HANCOCK JOHN MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV, 497, 1999-06-04

HANCOCK JOHN MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
497, 1999-06-04

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<PAGE>

PROSPECTUS DATED MAY 3, 1999

FLEXV2

a scheduled premium variable life insurance policy
issued by

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
("JOHN HANCOCK")

JOHN HANCOCK LIFE SERVICING OFFICE
----------------------------------

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

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

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

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

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

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

GUIDE TO THIS PROSPECTUS

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

This prospectus is arranged in the following way:

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

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

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

. Behind the Additional Information section are the financial
statements for John Hancock and Separate Account UV. These start on
page 43.

. Finally, there is an Alphabetical Index of Key Words and Phrases at
the back of the prospectus on page 89.

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

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

2
<PAGE>

BASIC INFORMATION

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

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

3
<PAGE>

WHAT IS THE POLICY?

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

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

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

. Borrow amounts you have in the investment options

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

. Change the beneficiary who will receive the death benefit

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

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

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

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

WHO OWNS THE POLICY?

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

HOW CAN I INVEST MONEY IN THE POLICY?

Premium Payments

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

4
<PAGE>

Maximum premium payments

If you have chosen the Option 1 or Option 2 death benefit (see "How much will
John Hancock pay when the insured person dies?"), Federal tax law limits the
amount of premium payments you can make relative to the amount of your policy's
insurance coverage. We will not knowingly accept any amount by which a premium
payment exceeds the maximum. If you exceed certain other limits, the law may
impose a penalty on amounts you take out of your policy. We'll monitor your
premium payments and let you know if you're about to exceed this limit. More
discussion of these tax law requirements begins on page 36.

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

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

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

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

Ways to pay premiums

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

We will also accept premiums:

. by wire or by exchange from another insurance company,

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

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

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

IS THERE A MINIMUM AMOUNT I MUST INVEST?

Required Premiums

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

5
<PAGE>

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

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

Excess Value and its components

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

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

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

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

Lapse

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

6
<PAGE>

Options on Lapse

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

Both the Variable and Fixed Paid-Up Insurance options provide an amount of
paid-up whole life insurance, determined in accordance with the policy, which
the surrender value will purchase. The amount of Variable Paid-Up Insurance may
then increase or decrease, subject to any guarantee, in response to the
investment experience of the variable investment options. The Fixed Paid-Up
Insurance option provides a fixed and level amount of insurance. The Fixed
Extended Term Insurance option provides a fixed amount of insurance determined
in accordance with the policy, with the insurance coverage continuing for as
long a period as the available policy surrender value will purchase.

The Variable Paid-Up Insurance option is not available unless its initial
amount is at least $5,000. If you have elected no option before the end of the
grace period, the Fixed Extended Term Insurance option automatically applies
unless the amount of Fixed Paid-Up Insurance would equal or exceed the amount of
Fixed Extended Term Insurance or unless the insured person is a substandard
risk. In either of the latter cases, Fixed Paid-Up Insurance is provided.

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

Reinstatement

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

Amount of Required Premiums

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

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

7
<PAGE>

Premium recalculation

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

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

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

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

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

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

8
<PAGE>

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

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

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

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

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

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

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

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

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

. the amount you invested,

9
<PAGE>

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

. minus all charges we deduct, and

. minus all withdrawals you have made.

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

WHAT CHARGES WILL JOHN HANCOCK DEDUCT FROM MY INVESTMENT IN THE POLICY?

Deductions from premium payments

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

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

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

Deductions from account value

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

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

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

10
<PAGE>

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

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

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

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

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

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

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

<PAGE>

charged. A policy of less than $250,000 Guaranteed Death Benefit at time
of surrender or lapse is not currently charged if the surrender or lapse
is after the fourth policy year and is charged no more than $300 if the
surrender or lapse is in the first four policy years. We may withdraw or
modify these lower current charges at any time.

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

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

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

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

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

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

12
<PAGE>

The figures in the following chart for the funds of the Trust are expressed as
percentages of each fund's average daily net assets for 1998 (rounded to two
decimal places). The percentages reflect the investment management fees that
were payable for1998 and the 1998 other operating expenses that would have been
allocated to the funds under the allocation rules currently in effect.

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

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

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

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

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

13
<PAGE>

WHAT OTHER CHARGES COULD JOHN HANCOCK IMPOSE IN THE FUTURE?

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

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

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

HOW CAN I CHANGE MY POLICY'S INVESTMENT ALLOCATIONS?

Future premium payments

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

Transfers of existing account value

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

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

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

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

. The most you can transfer at any one time is the greater of $500 or 25%
of the assets in your fixed investment option.

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

Limitation on number of investment options

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

14
<PAGE>

Dollar cost averaging

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

HOW CAN I ACCESS MY INVESTMENT IN THE POLICY?

Full surrender

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

Partial withdrawals of Excess Value

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

Policy loans

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

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

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

15
<PAGE>

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

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

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

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

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

HOW MUCH WILL JOHN HANCOCK PAY WHEN THE INSURED PERSON DIES?

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

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

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

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

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

If neither Option 1 nor Option 2 meets your objectives, you may elect Option
3. If you elect Option 3 and your policy is issued in New York, we will issue a
special Option 3 endorsement to your policy. If your policy is issued in New
York and the insured person is less than age 20 at the time of application for
the policy, Option 3 will automatically apply and will remain applicable for the
life of the policy.

16
<PAGE>

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

The minimum insurance amount

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

HOW CAN I CHANGE MY POLICY'S INSURANCE COVERAGE?

Change of death benefit option

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

Partial surrenders

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

17
<PAGE>

Tax consequences

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

CAN I CANCEL MY POLICY AFTER IT'S ISSUED?

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

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

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

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

This is often referred to as the "free look" period. To cancel your policy,
simply deliver or mail the policy to us at one of the addresses shown on page 1,
or to the John Hancock representative who delivered the policy to you. Coverage
will be cancelled immediately as of the date of such mailing or delivery.

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

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

Choosing a payment option

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

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

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

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

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

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

18
<PAGE>

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

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

Changing a payment option

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

Tax impact

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

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

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

State law insurance requirements

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

Variations in expenses or risks

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

HOW WILL MY POLICY BE TREATED FOR INCOME TAX PURPOSES?

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

19
<PAGE>

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

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

HOW DO I COMMUNICATE WITH JOHN HANCOCK?

General Rules

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

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

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

. transfers of account value among investment options

. change of allocation among investment options for new premium
payments

. change of death benefit option

. change of beneficiary

. election of payment option for policy proceeds

. tax withholding elections

. election of telephone transaction privilege

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

We have special forms that should be used for a number of the requests
mentioned above. You can obtain these forms from the John Hancock Life Servicing
Office or your John Hancock representative. Each communication to us must
include your name, your policy number and the name of the insured person. We
cannot process any request that doesn't include this required information. Any
communication that arrives after the close of our business day, or on a day that
is not a business day, will be considered "received" by us on the next following
business day.

20
<PAGE>

Our business day currently closes at 4:00 p.m. Eastern Standard Time, but
special circumstances (such as suspension of trading on a major exchange) may
dictate an earlier closing time.

Telephone Transactions

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

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

21
<PAGE>

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

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

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

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

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

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

22
<PAGE>

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

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

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

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

23
<PAGE>

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

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -------------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 307 $ 339 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 779 867 960 9 97 190
3 2,979 100,000 100,000 100,000 1,266 1,443 1,636 361 538 731
4 4,073 100,000 100,000 100,000 1,736 2,035 2,372 696 995 1,332
5 5,222 100,000 100,000 100,000 2,186 2,641 3,173 1,011 1,466 1,998
6 6,428 100,000 100,000 100,000 2,618 3,262 4,046 1,308 1,952 2,736
7 7,694 100,000 100,000 100,000 3,028 3,896 4,995 1,818 2,686 3,785
8 9,024 100,000 100,000 100,000 3,417 4,542 6,029 2,297 3,422 4,909
9 10,420 100,000 100,000 100,000 3,781 5,200 7,153 2,851 4,270 6,223
10 11,886 100,000 100,000 100,000 4,131 5,883 8,397 3,591 5,343 7,857
11 13,425 100,000 100,000 100,000 4,454 6,577 9,756 4,004 6,127 9,306
12 15,042 100,000 100,000 100,000 4,749 7,282 11,241 4,434 6,967 10,926
13 16,739 100,000 100,000 100,000 5,016 7,997 12,868 4,836 7,817 12,688
14 18,521 100,000 100,000 100,000 5,252 8,722 14,650 5,252 8,722 14,650
15 20,392 100,000 100,000 100,000 5,455 9,454 16,604 5,455 9,454 16,604
16 22,356 100,000 100,000 100,000 5,623 10,193 18,748 5,623 10,193 18,748
17 24,419 100,000 100,000 100,000 5,748 10,931 21,102 5,748 10,931 21,102
18 26,585 100,000 100,000 100,000 5,826 11,665 23,685 5,826 11,665 23,685
19 28,859 100,000 100,000 100,000 5,851 12,390 26,523 5,851 12,390 26,523
20 31,247 100,000 100,000 100,000 5,814 13,096 29,641 5,814 13,096 29,641
25 45,102 100,000 100,000 100,000 4,471 16,143 50,807 4,471 16,143 50,807
30 62,785 100,000 100,000 104,334 164 17,365 86,945 164 17,365 86,945
35 85,353 100,000 100,000 169,891 0 13,882 147,732 0 13,882 147,732
40 149,565 100,000 100,000 253,548 0 21,437 241,474 0 21,437 241,474
45 231,518 100,000 100,000 418,124 0 0 398,213 0 0 398,213
</TABLE>

- ---------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,003 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,003 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

24
<PAGE>

DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT): $100,000
$900 BASE POLICY PREMIUM (1)

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

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

25
<PAGE>

DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT): $100,000
$900 BASE POLICY PREMIUM (1)

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -------------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 307 $ 339 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 779 867 960 9 97 190
3 2,979 100,000 100,000 100,000 1,266 1,443 1,636 361 538 731
4 4,073 100,000 100,000 100,000 1,736 2,035 2,372 696 995 1,332
5 5,222 100,000 100,000 100,000 2,186 2,641 3,173 1,011 1,466 1,998
6 6,428 100,000 100,000 100,000 2,618 3,262 4,046 1,308 1,952 2,736
7 7,694 100,000 100,000 100,000 3,028 3,896 4,995 1,818 2,686 3,785
8 9,024 100,000 100,000 100,000 3,417 4,542 6,029 2,297 3,422 4,909
9 10,420 100,000 100,000 100,000 3,781 5,200 7,153 2,851 4,270 6,223
10 11,886 100,000 100,000 100,000 4,131 5,883 8,397 3,591 5,343 7,857
11 13,425 100,000 100,000 100,000 4,454 6,577 9,756 4,004 6,127 9,306
12 15,042 100,000 100,000 100,000 4,749 7,282 11,241 4,434 6,967 10,926
13 16,739 100,000 100,000 100,000 5,016 7,997 12,868 4,836 7,817 12,688
14 18,521 100,000 100,000 100,000 5,252 8,722 14,650 5,252 8,722 14,650
15 20,392 100,000 100,000 100,000 5,455 9,454 16,604 5,455 9,454 16,604
16 22,356 100,000 100,000 100,000 5,623 10,193 18,748 5,623 10,193 18,748
17 24,419 100,000 100,000 100,000 5,748 10,931 21,102 5,748 10,931 21,102
18 26,585 100,000 100,000 100,000 5,826 11,665 23,685 5,826 11,665 23,685
19 28,859 100,000 100,000 100,701 5,851 12,390 26,522 5,851 12,390 26,522
20 31,247 100,000 100,000 102,098 5,814 13,096 29,632 5,814 13,096 29,632
25 45,102 100,000 100,000 113,853 4,471 16,143 50,353 4,471 16,143 50,353
30 62,785 100,000 100,000 137,670 164 17,365 83,619 164 17,365 83,619
35 85,353 100,000 100,000 181,910 0 13,882 137,339 0 13,882 137,339
40 149,565 100,000 100,000 247,707 0 20,757 220,764 0 20,757 220,764
45 231,518 100,000 100,000 380,274 0 0 359,475 0 0 359,475
</TABLE>

- ---------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,003 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,003 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

26
<PAGE>

DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT): $100,000
$900 BASE POLICY PREMIUM (1)

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

27
<PAGE>

DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
SUM INSURED AT ISSUE (GUARANTEED DEATH BENEFIT): $100,000
$900 BASE POLICY PREMIUM (1)

<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -------------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 307 $ 339 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 779 867 960 9 97 190
3 2,979 100,000 100,000 100,000 1,266 1,443 1,636 361 538 731
4 4,073 100,000 100,000 100,000 1,736 2,035 2,372 696 995 1,332
5 5,222 100,000 100,000 100,000 2,186 2,641 3,173 1,011 1,466 1,998
6 6,428 100,000 100,000 100,000 2,618 3,262 4,046 1,308 1,952 2,736
7 7,694 100,000 100,000 100,000 3,028 3,896 4,995 1,818 2,686 3,785
8 9,024 100,000 100,000 100,000 3,417 4,542 6,029 2,297 3,422 4,909
9 10,420 100,000 100,000 100,000 3,781 5,200 7,153 2,851 4,270 6,223
10 11,886 100,000 100,000 100,000 4,131 5,883 8,397 3,591 5,343 7,857
11 13,425 100,000 100,000 100,000 4,454 6,577 9,756 4,004 6,127 9,306
12 15,042 100,000 100,000 100,000 4,749 7,282 11,241 4,434 6,967 10,926
13 16,739 100,000 100,000 100,000 5,016 7,997 12,868 4,836 7,817 12,688
14 18,521 100,000 100,000 100,000 5,252 8,722 14,650 5,252 8,722 14,650
15 20,392 100,000 100,000 100,000 5,455 9,454 16,604 5,455 9,454 16,604
16 22,356 100,000 100,000 100,000 5,623 10,193 18,748 5,623 10,193 18,748
17 24,419 100,000 100,000 100,000 5,748 10,931 21,102 5,748 10,931 21,102
18 26,585 100,000 100,000 100,000 5,826 11,665 23,685 5,826 11,665 23,685
19 28,859 100,000 100,000 100,000 5,851 12,390 26,523 5,851 12,390 26,523
20 31,247 100,000 100,000 100,000 5,814 13,096 29,641 5,814 13,096 29,641
25 45,102 100,000 100,000 100,000 4,471 16,143 50,805 4,471 16,143 50,805
30 62,785 100,000 100,000 144,070 164 17,365 84,648 164 17,365 84,648
35 85,353 100,000 100,000 205,819 0 13,882 135,980 0 13,882 135,980
40 149,565 100,000 100,000 282,037 6,865 35,817 206,047 6,865 35,817 206,047
45 231,518 100,000 100,000 387,897 12,250 61,427 307,221 12,250 61,427 307,221
</TABLE>

- ---------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $7,003 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $7,003 at 6% and $0 at 12%.

28
<PAGE>

ADDITIONAL INFORMATION

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

<TABLE>
<CAPTION>
CONTENTS OF THIS SECTION PAGES TO SEE
- ------------------------ ------------
<S> <C>
Description of John Hancock .................................... 30
How we support the policy and investment options ............... 30-31
Procedures for issuance of a policy ............................ 31-32
Commencement of investment performance ......................... 32
How we process certain policy transactions ..................... 32-33
Effects of policy loans ........................................ 33-34
How we calculate "basic policy value" .......................... 34
Additional information about how certain policy charges work ... 34-35
How we market the policies ..................................... 35-36
Tax considerations ............................................. 36-38
Reports that you will receive .................................. 38
Voting privileges that you will have ........................... 38-39
Changes that John Hancock can make as to your policy ........... 39
Adjustments we make to death benefits .......................... 39
When we pay policy proceeds .................................... 39-40
Other details about exercising rights and paying benefits ...... 40
Year 2000 Issues ............................................... 40-41
Legal matters .................................................. 41
Registration statement filed with the SEC ...................... 41
Accounting and actuarial experts ............................... 41
Financial statements of John Hancock and the Account ........... 41
List of Directors and Executive Officers of John Hancock ....... 42
</TABLE>

29
<PAGE>

DESCRIPTION OF JOHN HANCOCK

We are John Hancock, a mutual life insurance company chartered in
Massachusetts in 1862. Our Home Office is at John Hancock Place, Boston,
Massachusetts 02117. We are authorized to transact a life insurance and annuity
business in all states and in the District of Columbia. As of the end of 1998,
our assets were approximately $67 billion.

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

HOW WE SUPPORT THE POLICY AND INVESTMENT OPTIONS

Separate Account UV

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

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

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

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

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

Our general account

Our obligations under the policy's fixed investment option are backed by our
general account assets. Our general account consists of assets owned by us other
than those in the Account and in other separate accounts that we may establish.
Subject to applicable law, we have sole discretion over the investment of assets
of the general account and policy owners do not share in the investment
experience of, or have any preferential claim on, those assets. Instead, we
guarantee that the account value allocated

30
<PAGE>

to the fixed investment option will accrue interest daily at an effective annual
rate of at least 4% without regard to the actual investment experience of the
general account.

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

PROCEDURES FOR ISSUANCE OF A POLICY

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

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

Commencement of insurance coverage

After you apply for a policy, it can sometimes take up to several weeks for us
to gather and evaluate all the information we need to decide whether to issue a
policy to you and, if so, what the insured person's rate class should be. After
we approve an application for a policy and assign an appropriate insurance rate
class, we will prepare the policy for delivery. We will not pay a death benefit
under a policy unless the policy is in effect when the insured person dies
(except for the circumstances described under "Temporary insurance coverage
prior to policy delivery" on page 32).

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

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

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

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

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

Backdating

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

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

31
<PAGE>

Temporary coverage prior to policy delivery

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

Monthly deduction dates

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

COMMENCEMENT OF INVESTMENT PERFORMANCE

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

HOW WE PROCESS CERTAIN POLICY TRANSACTIONS

Premium payments

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

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

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

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

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

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

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

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

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

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

Transfers among investment options

Any reallocation among investment options must be such that the total in all
investment options after reallocation equals 100% of account value. Transfers
out of a variable investment option will be effective

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<PAGE>

at the end of the business day in which we receive at our Life Servicing Office
notice satisfactory to us.

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

Dollar cost averaging

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

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

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

Telephone transfers and policy loans

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

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

Effective date of other policy transactions

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

. Reinstatements of lapsed policies

. Change of death benefit Option from 1 to 2

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

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

EFFECTS OF POLICY LOANS

The account value, the surrender value, and any death benefit above the
Guaranteed Death Benefit are permanently affected by any loan, whether or not it
is

33
<PAGE>

repaid in whole or in part. This is because the amount of the loan is deducted
from the investment options and placed in a special loan account. The investment
options and the special loan account will generally have different rates of
investment return.

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

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

HOW WE CALCULATE BASIC ACCOUNT VALUE

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

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

ADDITIONAL INFORMATION ABOUT HOW CERTAIN POLICY CHARGES WORK

Sales expenses and related charges

The sales charges (i.e., the premium sales charge and the CDSC) help to
compensate us for the cost of selling our policies. (See "What charges will John
Hancock deduct from my investment in the policy?" in the Basic Information
section of this prospectus.) The amount of the charges in any policy year does
not specifically correspond to sales expenses for that year. We expect to
recover our total sales expenses over the life of the policies. To the extent
that the sales charges do not cover total sales expenses, the sales expenses may
be recovered from other sources, including gains from the charge for mortality
and expense risks and other gains with respect to the policies, or from our
general assets. (See "How we market the policies" on page 35.)

Effect of premium payment pattern

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

34
<PAGE>

Monthly charges

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

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

Reduced charges for eligible classes

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

HOW WE MARKET THE POLICIES

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

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

Signator's representatives are compensated for sales of the policies on a
commission and service fee basis by Signator, and John Hancock reimburses
Signator for such compensation and for other direct and indirect expenses
(including agency expense allowances, general agent, district manager and
supervisor's compensation, agent's training allowances, deferred compensation
and insurance benefits of agents, general agents, district managers and
supervisors, agency office clerical expenses and

35
<PAGE>

advertising) actually incurred in connection with the marketing and sale of the
policies.

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

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

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

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

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

TAX CONSIDERATIONS

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

Policy proceeds

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

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

In general, the owner will be taxed on the amount of distributions that exceed
the premiums paid under

36
<PAGE>

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

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

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

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

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

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

7-pay premium limit

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

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

The owner will be taxed on distributions and loans from a "modified endowment"
to the extent of any income (gain) to the owner (on an income-first basis). The
distributions and loans affected will be those made on or after, and within the
two year period prior to, the time the policy becomes a modified endowment.
Additionally, a 10% penalty tax may be imposed on taxable portions of such
distributions or loans that are made before the owner attains age 59 1/2.

Furthermore, any time there is a "material change" in a policy (such as a
Guaranteed Death Benefit increase, the addition of certain other policy benefits
after issue, a change in death benefit option,

37
<PAGE>

or reinstatement of a lapsed policy), the policy will have a new 7-pay limit as
if it were a newly-issued policy. If a prescribed portion of the policy's then
account value, plus all other premiums paid within 7 years after the material
change, at any time exceed the new 7-pay limit, the policy will become a
modified endowment.

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

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

Corporate and H.R. 10 plans

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

REPORTS THAT YOU WILL RECEIVE

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

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

VOTING PRIVILEGES THAT YOU WILL HAVE

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

We determine the number of a fund's shares held in a subaccount attributable
to each owner by dividing the amount of a policy's account value held in the
subaccount by the net asset value of one share in the fund. Fractional votes
will be counted. We determine the number of shares as to which the owner may
give instructions as of the record date for the Series Fund's meeting. Owners of
policies may give instructions regarding the election of the Board of

38
<PAGE>

Trustees or Board of Directors of the Series Fund, ratification of the selection
of independent auditors, approval of Series Fund investment advisory agreements
and other matters requiring a shareholder vote. We will furnish owners with
information and forms to enable owners to give voting instructions.

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

CHANGES THAT JOHN HANCOCK CAN MAKE AS TO YOUR POLICY

Changes relating to a Series Fund or the Account

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

Other permissible changes

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

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

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

. Combining or removing investment options

. Changes in the form of organization of any separate account

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

ADJUSTMENTS WE MAKE TO DEATH BENEFITS

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

WHEN WE PAY POLICY PROCEEDS

General

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

39
<PAGE>

death, we will pay the proceeds as a single sum, normally within 7 days
thereafter.

Delay to challenge coverage

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

Delay for check clearance

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

Delay of separate account proceeds

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

OTHER DETAILS ABOUT EXERCISING RIGHTS AND PAYING BENEFITS

Joint ownership

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

Assigning your policy

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

Your beneficiary

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

YEAR 2000 ISSUES

The advent of the Year 2000 presents a technological challenge to John
Hancock. In response to this challenge, John Hancock has developed and is
executing 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.

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<PAGE>

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 has substantially completed the process of remediating its
systems and expects the compliance testing component of the project to be
substantially complete by June, 1999. This completion target was derived
utilizing numerous assumptions of future events, including availability of
certain resources and other factors. However, there can be no guarantee that
this estimate will be achieved, that these steps will be sufficient or that
actual results may not differ materially from those anticipated. For more
information about the impact of year 2000, please refer to Note 15 of the Notes
to Statutory-Basis Financial Statements of John Hancock Mutual Life Insurance
Company included in this prospectus.

LEGAL MATTERS

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

REGISTRATION STATEMENT FILED WITH THE SEC

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

ACCOUNTING AND ACTUARIAL EXPERTS

The financial statements of 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 Deborah A. Poppel, F.S.A.,an Actuary of John
Hancock.

FINANCIAL STATEMENTS OF JOHN HANCOCK AND THE ACCOUNT

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.

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<PAGE>

LIST 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)

E. James Morton Director, formerly Chairman of the Board and Chief
Executive Officer, John Hancock

John M. Connors, Jr. President and 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)

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

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

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

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

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

Richard F. Syron Chairman of the Board and Chief 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.).

Edward H. Linde President and Chief Executive Officer, Boston
Properties, Inc. (real estate)

Wayne A. Budd Group President, Bell Atlantic - New England
(telecommunications)
</TABLE>

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

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

42
<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, 1998
and 1997, 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.

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

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

In our opinion, because of the effects of the matter described in the
preceding paragraph, the financial statements referred to above do not present
fairly, in conformity with generally accepted accounting principles, the
financial position of John Hancock Mutual Life Insurance Company at December 31,
1998 and 1997, or the results of its operations or its cash flows for the years
then ended.

Also, in our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of John Hancock Mutual
Life Insurance Company at December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting practices prescribed or permitted by the Commonwealth of
Massachusetts Division of Insurance.

ERNST & YOUNG LLP

Boston, Massachusetts
February 19, 1999

43
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
December 31
---------------------
1998 1997
--------- ---------
(In millions)
<S> <C> <C>
ASSETS
Bonds--Note 6 ................................... $23,353.0 $22,986.0
Stocks:
Preferred .................................... 844.7 640.6
Common ....................................... 269.3 256.9
Investments in affiliates .................... 1,520.3 1,442.0
--------- ---------
2,634.3 2,339.5
Mortgage loans on real estate--Note 6 ........... 8,223.7 7,851.2
Real estate:
Company occupied ............................. 372.2 375.1
Investment properties ........................ 1,472.1 1,893.4
--------- ---------
1,844.3 2,268.5
Policy loans .................................... 1,573.8 1,577.3
Cash items:
Cash in banks and offices .................... 241.5 176.0
Temporary cash investments ................... 1,107.4 548.8
--------- ---------
1,348.9 724.8
Premiums due and deferred ....................... 253.4 222.3
Investment income due and accrued ............... 527.5 505.8
Other general account assets .................... 1,156.6 948.6
Assets held in separate accounts ................ 17,447.0 16,021.7
--------- ---------
TOTAL ASSETS .................................... $58,362.5 $55,445.7
========= =========
OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY
RESERVES
OBLIGATIONS
Policy reserves ............................... $19,804.8 $19,206.6
Policyholders' and beneficiaries' funds ....... 14,216.9 13,985.1
Dividends payable to policyholders ............ 449.1 399.7
Policy benefits in process of payment ......... 111.4 115.5
Other policy obligations ...................... 322.6 214.8
Asset valuation reserve--Note 1 ............... 1,289.6 1,165.7
Federal income and other accrued taxes--Note 1 211.5 96.9
Other general account obligations ............. 1,109.3 1,084.5
Obligations related to separate accounts ...... 17,458.6 16,019.1
--------- ---------
TOTAL OBLIGATIONS ............................... 54,973.8 52,287.9
POLICYHOLDERS' CONTINGENCY RESERVES
Surplus notes--Note 2 ......................... 450.0 450.0
Special contingency reserve for group insurance 160.0 151.8
General contingency reserve ................... 2,778.7 2,556.0
--------- ---------
TOTAL POLICYHOLDERS' CONTINGENCY RESERVES ...... 3,388.7 3,157.8
--------- ---------
TOTAL OBLIGATIONS AND POLICYHOLDERS'CONTINGENCY
RESERVES ....................................... $58,362.5 $55,445.7
========= =========
</TABLE>

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

44
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

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

<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1998 1997
--------- ----------
(In millions)
<S> <C> <C>
INCOME
Premiums, annuity considerations and pension fund
contributions..................................... $ 8,844.0 $ 7,371.6
Net investment income--Note 4 ...................... 2,956.2 2,856.1
Other, net ......................................... 233.8 196.4
--------- ----------
12,034.0 10,424.1
BENEFITS AND EXPENSES
Payments to policyholders and beneficiaries:
Death benefits .................................. 582.9 737.4
Accident and health benefits .................... 76.9 121.4
Annuity benefits ................................ 1,612.4 1,668.2
Surrender benefits and annuity fund
withdrawals..................................... 6,712.4 6,293.1
Matured endowments .............................. 20.7 21.0
--------- ----------
9,005.3 8,841.1
Additions to reserves to provide for future
payments to policyholders and beneficiaries ...... 1,106.7 (122.6)
Expenses of providing service to policyholders
and obtaining new insurance:
Field sales compensation and expenses ........... 290.7 278.3
Home office and general expenses ................ 529.0 493.0
Payroll, state premium and miscellaneous taxes ..... 52.0 49.9
--------- ----------
10,983.7 9,539.7
--------- ----------
GAIN FROM OPERATIONS BEFORE DIVIDENDS TO
POLICYHOLDERS, FEDERAL INCOME TAXES AND
NET REALIZED CAPITAL GAINS (LOSSES) ......... 1,050.3 884.4
Dividends to policyholders ........................... 446.0 398.2
Federal income tax (credit) expense--Note 1 .......... (2.8) 18.9
--------- ----------
448.8 417.1
--------- ----------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL GAINS (LOSSES) ...................... 607.1 467.3
Net realized capital gains (losses)--Note 5 .......... 0.7 (89.8)
--------- ----------
NET INCOME ................................... 607.8 377.5
Other increases (decreases) in policyholders'
contingency reserves:
Net unrealized capital (losses) gains and other
adjustments--Note 5 .............................. (214.5) 58.6
Valuation reserve changes--Note 1 .................. 0.0 1.4
Prior years' federal income taxes .................. (25.5) (35.6)
Other reserves and adjustments, net ................ (136.9) (100.2)
--------- ----------
NET INCREASE IN POLICYHOLDERS' CONTINGENCY
RESERVES..................................... 230.9 301.7
Policyholders' contingency reserves at beginning of
year................................................. 3,157.8 2,856.1
--------- ----------
POLICYHOLDERS' CONTINGENCY RESERVES AT END OF YEAR ... $ 3,388.7 $ 3,157.8
========= ==========
</TABLE>

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

45
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

STATUTORY-BASIS STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year ended December 31
------------------------
1998 1997
---------- ----------
(In millions)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Insurance premiums, annuity considerations and
deposits ........................................ $ 8,945.5 $ 7,518.8
Net investment income ............................. 2,952.8 2,988.7
Benefits to policyholders and beneficiaries ....... (9,190.4) (9,030.3)
Dividends paid to policyholders ................... (396.6) (394.0)
Insurance expenses and taxes ...................... (874.4) (828.6)
Net transfers from separate accounts .............. 131.1 832.7
Other, net ........................................ (181.7) (720.9)
---------- ----------
NET CASH PROVIDED FROM OPERATIONS .............. 1,386.3 366.4
---------- ----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Bond purchases .................................... (12,403.6) (18,003.6)
Bond sales ........................................ 8,447.8 13,541.1
Bond maturities and scheduled redemptions ......... 2,537.7 2,927.6
Bond prepayments .................................. 1,202.7 1,096.3
Stock purchases ................................... (623.2) (1,125.7)
Proceeds from stock sales ......................... 378.4 921.7
Real estate purchases ............................. (147.6) (243.0)
Real estate sales ................................. 630.5 444.5
Other invested assets purchases ................... (185.3) (171.1)
Proceeds from the sale of other invested assets ... 120.5 109.3
Mortgage loans issued ............................. (1,978.5) (1,165.8)
Mortgage loan repayments .......................... 1,575.6 1,176.9
Other, net ........................................ (38.6) (333.8)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES .......... (483.6) (825.6)
---------- ----------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Net decrease in short-term note payable ........... (75.0) (16.4)
Repayment of REMIC notes payable .................. (203.6) (216.3)
---------- ----------
NET CASH USED IN FINANCING ACTIVITIES .......... (278.6) (232.7)
---------- ----------
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH
INVESTMENTS ........................................ 624.1 (691.9)
Cash and temporary cash investments at beginning of
year ............................................... 724.8 1,416.7
---------- ----------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR .. $ 1,348.9 $ 724.8
========== ==========
</TABLE>

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

46
<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 business units: 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 a major portion of its group insurance
business to UNICARE Life & Health Insurance Company (UNICARE), a wholly-owned
subsidiary of WellPoint Health Networks Inc. The business sold includes the
Company's group accident and health business and related group life business and
Cost Care, Inc., Hancock Association Services Group and Tri-State, Inc., all
indirect wholly-owned subsidiaries of the Company. 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 gain from
operations 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.

The Company has secured a $397.0 million letter of credit facility with a group
of banks. The banks have agreed to issue a letter of credit to the Company
pursuant to which the Company may draw up to $397.0 million for any claims not
satisfied by UNICARE under the coinsurance agreement after the Company has
incurred the first $113.0 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 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.

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

47
<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 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 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: During March 1998, the NAIC adopted the
codification of statutory accounting practices, which is effective in 2001.
Codification will likely change, to some extent, prescribed statutory accounting
practices and may result in changes to the accounting practices that the Company
uses to prepare its statutory-basis financial statements. Codification will
require adoption by the various states before it becomes the prescribed
statutory basis of accounting for insurance companies domesticated within those
states. Accordingly, before codification becomes effective for the Company, the
Massachusetts Division of Insurance must adopt codification as the prescribed
basis of accounting on which domestic insurers must report their statutory-basis
results to the Division of Insurance. The impact of any such changes on the
Company's 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.

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.

48
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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. Net premiums
related to equity collar positions are amortized into income on a
straight-line basis over the term of the collars. The collars are carried at
fair value, with changes in fair value reflected directly in policyholders'
contingency reserves.

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. During 1998, the Company made a
strategic decision to sell the majority of its commercial real estate
portfolio. Properties with a book value of $533.8 million were sold in 1998,
and an additional $1.1 billion of real estate is expected to be sold in 1999.
Net gains on the properties sold in 1998 amounted to $64.3 million. Those
properties to be sold subsequent to December 31, 1998 are carried at the lower
of depreciated cost at the date a determination to sell was made or fair
value. Accumulated depreciation amounted to $370.0 million and $470.5 million
at December 31, 1998 and 1997, respectively.

Real estate acquired in satisfaction of debt and real estate held for sale,
which are classified with investment properties, are carried at the lower of
cost or fair value.

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

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 historically
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. During 1998, in connection with
the Company's plans to dispose of certain real estate holdings, additional
contributions were recorded that resulted in the AVR exceeding the prescribed
maximum reserve level by $111.3 million. The Company received permission from
the Massachusetts Division of Insurance to record its AVR in excess of the
prescribed maximum reserve level. Changes to the AVR are charged or credited
directly to policyholders' contingency reserves.

49
<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, 1998, the IMR, net of 1998 amortization of $34.9 million, amounted to $261.6
million which is included in other policy obligations. The corresponding 1997
amounts were $25.2 million and $165.6 million, respectively.

Property and Equipment: Data processing equipment, which amounted to $31.4
million in 1998 and $30.0 million in 1997 and is included in other general
account assets, is reported at depreciated cost, with depreciation recorded on a
straight-line basis. Non-admitted 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 $20.1 million in 1998 and $21.8 million
in 1997.

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 14.

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

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

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

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

The fair value for mortgage loans is estimated using discounted cash flow
analyses using interest rates adjusted to reflect the credit characteristics
of the underlying loans. Mortgage loans with similar 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
approximate their fair values.

50
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

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

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

The fair value for outstanding commitments to purchase long-term bonds and
issue real estate mortgages is estimated using a discounted cash flow method
incorporating adjustments for the difference in the level of interest rates
between the dates the commitments were made and December 31, 1998. The fair
value for commitments to purchase other invested assets 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 method. 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 from 2 1/2% to 6%, and using principally the net
level premium method for policies issued prior to 1978 and a modified
preliminary term method for policies issued in 1979 and later. Annuity and
supplementary contracts with life contingency reserves are based principally on
modifications of the 1937 Standard Annuity Table, the Group Annuity Mortality
Tables for 1951, 1971 and 1983, the 1971 Individual Annuity Mortality Table and
the a-1983 Individual Annuity Mortality Table, with interest rates generally
ranging from 2% to 8 3/4%.

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.

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

<TABLE>
<CAPTION>
December 31, 1998 December 31, 1997
-------------------- ----------------------
Statement Fair Statement Fair
Value Value Value Value
--------- --------- --------- -----------
(In millions)
<S> <C> <C> <C> <C>
Guaranteed investment contracts ...... $12,666.9 $12,599.7 $11,499.4 $11,516.8
Fixed-rate deferred and immediate
annuities ........................... 4,375.0 4,412.2 4,289.1 4,290.4
Supplementary contracts without
life contingencies .................. 42.7 44.7 40.9 42.1
--------- --------- --------- ----------
$17,084.6 $17,056.6 $15,829.4 $15,849.3
========= ========= ========= ==========
</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.

The Company made federal tax payments of $74.9 million in 1998 and $146.4
million in 1997.

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. 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. No additional refinements were made during 1998.

Reinsurance: Premiums, commissions, expense reimbursements, benefits and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies issued and the terms of
the reinsurance contracts. Premiums ceded to other companies have been reported
as a reduction of premium income. Amounts applicable to reinsurance ceded for
future policy benefits, unearned premium reserves and claim liabilities have
been reported as reductions of these items.

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

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

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

NOTE 2--SURPLUS NOTES

On February 25, 1994, the Company issued $450 million of surplus notes that bear
interest at 7 3/8% and are scheduled to mature on February 15, 2024. The
issuance of the surplus notes was approved by the 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 1998 and 1997.

NOTE 3--BORROWED MONEY

At December 31, 1998, the Company had a $500 million syndicated line of credit.
There are 26 banks that 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, 1998,
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 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 5.06% and 5.72%, respectively, at December 31, 1998 and 1997. The class A1
notes were fully repaid on March 25, 1997 and the class A2 notes were fully
repaid on June 25, 1998. The outstanding balances of the notes totaled $42.6
million at December 31, 1997 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 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
were fully repaid on December 28, 1998. The outstanding balances of the notes
totaled $161.0 million at December 31, 1997 and are included in other general
account obligations.

At December 31, 1997, the Company had 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 $6.6 million and $21.2 million during 1998
and 1997, respectively.

53
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 4--NET INVESTMENT INCOME

Investment income has been reduced by the following amounts:

<TABLE>
<CAPTION>
1998 1997
------ ------
(In millions)
<S> <C> <C>
Investment expenses ..................................... $317.5 $339.6
Interest expense ........................................ 44.3 57.9
Depreciation on real estate and other invested assets ... 41.6 76.6
Real estate and other investment taxes .................. 60.1 61.5
------ ------
$463.5 $535.6
====== ======
</TABLE>

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

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

<TABLE>
<CAPTION>
1998 1997
------- ------
(In millions)
<S> <C> <C>
Net gains from asset sales and foreclosures ............. $ 303.3 $ 63.4
Capital gains tax ....................................... (171.7) (84.1)
Net capital gains transferred to the IMR ................ (130.9) (69.1)
------- ------
Net Realized Capital Gains (Losses) ................... $ 0.7 $(89.8)
======= ======
</TABLE>

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

<TABLE>
<CAPTION>
1998 1997
------- -------
(In millions)
<S> <C> <C>
Net (losses) gains from changes in security values and
book value adjustments ................................. $ (90.6) $ 159.5
Increase in asset valuation reserve ..................... (123.9) (100.9)
------- -------
Net Unrealized Capital (Losses) Gains and Other
Adjustments. ........................................ $(214.5) $ 58.6
======= =======
</TABLE>

54
<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
December 31, 1998 Value Gains Losses Fair Value
----------------- ----------- ---------- -------- -----------
(In millions)
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S.
government corporations and
agencies .......................... $ 123.3 $ 5.9 $ 0.0 $ 129.2
Obligations of states and
political subdivisions ............ 86.4 9.9 0.0 96.3
Debt securities issued by
foreign governments ............... 264.5 29.4 8.2 285.7
Corporate securities ............... 18,155.4 1,567.7 294.4 19,428.7
Mortgage-backed securities ......... 4,723.4 181.2 5.2 4,899.4
----------- ---------- -------- -----------
Total bonds ...................... $ 23,353.0 $ 1,794.1 $ 307.8 $ 24,839.3
=========== ========== ======== ===========
</TABLE>

<TABLE>
<CAPTION>
December 31, 1997
-----------------
<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>

The statement value and fair value of bonds at December 31, 1998, by contractual
maturity, are shown below. Maturities will differ from contractual maturities
because eligible borrowers may exercise their right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Statement Fair
Value Value
--------- ----------
(In millions)
<S> <C> <C>
Due in one year or less ............................... $ 1,569.1 $ 1,622.2
Due after one year through five years ................. 5,597.3 5,922.5
Due after five years through ten years ................ 5,335.6 5,666.5
Due after ten years ................................... 6,127.6 6,728.7
--------- ---------
18,629.6 19,939.9
Mortgage-backed securities ............................ 4,723.4 4,899.4
--------- ---------
$23,353.0 $24,839.3
========= =========
</TABLE>

Gross gains of $126.4 million in 1998 and $61.5 million in 1997 and gross losses
of $62.3 million in 1998 and $86.6 million in 1997 were realized from the sale
of bonds.

At December 31, 1998, bonds with an admitted asset value of $18.9 million were
on deposit with state insurance departments to satisfy regulatory requirements.

55
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED

The cost of common stocks was $258.4 million and $148.0 million at December 31,
1998 and 1997, respectively. At December 31, 1998, gross unrealized appreciation
on common stocks totaled $64.9 million, and gross unrealized depreciation
totaled $54.0 million. The fair value of preferred stock totaled $832.4 million
at December 31, 1998 and $695.8 million at December 31, 1997.

The Company participates in a security lending program for the purpose of
enhancing income on securities held. At December 31, 1998 and 1997, $421.5
million and $217.0 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 $56.4 million, bonds with
amortized cost of $105.1 million and real estate with depreciated cost of $14.6
million were non-income producing for the twelve months ended December 31, 1998.

Restructured commercial mortgage loans aggregated $230.5 million and $314.3
million as of December 31, 1998 and 1997, 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
--------------------------
1998 1997
------- -------
(In millions)
<S> <C> <C>
Expected ........................... $ 22.5 $ 33.8
Actual ............................. 11.6 24.9
</TABLE>

Generally, the terms of the restructured mortgage loans call for the Company to
receive some form or combination of an equity participation in the underlying
collateral, excess cash flows or an effective yield at the maturity of the loans
sufficient to meet the original terms of the loans.

At December 31, 1998, the mortgage loan portfolio was diversified by geographic
region and specific collateral property type as displayed below. The Company
controls credit risk through credit approvals, limits and monitoring procedures.

<TABLE>
<CAPTION>
Statement Geographic Statement
Property Type Value Concentration Value
-------------- ------------- ------------- ---------------
(In millions) (In millions)
<S> <C> <C> <C>
Apartments ............. $1,722.7 East North Central ..... $1,164.3
Hotels ................. 283.2 East South Central ..... 137.1
Industrial ............. 894.9 Middle Atlantic ........ 1,408.5
Office buildings ....... 2,094.0 Mountain ............... 345.0
Retail ................. 1,589.6 New England ............ 791.1
1-4 Family ............. 6.4 Pacific ................ 1,848.7
Agricultural ........... 1,298.3 South Atlantic ......... 1,531.3
Other .................. 334.6 West North Central ..... 287.5
West South Central ..... 602.2
Other .................. 108.0
-------- --------
$8,223.7 $8,223.7
======== ========
</TABLE>

56
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 6--INVESTMENTS--CONTINUED

At December 31, 1998, the fair values of the commercial and agricultural
mortgage loan portfolios were $7.3 billion and $1.3 billion, respectively. The
corresponding amounts as of December 31, 1997 were approximately $6.7 billion
and $1.5 billion, respectively.

The maximum and minimum lending rates for mortgage loans during 1998 were 9.68%
and 6.82% for agricultural loans, 9.25% and 6.73% for other properties, and 7.5%
and 6.65% 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 1998 were
$784.0 million, $310.0 million, and $7.7 million, respectively. The
corresponding amounts in 1997 were $787.1 million, $386.6 million, and $7.5
million, respectively.

The Company cedes business to reinsurers to share risks under life, health and
annuity contracts for the purpose of reducing exposure to large losses.
Premiums, benefits and reserves ceded to reinsurers in 1998 were $873.9 million,
$772.5 million and $712.2 million, respectively. The corresponding amounts in
1997 were $801.8 million, $767.9 million and $594.9 million, respectively.

Premiums, benefits, and reserves ceded related to the group accident and health
and related group life business sold in 1997, included in the amounts above,
were $458.2 million, $481.2 million, and $238.6 million, respectively, at
December 31, 1998. The corresponding amounts in 1997 were $487.4 million, $503.3
million, and $247.9 million, respectively.

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

<TABLE>
<CAPTION>
December 31
------------------
1998 1997
------- -------
(In millions)
<S> <C> <C>
Reinsurance recoverables ........................... $ 18.6 $ 12.5
Funds withheld from reinsurers ..................... 49.5 35.1
</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 $251.1 million at December 31, 1998 and $236.3
million at December 31, 1997.

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 1998 issues of flexible premium variable life
insurance and scheduled premium variable life insurance policies. In connection
with this agreement, the Company transferred $4.9 million and $22.0 million of
cash for tax, commission, and expense allowances to Variable Life, which
decreased the Company's net gain from operations by $22.2 million and $10.1
million in 1998 and 1997, respectively.

57
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 7--REINSURANCE--CONTINUED

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

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

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

The Company has not entered into any reinsurance agreements in which the
reinsurer may unilaterally cancel any reinsurance for reasons other than
nonpayment of premiums or other similar credits. The Company does not have any
reinsurance agreements in effect in which the amount of losses paid or accrued
through December 31, 1998 would result in a payment to the reinsurer of amounts
which, in the aggregate and allowing for offset of mutual credits from other
reinsurance agreements with the same reinsurer, exceed the total direct premiums
collected under the reinsured policies.

NOTE 8--BENEFITS PLANS AND OTHER POSTRETIREMENT 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 $92.6 million in 1998 and
$89.7 million in 1997.

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.

58
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFITS PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED

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 $10,000 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 $10,000. The Company
matches the first 3% of pretax contributions for marketing representatives and
the first 2% of pre-tax 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 expense for defined contribution plans was $8.1 million and $6.2 million in
1998 and 1997, respectively.

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.

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 has 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 approximately zero. As of December 31, 1998, 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.

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

59
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFITS PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED

The changes in benefit obligation and plan assets are summarized as follows:

<TABLE>
<CAPTION>
Year ended December 31
-----------------------------------------------
Pension Benefits Other Benefits
--------------------- ---------------------
1998 1997 1998 1997
-------- -------- -------- --------
(In millions)
<S> <C> <C> <C> <C> <C>
Change in benefit
obligation:
Benefit obligation at
beginning of year ....... $1,704.0 $1,582.3 $ 381.0 $ 400.5
Service cost ............. 32.8 30.7 6.8 8.5
Interest cost ............ 115.5 109.3 24.4 25.5
Actuarial loss/(gain) .... 55.5 77.5 (16.8) (22.2)
Benefits paid ............ (99.4) (95.8) (28.5) (31.3)
Benefit obligation at end
of year ................. 1,808.4 1,704.0 366.9 381.0

Change in plan assets:
Fair value of plan assets
at beginning of year .... 1,995.5 1,787.6 172.7 132.4
Actual return of plan
assets .................. 296.1 295.5 39.9 31.0
Employer contribution .... 10.0 8.2 2.6 9.3
Benefits paid ............ (99.4) (95.8) 0.0 0.0
Fair value of plan assets
at end of year .......... 2,202.2 1,995.5 215.2 172.7

Funded status ............ 393.8 291.5 (151.7) (208.3)
Unrecognized actuarial
loss .................... (292.0) (219.6) (163.0) (127.1)
Unrecognized prior service
cost .................... 23.1 29.6 17.8 19.7
Unrecognized net
transition (asset)
obligation .............. (23.9) (35.5) 294.3 315.2
-------- -------- -------- --------
Net amount recognized .... $ 101.0 $ 66.0 $ (2.6) $ (0.5)
======== ======== ======== ========
</TABLE>

The assumptions used in accounting for the benefit plans were as follows:

<TABLE>
<CAPTION>
Year ended December 31
--------------------------------------
Pension Benefits Other Benefits
---------------- ---------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Discount rate ...................... 6.75% 7.00% 6.75% 7.00%
Expected return on plan assets ..... 8.50% 8.50% 8.50% 8.50%
Rate of compensation increase ...... 4.56% 4.77% 4.00% 4.00%
</TABLE>

For measurement purposes, a 5.75 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1999. The rate was
assumed to decrease gradually to 5.00 percent in 2001 and remain at that level
thereafter.

<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 8--BENEFITS PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED

Net periodic benefit (credit) cost includes the following components:

<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------
Pension Benefits Other Benefits
------------------ ------------------
1998 1997 1998 1997
------- ------- ------- -------
(in millions)
<S> <C> <C> <C> <C>
Service cost ..................... $ 32.7 $ 30.7 $ 6.8 $ 8.5
Interest cost .................... 115.5 109.3 24.4 25.5
Expected return on plan assets ... (165.5) (147.9) (39.9) (31.0)
Amortization of transition
(asset) obligation .............. (11.6) (11.7) 20.9 20.9
Amortization of prior service
cost ............................ 6.5 6.6 1.9 1.9
Recognized actuarial (gain) loss . (2.6) (1.0) 19.0 15.0
------- ------- ------- -------
Net periodic benefit (credit)
cost ......................... $ (25.0) $ (14.0) $ 33.1 $ 40.8
======= ======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
1-Percentage Point 1-Percentage Point
Increase Decrease
------------------ ------------------
(In millions)
<S> <C> <C>
Effect on total of service and
interest costs ............................... $ 2.9 $ (2.5)
Effect on postretirement benefit
obligations .................................. 28.7 (25.9)
</TABLE>

NOTE 9--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 majority-owned affiliates amounted to $13.8
billion at December 31, 1998 and $12.4 billion at December 31, 1997; total
liabilities amounted to $12.5 billion at December 31, 1998 and $11.1 billion at
December 31, 1997; and total net income was $148.5 million in 1998 and $184.8
million in 1997.

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 (See Note 7). 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 13).

The Company received dividends of $62.2 million and $65.9 million in 1998 and
1997, respectively, from unconsolidated affiliates.

61
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 10--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

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

<TABLE>
<CAPTION>
Number of Contracts/ Assets (Liabilities)
Notional Amounts 1998 1997
-------------------- -------------------- ------------------
Carrying Fair Carrying Fair
1998 1997 Value Value Value Value
-------- -------- -------- -------- -------- --------
($ In millions)
<S> <C> <C> <C> <C> <C> <C>
Futures contracts to
sell securities ........... $ 11,286 $ 3,733 $(3.1) $ (3.1) $ (2.5) $ (2.5)
Futures contracts to
acquire securities ........ 1,464 1,359 (0.3) (0.3) 1.2 1.2
Interest rate swap
agreements ................ 7,684.0 7,254.7 -- (159.1) -- (58.3)
Interest rate cap
agreements ................ 115.0 115.0 0.4 0.4 0.6 0.6
Interest rate floor
agreements ................ 125.0 125.0 0.7 0.7 0.4 0.4
Interest rate swaption
agreements ................ 0.0 34.2 -- 0.0 -- 0.0
Currency rate swap
agreements ................ 2,881.5 221.5 -- 16.2 -- (9.7)
Equity collar
agreements ................ -- -- 28.6 28.6 (14.1) (14.1)
</TABLE>

Financial futures contracts are used principally 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 contracts or notional
amounts of the contracts represent the extent of the Company's involvement but
not the future cash requirements, as the Company intends to close the open
positions prior to settlement. The futures contracts expire in 1999.

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

The Company invests in common stock that is subject to fluctuations from market
value changes in stock prices. The Company sometimes seeks to reduce its market
exposure to such holdings by entering into equity collar agreements. A collar
consists of a call that limits the Company's potential for gain from
appreciation in the stock price as well as a put that limits the Company's loss
potential from a decline in the stock price.

The interest rate swap agreements expire in 1999 to 2028. The interest rate cap
and floor agreements expire in 2000 to 2007. Interest rate swaption agreements
expire in 2025. The currency rate swap agreements expire in 1999 to 2018. The
equity collar agreements expire in 2003.

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform to the terms of the contract. The Company continually
monitors its position and the credit ratings of the counterparties to these
derivative instruments. To limit exposure associated with counterparty
nonperformance on interest rate and currency swap agreements, the Company enters
into master netting agreements with its counterparties. The Company believes the
risk of incurring losses due to nonperformance by its counterparties is remote
and that such losses, if any, would be immaterial. Futures contracts trade on
organized exchanges and, therefore, have minimal credit risk.

62
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 11--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 $26.2 million in 1998 and $27.4 million in 1997.
Future minimum rental commitments under noncancellable operating leases for
office space and furniture and equipment are as follows:

<TABLE>
<CAPTION>
December 31, 1998
-------------------
(In millions)
<S> <C>
1999 ....................................................... $19.0
2000 ....................................................... 16.5
2001 ....................................................... 13.5
2002 ....................................................... 10.0
2003 ....................................................... 5.9
Thereafter ................................................. 7.5
-----
Total minimum payments ..................................... $72.4
=====
</TABLE>

NOTE 12--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, 1998 Percent
----------------- ---------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with
adjustment):
With market value adjustment ................... $ 792.0 2.0%
At book value less surrender charge ............ 2,773.8 7.1
--------- -----
Total with adjustment ....................... 3,565.8 9.1
Subject to discretionary withdrawal (without
adjustment) at book value ..................... 3,782.8 9.8
Subject to discretionary withdrawal--separate
accounts ...................................... 14,809.7 38.1
Not subject to discretionary withdrawal:
General account ................................ 15,375.2 39.6
Separate accounts .............................. 1,301.5 3.4
--------- -----
Total annuity reserves, deposit fund liabilities
and separate accounts--before reinsurance ........ 38,835.0 100.0%
=====
Less reinsurance ceded ............................ (0.1)
---------
Net annuity reserves, deposit fund liabilities
and separate accounts ............................ $38,834.9
=========
</TABLE>

Any liquidation costs associated with the $14.8 billion of separate accounts
subject to discretionary withdrawal are sustained by the separate account
contractholders and not by the general account.

63
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 13--COMMITMENTS AND CONTINGENCIES

The Company has extended commitments to purchase long-term bonds, preferred and
common stocks, and other invested assets and issue real estate mortgages
totaling $329.1 million, $72.0 million, $214.1 million and $471.4 million,
respectively, at December 31, 1998. 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 $1.1 billion at December 31, 1998. The majority
of these commitments expire in 1999.

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 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, 1998, the aggregate
outstanding principal balance of all the remaining pools of loans from 1991,
1993, and 1996 was $602.8 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
1998 and 1997 amounted to $4.6 million and $4.1 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, 1998, the
aggregate outstanding principal balance of the pools of loans was $445.8
million. There were no mortgage loans buy-backs in 1998 and 1997.

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, 1998 were $411.7 million for short-term borrowings
and $173.4 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, 1998. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.

64
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 13--COMMITMENTS AND CONTINGENCIES--CONTINUED

During 1997, the Company entered into a court approved settlement relating to a
class action lawsuit involving certain individual life insurance policies sold
from 1979 through 1996. In entering into the settlement, the Company
specifically denied any wrongdoing. The Company has established a litigation
reserve in connection with the settlement to provide for relief to class members
and for legal and administrative costs associated with the settlement. The
reserve has been charged, net of the related tax effect, directly to
policyholders' contingency reserves of the Company. Given the uncertainties
associated with estimating the reserve, it is possible that the final cost of
the settlement could be different from the amounts presently provided for by the
Company. However, the Company does not believe that the ultimate resolution of
the settlement will have a material adverse effect on the Company's financial
position.

NOTE 14--FAIR VALUE OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
December 31
---------------------------------------------
1998 1997
--------------------- ---------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------- --------- --------- ---------
(In millions)
<S> <C> <C> <C> <C>
Assets
Bonds--Note 6 ........... $23,353.0 $24,839.3 $22,986.0 $24,524.8
Preferred
stocks--Note 6 ......... 844.7 832.4 640.6 695.8
Common stocks--Note 6 ... 269.3 269.3 256.9 256.9
Mortgage loans on
real estate--Note 6 .... 8,223.7 8,619.7 7,851.2 8,215.9
Policy loans--Note 1 .... 1,573.8 1,573.8 1,577.3 1,577.3
Cash and cash
equivalents--Note 1 .... 1,348.9 1,348.9 724.8 724.8
Liabilities
Guaranteed investment
contracts--Note 1 ...... 12,666.9 12,599.7 11,499.4 11,516.8
Fixed rate deferred
and immediate
annuities--Note 1 ...... 4,375.0 4,412.2 4,289.1 4,290.4
Supplementary
contracts without
life contingencies--
Note 1 ................. 42.7 44.7 40.9 42.1
Derivatives assets
(liabilities) relating
to:--Note 10
Futures contracts .......... (3.4) (3.4) (1.3) (1.3)
Interest rate swaps ........ -- (159.1) -- (58.3)
Currency rate swaps ........ -- 16.2 -- (9.7)
Interest rate caps ......... 0.4 0.4 0.6 0.6
Interest rate floors ....... 0.7 0.7 0.4 0.4
Equity collar agreements ... 28.6 28.6 (14.1) (14.1)
Commitments--Note 13 ....... -- 1,114.2 -- 1,332.3
</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.

65
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 15--IMPACT OF YEAR 2000 (UNAUDITED)

The Company is executing its plan to address the impact of the Year 2000 issues
that result from computer programs being written using two digits to reflect the
year rather than four to define the applicable year and century. historically,
the first two digits were hardcoded to save memory.

Many of the Company's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in an information technology (IT) system failure or miscalculations
causing disruptions of operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities. In addition, non-IT systems including, but not limited to,
security alarms, elevators and telephones are subject to malfunction due to
their dependence on embedded technology such as microcontrollers for proper
operation. As described, the Year 2000 project presents a number of challenges
for financial institutions since the correction of Year 2000 issues in IT and
non-IT systems will be complex and costly for the entire industry.

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

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

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

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

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

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

66
<PAGE>

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED

NOTE 15--IMPACT OF YEAR 2000 (UNAUDITED)--CONTINUED

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

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

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

67
<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 Equity Index
(formerly, International Equities), Small Cap Growth, International Balanced,
Mid Cap Growth, Large Cap Value, Money Market, Mid Cap Value, Diversified Mid
Cap Growth (formerly, Special Opportunities), Real Estate Equity, Growth &
Income, Managed, Short-Term Bond (formerly, Short-Term U.S. Government), Small
Cap Value, International Opportunities, Equity Index, Strategic Bond, Turner
Core Growth, Brandes International Equity (formerly, Edinburgh International
Equity) Frontier Capital Appreciation, Emerging Markets Equity, Global Equity,
Bond Index, Small/Mid Cap CORE and High-Yield Bond Subaccounts) as of December
31, 1998, 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.

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, 1998, 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 10, 1999

68
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 1998

<TABLE>
<CAPTION>
LARGE CAP SOVEREIGN INTERNATIONAL SMALL CAP INTERNATIONAL MID CAP LARGE CAP
GROWTH BOND EQUITY INDEX 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 .. $29,089,283 $67,185,725 $4,843,434 $1,802,291 $ 210,332 $ 1,473,582 $3,774,075
Investments in shares of
portfolios of M Fund Inc., at
value. ............................. -- -- -- -- -- -- --
Policy loans and accrued interest
receivable ......................... 1,968,975 9,925,170 263,940 -- -- -- --
Receivable from:
John Hancock Variable Series
Trust I ........................... 21,267 7,561 763 2,331 1,855 2,479 8,037
M Fund Inc. ........................ -- -- -- -- -- -- --
----------- ----------- ---------- ---------- ----------- ------------ ----------
Total assets ........................ 31,079,525 77,118,456 5,108,137 1,804,622 212,187 1,476,061 3,782,112
LIABILITIES
Payable to John Hancock Mutual
Life Insurance Company ............. 20,777 6,369 683 2,302 1,852 2,456 7,975
Asset charges payable ............... 490 1,192 80 29 3 23 62
----------- ----------- ---------- ---------- ----------- ------------ ----------
Total liabilities ................... 21,267 7,561 763 2,331 1,855 2,479 8,037
----------- ----------- ---------- ---------- ----------- ------------ ----------
Net assets .......................... $31,058,258 $77,110,895 $5,107,374 $1,802,291 $ 210,332 $ 1,473,582 $3,774,075
=========== =========== ========== ========== =========== ============ ==========
</TABLE>

<TABLE>
<CAPTION>
DIVERSIFIED
MONEY MID CAP MID CAP REAL ESTATE GROWTH &
MARKET VALUE GROWTH EQUITY INCOME MANAGED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of portfolios of
John Hancock Variable Series Trust I,
at value .............................. $47,242,706 $6,049,829 $4,916,238 $5,305,959 $267,925,840 $ 98,661,041
Investments in shares of portfolios of
M Fund Inc., at value -- -- -- -- -- --
Policy loans and accrued interest
receivable ............................ 2,027,110 -- -- 225,050 29,167,555 12,154,307
Receivable from:
John Hancock Variable Series
Trust I .............................. 2,757,264 2,873 1,517 3,585 96,540 63,052
M Fund Inc. ........................... -- -- -- -- -- --
----------- ---------- ---------- ---------- ------------ ------------
Total assets ........................... 52,027,080 6,052,702 4,917,755 5,534,594 297,189,935 110,878,400
LIABILITIES
Payable to John Hancock Mutual Life
Insurance Company ..................... 2,757,795 2,775 1,439 3,498 91,946 62,013
Asset charges payable .................. 754 98 78 88 4,593 1,724
----------- ---------- ---------- ---------- ------------ ------------
Total liabilities ...................... 2,758,549 2,873 1,517 3,586 96,539 63,737
----------- ---------- ---------- ---------- ------------ ------------
Net assets ............................. $49,268,531 $6,049,829 $4,916,238 $5,531,008 $297,093,396 $110,814,663
=========== ========== ========== ========== ============ ============
<CAPTION>

SHORT-TERM
BOND
SUBACCOUNT
------------
<S> <C>
ASSETS
Investments in shares of portfolios of
John Hancock Variable Series Trust I,
at value .............................. $496,489
Investments in shares of portfolios of . --
M Fund Inc., at value
Policy loans and accrued interest ...... --
receivable
Receivable from:
John Hancock Variable Series .......... 76
Trust I
M Fund Inc. ........................... --
--------
Total assets ........................... 496,565
LIABILITIES
Payable to John Hancock Mutual Life .... 68
Insurance Company
Asset charges payable .................. 8
--------
Total liabilities ...................... 76
--------
Net assets ............................. $496,489
========
</TABLE>

See accompanying notes.

69
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 1998

<TABLE>
<CAPTION>
TURNER BRANDES
SMALL CAP INTERNATIONAL EQUITY STRATEGIC CORE INTERNATIONAL
VALUE OPPORTUNITIES INDEX BOND GROWTH EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value ............................. $2,550,502 $4,181,723 $7,247,833 $ 470,424 $ -- $ --
Investments in shares
of portfolios of M
Fund Inc.,
at value .......................... -- -- -- -- 125,007 255,755
Policy loans and
accrued interest
receivable ........................ -- -- -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I ................... 4,417 2,936 13,979 4,071 2 4
M Fund Inc. ....................... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total assets ....................... 2,554,919 4,184,659 7,261,812 474,495 125,009 255,759
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company ................. 4,376 2,867 13,860 4,063 -- --
Asset charges payable .............. 41 68 119 8 2 4
---------- ---------- ---------- ---------- ---------- ----------
Total liabilities .................. 4,417 2,935 13,979 4,071 2 4
---------- ---------- ---------- ---------- ---------- ----------
Net assets ......................... $2,550,502 $4,181,724 $7,247,833 $ 470,424 $ 125,007 $ 255,755
========== ========== ========== ========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
FRONTIER EMERGING SMALL/
CAPITAL MARKETS GLOBAL BOND MID CAP HIGH YIELD
APPRECIATION EQUITY EQUITY INDEX CORE BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value ............................. $ -- $ 729 $ 16,495 $ 14,549 $ 32,699 $ 5,453
Investments in shares
of portfolios of M
Fund Inc.,
at value .......................... 2,533,128 -- -- -- -- --
Policy loans and
accrued interest
receivable ........................ -- -- -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I ................... 41 -- -- -- 1 --
M Fund Inc. ....................... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total assets ....................... 2,533,169 729 16,495 14,549 32,700 5,453
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company ................. -- -- -- -- -- --
Asset charges payable .............. 41 -- -- -- 1 --
---------- ---------- ---------- ---------- ---------- ----------
Total liabilities .................. 41 0 0 0 1 0
---------- ---------- ---------- ---------- ---------- ----------
Net assets ......................... $2,533,128 $ 729 $ 16,495 $ 14,549 $ 32,699 $ 5,453
========== ========== ========== ========== ========== ==========
</TABLE>

See accompanying notes.

<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 SOVEREIGN BOND
SUBACCOUNT SUBACCOUNT
-------------------------------------------- ---------------------------------------------
1998 1997 1996 1998 1997 1996
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I ..................... $ 2,836,032 $ 1,686,429 $ 1,905,476 $ 5,266,576 $ 4,454,173 $ 3,765,421
M Fund Inc. .................. -- -- -- -- -- --
Interest income on
policy loans ................. 128,186 103,747 83,974 727,807 696,074 678,580
----------- ----------- ----------- ----------- ----------- -----------
Total investment
income ........................ 2,964,218 1,790,176 1,989,450 5,994,383 5,150,247 4,444,001
Expenses:
Mortality and expense
risks ........................ 143,859 99,710 69,829 415,570 370,612 325,346
----------- ----------- ----------- ----------- ----------- -----------
Net investment income .......... 2,820,359 1,690,466 1,919,621 5,578,813 4,779,635 4,118,655
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss) ...................... 433,509 292,430 145,304 (142,628) (230,607) (169,158)
Net unrealized
appreciation
(depreciation)
during the period ............ 4,558,660 2,142,494 3,756 (102,600) 1,277,686 (1,418,707)
----------- ----------- ----------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments ......... 4,992,169 2,434,924 149,060 (245,228) 1,047,079 (1,587,865)
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net
assets resulting from
operations .................... $ 7,812,528 $ 4,125,390 $ 2,068,681 $ 5,333,585 $ 5,826,714 $ 2,530,790
=========== =========== =========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL CAP GROWTH
SUBACCOUNT SUBACCOUNT
-------------------------------------------- ---------------------------------------------
1998 1997 1996 1998 1997 1996*
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I ..................... $ 743,339 $ 195,240 $ 42,110 $ -- $ 436 $ 160
M Fund Inc. .................. -- -- -- -- -- --
Interest income on
policy loans ................. 17,802 15,746 13,158 -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total investment
income ........................ 761,141 210,986 55,268 -- 436 160
Expenses:
Mortality and expense
risks ........................ 26,542 24,261 19,834 8,233 4,231 538
----------- ----------- ----------- ----------- ----------- -----------
Net investment income
(loss) ........................ 734,599 186,725 35,434 (8,233) (3,795) (378)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss) ...................... 52,891 50,829 25,854 21,741 6,475 (690)
Net unrealized
appreciation
(depreciation)
during the period ............ 13,239 (463,778) 217,574 204,674 92,108 (5,174)
----------- ----------- ----------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments ......... 66,130 (412,949) 243,428 226,415 98,583 (5,864)
----------- ----------- ----------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations .................... $ 800,729 $ (226,224) $ 278,862 $ 218,182 $ 94,788 $ (6,242)
=========== =========== =========== =========== =========== ===========
</TABLE>

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

See accompanying notes.

71
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
INTERNATIONAL BALANCED MID CAP GROWTH
SUBACCOUNT SUBACCOUNT
-------------------------------------------- --------------------------------------------
1998 1997 1996* 1998 1997 1996*
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I ...................... $ 12,240 $ 3,972 $ 734 $ 130,303 $ -- $ 411
M Fund Inc. ................... -- -- -- -- -- --
Interest income on
policy loans .................. -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total investment
income ......................... 12,240 3,972 734 130,303 -- 411
Expenses:
Mortality and expense
risks ......................... 826 392 81 5,242 2,164 292
----------- ----------- ----------- ----------- ----------- -----------
Net investment income
(loss) ......................... 11,414 3,580 653 125,061 (2,164) 199
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss) ....................... 1,050 429 9 26,192 5,866 (17)
Net unrealized
appreciation
(depreciation)
during the period ............. 12,294 (4,312) 899 193,946 66,874 1,684
----------- ----------- ----------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments .......... 13,344 (3,883) 908 220,138 72,740 1,667
----------- ----------- ----------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations ..................... $ 24,758 $ (303) $ 1,561 $ 345,199 $ 70,576 $ 1,786
=========== =========== =========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
LARGE CAP VALUE MONEY MARKET
SUBACCOUNT SUBACCOUNT
-------------------------------------------- --------------------------------------------
1998 1997 1996* 1998 1997 1996
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions
received from:
John Hancock
Variable Series
Trust I ...................... $ 185,232 $ 57,265 $ 2,056 $ 2,249,510 $ 641,356 $ 1,073,915
M Fund Inc. ................... -- -- -- -- -- --
Interest income on
policy loans .................. -- -- -- 154,162 148,802 160,206
----------- ----------- ----------- ----------- ----------- -----------
Total investment
income ......................... 185,232 57,265 2,056 2,403,672 790,158 1,234,121
Expenses:
Mortality and expense
risks ......................... 15,356 3,303 218 263,735 81,437 134,461
----------- ----------- ----------- ----------- ----------- -----------
Net investment income ........... 169,876 53,962 1,838 2,139,937 708,721 1,099,660
Net realized and
unrealized gain on
investments:
Net realized gain .............. 68,953 17,858 588 -- -- --
Net unrealized
appreciation during
the period .................... 64,132 80,036 4,787 -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net realized and
unrealized gain on
investments .................... 133,085 97,894 5,375 -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net
assets resulting from
operations ..................... $ 302,961 $ 151,856 $ 7,213 $ 2,139,937 $ 708,721 $ 1,099,660
=========== =========== =========== =========== =========== ===========
</TABLE>

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

See accompanying notes.

72
<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 VALUE DIVERSIFIED MID CAP
SUBACCOUNT GROWTH
----------------------------------------- -----------------------------------------
1998 1997 1996* 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I ........ $ 53,920 $ 150,951 $ 5,010 $ 93,281 $ 407,765 $ 114,600
M Fund Inc. ................................. -- -- -- -- -- --
Interest income on policy loans .............. -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total investment income ....................... 53,920 150,951 5,010 93,281 407,765 114,600
Expenses:
Mortality and expense risks .................. 34,857 7,632 572 26,942 22,030 10,841
------------ ------------ ------------ ------------ ------------ ------------
Net investment income ......................... 19,063 143,319 4,438 66,339 385,735 103,759
Net realized and unrealized gain (loss) on
investments:
Net realized gain ............................ 74,634 10,646 8,413 33,249 276,956 81,916
Net unrealized appreciation (depreciation)
during the period ........................... (944,401) 145,409 14,211 126,465 (477,912) 264,010
------------ ------------ ------------ ------------ ------------ ------------
Net realized and unrealized gain (loss) on
investments .................................. (869,767) 156,055 22,624 159,714 (200,956) 345,926
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations .............................. $ (850,704) $ 299,374 $ 27,062 $ 226,053 $ 184,779 $ 449,685
============ ============ ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
REAL ESTATE EQUITY GROWTH & INCOME
SUBACCOUNT SUBACCOUNT
----------------------------------------- -----------------------------------------
1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I .................................... $ 343,976 $ 330,296 $ 177,243 $ 26,306,209 $ 25,377,474 $ 18,406,284
M Fund Inc. ................................. -- -- -- -- -- --
Interest income on policy loans .............. 17,260 15,261 13,041 1,996,131 1,728,054 1,562,266
------------ ------------ ------------ ------------ ------------ ------------
Total investment income ....................... 361,236 345,557 190,284 28,302,340 27,105,528 19,968,550
Expenses:
Mortality and expense risks .................. 33,890 25,420 16,931 1,466,469 1,136,268 842,055
------------ ------------ ------------ ------------ ------------ ------------
Net investment income ......................... 327,346 320,137 173,353 26,835,871 25,969,260 19,126,495
Net realized and unrealized gain
(loss) on investments:
Net realized gain ............................ 158,205 181,015 39,891 3,223,935 1,982,518 820,430
Net unrealized appreciation
(depreciation) during the period ............ (1,546,717) 165,392 637,301 32,918,552 18,247,212 4,555,481
------------ ------------ ------------ ------------ ------------ ------------
Net realized and unrealized gain
(loss) on investments ........................ (1,388,512) 346,407 677,192 36,142,487 20,229,730 5,375,911
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from operations ............. $ (1,061,166) $ 666,544 $ 850,545 $ 62,978,358 $ 46,198,990 $ 24,502,406
============ ============ ============ ============ ============ ============
</TABLE>

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

See accompanying notes.

73
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
MANAGED SHORT-TERM BOND
SUBACCOUNT SUBACCOUNT
---------------------------------------------- ----------------------------------------------
1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I .................... $ 9,347,788 $ 7,891,222 $ 8,705,892 $ 27,350 $ 1,036,747 $ 201,830
M Fund Inc. ................. -- -- -- -- -- --
Interest income on
policy loans ................ 854,487 768,231 705,413 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total investment income ....... 10,202,275 8,659,453 9,411,305 27,350 1,036,747 201,830
Expenses:
Mortality and expense
risks ....................... 577,276 497,030 426,946 2,680 121,572 15,305
------------ ------------ ------------ ------------ ------------ ------------
Net investment income ......... 9,624,999 8,162,423 8,984,359 24,670 915,175 186,525
Net realized and
unrealized gain
(loss) on investments:
Net realized gain (loss) .... 791,245 437,661 230,806 265 (27,616) 577
Net unrealized appreciation
(depreciation) during the
period ...................... 6,629,458 4,941,061 (2,103,918) (4,247) 226,435 225,129
------------ ------------ ------------ ------------ ------------ ------------
Net realized and
unrealized gain
(loss) on investments ........ 7,420,703 5,378,722 (1,873,112) (3,982) 198,819 225,706
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net
assets resulting from
operations ................... $ 17,045,702 $ 13,541,145 $ 7,111,247 $ 20,688 $ 1,113,994 $ 412,231
============ ============ ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
SMALL CAP VALUE INTERNATIONAL OPPORTUNITIES
SUBACCOUNT SUBACCOUNT
---------------------------------------------- ----------------------------------------------
1998 1997 1996* 1998 1997 1996*
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I .................... $ 12,675 $ 95,844 $ 1,653 $ 33,443 $ 5,284 $ 482
M Fund Inc. ................. -- -- -- -- -- --
Interest income on
policy loans ................ -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total investment income ....... 12,675 95,844 1,653 33,443 5,284 482
Expenses:
Mortality and expense
risks ....................... 11,853 3,270 128 21,581 1,697 295
------------ ------------ ------------ ------------ ------------ ------------
Net investment income ......... 822 92,574 1,525 11,862 3,587 187
Net realized and
unrealized gain (loss) on
investments:
Net realized gain ............ 29,257 19,812 11 33,474 3,191 57
Net unrealized
appreciation (depreciation)
during the period ........... (105,331) (12,804) 2,702 272,314 (12,223) 7,271
------------ ------------ ------------ ------------ ------------ ------------
Net realized and
unrealized gain
(loss) on investments ........ (76,074) 7,008 2,713 305,788 (9,032) 7,328
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations ................... $ (75,252) $ 99,582 $ 4,238 $ 317,650 $ (5,445) $ 7,515
============ ============ ============ ============ ============ ============
</TABLE>

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

See accompanying notes.

74
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
EQUITY INDEX STRATEGIC BOND
SUBACCOUNT SUBACCOUNT
------------------------------------------ -------------------------------------------
1998 1997 1996* 1998 1997 1996*
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I ....................... $ 185,267 $ 54,601 $ 4,958 $ 19,628 $ 9,400 $ 539
M Fund Inc. .................... -- -- -- -- --
Interest income on
policy loans ................... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total investment income .......... 185,267 54,601 4,958 19,628 9,400 539
Expenses:
Mortality and expense risks ..... 27,141 5,346 287 1,979 658 30
---------- ---------- ---------- ---------- ---------- ----------
Net investment income ............ 158,126 49,255 4,671 17,649 8,742 509
Net realized and
unrealized gain (loss) on
investments:
Net realized gain (loss) ....... 443,879 14,525 620 3,991 348 36
Net unrealized
appreciation (depreciation)
during the period .............. 585,673 146,714 6,278 4,308 1,260 8
---------- ---------- ---------- ---------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments ........... 1,029,552 161,239 6,898 8,299 1,608 44
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from
operations ...................... $1,187,678 $ 210,494 $ 11,569 $ 25,948 $ 10,350 $ 553
========== ========== ========== ========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
TURNER CORE GROWTH BRANDES INTERNATIONAL EQUITY
SUBACCOUNT SUBACCOUNT
------------------------------------------ -------------------------------------------
1998 1997 1996* 1998 1997 1996*
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I ....................... $ -- $ -- $ -- $ -- $ -- $ --
M Fund Inc. .................... 2,231 6,373 958 14,444 1,796 510
Interest income on
policy loans ................... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total investment income .......... 2,231 6,373 958 14,444 1,796 510
Expenses:
Mortality and expense risks ..... 565 301 83 1,158 684 173
---------- ---------- ---------- ---------- ---------- ----------
Net investment income ............ 1,666 6,072 875 13,286 1,112 337
Net realized and
unrealized gain (loss) on
investments:
Net realized gain (loss) ........ 2,780 839 48 600 888 (91)
Net unrealized
appreciation (depreciation)
during the period .............. 22,686 6,487 784 8,581 (1,473) (1,056)
---------- ---------- ---------- ---------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments ........... 25,466 7,326 832 9,181 (585) (1,147)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from
operations ...................... $ 27,132 $ 13,398 $ 1,707 $ 22,467 $ 527 $ (810)
========== ========== ========== ========== ========== ==========
</TABLE>

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

See accompanying notes.

75
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF OPERATIONS (CONTINUED)

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
EMERGING SMALL/ HIGH
MARKETS GLOBAL BOND MID CAP YIELD
FRONTIER CAPITAL APPRECIATION EQUITY EQUITY INDEX CORE BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------- ---------- ---------- ---------- ---------- ----------
1998 1997 1996* 1998** 1998** 1998** 1998** 1998**
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series
Trust I .......................... $ -- $ -- $ -- $ 1 $ 117 $ 296 $ -- $ 50
M Fund Inc. ....................... 12,832 6,463 -- -- -- -- -- --
Interest income on policy loans .... -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- --------
Total investment income ............. 12,832 6,463 -- 1 117 296 -- 50
Expenses:
Mortality and expense risks ........ 13,446 1,409 477 0 60 11 48 2
-------- -------- -------- -------- -------- -------- -------- --------
Net investment income ............... (614) 5,054 (477) 1 57 285 (48) 48
Net realized and unrealized gain
(loss) on investments:
Net realized gain (loss) ........... 23,061 8,970 6,683 (1) (16) (26) (1,957) (108)
Net unrealized appreciation
(depreciation) during the period .. (840) 32,469 1,317 (48) (303) (147) 1,888 (19)
-------- -------- -------- -------- -------- -------- -------- --------
Net realized and unrealized gain
(loss) on investments .............. 22,221 41,439 8,000 (48) (319) (173) (69) (127)
-------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in net
assets resulting from operations ... $ 21,607 $ 46,493 $ 7,523 $ (48) $ (262) $ 112 $ (117) $ (79)
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>

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

See accompanying notes.

76
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEARS AND PERIODS ENDED DECEMBER 31,

<TABLE>
<CAPTION>
LARGE CAP GROWTH SOVEREIGN BOND
SUBACCOUNT SUBACCOUNT
--------------------------------------- ---------------------------------------
1998 1997 1996 1998 1997 1996
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) ............. $ 2,820,359 $ 1,690,466 $ 1,919,621 $ 5,578,813 $ 4,779,635 $ 4,118,655
Net realized gain (loss) ................. 433,509 292,430 145,304 (142,628) (230,607) (169,158)
Net unrealized appreciation (depreciation)
during the period ....................... 4,558,660 2,142,494 3,756 (102,600) 1,277,686 (1,418,707)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations ................ 7,812,528 4,125,390 2,068,681 5,333,585 5,826,714 2,530,790
From policyholder transactions:
Net premiums from policyholders .......... 6,922,934 5,387,401 4,588,842 10,038,753 10,001,325 12,282,665
Net benefits to policyholders ............ (4,268,727) (3,728,476) (3,100,493) (8,215,396) (8,526,521) (8,373,358)
Net increase in policy loans ............. 399,407 326,883 174,445 241,068 474,983 344,564
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting from
policyholder transactions ................ 3,053,614 1,985,808 1,662,794 2,064,425 1,949,787 4,253,871
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets ................ 10,866,142 6,111,198 3,731,475 7,398,010 7,776,501 6,784,661
Net assets at beginning of period ......... 20,192,116 14,080,918 10,349,443 69,712,885 61,936,384 55,151,723
----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period ............... $31,058,258 $20,192,116 $14,080,918 $77,110,895 $69,712,885 $61,936,384
=========== =========== =========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL CAP GROWTH
SUBACCOUNT SUBACCOUNT
--------------------------------------- ---------------------------------------
1998 1997 1996 1998 1997 1996*
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income (loss) ............. $ 734,599 $ 186,725 $ 35,434 $ (8,233) $ (3,795) $ (378)
Net realized gain
(loss) .................................. 52,891 50,829 25,854 21,741 6,475 (690)
Net unrealized appreciation
(depreciation) during the period ........ 13,239 (463,778) 217,574 204,674 92,108 (5,174)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations ......... 800,729 (226,224) 278,862 218,182 94,788 (6,242)
From policyholder transactions:
Net premiums from policyholders .......... 1,489,281 1,504,962 1,691,043 891,480 809,492 276,720
Net benefits to policyholders ............ (1,389,338) (1,091,126) (1,137,159) (269,586) (199,118) (13,425)
Net increase in policy loans ............. 42,026 13,761 47,823 -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net
assets resulting from policyholder
transactions ............................. 141,969 427,597 601,707 621,894 610,374 263,295
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets ................ 942,698 201,373 880,569 840,076 705,162 257,053
Net assets at beginning of period ......... 4,164,676 3,963,303 3,082,734 962,215 257,053 0
----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period ............... $ 5,107,374 $ 4,164,676 $ 3,963,303 $ 1,802,291 $ 962,215 $ 257,053
=========== =========== =========== =========== =========== ===========
</TABLE>

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

See accompanying notes.

77
<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>
INTERNATIONAL BALANCED MID CAP GROWTH
SUBACCOUNT SUBACCOUNT
------------------------------------------ ------------------------------------------
1998 1997 1996* 1998 1997 1996*
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) ............. $ 11,414 $ 3,580 $ 653 $ 125,061 $ (2,164) $ 119
Net realized gain (loss) ................. 1,050 429 9 26,192 5,866 (17)
Net unrealized appreciation
(depreciation) during the period ........ 12,294 (4,312) 899 193,946 66,874 1,684
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ................ 24,758 (303) 1,561 345,199 70,576 1,786
From policyholder transactions:
Net premiums from policyholders .......... 150,466 62,380 32,725 722,359 457,341 172,848
Net benefits to policyholders ............ (50,204) (9,531) (1,520) (211,806) (125,239) (9,482)
Net increase in policy loans ............. -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting from
policyholder transactions ................ 100,262 52,849 31,205 560,553 332,102 163,366
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets ................ 125,020 52,546 32,766 905,752 402,678 165,152
Net assets at beginning of period ......... 85,312 32,766 0 567,830 165,152 0
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of period ............... $ 210,322 $ 85,312 $ 32,766 $ 1,473,582 $ 567,830 $ 165,152
============ ============ ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
LARGE CAP VALUE MONEY MARKET
SUBACCOUNT SUBACCOUNT
------------------------------------------ ------------------------------------------
1998 1997 1996* 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets from operations:
Net investment income (loss) ............. $ 169,876 $ 53,962 $ 1,838 $ 2,139,937 $ 708,721 $ 1,099,660
Net realized gain (loss) ................. 68,953 17,858 588 -- -- --
Net unrealized appreciation (depreciation)
during the period ....................... 64,132 80,036 4,787 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations ................ 302,961 151,856 7,213 2,139,937 708,721 1,099,660
From policyholder transactions:
Net premiums from policyholders .......... 2,321,441 1,506,756 107,940 55,692,824 11,210,536 34,216,886
Net benefits to policyholders ............ (528,449) (85,021) (10,621) (22,850,788) (9,620,370) (44,096,427)
Net increase (decrease) in policy loans .. -- -- -- (198,682) 103,247 (134,332)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder transactions . 1,792,991 1,421,735 97,319 32,643,354 1,693,413 (10,013,873)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets ..... 2,095,952 1,573,591 104,532 34,783,291 2,402,134 (8,914,213)
Net assets at beginning of period ......... 1,678,123 104,532 0 14,485,240 12,083,106 20,997,319
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of period ............... $ 3,774,075 $ 1,678,123 $ 104,532 $ 49,268,531 $ 14,485,240 $ 12,083,106
============ ============ ============ ============ ============ ============
</TABLE>

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

See accompanying notes.

78
<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 VALUE DIVERSIFIED MID CAP GROWTH
SUBACCOUNT SUBACCOUNT
------------------------------------------ ------------------------------------------
1998 1997 1996* 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income .................. $ 19,063 $ 143,319 $ 4,438 $ 66,339 $ 385,735 $ 103,759
Net realized gain ...................... 74,634 10,646 8,413 33,249 276,956 81,916
Net unrealized appreciation
(depreciation) during the period ...... (944,401) 145,409 14,211 126,465 (477,912) 264,010
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations .............. (850,704) 299,374 27,062 226,053 184,779 449,685
From policyholder transactions:
Net premiums from policyholders ........ 5,639,732 1,620,752 284,225 1,812,711 2,554,133 2,077,582
Net benefits to policyholders .......... (775,357) (112,395) (82,860) (1,214,489) (1,628,677) (497,713)
Net increase in policy loans ........... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from policyholder transactions ......... 4,864,375 1,508,357 201,365 598,224 925,456 1,579,869
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets .............. 4,013,671 1,807,731 228,427 824,277 1,110,235 2,029,554
Net assets at beginning of period ....... 2,036,158 228,427 0 4,091,961 2,981,726 952,172
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of period ............. $ 6,049,829 $ 2,036,158 $ 228,427 $ 4,916,238 $ 4,091,961 $ 2,981,726
============ ============ ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
REAL ESTATE EQUITY GROWTH & INCOME
SUBACCOUNT SUBACCOUNT
------------------------------------------ ------------------------------------------
1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income .................. $ 327,346 $ 320,137 $ 173,353 $ 26,835,871 $ 25,969,260 $ 19,126,495
Net realized gain (loss) ............... 158,205 181,015 39,891 3,223,935 1,982,518 820,430
Net unrealized appreciation
(depreciation) during the period ...... (1,546,717) 165,392 637,301 32,918,552 18,247,212 4,555,481
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting from
operations ............................. (1,061,166) 666,544 850,545 62,978,358 46,198,990 24,502,406
From policyholder transactions:
Net premiums from policyholders ........ 3,382,263 1,748,132 1,161,434 35,108,834 30,351,780 32,903,369
Net benefits to policyholders .......... (1,663,696) (1,218,783) (1,008,266) (29,649,984) (24,619,851) (21,130,764)
Net increase in policy loans ........... (1,103) 34,311 33,973 3,672,137 3,346,307 1,965,133
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting from
policyholder transactions .............. 1,717,464 563,660 187,141 9,130,987 9,078,236 13,737,738
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets .............. 656,298 1,230,204 1,037,686 72,109,345 55,277,226 38,240,144
Net assets at beginning of period ....... 4,874,710 3,644,506 2,606,820 224,984,051 169,706,825 131,466,681
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of period ............. $ 5,531,008 $ 4,874,710 $ 3,644,506 $297,093,396 $224,984,051 $169,706,825
============ ============ ============ ============ ============ ============
</TABLE>

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

See accompanying notes.

79
<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>
MANAGED SHORT-TERM BOND
SUBACCOUNT SUBACCOUNT
------------------------------------------ ------------------------------------------
1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income ................ $ 9,624,999 $ 8,162,423 $ 8,984,359 $ 24,670 $ 915,175 $ 186,525
Net realized gain (loss) ............. 791,245 437,661 230,806 265 (27,616) 577
Net unrealized appreciation
(depreciation) during the period .... 6,629,458 4,941,061 (2,103,918) (4,247) 226,435 225,129
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting
from
operations ........................... 17,045,702 13,541,145 7,111,247 20,688 1,113,994 412,231
From policyholder transactions:
Net premiums from policyholders ...... 13,116,210 13,194,907 14,481,195 420,697 116,602 24,721,092
Net benefits to policyholders ........ (14,539,301) (14,539,295) (12,942,967) (71,999) (26,168,835) (147,655)
Net increase in policy loans ......... 1,134,137 1,257,640 719,880 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder
transactions ......................... (288,954) (86,748) 2,258,108 348,698 (26,052,233) 24,573,437
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets . 16,756,748 13,454,397 9,369,355 369,386 (24,938,239) 24,985,668
Net assets at beginning of period ..... 94,057,915 80,603,518 71,234,163 127,103 25,065,342 79,674
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of period ........... $110,814,663 $ 94,057,915 $ 80,603,518 $ 496,489 $ 127,103 $ 25,065,342
============ ============ ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
SMALL CAP VALUE INTERNATIONAL OPPORTUNITIES
SUBACCOUNT SUBACCOUNT
------------------------------------------ ------------------------------------------
1998 1997 1996* 1998 1997 1996*
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income ................ $ 822 $ 92,574 $ 1,525 $ 11,862 $ 3,587 $ 187
Net realized gain .................... 29,257 19,812 11 33,474 3,191 57
Net unrealized appreciation
(depreciation) during the period .... (105,331) (12,804) 2,702 272,314 (12,223) 7,271
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from operations ..... (75,252) 99,582 4,238 317,650 (5,445) 7,515
From policyholder transactions:
Net premiums from policyholders ...... 1,644,666 1,224,547 63,825 3,814,201 295,915 141,907
Net benefits to policyholders ........ (270,585) (137,364) (3,155) (339,134) (46,736) (4,149)
Net increase in policy loans ......... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net
assets resulting from policyholder
transactions ......................... 1,374,081 1,087,183 60,670 3,475,067 249,179 137,758
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets ............ 1,298,829 1,186,765 64,908 3,792,717 243,734 145,273
Net assets at beginning of period ..... 1,251,673 64,908 0 389,007 145,273 0
------------ ------------ ------------ ------------ ------------ ------------
Net assets at end of period ........... $ 2,550,502 $ 1,251,673 $ 64,908 $ 4,181,724 $ 389,007 $ 145,273
============ ============ ============ ============ ============ ============
</TABLE>

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

See accompanying notes.

80
<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>
EQUITY INDEX STRATEGIC BOND
SUBACCOUNT SUBACCOUNT
------------------------------------------- -------------------------------------------
1998 1997 1996* 1998 1997 1996*
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets
from operations:
Net investment income ............. $ 158,126 $ 49,255 $ 4,671 $ 17,649 $ 8,742 $ 509
Net realized gain ................. 443,879 14,525 620 3,991 348 36
Net unrealized appreciation
during the period ................ 585,673 146,714 6,278 4,308 1,260 8
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net
assets resulting from operations .. 1,187,678 210,494 11,569 25,948 10,350 553
From policyholder transactions:
Net premiums from policyholders ... 4,822,053 1,827,052 234,122 381,024 161,548 13,347
Net benefits to policyholders ..... (885,493) (149,826) (9,816) (83,865) (37,799) (682)
Net increase in policy loans ...... -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net
assets resulting from policyholder
transactions ...................... 3,936,560 1,677,226 224,306 297,159 123,749 12,665
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets ......... 5,124,238 1,887,720 235,875 323,107 134,099 13,218
Net assets at beginning of period .. 2,123,595 235,875 0 147,317 13,218 0
----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period ........ $ 7,247,833 $ 2,123,595 $ 235,875 $ 470,424 $ 147,317 $ 13,218
=========== =========== =========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
TURNER CORE GROWTH BRANDES INTERNATIONAL EQUITY
SUBACCOUNT SUBACCOUNT
------------------------------------------- -------------------------------------------
1998 1997 1996* 1998 1997 1996*
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from operations:
Net investment income ............. $ 1,666 $ 6,072 $ 875 $ 13,286 $ 1,112 $ 337
Net realized gain (loss) .......... 2,780 839 48 600 888 (91)
Net unrealized appreciation
(depreciation)
during the period ................ 22,686 6,487 784 8,581 (1,473) (1,056)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from
operations ........................ 27,132 13,398 1,707 22,467 527 (810)
From policyholder transactions:
Net premiums from policyholders ... 39,069 33,658 28,147 141,892 82,259 91,573
Net benefits to policyholders ..... (9,834) (7,208) (1,062) (34,941) (45,350) (1,860)
Net increase in policy loans ...... -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net
assets resulting from policyholder
transactions ...................... 29,235 26,450 27,085 106,951 36,909 89,713
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets ......... 56,367 39,848 28,792 129,418 37,436 88,903
Net assets at beginning of period .. 68,640 28,792 0 126,339 88,903 0
----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period ........ $ 125,007 $ 68,640 $ 28,792 $ 255,755 $ 126,339 $ 88,903
=========== =========== =========== =========== =========== ===========
</TABLE>

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

See accompanying notes.

81
<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>
EMERGING SMALL/ HIGH
MARKETS GLOBAL BOND MID CAP YIELD
FRONTIER CAPITAL APPRECIATION EQUITY EQUITY INDEX CORE BOND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------------------------------- ---------- ---------- ---------- ---------- ----------
1998 1997 1996* 1998** 1998** 1998** 1998** 1998**
---------- -------- -------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
from operations:
Net investment income (loss) .... $ (614) $ 5,054 $ (477) $ 1 $ 57 $ 285 $ (48) $ 48
Net realized gain (loss) ........ 23,061 8,970 6,683 (1) (16) (26) (1,957) (108)
Net unrealized appreciation
(depreciation) during the period (840) 32,469 1,317 (48) (303) (147) 1,888 (19)
---------- -------- -------- ----- ------- ------- -------- ---------
Net increase (decrease) in net
assets resulting from operations 21,607 46,493 7,523 (48) (262) 112 (117) (79)
From policyholder transactions:
Net premiums from policyholders . 2,465,299 138,553 230,461 784 17,519 16,730 52,673 108,274
Net benefits to policyholders ... (227,386) (70,647) (78,775) (7) (762) (2,293) (19,857) (102,742)
Net increase in policy loans .... -- -- -- -- -- -- -- --
---------- -------- -------- ----- ------- ------- -------- ---------
Net increase in net assets
resulting from policyholder
transactions .................... 2,237,913 67,906 151,686 777 16,757 14,437 32,816 5,532
---------- -------- -------- ----- ------- ------- -------- ---------
Net increase in net assets ....... 2,259,520 114,399 159,209 729 16,495 14,549 32,699 5,453
Net assets at beginning of period 273,608 159,209 0 0 0 0 0 0
---------- -------- -------- ----- ------- ------- -------- ---------
Net assets at end of period ...... $2,533,128 $273,608 $159,209 $ 729 $16,495 $14,549 $ 32,699 $ 5,453
========== ======== ======== ===== ======= ======= ======== =========
</TABLE>

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

See accompanying notes.

82
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1998

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

Federal Income Taxes

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

83
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

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.

84
<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, 1998 were as follows:

<TABLE>
<CAPTION>
SUBACCOUNT SHARES OWNED COST VALUE
---------- ------------ ------------ -------------
<S> <C> <C> <C>
Large Cap Growth .............. 1,110,523 $ 21,789,053 $ 29,089,283
Sovereign Bond ................ 6,771,659 67,673,435 67,185,725
International Equity Index .... 311,263 5,008,102 4,843,434
Small Cap Growth .............. 138,771 1,510,683 1,802,291
International Balanced ........ 18,907 201,451 210,332
Mid Cap Growth ................ 97,488 1,211,077 1,473,582
Large Cap Value ............... 269,187 3,625,121 3,774,075
Money Market .................. 4,724,271 47,242,706 47,242,706
Mid Cap Value ................. 496,463 6,834,611 6,049,829
Diversified Mid Cap Growth .... 308,429 4,879,083 4,916,238
Real Estate Equity ............ 425,847 6,005,341 5,305,959
Growth & Income ............... 13,745,190 204,200,346 267,925,840
Managed ....................... 6,309,777 86,765,615 98,661,041
Short-Term Bond ............... 49,410 500,882 496,489
Small Cap Value ............... 220,083 2,665,935 2,550,502
International Opportunities ... 342,354 3,914,392 4,181,723
Equity Index .................. 409,419 6,509,168 7,247,833
Strategic Bond ................ 44,382 464,847 470,424
Turner Core Growth ............ 7,007 95,050 125,007
Brandes International Equity .. 23,594 249,703 255,755
Frontier Capital Appreciation . 167,868 2,500,182 2,533,128
Emerging Markets .............. 103 777 729
Global Equity ................. 1,681 16,798 16,495
Bond Index .................... 1,428 14,696 14,549
Small/Mid Cap CORE ............ 3,626 30,811 32,699
High Yield Bond ............... 591 5,472 5,453
</TABLE>

85
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--(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 1998,
were as follows:

<TABLE>
<CAPTION>
SUBACCOUNT PURCHASES SALES
---------- ----------- -----------
<S> <C> <C>
Large Cap Growth ...................... $ 6,774,969 $ 1,312,334
Sovereign Bond ........................ 11,567,936 4,169,838
International Equity Index ............ 1,784,110 951,538
Small Cap Growth ...................... 806,640 192,979
International Balanced ................ 126,798 15,122
Mid Cap Growth ........................ 807,563 121,950
Large Cap Value ....................... 2,359,015 396,146
Money Market .......................... 56,538,955 21,551,247
Mid Cap Value ......................... 5,537,800 654,362
Diversified Mid Cap Growth ............ 1,324,819 660,257
Real Estate Equity .................... 2,869,843 824,508
Growth & Income ....................... 42,879,493 10,719,822
Managed ............................... 14,154,576 5,992,753
Short-Term Bond ....................... 447,882 74,515
Small Cap Value ....................... 1,649,871 274,967
International Opportunities ........... 3,882,937 396,009
Equity Index .......................... 6,624,974 2,530,288
Strategic Bond ........................ 394,527 79,721
Turner Core Growth .................... 42,112 11,211
Brandes International Equity .......... 151,328 31,092
Frontier Capital Appreciation ......... 2,487,618 250,320
Emerging Markets ...................... 785 7
Global Equity ......................... 17,047 233
Bond Index ............................ 17,026 2,304
Small/Mid Cap CORE .................... 41,751 8,983
High Yield Bond ....................... 6,547 967
</TABLE>

5. IMPACT OF YEAR 2000 (UNAUDITED)

The John Hancock Mutual Variable Life Insurance Account UV, along with John
Hancock Mutual Life Insurance Company, its ultimate parent (together, John
Hancock), is executing its plan to address the impact of the Year 2000 issues
that result from computer programs being written using two digits to reflect the
year rather than four to define the applicable year and century. Historically,
the first two digits were hardcoded to save memory. Many of the John Hancock's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in an
information technology (IT) system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices or engage in similar normal business
activities. In addition, non-IT systems including, but not limited to, security
alarms, elevators and telephones are subject to malfunction due to their
dependence on embedded technology such as microcontrollers for proper operation.
As described, the Year 2000 project presents a number of challenges for
financial institutions since the correction of Year 2000 issues in IT and non-IT
systems will be complex and costly for the entire industry.

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

86
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

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

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

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

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

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

87
<PAGE>

JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

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

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

88
<PAGE>

ALPHABETICAL INDEX OF KEY WORDS AND PHRASES

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

<TABLE>
<CAPTION>
KEY WORD OR PHRASE PAGE KEY WORD OR PHRASE PAGE
<S> <C> <C> <C>
Account ........................ 30 monthly deduction date ........ 32
mortality and expense risk
account value .................. 9 charge ....................... 11
attained age ................... 10 Option 1; Option 2; Option 3 .. 16
base policy premium ............ 7 optional benefits ............. 11
basic account value ............ 34 owner ......................... 4
beneficiary .................... 40 partial surrender ............. 17
business day ................... 21 partial withdrawal ............ 15
changing Option 1 or 2 ......... 17 partial withdrawal charge ..... 12
charges ........................ 10 payment options ............... 18
Code ........................... 36 policy anniversary ............ 31
cost of insurance rates ........ 10 policy year ................... 31
date of issue .................. 31 premium; premium payment ...... 4
death benefit .................. 4 premium recalculation ......... 8
deductions ..................... 10 prospectus .................... 2
dollar cost averaging .......... 15 receive; receipt .............. 20
Excess Value ................... 6 reinstate; reinstatement ...... 7
expenses of the Series Funds ... 12 Required Premium .............. 5
fixed investment option ........ 30 SEC ........................... 2
full surrender ................. 15 Separate Account UV ........... 30
fund ........................... 2 Series Funds .................. 2
grace period ................... 6 Servicing Office .............. 1
Guaranteed Death Benefit ....... 16 special loan account .......... 15
guaranteed maximum
recalculation premium ......... 8 subaccount .................... 30
insurance charge ............... 10 Sum Insured ................... 16
insured person ................. 4 surrender ..................... 15
investment options ............. 1 surrender charge .............. 15
John Hancock ................... 30 surrender value ............... 15
John Hancock Variable Series
Trust ......................... 2 tax considerations ............ 36
lapse .......................... 6 telephone transfers ........... 21
loan ........................... 15 transfers of account value .... 14
loan interest .................. 15 variable investment options ... 1
maximum premiums ............... 5 we; us ........................ 30
minimum insurance amount ....... 17 withdrawal .................... 15
minimum premiums ............... 5 withdrawal charges ............ 12
modified endowment contract .... 37 you; your ..................... 4
</TABLE>

89
<PAGE>

[LOGO] JOHN HANCOCK(R)

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

S8144NY 5/99
<PAGE>

PROSPECTUS DATED MAY 3, 1999

FLEXV2

a scheduled premium variable life insurance policy
issued by

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY ("JOHN HANCOCK")

JOHN HANCOCK LIFE SERVICING OFFICE
----------------------------------

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

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

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

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

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

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

GUIDE TO THIS PROSPECTUS

This prospectus is arranged in the following way:

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

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

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

. Behind the Additional Information section are the financial statements for
John Hancock and Separate Account UV. These start on page 43.

. Finally, there is an Alphabetical Index of Key Words and Phrases at the
back of the prospectus on page 89.

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

**********

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

2
<PAGE>

BASIC INFORMATION

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

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

3
<PAGE>

WHAT IS THE POLICY?

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

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

. Borrow amounts you have in the investment options

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

. Change the beneficiary who will receive the death benefit

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

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

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

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

WHO OWNS THE POLICY?

HOW CAN I INVEST MONEY IN THE POLICY?

Premium Payments

4
<PAGE>

Maximum premium payments

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

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

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

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

Ways to pay premiums

We will also accept premiums:

. by wire or by exchange from another insurance company,

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

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

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

IS THERE A MINIMUM AMOUNT I MUST INVEST?

Required Premiums

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

5
<PAGE>

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

Excess Value and its components

Lapse

6
<PAGE>

Options on Lapse

Reinstatement

Amount of Required Premiums

7
<PAGE>

Premium recalculation

8
<PAGE>

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

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

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

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

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

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

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

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

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

. the amount you invested,

9
<PAGE>

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

. minus all charges we deduct, and

. minus all withdrawals you have made.

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

WHAT CHARGES WILL JOHN HANCOCK DEDUCT FROM MY INVESTMENT IN THE POLICY?

Deductions from premium payments

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

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

Deductions from account value

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

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

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

10
<PAGE>

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

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

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

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

11
<PAGE>

charged. A policy of less than $250,000 Guaranteed Death Benefit at time of
surrender or lapse is not currently charged if the surrender or lapse is after
the fourth policy year and is charged no more than $300 if the surrender or
lapse is in the first four policy years. We may withdraw or modify these lower
current charges at any time.

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

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

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

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

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

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

12
<PAGE>

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

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

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

WHAT OTHER CHARGES COULD JOHN HANCOCK IMPOSE IN THE FUTURE?

13
<PAGE>

HOW CAN I CHANGE MY POLICY'S INVESTMENT ALLOCATIONS?

Future premium payments

Transfers of existing account value

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

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

. The most you can transfer at any one time is the greater of $500 or 25% of the
assets in your fixed investment option.

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

Limitation on number of investment options

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

Dollar cost averaging

14
<PAGE>

HOW CAN I ACCESS MY INVESTMENT IN THE POLICY?

Full surrender

Partial withdrawals of Excess Value

Policy loans

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

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

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

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

15
<PAGE>

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

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

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

HOW MUCH WILL JOHN HANCOCK PAY WHEN THE INSURED PERSON DIES?

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

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

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

If neither Option 1 nor Option 2 meets your objectives, you may elect Option
3. If you elect Option 3 and your policy is issued in New York, we will issue a
special Option 3 endorsement to your policy. If your policy is issued in New
York and the insured person is les than age 20 at the tiem of application for
the policy, Option 3 will automatically apply and teh remain applicable for the
life of the policy.

16
<PAGE>

The minimum insurance amount

HOW CAN I CHANGE MY POLICY'S INSURANCE COVERAGE?

Change of death benefit option

Partial surrenders

Tax consequences

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

CAN I CANCEL MY POLICY AFTER IT'S ISSUED?

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

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

17
<PAGE>

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

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

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

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

Choosing a payment option

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

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

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

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

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

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

18
<PAGE>

Changing a payment option

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

Tax impact

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

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

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

State law insurance requirements

Variations in expenses or risks

HOW WILL MY POLICY BE TREATED FOR INCOME TAX PURPOSES?

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

19
<PAGE>

HOW DO I COMMUNICATE WITH JOHN HANCOCK?

General Rules

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

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

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

. transfers of account value among investment options

. change of allocation among investment options for new premium payments

. change of death benefit option

. change of beneficiary

. election of payment option for policy proceeds

. tax withholding elections

. election of telephone transaction privilege

Telephone Transactions

20
<PAGE>

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

21
<PAGE>

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

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

22
<PAGE>

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

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

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

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

23
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 308 $ 340 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 780 868 961 10 98 191
3 2,979 100,000 100,000 100,000 1,267 1,445 1,638 362 540 733
4 4,073 100,000 100,000 100,000 1,738 2,038 2,375 698 998 1,335
5 5,222 100,000 100,000 100,000 2,189 2,645 3,178 1,014 1,470 2,003
6 6,428 100,000 100,000 100,000 2,622 3,268 4,053 1,312 1,958 2,743
7 7,694 100,000 100,000 100,000 3,034 3,904 5,005 1,824 2,694 3,795
8 9,024 100,000 100,000 100,000 3,424 4,553 6,043 2,304 3,433 4,923
9 10,420 100,000 100,000 100,000 3,789 5,214 7,172 2,859 4,284 6,242
10 11,886 100,000 100,000 100,000 4,140 5,900 8,422 3,600 5,360 7,882
11 13,425 100,000 100,000 100,000 4,466 6,599 9,789 4,016 6,149 9,339
12 15,042 100,000 100,000 100,000 4,763 7,309 11,283 4,448 6,994 10,968
13 16,739 100,000 100,000 100,000 5,032 8,029 12,920 4,852 7,849 12,740
14 18,521 100,000 100,000 100,000 5,270 8,760 14,715 5,270 8,760 14,715
15 20,392 100,000 100,000 100,000 5,475 9,499 16,684 5,475 9,499 16,684
16 22,356 100,000 100,000 100,000 5,645 10,245 18,846 5,645 10,245 18,846
17 24,419 100,000 100,000 100,000 5,773 10,992 21,220 5,773 10,992 21,220
18 26,585 100,000 100,000 100,000 5,852 11,734 23,828 5,852 11,734 23,828
19 28,859 100,000 100,000 100,000 5,880 12,469 26,694 5,880 12,469 26,694
20 31,247 100,000 100,000 100,000 5,846 13,187 29,847 5,846 13,187 29,847
25 45,102 100,000 100,000 100,000 4,515 16,306 51,288 4,515 16,306 51,288
30 62,785 100,000 100,000 105,613 215 17,640 88,011 215 17,640 88,011
35 85,353 100,000 100,000 172,293 0 14,332 149,820 0 14,332 149,820
40 149,402 100,000 100,000 257,737 0 22,211 245,464 0 22,211 245,464
45 231,148 100,000 100,000 426,009 0 0 405,723 0 0 405,723
</TABLE>

---------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $6,975 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $6,975 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

24
<PAGE>

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

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

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

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

25
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 308 $ 340 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 780 868 961 10 98 191
3 2,979 100,000 100,000 100,000 1,267 1,445 1,638 362 540 733
4 4,073 100,000 100,000 100,000 1,738 2,038 2,375 698 998 1,335
5 5,222 100,000 100,000 100,000 2,189 2,645 3,178 1,014 1,470 2,003
6 6,428 100,000 100,000 100,000 2,622 3,268 4,053 1,312 1,958 2,743
7 7,694 100,000 100,000 100,000 3,034 3,904 5,005 1,824 2,694 3,795
8 9,024 100,000 100,000 100,000 3,424 4,553 6,043 2,304 3,433 4,923
9 10,420 100,000 100,000 100,000 3,789 5,214 7,172 2,859 4,284 6,242
10 11,886 100,000 100,000 100,000 4,140 5,900 8,422 3,600 5,360 7,882
11 13,425 100,000 100,000 100,000 4,466 6,599 9,789 4,016 6,149 9,339
12 15,042 100,000 100,000 100,000 4,763 7,309 11,283 4,448 6,994 10,968
13 16,739 100,000 100,000 100,000 5,032 8,029 12,920 4,852 7,849 12,740
14 18,521 100,000 100,000 100,000 5,270 8,760 14,715 5,270 8,760 14,715
15 20,392 100,000 100,000 100,000 5,475 9,499 16,684 5,475 9,499 16,684
16 22,356 100,000 100,000 100,000 5,645 10,245 18,846 5,645 10,245 18,846
17 24,419 100,000 100,000 100,000 5,773 10,992 21,220 5,773 10,992 21,220
18 26,585 100,000 100,000 100,000 5,852 11,734 23,828 5,852 11,734 23,828
19 28,859 100,000 100,000 100,872 5,880 12,469 26,693 5,880 12,469 26,693
20 31,247 100,000 100,000 102,302 5,846 13,187 29,835 5,846 13,187 29,835
25 45,102 100,000 100,000 114,311 4,515 16,306 50,810 4,515 16,306 50,810
30 62,785 100,000 100,000 138,633 215 17,640 84,582 215 17,640 84,582
35 85,353 100,000 100,000 183,851 0 14,332 139,280 0 14,332 139,280
40 149,402 100,000 100,000 251,493 0 21,498 224,549 0 21,498 224,549
45 231,148 100,000 100,000 387,490 0 0 366,691 0 0 366,691
</TABLE>

- ---------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $6,975 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $6,975 at 6% and $0 at 12%, subject to any maximums required
to maintain the Policy's status for federal income tax purposes.

26
<PAGE>

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

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

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

- ---------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $5,809 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $5,809 at 6% and $0 at 12%.

27
<PAGE>

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

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

<TABLE>
<CAPTION>
Death Benefit(3) Account Value(3) Surrender Value(3)
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
- ------- -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 945 $100,000 $100,000 $100,000 $ 276 $ 308 $ 340 $ 0 $ 0 $ 0
2 1,937 100,000 100,000 100,000 780 868 961 10 98 191
3 2,979 100,000 100,000 100,000 1,267 1,445 1,638 362 540 733
4 4,073 100,000 100,000 100,000 1,738 2,038 2,375 698 998 1,335
5 5,222 100,000 100,000 100,000 2,189 2,645 3,178 1,014 1,470 2,003
6 6,428 100,000 100,000 100,000 2,622 3,268 4,053 1,312 1,958 2,743
7 7,694 100,000 100,000 100,000 3,034 3,904 5,005 1,824 2,694 3,795
8 9,024 100,000 100,000 100,000 3,424 4,553 6,043 2,304 3,433 4,923
9 10,420 100,000 100,000 100,000 3,789 5,214 7,172 2,859 4,284 6,242
10 11,886 100,000 100,000 100,000 4,140 5,900 8,422 3,600 5,360 7,882
11 13,425 100,000 100,000 100,000 4,466 6,599 9,789 4,016 6,149 9,339
12 15,042 100,000 100,000 100,000 4,763 7,309 11,283 4,448 6,994 10,968
13 16,739 100,000 100,000 100,000 5,032 8,029 12,920 4,852 7,849 12,740
14 18,521 100,000 100,000 100,000 5,270 8,760 14,715 5,270 8,760 14,715
15 20,392 100,000 100,000 100,000 5,475 9,499 16,684 5,475 9,499 16,684
16 22,356 100,000 100,000 100,000 5,645 10,245 18,846 5,645 10,245 18,846
17 24,419 100,000 100,000 100,000 5,773 10,992 21,220 5,773 10,992 21,220
18 26,585 100,000 100,000 100,000 5,852 11,734 23,828 5,852 11,734 23,828
19 28,859 100,000 100,000 100,000 5,880 12,469 26,694 5,880 12,469 26,694
20 31,247 100,000 100,000 100,000 5,846 13,187 29,847 5,846 13,187 29,847
25 45,102 100,000 100,000 100,000 4,515 16,306 51,284 4,515 16,306 51,284
30 62,785 100,000 100,000 145,677 215 17,640 85,591 215 17,640 85,591
35 85,353 100,000 100,000 208,503 0 14,332 137,753 0 14,332 137,753
40 149,402 100,000 100,000 286,387 6,934 36,317 209,225 6,934 36,317 209,225
45 231,148 100,000 100,000 394,789 12,381 62,189 312,680 12,381 62,189 312,680
</TABLE>

- ---------
(1) Assumes annual premium payments of $900 per year until the premium
recalculation at age 70 and annual recalculated premium amounts thereafter.
If premiums are paid more frequently than annually, the above values shown
would be affected.
(2) Assumes payment of recalculated annual premium amounts of $6,975 after age
70. As indicated in note (3) below, the actual recalculated premium may be
lower or higher than this amount.
(3) Assumes payment of recalculated premiums after age 70 in annual amounts of
$8,404 at 0%, $6,975 at 6% and $0 at 12%.

28
<PAGE>

ADDITIONAL INFORMATION

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

<TABLE>
<CAPTION>
CONTENTS OF THIS SECTION PAGES TO SEE
- ------------------------ ------------
<S> <C>
Description of John Hancock ................................. 30
How we support the policy and investment options ............ 30-31
Procedures for issuance of a policy.......................... 31-32
Commencement of investment performance....................... 32
How we process certain policy transactions .................. 32-33
Effects of policy loans .................. .................. 33-34
How we calculate "basic policy value"..... .................. 34
Additional information about how certain policy charges work 34-35
How we market the policies................................... 35-36
Tax considerations........................................... 36-38
Reports that you will receive................................ 38
Voting privileges that you will have......................... 38-39
Changes that John Hancock can make as to your policy ........ 39
Adjustments we make to death benefits........................ 39
When we pay policy proceeds.................................. 39-40
Other details about exercising rights and paying benefits ... 40
Year 2000 Issues............................................. 40-41
Legal matters................................................ 41
Registration statement filed with the SEC.................... 41
Accounting and actuarial experts............................. 41
Financial statements of John Hancock and the Account ........ 41
List of Directors and Executive Officers of John Hancock .... 42
</TABLE>

29
<PAGE>

DESCRIPTION OF JOHN HANCOCK

HOW WE SUPPORT THE POLICY AND INVESTMENT OPTIONS

Separate Account UV

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

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

Our general account

30
<PAGE>

regard to the actual investment experience of the general account.

PROCEDURES FOR ISSUANCE OF A POLICY

Commencement of insurance coverage

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

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

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

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

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

Backdating

31
<PAGE>

Temporary coverage prior to policy delivery

Monthly deduction dates

COMMENCEMENT OF INVESTMENT PERFORMANCE

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

HOW WE PROCESS CERTAIN POLICY TRANSACTIONS

Premium payments

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

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

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

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

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

Transfers among investment options

32
<PAGE>

at the end of the business day in which we receive at our Life Servicing Office
notice satisfactory to us.

Dollar cost averaging

Telephone transfers and policy loans

Effective date of other policy transactions

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

. Reinstatements of lapsed policies

. Change of death benefit Option from 1 to 2

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

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

EFFECTS OF POLICY LOANS

The account value, the surrender value, and any death benefit above the
Guaranteed Death Benefit are permanently affected by any loan, whether or not it
is

33
<PAGE>

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

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

HOW WE CALCULATE BASIC ACCOUNT VALUE

ADDITIONAL INFORMATION ABOUT HOW CERTAIN POLICY CHARGES WORK

Sales expenses and related charges

Effect of premium payment pattern

34
<PAGE>

Monthly charges

Reduced charges for eligible classes

HOW WE MARKET THE POLICIES

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

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

35
<PAGE>

advertising) actually incurred in connection with the marketing and sale of the
policies.

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

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

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

TAX CONSIDERATIONS

Policy proceeds

In general, the owner will be taxed on the amount of distributions that exceed
the premiums paid under

36
<PAGE>

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

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

7-pay premium limit

37
<PAGE>

Corporate and H.R. 10 plans

REPORTS THAT YOU WILL RECEIVE

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

VOTING PRIVILEGES THAT YOU WILL HAVE

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

We determine the number of a fund's shares held in a subaccount attributable
to each owner by dividing the amount of a policy's account value held in the
subaccount by the net asset value of one share in the fund. Fractional votes
will be counted. We determine the number of shares as to which the owner may
give instructions as of the record date for the Trust's meeting. Owners of
policies may give instructions regarding the election of the Board of

38
<PAGE>

Trustees of the Trust, ratification of the selection of independent auditors,
approval of Trust investment advisory agreements and other matters requiring a
shareholder vote. We will furnish owners with information and forms to enable
owners to give voting instructions.

CHANGES THAT JOHN HANCOCK CAN MAKE AS TO YOUR POLICY

Changes relating to the Trust or the Account

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

Other permissible changes

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

. Combining or removing investment options

. Changes in the form of organization of any separate account

ADJUSTMENTS WE MAKE TO DEATH BENEFITS

WHEN WE PAY POLICY PROCEEDS

General

39
<PAGE>

death, we will pay the proceeds as a single sum, normally within 7 days
thereafter.

Delay to challenge coverage

Delay for check clearance

Delay of separate account proceeds

OTHER DETAILS ABOUT EXERCISING RIGHTS AND PAYING BENEFITS

Joint ownership

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

Assigning your policy

Your beneficiary

YEAR 2000 ISSUES

The advent of the Year 2000 presents a technological challenge to John
Hancock. In response to this challenge, John Hancock has developed and is
executing 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 its 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

40
<PAGE>

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.

LEGAL MATTERS

REGISTRATION STATEMENT FILED WITH THE SEC

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

ACCOUNTING AND ACTUARIAL EXPERTS

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 and Second Vice President of John Hancock.