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. 33-64364
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM S-6
Post-Effective Amendment No. 6 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
- ---------------- ---------------------
<S> <C>
1, 2 Cover, The Account and Series
Fund, 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

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
</TABLE>

<PAGE>

[LOGO OF JOHN HANCOCK APPEARS HERE]

John Hancock Mutual Life Insurance Company
(John Hancock)

FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP 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 617-572-5410

PROSPECTUS MAY 1, 1998

The flexible premium variable life survivorship policy ("Policy") described in
this Prospectus can be funded, at the discretion of the Owner, by any 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 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. The
assets of the Fixed Account will be invested in John Hancock's general account.

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. 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
Policy Split Option . . . . . . . . . . . . . . . . . . . . . . . . 14
Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Transfers Among Subaccounts . . . . . . . . . . . . . . . . . . . . 16
Telephone Transfers and Policy Loans . . . . . . . . . . . . . . . 16
Loan Provisions and Indebtedness . . . . . . . . . . . . . . . . . 17
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . 18
CHARGES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 19
Charges Deducted from Premiums . . . . . . . . . . . . . . . . . . 19
Sales Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Reduced Charges for Eligible Groups . . . . . . . . . . . . . . . . 20
Charges Deducted from Account Value or Assets . . . . . . . . . . . 20
Guarantee of Premiums and Certain Charges . . . . . . . . . . . . . 23
DISTRIBUTION OF POLICIES . . . . . . . . . . . . . . . . . . . . . . 23
TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 24
Policy Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Charge for John Hancock's Taxes . . . . . . . . . . . . . . . . . . 25
Policy Split Option . . . . . . . . . . . . . . . . . . . . . . . . 25
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JOHN HANCOCK . . . . . . 26
REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
VOTING PRIVILEGES . . . . . . . . . . . . . . . . . . . . . . . . . . 27
CHANGES THAT JOHN HANCOCK CAN MAKE . . . . . . . . . . . . . . . . . 28
STATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . 28
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . 28
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 29
APPENDIX--OTHER POLICY PROVISIONS . . . . . . . . . . . . . . . . . . A-1
Settlement Provisions . . . . . . . . . . . . . . . . . . . . . . . A-1
Additional Insurance Benefits . . . . . . . . . . . . . . . . . . . A-1
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX--IMPACT OF YEAR 2000 . . . . . . . . . . . . . . . . . . . .
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, SURRENDER VALUES AND
ACCUMULATED PREMIUMS . . . . . . . . . . . . . . . . . . . . . . . . A-4
</TABLE>

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY OTHER JURISDICTION THE
POLICY DESCRIBED HEREIN IS AVAILABLE ONLY IN NEW YORK. 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
Additional Sum Insured . . . . . . . . . . . . . . . . . . . . . . . 15
Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
Basic Sum Insured . . . . . . . . . . . . . . . . . . . . . . . . . 1
DAC Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Fixed Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Front Cover
Grace Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Guaranteed Minimum Death Benefit . . . . . . . . . . . . . . . . . . 15
Guaranteed Minimum Death Benefit Premium . . . . . . . . . . . . . . 11
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Investment Rule . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Loan Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Minimum First Premium . . . . . . . . . . . . . . . . . . . . . . . 11
Planned Premium . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Policy Anniversary . . . . . . . . . . . . . . . . . . . . . . . . . A-2
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Front Cover
Servicing Office . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . .
Front Cover
Surrender Value . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Target Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Total Sum Insured . . . . . . . . . . . . . . . . . . . . . . . . . 15
Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Valuation Period . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Variable Subaccounts . . . . . . . . . . . . . . . . . . . . . . . . 2
7-Pay Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
<PAGE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?

John Hancock issues variable life insurance policies. The Policies described
in this Prospectus provide life insurance coverage on two insureds, with a death
benefit payable only when the last surviving insured dies. The Policies also
provide for premium flexibility. John Hancock issues other variable life
insurance policies. These other policies are funded by the Account and use the
same underlying Fund, but are offered by means of other Prospectuses.

As explained below, the death benefit and Surrender Value under the Policy may
increase or decrease daily. The Policies differ from ordinary fixed-benefit life
insurance in the way they work. However, the Policies are like fixed-benefit
survivorship life insurance in providing lifetime protection against economic
loss resulting from the death of the second of two persons 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 processing
expenses, taxes, and sales expenses. John Hancock then places the rest of the
premium into the 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 insureds and
with the amount of insurance provided at the start of each month.

The Policy provides for payment of death benefit proceeds when the last
surviving 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 under Option A equals the Total Sum Insured less
any withdrawals that the Owner has made. The death benefit under Option B equals
the Total Sum Insured plus the Policy Account Value on the date of death of the
last surviving insured. Under Option A, the Owner may also elect an Extra Death
Benefit feature that may result in a higher death benefit in some cases. 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.

Within limits prescribed by John Hancock, the Owner may also elect whether to
purchase the coverage as part of the "Basic Sum Insured" or as an "Additional
Sum Insured." The Basic Sum Insured will not lapse during the first ten Policy
years, so long as (1) specified Guaranteed Minimum Death Benefit Premiums have
been paid, and (2) the Additional Sum Insured is not scheduled to exceed the
Basic Sum Insured at any time. The Owner may elect for this Guaranteed Minimum
Death Benefit feature to extend beyond ten years. The Additional Sum Insured is
subject to lapse, but has certain cost and other advantages.

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 either
of the insureds is living. The Surrender Value is the Account Value less 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

1
<PAGE>

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

The minimum Total Sum Insured that may be bought at issue is $500,000. All
persons insured must meet specified age limits and certain health and other
criteria called "underwriting standards." The smoking status of the insureds is
generally reflected in the insurance charges made. Policies issued under certain
circumstances will not directly reflect the sexes of the insureds in either the
premium rates or the charges and values under the Policy.

WHAT IS THE AMOUNT OF THE PREMIUMS?

Premiums are flexible, and the Owner may choose the amount and frequency of
premium payments, so long as each premium payment is at least $100 and meets
certain other requirements.

The minimum amount of premium required at the time of Policy issue is
determined by John Hancock based on the characteristics of each insured, the
Policy's Total Sum Insured at issue, and the Policy options selected by the
Owner. Unless the Guaranteed Minimum Death Benefit is in effect, if the Policy
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.

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.

The Policy has a Guaranteed Minimum Death Benefit provision which guarantees
that the basic Sum Insured will not lapse during the first ten Policy years if
(1) prescribed amounts of premiums have been paid, based on the characteristics
of each insured and the amount of the Basic Sum Insured at issue and (2) any
Additional Sum Insured is not scheduled to exceed the Basic Sum Insured at any
time. The Owner may at the time of application elect for this feature to be
extended beyond the first ten Policy years for an additional charge.

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 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. .
Small Cap Value . . . 0.80% 0.25 % 1.05% 0.50%
Small Cap Growth. . . 0.75% 0.25 % 1.00% 0.37%
Global Equity . . . .
International Balanced 0.85% 0.25 % 1.10% 0.71%
International Equity
Index. . . . . . . . 0.18% 0.19 % 0.37% N/A
International
Opportunities. . . . 0.97% 0.25 % 1.22% 0.60%
Emerging Markets
Equity . . . . . . .
Short-Term Bond . . . 0.30% 0.21% 0.51%
Bond Index. . . . . .
Sovereign Bond. . . . 0.25% 0.06 % 0.31% N/A
Strategic Bond. . . . 0.75% 0.25 % 1.00% 0.57%
High Yield Bond . . .
Money Market. . . . . 0.25% 0.08 % 0.33% N/A
</TABLE>

- ---------

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

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?

Premium Processing Charge. A 1.25% charge deducted from each premium payment.
This charge will be reduced for Policies with a Total Sum Insured at issue of
more than $5,000,000, subject to a minimum charge of .50%.

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. A charge deducted from each premium payment in the amount of 30%
of premiums paid in the first Policy year up to the "target premium" and 3.5% of
premiums paid during the first Policy year in excess of that target. The current
sales charge in subsequent Policy years on premiums paid up to the target
premium generally is: 15% of such premiums in each of years 2 through 5; 10% of
such premiums in each of years 6 through 10; 3% of such premiums in years 11
through 20; and 0% of such premiums thereafter. The current sales charge in
subsequent Policy years on premiums paid in excess of the target premium is:
3.5% of such excess premiums paid in years 2 through 10; 3% of such excess
premiums paid in years 11 through 20; and 0% of such excess premiums paid
thereafter. Subject to maximums set forth in the Policy, certain of these
charges may be increased after the tenth Policy year.

3
<PAGE>

Issue Charge. A charge deducted monthly from Account Value in an amount equal
to $55.55 for the first 5 Policy years, plus 2c per $1,000 of the Total Sum
Insured at issue for the first 3 Policy years, except that the charge per $1,000
is guaranteed not to exceed $200 per month.

Administrative Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $10 all Policy years plus 3c per $1,000 of the
Total Sum Insured at issue (currently $7.50 for all Policy years, plus 1c per
$1,000 of the Total Sum Insured at issue for the first 10 Policy years, except
that the $7.50 charge currently is zero for any Policy with a Total Sum Insured
at issue of at least $5,000,000).

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

Guaranteed Minimum Death Benefit Charge. If the Guaranteed Minimum Death
Benefit option is elected beyond the first 10 Policy years, a maximum charge
starting at the beginning of the eleventh Policy year not to exceed 3c per
$1,000 (currently 1c per $1,000) of the Basic Sum Insured at issue, deducted
monthly from Account Value.
Charge for Mortality and Expense Risks. A charge deducted daily from the
variable Subaccounts at a maximum effective annual rate of .90% of the assets of
each variable Subaccount. The current charges are: for a Policy with a Sum
Insured at issue of at least $500,000 but less than $5 million, .625% of assets;
at least $5 million but less than $15 million, .575% of assets; and $15 million
or more, .525% of assets.

Charge for Extra Mortality Risks. An additional charge, depending upon the
ages of the insureds and the degree of additional mortality risk, required if
either of the insureds does not qualify for the standard 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 may be deducted from premiums when paid or deducted monthly from Account
Value.

Charge for Partial Withdrawal. A charge of $20 made against 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?

4
<PAGE>

Subaccount is reallocated among the Subaccounts in accordance with the Owner's
election. Net premiums derived from payments received after this reallocation
date are allocated, generally on the date of receipt, to one or more of the
Subaccounts as elected by the Owner.

HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?

At issue and subsequently thereafter, the Owner will provide us with the rule
("Investment Rule") we will follow to invest net premiums or other amounts in
any of the Subaccounts. The Owner may change the Investment Rule under which
John Hancock will allocate amounts to Subaccounts. See "Premiums--Billing,
Allocation of Premium Payments (Investment Rule)."

WHAT COMMISSIONS ARE PAID TO AGENTS?

The Policies are sold through agents who are licensed by state authorities to
sell John Hancock's insurance policies. Commissions payable to agents are
described under "Distribution of Policies." Sales expenses in any year are not
equal to the deduction for sales 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?

The death benefit proceeds, payable when the last insured dies, will equal the
death benefit of the Policy, plus any additional rider benefits included and
then due, minus any Indebtedness. The death benefit payable depends on the
Policy's Total Sum Insured and the death benefit option selected by the Owner at
the time the Policy is issued, as follows:

OPTION A: The death benefit equals the Policy's current Total Sum Insured
less any withdrawals of Account Value that the Owner has made. (The Sum Total
Insured is the Basic Sum Insured plus the amount of any Additional Sum
Insured.) If this option is elected, the Owner may also elect an optional
Extra Death Benefit feature, under which the death benefit will increase if
and when the Policy Account Value exceeds a certain predetermined amount.

OPTION B: The death benefit is the Policy's current Total Sum Insured plus
the Policy Account Value on the date of death of the last surviving insured,
and varies in amount based on investment results.

The death benefit of the Policy under either Option A or Option B will be
increased if necessary to ensure that the Policy will continue to qualify as
life insurance under the Federal tax law. See "Death Benefits" and "Tax
Considerations."

If the last surviving insured or the younger of two living insureds attains
age 100, the Surrender Value otherwise payable on such date will become payable
to the beneficiary instead of any death benefit.

Under the Guaranteed Minimum Death Benefit provision, the Policy is guaranteed
not to lapse during the first 10 Policy years, provided the amount of premiums
paid, accumulated at 4% interest, minus any withdrawals, also accumulated at 4%
interest, is at least equal to the Guaranteed Minimum Death Benefit Premiums,
accumulated at 4% interest. For an additional charge, the Owner also may elect
for this benefit to continue beyond the tenth Policy year. However, the
Guaranteed Minimum Death Benefit will not apply to any Policy if the Additional
Sum Insured is scheduled to exceed the Basic Sum Insured at any time. The
Guaranteed Minimum Death Benefit feature applies only to the Basic Sum Insured
and not to any amount of Additional Sum Insured.

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<PAGE>

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.

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

The Owner may obtain a Policy loan in the maximum amount of 90% of the
Surrender Value. 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%.
In jurisdictions where a fixed loan rate is applicable, John Hancock will charge
interest at an effective annual rate of 5% in the first 20 Policy years and 4.5%
thereafter, accrued and compound daily. A loan plus accrued interest
("Indebtedness") may be repaid at the discretion of the Owner in whole or in
part in accordance with the terms of the Policy.

While a loan is outstanding, the rate of interest credited to the Account
Value because of the loan will usually be different than the net investment
experience of the Subaccounts. Therefore, the Account Value, the Surrender Value
and any death benefit above the current Total 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 for both insureds,
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 cancelled
immediately as of the date of such mailing or delivery. Any premium paid on it
will be refunded.

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.

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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.

JOHN HANCOCK

John Hancock, a mutual life insurance company chartered in 1862 under
Massachusetts law, is authorized to transact a life insurance and annuity
business in Massachusetts and all other states. 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 in 1993,
meets the definition of "separate account" under the Federal securities laws and
is registered as a unit investment trust under the Investment Company Act of
1940 ("1940 Act").

The Account's assets are the property of John Hancock. Each Policy provides
that the portion of the Account's assets equal to the reserves and other
liabilities under the Policy shall not be chargeable with liabilities arising
out of any other business John Hancock may conduct. In addition to the assets
attributable to variable life policies, the Account's assets include assets
derived from charges made by John Hancock. From time to time these additional
assets may be transferred in cash by John Hancock to its general account. Before
making any such transfer, John Hancock will consider any possible adverse impact
the transfer might have on any Subaccount. Additional premiums are charged for
Policies where the insured is classified as a substandard risk and a portion of
these premiums is allocated to the Account.

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

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

SERIES FUND

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

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Managed Portfolio

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

Growth & Income Portfolio

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

Equity Index Portfolio

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

Large Cap Value Portfolio

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

Large Cap Growth Portfolio

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

Mid Cap Value Portfolio

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

Mid Cap Growth Portfolio

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

Diversified Mid Cap Growth Portfolio

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

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.

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<PAGE>

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.

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.

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Bond Index Portfolio

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

Sovereign Bond Portfolio

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

Strategic Bond Portfolio

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

High Yield Bond Portfolio

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

Money Market Portfolio

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

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

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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.

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."

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. The rate of
interest declared with respect to any amount in the Fixed Account may depend on
when that amount was first allocated to the Fixed Account.

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<PAGE>

Because of exemptive and exclusionary provisions, interests in John Hancock's
general account have not been registered under the Securities Act of 1933 and
the general account has not been registered as an investment company under the
1940 Act. Accordingly, neither the general account nor any interests therein are
subject to the provisions of these Acts, and John Hancock has been advised that
the staff of the Securities and Exchange Commission has not reviewed the
disclosure in this Prospectus relating to the Fixed Account. Disclosure
regarding the Fixed Account may, however, be subject to certain
generally-applicable provisions of the Federal securities laws relating to
accuracy and completeness of statements made in prospectuses.

POLICY PROVISIONS AND BENEFITS

REQUIREMENTS FOR ISSUANCE OF POLICY

The Policy is generally available with a minimum Total Sum Insured at issue of
$500,000 and a minimum Basic Sum Insured of $250,000. At the time of issue, each
insured must be age 20 through 80. 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. Amounts of coverage that
John Hancock will accept under the Policies may be limited by John Hancock's
underwriting and reinsurance procedures as in effect from time to time.

Policies issued under certain circumstances will not directly reflect the
sexes of the insureds in either the premium rates or the charges or values under
the Policy. Accordingly, 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 is at least
$100 and meets the other 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 each of the insureds at issue, the Total 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.

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 grace period, unless
the Guaranteed Minimum 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. 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. 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>

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. Also, as described under
"Death Benefits--Optional Extra Death Benefit Feature," the Optional Extra Death
Benefit feature may result in a death benefit under Option A that is higher than
the Total Sum Insured. If the payment of a given premium will cause the Policy
Account Value to increase to such an extent that an increase in death benefit is
necessary either to satisfy federal tax law requirements or because of the way
the Optional Extra Death Benefit feature operates, 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 maintain the Guaranteed
Minimum Death Benefit in effect under a Policy.

Whether or not the Guaranteed Minimum Death Benefit is in effect, John Hancock
also reserves the right to limit premium payments above the amount of the
cumulative Guaranteed Minimum Death Benefit Premiums. John Hancock will not,
however, refuse to accept any premium payment that is required to keep the
Policy from lapsing.

Guaranteed Minimum Death Benefit Premiums. A Guaranteed Minimum Death Benefit
feature may apply during the first ten Policy years and, if the Owner has
elected, thereafter. See "Death Benefits." The Guaranteed Minimum Death Benefit
Premiums required to maintain this benefit in force depend on the issue age,
sex, smoking status, and underwriting class of each of the insureds at issue and
the Basic Sum Insured at issue. This premium will be higher than the Minimum
First Premium and is 85% of the target premium (discussed under "Sales Charge").
To keep the Guaranteed Minimum Death Benefit in effect, the amount of actual
premiums paid, accumulated at 4% interest, minus any withdrawals, also
accumulated at 4% interest, must at each Policy anniversary be at least equal to
the Guaranteed Minimum Death Benefit Premiums due to date accumulated at 4%
interest. If this test is not satisfied on any Policy anniversary, a 61-day
grace period will commence as of that anniversary and John Hancock will notify
the Owner 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 grace period. If John Hancock
does not receive payment for the amount of the deficiency by the end of the
grace period, the Guaranteed Minimum Death Benefit feature will lapse unless and
until restored as described under "Default--Reinstatement." The Guaranteed
Minimum Death Benefit will not apply if the Additional Sum Insured is scheduled
to exceed the Basic Sum Insured at any time.

Billing, Allocation of Premium Payments (Investment Rule). The Owner may at
any time elect to be billed by John Hancock for an amount of premium other than
the Guaranteed Minimum Death Benefit Premium. The Owner may also elect to be
billed for premiums on an annual, semi-annual or quarterly basis. An automatic
check-writing ("premiumatic") program 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 premium
processing charge, the state premium tax charge, the 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 any 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. Notwithstanding the Investment Rule, any net premium (or
portion thereof) credited to Account Value as of a date prior to the end of the
Valuation Period (or as of the premium's date of receipt, if later) that
includes the 20th day following the date of issue will automatically be
allocated to the Money

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<PAGE>

Market Subaccount. At the end of that Valuation Period, the Policy's Account
Value will be reallocated automatically among the Subaccounts in accordance with
the Investment Rule chosen by the Owner.

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.

(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 a material change in, the Policy may also result in the application of
the modified endowment treatment. See "Policy Proceeds" under "Tax
Considerations." If John Hancock receives any premium payment that will cause a
Policy to become a modified endowment, the excess portion of that premium
payment will not be accepted unless the Owner signs an 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 acknowledgment 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, increased
or decreased by the investment experience of the Subaccounts, increased by net
premiums received and decreased by any partial withdrawal. 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
any Indebtedness.

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<PAGE>

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 or the
surrendered Policy.

If a Policy is surrendered during the second Policy year, a portion of the
sales charge, equal to 5% of premiums paid in the second Policy year up to one
target premium, will be refunded to the Owner.

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 when
at least one of the insureds is still living, provided that the Policy is not in
a 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.

A withdrawal will reduce any Option A death benefit by the amount withdrawn.
John Hancock reserves the right to refuse any withdrawal request that would
cause the Policy's death benefit to fall below $500,000.

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.

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

POLICY SPLIT OPTION

The Owner may elect a rider that permits the Policy's current Total Sum
Insured to be split on a "50/50" basis into two other individual life insurance
policies on the lives of the insured persons. Such a split will not require
evidence of insurability of either insured, but is permitted only upon the
insureds' divorce or the occurrence of certain Federal tax law changes. This
rider must be elected at the time of application for a Policy, but may be
cancelled at any time by the Owner. The monthly charge for the rider is 3c per
$1,000 of current Sum Insured. Certain conditions, described in the rider, must
be met prior to effecting a Policy split. The rider automatically terminates on
the date of death of the first insured to die, the Policy anniversary nearest
the older insured's 80th birthday, or the date the Policy terminates, whichever
is earliest.

Tax Considerations. See "Tax Considerations--Policy Split Option", for
possible tax consequences of a Policy split under the option described above.

DEATH BENEFITS

The death benefit proceeds are payable when the last surviving insured dies
while the Policy is in effect. The death benefit proceeds will equal the death
benefit of the Policy, plus any additional rider benefits then due, minus any
Indebtedness. If the last surviving insured dies during a grace period, John
Hancock will also deduct any overdue monthly deductions. If the last surviving
insured or the younger of two living insureds attains age 100, the Surrender
Value otherwise payable on such date will become payable to the beneficiary
instead of any death benefit.

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<PAGE>

The death benefit payable depends on the current Total Sum Insured and the
death benefit option selected by the Owner at the time the Policy is issued, as
follows:

OPTION A: The death benefit equals the current Total Sum Insured, plus any
increases in death benefit described below under "Optional Extra Death Benefit
Feature" and "Definition of Life Insurance", and reduced by the amount of any
partial withdrawals that have been made over the life of the Policy.

OPTION B: The death benefit is the current Total Sum Insured, plus the
Policy Account Value at the end of the Valuation Period in which the last
surviving insured dies. This death benefit is a varying amount and fluctuates
with the amount of the Account Value. This death benefit is also subject to
any increase described below under "Definition of Life Insurance."

The Total Sum Insured is the Basic Sum Insured plus the amount of any
Additional Sum Insured (discussed below).

Owners who prefer to have favorable investment experience reflected in
increased insurance coverage should choose Option B. Owners who prefer to have
insurance coverage that generally does not vary in amount and lower cost of
insurance charges should choose Option A.

Optional Extra Death Benefit Feature. If Option A is elected, the Owner may
also elect an Optional Extra Death Benefit feature. Pursuant to this feature the
death benefit under Option A will be no less than the amount of the Policy
Account Value at the beginning of the Policy year in which the last surviving
insured dies, multiplied by a factor specified in the Policy. The factor is
based on the younger insured's age. The Optional Extra Death Benefit feature may
result in an Option A death benefit that is higher than the minimum death
benefit required under Federal tax law, as described below under "Definition of
Life Insurance." Although there is no special charge for the optional Extra
Death Benefit feature, the monthly cost of insurance deductions will be based on
the amount of death benefit then in effect, including any additional death
benefit pursuant to this option. An election of this option must be made at the
time of application for the Policy, although the Owner may revoke the election
at any time. There may be tax consequences involved, if revoking the Optional
Extra Death Benefit feature under Option A causes a reduction in death benefit.
See "Tax Considerations--Policy Proceeds."

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. The higher death benefit amount will
be equal to the Policy Account Value on the date of death of the last surviving
insured, times a percentage which declines with age and which is set out in the
Policy. The monthly deductions for the cost of insurance will be based on the
amount of death benefit then in effect, including any additional death benefit
required to satisfy the definition of life insurance.

Guaranteed Minimum Death Benefit. During the first 10 Policy years (and
thereafter if the Owner elects), the Basic Sum Insured is guaranteed not to
lapse, provided (1) the amount of premiums paid through each Policy anniversary,
accumulated at 4% interest, minus any withdrawals, also accumulated at 4%
interest, is at least equal to the Guaranteed Minimum Death Benefit Premiums
accumulated at 4% interest and (2) any Additional Sum Insured under a Policy is
not scheduled to exceed the Basic Sum Insured at any time. At any time when this
feature is not in force, the death benefit of the Policy is not guaranteed. The
election to extend the Guaranteed Minimum Death Benefit beyond ten Policy years
must be made at the time of Policy issuance, and the Owner may revoke the
election at any time. John Hancock imposes a charge after the tenth Policy year
if the Owner elects to extend this benefit.

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<PAGE>

Additional Sum Insured. The Owner must purchase an amount of Additional Sum
Insured under the Policy equal in amount to the Basic Sum Insured under the
Policy. The Basic Sum Insured and Additional Sum Insured generally cannot be
increased or decreased after issue, although the Additional Sum Insured may be
decreased or, upon application and submission or evidence of insurability,
increased on a Policy anniversary. John Hancock may refuse to accept any request
to reduce the Additional Sum Insured (a) that would cause the Policy's current
Total Sum Insured to fall below $500,000 or (b) if immediately following the
reduction, the Policy's current death benefit would reflect an increase
necessary for the Policy to continue to qualify as life insurance (see "Death
Benefits--Definition of Life Insurance") or an increase pursuant to the optional
Extra Death Benefit feature. Any change in Additional Sum Insured will become
effective at the beginning of the Policy year after John Hancock receives in
good order at its Servicing Office all information necessary to process the
change, and, in the case of an increase in coverage, approves the change.

Any decision by the Owner to modify the amount of Additional Sum Insured
coverage after issue can have significant tax consequences. See "Tax
Considerations--Policy Proceeds."

The Owner may elect among several forms of Additional Sum Insured coverage: a
level amount of coverage; an amount of coverage that increases on each Policy
anniversary up to a prescribed limit; an amount of coverage that increases on
each Policy anniversary equal to the amount of premiums paid during prior Policy
years plus the Planned Premium for the current Policy year, subject to certain
limits; or a combination of those forms of coverage.

The amount of any Additional Sum Insured is not included in any Guaranteed
Minimum Death Benefit. Therefore, if the Policy's Account Value is insufficient
to pay the monthly charges as they fall due (including the charges for the
Additional Sum Insured) the Additional Sum Insured coverage will lapse, even if
the Basic Sum Insured stays in effect pursuant to the Guaranteed Minimum Death
Benefit feature.

The Additional Sum Insured is limited to 100% of the Basic Sum Insured at
issue of the Policy and 400% of the Basic Sum Insured thereafter.

Temporary Coverage Prior to Policy Delivery. If a specified amount of premium
is paid with the application for a Policy, temporary survivorship term coverage
may be available prior to the time when coverage under the Policy takes effect.
Temporary term coverage under all applications with John Hancock and its
affiliates will not exceed $1,000,000, and is subject to the terms and
conditions described in the application for a Policy.

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.

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<PAGE>

at its Servicing Office. (John Hancock reserves the right to defer such Fixed
Account transfers for up to 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.

If an Owner requests a change inconsistent with the transfer provisions, the
portion of the request inconsistent with the transfer provisions will not be
effective. No transfers among subaccounts may be made while the Policy is in a
grace period.

TELEPHONE TRANSFERS AND POLICY LOANS

Once a written authorization is completed by the Owner, the Owner may request
a transfer or policy loan by telephoning 1-800-732-5543 or by sending a written
request via fax to 1-800-621-0488. 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
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 JHVLICO does not employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, it may be
liable for any loss due to unauthorized or fraudulent instructions.

LOAN PROVISIONS AND INDEBTEDNESS

Loan Provisions. Loans may be made at any time a Loan Value is available,
either of the insureds is alive, and the Policy is not in a grace period. 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. The Loan Value
will be 90% of the Surrender Value. 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 $500. A loan
may be repaid in full or in part at any time before the last surviving insured's
death and while 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 John
Hancock's general account called the "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

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<PAGE>

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.

Effect of Loan and Indebtedness. While the Indebtedness is outstanding, that
portion of the Account Value that is in Loan Assets is credited with interest at
a rate that is 1% less than the loan interest rate for the first 20 Policy years
and .5% less than the loan interest rate thereafter. The rate credited the Loan
Assets will usually be different than the net return for the Subaccounts. Since
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 Total Sum Insured are all 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 90% of the Account 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, specifying the
amount that must be paid to keep the Policy in force beyond that period, unless
a repayment of at least the amount specified in the notice is made within that
period.

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

DEFAULT

Premium Grace Period, Default and Lapse. Unless the Guaranteed Minimum 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 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 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.

If the Guaranteed Minimum Death Benefit is in effect and the Policy provides
for an Additional Sum Insured, the grace period and lapse procedures set forth
in the preceding paragraph will apply only to the Additional Sum Insured. Lapse
of the Additional Sum Insured can have significant tax consequences. See "Tax
Considerations--Policy Proceeds." If the Guaranteed Minimum Death Benefit has
been in effect and lapses at the end of a grace period (as described in
"Premiums--Guaranteed Minimum Death Benefit Premiums"), the usual default, grace
period and lapse procedures described in the preceding paragraph will be applied
commencing with the first day of the first Policy month following the lapse of
the Guaranteed Minimum Death Benefit.

The insurance under the Policy continues in full force during any grace period
but, if the last surviving insured dies during the grace period, the amount in
default is deducted from the death benefit otherwise payable.

Written notice will be furnished to the Owner at his or her last known
address, at least 31 days prior to the end of any grace period, specifying the
minimum amount which must be paid to continue the Policy in force on a premium
paying basis after the end of the grace period.

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<PAGE>

Reinstatement. A lapsed Policy (or a lapsed Additional Sum Insured, if the
Basic Sum Insured remains in force or is reinstated) or the Guaranteed Minimum
Death Benefit may be reinstated in accordance with the Policy's terms. Evidence
of insurability satisfactory to John Hancock will be required (except as to a
request to restore the Guaranteed Minimum Death Benefit within 1 year after the
beginning of its grace period) and payment of the required premium and charges.
The request must be received at John Hancock's Servicing Office within 3 years
after the beginning of the grace period (or 5 years if the request relates only
to the Guaranteed Minimum Death Benefit). John Hancock reserves the right to
refuse Guaranteed Minimum Death Benefit restorations after the first. A
reinstatement of the Basic Sum Insured or the Additional Sum Insured may be
deemed a material change for Federal income tax purposes. See "Premiums--7-Pay
Premium Limit" and "Tax Considerations."

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.

CHARGES AND EXPENSES

CHARGES DEDUCTED FROM PREMIUMS

In addition to the sales charge (see "Sales Charge" below), the following
charges are deducted from premiums:

Premium Processing Charge. 1.25% of each premium payment will be deducted from
each premium payment for collection and Policy processing costs. This charge
will be reduced for a Policy with a Sum Insured at issue of more than
$5,000,000, subject to a minimum charge equal to .50%. The premium processing
charge for these larger Policies will be the greater of .50% or the percentage
computed pursuant to the following mathematical formula:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
(Total Sum Insured at Issue -
1.25% X ( 1 - [ $5,000,000) X .25 ] )
-------------------------------------
$10,000,000
</TABLE>

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

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<PAGE>

Policies not yet issued in order to correspond with changes in the Federal
income tax treatment of the Policies' deferred acquisition costs.

SALES CHARGE

A charge is 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."

The sales charge in the first Policy year is equal to 30% of the premiums paid
up to one "target premium" and 3.5% of all premiums in excess of the target
premium in that year. The target premium is established at issue and is the
amount of the level premium that would be necessary to support a whole life
insurance policy in the amount of the Basic Sum Insured at the maximum
guaranteed cost of insurance rates, assuming deductions or charges for the other
policy expenses at the maximum levels guaranteed under the Policy, and a net
interest rate of 5%. Target premiums will vary based on the issue age, sex,
smoking status and underwriting class of each of the insureds.

The current sales charge for premiums paid up to one target premium in
subsequent Policy years is 15% in years 2 through 5, 10% in years 6 through 10,
3% for years 11 through 20 and 0% thereafter. The current sales charge for
premiums paid in excess of the target premium is 3.5% in years 2 through 10, 3%
in years 11 through 20 and 0% thereafter.

The guaranteed maximum sales charges under the Policy are no higher than the
current sales charges, except that the guaranteed maximum sales charge for
premiums paid up to one target premium is 4% in years 11 through 20 and 3%
thereafter and, for premiums paid in excess of one target premium, is 3% after
year 20. Because the Policies were first offered only in 1993, sales charges at
the lower current rates are not yet applicable under any outstanding Policy.

Notwithstanding the foregoing, if the younger insured is age 71 or older at
the time of Policy issuance, the current and guaranteed sales charge in Policy
year 12 and thereafter is 0%.

An Owner may structure the timing and amount of premium payments to minimize
the sales charges deducted from premium payments, 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 $10,000 each, would pay total sales charges of $14,000 if he paid $10,000 in
each of the first ten Policy years, but would pay total sales charges of only
$9,750 if he paid $20,000 (i.e., two times the target premium amount) in every
other Policy year up to the ninth Policy year. However, delaying the payment of
target premiums to later Policy years could increase the risk that the
Guaranteed Minimum Death Benefit may lapse and that the Account Value will be
insufficient to pay monthly Policy charges as they come due. As a result, the
Policy or any Additional Sum Insured may lapse. 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."

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<PAGE>

REDUCED CHARGES FOR ELIGIBLE GROUPS

The sales 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
Policy Owner.

CHARGES DEDUCTED FROM ACCOUNT VALUE OR ASSETS

The following charges are deducted from Account Value or assets:

Issue Charge. John Hancock will deduct an issue charge from Account Value,
currently at the rate of $55.55 per month for the first 5 Policy years, plus 2c
per $1,000 of the Total Sum Insured at issue per month for the first 3 Policy
years. The charge per $1,000 of Total Sum Insured at issue is guaranteed not to
exceed $200 per month. Thus, for a Policy with a Total Sum Insured at issue of
$1,000,000, the aggregate amount deducted during the first 3 Policy years would
be $2,719.80.

The issue charge is 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.

Administrative Charge. John Hancock will deduct from the Account Value a
maximum charge of $10 for all Policy years plus 3c per $1,000 of the Total Sum
Insured at issue per month. The current monthly charge is $7.50 for all Policy
years, plus 1c per $1,000 of the Total Sum Insured at issue for the first 10
Policy years, except that the $7.50 charge currently is zero for any Policy with
a Total Sum Insured at issue of at least $5,000,000. Thus, for a Policy with a
Total Sum Insured at issue of $1,000,000 and using the current administrative
charge, the aggregate amount deducted during the first 10 Policy years would be
$2,100.

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 each of the insureds and the amount at risk. The
amount at risk is the difference between the current death benefit and the
Account Value (after reflecting all charges against 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 each of the insureds 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

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<PAGE>

Commissioners' Standard Ordinary Mortality Tables, as set forth in the Policy.
The insurance charge is not affected by the death of the first insured to die.

If an insured's underwriting risk classification has worsened, any
subsequently-added Additional Sum Insured coverage may have higher insurance
charge rates than the Basic Sum Insured. If an insured's underwriting risk
classification has improved, cost of insurance rates on the total Sum Insured
may be reduced, as may the target premium with respect to subsequent premium
payments.

Lower current insurance rates are offered at most ages for insureds who
qualify as non-smokers. To qualify, an insured must meet additional requirements
that relate to smoking habits.

Guaranteed Minimum Death Benefit Charge. There is no charge for any Guaranteed
Minimum Death Benefit during the first 10 Policy years. If the Guaranteed
Minimum Death Benefit option is elected for a period beyond the first 10 Policy
years, John Hancock deducts a charge from Account Value beginning in the
eleventh Policy year. The maximum monthly charge is 3c per $1000 of the Basic
Sum Insured at issue and the current monthly charge is 1c per $1,000 of the
Basic Sum Insured at issue. If the Guaranteed Minimum Death Benefit lapses due
to failure to pay sufficient premiums, the charge will be discontinued. Because
the Policies were first offered only in 1993, no Guaranteed Minimum Death
Benefit charge is yet applicable to any Policy at the current rate.

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 effective annual rate of
this charge will vary, depending upon the Total Sum Insured at issue. The table
below shows the current levels of this charge. 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 Hancock will realize a gain from this charge to the extent it is
not needed to provide for benefits and expenses under the Policies.

<TABLE>
<CAPTION>
Current Charge For
Total Sum Insured at Issue Mortality and Expense Risks
-------------------------- --------------------------
<S> <C>
$500,000 but less than $5 million . . . . .625% of assets
$5 million but less than $15 million . . . .575% of assets
Greater than $15 million . . . . . . . . . .525% of assets
</TABLE>

Charges for Extra Mortality Risks. An insured who does not qualify for the
standard underwriting class must pay an additional charge because of the extra
mortality risk. The level of the charge depends upon the ages of the insureds
and the degree of extra mortality risk. This additional charge is deducted
monthly from Account Value.

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 may be deducted from premiums when paid or 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.

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<PAGE>

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 briefly in the Summary
of this Prospectus, and of certain non-advisory operating expenses. 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 the first day of each Policy month 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 Minimum Death Benefit Premium is guaranteed not to
increase. The premium processing charge, the state premium tax charge, the
Federal DAC Tax charge, the issue charge and the charge for partial withdrawals
are guaranteed not to increase over the life of the Policy. The administrative
charge, the Guaranteed Minimum Death Benefit Charge, the sales charge, the
mortality and expense risk charge, and the insurance charge are guaranteed not
to exceed the maximums set forth in the Policy.

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,
JHVLICO, and the Account, Distributors acts as the principal underwriter of the
Policies. The sales agreement will remain in effect until terminated upon sixty
days' written notice by any party. 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.

24
<PAGE>

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 and its affiliates 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. Distributors is also the
principal underwriter for the Fund.

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 and the
investment diversification requirements mentioned below, as John Hancock
believes it will, 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.

25
<PAGE>

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 an
increase in Additional Sum Insured, 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 Total 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.

The Code and Treasury Regulations set forth requirements for the
diversification of the investments underlying variable life insurance policies.
John Hancock and the Portfolios intend to comply with these requirements with
respect to the Policy. Failure to meet these requirements would mean that the
Policy would not be treated as a life insurance contract, subjecting the Owner
to Federal income tax on the income and gains under the Policy.

The Treasury Department has said in the past that it may issue a regulation or
a ruling prescribing the circumstances in which an Owner's control over
investments underlying a variable life insurance policy may cause the Owner,
rather than the insurance company, to be treated as the owner of the assets in
the Account, with the effect that income and gains from the Account would be
included in the Owner's income for Federal income tax purposes. Under current
law, we believe that John Hancock, and not the Policy Owner, would be considered
the owner of the assets of the Account. However, John Hancock has reserved
certain rights to alter the Policy and the investment alternatives of the
Account if necessary to comply with any such regulation or ruling.

The United States Congress and the Treasury Department have in the past and
may in the future consider new legislation that, if enacted, could change the
Federal tax treatment of life insurance policy income or death benefits. Any
such change could have a retroactive effect. We suggest you consult with your
legal or tax adviser, if you have any questions about this.

26
<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.

POLICY SPLIT OPTION

An Owner may elect to split a Policy into two other individual life insurance
policies, as described under "Policy Split Option." A Policy split could have
adverse tax consequences including, but not limited to, the recognition of
taxable income in an amount up to any taxable gain in the Policy at the time of
the split.

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>

27
<PAGE>

<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>

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, Basic Sum Insured, Additional Sum
Insured, 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 and
contracts and shares for which instructions from owners are not received will be
represented by John Hancock at the meeting and will

28
<PAGE>

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
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.

29
<PAGE>

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. Bocoge, 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.

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 Malcolm
Cheung, 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.

30
<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.

31
<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.

32
<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.

33
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

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.

34
<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.

35
<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.

36
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

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.

37
<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.

38
<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.

39
<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.

40
<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

41
<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.

42
<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>

43
<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.

44
<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.

45
<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.

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.

Ernst & Young LLP

Boston, Massachusetts

February 6, 1998

46
<PAGE>

REPORT OF ERNST & YOUNG LLP, 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 year ended December 31,
1997.

Also, in our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of John Hancock 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.

Ernst & Young LLP

Boston, Massachusetts

February 18, 1998

47
<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.

48
<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.

49
<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.

50
<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.

51
<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.

52
<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.

53
<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.

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
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.

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 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

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
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

57
<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>

58
<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.

59
<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.

60
<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.

61
<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>

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.

62
<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.

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.

63
<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>

64
<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.

65
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT 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>

66
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT 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.

67
<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.

68
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

69
<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

70
<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

71
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 14--COMMITMENTS AND CONTINGENCIES--CONTINUED
cost of the settlement could be different from the amounts presently provided
for by the Company. However, the 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.

72
<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.

73
<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.

The tax treatment of the Policy proceeds may vary, depending on which
settlement option is chosen and when. You should consult your tax advisor in
this regard.

ADDITIONAL INSURANCE BENEFITS

On payment of an additional premium or charge and subject to certain age and
insurance underwriting requirements, certain additional provisions, such as the
yearly renewable term benefits discussed below, which are subject to the
restrictions and limitations set forth therein, may be included in a Policy by
rider.

Yearly Renewable Term Insurance. This is term insurance on the life of one of
the insureds under the base Policy and payable upon the death of the covered
insured person. This insurance is level or decreasing in amount and may be
applied for, or increased, at any time upon evidence of insurability and any
other underwriting requirements. The yearly coverage also may be cancelled by
the Owner at any time. The charges for this coverage will be separately billed
to and paid by the Owner and not out of Account Value. An increase or a decrease
in this insurance may have significant tax consequences. See "Premiums--7-Pay
Premium Limit" and "Tax Considerations."

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 on the death of the last surviving insured there is
no surviving Beneficiary, the Owner will be the Beneficiary, but if the Owner
was one of the insureds, his or her estate will be the Beneficiary.

A-74
<PAGE>

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.

If a Policy has joint Owners, both Owners must join in any request or
instructions to John Hancock under the Policy.

Misstatement of Age or Sex. If the age or sex of an 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.

Suicide. If either 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 either insured commits suicide within 2 years
(except where state law requires a shorter period) from the date of any Policy
change that increases the death benefit, the death benefit will be limited as
described in the Policy. Subject to terms and conditions set forth in the
Policy, we will make coverage available to any surviving insured, if the
surviving insured elects such coverage within 60 days after the suicide.

Age and Policy Anniversaries. For purpose of the Policy, an insured's "age" is
his or her age on his or her nearest birthday. Policy months and Policy years
are calculated from the date of issue.

Incontestability. The Policy shall be incontestable other than for nonpayment
of premiums after it has been in force during the lifetime of an 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.

A-75
<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.

A-76
<PAGE>

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

The following tables illustrate the changes in death benefit and Surrender
Value of the Policy, disregarding any Policy loans. Each table separately
illustrates the operation of a Policy for identified issue ages, Planned Premium
schedule and Sum Insured and shows how the death benefit 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 death benefit and surrender
value figures set forth in the tables with those under other variable life
insurance policies which may be issued by John Hancock or other companies.
Tables are provided for Option A, without the Extra Death Benefit feature, as
well as for Option B death benefits. The death benefit and Surrender Value for a
Policy would be different from those shown if premiums are paid in different
amounts or at different times or if the actual gross rates of investment return
average 0%, 6% or 12% over a period of years, but nevertheless fluctuate above
or below the average for individual Policy years, or if the Policy were issued
under circumstances in which no distinctions are made based on the gender of the
insureds.

The amounts shown for the death benefit and Surrender Value are as of the end
of each Policy year. The first two tables headed "Using Current Charges" assume
that the current rates for insurance, sales, risk, and expense charges will
apply in each year illustrated. The two 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 seven 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 Minimum Death Benefit has not been
elected beyond the tenth Policy year and that no optional rider benefits have
been elected.

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.

A-77
<PAGE>

PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 SUM INSURED ($250,000
BASIC SUM INSURED; $250,000 ADDITIONAL SUM INSURED) MALE, ISSUE AGE 55,
NONSMOKER UNDERWRITING CLASS FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING
CLASS OPTION A DEATH BENEFIT NO GUARANTEED MINIMUM DEATH BENEFIT OPTION
AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING CURRENT CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------ ------------------------------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------------ ------------------------------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
- ------- ------------------ -------- -------- ---------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 8,564 $500,000 $500,000 $ 500,000 $ 5,359 $ 5,707 $ 6,055
2 17,556 500,000 500,000 500,000 11,209 12,272 13,378
3 26,998 500,000 500,000 500,000 16,932 19,088 21,418
4 36,912 500,000 500,000 500,000 22,638 26,278 30,364
5 47,322 500,000 500,000 500,000 28,199 33,725 40,176
6 58,252 500,000 500,000 500,000 34,469 42,329 51,865
7 69,728 500,000 500,000 500,000 40,642 51,314 64,769
8 81,779 500,000 500,000 500,000 46,717 60,694 79,010
9 94,432 500,000 500,000 500,000 52,692 70,485 94,729
10 107,717 500,000 500,000 500,000 58,562 80,701 112,076
11 121,667 500,000 500,000 500,000 64,711 91,763 131,642
12 136,314 500,000 500,000 500,000 70,726 103,282 153,219
13 151,694 500,000 500,000 500,000 76,595 115,268 177,012
14 167,843 500,000 500,000 500,000 82,307 127,734 203,250
15 184,799 500,000 500,000 500,000 87,851 140,692 232,191
16 202,603 500,000 500,000 507,538 93,213 154,155 264,113
17 221,297 500,000 500,000 556,553 98,362 168,122 299,244
18 240,926 500,000 500,000 608,630 103,272 182,603 337,872
19 261,536 500,000 500,000 664,091 107,919 197,609 380,324
20 283,177 500,000 500,000 723,258 112,274 213,153 426,956
25 408,735 500,000 500,000 1,090,951 129,281 300,920 738,769
30 568,983 500,000 536,707 1,622,147 128,576 405,324 1,225,053
35 773,504 500,000 637,519 2,392,922 86,226 522,441 1,960,979
</TABLE>

*The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Guaranteed Minimum Death Benefit after the tenth Policy
Year, or optional rider benefits are elected.

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

A-78
<PAGE>

PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 SUM INSURED ($250,000
BASIC SUM INSURED; $250,000 ADDITIONAL SUM INSURED) MALE, ISSUE AGE 55,
NONSMOKER UNDERWRITING CLASS FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING
CLASS OPTION B DEATH BENEFIT NO GUARANTEED MINIMUM DEATH BENEFIT OPTION
AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING CURRENT CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------ ------------------------------
Assuming Hypothetical Assuming Hypothetical
End of Planned Premiums Gross Annual Return of Gross Annual Return of
Policy Accumulated at ------------------------------ ------------------------------
Year 5% Annual Interest 0% 6% 12% 0% 6% 12%
- ------- ------------------ -------- -------- ---------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 8,564 $505,359 $505,707 $ 506,055 $ 5,359 $ 5,707 $ 6,055
2 17,556 511,207 512,271 513,377 11,207 12,271 13,377
3 26,998 516,927 519,082 521,411 16,927 19,082 21,411
4 36,912 522,626 526,263 530,347 22,626 26,263 30,347
5 47,322 528,173 533,694 540,138 28,173 33,694 40,138
6 58,252 534,421 542,269 551,790 34,421 42,269 51,790
7 69,728 540,569 551,217 564,643 40,569 51,217 64,643
8 81,779 546,612 560,551 578,816 46,612 60,551 78,816
9 94,432 552,549 570,283 594,444 52,549 70,283 94,444
10 107,717 558,374 580,425 611,672 58,374 80,425 111,672
11 121,667 564,473 591,400 631,090 64,473 91,400 131,090
12 136,314 570,425 602,806 652,466 70,425 102,806 152,466
13 151,694 576,214 614,645 675,987 76,214 114,645 175,987
14 167,843 581,826 626,919 701,857 81,826 126,919 201,857
15 184,799 587,243 639,626 730,300 87,243 139,626 230,300
16 202,603 592,445 652,763 761,560 92,445 152,763 261,560
17 221,297 597,390 666,301 795,882 97,390 166,301 295,882
18 240,926 602,042 680,220 833,543 102,042 180,220 333,544
19 261,536 606,363 694,491 874,848 106,363 194,491 374,848
20 283,177 610,311 709,085 920,126 110,311 209,085 420,126
25 408,735 623,330 786,092 1,220,927 123,330 286,092 720,927
30 568,983 612,436 855,864 1,684,888 112,436 355,864 1,184,888
35 773,504 550,594 883,845 2,379,281 50,594 383,845 1,879,281
</TABLE>

A-79
<PAGE>

<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------ -----------------------------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------------ -----------------------------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
- ------- ------------------ -------- -------- ---------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 8,564 $500,000 $500,000 $ 500,000 $ 5,194 $ 5,537 $ 5,879
2 17,556 500,000 500,000 500,000 10,866 11,906 12,988
3 26,998 500,000 500,000 500,000 16,398 18,499 20,769
4 36,912 500,000 500,000 500,000 21,901 25,436 29,406
5 47,322 500,000 500,000 500,000 27,245 32,599 38,850
6 58,252 500,000 500,000 500,000 33,282 40,879 50,098
7 69,728 500,000 500,000 500,000 39,125 49,417 62,393
8 81,779 500,000 500,000 500,000 44,760 58,207 75,829
9 94,432 500,000 500,000 500,000 50,173 67,246 90,511
10 107,717 500,000 500,000 500,000 55,346 76,524 106,551
11 121,667 500,000 500,000 500,000 60,518 86,307 124,367
12 136,314 500,000 500,000 500,000 65,396 96,314 143,834
13 151,694 500,000 500,000 500,000 69,945 106,525 165,108
14 167,843 500,000 500,000 500,000 74,120 116,910 188,362
15 184,799 500,000 500,000 500,000 77,868 127,433 213,792
16 202,603 500,000 500,000 500,000 81,130 138,058 241,632
17 221,297 500,000 500,000 506,063 83,816 148,721 272,097
18 240,926 500,000 500,000 549,825 85,899 159,421 305,227
19 261,536 500,000 500,000 595,682 87,278 170,097 341,147
20 283,177 500,000 500,000 643,777 87,857 180,698 380,037
25 408,735 500,000 500,000 923,674 73,575 230,291 625,492
30 568,983 500,000 500,000 1,285,458 3,129 263,288 970,784
35 773,504 ** 500,000 1,757,533 ** 253,486 1,440,283
</TABLE>

*The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Guaranteed Minimum Death Benefit after the tenth
Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.

A-80
<PAGE>

PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 SUM INSURED ($250,000
BASIC SUM INSURED; $250,000 ADDITIONAL SUM INSURED) MALE, ISSUE AGE 55,
NONSMOKER UNDERWRITING CLASS FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING
CLASS OPTION B DEATH BENEFIT NO GUARANTEED MINIMUM DEATH BENEFIT OPTION
AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING MAXIMUM CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------ -----------------------------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------------ -----------------------------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
- ------- ------------------ -------- -------- ---------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 8,564 $505,194 $505,536 $ 505,879 $ 5,194 $ 5,536 $ 5,879
2 17,556 510,865 511,905 512,986 10,865 11,905 12,986
3 26,998 516,393 518,493 520,763 16,393 18,493 20,763
4 36,912 521,889 525,422 529,390 21,889 25,422 29,390
5 47,322 527,220 532,569 538,813 27,220 32,569 38,813
6 58,252 533,236 540,821 550,025 33,236 40,821 50,025
7 69,728 539,046 549,314 562,259 39,046 49,314 62,259
8 81,779 544,632 558,035 575,597 44,632 58,035 75,597
9 94,432 549,976 566,970 590,127 49,976 66,970 90,127
10 107,717 555,054 576,100 605,939 55,054 76,100 105,939
11 121,667 560,096 585,674 623,418 60,096 85,674 123,418
12 136,314 564,802 595,393 642,399 64,802 95,393 142,399
13 151,694 569,127 605,209 662,977 69,127 105,209 162,977
14 167,843 573,010 615,059 685,246 73,010 115,059 185,246
15 184,799 576,384 624,867 709,295 76,384 124,867 209,295
16 202,603 579,175 634,544 735,217 79,175 134,544 235,217
17 221,297 581,265 643,954 763,066 81,265 143,954 263,066
18 240,926 582,623 653,042 792,990 82,623 153,042 292,990
19 261,536 583,121 661,650 825,053 83,121 161,650 325,053
20 283,177 582,649 669,627 859,334 82,649 169,627 359,334
25 408,735 560,153 692,423 1,065,509 60,153 192,423 565,509
30 568,983 ** 653,945 1,323,300 ** 153,945 823,300
35 773,504 ** ** 1,608,674 ** ** 1,108,674
</TABLE>

*The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Guaranteed Minimum Death Benefit after the tenth
Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.

A-81
<PAGE>

[LOGO OF JOHN HANCOCK APPEARS HERE]

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

S8143 NY 5/98
<PAGE>

John Hancock Mutual Life
Insurance Company
(John Hancock)

[LOGO OF JOHN HANCOCK MUTUAL LIFE APPEARS HERE]

FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP 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 617-572-5410

PROSPECTUS MAY 1, 1998

The flexible premium variable life survivorship policy ("Policy") described in
this Prospectus can be funded, at the discretion of the Owner, by any 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 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 Funds, 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 John Hancock's
general account.

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. 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.

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Account Value and Surrender Value . . . . . . . . . . . . . . . . . 14
Policy Split Option . . . . . . . . . . . . . . . . . . . . . . . . 15
Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Transfers Among Subaccounts . . . . . . . . . . . . . . . . . . . . 17
Telephone Transfers and Policy Loans . . . . . . . . . . . . . . . . 17
Loan Provisions and Indebtedness . . . . . . . . . . . . . . . . . . 18
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Exchange Privilege . . . . . . . . . . . . . . . . . . . . . . . . . 19
CHARGES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 20
Charges Deducted from Premiums . . . . . . . . . . . . . . . . . . . 20
Sales Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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
Policy Split Option . . . . . . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . 30
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 30
APPENDIX--OTHER POLICY PROVISIONS . . . . . . . . . . . . . . . . . . A-1
Settlement Provisions . . . . . . . . . . . . . . . . . . . . . . . A-1
Additional Insurance Benefits . . . . . . . . . . . . . . . . . . . A-1
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, SURRENDER VALUES AND
ACCUMULATED PREMIUMS . . . . . . . . . . . . . . . . . . . . . . . . A-3
</TABLE>

INDEX OF DEFINED WORDS AND PHRASES

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

<TABLE>
<CAPTION>
Page
<S> <C>
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Account Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Additional Sum Insured . . . . . . . . . . . . . . . . . . . . . . . 16
Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
Basic Sum Insured. . . . . . . . . . . . . . . . . . . . . . . . . . 1
DAC Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Fixed Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Front Cover
Grace Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Guaranteed Minimum Death Benefit . . . . . . . . . . . . . . . . . . 16
Guaranteed Minimum Death Benefit Premium . . . . . . . . . . . . . . 12
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Investment Rule . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Loan Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Minimum First Premium . . . . . . . . . . . . . . . . . . . . . . . 12
Planned Premium . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Policy Anniversary . . . . . . . . . . . . . . . . . . . . . . . . . A-2
Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . Front Cover
Servicing Office . . . . . . . . . . . . . . . . . . . . . . . Front Cover
Subaccount . . . . . . . . . . . . . . . . . . . . . . . . . . Front Cover
Surrender Value . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Target Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Total Sum Insured . . . . . . . . . . . . . . . . . . . . . . . . . 16
Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Valuation Period . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Variable Subaccounts . . . . . . . . . . . . . . . . . . . . . . . . 2
7-Pay Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>

<PAGE>

SUMMARY

WHAT IS THE VARIABLE LIFE POLICY BEING 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 processing
expenses, taxes, and sales expenses. John Hancock then places the rest of the
premium into the 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 insureds and
with the amount of insurance provided at the start of each month.

1
<PAGE>

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

WHAT IS THE AMOUNT OF THE PREMIUMS?

Premiums are flexible, and the Owner may choose the amount and frequency of
premium payments, so long as each premium payment is at least $100 and meets
certain other requirements.

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 current Portfolios of the Funds are: Managed, Growth & Income, Equity
Index, Large Cap Value, Large Cap Growth, Mid Cap Value, Mid Cap Growth,
Diversified Mid Cap Growth, Real Estate Equity, Small/Mid Cap CORE, Small Cap
Value, Small Cap Growth, Global Equity, International Balanced, International
Equity Index, International Opportunities, Emerging Markets Equity, Short-Term
Bond, Bond Index, Sovereign Bond, Strategic Bond, High Yield Bond, Money Market,
Edinburgh Overseas Equity, Turner Core Growth, Frontier Capital Appreciation,
and Enhanced U.S. Equity.

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.

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 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.

3
<PAGE>

WHAT ARE THE CHARGES MADE BY JOHN HANCOCK?

Charge for Mortality and Expense Risks. A charge deducted daily from the
variable Subaccounts at a maximum effective annual rate of .90% of the assets of
each variable Subaccount. The current charges are: for a Policy with a Sum
Insured at issue of at least $500,000 but less than $5 million, .625% of assets;
at least $5 million but less than $15 million, .575% of assets; and $15 million
or more, .525% of assets.

4
<PAGE>

Charge for Partial Withdrawal. A charge of $20 made against 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?

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 the Money Market Subaccount on the date of issue of the Policy. The initial
net premium is the gross Minimum First Premium, plus any additional amount of
premium that has been paid prior to the date of issue, less the premium
processing charge, and less the charges deducted for sales expenses, state
premium taxes, and the Federal DAC Tax. These charges also apply to subsequent
premium payments. Twenty days after the date of issue, the amount in the Money
Market Subaccount is reallocated among the Subaccounts in accordance with the
Owner's election. Net premiums derived from payments received after this
reallocation date are allocated, generally on the date of receipt, to one or
more of the Subaccounts as elected by the Owner.

HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?

WHAT COMMISSIONS ARE PAID TO AGENTS?

WHAT IS THE DEATH BENEFIT?

5
<PAGE>

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?

6
<PAGE>

Policy will be cancelled immediately as of the date of such mailing or delivery.
Any premium paid on it will be refunded.

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?

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.

JOHN HANCOCK

THE ACCOUNT AND SERIES FUNDS

THE ACCOUNT

7
<PAGE>

The assets in the variable Subaccounts 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.

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

8
<PAGE>

Mid Cap Value Portfolio

Mid Cap Growth Portfolio

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

Diversified Mid Cap Growth Portfolio

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

Real Estate Equity Portfolio

Small/Mid Cap CORE Portfolio

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

9
<PAGE>

International Opportunities Portfolio

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

Emerging Markets Equity Portfolio

Short-Term Bond Portfolio

Bond Index Portfolio

Sovereign Bond Portfolio

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.

10
<PAGE>

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
three Portfolios described above. Edinburgh Fund Managers PLC provides
sub-investment advice to the Edinburgh Overseas Equity Portfolio; Turner
Investment Partners, Inc. provides sub-investment advice to the Turner Core
Growth Portfolio; Frontier

11
<PAGE>

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.

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

12
<PAGE>

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

PREMIUMS

13
<PAGE>

tax law requirements or because of the way the Optional Extra Death Benefit
feature operates, 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 maintain the Guaranteed Minimum Death Benefit in effect
under a Policy.

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:

14
<PAGE>

(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.

(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
any Indebtedness.

When Policy May Be Surrendered. A Policy may be surrendered for its Surrender
Value at any time while either of the insureds is living and the Policy is not
in a 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 or the surrendered Policy.

15
<PAGE>

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

POLICY SPLIT OPTION

Tax Considerations. See "Tax Considerations--Policy Split Option", for
possible tax consequences of a Policy split under the option described above.

DEATH BENEFITS

The death benefit payable depends on the current Total Sum Insured and the
death benefit option selected by the Owner at the time the Policy is issued, as
follows:

16
<PAGE>

The Total Sum Insured is the Basic Sum Insured plus the amount of any Additional
Sum Insured (discussed below).

17
<PAGE>

Additional Sum Insured will become effective at the beginning of the Policy year
after John Hancock receives in good order at its Servicing Office all
information necessary to process the change, and, in the case of an increase in
coverage, approves the change.

Any decision by the Owner to modify the amount of Additional Sum Insured
coverage after issue can have significant tax consequences. See "Tax
Considerations--Policy Proceeds."

The Additional Sum Insured is limited to 100% of the Basic Sum Insured at
issue of the Policy and 400% of the Basic Sum Insured thereafter.

TRANSFERS AMONG SUBACCOUNTS

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 up to 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.

18
<PAGE>

TELEPHONE TRANSFERS AND POLICY LOANS

LOAN PROVISIONS AND INDEBTEDNESS

19
<PAGE>

than the net return for the Subaccounts. Since 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
Total Sum Insured are all 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.

Tax Considerations. If the 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 the sales charge (see "Sales Charge" below), the following
charges are deducted from premiums:

( [ ] )
1.25% X ( 1 [ --(Total Sum Insured at Issue--$5,000,000) X .25 ] )
( [ ------------------------------------------ ] )
$10,000,000

SALES CHARGE

21
<PAGE>

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."

Notwithstanding the foregoing, if the younger insured is age 71 or older at
the time of Policy issuance, the current and guaranteed sales charge in Policy
year 12 and thereafter is 0%.

REDUCED CHARGES FOR ELIGIBLE GROUPS

22
<PAGE>

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 Policy Owner.

CHARGES DEDUCTED FROM ACCOUNT VALUE OR ASSETS

The following charges are deducted from Account Value or assets:

Issue Charge. John Hancock will deduct an issue charge from Account Value,
currently at the rate of $55.55 per month for the first 5 Policy years, plus 2c
per $1,000 of the Total Sum Insured at issue per month for the first 3 Policy
years. The charge per $1,000 of Total Sum Insured at issue is guaranted not to
exceed $200 per month. Thus, for a Policy with a Total Sum Insured at issue of
$1,000,000, the aggregate amount deducted during the first 3 Policy years would
be $2,719.80.

Lower current insurance rates are offered at most ages for insureds who
qualify as non-smokers. To qualify, an insured must meet additional requirements
that relate to smoking habits.

23
<PAGE>

<TABLE>
<CAPTION>
Current Charge For
Total Sum Insured at Issue Mortality and Expense Risks
- -------------------------- -----------------------------
<S> <C>
$500,000 but less than $5 million . . . .625% of assets
$5 million but less than $15 million . .575% of assets
Greater than $15 million . . . . . . . .525% of assets
</TABLE>

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 briefly in the Summary
of this Prospectus, and of certain non-advisory operating expenses. For a full
description of these deductions, see the attached Prospectuses for the Funds.

24
<PAGE>

GUARANTEE OF PREMIUMS AND CERTAIN CHARGES

DISTRIBUTION OF POLICIES

The maximum commission payable to a Distributors representative for selling a
Policy is 45% of the target premium paid in the first Policy year, 5% of the
target premium paid in the second through fifth 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%.

25
<PAGE>

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.

TAX CONSIDERATIONS

POLICY PROCEEDS

26
<PAGE>

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 age 59 1/2.

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

27
<PAGE>

POLICY SPLIT OPTION

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:

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).
</TABLE>

28
<PAGE>

Directors Principal Occupations
--------- ---------------------
<S> <C>
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
------------------

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>

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 and
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.

29
<PAGE>

votes will be counted. The number of shares as to which the owner may give
instructions will be determined as of the record date for the Funds' meeting.

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 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

30
<PAGE>

LEGAL MATTERS

REGISTRATION STATEMENT

EXPERTS

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

FINANCIAL STATEMENTS

31
<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.

32
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 1997

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

33
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
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.

34
<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.

35
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
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.

36
<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.

37
<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.

38
<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.

39
<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>

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.

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>

<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.

41
<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

42
<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.

43
<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
- ---------- ------------ ---- -----

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

44
<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
- ---------- --------- -----

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

5. IMPACT OF YEAR 2000 (UNAUDITED)

45
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--CONTINUED

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

46
<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Policyholders
John Hancock Mutual Variable Life Insurance Account UV
of John Hancock Mutual Life Insurance Company

Ernst & Young LLP

Boston, Massachusetts
February 6, 1998

47
<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

48
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

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

49
<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.

50
<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.

51
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS

NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES

52
<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:

53
<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.

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 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.

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

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.

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 statement value and fair value for investment-type insurance contracts are
as follows:

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

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

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

58
<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:

1997 1996
---- ----
(In millions)

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
====== ======

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

Net realized capital losses consist of the following items:

1997 1996
---- ----
(In millions)

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)
====== ======

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

1997 1996
---- ----
(In millions)

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
======= ======

59
<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:

Gross Gross
Statement Unrealized Unrealized Fair
Year ended December 31, 1997 Value Gains Losses Value
- ---------------------------- --------- ---------- ---------- -----
(In millions)
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
========= ======== ====== =========

Year ended December 31, 1996
- ----------------------------

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
========= ======== ====== =========

Statement Fair
Value Value
--------- -----
(In millions)

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.

60
<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.

Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)

Expected . . . . . . . . . . . . . . . . . . . . . $33.8 $46.3
Actual . . . . . . . . . . . . . . . . . . . . . . 24.9 29.1

61
<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.

Statement Geographic Statement
Property Type Value Concentration Value
------------- --------- ------------- ---------
(In millions) (In millions)

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
======== ========

NOTE 7--REINSURANCE

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.

62
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 7--REINSURANCE--CONTINUED

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

Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)

Reinsurance recoverables . . . . . . . . . . . . . $12.5 $26.5
Funds withheld from reinsurers . . . . . . . . . . 35.1 23.4

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

63
<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.

NOTE 8--BENEFIT PLANS

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

64
<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:

Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)

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
======= =======

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

1997 1996
----- -------

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%

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

Year ended December 31
-----------------------
1997 1996
---- ----
(In millions)

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)
========= =========

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.

65
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS

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.

December 31
----------------------------------------
1997 1996
------------------- -------------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
------- --------- ------- ---------
(In millions)

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)
======= ======= ======= =======

66
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 9--OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED

Net periodic postretirement benefits cost included the following components:

December 31
--------------------------------------
1997 1996
------------------ ------------------
Medical Medical
and Life and Life
Dental Insurance Dental Insurance
Plans Plans Plans Plans
------- --------- ------- ---------
(In millions)

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
====== ===== ====== =====

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 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.

67
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 10--AFFILIATES--CONTINUED

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 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.

68
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

<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>

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
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

69
<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.

70
<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.

71
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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>

NOTE 16--IMPACT OF YEAR 2000 (UNAUDITED)

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

72
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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.

73
<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 than 3 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.

The tax treatment of the Policy proceeds may vary, depending on which
settlement option is chosen and when. You should consult your tax advisor in
this regard.

ADDITIONAL INSURANCE BENEFITS

GENERAL PROVISIONS

A-74
<PAGE>

is no surviving Beneficiary, the Owner will be the Beneficiary, but if the Owner
was one of the insureds, his or her estate will be the Beneficiary.

If a Policy has joint Owners, both Owners must join in any request or
instructions to John Hancock under the Policy.

Age and Policy Anniversaries. For purpose of the Policy, an insured's "age" is
his or her age on his or her nearest birthday. Policy months and Policy years
are calculated from the date of issue.

A-75
<PAGE>

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

The amounts shown for the death benefit and Surrender Value are as of the end
of each Policy year. The first two tables headed "Using Current Charges" assume
that the current rates for insurance, sales, risk, and expense charges will
apply in each year illustrated. The two 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 seven 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 Minimum Death Benefit has not been
elected beyond the tenth Policy year and that no optional rider benefits have
been elected.

A-76

<PAGE>

PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP
$500,000 SUM INSURED ($250,000 BASIC SUM INSURED; $250,000
ADDITIONAL SUM INSURED)
MALE, ISSUE AGE 55, NONSMOKER UNDERWRITING CLASS
FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING CLASS
OPTION A DEATH BENEFIT NO GUARANTEED MINIMUM DEATH BENEFIT OPTION
AFTER TENTH POLICY YEAR
PLANNED PREMIUM: $8,156*
USING CURRENT CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------------------------ -----------------------------------------
Assuming hypothetical Assuming hypothetical
gross annual return of gross annual return of
End of Planned Premiums ------------------------------------------------ -----------------------------------------
Policy accumulated at 6%
Year 5% annual interest 0% --------------------- 12% 0% 6% 12%
- ------- ------------------ -------- --------------- ---------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 8,564 $500,000 $500,000 $ 500,000 $ 5,357 $ 5,705 $ 6,053
2 17,556 500,000 500,000 500,000 11,204 12,267 13,372
3 26,998 500,000 500,000 500,000 16,921 19,076 21,404
4 36,912 500,000 500,000 500,000 22,621 26,257 30,340
5 47,322 500,000 500,000 500,000 28,173 33,693 40,137
6 58,252 500,000 500,000 500,000 34,433 42,283 51,806
7 69,728 500,000 500,000 500,000 40,595 51,250 64,684
8 81,779 500,000 500,000 500,000 46,656 60,609 78,893
9 94,432 500,000 500,000 500,000 52,616 70,375 94,571
10 107,717 500,000 500,000 500,000 58,469 80,562 111,867
11 121,667 500,000 500,000 500,000 64,600 91,589 131,372
12 136,314 500,000 500,000 500,000 70,594 103,069 152,874
13 151,694 500,000 500,000 500,000 76,442 115,011 176,577
14 167,843 500,000 500,000 500,000 82,132 127,426 202,708
15 184,799 500,000 500,000 500,000 87,651 140,327 231,522
16 202,603 500,000 500,000 505,965 92,988 153,727 263,295
17 221,297 500,000 500,000 554,708 98,109 167,623 298,252
18 240,926 500,000 500,000 606,480 102,991 182,025 336,678
19 261,536 500,000 500,000 661,595 107,608 196,943 378,895
20 283,177 500,000 500,000 720,375 111,932 212,390 425,254
25 408,735 500,000 500,000 1,085,309 128,767 299,495 734,948
30 568,983 500,000 533,540 1,611,713 127,853 402,932 1,217,174
35 773,504 500,000 633,138 2,374,380 85,225 518,851 1,945,784
</TABLE>

* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Guaranteed Minimum Death Benefit after the tenth
Policy Year, or optional rider benefits are elected.

A-77
<PAGE>

PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP
$500,000 SUM INSURED ($250,000 BASIC SUM INSURED;
$250,000 ADDITIONAL SUM INSURED)
MALE, ISSUE AGE 55, NONSMOKER UNDERWRITING CLASS
FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING CLASS
OPTION B DEATH BENEFIT
NO GUARANTEED MINIMUM DEATH BENEFIT OPTION AFTER TENTH POLICY YEAR
PLANNED PREMIUM: $8,156*
USING CURRENT CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------ -------------------------------
Assuming Hypothetical Assuming Hypothetical
End of Planned Premiums Gross Annual Return of Gross Annual Return of
Policy Accumulated at ------------------------------ -------------------------------
Year 5% Annual Interest 0% 6% 12% 0% 6% 12%
- ------- ------------------ -------- -------- ---------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 8,564 $505,357 $505,705 $ 506,053 $ 5,357 $ 5,705 $ 6,053
2 17,556 511,202 512,265 513,370 11,202 12,265 13,370
3 26,998 516,916 519,071 521,398 16,916 19,071 21,398
4 36,912 522,609 526,243 530,323 22,609 26,243 30,323
5 47,322 528,147 533,662 540,099 28,147 33,662 40,099
6 58,252 534,386 542,223 551,732 34,386 42,223 51,732
7 69,728 540,521 551,154 564,559 40,521 51,154 64,559
8 81,779 546,551 560,466 578,699 46,551 60,466 78,699
9 94,432 552,473 570,173 594,287 52,473 70,173 94,287
10 107,717 558,282 580,287 611,464 58,282 80,287 111,464
11 121,667 564,363 591,228 630,821 64,363 91,228 130,821
12 136,314 570,295 602,595 652,123 70,295 102,595 152,123
13 151,694 576,063 614,390 675,555 76,063 114,390 175,555
14 167,843 581,652 626,613 701,320 81,652 126,613 201,320
15 184,799 587,045 639,264 729,637 87,045 139,264 229,637
16 202,603 592,222 652,339 760,749 92,222 152,339 260,749
17 221,297 597,140 665,808 794,898 97,140 165,808 294,898
18 240,926 601,765 679,650 832,356 101,765 179,650 332,356
19 261,536 606,057 693,838 873,424 106,057 193,838 373,424
20 283,177 609,977 708,338 918,427 109,977 208,338 418,427
25 408,735 622,842 784,743 1,217,069 122,842 284,743 717,069
30 568,983 611,801 853,636 1,676,767 111,801 353,636 1,176,767
35 773,504 549,874 880,436 2,363,076 49,874 380,436 1,863,076
</TABLE>

* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Guaranteed Minimum Death Benefit after the tenth
Policy Year, or optional rider benefits are elected.

A-78
<PAGE>

PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP
$500,000 SUM INSURED ($250,000 BASIC SUM INSURED; $250,000 ADDITIONAL
SUM INSURED)
MALE, ISSUE AGE 55, NONSMOKER UNDERWRITING CLASS
FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING CLASS
OPTION A DEATH BENEFIT
NO GUARANTEED MINIMUM DEATH BENEFIT OPTION AFTER TENTH POLICY YEAR
PLANNED PREMIUM: $8,156*
USING MAXIMUM CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------ -------------------------------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------------ -------------------------------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
- ------- ------------------ -------- -------- ---------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 8,564 $500,000 $500,000 $ 500,000 $ 5,193 $ 5,535 $ 5,877
2 17,556 500,000 500,000 500,000 10,861 11,901 12,982
3 26,998 500,000 500,000 500,000 16,388 18,487 20,756
4 36,912 500,000 500,000 500,000 21,884 25,416 29,383
5 47,322 500,000 500,000 500,000 27,220 32,568 38,812
6 58,252 500,000 500,000 500,000 33,247 40,835 50,041
7 69,728 500,000 500,000 500,000 39,079 49,356 62,312
8 81,779 500,000 500,000 500,000 44,701 58,125 75,717
9 94,432 500,000 500,000 500,000 50,100 67,140 90,359
10 107,717 500,000 500,000 500,000 55,258 76,390 106,352
11 121,667 500,000 500,000 500,000 60,412 86,141 124,109
12 136,314 500,000 500,000 500,000 65,272 96,112 143,506
13 151,694 500,000 500,000 500,000 69,801 106,282 164,696
14 167,843 500,000 500,000 500,000 73,955 116,619 187,848
15 184,799 500,000 500,000 500,000 77,681 127,090 213,159
16 202,603 500,000 500,000 500,000 80,921 137,656 240,857
17 221,297 500,000 500,000 504,325 83,583 148,254 271,162
18 240,926 500,000 500,000 547,820 85,642 158,882 304,114
19 261,536 500,000 500,000 593,381 86,995 169,477 339,829
20 283,177 500,000 500,000 641,147 87,548 179,989 378,485
25 408,735 500,000 500,000 918,835 73,127 228,954 622,215
30 568,983 500,000 500,000 1,277,149 2,535 260,752 964,509
35 773,504 ** 500,000 1,743,928 ** 248,093 1,429,134
</TABLE>

* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies,
if policy loans are taken, or if Guaranteed Minimum Death Benefit after the
tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.

A-79
<PAGE>

PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP
$500,000 SUM INSURED ($250,000 BASIC SUM INSURED; $250,000 ADDITIONAL
SUM INSURED)
MALE, ISSUE AGE 55, NONSMOKER UNDERWRITING CLASS
FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING CLASS
OPTION B DEATH BENEFIT
NO GUARANTEED MINIMUM DEATH BENEFIT OPTION AFTER TENTH POLICY YEAR
PLANNED PREMIUM: $8,156*
USING MAXIMUM CHARGES

<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------ -------------------------------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------------ -------------------------------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
- ------- ------------------ -------- -------- ---------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 8,564 $505,193 $505,535 $ 505,877 $ 5,193 $ 5,535 $ 5,877
2 17,556 510,860 511,899 512,980 10,860 11,899 12,980
3 26,998 516,383 518,482 520,749 16,383 18,482 20,749
4 36,912 521,872 525,402 529,366 21,872 25,402 29,366
5 47,322 527,195 532,538 538,776 27,195 32,538 38,776
6 58,252 533,202 540,777 549,968 33,202 40,777 49,968
7 69,728 539,000 549,253 562,178 39,000 49,253 62,178
8 81,779 544,573 557,953 575,485 44,573 57,953 75,485
9 94,432 549,903 566,865 589,976 49,903 66,865 89,976
10 107,717 554,965 575,968 605,740 54,965 75,968 105,740
11 121,667 559,991 585,510 623,162 59,991 85,510 123,162
12 136,314 564,679 595,193 642,074 64,679 95,193 142,074
13 151,694 568,985 604,969 662,570 68,985 104,969 162,570
14 167,843 572,848 614,774 684,742 72,848 114,774 184,742
15 184,799 576,202 624,531 708,677 76,202 124,531 208,677
16 202,603 578,971 634,153 734,465 78,971 134,153 234,465
17 221,297 581,040 643,504 762,158 81,040 143,504 262,158
18 240,926 582,376 652,525 791,902 82,376 152,525 291,902
19 261,536 582,853 661,062 823,756 82,853 161,062 323,756
20 283,177 582,359 668,963 857,797 82,359 168,963 357,797
25 408,735 559,775 691,295 1,062,148 59,775 191,295 562,148
30 568,983 ** 652,253 1,316,545 ** 152,253 816,545
35 773,504 ** ** 1,595,905 ** ** 1,095,905
</TABLE>

* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies,
if policy loans are taken, or if Guaranteed Minimum Death Benefit after the
tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.

A-80
<PAGE>

[LOGO TO APPEAR HERE]

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

S8143NY-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.

Two prospectuses consisting of 84 pages each.

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. 2 to this Form S-6
Registration Statement, filed 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 for 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 for John Hancock Variable Life
Account S (File No. 333-15075) filed April 18, 1997.

(c) Schedule of sales commissions included in the text under the
heading "Distribution of Policies" in the prospectus filed as
part of this Post-Effective Amendment.

(4) Not Applicable.

(5) (a) Form of survivorship variable life insurance policy, included in
Pre-Effective Amendment No. 1 to this Form S-6 Registration
Statement, filed on October 29, 1993.

(b) Form of rider option to split policy, included in the initial
Form S-6 Registration Statement of this Account, filed June 11,
1993.

(6) Charter and By-Laws of John Hancock Mutual Life Insurance Company,
previously filed electronically on April 12, 1996.

(7) Not Applicable.

(8) Not Applicable.

(9) Not Applicable.

(10) Form of application for Policy included in Pre-Effective Amendment
No. 1 to this Form S-6 registration statement, filed October 29,
1993.

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 this Form S-6 registration statement,
filed October 29, 1993.

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), included in
Pre-Effective Amendment No. 1 to this Form S-6 registration statement filed
on October 29, 1993.

9. Power of attorney for Robert J. Tarr, Jr., 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 12, 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
the initial Form S-6 Registration Statement of this Account, filed June 11,
1993.

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: /s/ 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
--------- ----- ----

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

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

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

FOR: Foster L. Aborn Vice Chairman of the Board
William L. Boyan Vice Chairman of the Board
David F. D'Alessandro Vice 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 28, 1998

Memorandum to: Board of Directors
John Hancock Mutual Life Insurance Company

Subject: Actuarial Opinion

Members of the Board:

This opinion is furnished with the filing of this post-Effective Amendment to
the Registration Statement on Form S-6 (File Number 33-64364) which covers
certain flexible premium joint and last survivor variable life insurance
Contracts issued by John Hancock Mutual Life Insurance Company, under which
amounts will be allocated by JHMLICO to subaccounts of John Hancock Mutual
Variable Life Insurance Account UV.

The Prospectus included in the amended Registration Statement describes
Contracts which are issued by the Company. The Contract forms were prepared
under my direction, and I am familiar with the amended Registration Statement
exhibits thereto. In my opinion, the death benefits, surrender values, and
accumulated premiums of the Contract as illustrated in the amended Registration
Statement are based on the assumptions stated in the illustrations and are
consistent with the provisions of the Contract. Such assumptions, including the
current rates of cost of insurance and other current charges, are reasonable.
The Contract has not been designed so as to make the relationship between
premiums and benefits, as shown in the illustrations, appear more favorable to a
prospective purchaser of a Contract for joint insureds who are non-smoker males
age 55 and non-smoker females age 50, than to purchasers of a Contract for joint
insureds who have different underwriting characteristics. Nor were the
particular illustrations shown selected for the purpose of making the
relationship appear more favorable.

I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of my name under the heading "Experts" in the
Prospectus relating to acturial matters.

/s/ Deborah A. Poppel
Deborah A. Poppel, FSA

<PAGE>

EXHIBIT 7

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to out 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. 6 to the Registration Statement (Form S-6, No. 33-64364).

/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. 33-64364 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 purposes 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