . 1,442.0 1,268.9
--------- ---------
2,339.5 1,934.9
Mortgage loans on real estate--Note 6 . . . . . . . . 7,851.2 7,964.0
Real estate:
Company occupied . . . . . . . . . . . . . . . . . . 375.1 372.1
Investment properties . . . . . . . . . . . . . . . 1,893.4 2,042.3
--------- ---------
2,268.5 2,414.4
Policy loans . . . . . . . . . . . . . . . . . . . . . 1,577.3 1,589.3
Cash items:
Cash in banks and offices . . . . . . . . . . . . . 176.0 348.4
Temporary cash investments . . . . . . . . . . . . . 548.8 1,068.3
--------- ---------
724.8 1,416.7
Premiums due and deferred . . . . . . . . . . . . . . 222.3 278.4
Investment income due and accrued . . . . . . . . . . 505.8 547.8
Other general account assets . . . . . . . . . . . . . 948.6 1,009.9
Assets held in separate accounts . . . . . . . . . . . 16,021.7 13,969.1
--------- ---------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $55,445.7 $53,591.5
========= =========
OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY RESERVES
OBLIGATIONS
Policy reserves . . . . . . . . . . . . . . . . . . $19,206.6 $18,544.0
Policyholders' and beneficiaries' funds . . . . . . 13,985.1 14,679.3
Dividends payable to policyholders . . . . . . . . . 399.7 395.5
Policy benefits in process of payment . . . . . . . 115.5 236.3
Other policy obligations . . . . . . . . . . . . . . 214.8 210.5
Asset valuation reserve--Note 1 . . . . . . . . . . 1,165.7 1,064.8
Federal income and other accrued taxes--Note 1 . . . 96.9 125.1
Other general account obligations . . . . . . . . . 1,084.5 1,521.7
Obligations related to separate accounts . . . . . . 16,019.1 13,958.2
--------- ---------
TOTAL OBLIGATIONS . . . . . . . . . . . . . . . . . . 52,287.9 50,735.4
POLICYHOLDERS' CONTINGENCY RESERVES
Surplus notes--Note 2 . . . . . . . . . . . . . . . 450.0 450.0
Special contingency reserve for group insurance . . 151.8 194.8
General contingency reserve . . . . . . . . . . . . 2,556.0 2,211.3
--------- ---------
TOTAL POLICYHOLDERS' CONTINGENCY RESERVES . . . . . . 3,157.8 2,856.1
--------- ---------
TOTAL OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY
RESERVES. . . . . . . . . . . . . . . . . . . . . . . $55,445.7 $53,591.5
========= =========
</TABLE>

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

51
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF OPERATIONS AND CHANGES IN POLICYHOLDERS'
CONTINGENCY RESERVES

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

52
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

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

53
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES

54
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

The Company distributes its group benefit products through group
representatives, who are John Hancock employees or through intermediaries, in
key markets nationwide.

The significant accounting practices of the Company are as follows:

55
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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

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

Investments in affiliates are included on the statutory equity method.

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

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 fair
value as of the date of foreclosure.

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

56
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

The Company also records the NAIC prescribed Interest Maintenance Reserve (IMR)
that represents that portion of the after tax net accumulated unamortized
realized capital gains and losses on sales of fixed income securities,
principally bonds and mortgage loans, attributable to changes in the general
level of interest rates. Such gains and losses are deferred and amortized into
income over the remaining expected lives of the investments sold. At December
31, 1997, the IMR, net of 1997 amortization of $25.2 million, amounted to $165.6
million which is included in other policy obligations. The corresponding 1996
amounts were $18.9 million and $121.7 million, respectively.

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

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

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

57
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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

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

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: Life, annuity, and accident and health benefit reserves are
developed by actuarial methods and are determined based on published tables
using statutorily specified interest rates and valuation methods that will
provide, in the aggregate, reserves that are greater than or equal to the
minimum or guaranteed policy cash values or the amounts required by the
Commonwealth of Massachusetts Division of Insurance. Reserves for 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 generally
ranging from 2% to 8 3/4%.

58
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS 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:

December 31, 1997 December 31, 1996
-------------------- --------------------
Statement Fair Statement Fair
Value Value Value Value
--------- ----- --------- -----
(In millions)
<S> <C> <C> <C> <C>
Guaranteed investment contracts $11,499.4 $11,516.8 $11,921.6 $11,943.2
Fixed-rate deferred and immediate
annuities . . . . . . . . . . . 4,289.1 4,290.4 3,909.3 3,886.1
Supplementary contracts without
life contingencies . . . . . . 40.9 42.1 45.6 46.0
--------- --------- --------- ---------
$15,829.4 $15,849.3 $15,876.5 $15,875.3
========= ========= ========= =========
</TABLE>

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

59
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

investment contracts were made in 1996 resulting in a $27.5 million decrease in
policyholders' contingency reserves at December 31, 1996.

Guaranty Fund Assessments: Guaranty fund assessments are accrued when the
Company receives notice that an amount is payable to a guaranty fund.

NOTE 2--SURPLUS NOTES

NOTE 3--BORROWED MONEY

60
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 3--BORROWED MONEY--CONTINUED

in two notes. The interest rates on the class A1 and A2 notes are calculated on
a floating basis, based on the monthly LIBOR rate plus 5 and 19 basis points,
respectively. The class A1 notes were fully repaid on December 26, 1997 and the
class A2 notes have a last scheduled payment date of July 26, 1999. The
outstanding balances of the notes totaled $161.0 million and $292.0 million at
December 31, 1997 and 1996, respectively, and are included in other general
account obligations.

Interest paid on borrowed money was $19.3 million and $10.4 million during 1997
and 1996, respectively.

NOTE 4--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

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

Net realized capital losses consist of the following items:

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

1997 1996
---- ----
(In millions)
<S> <C> <C>
Net gains from changes in security values and book value
adjustments. . . . . . . . . . . . . . . . . . . . . . . $ 159.5 $242.2
Increase in asset valuation reserve . . . . . . . . . . . (100.9) (50.5)
------- ------
Net Unrealized Capital Gains and Other Adjustments . . . $ 58.6 $191.7
======= ======
</TABLE>

61
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS

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

Year ended December 31, 1996
- ----------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies . . $ 430.2 $ 8.8 $ 4.2 $ 434.8
Obligations of states and
political subdivisions. . . . 175.2 8.8 3.9 180.1
Debt securities issued by
foreign governments . . . . . 203.5 30.1 0.0 233.6
Corporate securities . . . . . 16,902.1 1,083.2 112.6 17,872.7
Mortgage-backed securities . . 4,756.0 116.3 54.5 4,817.8
--------- -------- ------ ---------
Total bonds . . . . . . . . . $22,467.0 $1,247.2 $175.2 $23,539.0
========= ======== ====== =========
</TABLE>

<TABLE>
<CAPTION>
Statement Fair
Value Value
--------- -----
(In millions)
<S> <C> <C>

Due in one year or less . . . . . . . . . . . . . . . $ 1,386.4 $ 1,426.6
Due after one year through five years . . . . . . . . 5,809.6 6,079.2
Due after five years through ten years . . . . . . . . 5,465.5 5,867.1
Due after ten years . . . . . . . . . . . . . . . . . 5,342.8 6,082.6
--------- ---------
18,004.3 19,455.5
Mortgage-backed securities . . . . . . . . . . . . . . 4,981.7 5,069.3
--------- ---------
$22,986.0 $24,524.8
========= =========
</TABLE>

Gross gains of $61.5 million in 1997 and $43.8 million in 1996 and gross losses
of $86.6 million in 1997 and $27.6 million in 1996 were realized from the sale
of bonds.

62
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED

At December 31, 1997, bonds with an admitted asset value of $19.2 million were
on deposit with state insurance departments to satisfy regulatory requirements.

<TABLE>
<CAPTION>
Year ended December 31
----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Expected . . . . . . . . . . . . . . . . . . . . . $33.8 $46.3
Actual . . . . . . . . . . . . . . . . . . . . . . 24.9 29.1
</TABLE>

63
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED

At December 31, 1997, the mortgage loan portfolio was diversified by geographic
region and specific collateral property type as displayed below. The Company
controls credit risk through credit approvals, limits and monitoring procedures.

NOTE 7--REINSURANCE

64
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 7--REINSURANCE--CONTINUED

$767.9 million and $594.9 million, respectively. The corresponding amounts in
1996 were $304.0 million, $217.0 million and $251.2 million, respectively.

Premiums, benefits, and reserves ceded related to the business sold in 1997,
included in the amounts above, were $487.4 million, $503.3 million, and $247.9
million, respectively, at December 31, 1997.

Amounts recoverable on paid claims and funds withheld from reinsurers were as
follows:

<TABLE>
<CAPTION>
Year ended December 31
----------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Reinsurance recoverables . . . . . . . . . . . . . $12.5 $26.5
Funds withheld from reinsurers . . . . . . . . . . 35.1 23.4
</TABLE>

65
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 7--REINSURANCE--CONTINUED

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

NOTE 8--BENEFIT PLANS

The Company provides additional compensation to employees based on achievement
of annual and long-term corporate financial objectives.

66
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFIT PLANS--CONTINUED

Pension (benefit) expense is summarized as follows:

Assumptions used in accounting for the defined benefit pension plans were as
follows:

<TABLE>
<CAPTION>
1997 1996
----- -------
<S> <C> <C>
Discount rate . . . . . . . . . . . . . . . . . . . . . . 7.00% 7.25%
Weighted rate of increase in compensation levels . . . . . 4.80% 4.80%
Expected long-term rate of return on assets . . . . . . . 8.50% 8.50%
</TABLE>

The following table sets forth the funded status and actuarially determined
amounts related to the Company's defined benefit pension plans:

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.

67
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS

68
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED

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
----------------------------------------
1997 1996
------------------- -------------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
------- --------- ------- ---------
(In millions)
<S> <C> <C> <C> <C>
Accumulated postretirement benefit
obligation:
Retirees . . . . . . . . . . . . $(228.8) $ (95.7) $(234.2) $(100.6)
Fully eligible active plan
participants . . . . . . . . . (38.7) (17.9) (46.4) (19.4)
------- ------- ------- -------
(267.5) (113.6) (280.6) (120.0)
Plan assets at fair value . . . . 172.7 0.0 132.4 0.0
------- ------- ------- -------
Accumulated postretirement benefit
obligation in excess of plan
assets. . . . . . . . . . . . . . (94.8) (113.6) (148.2) (120.0)
Unrecognized prior service cost . 14.9 4.8 16.7 5.3
Unrecognized prior net gain . . . (122.8) (4.2) (93.0) 4.0
Unrecognized transition obligation 240.7 75.0 256.8 78.4
------- ------- ------- -------
Accrued postretirement benefit
cost. . . . . . . . . . . . . . . $ 38.0 $ (38.0) $ 32.3 $ (32.3)
======= ======= ======= =======
</TABLE>

Net periodic postretirement benefits cost included the following components:

69
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED

coverages is 5.75% for 1998 (8.0% was assumed for 1997) and is assumed to
decrease gradually to 5.00% 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, 1997 by $26.2
million and the aggregate of the eligibility and interest cost components of net
periodic postretirement benefit cost by $3.0 million for 1997 and $2.9 million
for 1996.

NOTE 10--AFFILIATES

During 1996, the Company sold certain of its affiliates including its ongoing
property and casualty business and its broker-dealer operations to realign its
business objectives.

The Company received dividends of $65.9 million and $9.4 million in 1997 and
1996, respectively, from unconsolidated affiliates.

NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

70
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK--CONTINUED

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 1998 to 2026. These swaps involve, to varying
degrees, interest rate risk in excess of amounts recognized in the statements of
financial position.

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

<TABLE>
<CAPTION>
December 31
------------------
1997 1996
---- ----
(In millions)
<S> <C> <C>
Futures contracts to purchase securities . . . . . . . . $ 154.0 $ 117.6
======== ========
Futures contracts to sell securities . . . . . . . . . . $ 414.2 $ 136.4
======== ========
Notional amount of interest rate swaps, interest rate
swaptions, currency rate swaps, interest rate caps and
interest rate floors to:
Receive variable rates . . . . . . . . . . . . . . . . $5,043.7 $3,822.8
======== ========
Receive fixed rates . . . . . . . . . . . . . . . . . $2,596.7 $2,912.5
======== ========
</TABLE>

71
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 11--FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK--CONTINUED

million, $9.7 million, $(0.6) million and $(0.4) million, respectively. The
corresponding amounts as of December 31, 1996 were $16.4 million, $41.1 million,
$(0.6) million and $(0.1) million, respectively. The fair values of the swap
agreements are not recognized in the financial statements.

NOTE 12--LEASES

72
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 13--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND
OBLIGATIONS RELATED TO SEPARATE ACCOUNTS

Any liquidation costs associated with the $13.5 billion of separate accounts
subject to discretionary withdrawal are sustained by the separate account
contractholders and not by the general account.

NOTE 14--COMMITMENTS AND CONTINGENCIES

The Company has contingent liabilities, pursuant to guarantee agreements issued
in connection with real estate joint ventures, in the amount of $43.3 million.

73
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 14--COMMITMENTS AND CONTINGENCIES--CONTINUED

the total outstanding principal balance of $1.036 billion as of July 1, 1996,
but is not required to commit collateral to support this loss contingency. At
December 31, 1997, the aggregate outstanding principal balance of all the
remaining pools of loans from 1991, 1993, and 1996 is $672.0 million.

74
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 14--COMMITMENTS AND CONTINGENCIES--CONTINUED

Company does not believe that the ultimate resolution of the settlement will
have a material adverse effect on the Company's financial position.

NOTE 15--FAIR VALUE OF FINANCIAL INSTRUMENTS

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

NOTE 16--IMPACT OF YEAR 2000 (UNAUDITED)

75
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 16--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

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

76
<PAGE>

APPENDIX--OTHER POLICY PROVISIONS

SETTLEMENT PROVISIONS

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

Option 1--Interest Income at the declared rate but not less than3 1/2% a
year on proceeds held on deposit.

Option 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

GENERAL PROVISIONS

77
<PAGE>

78
<PAGE>

APPENDIX--IMPACT OF YEAR 2000

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

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

79
<PAGE>

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

The amounts shown for the death benefit, Account Value and Surrender Value are
as of the end of each Policy year. The tables headed "Using Current Charges"
assume that the current rates for insurance, sales, risk, and expense charges
(including John Hancock's intended waiver after ten Policy years of the sales
charges deducted from certain premiums and its intended reduction in the tenth
Policy year in the insurance charge deducted monthly from Account Value) will
apply in each year illustrated. The tables headed "Using Maximum Charges"
assumes that the maximum (guaranteed) insurance, sales, risk, and expense
charges will be made in each year illustrated. The amounts shown in all tables
reflect an average asset charge for the daily investment advisory expense
charges to the Portfolios of the Funds (equivalent to an effective annual rate
of .61%) and an assumed average asset charge for the annual nonadvisory
operating expenses of each Portfolio of the Funds (equivalent to an effective
annual rate of .19%). For a description of expenses charged to the Portfolios,
including the reimbursement of any Portfolio for annual non-advisory operating
expenses in excess of an effective annual rate of .25%, a continuing obligation
of the Fund's investment adviser, see the attached Prospectuses for the Funds.
The charges for the daily investment management fee and the annual non-advisory
operating expenses are based on the hypothetical assumption that Policy values
are allocated equally among the variable Subaccounts. The actual Portfolio
charges and expenses associated with any Policy will vary depending upon the
actual allocation of Policy values among Subaccounts.

The tables assume that the Guaranteed Death Benefit feature was in effect the
first 5 Policy years.

80
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- ------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- ------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 244 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 814 0 0 71
3 2,516 100,000 100,000 100,000 1,091 1,241 1,404 0 148 311
4 3,439 100,000 100,000 100,000 1,502 1,757 2,044 410 664 951
5 4,409 100,000 100,000 100,000 1,895 2,283 2,738 802 1,190 1,645
6 5,428 100,000 100,000 100,000 2,269 2,820 3,491 1,176 1,727 2,398
7 6,497 100,000 100,000 100,000 2,622 3,365 4,306 1,529 2,272 3,214
8 7,620 100,000 100,000 100,000 2,953 3,917 5,191 2,059 3,023 4,297
9 8,799 100,000 100,000 100,000 3,260 4,477 6,150 2,565 3,781 5,455
10 10,037 100,000 100,000 100,000 3,551 5,052 7,205 3,255 4,756 6,909
11 11,337 100,000 100,000 100,000 3,846 5,665 8,387 3,649 5,467 8,189
12 12,702 100,000 100,000 100,000 4,119 6,289 9,679 4,020 6,190 9,580
13 14,135 100,000 100,000 100,000 4,365 6,921 11,092 4,365 6,921 11,092
14 15,640 100,000 100,000 100,000 4,584 7,560 12,636 4,584 7,560 12,636
15 17,220 100,000 100,000 100,000 4,774 8,205 14,327 4,774 8,205 14,327
16 18,879 100,000 100,000 100,000 4,934 8,856 16,181 4,934 8,856 16,181
17 20,621 100,000 100,000 100,000 5,053 9,503 18,209 5,053 9,503 18,209
18 22,450 100,000 100,000 100,000 5,126 10,140 20,425 5,126 10,140 20,425
19 24,370 100,000 100,000 100,000 5,147 10,762 22,849 5,147 10,762 22,849
20 26,387 100,000 100,000 100,000 5,110 11,362 25,504 5,110 11,362 25,504
25 38,086 100,000 100,000 100,000 3,818 13,789 43,255 3,818 13,789 43,255
30 53,018 ** 100,000 100,000 ** 14,215 72,810 ** 14,215 72,810
35 72,076 ** 100,000 142,014 ** 9,692 123,490 ** 9,692 123,490
40 96,398 ** ** 217,249 ** ** 206,904 ** ** 206,904
45 127,441 ** ** 362,450 ** ** 345,190 ** ** 345,190
</TABLE>

- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

81
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- ------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- ------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 216 242 0 0 0
2 1,636 100,000 100,000 100,000 609 679 753 0 0 10
3 2,516 100,000 100,000 100,000 1,010 1,152 1,306 0 59 213
4 3,439 100,000 100,000 100,000 1,393 1,633 1,903 300 540 810
5 4,409 100,000 100,000 100,000 1,756 2,121 2,547 663 1,028 1,454
6 5,428 100,000 100,000 100,000 2,100 2,616 3,243 1,007 1,523 2,150
7 6,497 100,000 100,000 100,000 2,421 3,115 3,992 1,328 2,022 2,899
8 7,620 100,000 100,000 100,000 2,721 3,619 4,801 1,827 2,725 3,907
9 8,799 100,000 100,000 100,000 2,995 4,124 5,672 2,300 3,429 4,977
10 10,037 100,000 100,000 100,000 3,253 4,641 6,627 2,957 4,345 6,331
11 11,337 100,000 100,000 100,000 3,484 5,160 7,661 3,287 4,962 7,463
12 12,702 100,000 100,000 100,000 3,687 5,677 8,779 3,588 5,578 8,680
13 14,135 100,000 100,000 100,000 3,860 6,191 9,990 3,860 6,191 9,990
14 15,640 100,000 100,000 100,000 4,003 6,702 11,304 4,003 6,702 11,304
15 17,220 100,000 100,000 100,000 4,111 7,205 12,729 4,111 7,205 12,729
16 18,879 100,000 100,000 100,000 4,183 7,699 14,276 4,183 7,699 14,276
17 20,621 100,000 100,000 100,000 4,214 8,176 15,954 4,214 8,176 15,954
18 22,450 100,000 100,000 100,000 4,195 8,631 17,773 4,195 8,631 17,773
19 24,370 100,000 100,000 100,000 4,124 9,057 19,747 4,124 9,057 19,747
20 26,387 100,000 100,000 100,000 3,990 9,443 21,886 3,990 9,443 21,886
25 38,086 100,000 100,000 100,000 2,152 10,500 35,754 2,152 10,500 35,754
30 53,018 ** 100,000 100,000 ** 8,792 57,666 ** 8,792 57,666
35 72,076 ** 100,000 109,076 ** 681 94,849 ** 681 94,849
40 96,398 ** ** 164,737 ** ** 156,892 ** ** 156,892
45 127,441 ** ** 270,949 ** ** 258,047 ** ** 258,047
</TABLE>

- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

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

82
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- ------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,217 100,243 100,269 217 243 269 0 0 0
2 1,636 100,660 100,734 100,811 660 734 811 0 0 68
3 2,516 101,086 101,236 101,398 1,086 1,236 1,398 0 143 305
4 3,439 101,495 101,748 102,034 1,495 1,748 2,034 402 655 941
5 4,409 101,883 102,269 102,720 1,883 2,269 2,720 791 1,176 1,628
6 5,428 102,252 102,798 103,463 2,252 2,798 3,463 1,159 1,705 2,371
7 6,497 102,598 103,333 104,265 2,598 3,333 4,265 1,505 2,240 3,172
8 7,620 102,921 103,874 105,131 2,921 3,874 5,131 2,027 2,980 4,237
9 8,799 103,220 104,418 106,066 3,220 4,418 6,066 2,524 3,723 5,370
10 10,037 103,500 104,975 107,090 3,500 4,975 7,090 3,203 4,678 6,793
11 11,337 103,782 105,564 108,231 3,782 5,564 8,231 3,584 5,367 8,033
12 12,702 104,040 106,161 109,471 4,040 6,161 9,471 3,941 6,062 9,373
13 14,135 104,270 106,760 110,819 4,270 6,760 10,819 4,270 6,760 10,819
14 15,640 104,471 107,360 112,283 4,471 7,360 12,283 4,471 7,360 12,283
15 17,220 104,640 107,959 113,872 4,640 7,959 13,872 4,640 7,959 13,872
16 18,879 104,777 108,555 115,601 4,777 8,555 15,601 4,777 8,555 15,601
17 20,621 104,871 109,138 117,472 4,871 9,138 17,472 4,871 9,138 17,472
18 22,450 104,916 109,700 119,494 4,916 9,700 19,494 4,916 9,700 19,494
19 24,370 104,907 110,233 121,677 4,907 10,233 21,677 4,907 10,233 21,677
20 26,387 104,836 110,729 124,031 4,836 10,729 24,031 4,836 10,729 24,031
25 38,086 103,340 112,321 138,812 3,340 12,321 38,812 3,340 12,321 38,812
30 53,018 ** 111,132 159,923 ** 11,132 59,923 ** 11,132 59,923
35 72,076 ** 103,989 188,856 ** 3,989 88,856 ** 3,989 88,856
40 96,398 ** ** 227,346 ** ** 127,346 ** ** 127,346
45 127,441 ** ** 274,525 ** ** 174,525 ** ** 174,525
</TABLE>

- ---------
* If premiums are paid more frequently than annually, the above values shown
above would be affected.
** Policy lapses unless additional premium payments are made.

83
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- ------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- --------- --------- -------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,190 100,216 100,241 190 216 241 0 0 0
2 1,636 100,607 100,677 100,751 607 677 751 0 0 8
3 2,516 101,006 101,147 101,301 1,006 1,147 1,301 0 54 208
4 3,439 101,386 101,624 101,893 1,386 1,624 1,893 293 532 800
5 4,409 101,745 102,107 102,530 1,745 2,107 2,530 652 1,014 1,437
6 5,428 102,084 102,595 103,216 2,084 2,595 3,216 991 1,502 2,123
7 6,497 102,399 103,085 103,953 2,399 3,085 3,953 1,306 1,993 2,860
8 7,620 102,691 103,578 104,744 2,691 3,578 4,744 1,797 2,684 3,850
9 8,799 102,957 104,069 105,593 2,957 4,069 5,593 2,262 3,374 4,898
10 10,037 103,205 104,569 106,520 3,205 4,569 6,520 2,909 4,273 6,223
11 11,337 103,425 105,067 107,516 3,425 5,067 7,516 3,227 4,869 7,318
12 12,702 103,615 105,558 108,586 3,615 5,558 8,586 3,516 5,460 8,488
13 14,135 103,773 106,043 109,738 3,773 6,043 9,738 3,773 6,043 9,738
14 15,640 103,899 106,518 110,978 3,899 6,518 10,978 3,899 6,518 10,978
15 17,220 103,989 106,979 112,310 3,989 6,979 12,310 3,989 6,979 12,310
16 18,879 104,041 107,423 113,742 4,041 7,423 13,742 4,041 7,423 13,742
17 20,621 104,049 107,843 115,278 4,049 7,843 15,278 4,049 7,843 15,278
18 22,450 104,007 108,230 116,920 4,007 8,230 16,920 4,007 8,230 16,920
19 24,370 103,910 108,578 118,676 3,910 8,578 18,676 3,910 8,578 18,676
20 26,387 103,748 108,873 120,546 3,748 8,873 20,546 3,748 8,873 20,546
25 38,086 101,765 109,231 131,804 1,765 9,231 31,804 1,765 9,231 31,804
30 53,018 ** 106,310 146,547 ** 6,310 46,547 ** 6,310 46,547
35 72,076 ** ** 164,132 ** ** 64,132 ** ** 64,132
40 96,398 ** ** 181,828 ** ** 81,828 ** ** 81,828
45 127,441 ** ** 191,682 ** ** 91,682 ** ** 91,682
</TABLE>

- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

84
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ----------------------------- ------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- --------- --------- -------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 244 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 814 0 0 71
3 2,516 100,000 100,000 100,000 1,091 1,241 1,404 0 148 311
4 3,439 100,000 100,000 100,000 1,502 1,757 2,044 410 664 951
5 4,409 100,000 100,000 100,000 1,895 2,283 2,738 802 1,190 1,645
6 5,428 100,000 100,000 100,000 2,269 2,820 3,491 1,176 1,727 2,398
7 6,497 100,000 100,000 100,000 2,622 3,365 4,306 1,529 2,272 3,214
8 7,620 100,000 100,000 100,000 2,953 3,917 5,191 2,059 3,023 4,297
9 8,799 100,000 100,000 100,000 3,260 4,477 6,150 2,565 3,781 5,455
10 10,037 100,000 100,000 100,000 3,551 5,052 7,205 3,255 4,756 6,909
11 11,337 100,000 100,000 100,000 3,846 5,665 8,387 3,649 5,467 8,189
12 12,702 100,000 100,000 100,000 4,119 6,289 9,679 4,020 6,190 9,580
13 14,135 100,000 100,000 100,000 4,365 6,921 11,092 4,365 6,921 11,092
14 15,640 100,000 100,000 100,000 4,584 7,560 12,636 4,584 7,560 12,636
15 17,220 100,000 100,000 100,000 4,774 8,205 14,327 4,774 8,205 14,327
16 18,879 100,000 100,000 100,000 4,934 8,856 16,181 4,934 8,856 16,181
17 20,621 100,000 100,000 100,000 5,053 9,503 18,209 5,053 9,503 18,209
18 22,450 100,000 100,000 100,000 5,126 10,140 20,425 5,126 10,140 20,425
19 24,370 100,000 100,000 100,000 5,147 10,762 22,849 5,147 10,762 22,849
20 26,387 100,000 100,000 100,000 5,110 11,362 25,504 5,110 11,362 25,504
25 38,086 100,000 100,000 100,000 3,818 13,789 43,255 3,818 13,789 43,255
30 53,018 ** 100,000 122,741 ** 14,215 72,116 ** 14,215 72,116
35 72,076 ** 100,000 175,818 ** 9,692 116,159 ** 9,692 116,159
40 96,398 ** ** 249,124 ** ** 182,002 ** ** 182,002
45 127,441 ** ** 350,860 ** ** 277,887 ** ** 277,887
</TABLE>

- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

85
<PAGE>

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

MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE: $100,000
$760 BASE POLICY TARGET PREMIUM*

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- ------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 216 242 0 0 0
2 1,636 100,000 100,000 100,000 609 679 753 0 0 10
3 2,516 100,000 100,000 100,000 1,010 1,152 1,306 0 59 213
4 3,439 100,000 100,000 100,000 1,393 1,633 1,903 300 540 810
5 4,409 100,000 100,000 100,000 1,756 2,121 2,547 663 1,028 1,454
6 5,428 100,000 100,000 100,000 2,100 2,616 3,243 1,007 1,523 2,150
7 6,497 100,000 100,000 100,000 2,421 3,115 3,992 1,328 2,022 2,899
8 7,620 100,000 100,000 100,000 2,721 3,619 4,801 1,827 2,725 3,907
9 8,799 100,000 100,000 100,000 2,995 4,124 5,672 2,300 3,429 4,977
10 10,037 100,000 100,000 100,000 3,253 4,641 6,627 2,957 4,345 6,331
11 11,337 100,000 100,000 100,000 3,484 5,160 7,661 3,287 4,962 7,463
12 12,702 100,000 100,000 100,000 3,687 5,677 8,779 3,588 5,578 8,680
13 14,135 100,000 100,000 100,000 3,860 6,191 9,990 3,860 6,191 9,990
14 15,640 100,000 100,000 100,000 4,003 6,702 11,304 4,003 6,702 11,304
15 17,220 100,000 100,000 100,000 4,111 7,205 12,729 4,111 7,205 12,729
16 18,879 100,000 100,000 100,000 4,183 7,699 14,276 4,183 7,699 14,276
17 20,621 100,000 100,000 100,000 4,214 8,176 15,954 4,214 8,176 15,954
18 22,450 100,000 100,000 100,000 4,195 8,631 17,773 4,195 8,631 17,773
19 24,370 100,000 100,000 100,000 4,124 9,057 19,747 4,124 9,057 19,747
20 26,387 100,000 100,000 100,000 3,990 9,443 21,886 3,990 9,443 21,886
25 38,086 100,000 100,000 100,000 2,152 10,500 35,754 2,152 10,500 35,754
30 53,018 ** 100,000 100,000 ** 8,792 57,666 ** 8,792 57,666
35 72,076 ** 100,000 138,684 ** 681 91,625 ** 681 91,625
40 96,398 ** ** 192,751 ** ** 140,817 ** ** 140,817
45 127,441 ** ** 265,174 ** ** 210,022 ** ** 210,022
</TABLE>

- ---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.

86
<PAGE>

[LOGO OF JOHN HANCOCK APPEARS HERE]

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

S8148NY-M 5/98

<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.

REPRESENTATION OF REASONABLENESS

John Hancock Mutual Life Insurance Company represents that the fees and
charges deducted under the Policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the insurance company.

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 90 pages.

The undertaking to file reports.

The undertaking regarding indemnification.

The signatures.

The following exhibits:
<PAGE>

1.A.(1) John Hancock Board Resolution establishing the separate account
included in Post-Effective Amendment No. 1 to the registration
statement of this Account, filed in April, 1995.

(2) Not Applicable

(3) (a) Form of Distribution Agreement by and among John Hancock
Distributors, Inc., John Hancock Mutual Life Insurance Company,
and John Hancock Variable Life Insurance Company, incorporated by
reference from Pre-Effective Amendment No. 2 to Form S-6
Registration Statement of John Hancock Variable Life Account S
(File No. 333-15075) filed April 18, 1997.

(b) Specimen Variable Contracts Selling Agreement between John Hancock
Distributors, Inc., and selling broker-dealers, incorporated by
reference from Pre-Effective Amendment No. 2 to Form S-6
Registration Statement of John Hancock Variable Life Account S
(File No. 333-15075) filed April 18, 1997.

(4) Not Applicable

(5) Form of flexible premium variable life insurance policy included in
the initial registration statement of this Account on this Form S-6,
filed March 18, 1994.

(6) Charter and By-Laws of John Hancock Mutual Life Insurance Company,
previously filed electronically on April 19, 1996.

(7) Not Applicable.

(8) Not Applicable.

(9) Not Applicable.

(10) Form of application for Policy, previously filed electronically on
April 19, 1996.

2. Included as exhibit 1.A (5) above
<PAGE>

3. Opinion and consent of counsel as to securities being registered included in
Pre-Effective Amendment No. 1 to the registration statement of this Account
on this Form S-6, filed August 30, 1994.

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-3(T)(b)(12)(iii), previously
filed electronically on April 19, 1996.

9. Power of attorney for Robert J. Tarr, previously filed electronically on
April 23, 1997. 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,
previously filed electronically on April 19, 1996.

10. Representations, Description and Undertaking pursuant to Rule 6e-
3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940, included in
Pre-Effective Amendment No. 1 to the registration statement of this Account
on this Form S-6, filed August 30, 1994.

11. 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 April, 1998.

JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY

(SEAL)

By STEPHEN L. BROWN
----------------
Stephen L. Brown
Chairman of the Board

Attest: RONALD J. BOCAGE
--------------------------
Ronald J. Bocage
Vice President and 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
--------- ----- ----
<S> <C> <C>

Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
THOMAS E. MOLONEY
- -----------------
Thomas E. Moloney April 29, 1998

JANET A. PENDLETON Vice President/Controller
- ------------------ (Principal
Janet A. Pendleton Accounting Officer) April 29, 1998

Chairman of the Board and
Chief Executive Officer
STEPHEN L. BROWN (Principal Executive Officer)
- ----------------
Stephen L. Brown
for himself and as
Attorney-in-Fact April 29, 1998

</TABLE>

FOR: Foster L. Aborn Vice Chairman of the Board
William L. Boyan Vice Chairman of the Board
David F. D'Alessandro President & Chief Operating Officer

Nelson S. Gifford Director E. James Morton Director
John F. Magee Director Thomas L. Phillips Director
John M. Connors Director Joan T. Bok Director
Robert J. Tarr, Jr. 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
<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 April, 1998.

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
(Registrant)

By John Hancock Mutual Life Insurance Company
(Depositor)

(SEAL)

By STEPHEN L. BROWN
----------------
Stephen L. Brown
Chairman of the Board

Attest: RONALD J. BOCAGE
--------------------------
Ronald J. Bocage
Vice President and Counsel

<PAGE>

EXHIBIT 6

[John Hancock Mutual Life Insurance Company Letterhead]

April 8, 1998

Board of Directors
John Hancock Mutual Life Insurance Company

Members of the Board:

This opinion is furnished in connection with the filing of this Post-Effective
Amendment to the Registration Statement on Form S-6 (File No. 33-76662) by John
Hancock Mutual Life Insurance Company (JHMLICO) under the Securities Act of
1933, as amended, with respect to the flexible premium variable life insurance
policy under which amounts will be allocated by JHMLICO to one or more of the
subaccounts of John Hancock Variable Life Account UV ("Account"). The flexible
premium policy is described in the prospectus indicated in the amended
Registration Statement.

I am familiar with the policy form and the amended Registration Statement and
exhibits thereto. In my opinion, the illustration of death benefit, account
value, surrender value, and accumulated premiums shown in the appendix of the
flexible premium prospectus included in the amended Registration Statement,
based on the assumptions stated in the illustrations, are consistent with the
provisions of the policy. Such assumptions, including the current cost of
insurance rates and other charges, are reasonable. The policy has not been
designed so as to make the relationship between premiums and benefits, as shown
in the illustrations, appear disproportionately more favorable to a prospective
purchaser of a Policy for a standard risk male nonsmoker age 35, than to a
prospective purchaser of a policy for a male at other ages or in another risk
classification or for a female nor have the particular examples set forth in the
illustrations been selected for the purpose of making this relationship appear
more favorable.

I hereby consent to the filing of this opinion as an exhibit to the amended
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/ Malcolm Cheung
------------------
Malcolm Cheung, FSA
Second Vice President

<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 6, 1998 with respect to
the financial statements of John Hancock Mutual Variable Life Insurance Account
UV and dated February 18, 1998, with respect to the financial statements of John
Hancock Mutual Life Insurance Company, included in this Post-Effective Amendment
No. 5 to the Registration Statement (Form S-6, No. 33-76662).

/s/Ernst & Young LLP
ERNST & YOUNG LLP

Boston, Massachusetts
April 24, 1998

<PAGE>

EXHIBIT 11

[John Hancock Mutual Life Insurance Company Letterhead]

April 28, 1998

United States Securities
and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

John Hancock Mutual Variable Life Insurance Account UV
File Nos. 33-76662 and 811-7766

Commissioners:

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/ Sandra M. DaDalt
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Sandra M. DaDalt
Counsel