<PAGE>
As filed with the Securities and Exchange Commission on November 1, 2000
Registration No. 33-76662
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-6
Post-Effective Amendment No. 9 to
Registration Statement Under
THE SECURITIES ACT OF 1933
----------------------
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
(Exact name of trust)
JOHN HANCOCK LIFE INSURANCE COMPANY
(Name of depositor)
JOHN HANCOCK PLACE
BOSTON, MASSACHUSETTS 02117
(Complete address of depositor's principal executive offices)
--------------------
RONALD J BOCAGE, ESQ.
JOHN HANCOCK LIFE INSURANCE COMPANY
JOHN HANCOCK PLACE, BOSTON, 02117
(Name and complete address of agent for service)
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Copy to:
THOMAS C. LAUERMAN, ESQ.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
--------------------
It is proposed that this filing become effective(check appropriate box)
/ /immediately upon filing pursuant to paragraph (b) of Rule 485
--
/X/on November 1, 2000 pursuant to paragraph (b) of Rule 485
--
/ /60 days after filing pursuant to paragraph (a)(1) of Rule 485
--
/ /on (date) pursuant to paragraph (a)(1) of Rule 485
--
If appropriate check the following box
/_/this post-effective amendment designates a new effective date for a
previously filed amendment
Pursuant to the provisions of Rule 24f-2, Registrant has registered an
indefinite amount of the securities being offered and filed its Notice for
fiscal year 1999 pursuant to Rule 24f-2 on March 30, 2000.
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that Section.
REPRESENTATION OF REASONABLENESS
John Hancock Life Insurance Company represents that the fees and
charges deducted under the Policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the insurance company.
UNDERTAKING REGARDING INDEMNIFICATION
Pursuant to Article 9 of John Hancock's Bylaws and Section 67 of the
Massachusetts Business Corporation Law, John Hancock indemnifies each director,
former director, officer, and former officer, and his heirs and legal
representatives from liability incurred or imposed in connection with any legal
action in which he may be involved by reason of any alleged act or omission as
an officer or a director of John Hancock.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectuses containing the information specified in the instructions
in Form S-6 under the Securities Act of 1933.
The undertaking to file reports.
The undertaking regarding indemnification.
The signatures.
The following exhibits:
<PAGE>
1.A.(1) John Hancock Board Resolution establishing the separate account
included in Post-Effective Amendment No. 1 to the registration
statement of this Account, filed in April, 1995.
(2) Not Applicable
(3) (a) Form of Distribution Agreement by and among John Hancock
Distributors, Inc., John Hancock Mutual Life Insurance Company,
and John Hancock Variable Life Insurance Company, incorporated by
Amendments reference from Pre-Effective Amendment No. 2 to Form S-
6 Registration Statement of John Hancock Variable Life Account S
(File No. 333-15075) filed April 18, 1997.
(b) Specimen Variable Contracts Selling Agreement between John Hancock
Distributors, Inc., and selling broker-dealers, incorporated by
Amendments reference from Pre-Effective Amendment No. 2 to Form S-
6 Registration Statement of John Hancock Variable Life Account S
(File No. 333-15075) filed April 18, 1997.
(c) Schedule of sales commissions included in Exhibit 1. A. (3) (a)
Amendments above.
(4) Not Applicable
(5) Form of flexible premium variable life insurance policy included in
the initial registration statement of this Account on this Form S-6,
filed March 18, 1994.
(6) Charter and By-Laws of John Hancock Mutual Life Insurance Company,
previously filed in Post-Effective Amendment No. 2 to this Account on
April 19, 1996.
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Form of application for Policy, previously filed in Post-Effective
Amendment No. 2 to this Account on April 19, 1996.
(11) Not Applicable. The Registrant invests only in shares of open-end
Funds.
2. Included as exhibit 1.A above
<PAGE>
3. Opinion and consent of counsel as to securities being registered included in
Pre-Effective Amendment No. 1 to the registration statement of this Account
on this Form S-6, filed August 30, 1994.
4. Not Applicable
5. Not Applicable
6. Opinion and consent of actuary.
7. Consent of independent auditors, (Filed herewith).
8. Memorandum describing John Hancock's issuance, transfer and redemption
procedures for the policy pursuant to Rule 6e-3(T)(b)(12)(iii), previously
filed electronically on April 19, 1996.
9. Power of attorney for Robert J. Tarr, previously filed electronically on
April 23, 1997. Powers of attorney for Bodman, Gifford, Boyan, Morton,
Magee, Connors, Brown, Phillips, Booth, Vappi, Bromery, Staley,
D'Alessandro, Fast, Aborn, Bok, Feldstein, Fish, Syron and Hawley,
previously filed electronically on April 19, 1996.
10. Representations, Description and Undertaking pursuant to Rule 6e-
3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940, included in
Pre-Effective Amendment No. 1 to the registration statement of this Account
on this Form S-6, filed August 30, 1994.
11. Opinion of counsel as to eligibility of this Post-Effective Amendment for
filing pursuant to Rule 485(b) (Filed herewith).
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the John
Hancock Life Insurance Company has duly caused this Post-Effective Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunder duly authorized, and its seal to be hereunto fixed and attested, all
in the City of Boston and Commonwealth of Massachusetts on the 1st day of
November, 2000.
JOHN HANCOCK LIFE INSURANCE COMPANY
(SEAL)
/s/ David F. D'Alessandro
-------------------------
David F. D'Alessandro
President and Chief
Executive Officer
/s/ Ronald J. Bocage
Attest: Ronald J. Bocage
------------------------
Vice President and Counsel
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities with John Hancock Life Insurance Company
and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Executive Vice President
/s/ Thomas E. Moloney and Chief Financial Officer
(Principal Financial Officer
THOMAS E. MOLONEY and Acting Principal Accounting Officer)
-----------------
Thomas E. Moloney November 1, 2000
/s/ DAVID F. D'ALESSANDRO President and Chief Executive Officer
(Principal Executive Officer)
David F. D'Alessandro
---------------------
David F. Alessandro for himself and as Attorney-in-Fact November 1, 2000
</TABLE>
<TABLE>
<S> <C> <C> <C>
FOR:
Foster L. Aborn I. MacAllister Booth Director
Samuel W. Bodman Director
Nelson S. Gifford Director Michael C. Hawley Director
E. James Morton Director Kathleen F. Feldstein Director
John M. Connors Director Richard F. Syron Director
Robert J. Tarr, Jr. Director Wayne A. Budd Director
Robert E. Fast Director Edward H. Linde Director
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, and
its seal to be hereunto fixed and attested, all in the City of Boston and
Commonwealth of Massachusetts on the 1st day of November, 2000.
On behalf of the Registrant
By John Hancock Life Insurance Company
(Depositor)
(SEAL) /s/ David F. D'Alessandro
-------------------------
David F. D'Alessandro
President and Chief Executive Officer
/s/ Ronald J. Bocage
Attest: Ronald J. Bocage
----------------
Ronald J. Bocage
Vice President and Counsel
<PAGE>
PROSPECTUS DATED NOVEMBER 1, 2000
MEDALLION VARIABLE LIFE
a flexible premium variable life insurance policy
issued by
JOHN HANCOCK LIFE INSURANCE COMPANY
("JOHN HANCOCK")
JOHN HANCOCK LIFE SERVICING OFFICE
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EXPRESS DELIVERY
----------------
529 Main Street (X-4)
Charlestown, MA 02129
U.S. MAIL
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P.O. Box 111
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 variable investment options:
<TABLE>
<CAPTION>
VARIABLE INVESTMENT OPTION MANAGED BY
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<S> <C>
Managed. . . . . . . . . . . . . . . . . . . . . . . . . Independence Investment Associates, Inc. and
Capital Guardian Trust Company
Growth & Income . . . . . Independence Investment Associates, Inc. and Putnam
Investment Management, 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. and Morgan
Stanley Dean Witter Investment Management Inc.
Small/Mid Cap CORE /SM/ . Goldman Sachs Asset Management
Small/Mid Cap Growth. . . Wellington Management Company, LLP
Small Cap Equity . . . . . Capital Guardian Trust Company
Small Cap Growth . . . . John Hancock Advisers, Inc.
Global Balanced . . . . . Capital Guardian Trust Company
International Equity Index . . . . . . . . . . . . . . . . Independence International Associates, Inc.
International Opportunities . . . . . . . . . . . . . . . T. Rowe Price International, Inc.
Morgan Stanley Dean Witter Investment Management
Emerging Markets Equity . . . . . . . . . . . . . . . . . Inc.
Short-Term Bond . . . . . Independence Investment Associates, Inc.
Bond Index . . . . . . . . Mellon Bond Associates, LLP
Active Bond . . . . . . . . . . . . . . . . . . . . . . . John Hancock Advisers, Inc.
Global Bond . . . . . . . . . . . . . . . . . . . . . . . Capital Guardian Trust Company
High Yield Bond . . . . . Wellington Management Company, LLP
Money Market . . . . . . . John Hancock Life Insurance Company
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</TABLE>
We may add, modify or delete variable investment options in the future.
<PAGE>
When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of the John Hancock
Variable Series Trust I (the "Trust"). The Trust is a mutual fund that offers a
number of different investment options (which are called "funds"). The
investment results of each variable investment option you select will depend on
those of the corresponding fund of the Trust. Attached to this prospectus is a
prospectus for the Trust that contains detailed information about each fund
offered under the policy. Be sure to read the prospectus for the Trust before
selecting any of the variable investment options shown on page 1.
GUIDE TO THIS PROSPECTUS
This prospectus contains information that you should know before you buy a
policy or exercise any of your rights under the policy. However, please keep in
mind that this is a prospectus - - it is not the policy. The prospectus
---
simplifies many policy provisions to better communicate the policy's essential
features. Your rights and obligations under the policy will be determined by the
language of the policy itself. When you receive your policy, read it carefully.
This prospectus is arranged in the following way:
. The section which follows is called "Basic Information". It is in a
question and answer format. We suggest you read the Basic Information
section before reading any other section of the prospectus.
. Behind the Basic Information section are illustrations of
hypothetical policy benefits that help clarify how the policy works.
These start on page 19.
. 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
26.
. Behind the Additional Information section are the financial
statements for John Hancock and Separate Account UV. These start on
page 40.
. Finally, there is an Alphabetical Index of Key Words and Phrases at
the back of the prospectus on page 115.
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.
<TABLE>
<CAPTION>
<S> <C>
QUESTION BEGINNING ON PAGE
--------
.What is the policy?....................................... 4
.Who owns the policy?...................................... 4
.How can I invest money in the policy?..................... 4
.Is there a minimum amount I must invest?.................. 5
.How will the value of my investment in the policy change.. 6
over time?
.What charges will John Hancock deduct from my investment.. 7
in the policy?
.What charges will the Trust deduct from my investment in.. 9
the policy?
.What other charges could John Hancock impose in the....... 10
future?
.How can I change my policy's investment allocations?...... 11
.How can I access my investment in the policy?............. 12
.How much will John Hancock pay when the insured person.... 13
dies?
.How can I change my policy's insurance coverage?.......... 14
.Can I cancel my policy after it's issued?................. 15
.Can I choose the form in which John Hancock pays out...... 15
policy proceeds?
.To what extent can John Hancock vary the terms and
conditions of its policies in particular cases?........... 16
.How will my policy be treated for income tax purposes?.... 16
.How do I communicate with John Hancock?................... 17
</TABLE>
Here are the page numbers where the questions and answers appear:
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 or withdraw amounts you have in the investment options
. Change the beneficiary who will receive the death benefit
. Change the amount of insurance
. Turn in (i.e., "surrender") the policy for the full amount of its
surrender value
. 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". The amount we require as your first premium depends upon the
-----
specifics of your policy and the insured person. Except as noted below, you can
make any other premium payments you wish at any time. That's why the policy is
called a "flexible premium" policy.
4
<PAGE>
Maximum premium payments
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
33. 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.
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 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?
Planned Premiums
The Policy Specifications page of your policy will show the "Planned Premium"
for the policy. You choose this amount in the policy application. The premium
reminder notice we send you is based on this amount. You will also choose how
often to pay premiums-- annually, semi-annually, quarterly or monthly. The date
on which such a payment is "due" is referred to in the policy as a "modal
processing date." However, payment of Planned Premiums is not necessarily
required. You need only invest enough to keep the policy in force (see "Lapse
and reinstatement" and "Guaranteed death benefit feature" below).
5
<PAGE>
Lapse and reinstatement
If the policy's surrender value is not sufficient to pay the charges and the
guaranteed death benefit feature is not in effect, we will notify you of how
much you will need to pay to keep the policy in force. You will have a 61 day
"grace period" 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).
All coverage under the policy will then cease. Even if the policy terminates in
this way, you can still reactivate (i.e., "reinstate") it within 1 year from the
beginning of the grace period. 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. 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.
Guaranteed death benefit feature
This feature is available only if the insured person meets certain
underwriting requirements. The feature guarantees that your policy will not
lapse during the first 5 policy years, regardless of adverse investment
performance, if on each modal processing date during that 5 year period the
amount of cumulative premiums you have paid (less all withdrawals taken from the
policy) equals or exceeds the sum of all Guaranteed Death Benefit Premiums due
to date. The Guaranteed Death Benefit Premium (or "GDB Premium) is defined in
the policy and is "due" on each modal processing date. (The term "modal
processing date" is defined under "Planned Premiums" on page 5.)
No GDB Premium will ever be greater than the so-called "guideline premium" for
the policy as defined in Section 7702 of the Internal Revenue Code. Also, the
GDB Premiums may change in the event of any change in the face amount of the
policy or any change in the death benefit option (see "How much will John
Hancock pay when the insured person dies?" on page 13).
If the Guaranteed Death Benefit test is not satisfied on any modal processing
date, we will notify you immediately and tell you how much you will need to pay
to keep the feature in effect. You will have until the second monthly deduction
date after default to make that payment. If you don't pay at least the required
amount by the end of that period, the feature will permanently lapse. You cannot
restore the feature once it has lapsed.
If there are monthly charges that remain unpaid because of this feature, we
will deduct such charges when there is sufficient surrender value to pay them.
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.
6
<PAGE>
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 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,
. 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 12.
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 4% of a certain portion of the premium you pay. The portion of
each year's premium that is subject to the charge is called the "Target
Premium". It's determined at the time the policy is issued and will appear
in the "Policy Specifications" section of the policy. We currently waive
one half of this charge for policies with a face amount 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.
7
<PAGE>
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 the maximum rates shown in the policy. The
table of rates we use will depend on the insurance risk characteristics
and (usually) gender of the insured person, the face amount of insurance
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.) We currently apply a lower insurance charge
for policies with a face amount 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, but
such a reduction is not guaranteed either. Because policies of this type
were first offered for sale in 1994, no reductions have yet been made.
. Extra mortality charge - A monthly charge specified in your policy for
------------------------
additional mortality risk if the insured person is subject to certain
types of special insurance risk.
. 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 benefits charge - Monthly charges for any optional insurance
--------------------------
benefits added to the policy by means of a rider. We currently offer a
number of optional riders, such as the accidental death benefit rider.
. 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 face amount at that time. The maximum charge is $5 per $1,000 of
face amount in policy years 1 through 7, $4 per $1,000 in policy year 8
and $3 per $1,000 in policy year 9.
8
<PAGE>
. Contingent deferred sales charge ("CDSC") - A charge we deduct if the
-------------------------------------------
policy lapses or is surrendered within the first 12 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 charge
is a percentage of premiums received that do not exceed the Target
Premium. ("Target Premium" is described above under "Deductions from
premium payments.") In policy years 1 through 3, the charge is a
percentage of premiums received prior to the end of the policy year in
question. Thereafter, it's a percentage of only those premiums received in
policy years 1 through 3. The charge reaches its maximum at the end of the
third policy year, stays level through the seventh policy year, and is
reduced by an equal amount at the beginning of each policy year thereafter
until it reaches zero. This is shown in the following table (where the
percentages are rounded to one decimal place):
FOR SURRENDERS OR LAPSES DURING PERCENTAGE
------------------------------------------
Policy years 1-7 26.0%
Policy year 8 21.7%
Policy year 9 17.3%
Policy year 10 13.0%
Policy year 11 8.7%
Policy year 12 4.3%
Policy year 13 and later 0.0%
The above table applies only if the insured person is less than attained
age 55 at issue. For older issue ages, the maximum is reached earlier and
the percentage may decrease to zero in fewer than 12 policy years.
Regardless of issue age, there is a further limitation on the CDSC that
can be charged if surrender or lapse occurs in the second policy year. The
CDSC cannot exceed 32% of one year's Target Premium.
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. Partial withdrawal charge - A charge for each partial withdrawal of
---------------------------
account value to compensate us for the administrative expenses of
processing the withdrawal. The charge is equal to the lesser of $20 or 2%
of the withdrawal amount.
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 1999 (rounded to two decimal places).
9
<PAGE>
<TABLE>
<CAPTION>
Investment Other Operating Total Fund Other Operating
Management Expenses* With Operating Expenses Absent
Fund Name Fee* Reimbursement Expenses Reimbursement
--------- ---------- --------------- ---------- ----------------
<S> <C> <C> <C> <C>
Managed............... 0.67% 0.03% 0.70% 0.03%
Growth & Income....... 0.67% 0.03% 0.70% 0.03%
Equity Index.......... 0.14% 0.00% 0.14% 0.08%
Large Cap Value....... 0.74% 0.10% 0.84% 0.11%
Large Cap Growth...... 0.36% 0.03% 0.39% 0.03%
Mid Cap Value......... 0.80% 0.10% 0.90% 0.12%
Mid Cap Growth........ 0.82% 0.10% 0.92% 0.11%
Real Estate Equity.... 1.01% 0.10% 1.11% 0.10%
Small/Mid Cap CORE/
SM/.................. 0.80% 0.10% 0.90% 0.66%
Small/Mid Cap Growth.. 0.75% 0.10% 0.85% 0.10%
Small Cap Equity *.... 0.90% 0.10% 1.00% 0.16%
Small Cap Growth...... 0.75% 0.10% 0.85% 0.14%
Global Balanced *..... 1.05% 0.10% 1.15% 0.46%
International Equity
Index................ 0.16% 0.10% 0.26% 0.22%
International
Opportunities........ 0.87% 0.10% 0.97% 0.29%
Emerging Markets
Equity............... 1.27% 0.10% 1.37% 2.17%
Short-Term Bond....... 0.30% 0.10% 0.40% 0.13%
Bond Index............ 0.15% 0.10% 0.25% 0.20%
Active Bond *......... 0.61% 0.03% 0.64% 0.03%
Global Bond........... 0.85% 0.10% 0.95% 0.15%
High Yield Bond....... 0.65% 0.10% 0.75% 0.39%
Money Market.......... 0.25% 0.06% 0.31% 0.06%
</TABLE>
* John Hancock Variable Series Trust I funds' percentages for "other fund
expenses" are based on the allocation methodology and expense
reimbursement policy adopted April 23, 1999, and are calculated as if that
allocation methodology and expense reimbursement policy had been in effect
for all of 1999. Under the expense reimbursement policy, John Hancock
Life Insurance Company voluntarily reimburses a fund when the fund's
"other fund expenses" exceed 0.10% of the fund's average daily net assets
(0.00% for Equity Index). Shareholders of the Managed, Growth & Income,
Real Estate Equity, Small Cap Equity, Global Balanced, Active Bond, and
Global Bond funds have approved new management fee schedules, which apply
to these funds effective November 1, 2000. The investment management fee
percentages for each of these funds are calculated as if those new fee
schedules had been in effect for all of 1999. The investment management
fee percentages for all other funds reflect the investment management fees
that were actually payable for 1999.
** Small Cap Equity was formerly "Small Cap Value", Global Balanced was
formerly "International Balanced" and Active Bond was formerly "Sovereign
Bond".
"CORE /SM"/ IS A SERVICE MARK OF GOLDMAN, SACHS & CO.
WHAT OTHER CHARGES COULD JOHN HANCOCK IMPOSE IN THE FUTURE?
Except for the DAC tax charge, we currently make no charge for our Federal
income taxes. However, if we incur, or expect to incur, additional income taxes
attributable to any subaccount of the Account or this class of policies in
future years, we reserve the right to make a charge for such taxes. Any such
charge would reduce what you earn on any affected investment options. However,
we expect that no such charge will be necessary.
10
<PAGE>
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.
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.
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
total 100%.
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. We also reserve the right to impose limits on the
number and frequency of transfers out of the variable investment options.
Limitation on number of investment options
Whether through the allocation of premium or through the transfer of existing
account value, you can never be invested in more than ten investment options at
any one time.
Dollar cost averaging
This is a program of automatic monthly transfers out of the Money Market
investment option into one or more of the other variable investment options. You
choose the investment options and the dollar amount and timing of the transfers.
The program is designed to reduce the risks that result from market
fluctuations. It does this by spreading out the allocation of your
11
<PAGE>
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
You may make a partial withdrawal of your surrender value at any time. Each
partial withdrawal must be at least $1,000. There is a charge (usually $20) 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. We will not permit a partial withdrawal if it would cause
your surrender value to fall below 3 months' worth of monthly charges (see
"Deductions from account value" on page 8). We also reserve the right to refuse
any partial withdrawal that would cause the policy's face amount to fall below
$100,000. Under the Option 1 or Option 3 death benefit, the reduction of your
account value occasioned by a partial withdrawal could cause the minimum
insurance amount to become less than your face amount of insurance (see "How
much will John Hancock pay when the insured person dies?" on page 13). If that
happens, we will automatically reduce your face amount of insurance. The
calculation of that reduction is explained in the policy. If such a face amount
reduction would cause your policy to fail the Code's definition of life
insurance, we will not permit the partial withdrawal.
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 your account value that is in the fixed investment
option plus one of the following:
. In policy years 2 and 3 - - 75% of your account value that is in the
variable investment options
. In all later policy years - - 90% of your account value that is in
the variable investment options
The minimum amount of each loan is $300. The interest charged on any loan is
an effective annual rate of 5.0% in the first 20 policy years and 4.5%
thereafter. 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
12
<PAGE>
value is then allocated among them and is placed in a special loan account. This
special loan account will earn interest at an effective annual rate of 4.0%.
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 the "face
amount" of insurance. 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 face
amount 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 face
amount plus your policy's account value 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 face
amount 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.
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
13
<PAGE>
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?
Increase in coverage
Increases in the face amount of insurance coverage are generally not permitted
under our current administrative rules. We expect to be able to allow such
increases in the future, but that is not guaranteed.
Decrease in coverage
After the first policy year, you may request a reduction in the face amount of
insurance coverage at any time, but only if:
. the remaining face amount will be at least $100,000, and
. the remaining face amount will at least equal the minimum required by
the tax laws to maintain the policy's life insurance status.
As to when an approved decrease would take effect, see "Effective date of
other policy transactions" on page 30.
Change of death benefit option
You may request to change your coverage from death benefit Option 1 to Option
2 or vice-versa. If you request a 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
14
<PAGE>
increases our insurance risk exposure. If you have chosen death benefit Option
3, you can never change to either Option 1 or Option 2.
Tax consequences
Please read "Tax considerations" starting on page 33 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 John Hancock at one of the addresses shown
on page 1, or to the John Hancock representative who delivered the policy to
you.
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
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
15
<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 of your
insurance coverage may vary from the terms and conditions described in this
prospectus, 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 32. 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.
16
<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 on page 33.
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. They
include the following:
. loans, 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
. increase or decrease in face amount
. 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
17
<PAGE>
information. Any communication that arrives after the close of our business day,
or on a day that is not a business day, will be considered "received" by us on
the next following business day. Our business day currently closes at 4:00 p.m.
Eastern Standard Time, but special circumstances (such as suspension of trading
on a major exchange) may dictate an earlier closing time.
Telephone Transactions
If you complete a special authorization form, you can request loans, transfers
among investment options and changes of allocation among investment options
simply by telephoning us at 1-800-732-5543 or by faxing us at 1-617-886-3048.
Any fax request should include your name, daytime telephone number, policy
number and, in the case of transfers and changes of allocation, the names of the
investment options involved. We will honor telephone instructions from anyone
who provides the correct identifying information, so there is a risk of loss to
you if this service is used by an unauthorized person. However, you will receive
written confirmation of all telephone transactions. There is also a risk that
you will be unable to place your request due to equipment malfunction or heavy
phone line usage. If this occurs, you should submit your request in writing.
The policies are not designed for professional market timing organizations or
other persons or entities that use programmed orfrequent 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.
18
<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
face amount. 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% (i.e., before any fees or
expenses deducted from Trust assets). After the deduction of average fees and
expenses at the Trust level (as described below) the corresponding net annual
rates of return would be -0.74%, 5.22% and 11.17%. Investment return reflects
investment income and all realized and unrealized capital gains and losses. The
tables assume annual Planned 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 two 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 intended
waiver of the premium sales charge after the tenth policy year and the intended
reduction in the insurance charge after the tenth policy year. The tables headed
"Maximum Charges" are the same, except that the maximum permitted rates for all
years are used for all charges. The tables do not reflect any charge that we
reserve the right to make but are not currently making.
With respect to fees and expenses deducted from Trust assets, the amounts
shown in all tables reflect (1) investment management fees equivalent to an
effective annual rate of .66%, and (2) an assumed average asset charge for all
other Trust operating expenses equivalent to an effective annual rate of .08%.
These rates are the arithmetic average for all funds of the Trust. In other
words, they are based on the hypothetical assumption that policy account values
are allocated equally among the variable investment options. The actual rates
associated with any policy will vary depending upon the actual allocation of
policy values among the investment options. The charge shown above for all other
Trust operating expenses reflects reimbursements to certain funds as described
in the footnote to the table on page 10. We currently expect those reimbursement
arrangements to continue indefinitely, but that is not guaranteed.
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 Planned 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 face amount and annual Planned Premium amount requested.
19
<PAGE>
DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 218 244 270 0 0 0
2 1,636 100,000 100,000 100,000 663 737 815 0 0 72
3 2,516 100,000 100,000 100,000 1,093 1,243 1,406 0 150 313
4 3,439 100,000 100,000 100,000 1,506 1,761 2,048 413 668 956
5 4,409 100,000 100,000 100,000 1,900 2,289 2,745 807 1,196 1,652
6 5,428 100,000 100,000 100,000 2,276 2,828 3,501 1,183 1,736 2,408
7 6,497 100,000 100,000 100,000 2,631 3,376 4,321 1,538 2,283 3,228
8 7,620 100,000 100,000 100,000 2,964 3,932 5,211 2,070 3,038 4,317
9 8,799 100,000 100,000 100,000 3,274 4,496 6,176 2,579 3,801 5,481
10 10,037 100,000 100,000 100,000 3,568 5,076 7,240 3,272 4,780 6,944
11 11,337 100,000 100,000 100,000 3,866 5,695 8,432 3,669 5,497 8,234
12 12,702 100,000 100,000 100,000 4,142 6,325 9,736 4,043 6,226 9,637
13 14,135 100,000 100,000 100,000 4,392 6,965 11,163 4,392 6,965 11,163
14 15,640 100,000 100,000 100,000 4,615 7,612 12,725 4,615 7,612 12,725
15 17,220 100,000 100,000 100,000 4,809 8,267 14,437 4,809 8,267 14,437
16 18,879 100,000 100,000 100,000 4,972 8,928 16,315 4,972 8,928 16,315
17 20,621 100,000 100,000 100,000 5,105 9,595 18,379 5,105 9,595 18,379
18 22,450 100,000 100,000 100,000 5,197 10,260 20,644 5,197 10,260 20,644
19 24,370 100,000 100,000 100,000 5,247 10,920 23,132 5,247 10,920 23,132
20 26,387 100,000 100,000 100,000 5,258 11,581 25,875 5,258 11,581 25,875
25 38,086 100,000 100,000 100,000 4,777 14,946 44,737 4,777 14,946 44,737
30 53,018 100,000 100,000 100,000 3,271 18,411 77,172 3,271 18,411 77,172
35 72,076 ** 100,000 152,466 ** 21,031 132,579 ** 21,031 132,579
40 96,398 ** 100,000 236,015 ** 21,024 224,777 ** 21,024 224,777
45 127,441 ** 100,000 398,132 ** 15,461 379,174 ** 15,461 379,174
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
20
<PAGE>
DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 610 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,011 1,154 1,308 0 61 216
4 3,439 100,000 100,000 100,000 1,396 1,636 1,907 303 543 815
5 4,409 100,000 100,000 100,000 1,760 2,126 2,554 668 1,033 1,461
6 5,428 100,000 100,000 100,000 2,106 2,623 3,253 1,013 1,531 2,160
7 6,497 100,000 100,000 100,000 2,430 3,126 4,007 1,337 2,033 2,914
8 7,620 100,000 100,000 100,000 2,731 3,633 4,821 1,837 2,739 3,927
9 8,799 100,000 100,000 100,000 3,008 4,142 5,700 2,313 3,447 5,004
10 10,037 100,000 100,000 100,000 3,269 4,664 6,664 2,972 4,368 6,367
11 11,337 100,000 100,000 100,000 3,503 5,187 7,707 3,305 4,990 7,510
12 12,702 100,000 100,000 100,000 3,709 5,710 8,838 3,610 5,611 8,739
13 14,135 100,000 100,000 100,000 3,885 6,232 10,064 3,885 6,232 10,064
14 15,640 100,000 100,000 100,000 4,031 6,749 11,395 4,031 6,749 11,395
15 17,220 100,000 100,000 100,000 4,142 7,261 12,841 4,142 7,261 12,841
16 18,879 100,000 100,000 100,000 4,218 7,763 14,412 4,218 7,763 14,412
17 20,621 100,000 100,000 100,000 4,251 8,251 16,119 4,251 8,251 16,119
18 22,450 100,000 100,000 100,000 4,236 8,716 17,971 4,236 8,716 17,971
19 24,370 100,000 100,000 100,000 4,168 9,153 19,983 4,168 9,153 19,983
20 26,387 100,000 100,000 100,000 4,038 9,553 22,167 4,038 9,553 22,167
25 38,086 100,000 100,000 100,000 2,214 10,690 36,392 2,214 10,690 36,392
30 53,018 ** 100,000 100,000 ** 9,097 59,060 ** 9,097 59,060
35 72,076 ** 100,000 112,441 ** 1,145 97,774 ** 1,145 97,774
40 96,398 ** ** 170,374 ** ** 162,261 ** ** 162,261
45 127,441 ** ** 281,214 ** ** 267,823 ** ** 267,823
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
21
<PAGE>
DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,217 100,243 100,270 217 243 270 0 0 0
2 1,636 100,661 100,735 100,812 661 735 812 0 0 69
3 2,516 101,088 101,238 101,401 1,088 1,238 1,401 0 145 308
4 3,439 101,498 101,752 102,038 1,498 1,752 2,038 405 659 945
5 4,409 101,888 102,274 102,727 1,888 2,274 2,727 795 1,182 1,634
6 5,428 102,259 102,806 103,473 2,259 2,806 3,473 1,166 1,714 2,380
7 6,497 102,607 103,344 104,279 2,607 3,344 4,279 1,514 2,252 3,186
8 7,620 102,932 103,888 105,150 2,932 3,888 5,150 2,038 2,994 4,256
9 8,799 103,233 104,437 106,092 3,233 4,437 6,092 2,538 3,742 5,396
10 10,037 103,516 104,998 107,124 3,516 4,998 7,124 3,220 4,702 6,827
11 11,337 103,802 105,594 108,274 3,802 5,594 8,274 3,604 5,396 8,077
12 12,702 104,063 106,196 109,527 4,063 6,196 9,527 3,964 6,097 9,428
13 14,135 104,297 106,802 110,888 4,297 6,802 10,888 4,297 6,802 10,888
14 15,640 104,501 107,411 112,368 4,501 7,411 12,368 4,501 7,411 12,368
15 17,220 104,674 108,018 113,978 4,674 8,018 13,978 4,674 8,018 13,978
16 18,879 104,814 108,624 115,729 4,814 8,624 15,729 4,814 8,624 15,729
17 20,621 104,922 109,228 117,637 4,922 9,228 17,637 4,922 9,228 17,637
18 22,450 104,987 109,818 119,709 4,987 9,818 19,709 4,987 9,818 19,709
19 24,370 105,006 110,391 121,958 5,006 10,391 21,958 5,006 10,391 21,958
20 26,387 104,985 110,951 124,409 4,985 10,951 24,409 4,985 10,951 24,409
25 38,086 104,321 113,575 140,622 4,321 13,575 40,622 4,321 13,575 40,622
30 53,018 102,626 115,737 166,563 2,626 15,737 66,563 2,626 15,737 66,563
35 72,076 ** 116,022 207,355 ** 16,022 107,355 ** 16,022 107,355
40 96,398 ** 111,961 270,843 ** 11,961 170,843 ** 11,961 170,843
45 127,441 ** 100,300 370,102 ** 300 270,102 ** 300 270,102
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
22
<PAGE>
DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,191 100,216 100,242 191 216 242 0 0 0
2 1,636 100,608 100,678 100,752 608 678 752 0 0 9
3 2,516 101,007 101,149 101,303 1,007 1,149 1,303 0 56 210
4 3,439 101,389 101,628 101,897 1,389 1,628 1,897 296 535 805
5 4,409 101,749 102,112 102,537 1,749 2,112 2,537 657 1,019 1,444
6 5,428 102,090 102,603 103,227 2,090 2,603 3,227 997 1,510 2,134
7 6,497 102,407 103,096 103,968 2,407 3,096 3,968 1,315 2,003 2,875
8 7,620 102,702 103,592 104,765 2,702 3,592 4,765 1,808 2,698 3,871
9 8,799 102,970 104,087 105,620 2,970 4,087 5,620 2,275 3,392 4,925
10 10,037 103,221 104,592 106,555 3,221 4,592 6,555 2,924 4,295 6,259
11 11,337 103,443 105,094 107,561 3,443 5,094 7,561 3,245 4,896 7,364
12 12,702 103,635 105,591 108,644 3,635 5,591 8,644 3,537 5,492 8,545
13 14,135 103,797 106,082 109,810 3,797 6,082 9,810 3,797 6,082 9,810
14 15,640 103,926 106,564 111,066 3,926 6,564 11,066 3,926 6,564 11,066
15 17,220 104,019 107,033 112,418 4,019 7,033 12,418 4,019 7,033 12,418
16 18,879 104,074 107,486 113,873 4,074 7,486 13,873 4,074 7,486 13,873
17 20,621 104,086 107,915 115,435 4,086 7,915 15,435 4,086 7,915 15,435
18 22,450 104,046 108,311 117,108 4,046 8,311 17,108 4,046 8,311 17,108
19 24,370 103,952 108,669 118,899 3,952 8,669 18,899 3,952 8,669 18,899
20 26,387 103,793 108,976 120,809 3,793 8,976 20,809 3,793 8,976 20,809
25 38,086 101,820 109,401 132,376 1,820 9,401 32,376 1,820 9,401 32,376
30 53,018 ** 106,560 147,696 ** 6,560 47,696 ** 6,560 47,696
35 72,076 ** ** 166,326 ** ** 66,326 ** ** 66,326
40 96,398 ** ** 185,847 ** ** 85,847 ** ** 85,847
45 127,441 ** ** 198,800 ** ** 98,800 ** ** 98,800
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
23
<PAGE>
DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 218 244 270 0 0 0
2 1,636 100,000 100,000 100,000 663 737 815 0 0 72
3 2,516 100,000 100,000 100,000 1,093 1,243 1,406 0 150 313
4 3,439 100,000 100,000 100,000 1,506 1,761 2,048 413 668 956
5 4,409 100,000 100,000 100,000 1,900 2,289 2,745 807 1,196 1,652
6 5,428 100,000 100,000 100,000 2,276 2,828 3,501 1,183 1,736 2,408
7 6,497 100,000 100,000 100,000 2,631 3,376 4,321 1,538 2,283 3,228
8 7,620 100,000 100,000 100,000 2,964 3,932 5,211 2,070 3,038 4,317
9 8,799 100,000 100,000 100,000 3,274 4,496 6,176 2,579 3,801 5,481
10 10,037 100,000 100,000 100,000 3,568 5,076 7,240 3,272 4,780 6,944
11 11,337 100,000 100,000 100,000 3,866 5,695 8,432 3,669 5,497 8,234
12 12,702 100,000 100,000 100,000 4,142 6,325 9,736 4,043 6,226 9,637
13 14,135 100,000 100,000 100,000 4,392 6,965 11,163 4,392 6,965 11,163
14 15,640 100,000 100,000 100,000 4,615 7,612 12,725 4,615 7,612 12,725
15 17,220 100,000 100,000 100,000 4,809 8,267 14,437 4,809 8,267 14,437
16 18,879 100,000 100,000 100,000 4,972 8,928 16,315 4,972 8,928 16,315
17 20,621 100,000 100,000 100,000 5,105 9,595 18,379 5,105 9,595 18,379
18 22,450 100,000 100,000 100,000 5,197 10,260 20,644 5,197 10,260 20,644
19 24,370 100,000 100,000 100,000 5,247 10,920 23,132 5,247 10,920 23,132
20 26,387 100,000 100,000 100,000 5,258 11,581 25,875 5,258 11,581 25,875
25 38,086 100,000 100,000 100,000 4,777 14,946 44,737 4,777 14,946 44,737
30 53,018 100,000 100,000 130,207 3,271 18,411 76,502 3,271 18,411 76,502
35 72,076 ** 100,000 193,078 ** 21,031 127,562 ** 21,031 127,562
40 96,398 ** 100,000 285,457 ** 21,024 208,545 ** 21,024 208,545
45 127,441 ** 100,000 425,000 ** 15,461 336,607 ** 15,461 336,607
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
24
<PAGE>
DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 610 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,011 1,154 1,308 0 61 216
4 3,439 100,000 100,000 100,000 1,396 1,636 1,907 303 543 815
5 4,409 100,000 100,000 100,000 1,760 2,126 2,554 668 1,033 1,461
6 5,428 100,000 100,000 100,000 2,106 2,623 3,253 1,013 1,531 2,160
7 6,497 100,000 100,000 100,000 2,430 3,126 4,007 1,337 2,033 2,914
8 7,620 100,000 100,000 100,000 2,731 3,633 4,821 1,837 2,739 3,927
9 8,799 100,000 100,000 100,000 3,008 4,142 5,700 2,313 3,447 5,004
10 10,037 100,000 100,000 100,000 3,269 4,664 6,664 2,972 4,368 6,367
11 11,337 100,000 100,000 100,000 3,503 5,187 7,707 3,305 4,990 7,510
12 12,702 100,000 100,000 100,000 3,709 5,710 8,838 3,610 5,611 8,739
13 14,135 100,000 100,000 100,000 3,885 6,232 10,064 3,885 6,232 10,064
14 15,640 100,000 100,000 100,000 4,031 6,749 11,395 4,031 6,749 11,395
15 17,220 100,000 100,000 100,000 4,142 7,261 12,841 4,142 7,261 12,841
16 18,879 100,000 100,000 100,000 4,218 7,763 14,412 4,218 7,763 14,412
17 20,621 100,000 100,000 100,000 4,251 8,251 16,119 4,251 8,251 16,119
18 22,450 100,000 100,000 100,000 4,236 8,716 17,971 4,236 8,716 17,971
19 24,370 100,000 100,000 100,000 4,168 9,153 19,983 4,168 9,153 19,983
20 26,387 100,000 100,000 100,000 4,038 9,553 22,167 4,038 9,553 22,167
25 38,086 100,000 100,000 100,000 2,214 10,690 36,392 2,214 10,690 36,392
30 53,018 ** 100,000 100,504 ** 9,097 59,050 ** 9,097 59,050
35 72,076 ** 100,000 142,444 ** 1,145 94,109 ** 1,145 94,109
40 96,398 ** ** 198,634 ** ** 145,115 ** ** 145,115
45 127,441 ** ** 274,231 ** ** 217,195 ** ** 217,195
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
25
<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 18.
<TABLE>
<CAPTION>
CONTENTS OF THIS SECTION BEGINNING ON PAGE
------------------------ -----------------
<S> <C>
Description of John Hancock................................ 27
How we support the policy and investment options........... 27
Procedures for issuance of a policy........................ 28
Commencement of investment performance..................... 29
How we process certain policy transactions................. 29
Effects of policy loans.................................... 31
Additional information about how certain policy charges.... 31
work
How we market the policies................................. 32
Tax considerations......................................... 33
Reports that you will receive.............................. 35
Voting privileges that you will have....................... 35
Changes that John Hancock can make as to your policy....... 36
Adjustments we make to death benefits...................... 36
When we pay policy proceeds................................ 36
Other details about exercising rights and paying benefits.. 37
Legal matters.............................................. 37
Registration statement filed with the SEC.................. 37
Accounting and actuarial experts........................... 37
Financial statements of John Hancock and the Account....... 38
List of Directors and Executive Officers of John Hancock... 39
</TABLE>
26
<PAGE>
DESCRIPTION OF JOHN HANCOCK
We are John Hancock Life Insurance Company, a Massachusetts stock life
insuarnce company. On February 1, 2000, John Hancock Mutual Life Insurance
Company (which was chartered in Massachusetts in 1862) converted to a stock
company by "demutualizing" and changed its name to John Hancock Life Insurance
Company. As part of the demutualization process, John Hancock Life Insurance
Company became a subsidiary of John Hancock Financial Services, Inc., a newly
formed publicly-traded corporation. 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 the
Trust. New subaccounts may be added as new funds are added to the Trust and made
available to policy owners. Existing subaccounts may be deleted if existing
funds are deleted from the Trust.
We will purchase and redeem Trust shares for the Account at their net asset
value without any sales or redemption charges. Shares of the Trust represent an
interest in one of the funds of the Trust which corresponds to a subaccount of
the Account. Any dividend or capital gains distributions received by the Account
will be reinvested in shares of that same fund at their net asset value as of
the dates paid.
On each business day, shares of each fund are purchased or redeemed by us for
each subaccount based on, among other things, the amount of net premiums
allocated to the subaccount, distributions reinvested, and transfers to, from
and among subaccounts, all to be effected as of that date. Such purchases and
redemptions are effected at each fund's net asset value per share determined for
that same date. A "business day" is any date on which the New York Stock
Exchange is open for trading. We compute policy values for each business day as
of the close of that day (usually 4:00 p.m. Eastern Standard Time).
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
27
<PAGE>
applicable law, we have sole discretion over the investment of assets of the
general account and policy owners do not share in the investment experience of,
or have any preferential claim on, those assets. Instead, we guarantee that the
account value allocated to the fixed investment option will accrue interest
daily at an effective annual rate of at least 4% without regard to the actual
investment experience of the general account.
Because of exemptive and exclusionary provisions, interests in our fixed
investment option have not been registered under the Securities Act of 1933 and
our general account has not been registered as an investment company under the
1940 Act. Accordingly, neither the general account nor any interests therein are
subject to the provisions of these acts, and we have been advised that the staff
of the SEC has not reviewed the disclosure in this prospectus relating to the
fixed investment option. Disclosure regarding the fixed investment option may,
however, be subject to certain generally-applicable provisions of the Federal
securities laws relating to accuracy and completeness of statements made in
prospectuses.
PROCEDURES FOR ISSUANCE OF A POLICY
Generally, the policy is available with a minimum face amount at issue of
$100,000. At the time of issue, the insured person must have an attained age of
at least 20 and no more than 75. 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.
Minimum Initial Premium
The Minimum Initial Premium must be received by us at our Life Servicing
Office in order for the policy to be in full force and effect. There is no grace
period for the payment of the Minimum Initial Premium. The minimum amount of
premium required at the time of policy issue is equal to three monthly
Guaranteed Death Benefit Premiums (see "Guaranteed death benefit feature" in the
Basic Information section of this prospectus). However, if an owner has chosen
to pay premiums on a monthly basis, the minimum amount required is only equal to
one monthly Guaranteed Death Benefit Premium.
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 29).
The policy will take effect only if all of the following conditions are
satisfied:
. The policy is delivered to and received by the applicant.
. The Minimum Initial 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.
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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
always takes effect retroactively. Backdating results in a lower insurance
charge (because of the insured person's younger age at issue), but monthly
charges begin earlier than would otherwise be the case. Those monthly charges
will be deducted as soon as we receive premiums sufficient to pay them.
Temporary coverage prior to policy delivery
If a specified amount of premium is paid with the application for a policy and
other conditions are met, we will provide temporary term life insurance coverage
on the insured person for a period prior to the time coverage under the policy
takes effect. Such temporary term coverage will be subject to the terms and
conditions described in the application for the policy, including limits on
amount and duration of coverage.
Monthly deduction dates
Each charge that we deduct monthly is assessed against your account value or
the subaccounts at the close of business on the date of issue and at the close
of the first business day in each subsequent policy month.
COMMENCEMENT OF INVESTMENT PERFORMANCE
All premium payments will be allocated among the investment options you have
chosen as soon as they are processed.
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 date of issue.
(2) If the Minimum Initial 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 Minimum
Initial Premium is received.
(3) 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.
(4) If we receive any premium payment that we think 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
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acknowledgment. We will then process it accordingly.
(5) 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 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 policy anniversary on or next
following the date we approve your request:
. Face amount increases, when and if permitted by our administrative rules
. Change of death benefit option
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Face amount decreases or reinstatements of lapsed policies take effect on the
monthly deduction date on or next following the date we approve the request for
decrease or reinstatement.
We process loans, surrenders, partial withdrawals 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 face
amount are permanently affected by any loan, whether or not it is repaid in
whole or in part. This is because the amount of the loan is deducted from the
investment options and placed in a special loan account. The investment options
and the special loan account will generally have different rates of investment
return.
The amount of the outstanding loan (which includes accrued and unpaid
interest) is subtracted from the amount otherwise payable when the policy
proceeds become payable.
Whenever the outstanding loan equals or exceeds the surrender value, 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.
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 32.)
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 less than one
Target Premium in the first policy year or paying more than one Target Premium
in any policy year could reduce your total sales charges over time. For example,
if the Target Premium was $1,000 and you paid a premium of $1,000 in each of the
first ten policy years, you would pay total premium sales charges of $400 and be
subject to a maximum CDSC of $780. If you paid $2,000 (i.e., two times the
Target Premium amount) in every other policy year up to the tenth policy year,
you would pay total premium sales charges of only $200 and be subject to a
maximum CDSC of only $520. However, delaying the payment of Target Premiums to
later policy years could increase the risk that the account value will be
insufficient to pay monthly policy charges as they come due and that, as a
result, the policy will lapse and eventually terminate. Conversely, accelerating
the payment of Target Premiums to earlier policy years could cause aggregate
premiums paid to exceed the policy's 7-pay premium limit and, as a result, cause
the policy to become a modified endowment, with adverse tax consequences to you
upon receipt of policy distributions. (See "Tax considerations" beginning on
page 33.)
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
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<PAGE>
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 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 Target Premium paid in the first policy year, 6% of the
Target Premium paid in the second through fourth policy years, and 3% of the
Target Premium paid in
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each policy year thereafter. The maximum commission on any premium paid in any
policy year in excess of the Target 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 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 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 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).
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We also believe that, except as noted below, loans received under the policy
will be treated as indebtedness of an owner and that no part of any loan will
constitute income to the owner. However, the amount of any outstanding loan that
was not previously considered income (as discussed below) will be treated as if
it had been distributed to the owner if the policy terminates for any reason.
It is possible that, despite our monitoring, a policy might fail to qualify as
life insurance under Section 7702 of the Code. This could happen, for example,
if we inadvertently failed to return to you any premium payments that were in
excess of permitted amounts, or if the Trust failed to meet certain investment
diversification or other requirements of the Code. If this were to occur, you
would be subject to income tax on the income and gains under the policy for the
period of the disqualification and for subsequent periods.
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 Planned Premium
schedule 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 until maturity, 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 591/2.
Furthermore, any time there is a "material change" in a policy (such as a face
amount increase, the addition of certain other policy benefits after issue, a
change in death benefit option, or reinstatement of a lapsed policy), the policy
will have a new 7-pay limit as if it were a newly-issued policy. If a prescribed
portion of the policy's then account value, plus all other premiums paid within
7 years after the material change, at any time exceed the new 7-pay limit, the
policy will become a modified endowment.
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Moreover, if benefits under a policy are reduced (such as a reduction in the
face amount or 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 the following
information as of the end of the most recent reporting period: the amount of the
death benefit and 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 premium payments, transfers among investment options, policy
loans, partial withdrawals and certain other policy transactions.
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 Trustees
of the Trust, ratification of the selection of independent auditors, approval of
Trust investment advisory agreements and other matters requiring a shareholder
vote. We will furnish owners with information and forms to enable owners to give
voting instructions.
However, we may, in certain limited circumstances permitted by the SEC's
rules, disregard voting instructions. If we do disregard voting instructions,
you will receive a summary of that action and the reasons for it in the next
semi-annual report to owners.
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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
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 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.
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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.
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 certain of the financial
statements of 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
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Todd G. Engelsen, F.S.A., an Actuary and Second Vice President 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.
In addition to those financial statements of the Account included herein that
have been audited by Ernst & Young LLP, this prospectus also contains unaudited
financial statements of the Account for a period subsequent to the audited
financial statements.
The most current financial statements for John Hancock are those as of
December 31, 1999. We do not prepare such financial statements more often than
annually. Moreover, we believe that any additional benefit you would get from
more recent financial statements would not justify our cost in preparing them.
(This is true even though we would not necessarily have to incur the expense of
an independant audit of those financial statements.) In this connection, we
represent that there have been no material adverse changes in our financial
condition or operations between December 31, 1999 and the date of this
prospectus.
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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>
Stephen L. Brown...... Chairman of the Board, John Hancock
David F. D'Alessandro. President and Chief Executive Officer, John Hancock
Foster L. Aborn....... Director, formerly Vice Chairman of the Board and Chief
Investment Officer, John Hancock
Samuel W. Bodman...... Chairman of the Board and Chief Executive Officer,
Cabot Corporation (chemicals)
I. MacAllister Booth.. Retired Chairman of the Board and Chief Executive
Officer, Polaroid Corporation (photographic products)
Wayne A. Budd......... Executive Vice President and General Counsel, John
Hancock
John M. Connors, Jr... Chairman and Chief Executive Officer and Director,
Hill, Holliday, Connors, Cosmopoulos, Inc.
(advertising).
Robert E. Fast........ Senior Partner, Hale and Dorr (law firm).
Kathleen F. Feldstein. President, Economic Studies, Inc. (economic
consulting).
Nelson S. Gifford..... Principal, Fleetwing Capital Management (financial
services)
Michael C. Hawley..... Chairman and Chief Executive Officer, The Gillette
Company (razors, etc.)
Edward H. Linde....... President and Chief Executive Officer, Boston
Properties, Inc. (real estate)
Judith A, McHale...... President and Chief Operating Officer, Discovery
Communications, Inc. (multimedia communications)
E. James Morton....... Director, formerly Chairman of the Board and Chief
Executive Officer, John Hancock
R. Robert Popeo....... Chairman, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo
(law firm)
Richard F. Syron...... Chairman of the Board, President and Chief Executive
Officer, Thermo Electron Corp. (scientific and
industrial instruments)
Robert J. Tarr, Jr.... Former President, Chief Executive Officer and Chief
Operations Officer, Harcourt General, Inc. (publishing)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Other Executive
---------------
Officers
--------
Thomas E. Moloney..... Chief Financial Officer
Derek Chilvers........ Chairman and Chief Executive Officer of John Hancock
International Holdings, Inc.
John M. DeCiccio...... Executive Vice President and Chief Investment Officer
Maureen R. Ford....... President, Broker-Dealer Distribution and Financial
Advisory Network
Kathleen M. Graveline. Executive Vice President - Retail
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.
39
<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, 1999
and 1998, 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 auditing standards generally
accepted in the United States. 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 accounting principles generally accepted in the United
States. The variances between such practices and accounting principles generally
accepted in the United States 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 accounting principles generally accepted in the
United States, the financial position of John Hancock Mutual Life Insurance
Company at December 31, 1999 and 1998 or the results of its operations or its
cash flows for the years then ended.
However, 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, 1999 and 1998, 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
March 10, 2000
40
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
December 31
-----------------------
1999 1998
---------- -----------
(in millions)
<S> <C> <C>
ASSETS
Bonds--Note 6.................................... $26,188.1 $23,353.0
Stocks:
Preferred...................................... 926.6 844.7
Common......................................... 458.4 269.3
Investments in affiliates...................... 1,465.8 1,520.3
--------- ---------
2,850.8 2,634.3
Mortgage loans on real estate--Note 6............ 9,165.9 8,223.7
Real estate:
Company occupied............................... 366.6 372.2
Investment properties.......................... 501.7 1,472.1
--------- ---------
868.3 1,844.3
Policy loans..................................... 1,577.8 1,573.8
Cash items:
Cash in banks and offices...................... 292.6 241.5
Temporary cash investments..................... 868.0 1,107.4
--------- ---------
1,160.6 1,348.9
Premiums due and deferred........................ 234.8 253.4
Investment income due and accrued................ 574.8 527.5
Other general account assets..................... 1,364.7 1,156.6
Assets held in separate accounts................. 16,746.0 17,447.0
--------- ---------
TOTAL ASSETS..................................... $60,731.8 $58,362.5
========= =========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
41
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
December 31
-----------------------
1999 1998
---------- -----------
(in millions)
<S> <C> <C>
OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY RESERVES
OBLIGATIONS
Policy reserves................................. $20,574.1 $19,804.8
Policyholders' and beneficiaries' funds......... 16,128.3 14,216.9
Dividends payable to policyholders.............. 464.8 449.1
Policy benefits in process of payment........... 132.3 111.4
Other policy obligations........................ 304.7 322.6
Asset valuation reserve--Note 1................. 1,242.9 1,289.6
Federal income and other accrued Taxes--Note 1.. (12.1) 211.5
Other general account obligations............... 1,695.0 1,109.3
Obligations related to separate accounts........ 16,745.1 17,458.6
--------- ---------
TOTAL OBLIGATIONS................................. 57,275.1 54,973.8
POLICYHOLDERS' CONTINGENCY RESERVES
Surplus note--Note 2............................ 450.0 450.0
Special contingency reserve for group insurance. 153.4 160.0
General contingency reserve..................... 2,853.3 2,778.7
--------- ---------
TOTAL POLICYHOLDERS' CONTINGENCY RESERVES......... 3,456.7 3,388.7
--------- ---------
TOTAL OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY
RESERVES......................................... $60,731.8 $58,362.5
========= =========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
42
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF OPERATIONS AND CHANGES IN POLICYHOLDERS'
CONTINGENCY RESERVES
<TABLE>
<CAPTION>
Year ended December 31
--------------------------
1999 1998
----------- -------------
(In millions)
<S> <C> <C>
INCOME
Premiums, annuity considerations and pension fund
contributions................................... $ 9,622.9 $ 8,844.0
Net investment income--Note 4..................... 3,033.4 2,956.2
Other, net........................................ 241.9 233.8
--------- ---------
12,898.2 12,034.0
BENEFITS AND EXPENSES
Payments to policyholders and beneficiaries:
Death benefits................................. 675.6 582.9
Accident and health benefits................... 94.4 76.9
Annuity benefits............................... 1,734.3 1,612.4
Surrender benefits and annuity fund
withdrawals................................... 7,410.6 6,712.4
Matured endowments............................. 18.6 20.7
--------- ---------
9,933.5 9,005.3
Additions to reserves to provide for future
payments to policyholders and beneficiaries..... 1,238.9 1,106.7
Expenses of providing service to policyholders
and obtaining new insurance:
Field sales compensation and expenses.......... 248.8 290.7
Home office and general expenses............... 717.8 529.0
Payroll, state premium and miscellaneous taxes.... 48.9 52.0
--------- ---------
12,187.9 10,983.7
--------- ---------
GAIN FROM OPERATIONS BEFORE DIVIDENDS TO
POLICYHOLDERS, FEDERAL INCOME TAXES AND
NET REALIZED CAPITAL GAINS................. 710.3 1,050.3
Dividends to policyholders.......................... 461.1 446.0
Federal income tax credit--Note 1................... (216.9) (2.8)
--------- ---------
244.2 443.2
--------- ---------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL GAINS.............................. 466.1 607.1
Net realized capital gains--Note 5.................. 29.0 0.7
--------- ---------
NET INCOME.................................. 495.1 607.8
Other increases/(decreases) in policyholders'
contingency reserves:
Net unrealized capital losses and other
adjustments--Note 5............................. (147.0) (214.5)
Prior years' federal income taxes................. (21.9) (25.5)
Other reserves and adjustments, net--Notes 1, 7
and 13.......................................... (258.2) (136.9)
--------- ---------
NET INCREASE IN POLICYHOLDERS' CONTINGENCY
RESERVES................................... 68.0 230.9
Policyholders' contingency reserves at beginning of
year............................................... 3,388.7 3,157.8
--------- ---------
POLICYHOLDERS' CONTINGENCY RESERVES AT END OF YEAR.. $ 3,456.7 $ 3,388.7
========= =========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
43
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1999 1998
----------- -------------
(In millions)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Insurance premiums, annuity considerations and
deposits........................................ $ 9,816.6 $ 8,945.5
Net investment income............................. 2,966.1 2,952.8
Benefits to policyholders and beneficiaries....... (10,047.9) (9,190.4)
Dividends paid to policyholders................... (445.4) (396.6)
Insurance expenses and taxes...................... (1,015.3) (874.4)
Net transfers from separate accounts.............. 1,436.6 131.1
Other, net........................................ (264.2) (181.7)
---------- ----------
NET CASH PROVIDED FROM OPERATIONS.............. 2,446.5 1,386.3
---------- ----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Bond purchases.................................... (15,946.3) (12,403.6)
Bond sales........................................ 10,098.5 8,447.8
Bond maturities and scheduled redemptions......... 2,443.9 2,537.7
Bond prepayments.................................. 644.9 1,202.7
Stock purchases................................... (2,546.2) (623.2)
Proceeds from stock sales......................... 2,174.0 378.4
Real estate purchases............................. (188.7) (147.6)
Real estate sales................................. 1,258.4 630.5
Other invested assets purchases................... (127.9) (185.3)
Proceeds from the sale of other invested assets... 358.4 120.5
Mortgage loans issued............................. (2,254.2) (1,978.5)
Mortgage loan repayments.......................... 1,267.3 1,575.6
Other, net........................................ 183.1 (38.6)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES.......... (2,634.8) (483.6)
---------- ----------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Net decrease in short-term note payable........... 0.0 (75.0)
Repayment of REMIC notes payable.................. 0.0 (203.6)
---------- ----------
NET CASH USED IN FINANCING ACTIVITIES.......... 0.0 (278.6)
---------- ----------
(DECREASE) INCREASE IN CASH AND TEMPORARY CASH
INVESTMENTS........................................ (188.3) 624.1
Cash and temporary cash investments at beginning of
year............................................... 1,348.9 724.8
---------- ----------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR.. $ 1,160.6 $ 1,348.9
========== ==========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
44
<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. Pursuant to a Plan of
Reorganization, effective February 1, 2000, the Company converted from a mutual
life insurance company to a stock life insurance company and became a wholly
owned subsidiary of John Hancock Financial Services, Inc., which is a holding
company. See Note 15--Subsequent Events.
The Company offers financial products in two major groups: (i) its retail
business, which offers protection and asset gathering products primarily to
retail consumers; and (ii) the investment and pension business, which offers
guaranteed and structured financial products primarily to institutional
customers. In addition, there is a corporate business unit. The Company's
reportable business units are strategic business units offering different
products and services. The reportable business units are managed separately, as
they focus on different products, markets or distribution channels.
In the Retail-Protection business unit, the Company offers a variety of
individual life insurance and individual and group long-term care insurance
products, including participating whole life, term life, and retail and group
long-term care insurance. Products are distributed through multiple distribution
channels, including insurance agents and brokers and alternative distribution
channels that include banks, financial planners, direct marketing and the
Internet.
In the Retail-Asset Gathering business unit, the Company offers individual
annuities, consisting of fixed deferred annuities, fixed immediate annuities,
single premium immediate annuities, and variable annuities. This business unit
distributes its products through distribution channels including insurance
agents and brokers affiliated with the Company, securities brokerage firms,
financial planners, and banks.
In the Investment and Pension business unit, the Company offers a variety of
retirement products to qualified defined benefit plans, defined contribution
plans and non-qualified buyers. The Company's products include guaranteed
investment contracts, funding agreements, single premium annuities, and general
account participating annuities and fund type products. These contracts provide
non-guaranteed, partially guaranteed, and fully guaranteed investment options
through general and separate account products. The business unit distributes its
products through a combination of dedicated regional representatives, pension
consultants and investment professionals.
The Corporate business unit primarily consists of certain corporate operations
and businesses that are either disposed or in run-off. Corporate operations
primarily include certain financing activities, income on capital not
specifically allocated to the business units and certain non-recurring expenses
not allocated to the business units. The disposed businesses primarily consist
of group health operations.
The Company established a "corporate account" as part of the Corporate business
unit to facilitate the capital management process. The corporate account
contains capital not allocated to support the operations of the Company's
business units.
Late in the fourth quarter of 1999, the Company transferred certain assets from
the business units to the corporate account. These assets include investments in
certain subsidiaries and the home office real estate complex (collectively
referred to as "corporate purpose assets"). Historically, the Company has
allocated the investment performance or other earnings of corporate purpose
assets among all of the business units. However, subsequent to the conversion to
a stock life insurance company, the Company will centrally manage the
performance of corporate purpose assets through the corporate account.
The asset transfer directly affected certain group pension participating
contractholders because those contracts have participating features under which
crediting rates and dividends are affected directly by portfolio earnings.
Certain participating contractholders participate in contract experience related
to net investment income and realized capital gains and losses in the general
account. These participating contractholders were compensated for transferred
assets
45
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
based on the fair value of the assets transferred, which amounted to $771.7
million. These participating contractholders were credited with their portion of
the difference between the fair value and carrying value of the assets
transferred through the crediting rates and dividends on their contracts. The
after-tax amount of the transfer was $170.8 million which was charged directly
to policyholders' contingency reserve.
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 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 or future estimated gross profits or gross
margins; (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 codified
statutory accounting principles ("Codification") effective January 1, 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
Commonwealth of Massachusetts must adopt Codification as the prescribed basis of
accounting on which domestic insurers must report their statutory-basis results
to the Division of Insurance. At this time, it is anticipated that the
Commonwealth of Massachusetts will adopt Codification effective January 1, 2001.
The impact of any such changes on the Company's statutory surplus is not
expected to be material.
46
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of new
business, are charged to operations as incurred and policyholder dividends are
provided as paid or accrued.
Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-term,
highly liquid investments both readily convertible to known amounts of cash and
so near maturity that there is insignificant risk of changes in value because of
changes in interest rates.
Valuation of Assets: General account investments are carried at amounts
determined on the following bases:
Bond and stock values are carried as prescribed by the 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 $1,057.3 million and $533.8 million
were sold in 1999 and 1998, respectively, and an additional $125.3 million of
real estate is expected to be sold in 2000. Net gains on the properties sold
amounted to $140.8 million and $64.3 million in 1999 and 1998, respectively.
Those properties to be sold subsequent to December 31, 1999 are carried at the
lower of depreciated cost at the date a determination to sell was made or fair
value. Accumulated depreciation amounted to $254.4 million and $370.0 million
at December 31, 1999 and 1998, 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
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
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. In connection
with the Company's plans to dispose of certain real estate holdings, during
1998, an additional contribution was recorded that resulted in the AVR exceeding
the prescribed maximum reserve level by $48.0 million and $111.3 million at
December 31, 1999 and 1998, respectively. 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.
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, 1999, the IMR, net of 1999 amortization of $51.4 million, amounted to $261.7
million that is included in other policy obligations. The corresponding 1998
amounts were $34.9 million and $261.6 million, respectively.
Property and Equipment: Data processing equipment, which amounted to $29.2
million in 1999 and $31.4 million in 1998 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 $19.7 million in 1999 and $20.1 million
in 1998.
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.
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
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.
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, 1999. 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 21/2% 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 83/4%.
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
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.
The statement value and fair value for investment-type insurance contracts are
as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
-------------------- ----------------------
Statement Fair Statement Fair
Value Value Value Value
--------- --------- --------- -----------
(in millions)
<S> <C> <C> <C> <C>
Guaranteed investment contracts... $13,111.6 $12,617.2 $12,666.9 $12,599.7
Fixed rate deferred and immediate
annuities........................ 4,685.7 4,656.9 4,375.0 4,412.2
Supplementary contracts without
life contingencies............... 55.7 55.7 42.7 44.7
--------- --------- --------- ---------
$17,853.0 $17,329.8 $17,084.6 $17,056.6
========= ========= ========= =========
</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 Internal Revenue Service sets the DER 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 $115.0 million in 1999 and $74.9
million in 1998.
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. No such refinements were made during 1999 or 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.
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
Guaranty Fund Assessments: Guaranty fund assessments are accrued when the
Company receives knowledge of an insurance insolvency.
NOTE 2--SURPLUS NOTES
On February 25, 1994, the Company issued $450 million of surplus notes that bear
interest at7 3/8% and are scheduled to mature on February 15, 2024. The issuance
of the surplus notes was approved by the Commonwealth of Massachusetts and any
payment of interest on and principal of the notes may be made only with the
prior approval of the Commissioner of Insurance of the Commonwealth of
Massachusetts. Surplus notes are reported as part of policyholders' contingency
reserves rather than liabilities. Interest of $33.2 million was paid on the
notes during 1999 and 1998.
NOTE 3--BORROWED MONEY
At December 31, 1999, the Company had two syndicated lines of credit with a
group of banks totaling $1.0 billion, $500.0 million of which expire on July 29,
2000 and $500.0 million of which expire on June 30, 2001. The banks will commit,
when requested, to loan funds at prevailing interest rates as determined in
accordance within each line of credit agreement. Under the terms of the
agreements, the Company is required to maintain certain minimum levels of net
worth and comply with certain other covenants, which were met at December 31,
1999. At December 31, 1999, the Company had no outstanding borrowings under
either agreement.
Interest paid on borrowed money was $7.9 million and $6.6 million during 1999
and 1998, respectively.
NOTE 4--NET INVESTMENT INCOME
Investment income has been reduced by the following amounts:
<TABLE>
<CAPTION>
1999 1998
------- ---------
(In millions)
<S> <C> <C>
Investment expenses................................... $277.1 $317.5
Interest expense...................................... 41.4 44.3
Depreciation on real estate and other invested assets. 22.9 41.6
Real estate and other investment taxes................ 41.8 60.1
------ ------
$383.2 $463.5
====== ======
</TABLE>
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS
Net realized capital gains consist of the following items:
<TABLE>
<CAPTION>
1999 1998
-------- ----------
(In millions)
<S> <C> <C>
Net gains from asset sales and foreclosures. $ 260.3 $ 303.3
Capital gains tax........................... (179.8) (171.7)
Net capital gains transferred to the IMR.... (51.5) (130.9)
------- -------
Net Realized Capital Gains................ $ 29.0 $ 0.7
======= =======
</TABLE>
51
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS--CONTINUED
Net unrealized capital losses and other adjustments consist of the following
items:
<TABLE>
<CAPTION>
1999 1998
-------- ----------
(In millions)
<S> <C> <C>
Net losses from changes in security values and book value
adjustments.............................................. $(193.7) $ (90.6)
Decrease (increase) in asset valuation reserve............ 46.7 (123.9)
------- -------
Net Unrealized Capital Losses and Other Adjustments....... $(147.0) (214.5)
======= =======
</TABLE>
NOTE 6--INVESTMENTS
The statement value and fair value of bonds are shown below:
<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized
December 31, 1999 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..................... $ 162.3 $ 0.4 $ 2.5 $ 160.2
Obligations of states and
political subdivisions....... 111.3 6.6 4.4 113.5
Debt securities issued by
foreign governments.......... 510.0 56.4 7.0 559.4
Corporate securities.......... 20,460.3 587.1 970.8 20,076.6
Mortgage-backed securities.... 4,944.2 22.1 167.7 4,798.6
--------- -------- -------- ---------
Total bonds................. $26,188.1 $ 672.6 $1,152.4 $25,708.3
========= ======== ======== =========
December 31, 1998
----------------
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>
The statement value and fair value of bonds at December 31, 1999, 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............... $ 1,515.9 $ 1,513.2
Due after one year through five years. 5,876.1 5,871.2
Due after five years through ten years 6,801.3 6,684.9
Due after ten years................... 7,050.6 6,840.4
--------- ---------
21,243.9 20,909.7
Mortgage-backed securities............ 4,944.2 4,798.6
--------- ---------
$26,188.1 $25,708.3
========= =========
</TABLE>
52
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 6--INVESTMENTS--CONTINUED
Gross gains of $99.1 million in 1999 and $126.4 million in 1998 and gross losses
of $94.4 million in 1999 and $62.3 million in 1998 were realized from the sale
of bonds.
At December 31, 1999, bonds with an admitted asset value of $26.6 million were
on deposit with state insurance departments to satisfy regulatory requirements.
The cost of common stocks was $345.3 million and $258.4 million at December 31,
1999 and 1998, respectively. At December 31, 1999, gross unrealized appreciation
on common stocks totaled $177.7 million, and gross unrealized depreciation
totaled $64.6 million. The fair value of preferred stock totaled $926.7 million
at December 31, 1999 and $832.4 million at December 31, 1998.
The Company participates in a security-lending program for the purpose of
enhancing income on securities held. At December 31, 1999 and 1998, $277.7
million and $421.5 million, respectively, of the Company's bonds and stocks were
on loan to various brokers/dealers, but were fully collateralized by cash and
U.S. government securities in an account held in trust for the Company. Such
assets reflect the extent of the Company's involvement in securities lending,
not the Company's risk of loss.
Mortgage loans with outstanding principal balances of $19.3 million, bonds with
amortized cost of $54.4 million and real estate with depreciated cost of $9.9
million were non-income as of December 31, 1999.
Restructured commercial mortgage loans aggregated $120.3 million and $230.5
million as of December 31, 1999 and 1998, 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
--------------------------
1999 1998
----------- -------------
(In millions)
<S> <C> <C>
Expected.................................. $10.8 $22.5
Actual.................................... 6.9 11.6
</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, 1999, 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.
53
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 6--INVESTMENTS--CONTINUED
<TABLE>
<CAPTION>
Statement Geographic Statement
Property Type Value Concentration Value
------------- ------------- ------------- ---------------
(In millions) (In millions)
<S> <C> <S> <C>
Apartments........... $1,809.1 East North Central.... $1,039.8
Hotels............... 404.0 East South Central.... 289.7
Industrial........... 816.8 Middle Atlantic....... 1,657.5
Office buildings..... 2,309.1 Mountain.............. 326.7
Retail............... 1,619.4 New England........... 836.1
1-4 Family........... 3.4 Pacific............... 2,025.0
Agricultural......... 1,803.6 South Atlantic........ 1,823.5
Other................ 400.5 West North Central.... 362.7
West South Central.... 701.9
Other................. 103.0
-------- --------
$9,165.9 $9,165.9
======== ========
</TABLE>
At December 31, 1999, the fair values of the commercial and agricultural
mortgage loan portfolios were $7.2 billion and $1.8 billion, respectively. The
corresponding amounts as of December 31, 1998 were approximately $7.3 billion
and $1.3 billion, respectively.
The maximum and minimum lending rates for mortgage loans during 1999 were 14.24%
and 6.84% for agricultural loans, 9.0% and 6.50% for other properties, and 10.0%
and 7.125% 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 1999 were
$673.5 million, $42.8 million, and $153.1 million, respectively. The
corresponding amounts in 1998 were $784.0 million, $310.0 million, and $7.7
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 1999 were $1,018.3
million, $488.5 million and $823.7 million, respectively. The corresponding
amounts in 1998 were $873.9 million, $772.5 million and $712.2 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 $463.9 million, $449.0 million, and $231.7 million, respectively, at
December 31, 1999. The corresponding amounts in 1998 were $458.2 million, $481.2
million, and $238.6 million, respectively.
54
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--REINSURANCE--CONTINUED
Amounts recoverable on paid claims and funds withheld from reinsurers were as
follows:
<TABLE>
<CAPTION>
December 31
--------------
1999 1998
------- --------
(In millions)
<S> <C> <C>
Reinsurance recoverables................. $ 27.5 $18.6
Funds withheld from reinsurers........... 227.3 49.5
</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 $245.7 million at December 31, 1999 and $251.1
million at December 31, 1998.
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 1999 issues of flexible premium variable life
insurance and scheduled premium variable life insurance policies. In connection
with this agreement, the Company transferred $44.5 million and $4.9 million of
cash to Variable Life in 1999 and 1998, respectively, for tax, commission, and
expense allowances to Variable Life, which decreased the Company's net gain from
operations by $20.6 million and $22.2 million in 1999 and 1998, respectively.
Variable Life also has a modified coinsurance agreement with the Company to
reinsure 50% of Variable Life's 1995 inforce block and 50% of 1996 and all
future issue years of certain retail annuity contracts. In connection with this
agreement, the Company made a net cash payment of $40.0 million and $12.7
million in 1999 and 1998, respectively, for surrender benefits, taxes, reserve
increase, commission expense allowances and premiums. This agreement decreased
the Company's net gain from operations by $26.9 million and $8.4 million in 1999
and 1998, 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 1999 and 1998 for all policies that are not reinsured under any other
indemnity agreement. In connection with the agreement, the Company received $0.8
million and $1.0 million in 1999 and 1998, respectively, for mortality claims
from Variable Life. This agreement increased the Company's net gain from
operations in both 1999 and 1998 by $0.5 million.
John Hancock Reassurance Company of Bermuda (JHReCo, a wholly-owned affiliate)
has a modified coinsurance agreement with the Company to reinsure 50% of the
Company's 1997 through 1999 issues of retail long-term care insurance policies.
In connection with this agreement, the Company transferred $22.6 million and
$1.9 million of cash to JHReCo in 1999 and 1998, respectively, for tax,
commission, and expense allowances to JHReCo. This agreement increased the
Company's net gain from operations by $17.4 million and $11.7 million in 1999
and 1998, respectively.
JHReCo has a modified coinsurance agreement with the Company to reinsure 30% of
the Company's issues prior to January 1, 1997 and 50% of the Company's 1997
through 1999 issues of group long-term care insurance policies. In connection
with this agreement, the Company transferred $49.9 million and $38.0 million of
cash to JHReCo in 1999 and 1998, respectively, for tax, commission, and expense
allowances to JHReCo. This agreement increased the Company's net gain from
operations by $3.6 million and $3.9 million in 1999 and 1998, respectively.
JHReCo also has a modified coinsurance agreement with the Company to reinsure
50% of one of the Company's single premium annuity contracts sold in 1999.
Premiums, benefits, and reserves ceded to JHReCo in 1999 were
55
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--REINSURANCE--CONTINUED
$169.4 million, $15.6 million and $166.1 million, respectively. This agreement
increased the Company's net gain from operations by $12.6 million in 1999.
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 were transferred to UNICARE in connection
with the sale. The insurance business sold was transferred to UNICARE through a
100% 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 remains
liable to its policyholders to the extent that UNICARE does not meet its
contractual obligations under the coinsurance agreement.
Through the Company's group health insurance operations, the Company entered
into a number of reinsurance arrangements in respect of personal accident
insurance and the occupational accident component of workers compensation
insurance, a portion of which was originated through a pool managed by Unicover
Managers, Inc. Under these arrangements, the Company both assumed risks as a
reinsurer, and also passed 95% of these risks on to other companies. This
business had originally been reinsured by a number of different companies, and
has become the subject of widespread disputes. The disputes concern the
placement of the business with reinsurers and recovery of the reinsurance. The
Company is engaged in disputes, including a number of legal proceedings, in
respect of this business. The risk to the Company is that other companies that
reinsured the business from the Company may seek to avoid their reinsurance
obligations. However, the Company believes that it has a reasonable legal
position in this matter. During the fourth quarter of 1999 and early 2000, the
Company received additional information about its exposure to losses under the
various reinsurance programs. As a result of this additional information and in
connection with global settlement discussions initiated in late 1999 with other
parties involved in the reinsurance programs, during the fourth quarter the
Company recognized a charge to policyholders' contingency reserves for
uncollectible reinsurance of $186.1 million, aftertax, as its best estimate of
its remaining loss exposure. The Company believes that any exposure to loss from
this issue, in addition to amounts already provided for as of December 31, 1999,
would not be material.
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, controls, 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
56
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--REINSURANCE--CONTINUED
company which is controlled, either directly or indirectly, by a party not
primarily engaged in the business of insurance.
The Company has not entered into any reinsurance agreements in which the
reinsurer may unilaterally cancel any reinsurance for reasons other than
nonpayment of premiums or other similar credits. The Company does not have any
reinsurance agreements in effect in which the amount of losses paid or accrued
through December 31, 1999 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 pension benefits to substantially all employees and general
agency personnel. These benefits are provided through both qualified defined
benefit and defined contribution pension plans. In addition, through
nonqualified plans, the Company provided supplemental pension benefits to
employees with salaries and/ or pension benefits in excess of the qualified plan
limits imposed by federal tax law. 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 $97.6 million in 1999 and $92.6
million in 1998. Plan assets consist principally of listed equity securities,
corporate obligations and U.S. government securities.
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. Because the qualified defined benefit plans are overfunded, no amounts
were contributed to these plans in 1999 or 1998. The funding policy for
nonqualified defined benefit plans is to contribute the amount of the benefit
payments made during the year. The projected benefit obligation and accumulated
benefit obligation for the non-qualified defined benefit pension plans, which
are underfunded, for which accumulated benefit obligations are in excess of plan
assets were $257.4 million and $239.3 million, respectively, at December 31,
1999 and $221.3 million and $194.8 million, respectively, at December 31, 1998.
Non-qualified plan assets, at fair value, were $1.0 million and $1.2 million at
December 31, 1999 and 1998, respectively.
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 pre-tax 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 $8.5 million and $8.1 million in
1999 and 1998, 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.
57
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 8--BENEFITS PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED
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.
The Company's policy is to fund postretirement benefits in amounts at or below
the annual tax qualified limits. As of December 31, 1999 and 1998, plan assets
related to non-union employees were comprised of an irrevocable health insurance
contract to provide future health benefits to retirees. Plan assets related to
union employees were comprised of approximately 70% equity securities and 30%
fixed income investments.
The changes in benefit obligation and plan assets are summarized as follows:
<TABLE>
<CAPTION>
Year ended December 31
----------------------------------------------
Pension Benefits Other Benefits
----------------------- --------------------
1999 1998 1999 1998
----------- ---------- -------- ----------
(In millions)
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning
of year....................... $1,808.4 $1,704.0 $ 366.9 $ 381.0
Service cost................... 33.8 32.8 6.6 6.8
Interest cost.................. 119.0 115.5 23.9 24.4
Actuarial loss/(gain).......... 30.7 55.5 (0.3) (16.8)
Amendments..................... 19.9 0.0 0.0 0.0
Benefits paid.................. (106.5) (99.4) (29.0) (28.5)
-------- -------- ------- -------
Benefit obligation at end of
year.......................... 1,905.3 1,808.4 368.1 366.9
-------- -------- ------- -------
Change in plan assets:
Fair value of plan assets at
beginning of year............. 2,202.2 1,995.5 215.2 172.7
Actual return on plan assets... 277.7 296.1 17.7 39.9
Employer contribution.......... 10.9 10.0 0.0 2.6
Benefits paid.................. (106.5) (99.4) 0.0 0.0
-------- -------- ------- -------
Fair value of plan assets at
end of year................... 2,384.3 2,202.2 232.9 215.2
-------- -------- ------- -------
Funded status.................. 479.0 393.8 (135.2) (151.7)
Unrecognized actuarial loss.... (349.7) (292.0) (155.7) (163.0)
Unrecognized prior service cost 39.1 23.1 16.0 17.8
Unrecognized net transition
(asset) obligation............ (11.8) (23.9) 273.3 294.3
-------- -------- ------- -------
Net amount recognized.......... $ 156.6 $ 101.0 $ (1.6) $ (2.6)
-------- -------- ------- -------
</TABLE>
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
The assumptions used in accounting for the benefit plans were as follows:
<TABLE>
<CAPTION>
Year ended December 31
--------------------------------------------
Pension Benefits Other Benefits
----------------------- ------------------
1999 1998 1999 1998
----------- ---------- ------- ---------
<S> <C> <C> <C> <C>
Discount rate................... 7.00% 6.75% 7.00% 6.75%
Expected return on plan assets.. 8.50% 8.50% 8.50% 8.50%
Rate of compensation increase... 4.77% 4.56% 4.77% 4.00%
</TABLE>
For measurement purposes, a 5.50 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2000. The rate was
assumed to decrease gradually to 5.25 percent in 2001 and remain at that level
thereafter.
Net periodic benefit (credit) cost includes the following components:
<TABLE>
<CAPTION>
Year ended December 31
--------------------------------------------
Pension Benefits Other Benefits
----------------------- ------------------
1999 1998 1999 1998
----------- ---------- ------- ---------
(In millions)
<S> <C> <C> <C> <C>
Service cost..................... $ 33.8 $ 32.8 $ 6.6 $ 6.8
Interest cost.................... 119.0 115.5 23.9 24.4
Expected return on plan assets... (182.9) (165.6) (18.2) (39.9)
Amortization of transition
(assets) obligation............. (12.1) (11.6) 21.0 20.9
Amortization of prior service
cost............................ 3.9 6.5 1.8 1.9
Recognized actuarial (gain) loss. (6.3) (2.6) (7.1) 19.0
------- ------- ------ ------
Net periodic benefit (credit)
cost......................... $ (44.6) $ (25.0) $ 28.0 $ 33.1
======= ======= ====== ======
</TABLE>
Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. A one-percentage point change in assumed
health care cost trend rates would have the following effects:
<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 $ (2.6)
Effect on postretirement benefit
obligations........................ 29.0 (26.1)
</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
service entities.
Total assets of unconsolidated majority-owned affiliates amounted to $16.0
billion at December 31, 1999 and $13.8 billion at December 31, 1998; total
liabilities amounted to $14.5 billion at December 31, 1999 and $12.5 billion at
December 31, 1998; and total net income was $99.5 million in 1999 and $148.5
million in 1998.
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).
59
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 9--AFFILIATES--CONTINUED
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 $129.0 million and $62.2 million in 1999 and
1998, respectively, from unconsolidated affiliates.
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>
Assets (Liabilities)
Number of Contracts/ -------------------------------------------
Notional Amounts 1999 1998
-------------------------- --------------------- --------------------
Carrying Fair Carrying Fair
1999 1998 Value Value Value Value
---------------- -------- ---------- --------- -------- ----------
(In millions)
<S> <C> <C> <C> <C> <C> <C>
Futures contracts to
sell securities...... $ 18,805 $ 11,286 $31.5 $ 31.5 $(3.1) $ (3.1)
Futures contracts to
acquire securities... 4,006 1,464 (0.9) (0.9) (0.3) (0.3)
Interest rate swap
agreements........... 9,194.0 7,684.0 -- (27.2) -- (159.1)
Interest rate cap
agreements........... 115.0 115.0 0.2 0.2 0.4 0.4
Interest rate floor
agreements........... 125.0 125.0 0.1 0.1 0.7 0.7
Interest rate swaption
agreements........... 30.0 0.0 (3.6) (3.6) -- 0.0
Currency rate swap
agreements........... 5,797.0 2,881.5 -- (44.8) -- 16.2
Equity collar
agreements........... -- -- 53.0 53.0 28.6 28.6
</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 2000.
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 2000 to 2029. The interest rate cap
agreements expire in 2000 to 2008. Interest rate floor agreements expire in
2003. Interest rate swaption agreements expire in 2025. The currency rate swap
agreements expire in 2000 to 2021. The equity collar agreements expire in 2003.
The Company's exposure to credit risk is the risk of loss from 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
60
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 10--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK--CONTINUED
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.
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 $24.3 million in 1999 and $26.2 million in 1998.
Future minimum rental commitments under noncancellable operating leases for
office space and furniture and equipment are as follows:
<TABLE>
<CAPTION>
December 31, 1999
-------------------
(In millions)
<S> <C>
2000.......................................... $19.1
2001.......................................... 15.9
2002.......................................... 12.8
2003.......................................... 8.9
2004.......................................... 5.3
Thereafter.................................... 7.0
-----
Total minimum payments........................ $69.0
=====
</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, 1999 Percent
----------------- ----------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with
adjustment):
With market value adjustment.................. $ 1,126.3 2.8%
At book value less surrender charge........... 2,845.0 7.1
--------- -----
Total with adjustment......................... 3,971.3 9.9
Subject to discretionary withdrawal (without
adjustment) at book
value....................................... 1,535.8 3.8
Subject to discretionary withdrawal--separate
accounts.................................... 14,287.3 35.4
Not subject to discretionary withdrawal:
General account............................... 19,320.6 48.0
Separate accounts............................. 1,175.7 2.9
--------- -----
Total annuity reserves, deposit fund liabilities
and separate accounts--before reinsurance...... 40,290.7 100.0%
=====
Less reinsurance ceded.......................... (0.1)
---------
Net annuity reserves, deposit fund liabilities
and separate accounts.......................... $40,290.6
=========
</TABLE>
61
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 12--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND
OBLIGATIONS RELATED TO SEPARATE ACCOUNTS--CONTINUED
Any liquidation costs associated with the $14.3 billion of separate accounts
subject to discretionary withdrawal are sustained by the separate account
contractholders and not by the general account.
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 $706.7 million, $6.0 million, $281.1 million and $194.6 million,
respectively, at December 31, 1999. 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 $1.2 billion at December 31, 1999. The majority
of these commitments expire in 2000.
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, 1999, the aggregate
outstanding principal balance of all the remaining pools of loans from 1991,
1993, and 1996 was $493.4 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
1999 and 1998 amounted to $3.4 million and $4.6 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, 1999, the
aggregate outstanding principal balance of the pools of loans was $365.2
million. There were no mortgage loans buy-backs in 1999 and 1998.
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, 1999 were $380.6 million for short-term borrowings
and $163.0 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
62
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 13--COMMITMENTS AND CONTINGENCIES--CONTINUED
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, 1999. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.
During 1997, the Company entered into a court-approved settlement relating to a
class action lawsuit involving certain individual life insurance policies sold
from 1979 through 1996. In entering into the settlement, the Company
specifically denied any wrongdoing. The reserve held in connection with the
settlement to provide relief to class members and for legal and administrative
costs associated with the settlement amounted to $322.8 million and $283.8
million at December 31, 1999 and 1998, respectively. Costs incurred related to
the settlement were $91.1 million and $150.0 million in 1999 and 1998,
respectively, which were charged directly to policyholders' contingency
reserves. The estimated reserve is based on a number of factors, including the
estimated number of claims, the expected type of relief to be sought by class
members (general relief or alternative dispute resolution), the estimated cost
per claim and the estimated costs to administer the claims.
During 1999, the Company transferred $194.9 million of reserves related to the
settlement to Variable Life representing Variable Life's share of the
settlement. The Company also contributed $194.9 million of capital to Variable
Life during 1999. If Variable Life's share of the settlement increases, the
Company will contribute additional capital to Variable Life so that Variable
Life's total stockholder's equity would not be impacted.
During 1996, management determined that it was probable that a settlement would
occur and that a minimum loss amount could be reasonably estimated. Accordingly,
the Company recorded its best estimate based on the information available at the
time. The terms of the settlement agreement were negotiated throughout 1997 and
approved by the court on December 31, 1997. In accordance with the terms of the
settlement agreement, the Company contacted class members during 1998 to
determine the actual type of relief to be sought by class members. The majority
of the responses from class members were received by the fourth quarter of 1998.
The type of relief sought by class members differed from the Company's previous
estimates, primarily due to additional outreach activities by regulatory
authorities during 1998 encouraging class members to consider alternative
dispute resolution relief. In 1999, the Company updated its estimate of the cost
of claims subject to alternative dispute resolution relief and revised its
reserve estimate accordingly.
Given the uncertainties associated with estimating the reserve, it is reasonably
possible that the final cost of the settlement could differ materially from the
amounts presently provided for by the Company. The Company will continue to
update its estimate of the final cost of the settlement as the claims are
processed and more specific information is developed, particularly as the actual
cost of the claims subject to alternative dispute resolution becomes available.
However, based on information available at this time, and the uncertainties
associated with the final claim processing and alternative dispute resolution,
the range of any additional costs related to the settlement cannot be reasonably
estimated.
63
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
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
-----------------------------------------------
1999 1998
-------------------- ------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------- --------- ---------- ------------
(In millions)
<S> <C> <C> <C> <C>
Assets
Bonds--Note 6............... $26,188.1 $25,708.3 $23,353.0 $24,839.3
Preferred stocks--Note 6.... 926.6 926.7 844.7 832.4
Common stocks--Note 6....... 458.4 458.4 269.3 269.3
Mortgage loans on real
estate--Note 6............ 9,165.9 9,009.5 8,223.7 8,619.7
Policy loans--Note 1........ 1,577.8 1,577.8 1,573.8 1,573.8
Cash and cash
equivalents--Note 1....... 1,160.6 1,160.6 1,348.9 1,348.9
Liabilities
Guaranteed investment
contracts--Note 1......... 13,111.6 12,617.2 12,666.9 12,599.7
Fixed rate deferred and
immediate annuities--Note
1......................... 4,685.7 4,656.9 4,375.0 4,412.2
Supplementary contracts
without life
contingencies--
Note 1.................... 55.7 55.7 42.7 44.7
Derivatives assets
(liabilities) relating
to:--Note 10
Futures contracts........... 30.6 30.6 (3.4) (3.4)
Interest rate swaps......... -- (27.2) -- (159.1)
Currency rate swaps......... -- (44.8) -- 16.2
Interest rate caps.......... 0.2 0.2 0.4 0.4
Interest rate floors........ 0.1 0.1 0.7 0.7
Equity collar agreements.... 53.0 53.0 28.6 28.6
Commitments--Note 13.......... -- 1,195.0 -- 1,114.2
</TABLE>
The carrying amounts in the table are included in the statutory-basis statements
of financial position. The methods and assumptions utilized by the Company in
estimating its fair value disclosures are described in Note 1.
NOTE 15--SUBSEQUENT EVENTS
Reorganization and Initial Public Offering
Pursuant to a Plan of Reorganization approved by the policyholders and the
Commonwealth of Massachusetts Division of Insurance, effective February 1, 2000,
the Company converted from a mutual life insurance company to a stock life
insurance company (i.e., demutualized) and became a wholly owned subsidiary of
John Hancock Financial Services, Inc., which is a holding company. All
policyholder membership interests in the Company were extinguished on that date
and eligible policyholders of the Company received, in the aggregate,
approximately 212.8 million shares of common stock, $1,438.7 million of cash and
$43.7 million policy credits as compensation. In connection with the
reorganization, the Company changed its name to John Hancock Life Insurance
Company.
In addition, on February 1, 2000, John Hancock Financial Services, Inc.
completed its initial public offering and 102 million shares of common stock
were issued at an initial public offering price of $17 per share. Net proceeds
from the offering were $1,657.7 million, of which $105.7 million was retained by
John Hancock Financial Services, Inc. and $1,552.0 million was contributed to
the Company.
64
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 15--SUBSEQUENT EVENTS--CONTINUED
Establishment of the Closed Block
Under the Plan of Reorganization, effective February 1, 2000, the Company
created a closed block for the benefit of policies included therein. The
policies included in the closed block are individual and joint traditional whole
life insurance policies of the Company that are paying or are expected to pay
dividends, and individual term life insurance policies that were in force on
February 1, 2000. The purpose of the closed block is to protect the policy
dividend expectations of these policies after the demutualization. Unless the
Commonwealth of Massachusetts Commissioner of Insurance and, in certain
circumstances, the New York Superintendent of Insurance consents to an earlier
termination, the closed block will continue in effect until the date none of
such policies is in force.
Acquisition of Long-Term Care Business
On January 3, 2000, the Company signed an agreement to purchase the individual
long-term care insurance business of Fortis, Inc. ("Fortis"). The business to be
acquired had earned premiums of approximately $124.4 million in 1999 and
included approximately 97,000 policies in force as of December 31, 1999. During
1999 the Company's individual long-term care earned premium was $177.3 million
and approximately 164,000 individual long-term care policies were in force.
NOTE 16--IMPACT OF YEAR 2000 (UNAUDITED)
By late 1999, the Company completed its Year 2000 readiness plan to address
issues that could result from computer programs being written using two digits
to define the applicable year rather than four to define the applicable year and
century. As a result the Company prepared for the transition to the Year 2000
and did not experience any significant Year 2000 problems with respect to its
mission critical information technology ("IT") or non-IT systems, applications
or infrastructure. During the date rollover to the year 2000, the Company
implemented and monitored its millennium rollover plan and conducted business as
usual on Monday, January 3, 2000.
Since January 3, 2000, the Company's information systems, including its mission
critical systems, which in the event of a Year 2000 failure would have the
greatest impact on its operations, have functioned properly. In addition, the
Company has not experienced any significant Year 2000 issues related to
interactions with its material business partners. The Company has experienced no
disruption in its ability to process claims, update customer accounts, process
financial transactions, report accurate data to management and no business
interruptions due to Year 2000 issues. While the Company continues to monitor
its systems, and those of its material business partners closely to ensure that
no unexpected Year 2000 issues develop, the Company has no reason to expect any
such issues.
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, 1999, the Company has incurred and expensed approximately
$20.8 million in related payroll costs for internal IT personnel on the project.
The estimated remaining IT personnel costs of the project are approximately $1.0
million. Through December 31, 1999, the Company incurred and expensed
approximately $47.0 million in external costs for the project. The estimated
remaining external cost of the project is approximately $2.0 million. The total
costs of the Year 2000 project, based on management's best estimates, include
approximately $21.7 million in internal IT personnel, $14.6 million in the
external modification of software, $18.3 million for external solution
providers, $9.1 million in replacement costs of non-compliant IT systems and
$6.9 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 $70 to $72.5 million. The Company's total Year 2000 project
costs include the estimated impact of external solution providers based on
presently available information.
65
<PAGE>
UNAUDITED FINANCIAL STATEMENTS
FOR
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
SECOND QUARTER 2000
66
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
INTERNATIONAL
LARGE CAP ACTIVE EQUITY SMALL CAP
GROWTH BOND INDEX GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash................... $ -- $ -- $ -- $ --
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value................. 48,724,465 73,025,493 7,123,296 7,666,668
Investments in shares
of portfolios of M
Fund Inc., at value... -- -- -- --
Policy loans and
accrued interest
receivable............ 3,043,428 10,375,346 411,737 --
Receivable from:
John Hancock Variable
Series Trust I....... 2,872 432,039 13,115 --
M Fund Inc............ -- -- -- --
----------- ----------- ---------- -----------
Total assets........... 51,770,765 83,832,878 7,548,148 7,666,668
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance
Company.............. 742 1,092 110 124
Asset charges payable.. 62 213 8 --
----------- ----------- ---------- -----------
Total liabilities...... 804 1,305 118 124
----------- ----------- ---------- -----------
Net assets............. $51,769,961 $83,831,573 $7,548,030 $ 7,666,544
=========== =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL MID CAP LARGE CAP MONEY
BALANCED GROWTH VALUE MARKET
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash...................... $ -- $ -- $ -- $ (1,285)
Investments in shares of
portfolios of John
Hancock Variable Series
Trust I, at value........ 177,025 17,365,257 9,694,756 21,053,018
Investments in shares of
portfolios of M Fund
Inc., at value........... -- -- -- --
Policy loans and accrued
interest receivable...... -- -- -- 2,186,507
Receivable from:
John Hancock Variable
Series Trust I.......... 389 -- 12,607 11,026
M Fund Inc............... -- -- -- --
-------- ----------- ---------- -----------
Total assets.............. 177,414 17,365,257 9,707,363 23,249,266
LIABILITIES
Payable to:
John Hancock Mutual Life
Insurance Company....... 3 280 161 977
Asset charges payable..... -- -- -- 134
-------- ----------- ---------- -----------
Total liabilities......... 3 280 161 1,111
-------- ----------- ---------- -----------
Net assets................ $177,411 $17,364,977 $9,707,202 $23,248,155
======== =========== ========== ===========
</TABLE>
See accompanying notes.
67
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
JUNE 30, 2000
<TABLE>
<CAPTION>
MID CAP SMALL/MID CAP REAL ESTATE GROWTH &
VALUE GROWTH EQUITY INCOME
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash................. $ -- $ -- $ 3 $ --
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value............... 6,233,979 5,570,881 4,294,336 303,554,525
Investments in shares
of portfolios of M
Fund Inc., at value
Policy loans and
accrued interest
receivable.......... -- -- 271,964 33,042,947
Receivable from:
John Hancock Variable
Series Trust I..... 4,448 -- -- 205,141
M Fund Inc.......... -- -- -- --
------------ ---------- ---------- ------------
Total assets......... 6,238,427 5,570,881 4,566,303 336,802,613
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance
Company............ 103 91 70 4,515
Asset charges payable -- -- 6 677
------------ ---------- ---------- ------------
Total liabilities.... 103 91 76 5,192
------------ ---------- ---------- ------------
Net assets........... $ 6,238,324 $5,570,790 $4,566,227 $336,797,421
============ ========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM SMALL CAP INTERNATIONAL
MANAGED BOND VALUE OPPORTUNITIES
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Cash................... $ (685) $ -- $ -- $ --
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value................. 105,001,203 264,753 4,036,903 8,034,392
Investments in shares
of portfolios of M
Fund Inc., at value
Policy loans and
accrued interest
receivable............ 13,318,794 -- -- --
Receivable from:
John Hancock Variable
Series Trust I....... 249,236 1,368 5,121 6,446
M Fund Inc............ -- -- -- --
------------ -------- ---------- ----------
Total assets........... 118,568,548 266,121 4,042,024 8,040,838
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance
Company.............. 1,571 4 68 131
Asset charges payable.. 273 -- -- --
------------ -------- ---------- ----------
Total liabilities...... 1,844 4 68 131
------------ -------- ---------- ----------
Net assets............. $118,566,704 $266,117 $4,041,956 $8,040,707
============ ======== ========== ==========
</TABLE>
See accompanying notes.
68
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
JUNE 30, 2000
<TABLE>
<CAPTION>
TURNER BRANDES
EQUITY GLOBAL CORE INTERNATIONAL
INDEX BOND GROWTH EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
ASSETS
Cash..................... $ -- $ -- $ -- $ --
Investments in shares of
portfolios of John
Hancock Variable Series
Trust I, at value....... 18,094,530 962,569 410,353 954,757
Investments in shares of
portfolios of M Fund
Inc., at value
Policy loans and accrued
interest receivable..... -- -- -- --
Receivable from:......... -- --
John Hancock Variable
Series Trust I......... 11,425 4,156 -- --
M Fund Inc.............. -- -- -- --
----------- ---------- -------- --------
Total assets............. 18,105,955 966,725 410,353 954,757
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance Company. 294 16 7 15
Asset charges payable.... -- -- -- --
----------- ---------- -------- --------
Total liabilities........ 294 16 7 15
----------- ---------- -------- --------
Net assets............... $18,105,661 $ 966,709 $410,346 $954,742
=========== ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
FRONTIER EMERGING INTERNATIONAL
CAPITAL MARKETS OPPORTUNITIES BOND
APPRECIATION EQUITY II INDEX
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------ ---------- ------------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash................... $ -- $ -- $ -- $ --
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value................. 695,498 1,067,137 254,192 86,010
Investments in shares
of portfolios of M
Fund Inc., at value... -- -- -- --
Policy loans and
accrued interest
receivable............ -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I....... -- -- 176 470
M Fund Inc............ -- -- -- --
-------- ---------- -------- -------
Total assets........... 695,498 1,067,137 254,368 86,480
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance
Company.............. 11 17 4 1
Asset charges payable.. -- -- -- --
-------- ---------- -------- -------
Total liabilities...... 11 17 4 1
-------- ---------- -------- -------
Net assets............. $695,487 $1,067,120 $254,364 $86,479
======== ========== ======== =======
</TABLE>
See accompanying notes.
69
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
JUNE 30, 2000
<TABLE>
<CAPTION>
CLIFTON
SMALL/MID CAP HIGH YIELD ENHANCED
CORE BOND U.S. EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ---------- -----------
<S> <C> <C> <C>
ASSETS
Cash................................ $ -- $ -- $ --
Investments in shares of portfolios
of John Hancock Variable Series
Trust I, at value.................. 170,344 1,346,012 25,816
Investments in shares of portfolios
of M Fund Inc., at value........... -- -- --
Policy loans and accrued interest
receivable......................... -- -- --
Receivable from:
John Hancock Variable Series Trust.I 257 9,204 --
M Fund Inc......................... -- -- --
-------- ---------- -------
Total assets........................ 170,601 1,355,216 25,816
LIABILITIES
Payable to:
John Hancock Mutual Life Insurance
Company........................... 3 22 --
Asset charges payable............... -- -- --
-------- ---------- -------
Total liabilities................... 3 22 --
-------- ---------- -------
Net assets.......................... $170,598 $1,355,194 $25,816
======== ========== =======
</TABLE>
See accompanying notes.
70
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
LARGE CAP GROWTH ACTIVE BOND
SUBACCOUNT SUBACCOUNT
---------------------------------- ----------------------------------------
2000 1999 1998 2000 1999 1998
---------- ---------- ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 52,930 $6,381,711 $2,836,032 $2,251,408 $ 5,184,234 $5,266,576
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... 105,837 1161,454 128,186 379,195 750,673 727,807
---------- ---------- ---------- ---------- ----------- -----------
Total investment
income............... 158,767 6,543,165 2,964,218 2,630,603 5,934,907
Expenses:
Mortality and expense
risks............... 137,840 213,770 143,859 234,304 452,925 415,570
---------- ---------- ---------- ---------- ----------- -----------
Net investment income. 20,927 6,329,395 2,820,359 2,396,299 5,481,982 5,578,813
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss).............. 520,755 1,146,308 433,509 (541,856) (388,883) (142,628)
Net unrealized
appreciation
(depreciation)
during the period... 2,094,997 320,087 4,558,660 690,472 (5,439,148) (102,600)
---------- ---------- ---------- ---------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments 2,615,752 1,466,395 4,992,169 148,616 (5,828,031) (245,228)
---------- ---------- ---------- ---------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations........... $2,636,679 $7,795,790 $7,812,528 $2,544,915 $ (346,049) $5,333,585
========== ========== ========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX SMALL CAP GROWTH
SUBACCOUNT SUBACCOUNT
-------------------------------- -------------------------------
2000 1999 1998 2000 1999 1998
---------- ---------- -------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 60,914 $ 212,869 $743,339 $ -- $ 543,433 $ --
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... 13,946 20,538 17,802 -- -- --
--------- ---------- -------- -------- ---------- --------
Total investment
income............... 74,860 233,407 761,141 543,433 --
Expenses:
Mortality and expense
risks............... 21,217 32,838 26,542 18,198 15,809 8,233
--------- ---------- -------- -------- ---------- --------
Net investment income
(loss)............... 53,643 200,569 734,599 (18,198) 527,624 (8,233)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain.... 57,135 62,140 52,891 61,745 48,210 21,741
Net unrealized
appreciation
(depreciation)
during the period... (479,838) 1,295,768 13,239 108,434 1,125,829 204,674
--------- ---------- -------- -------- ---------- --------
Net realized and
unrealized gain
(loss) on investments (422,703) 1,357,908 66,130 170,179 1,174,415 226,415
--------- ---------- -------- -------- ---------- --------
Net increase
(decrease) in net
assets resulting from
operations........... $(369,060) $1,558,477 $800,729 $151,981 $1,701,663 $218,182
========= ========== ======== ======== ========== ========
</TABLE>
See accompanying notes.
71
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
GLOBAL BALANCED MID CAP GROWTH
SUBACCOUNT SUBACCOUNT
------------------------------- --------------------------------------
2000 1999 1998 2000 1999 1998
---------- --------- -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 2,424 $ 17,211 $ 12,240 $ -- $1,373,009 $ 130,303
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... -- -- -- -- -- --
--------- -------- -------- ----------- ---------- ----------
Total investment
income............... 2,424 17,211 12,240 -- 1,373,009 130,303
Expenses:
Mortality and expense
risks............... 516 1,267 826 49,211 34,834 5,242
--------- -------- -------- ----------- ---------- ----------
Net investment income
(loss)............... 1,908 15,944 11,414 (49,211) 1,338,175 125,061
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain.... (1,775) 1,061 1,050 987,117 420,826 26,192
Net unrealized
appreciation
(depreciation)
during the period... (9,345) (8,559) 12,294 (1,782,512) 4,283,452 193,946
--------- -------- -------- ----------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments (11,120) (7,498) 13,344 (795,395) 4,704,278 220,138
--------- -------- -------- ----------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations........... $ (9,212) $ 8,446 $ 24,758 $ (844,606) $6,042,453 $ 345,199
========= ======== ======== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP VALUE MONEY MARKET
SUBACCOUNT SUBACCOUNT
-------------------------------- ----------------------------------
2000 1999 1998 2000 1999 1998
---------- ---------- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 104,294 $ 511,132 $185,232 $633,676 $1,134,371 $2,249,510
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... -- -- -- -- 155,491 154,162
--------- --------- -------- -------- ---------- ----------
Total investment
income............... 104,294 511,132 185,232 633,676 1,289,862 2,403,672
Expenses:
Mortality and expense
risks............... 27,912 36,983 15,356 61,140 146,758 263,735
--------- --------- -------- -------- ---------- ----------
Net investment income
(loss)............... 76,382 474,149 169,876 572,536 1,143,104 2,139,937
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain.... (83,486) 123,242 68,953 -- -- --
Net unrealized
appreciation
(depreciation)
during the period... (266,949) (499,454) 64,132 -- -- --
--------- --------- -------- -------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments (350,435) (376,212) 133,085 -- -- --
--------- --------- -------- -------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations........... $(274,053) $ 97,937 $302,961 $572,536 $1,143,104 $2,139,937
========= ========= ======== ======== ========== ==========
</TABLE>
See accompanying notes.
72
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
MID CAP VALUE SMALL/MID CAP GROWTH
SUBACCOUNT SUBACCOUNT
--------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
--------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 11,919 $ 30,563 $ 53,920 $ -- $ 840,786 $ 93,281
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... -- -- -- -- -- --
-------- --------- ---------- ----------- ----------- -----------
Total investment
income............... 11,919 30,563 53,920 -- 840,786 93,281
Expenses:
Mortality and expense
risks............... 14,736 28,106 34,857 15,760 30,491 26,942
-------- --------- ---------- ----------- ----------- -----------
Net investment income. (2,817) 2,457 19,063 (15,760) 810,295 66,339
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss).............. (51,073) (547,518) 74,634 (149,393) 16,952 33,249
Net unrealized
appreciation
(depreciation)
during the period... 304,436 657,486 (944,401) 575,021 (590,295) 126,465
-------- --------- ---------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments 253,363 109,968 (869,767) 425,628 (573,343) 159,714
-------- --------- ---------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations........... $250,546 $ 112,425 $ (850,704) $ 409,868 $ 236,952 $ 226,053
======== ========= ========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY GROWTH & INCOME
SUBACCOUNT SUBACCOUNT
---------------------------------- ----------------------------------------
2000 1999 1998 2000 1999 1998
--------- ---------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $108,322 $ 262,930 $ 343,976 $ 1,526,055 $35,057,066 $26,306,209
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... 9,674 17,361 17,260 1,190,757 2,279,107 1,996,131
-------- --------- ----------- ----------- ----------- -----------
Total investment
income............... 117,996 280,291 361,236 2,716,812 37,336,173 28,302,340
Expenses:
Mortality and expense
risks............... 12,119 24,900 33,890 934,682 1,779,482 1,466,469
-------- --------- ----------- ----------- ----------- -----------
Net investment income. 105,877 255,391 327,346 1,782,130 35,556,691 26,835,871
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)......... (91,535) (168,994) 158,205 2,647,435 5,502,422 3,223,935
Net unrealized
appreciation
(depreciation)
during the period... 483,848 (220,380) (1,546,717) (5,596,868) 2,405,417 32,918,552
-------- --------- ----------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss)
on investments 392,313 (389,374) (1,388,512) (2,949,433) 7,907,839 36,142,487
-------- --------- ----------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations........... $498,190 $(133,983) $(1,061,166) $(1,167,303) $43,464,530 $62,978,358
======== ========= =========== =========== =========== ===========
</TABLE>
See accompanying notes.
73
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
MANAGED SHORT-TERM BOND
SUBACCOUNT SUBACCOUNT
--------------------------------------- -----------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 1,592,291 $ 9,998,433 $ 9,347,788 $ 7,923 $ 15,539 $ 27,350
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... 483,211 953,686 854,487 -- -- --
----------- ----------- ----------- --------- --------- --------
Total investment
income............... 2,075,502 10,952,119 10,202,275 7,923 15,539 27,350
Expenses:
Mortality and expense
risks............... 330,081 649,802 577,276 744 1,497 2,680
----------- ----------- ----------- --------- --------- --------
Net investment income. 1,745,421 10,302,317 9,624,999 7,179 14,042 24,670
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss).............. 602,334 996,546 791,245 (1,357) (8,638) 265
Net unrealized
appreciation
(depreciation)
during the period... (1,028,010) (2,108,530) 6,629,458 885 (2,442) (4,247)
----------- ----------- ----------- --------- --------- --------
Net realized and
unrealized gain
(loss) on investments (425,676) (1,111,984) 7,420,703 (472) (11,080) (3,982)
----------- ----------- ----------- --------- --------- --------
Net increase in net
assets resulting from
operations........... $ 1,319,745 $ 9,190,333 $17,045,702 $ 6,707 $ 2,962 $ 20,688
=========== =========== =========== ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE INTERNATIONAL OPPORTUNITIES
SUBACCOUNT SUBACCOUNT
-------------------------------- --------------------------------
2000 1999 1998 2000 1999 1998
--------- ---------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 30,875 $ 79,585 $ 12,675 $ 29,144 $241,151 $ 33,443
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... -- -- -- -- -- --
-------- --------- --------- --------- -------- --------
Total investment
income............... 30,875 79,585 12,675 29,144 241,151 33,443
Expenses:
Mortality and expense
risks............... 10,390 17,680 11,853 22,685 17,937 21,581
-------- --------- --------- --------- -------- --------
Net investment income. 20,485 61,905 822 6,459 223,214 11,862
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss).............. (86,055) (33,134) 29,257 70,837 155,412 33,474
Net unrealized
appreciation
(depreciation)
during the period... 89,421 (148,401) (105,331) (218,272) 387,412 272,314
-------- --------- --------- --------- -------- --------
Net realized and
unrealized gain
(loss) on investments 3,366 (181,535) (76,074) (147,435) 542,824 305,788
-------- --------- --------- --------- -------- --------
Net increase
(decrease) in net
assets resulting from
operations........... $ 23,851 $(119,630) $ (75,252) $(140,976) $766,038 $317,650
======== ========= ========= ========= ======== ========
</TABLE>
See accompanying notes.
74
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
EQUITY INDEX GLOBAL BOND
SUBACCOUNT SUBACCOUNT
---------------------------------- ------------------------------
2000 1999 1998 2000 1999 1998
---------- ---------- ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I..... $ 94,492 $ 593,325 $ 185,267 $14,627 $ 37,862 $19,628
M Fund Inc.......... -- -- -- -- -- --
Interest income on
policy loans........ -- -- -- -- -- --
--------- ---------- ---------- ------- -------- -------
Total investment
income.............. 94,492 593,325 185,267 14,627 37,862 19,628
Expenses:
Mortality and expense
risks.............. 49,956 63,950 27,141 2,553 4,084 1,979
--------- ---------- ---------- ------- -------- -------
Net investment income 44,536 529,375 158,126 12,074 33,778 17,649
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)............. 165,284 271,978 443,879 (9,422) (151) 3,991
Net unrealized
appreciation
(depreciation)
during
the period......... (305,128) 1,282,937 585,673 22,501 (52,953) 4,308
--------- ---------- ---------- ------- -------- -------
Net realized and
unrealized gain
(loss) on investments (139,844) 1,554,915 1,029,552 13,079 (53,104) 8,299
--------- ---------- ---------- ------- -------- -------
Net increase
(decrease) in net
assets resulting
from operations..... $ (95,308) $2,084,290 $1,187,678 $25,153 $(19,326) $25,948
========= ========== ========== ======= ======== =======
</TABLE>
<TABLE>
<CAPTION>
TURNER CORE GROWTH BRANDES INTERNATIONAL
SUBACCOUNT EQUITY SUBACCOUNT
-------------------------- ----------------------------
2000 1999 1998 2000 1999 1998
-------- ------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 4,669 $19,328 $ 2,231 $11,821 $ 16,354 $14,444
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... -- -- -- -- -- --
------- ------- ------- ------- -------- -------
Total investment
income............... 4,669 19,328 2,231 11,821 16,354 14,444
Expenses:
Mortality and expense
risks............... 1,010 1,139 565 2,033 2,166 1,158
------- ------- ------- ------- -------- -------
Net investment income. 3,659 18,189 1,666 9,788 14,188 13,286
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain.... 15,398 26,736 2,780 4,917 11,526 600
Net unrealized
appreciation
(depreciation)
during
the period.......... (2,617) 23,628 22,686 38,205 122,734 8,581
------- ------- ------- ------- -------- -------
Net realized and
unrealized gain on
investments.......... 12,781 50,364 25,466 43,122 134,260 9,181
------- ------- ------- ------- -------- -------
Net increase in net
assets resulting from
operations........... $16,440 $68,553 $27,132 $52,910 $148,448 $22,467
======= ======= ======= ======= ======== =======
</TABLE>
See accompanying notes.
75
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
FRONTIER CAPITAL APPRECIATION EMERGING MARKETS
SUBACCOUNT EQUITY SUBACCOUNT
------------------------------- ------------------------------
2000 1999 1998 2000 1999 1998*
-------- ---------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $18,679 $ 13,028 $12,832 $ -- $ 15,636 $ 1
M Fund Inc........... -- -- -- -- --
Interest income on
policy loans......... -- -- -- -- -- --
------- -------- ------- --------- -------- -----
Total investment
income............... 18,679 13,028 12,832 -- 15,636 1
Expenses:
Mortality and expense
risks............... 1,765 4,257 13,446 2,493 466 0
------- -------- ------- --------- -------- -----
Net investment income
(loss)............... 16,914 8,771 (614) (2,493) 15,170 1
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss).............. 6,835 (59,550) 23,061 25,714 1,838 (1)
Net unrealized
appreciation
(depreciation)
during the period... 40,060 89,369 (840) (121,684) 92,713 (48)
------- -------- ------- --------- -------- -----
Net realized and
unrealized gain
(loss) on investments 46,895 29,819 22,221 (95,970) 94,551 (49)
------- -------- ------- --------- -------- -----
Net increase
(decrease) in net
assets resulting from
operations........... $63,809 $ 38,590 $21,607 $ (98,463) $109,721 $ (48)
======= ======== ======= ========= ======== =====
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL OPPORTUNITIES II BOND INDEX
SUBACCOUNT SUBACCOUNT
------------------------------- -----------------------------
2000 1999 1998* 2000 1999 1998*
---------- ---------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 2,847 $ 816 $ 117 $3,551 $ 2,971 $ 296
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... -- -- -- -- -- --
-------- --------- ----- ------ --------- -----
Total investment
income............... 2,847 816 117 3,551 2,971 296
Expenses:
Mortality and expense
risks............... 591 378 60 274 270 11
-------- --------- ----- ------ --------- -----
Net investment income
(loss)............... 2,256 438 57 3,277 2,701 285
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss).............. 1,228 196 (16) (875) (1,613) (26)
Net unrealized
appreciation
(depreciation)
during the period... (3,402) 20,203 (303) 2,959 (1,753) (147)
-------- --------- ----- ------ --------- -----
Net realized and
unrealized gain
(loss) on investments (2,174) 20,399 (319) 2,084 (3,366) (173)
-------- --------- ----- ------ --------- -----
Net increase
(decrease) in net
assets resulting from
operations........... $ 82 $ 20,837 $(262) $5,361 $ (665) $ 112
======== ========= ===== ====== ========= =====
</TABLE>
_________
* May 1, 1998 (commencement of operations).
See accompanying notes.
76
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
SMALL/MID CAP CORE HIGH YIELD BOND
SUBACCOUNT SUBACCOUNT
-------------------------- ----------------------------
2000 1999 1998* 2000 1999 1998*
-------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I...... $ 267 $ 6,699 $ -- $20,885 $ 3,011 $ 50
M Fund Inc........... -- -- -- -- -- --
Interest income on
policy loans......... -- -- -- -- -- --
------- ------- ------- ------- ------- -----
Total investment
income............... 267 6,699 -- 20,885 3,011 50
Expenses:
Mortality and expense
risks............... 385 335 48 1,272 220 2
------- ------- ------- ------- ------- -----
Net investment income
(loss)............... (118) 6,364 (48) 19,613 2,791 48
Net realized gain
(loss).............. 426 1,093 (1,957) (9,114) (396) (108)
Net unrealized
appreciation
(depreciation)
during the period... (2,399) 4,719 1,888 1,038 (1,172) (19)
------- ------- ------- ------- ------- -----
Net realized and
unrealized gain (loss)
on investments........ (1,973) 5,812 (69) (8,076) (1,568) (127)
------- ------- ------- ------- ------- -----
Net increase
(decrease) in net
assets resulting from
operations............ $(2,091) $12,176 $ (117) $11,537 $ 1,223 $ (79)
======= ======= ======= ======= ======= =====
</TABLE>
<TABLE>
<CAPTION>
CLIFTON
ENHANCED U.S.
EQUITY SUBACCOUNT
------------------
2000 1999**
-------- --------
<S> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I................... $ 676 $1,435
M Fund Inc............................................. -- --
Interest income on policy loans......................... -- --
----- ------
Total investment income................................. 676 1,435
Expenses:
Mortality and expense risks............................ 62 61
----- ------
Net investment income................................... 614 1,374
Net realized and unrealized gain (loss) on investments:
Net realized gain...................................... 292 11
Net unrealized appreciation (depreciation) during the
period................................................ (958) 1,285
----- ------
Net realized and unrealized gain (loss) on investments.. (666) 1,296
----- ------
Net increase (decrease) in net assets resulting from
operations............................................. $ (52) $2,670
===== ======
</TABLE>
_________
* From May 1, 1998 (commencement of operations).
** From May 1, 1999 (commencement of operations).
See accompanying notes.
77
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
LARGE CAP GROWTH SUBACCOUNT ACTIVE BOND SUBACCOUNT
--------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income....................... $ 20,927 $ 6,329,395 $ 2,820,359 $ 2,396,299 $ 5,481,982 $ 5,578,813
Net realized gain (loss).................... 520,755 1,146,308 433,509 (541,856) (388,883) (142,628)
Net unrealized appreciation (depreciation)
during the period.......................... 2,094,997 320,087 4,558,660 690,472 (5,439,148) (102,600)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations................... 2,636,679 7,795,790 7,812,528 2,544,915 (346,049) 5,333,585
From policyholder transactions:
Net premiums from policyholders............. 8,986,828 10,950,682 6,922,934 5,920,660 11,668,600 10,038,753
Net benefits to policyholders............... (4,313,445) (5,776,293) (3,869,320) (5,631,307) (7,543,864) (7,974,328)
Net increase in policy loans............... 431,462 -- -- 107,723 -- --
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting from
policyholder transactions................... 5,104,845 5,174,389 3,053,614 397,076 4,124,736 2,064,425
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets................... 7,741,524 12,970,179 10,866,142 2,941,991 3,778,687 7,398,010
Net assets at beginning of period............ 44,028,437 31,058,258 20,192,116 80,889,582 77,110,895 69,712,885
----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period.................. $51,769,961 $44,028,437 $31,058,258 $83,831,573 $80,889,582 $77,110,895
=========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX SUBACCOUNT SMALL CAP GROWTH SUBACCOUNT
--------------------------------------- ------------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ----------- ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss)............... $ 53,643 $ 200,569 $ 734,599 $ (18,198) $ 527,624 $ (8,233)
Net realized gain.......................... 57,135 62,140 52,891 61,745 48,210 21,741
Net unrealized appreciation (depreciation)
during the period......................... (479,838) 1,295,768 13,239 108,434 1,125,829 204,674
----------- ----------- ----------- ---------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations.................. (369,060) 1,558,477 800,729 151,981 1,701,663 218,182
From policyholder transactions:
Net premiums from policyholders............. 1,421,418 1,634,643 1,489,281 3,292,714 1,398,160 891,480
Net benefits to policyholders.............. (762,883) (1,119,500) (1,347,312) (290,085) (390,180) (269,586)
Net increase in policy loans.............. 77,561 -- -- -- -- --
----------- ----------- ----------- ---------- ------------ ------------
Net increase in net assets resulting from
policyholder transactions................. 736,096 515,143 141,969 3,002,629 1,007,980 621,894
----------- ----------- ----------- ---------- ------------ ------------
Net increase in net assets.................. 367,036 2,073,620 942,698 3,154,610 2,709,643 840,076
Net assets at beginning of period........... 7,180,994 5,107,374 4,164,676 4,511,934 1,802,291 962,215
----------- ----------- ----------- ---------- ------------ ------------
Net assets at end of period................. $ 7,548,030 $ 7,180,994 $ 5,107,374 $7,666,544 $ 4,511,934 $ 1,802,291
=========== =========== =========== ========== ============ ============
</TABLE>
See accompanying notes.
78
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
GLOBAL BALANCED SUBACCOUNT MID CAP GROWTH SUBACCOUNT
------------------------------------ --------------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ---------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss)............... $ 1,908 $ 15,944 $ 11,414 $ (49,211) $ 1,338,175 $ 125,061
Net realized gain (loss)................... (1,775) 1,061 1,050 987,117 420,826 26,192
Net unrealized appreciation (depreciation)
during the period......................... (9,345) (8,559) 12,294 (1,782,512) 4,283,452 193,946
---------- ---------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations.................. (9,212) 8,446 24,758 (844,606) 6,042,453 345,199
From policyholder transactions:
Net premiums from policyholders............ 46,281 115,573 150,466 7,441,238 7,041,199 772,359
Net benefits to policyholders.............. (60,026) (133,983) (50,204) (2,841,229) (947,660) (211,806)
Net increase (decrease) in policy loans... -- -- -- -- -- --
---------- ---------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder transactions... (13,745) (18,410) 100,262 4,600,009 6,093,539 560,553
---------- ---------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets....... (22,957) (9,964) 125,020 3,755,403 12,135,992 905,752
Net assets at beginning of period........... 200,368 210,332 85,312 13,609,574 1,473,582 567,830
---------- ---------- ---------- ----------- ------------ ------------
Net assets at end of period................. $ 177,411 $ 200,368 $ 210,332 $17,364,977 $ 13,609,574 $ 1,473,582
========== ========== ========== =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP VALUE SUBACCOUNT MONEY MARKET SUBACCOUNT
-------------------------------------- -------------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ---------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income...................... $ 76,382 $ 474,149 $ 169,876 $ 572,536 $ 1,143,104 $ 2,139,937
Net realized gain (loss)................... (83,486) 123,242 68,953 -- -- --
Net unrealized appreciation (depreciation)
during the period......................... (266,949) (499,454) 64,132 -- -- --
----------- ----------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations.................. (274,053) 97,937 302,961 572,536 1,143,104 2,139,937
From policyholder transactions:
Net premiums from policyholders............ 2,956,833 5,449,922 2,321,440 5,773,700 16,733,655 55,692,824
Net benefits to policyholders.............. (1,238,365) (1,059,147) (528,449) (3,624,978) (46,642,184) (22,850,788)
Net increase (decrease) in policy loans... -- -- -- 23,791 -- (198,682)
----------- ----------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder transactions... 1,718,468 4,390,775 1,792,991 2,172,513 (29,908,529) 32,643,354
----------- ----------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets....... 1,444,415 4,488,712 2,095,952 2,745,049 (28,765,425) 34,783,291
Net assets at beginning of period........... 8,262,787 3,774,075 1,678,123 20,503,106 49,268,531 14,485,240
----------- ----------- ---------- ----------- ------------ ------------
Net assets at end of period................. $ 9,707,202 $ 8,262,787 $3,774,075 $23,248,155 $ 20,503,106 $ 49,268,531
=========== =========== ========== =========== ============ ============
</TABLE>
See accompanying notes.
79
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
MID CAP VALUE SUBACCOUNT SMALL/MID CAP GROWTH SUBACCOUNT
--------------------------------------- ----------------------------------------------
2000 1999 1998 2000 1999 1998
----------- ------------ ------------ ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income................ $ (2,817) $ 2,457 $ 19,063 $ (15,760) $ 810,295 $ 66,339
Net realized gain (loss)............. (51,073) (547,518) 74,634 (149,393) 16,952 33,249
Net unrealized appreciation
(depreciation) during the period.... 304,436 657,486 (944,401) 575,021 (590,295) 126,465
---------- ----------- ----------- ------------ ------------ -------------
Net increase (decrease) in net assets
resulting from operations............ 250,546 112,425 (850,704) 409,868 236,952 226,053
From policyholder transactions:
Net premiums from policyholders...... 1,577,789 2,086,192 5,639,732 (115,753) 1,533,102 1,812,713
Net benefits to policyholders........ (291,643) (3,546,814) (775,357) (209,369) (1,200,248) (1,214,489)
Net increase (decrease) in policy
loans............................... -- -- -- -- -- --
---------- ----------- ----------- ------------ ------------ -------------
Net increase (decrease) in net assets
resulting from policyholder
transactions......................... 1,286,146 (1,460,622) 4,864,375 (325,122) 332,854 598,224
---------- ----------- ----------- ------------ ------------ -------------
Net increase (decrease) in net assets. 1,536,692 (1,348,197) 4,013,671 84,746 569,806 824,277
Net assets at beginning of period..... 4,701,632 6,049,829 2,036,158 5,486,044 4,916,238 4,091,961
---------- ----------- ----------- ------------ ------------ -------------
Net assets at end of period........... $6,238,324 $ 4,701,632 $ 6,049,829 $ 5,570,790 $ 5,486,044 $ 4,916,238
========== =========== =========== ============ ============ =============
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY SUBACCOUNT GROWTH & INCOME SUBACCOUNT
-------------------------------------- ---------------------------------------------
2000 1999 1998 2000 1999 1998
----------- ------------ ----------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income................. $ 105,877 $ 255,391 $ 327,346 $ 1,782,130 $ 35,556,691 $ 26,835,871
Net realized gain (loss).............. (91,535) (168,994) 158,205 2,647,435 5,502,422 3,223,935
Net unrealized appreciation
(depreciation) during the period..... 483,848 (220,380) (1,546,717) (5,596,868) 2,405,417 32,918,552
---------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations............. 498,190 (133,983) (1,061,166) (1,167,303) 43,464,530 62,978,358
From policyholder transactions:
Net premiums from policyholders....... 555,720 968,627 3,382,263 15,901,284 34,593,082 35,108,834
Net benefits to policyholders......... (554,815) (2,335,552) (1,663,696) (18,823,645) (34,650,911) (29,649,984)
Net increase (decrease) in policy
loans................................ 37,032 -- (1,103) 386,988 -- 3,672,137
---------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder
transactions.......................... 37,937 (1,366,925) 1,717,464 (2,535,373) (57,829) 9,130,987
---------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net assets.. 536,127 (1,500,908) 656,298 (3,702,676) 43,406,701 72,109,345
Net assets at beginning of period...... 4,030,100 5,531,008 4,874,710 340,500,097 297,093,396 224,984,051
---------- ----------- ----------- ------------ ------------ ------------
Net assets at end of period............ $4,566,227 $ 4,030,100 $ 5,531,008 $336,797,421 $340,500,097 $297,093,396
========== =========== =========== ============ ============ ============
</TABLE>
See accompanying notes.
80
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
MANAGED SUBACCOUNT SHORT-TERM BOND SUBACCOUNT
------------------------------------------ --------------------------------------------
2000 1999 1998 2000 1999 1998
------------- ------------- ------------ ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income................. $ 1,745,421 $ 10,302,317 $ 9,624,999 $ 7,179 $ 14,042 $ 24,670
Net realized gain (loss).............. 602,334 996,546 791,245 (1,357) (8,638) 265
Net unrealized appreciation
(depreciation) during the period..... (1,028,010) (2,108,530) 6,629,458 885 (2,442) (4,247)
------------ ------------ ------------ ------------ ------------- ----------
Net increase in net assets resulting
from operations....................... 1,319,745 9,190,333 17,045,702 6,707 2,962 20,688
From policyholder transactions:
Net premiums from policyholders....... 6,612,464 13,430,282 13,116,210 62,306 109,732 420,697
Net benefits to policyholders......... (8,783,955) (14,305,859) (14,539,301) (41,809) (370,270) (71,999)
Net increase in policy loans.......... 289,031 -- 1,134,137 -- -- --
------------ ------------ ------------ ------------ ------------- ----------
Net increase (decrease) in net assets
resulting from policyholder
transactions.......................... (1,882,460) (875,577) (288,954) 20,497 (260,538) 348,698
------------ ------------ ------------ ------------ ------------- ----------
Net increase (decrease) in net assets.. (562,715) 8,314,756 16,756,748 27,204 (257,576) 369,386
Net assets at beginning of period...... 119,129,419 110,814,663 94,057,915 238,913 496,489 127,103
------------ ------------ ------------ ------------ ------------- ----------
Net assets at end of period............ $118,566,704 $119,129,419 $110,814,663 $ 266,117 $ 238,913 $ 496,489
============ ============ ============ ============ ============= ==========
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE SUBACCOUNT INTERNATIONAL OPPORTUNITIES SUBACCOUNT
------------------------------------ -------------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ---------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income................ $ 20,485 $ 61,905 $ 822 $ 6,459 $ 223,214 $ 11,862
Net realized gain (loss)............. (86,055) (33,134) 29,257 70,837 155,412 33,474
Net unrealized appreciation
(depreciation) during the period.... 89,421 (148,401) (105,331) (218,272) 387,412 272,314
---------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations............ 23,851 (119,630) (75,252) (140,976) 766,038 317,650
From policyholder transactions:
Net premiums from policyholders...... 760,849 1,483,922 1,644,666 4,733,164 2,354,681 3,814,201
Net benefits to policyholders........ (210,136) (447,402) (270,585) (180,424) (3,673,500) (339,134)
Net increase in policy loans......... -- -- -- -- -- --
---------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets
resulting from policyholder
transactions......................... 550,713 1,036,520 1,374,081 4,552,740 (1,318,819) 3,475,067
---------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets. 574,564 916,890 1,298,829 4,411,764 (552,781) 3,792,717
Net assets at beginning of period..... 3,467,392 2,550,502 1,251,673 3,628,943 4,181,724 389,007
---------- ---------- ---------- ---------- ----------- ----------
Net assets at end of period........... $4,041,956 $3,467,392 $2,550,502 $8,040,707 $ 3,628,943 $4,181,724
========== ========== ========== ========== =========== ==========
</TABLE>
See accompanying notes.
81
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
EQUITY INDEX GLOBAL BOND
SUBACCOUNT SUBACCOUNT
-------------------------------------- ----------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ---------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income. $ 44,536 $ 529,375 $ 158,126 $ 12,074 $ 33,778 $ 17,649
Net realized gain
(loss)............... 165,284 271,978 443,879 (9,422) (151) 3,991
Net unrealized
appreciation
(depreciation)
during the period.... (305,128) 1,282,937 585,673 22,501 (52,953) 4,308
----------- ----------- ---------- -------- --------- --------
Net increase
(decrease) in net
assets resulting from
operations............ (95,308) 2,084,290 1,187,678 25,153 (19,326) 25,948
From policyholder
transactions:
Net premiums from
policyholders........ 5,310,072 6,697,385 4,822,053 205,433 696,619 381,025
Net benefits to
policyholders........ (1,515,182) (1,623,429) (885,493) (93,595) (317,999) (83,865)
Net increase in
policy loans......... -- -- -- -- -- --
----------- ----------- ---------- -------- --------- --------
Net increase in net
assets resulting from
policyholder
transactions.......... 3,794,890 5,073,956 3,936,560 111,838 378,620 297,159
----------- ----------- ---------- -------- --------- --------
Net increase in net
assets................ 3,699,582 7,158,246 5,124,238 136,991 359,294 323,107
Net assets at
beginning of period... 14,406,079 7,247,833 2,123,595 829,718 470,424 147,317
----------- ----------- ---------- -------- --------- --------
Net assets at end of
period................ $18,105,661 $14,406,079 $7,247,833 $966,709 $ 829,718 $470,424
=========== =========== ========== ======== ========= ========
</TABLE>
<TABLE>
<CAPTION>
TURNER CORE GROWTH
SUBACCOUNT BRANDES INTERNATIONAL EQUITY SUBACCOUNT
------------------------------ ------------------------------------------
2000 1999 1998 2000 1999 1998
--------- --------- -------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income. $ 3,659 $ 18,189 $ 1,666 $ 9,788 $ 14,188 $ 13,286
Net realized gain..... 15,398 26,736 2,780 4,917 11,526 600
Net unrealized
appreciation
(depreciation)
during the period.... (2,617) 23,628 22,686 38,205 122,734 8,581
-------- -------- -------- -------- -------- --------
Net increase in net
assets resulting from
operations............ 16,440 68,553 27,132 52,910 148,448 22,467
From policyholder
transactions:
Net premiums from
policyholders........ 152,961 109,802 39,070 389,836 152,629 141,892
Net benefits to
policyholders........ (16,862) (45,555) (9,835) (13,506) (31,332) (34,941)
Net increase in
policy loans......... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net increase in net
assets resulting from
policyholder
transactions.......... 136,099 64,247 29,235 376,330 121,297 106,951
-------- -------- -------- -------- -------- --------
Net increase in net
assets................ 152,539 132,800 56,367 429,240 269,745 129,418
Net assets at
beginning of period... 257,807 125,007 68,640 525,502 255,757 126,339
-------- -------- -------- -------- -------- --------
Net assets at end of
period................ $410,346 $257,807 $125,007 $954,742 $525,502 $255,757
======== ======== ======== ======== ======== ========
</TABLE>
See accompanying notes.
82
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
FRONTIER CAPITAL APPRECIATION EMERGING MARKETS EQUITY
SUBACCOUNT SUBACCOUNT
----------------------------------- ----------------------------------
2000 1999 1998 2000 1999 1998*
--------- ------------ ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss)............... $ 16,914 $ 8,771 $ (614) $ (2,493) $ 15,170 $ 1
Net realized gain
(loss)............... 6,835 (59,550) 23,061 25,714 1,838 (1)
Net unrealized
appreciation
(depreciation)
during the period.... 40,060 89,369 (840) (121,684) 92,713 (48)
-------- ----------- ---------- ---------- -------- -------
Net increase
(decrease) in net
assets resulting from
operations............ 63,809 38,590 21,607 (98,463) 109,721 (48)
From policyholder
transactions:
Net premiums from
policyholders........ 181,850 103,675 2,465,299 853,330 336,277 784
Net benefits to
policyholders........ (4,155) (2,221,410) (227,386) (125,559) (8,915) (7)
Net increase in
policy loans......... -- -- -- -- -- --
-------- ----------- ---------- ---------- -------- -------
Net increase
(decrease) in net
assets resulting from
policyholder
transactions.......... 177,695 (2,117,735) 2,237,913 727,771 327,362 777
-------- ----------- ---------- ---------- -------- -------
Net increase in net
assets................ 241,504 (2,079,145) 2,259,520 629,308 437,083 729
Net assets at
beginning of period... 453,983 2,533,128 273,608 437,812 729 --
-------- ----------- ---------- ---------- -------- -------
Net assets at end of
period................ $695,487 $ 453,983 $2,533,128 $1,067,120 $437,812 $ 729
======== =========== ========== ========== ======== =======
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL OPPORTUNITIES II BOND INDEX
SUBACCOUNT SUBACCOUNT
---------------------------------- ---------------------------------
2000 1999 1998* 2000 1999 1998*
------------- -------- ------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income................. $ 2,256 $ 438 $ 57 $ 3,277 $ 2,701 $ 285
Net realized gain (loss).............. 1,228 196 (16) (875) (1,613) (26)
Net unrealized appreciation
(depreciation) during the period..... (3,402) 20,203 (303) 2,959 (1,753) (147)
------------- -------- ------- ----------- -------- -------
Net increase (decrease) in net assets
resulting from operations............. 82 20,837 (262) 5,361 (665) 112
From policyholder transactions:
Net premiums from policyholders....... 163,951 125,955 17,519 13,572 80,921 16,730
Net benefits to policyholders......... (57,384) (15,572) (762) (6,663) (20,596) (2,293)
Net increase in policy loans.......... -- -- -- -- -- --
------------- -------- ------- ----------- -------- -------
Net increase in net assets resulting
from policyholder transactions........ 106,567 110,383 16,757 6,909 60,325 14,437
------------- -------- ------- ----------- -------- -------
Net increase in net assets............. 106,649 131,220 16,495 12,270 59,660 14,549
Net assets at beginning of period...... 147,715 16,495 -- 74,209 14,549 --
------------- -------- ------- ----------- -------- -------
Net assets at end of period............ $ 254,364 $147,715 $16,495 $ 86,479 $ 74,209 $14,549
============= ======== ======= =========== ======== =======
</TABLE>
_________
* From May 1, 1998 (commencement of operations).
See accompanying notes.
83
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
SMALL/MID CAP CORE HIGH YIELD BOND
SUBACCOUNT SUBACCOUNT
------------------------------ -----------------------------------
2000 1999 1998* 2000 1999 1998*
--------- --------- -------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss)............... $ (118) $ 6,364 $ (48) $ 19,613 $ 2,791 $ 48
Net realized gain
(loss)............... 426 1,093 (1,957) (9,114) (396) (108)
Net unrealized
appreciation
(depreciation)
during the period..... (2,399) 4,719 1,888 1,038 (1,172) (19)
-------- -------- -------- ---------- ------- ---------
Net increase
(decrease) in net
assets resulting from
operations............ (2,091) 12,176 (117) 11,537 1,223 (79)
From policyholder
transactions:
Net premiums from
policyholders........ 94,470 44,493 52,673 1,328,320 69,375 108,274
Net benefits to
policyholders........ 854 (12,003) (19,857) (60,714) -- (102,742)
Net increase in
policy loans......... -- -- -- -- -- --
-------- -------- -------- ---------- ------- ---------
Net increase in net
assets resulting from
policyholder
transactions.......... 95,324 32,490 32,816 1,267,606 69,375 5,532
-------- -------- -------- ---------- ------- ---------
Net increase in net
assets................ 93,232 44,666 32,699 1,279,143 70,598 5,453
Net assets at
beginning of period... 77,365 32,699 -- 76,051 5,453 --
-------- -------- -------- ---------- ------- ---------
Net assets at end of
period................ $170,598 $ 77,365 $ 32,699 $1,355,194 $76,051 $ 5,543
======== ======== ======== ========== ======= =========
</TABLE>
<TABLE>
<CAPTION>
CLIFTON ENHANCED
U.S. EQUITY SUBACCOUNT
-----------------------
2000 1999**
----------- ----------
<S> <C> <C>
Increase (decrease) in net assets from operations:
Net investment income.............................. $ 614 $ 1,374
Net realized gain.................................. 292 11
Net unrealized appreciation (depreciation) during
the period........................................ (958) 1,285
------- -------
Net increase (decrease) in net assets resulting from
operations......................................... (52) 2,670
From policyholder transactions:
Net premiums from policyholders.................... 15,980 15,505
Net benefits to policyholders...................... (8,287) --
Net increase in policy loans....................... -- --
------- -------
Net increase in net assets resulting from
policyholder transactions.......................... 7,693 15,505
------- -------
Net increase in net assets.......................... 7,641 18,175
Net assets at beginning of period................... 18,175 --
------- -------
Net assets at end of period......................... $25,816 $18,175
======= =======
</TABLE>
_________
* From May 1, 1998 (commencement of operations).
** From May 1, 1999 (commencement of operations).
See accompanying notes.
84
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
YEARS AND PERIODS ENDED JUNE 30, 2000
1. ORGANIZATION
John Hancock Mutual Variable Life Insurance Account UV (the Account) is a
separate investment account of John Hancock Life Insurance Company (JHLICO or
John Hancock). John Hancock Mutual Variable Life Insurance Account UV was formed
to fund variable life insurance policies (Policies) issued by JHLICO. The
Account is operated as a unit investment trust registered under the Investment
Company Act of 1940, as amended, and currently consists of twenty-seven
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-seven Portfolios of the Fund and
M Fund which are currently available are the Large Cap Growth, Active Bond
(formerly, Sovereign Bond), International Equity Index, Small Cap Growth, Global
Balanced (formerly, International Balanced), Mid Cap Growth, Large Cap Value,
Money Market, Mid Cap Value, Small/Mid Cap Growth (formerly, Diversified Mid Cap
Growth), Real Estate Equity, Growth & Income, Managed, Short-Term Bond, Small
Cap Value, International Opportunities, Equity Index, Global Bond (formerly,
Strategic Bond), Turner Core Growth, Brandes International Equity, Frontier
Capital Appreciation, Emerging Markets Equity, International Opportunities II
(formerly, Global Equity), Bond Index, Small/Mid Cap CORE, High Yield Bond and
Clifton Enhanced U.S. Equity Portfolios (formerly, Enhanced U.S. Equity
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 JHLICO'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 JHLICO. The portion of the
Account's assets applicable to the policies may not be charged with liabilities
arising out of any other business JHLICO 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
JHLICO, which is taxed as a life insurance company under the Internal Revenue
Code. JHLICO 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, JHLICO 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.
85
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Expenses
JHLICO 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.
JHLICO 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
JHLICO acts as the distributor, principal underwriter and investment advisor
for the Fund.
Certain officers of the Account are officers and directors of JHLICO or the
Fund.
86
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (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 June 30, 2000 were as follows:
<TABLE>
<CAPTION>
PORTFOLIO SHARES OWNED COST VALUE
--------- ------------ ----------- --------------
<S> <C> <C> <C>
Large Cap Growth............... 1,688,303 37,865,715 $ 48,724,465
Active Bond.................... 7,988,760 79,082,802 73,025,493
International Equity Index..... 385,177 6,423,009 7,123,296
Small Cap Growth............... 380,180 4,812,891 7,666,668
Global Balanced................ 17,540 185,375 177,025
Mid Cap Growth................. 619,812 14,180,987 17,365,257
Large Cap Value................ 743,931 10,201,568 9,694,756
Money Market................... 2,105,302 21,064,045 21,053,018
Mid Cap Value.................. 462,517 6,608,805 6,233,979
Small/Mid Cap Growth........... 365,644 5,532,048 5,570,881
Real Estate Equity............. 338,700 4,899,244 4,294,336
Growth & Income................ 15,313,823 237,723,202 303,554,525
Managed........................ 6,819,945 95,495,007 105,001,203
Short-Term U.S Government...... 27,289 280,710 264,753
Small Cap Value................ 368,648 4,249,570 4,036,903
International Opportunities.... 552,795 7,448,954 8,034,392
Equity Index................... 893,927 16,117,504 18,094,530
Global Bond.................... 96,559 991,751 962,569
Turner Core Growth............. 17,213 192,884 410,353
Brandes International Equity... 59,822 390,107 954,757
Frontier Capital Appreciation.. 29,358 398,053 695,498
Emerging Markets Equity........ 93,465 1,094,319 1,067,137
International Opportunities II. 21,167 237,674 254,192
Bond Index..................... 9,198 87,036 86,010
Small/Mid Cap Core............. 16,556 159,144 170,344
High Yield Bond................ 159,321 1,355,765 1,346,012
Clifton Enhanced US Equity..... 1,297 17,171 25,816
</TABLE>
87
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
4. DETAILS OF INVESTMENTS (CONTINUED)
Purchases, including reinvestment of dividend distributions and proceeds from
the sales of shares in the Portfolios of the Fund and of M Fund during 1999,
were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
--------- --------- -----------
<S> <C> <C>
Large Cap Growth.......................... 5,805,669 1,154,899
Active Bond............................... 6,550,840 3,882,555
International Equity Index................ 1,023,224 318,367
Small Cap Growth.......................... 3,126,744 1,421,888
Global Balanced........................... 43,815 55,650
Mid Cap Growth............................ 6,467,261 1,916,183
Large Cap Value........................... 2,921,252 1,126,241
Money Market.............................. 5,277,891 2,565,018
Mid Cap Value............................. 1,847,890 564,458
Small/Mid Cap Growth...................... 426,328 767,119
Real Estate Equity........................ 457,831 355,824
Growth & Income........................... 6,927,550 8,089,835
Managed................................... 4,713,065 5,215,503
Short-Term U.S Government................. 57,738 30,057
Small Cap Value........................... 880,388 309,121
International Opportunities............... 4,915,259 355,929
Equity Index.............................. 4,825,408 985,688
Global Bond............................... 238,197 114,270
Turner Core Growth........................ 0 0
Brandes International Equity.............. 0 0
Frontier Capital Appreciation............. 0 0
Emerging Markets Equity................... 812,522 87,227
International Opportunities II............ 115,810 6,982
Bond Index................................ 146,866 136,679
Small/Mid Cap Core........................ 98,036 8,982
High Yield Bond........................... 1,527,409 240,168
Clifton Enhanced US Equity................ 0 0
</TABLE>
88
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. NET ASSETS
Accumulation shares attributable to net assets of policyholders and
accumulation share values for each subaccount at December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
VLI CLASS #1 MVL CLASS #3 FLEX CLASS #4
--------------------------- --------------------------- ----------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES SHARES SHARES VALUES SHARES SHARESVALUES
--------- ------------ ------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth............ 0 0 40,237 $83.98 331,963 $ 83.98
Active Bond................. 0 0 17,005 24.41 1,308,502 24.41
International Equity Index.. 0 0 18,140 26.08 148,553 26.08
Small Cap Growth............ 0 0 65,672 22.82 231,279 22.82
Global Balanced............. 0 0 7,023 12.67 3,583 12.67
Mid Cap Growth.............. 0 0 130,455 34.02 318,089 34.02
Large Cap Value............. 0 0 56,833 15.74 500,501 15.74
Money Market................ 0 0 74,235 18.58 622,010 18.58
Mid Cap Value............... 0 0 54,304 14.82 316,883 14.82
Small/Mid Cap Growth........ 0 0 24,651 21.43 221,741 21.43
Real Estate Equity.......... 0 0 12,087 25.09 106,985 25.09
Growth & Income............. 0 0 118,112 67.63 1,905,323 67.63
Managed..................... 0 0 49,090 41.02 1,192,354 40.02
Short-Term Bond............. 0 0 226 13.34 13,886 13.34
Small Cap Value............. 0 0 34,134 12.43 259,898 12.43
International Opportunities. 0 0 19,177 15.85 462,709 15.85
Equity Index................ 0 0 213,813 22.90 468,851 22.90
Global Bond................. 0 0 24,481 12.51 40,686 12.51
Turner Core Growth.......... 0 0 3,464 27.61 11,391 27.61
Brandes International
Equity..................... 0 0 14,801 17.80 27,349 17.80
Frontier Capital
Appreciation............... 0 0 1,424 24.26 21,994 24.26
Emerging Markets Equity..... 0 0 18,570 11.88 59,253 11.88
International
Opportunities II........... 0 0 7,894 12.21 2,796 12.21
Bond Index.................. 0 0 5,047 10.72 2,752 10.72
Small/Mid Cap CORE.......... 0 0 2,148 11.27 535 11.27
High Yield Bond............. 0 0 14,488 9.88 119,283 9.88
Clifton Enhanced U.S
Equity..................... 0 0 2,006 12.87 0 12.87
</TABLE>
89
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
FLEX II CLASS #5 VEP CLASS #7 VEP CLASS #8
--------------------------------------------- --------------------------- ----------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARESVALUES SHARES SHARES VALUES SHARES SHARES VALUES
--------- ------------ ------------ ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth........ 22,632 $ 83.98 15,704 $36.03 14,153 $36.15
Active Bond............. 10,373 24.41 8,570 14.22 5,773 14.26
International Equity
Index.................. 8,993 26.08 13,138 16.58 6,389 16.64
Small Cap Growth........ 28,326 22.82 8,805 22.80 1,870 22.84
Global Balanced......... 3,145 12.67 251 12.66 0 12.68
Mid Cap Growth.......... 35,455 34.02 1,417 33.98 12,104 34.05
Large Cap Value......... 37,255 15.74 11,308 15.73 10,691 15.76
Money Market............ 7,353 18.58 40,065 13.43 20,590 13.45
Mid Cap Value........... 25,255 14.82 23,636 14.81 747 14.84
Small/Mid Cap Growth.... 6,480 21.43 2,422 21.40 4,637 21.46
Real Estate Equity...... 7,129 25.09 588 16.32 0 16.37
Growth & Income......... 62,231 67.63 68,339 30.67 25,579 30.77
Managed................. 27,064 40.02 15,758 21.07 9,908 23.14
Short-Term Bond......... 2,818 13.34 904 13.32 0 13.36
Small Cap Value......... 21,123 12.43 8,537 12.41 1,607 12.44
International
Opportunities.......... 10,708 15.85 8,879 15.83 5,760 15.87
Equity Index............ 62,333 22.90 27,531 22.87 18,207 22.92
Global Bond............. 7,666 12.51 4,409 12.50 0 12.53
Turner Core Growth...... 0 27.61 0 29.67 0 29.74
Brandes International
Equity................. 550 17.80 741 17.55 10,326 17.59
Frontier Capital
Appreciation........... 288 24.26 231 26.14 4,347 26.20
Emerging Markets Equity. 5,669 11.88 6,450 11.87 0 11.88
International
Opportunities II....... 252 12.21 3,813 12.21 0 12.21
Bond Index.............. 147 10.72 104 10.71 19 10.72
Small/Mid Cap CORE...... 124 11.27 12,342 11.26 0 11.27
High Yield Bond......... 1,696 9.88 1,716 9.87 21 9.88
Clifton Enhanced U.S
Equity................. 0 12.87 0 16.98 0 17.00
</TABLE>
90
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
VEP CLASS #9
---------------------------
ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES
--------- ------------ -------------
<S> <C> <C>
Large Cap Growth............................... 2,006 $36.26
Active Bond.................................... 0 14.31
International Equity Index..................... 0 16.70
Small Cap Growth............................... 0 22.89
Global Balanced................................ 0 12.71
Mid Cap Growth................................. 0 34.12
Large Cap Value................................ 0 15.79
Money Market................................... 0 13.51
Mid Cap Value.................................. 0 14.87
Small/Mid Cap Growth........................... 0 21.58
Real Estate Equity............................. 17 16.43
Growth & Income................................ 3,218 30.87
Managed........................................ 0 21.20
Short-Term Bond................................ 0 13.40
Small Cap Value................................ 0 12.46
International Opportunities.................... 0 15.90
Equity Index................................... 0 22.97
Global Bond.................................... 12.55
Turner Core Growth............................. 0 29.80
Brandes International Equity................... 0 17.64
Frontier Capital Appreciation.................. 0 26.25
Emerging Markets Equity........................ 0 11.89
International Opportunities II................. 6,073 12.23
Bond Index..................................... 0 10.73
Small/Mid Cap CORE............................. 0 11.28
High Yield Bond................................ 0 9.89
Clifton Enhanced U.S. Equity................... 0 17.03
</TABLE>
91
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Policyholders of
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,
Small Cap Growth, International Balanced, Mid Cap Growth, Large Cap Value, Money
Market, Mid Cap Value, Small/Mid Cap Growth (formerly, Diversified Mid Cap
Growth), Real Estate Equity, Growth & Income, Managed, Short-Term Bond, Small
Cap Value, International Opportunities, Equity Index, Global Bond (formerly,
Strategic Bond), Turner Core Growth, Brandes International Equity, Frontier
Capital Appreciation, Emerging Markets Equity, Global Equity, Bond Index,
Small/Mid Cap CORE, High-Yield Bond and Enhanced U.S. Equity Subaccounts) as of
December 31, 1999, and the related statements of operations and changes in net
assets for each of the periods indicated therein. These financial statements are
the responsibility of the Account's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Mutual Variable Life Insurance Account UV
at December 31, 1999, the results of their operations and changes in their net
assets for each of the periods indicated, in conformity with accounting
principles generally accepted in the United States.
ERNST & YOUNG LLP
Boston, Massachusetts
February 11, 2000
92
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
LARGE CAP SOVEREIGN INTERNATIONAL SMALL CAP INTERNATIONAL
GROWTH BOND EQUITY INDEX GROWTH BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash................... $ 4,878 $ 8,824 $ 777 $ 493 $ 23
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value................. 41,460,815 70,640,632 6,854,257 4,511,934 200,368
Investments in shares
of portfolios of M
Fund Inc., at value... -- -- -- -- --
Policy loans and
accrued interest
receivable............ 2,567,621 10,248,950 326,736 -- --
Receivable from:
John Hancock Variable
Series Trust I....... 12,029 21,016 3,262 2,588 3
M Fund Inc............ -- -- -- -- --
----------- ----------- ----------- ---------- ----------
Total assets........... 44,045,343 80,919,422 7,185,032 4,515,015 200,394
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company..... 11,330 19,753 3,148 2,515 --
Asset charges payable.. 5,576 10,087 890 566 26
----------- ----------- ----------- ---------- ----------
Total liabilities...... 16,906 29,840 4,038 3,081 26
----------- ----------- ----------- ---------- ----------
Net assets............. $44,028,437 $80,889,582 $ 7,180,994 $4,511,934 $ 200,368
=========== =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MID CAP LARGE CAP MONEY MID CAP SMALL/MID CAP
GROWTH VALUE MARKET VALUE GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- ----------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash................................... $ 1,515 $ 941 $ 11 $ 532 $ 612
Investments in shares of portfolios of
John Hancock Variable Series Trust I,
at value.............................. 13,609,575 8,262,786 18,351,172 4,701,632 5,486,044
Investments in shares of portfolios of
M Fund Inc., at value................. -- -- -- -- --
Policy loans and accrued interest
receivable............................ -- -- 2,153,219 -- --
Receivable from:
John Hancock Variable Series Trust I.. 5,644 1,207 7,868 2,755 2,116
M Fund Inc............................ -- -- -- -- --
----------- ---------- ----------- ---------- ----------
Total assets........................... 13,616,734 8,264,934 20,512,270 4,704,919 5,488,772
LIABILITIES
Payable to John Hancock Mutual Life
Insurance Company..................... 5,423 1,072 7,543 2,678 2,026
Asset charges payable.................. 1,737 1,075 1,621 609 702
----------- ---------- ----------- ---------- ----------
Total liabilities...................... 7,160 2,147 9,164 3,287 2,728
----------- ---------- ----------- ---------- ----------
Net assets............................. $13,609,574 $8,262,787 $20,503,106 $4,701,632 $5,486,044
=========== ========== =========== ========== ==========
</TABLE>
See accompanying notes.
93
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
REAL ESTATE GROWTH& SHORT-TERM SMALL CAP
EQUITY INCOME MANAGED BOND VALUE
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash................... $ 444 $ 36,737 $ 12,274 $ 27 $ 387
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value................. 3,800,017 307,871,384 106,178,553 238,913 3,467,391
Investments in shares
of portfolios of M
Fund Inc.,
at value.............. -- -- -- -- --
Policy loans and
accrued interest
receivable............ 230,080 32,628,714 12,951,552 -- --
Receivable from:
John Hancock Variable
Series Trust I....... 1,091 56,249 48,999 64 103
M Fund Inc............ -- -- -- -- --
---------- ------------ ------------ -------- ----------
Total assets........... 4,031,632 340,593,084 119,191,378 239,004 3,467,881
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance
Company............... 1,027 50,987 47,141 60 46
Asset charges payable.. 505 42,000 14,818 31 443
---------- ------------ ------------ -------- ----------
Total liabilities...... 1,532 92,987 61,959 91 489
---------- ------------ ------------ -------- ----------
Net assets............. $4,030,100 $340,500,097 $119,129,419 $238,913 $3,467,392
========== ============ ============ ======== ==========
</TABLE>
<TABLE>
<CAPTION>
BRANDES
INTERNATIONAL EQUITY GLOBAL TURNER INTERNATIONAL
OPPORTUNITIES INDEX BOND CORE GROWTH EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ----------- -------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash........................................ $ 406 $ 1,634 $ 87 $ 29 $ 59
Investments in shares of portfolios of John
Hancock Variable Series Trust I, at value.. 3,628,943 14,406,079 829,719 -- --
Investments in shares of portfolios of M
Fund Inc.,
at value................................... -- -- -- 257,807 525,501
Policy loans and accrued interest
receivable................................. -- -- -- -- --
Receivable from:
John Hancock Variable Series Trust I....... 1,276 7,201 28 -- --
M Fund Inc................................. -- -- -- 4 9
---------- ----------- -------- -------- --------
Total assets................................ 3,630,625 14,414,914 829,834 257,840 525,569
LIABILITIES
Payable to John Hancock Mutual Life
Insurance
Company.................................... 1,217 6,965 15 -- --
Asset charges payable....................... 465 1,870 101 33 67
---------- ----------- -------- -------- --------
Total liabilities........................... 1,682 8,835 116 33 67
---------- ----------- -------- -------- --------
Net assets.................................. $3,628,943 $14,406,079 $829,718 $257,807 $525,502
========== =========== ======== ======== ========
</TABLE>
See accompanying notes.
94
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
FRONTIER CAPITAL EMERGING
APPRECIATION MARKETS EQUITY GLOBAL EQUITY BOND INDEX
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Cash................... $ 50 $ 48 $ 16 $ 8
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value................. -- 437,812 147,715 74,210
Investments in shares
of portfolios of M
Fund Inc., at value... 453,983 -- -- --
Policy loans and
accrued interest
receivable............ -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I....... -- 1,808 2 1
M Fund Inc............ 7 -- -- --
-------- -------- -------- -------
Total assets........... 454,040 439,668 147,733 74,219
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company..... -- 1,801 -- --
Asset charges payable.. 57 55 18 10
-------- -------- -------- -------
Total liabilities...... 57 1,856 18 10
-------- -------- -------- -------
Net assets............. $453,983 $437,812 $147,715 $74,209
======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
SMALL/MID CAP HIGH YIELD ENHANCED U.S.
CORE BOND EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ---------- ---------------
<S> <C> <C> <C>
ASSETS
Cash................................ $ 9 $ 9 $ 2
Investments in shares of portfolios
of John Hancock Variable Series
Trust I, at value.................. 77,365 76,051 --
Investments in shares of portfolios
of M Fund Inc., at value........... -- -- 18,175
Policy loans and accrued interest
receivable......................... -- -- --
Receivable from:
John Hancock Variable Series Trust
I................................. 1 1 --
M Fund Inc......................... -- -- --
------- ------- -------
Total assets........................ 77,375 76,061 18,177
LIABILITIES
Payable to John Hancock Mutual Life
Insurance Company.................. -- -- --
Asset charges payable............... 10 10 2
------- ------- -------
Total liabilities................... 10 10 2
------- ------- -------
Net assets.......................... $77,365 $76,051 $18,175
======= ======= =======
</TABLE>
See accompanying notes.
95
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
LARGE CAP GROWTH SUBACCOUNT SOVEREIGN BOND SUBACCOUNT
---------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $6,381,711 $2,836,032 $1,686,429 $ 5,184,234 $5,266,576 $4,454,173
M Fund Inc............ -- -- -- -- -- --
Interest income on
policy loans.......... 161,454 128,186 103,747 750,673 727,807 696,074
---------- ---------- ---------- ----------- ---------- ----------
Total investment
income................ 6,543,165 2,964,218 1,790,176 5,934,907 5,994,383 5,150,247
Expenses:
Mortality and expense
risks................ 213,770 143,859 99,710 452,925 415,570 370,612
---------- ---------- ---------- ----------- ---------- ----------
Net investment income.. 6,329,395 2,820,359 1,690,466 5,481,982 5,578,813 4,779,635
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)............... 1,146,308 433,509 292,430 (388,883) (142,628) (230,607)
Net unrealized
appreciation
(depreciation)
during the period.... 320,087 4,558,660 2,142,494 (5,439,148) (102,600) 1,277,686
---------- ---------- ---------- ----------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments. 1,466,395 4,992,169 2,434,924 (5,828,031) (245,228) 1,047,079
---------- ---------- ---------- ----------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations............ $7,795,790 $7,812,528 $4,125,390 $ (346,049) $5,333,585 $5,826,714
========== ========== ========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX SUBACCOUNT SMALL CAP GROWTH SUBACCOUNT
-------------------------------------- ---------------------------------
1999 1998 1997 1999 1998 1997
------------ ---------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ 212,869 $743,339 $ 195,240 $ 543,433 $ -- $ 436
M Fund Inc............ -- -- -- -- -- --
Interest income on
policy loans.......... 20,538 17,802 15,746 -- -- --
---------- -------- --------- ---------- -------- -------
Total investment
income................ 233,407 761,141 210,986 543,433 -- 436
Expenses:
Mortality and expense
risks................ 32,838 26,542 24,261 15,809 8,233 4,231
---------- -------- --------- ---------- -------- -------
Net investment income
(loss)................ 200,569 734,599 186,725 527,624 (8,233) (3,795)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain..... 62,140 52,891 50,829 48,210 21,741 6,475
Net unrealized
appreciation
(depreciation)
during the period.... 1,295,768 13,239 (463,778) 1,125,829 204,674 92,108
---------- -------- --------- ---------- -------- -------
Net realized and
unrealized gain
(loss) on investments. 1,357,908 66,130 (412,949) 1,174,039 226,415 98,583
---------- -------- --------- ---------- -------- -------
Net increase
(decrease) in net
assets resulting from
operations............ $1,558,477 $800,729 $(226,224) $1,701,663 $218,182 $94,788
========== ======== ========= ========== ======== =======
</TABLE>
See accompanying notes.
96
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
INTERNATIONAL BALANCED SUBACCOUNT MID CAP GROWTH SUBACCOUNT
---------------------------------- -----------------------------------
1999 1998 1997 1999 1998 1997
---------- --------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ 17,211 $ 12,240 $ 3,972 $1,373,009 $ 130,303 --
M Fund Inc............ -- -- -- -- -- --
Interest income on
policy loans.......... -- -- -- -- -- --
-------- -------- --------- ---------- ---------- --------
Total investment
income................ 17,211 12,240 3,972 1,373,009 130,303 --
Expenses:
Mortality and expense
risks................ 1,267 826 392 34,834 5,242 2,164
-------- -------- --------- ---------- ---------- --------
Net investment income
(loss)................ 15,944 11,414 3,580 1,338,175 125,061 (2,164)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain..... 1,061 1,050 429 420,826 26,192 5,866
Net unrealized
appreciation
(depreciation)
during the period.... (8,559) 12,294 (4,312) 4,283,452 193,946 66,874
-------- -------- --------- ---------- ---------- --------
Net realized and
unrealized gain
(loss) on investments. (7,498) 13,344 (3,883) 4,704,278 220,138 72,740
-------- -------- --------- ---------- ---------- --------
Net increase
(decrease) in net
assets resulting from
operations............ $ 8,446 $ 24,758 $ (303) $6,042,453 $ 345,199 $ 70,576
======== ======== ========= ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP VALUE SUBACCOUNT MONEY MARKET SUBACCOUNT
------------------------------ ----------------------------------
1999 1998 1997 1999 1998 1997
---------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ 511,132 $185,232 $ 57,265 $1,134,371 $2,249,510 $641,356
M Fund Inc............ -- -- -- -- -- --
Interest income on
policy loans.......... -- -- -- 155,491 154,162 148,802
--------- -------- -------- ---------- ---------- --------
Total investment
income................ 511,132 185,232 57,265 1,289,862 2,403,672 790,158
Expenses:
Mortality and expense
risks................ 36,983 15,356 3,303 146,758 263,735 81,437
--------- -------- -------- ---------- ---------- --------
Net investment income.. 474,149 169,876 53,962 1,143,104 2,139,937 708,721
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain..... 123,242 68,953 17,858 -- -- --
Net unrealized
appreciation
(depreciation)
during the period.... (499,454) 64,132 80,036 -- -- --
--------- -------- -------- ---------- ---------- --------
Net realized and
unrealized gain
(loss) on investments. (376,212) 133,085 97,894 -- -- --
--------- -------- -------- ---------- ---------- --------
Net increase in net
assets resulting from
operations............ $ 97,937 $302,961 $151,856 $1,143,104 $2,139,937 $708,721
========= ======== ======== ========== ========== ========
</TABLE>
See accompanying notes.
97
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MID CAP VALUE SUBACCOUNT SMALL/MID CAP GROWTH SUBACCOUNT
---------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
---------- ------------ -------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ 30,563 $ 53,920 $150,951 $ 840,786 $ 93,281 $ 407,765
M Fund Inc............ -- -- -- -- -- --
Interest income on
policy loans.......... -- -- -- -- -- --
--------- ----------- -------- ----------- ----------- -----------
Total investment
income................ 30,563 53,920 150,951 840,786 93,281 407,765
Expenses:
Mortality and expense
risks................ 28,106 34,857 7,632 30,491 26,942 22,030
--------- ----------- -------- ----------- ----------- -----------
Net investment income.. 2,457 19,063 143,319 810,295 66,339 385,735
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)............... (547,518) 74,634 10,646 16,952 33,249 276,956
Net unrealized
appreciation
(depreciation)
during the period.... 657,486 (944,401) 145,409 (590,295) 126,465 (477,912)
--------- ----------- -------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments. 109,968 (869,767) 156,055 (573,343) 159,714 (200,956)
--------- ----------- -------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations............ $ 112,425 $ (850,704) $299,374 $ 236,952 $ 226,953 $ 184,779
========= =========== ======== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY SUBACCOUNT GROWTH & INCOME SUBACCOUNT
---------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
---------- ------------ -------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ 262,930 $ 343,976 $330,296 $35,057,066 $26,306,209 $25,377,474
M Fund Inc............ -- -- -- -- -- --
Interest income on
policy loans.......... 17,361 17,260 15,261 2,279,107 1,996,131 1,728,054
--------- ----------- -------- ----------- ----------- -----------
Total investment
income................ 280,291 361,236 345,557 37,336,173 28,302,340 27,105,528
Expenses:
Mortality and expense
risks................ 24,900 33,890 25,420 1,779,482 1,466,469 1,136,268
--------- ----------- -------- ----------- ----------- -----------
Net investment income.. 255,391 327,346 320,137 35,556,691 26,835,871 25,969,260
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)............... (168,994) 158,205 181,015 5,502,422 3,223,935 1,982,518
Net unrealized
appreciation
(depreciation)
during the period.... (220,380) (1,546,717) 165,392 2,405,417 32,918,552 18,247,212
--------- ----------- -------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments. (389,374) (1,388,512) 346,407 7,907,839 36,142,487 20,229,730
--------- ----------- -------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations............ $(133,983) $(1,061,166) $666,544 $43,464,530 $62,978,358 $46,198,990
========= =========== ======== =========== =========== ===========
</TABLE>
See accompanying notes.
98
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MANAGED SUBACCOUNT SHORT-TERM BOND SUBACCOUNT
-------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ----------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ 9,998,433 $ 9,347,788 $ 7,891,222 $ 15,539 $ 27,350 $1,036,747
M Fund Inc............ -- -- -- -- --
Interest income on
policy loans.......... 953,686 854,487 768,231 -- -- --
----------- ----------- ----------- --------- -------- ----------
Total investment
income................ 10,952,119 10,202,275 8,659,453 15,539 27,350 1,036,747
Expenses:
Mortality and expense
risks................ 649,802 577,276 497,030 1,497 2,680 121,572
----------- ----------- ----------- --------- -------- ----------
Net investment income.. 10,302,317 9,624,999 8,162,423 14,042 24,670 915,175
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)............... 996,546 791,245 437,661 (8,638) 265 (27,616)
Net unrealized
appreciation
(depreciation)
during the period.... (2,108,530) 6,629,458 4,941,061 (2,442) (4,247) 226,435
----------- ----------- ----------- --------- -------- ----------
Net realized and
unrealized gain
(loss) on
investments........... (1,111,984) 7,420,703 5,378,722 (11,080) (3,982) 198,819
----------- ----------- ----------- --------- -------- ----------
Net increase in net
assets resulting from
operations............ $ 9,190,333 $17,045,702 $13,541,145 $ 2,962 $ 20,688 $1,113,994
=========== =========== =========== ========= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE SUBACCOUNT INTERNATIONAL OPPORTUNITIES SUBACCOUNT
--------------------------------- -------------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- --------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ 79,585 $ 12,675 $ 95,844 $241,151 $ 33,443 $ 5,284
M Fund Inc............ -- -- -- -- -- --
Interest income on
policy loans.......... -- -- -- -- -- --
--------- --------- -------- -------- -------- --------
Total investment
income................ 79,585 12,675 95,844 241,151 33,443 5,284
Expenses:
Mortality and expense
risks................ 17,680 11,853 3,270 17,937 21,581 1,697
--------- --------- -------- -------- -------- --------
Net investment income.. 61,905 822 92,574 223,214 11,862 3,587
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)............... (33,134) 29,257 19,812 155,412 33,474 3,191
Net unrealized
appreciation
(depreciation)
during the period.... (148,401) (105,331) (12,804) 387,412 272,314 (12,223)
--------- --------- -------- -------- -------- --------
Net realized and
unrealized gain
(loss) on
investments........... (181,535) (76,074) 7,008 542,824 305,788 (9,032)
--------- --------- -------- -------- -------- --------
Net increase
(decrease) in net
assets resulting from
operations............ $(119,630) $ (75,252) $ 99,582 $766,038 $317,650 $ (5,445)
========= ========= ======== ======== ======== ========
</TABLE>
See accompanying notes.
99
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY INDEX SUBACCOUNT GLOBAL BOND SUBACCOUNT
-------------------------------- -----------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- -------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ 593,325 $ 185,267 $ 54,601 $ 37,862 $19,628 $ 9,400
M Fund Inc............ -- -- -- -- --
Interest income on
policy loans.......... -- -- -- -- -- --
---------- ---------- -------- -------- ------- -------
Total investment
income................ 593,325 185,267 54,601 37,862 19,628 9,400
Expenses:
Mortality and expense
risks................ 63,950 27,141 5,346 4,084 1,979 658
---------- ---------- -------- -------- ------- -------
Net investment income.. 529,375 158,126 49,255 33,778 17,649 8,742
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)............... 271,978 443,879 14,525 (151) 3,991 348
Net unrealized
appreciation
(depreciation)
during the period.... 1,282,937 585,673 146,714 (52,953) 4,308 1,260
---------- ---------- -------- -------- ------- -------
Net realized and
unrealized gain
(loss) on investments. 1,554,915 1,029,552 161,239 (53,104) 8,299 1,608
---------- ---------- -------- -------- ------- -------
Net increase
(decrease) in net
assets resulting from
operations............ $2,084,290 $1,187,678 $210,494 $(19,326) $25,948 $10,350
========== ========== ======== ======== ======= =======
</TABLE>
<TABLE>
<CAPTION>
TURNER CORE GROWTH SUBACCOUNT BRANDES INTERNATIONAL EQUITY SUBACCOUNT
------------------------------ ----------------------------------------
1999 1998 1997 1999 1998 1997
--------- --------- --------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ -- $ -- $ -- $ -- $ -- $ --
M Fund Inc............ 19,328 2,231 6,373 16,354 14,444 1,796
Interest income on
policy loans.......... -- -- -- -- -- --
------- ------- ------- -------- ------- -------
Total investment
income................ 19,328 2,231 6,373 16,354 14,444 1,796
Expenses:
Mortality and expense
risks................ 1,139 565 301 2,166 1,158 684
------- ------- ------- -------- ------- -------
Net investment income.. 18,189 1,666 6,072 14,188 13,286 1,112
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain..... 26,736 2,780 839 11,526 600 888
Net unrealized
appreciation
(depreciation)
during the period.... 23,628 22,686 6,487 122,734 8,581 (1,473)
------- ------- ------- -------- ------- -------
Net realized and
unrealized gain
(loss) on investments. 50,364 25,466 7,326 134,260 9,181 (585)
------- ------- ------- -------- ------- -------
Net increase in net
assets resulting from
operations............ $68,553 $27,132 $13,398 $148,448 $22,467 $ 527
======= ======= ======= ======== ======= =======
</TABLE>
See accompanying notes.
100
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FRONTIER CAPITAL APPRECIATION EMERGING MARKETS EQUITY GLOBAL EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------ ------------------------ ------------------
1999 1998 1997 1999 1998* 1999 1998*
---------- --------- ------- ------------ ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I....... $ -- $ -- $ -- $ 15,636 $ 1 $ 816 $ 117
M Fund Inc............ 13,028 12,832 6,463 -- -- -- --
Interest income on
policy loans.......... -- -- -- -- -- -- --
-------- ------- ------- -------- ------ ------- ------
Total investment
income................ 13,028 12,832 6,463 15,636 1 816 117
Expenses:
Mortality and expense
risks................ 4,257 13,446 1,409 466 0 378 60
-------- ------- ------- -------- ------ ------- ------
Net investment income
(loss)................ 8,771 (614) 5,054 15,170 1 438 57
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss)............... (59,550) 23,061 8,970 1,838 (1) 196 (16)
Net unrealized
appreciation
(depreciation)
during the period.... 89,369 (840) 32,469 92,713 (48) 20,203 (303)
-------- ------- ------- -------- ------ ------- ------
Net realized and
unrealized gain
(loss) on
investments........... 29,819 22,221 41,439 94,551 (49) 20,399 (319)
-------- ------- ------- -------- ------ ------- ------
Net increase
(decrease) in net
assets resulting from
operations............ $ 38,590 $21,607 $46,493 $109,721 $ (48) $20,837 $ (262)
======== ======= ======= ======== ====== ======= ======
</TABLE>
<TABLE>
<CAPTION>
BOND INDEX SMALL/MID CAP CORE
SUBACCOUNT SUBACCOUNT
------------------- --------------------
1999 1998* 1999 1998*
------------ ------ ----------- -------
<S> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I................. $ 2,971 $ 296 $ 6,699 $ --
M Fund Inc........................................... -- -- -- --
Interest income on policy loans....................... -- -- -- --
----------- ----- ----------- -------
Total investment income............................... 2,971 296 6,699 --
Expenses:
Mortality and expense risks.......................... 270 11 335 48
----------- ----- ----------- -------
Net investment income (loss).......................... 2,701 285 6,364 (48)
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss)............................. (1,613) (26) 1,093 (1,957)
Net unrealized appreciation (depreciation) during
the period.......................................... (1,753) (147) 4,719 1,888
----------- ----- ----------- -------
Net realized and unrealized gain (loss) on
investments.......................................... (3,366) (173) 5,812 (69)
----------- ----- ----------- -------
Net increase (decrease) in net assets resulting from
operations........................................... $ (665) $ 112 $ 12,176 $ (117)
=========== ===== =========== =======
<CAPTION>
ENHANCED
HIGH YIELD BOND U.S. EQUITY
SUBACCOUNT SUBACCOUNT
--------------------- ---------------
1999 1998* 1999**
------------- ----- ---------------
<S> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I................. $ 3,011 $ 50 $ --
M Fund Inc........................................... -- -- 1,435
Interest income on policy loans....................... -- -- --
----------- ----- -------
Total investment income............................... 3,011 50 1,435
Expenses:
Mortality and expense risks.......................... 220 2 61
----------- ----- -------
Net investment income (loss).......................... 2,791 48 1,374
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss)............................. (396) (108) 11
Net unrealized appreciation (depreciation) during
the period.......................................... (1,172) (19) 1,285
----------- ----- -------
Net realized and unrealized gain (loss) on
investments.......................................... (1,568) (127) 1,296
----------- ----- -------
Net increase (decrease) in net assets resulting from
operations........................................... $ 1,223 $ (79) $ 2,670
=========== ===== =======
</TABLE>
_________
* From May 1, 1998 (commencement of operations).
** From May 1, 1999 (commencement of operations).
See accompanying notes.
101
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
LARGE CAP GROWTH SUBACCOUNT SOVEREIGN BOND SUBACCOUNT
-------------------------------------------------------- ------------------------------------------
1999 1998 1997 1999 1998 1997
----------------------------- ------------ ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets from operations:
Net investment income...... $ 6,329,395 $ 2,820,359 $ 1,690,466 $ 5,481,982 $ 5,578,813 $ 4,779,635
Net realized gain (loss)... 1,146,308 433,509 292,430 (388,883) (142,628) (230,607)
Net unrealized appreciation
(depreciation) during the
period.................... 320,087 4,558,660 2,142,494 (5,439,148) (102,600) 1,277,686
---------------------------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
net assets resulting from
operations................. 7,795,790 7,812,528 4,125,390 (346,049) 5,333,585 5,826,714
From policyholder
transactions:
Net premiums from
policyholders............. 10,950,682 6,922,934 5,387,401 11,668,600 10,038,753 10,001,325
Net benefits to
policyholders............. (5,776,293) (3,869,320) (3,401,593) (7,543,864) (7,974,428) (8,051,538)
Net increase in policy
loans..................... -- -- -- -- -- --
---------------------------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from policyholder
transactions............... 5,174,389 3,053,614 1,985,808 4,124,736 2,064,425 1,949,787
---------------------------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets.. 12,970,179 10,866,142 6,111,198 3,778,687 7,398,010 7,776,501
Net assets at beginning of
period..................... 31,058,258 20,192,116 14,080,918 77,110,895 69,712,885 61,936,384
---------------------------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period. $ 44,028,437 $31,058,258 $20,192,116 $80,889,582 $77,110,895 $69,712,885
============================ =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX SUBACCOUNT
----------------------------------------------------------------
1999 1998 1997
--------------------------------------- ----------- ----------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss)............... $ 200,569 $ 734,599 $ 186,725
Net realized gain..... 62,140 52,891 50,829
Net unrealized
appreciation
(depreciation)
during the period.... 1,295,768 13,239 (463,778)
-------------------------------------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations............ 1,558,477 800,729 (226,224)
From policyholder
transactions:
Net premiums from
policyholders........ 1,634,643 1,489,281 1,504,962
Net benefits to
policyholders........ (1,119,500) (269,586) (199,118)
Net increase in
policy loans......... -- -- --
-------------------------------------- ---------- ----------
Net increase in net
assets resulting from
policyholder
transactions.......... 515,143 141,969 427,597
-------------------------------------- ---------- ----------
Net increase in net
assets................ 2,073,620 942,698 201,373
Net assets at
beginning of period... 5,107,374 4,164,676 3,963,303
-------------------------------------- ---------- ----------
Net assets at end of
period................ $ 7,180,994 $5,107,374 $4,164,676
====================================== ========== ==========
<CAPTION>
SMALL CAP GROWTH SUBACCOUNT
---------------------------------------------------------
1999 1998 1997
------------------------------ ----------- ------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income. $ 527,624 $ (8,233) $ (3,795)
(loss)
Net realized gain..... 48,210 21,741 6,475
Net unrealized
appreciation......... 1,125,829 204,674 92,108
(depreciation)....... ---------------------------- ---------- ---------
during the period
Net increase........... 1,701,663 218,182 94,788
(decrease) in net
assets resulting from
operations
From policyholder
transactions:
Net premiums from..... 1,398,160 891,480 809,492
policyholders
Net benefits to....... (390,180) -- --
policyholders
Net increase in
policy loans......... -- -- --
---------------------------- ---------- ---------
Net increase in net
assets resulting from. 1,007,980 621,894 610,374
policyholder.......... ---------------------------- ---------- ---------
transactions
Net increase in net.... 2,709,643 840,076 705,162
assets
Net assets at
beginning of period... 1,802,291 962,215 257,053
---------------------------- ---------- ---------
Net assets at end of
period................ $ 4,511,934 $1,802,291 $ 962,215
============================ ========== =========
</TABLE>
See accompanying notes.
102
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
INTERNATIONAL BALANCED SUBACCOUNT MID CAP GROWTH SUBACCOUNT
------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ----------- ------------- ------------- --------------
--------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . $ 15,944 $ 11,414 $ 3,580 $ 1,338,175 $ 125,061 $ (2,164)
Net realized gain . . . . . . . . . . . . . 1,061 1,050 429 420,826 26,192 5,866
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . (8,559) 12,294 (4,312) 4,283,452 193,946 66,874
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . 8,446 24,758 (303) 6,042,453 345,199 70,576
From policyholder transactions:
Net premiums from policyholders . . . . . . 115,573 150,466 62,380 7,041,199 772,359 457,341
Net benefits to policyholders . . . . . . . (133,983) (50,214) (9,531) (947,660) (211,806) (125,239)
Net increase in policy loans . . . . . . . -- -- -- -- -- --
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from policyholder transactions . (18,410) 100,262 52,849 6,093,539 560,553 332,102
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets . . . (9,964) 125,020 52,546 12,135,992 905,752 402,678
Net assets at beginning of period . . . . . 210,332 85,312 32,766 1,473,582 567,830 165,152
----------- ---------- ---------- ------------ ------------ -----------
Net assets at end of period . . . . . . . . $ 200,368 $ 210,332 $ 85,312 $ 13,609,574 $ 1,473,582 $ 567,830
=========== ========== ========== ============ ============ ===========
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP VALUE SUBACCOUNT MONEY MARKET SUBACCOUNT
------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ----------- ------------- ------------- --------------
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . . . . $ 474,149 $ 169,876 $ 53,962 $ 1,143,104 $ 2,139,937 $ 708,721
Net realized gain . . . . . . . . . . . . . 123,242 68,953 17,858 -- -- --
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . (499,454) 64,132 80,036 -- -- --
----------- ---------- ---------- ------------ ------------ -----------
Net increase in net assets resulting from
operations. . . . . . . . . . . . . . . . . 97,937 302,961 151,856 1,143,104 2,139,937 708,721
From policyholder transactions:
Net premiums from policyholders . . . . . . 5,449,922 2,321,440 1,506,756 16,733,655 55,692,824 11,210,536
Net benefits to policyholders . . . . . . . (1,059,147) (528,449) (85,021) (46,642,184) (22,850,788) (9,620,370)
Net increase (decrease) in policy loans . . -- -- -- -- (198,682) 103,247
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from policyholder transactions . 4,390,775 1,792,991 1,421,735 (29,908,529) 32,643,354 1,693,413
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets . . . 4,488,712 2,095,952 1,573,591 (28,765,425) 34,783,291 2,402,134
Net assets at beginning of period . . . . . 3,774,075 1,678,123 104,532 49,268,531 14,485,240 12,083,106
----------- ---------- ---------- ------------ ------------ -----------
Net assets at end of period . . . . . . . . $ 8,262,787 $3,774,075 $1,678,123 $ 20,503,106 $ 49,268,531 $14,485,240
=========== ========== ========== ============ ============ ===========
</TABLE>
See accompanying notes.
103
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MIDCAP VALUE SUBACCOUNT
----------------------------------------------------
1999 1998 1997
------------------------- ------------ -----------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income. $ 2,457 $ 19,063 $ 143,319
Net realized gain
(loss)............... (547,518) 74,634 10,646
Net unrealized
appreciation
(depreciation)
during the period.... 657,486 (944,401) 145,409
------------------------ ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations............ 112,425 (850,704) 299,374
From policyholder
transactions:
Net premiums from
policyholders........ 2,086,192 5,639,732 1,620,752
Net benefits to
policyholders........ (3,546,814) (775,357) (112,395)
Net increase in
policy loans......... -- -- --
------------------------ ----------- -----------
Net increase
(decrease) in net
assets resulting from
policyholder
transactions.......... (1,460,622) 4,864,375 1,508,357
------------------------ ----------- -----------
Net increase
(decrease) in net
assets................ (1,348,197) 4,013,671 1,807,731
Net assets at
beginning of period... 6,049,829 2,036,158 228,427
------------------------ ----------- -----------
Net assets at end of
period................ $ 4,701,632 $ 6,049,829 $ 2,036,158
======================== =========== ===========
<CAPTION>
SMALL/MID CAP GROWTH SUBACCOUNT
-------------------------------------------------------------------
1999 1998 1997
--------------------------------- -------------- ----------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income. $ 810,295 $ 66,339 $ 385,735
Net realized gain..... 16,952 33,249 276,956
(loss)
Net unrealized
appreciation......... (590,295) 126,465 (477,912)
(depreciation)....... -------------------------------- ------------- -------------
during the period
Net increase........... 236,952 226,053 184,779
(decrease) in net
assets resulting from
operations
From policyholder
transactions:
Net premiums from..... 1,533,102 1,812,713 2,554,133
policyholders
Net benefits to....... (1,200,248) (1,214,489) (1,628,677)
policyholders
Net increase in
policy loans......... -- -- --
-------------------------------- ------------- -------------
Net increase
(decrease) in net..... 332,854 598,224 925,456
assets resulting from. -------------------------------- ------------- -------------
policyholder
transactions
Net increase........... 569,806 824,277 1,110,235
(decrease) in net
assets
Net assets at
beginning of period... 4,916,238 4,091,961 2,981,726
-------------------------------- ------------- -------------
Net assets at end of
period................ $ 5,486,044 $ 4,916,238 $ 4,091,961
================================ ============= =============
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY SUBACCOUNT
-----------------------------------------------------------
1999 1998 1997
------------------------------- ------------ ------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income. $ 255,391 $ 327,346 $ 320,137
Net realized gain
(loss)............... (168,994) 158,205 181,015
Net unrealized
appreciation
(depreciation)
during the period.... (220,380) (1,546,717) 165,392
------------------------------ ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations............ (133,983) (1,061,166) 666,544
From policyholder
transactions:
Net premiums from
policyholders........ 968,627 3,382,263 1,748,132
Net benefits to
policyholders........ (2,335,552) (1,663,696) (1,218,783)
Net increase
(decrease) in policy
loans................ -- (1,103) 34,311
------------------------------ ----------- -----------
Net increase
(decrease) in net
assets resulting from
policyholder
transactions.......... (1,366,925) 1,717,464 563,660
------------------------------ ----------- -----------
Net increase
(decrease) in net
assets................ (1,500,908) 656,298 1,230,204
Net assets at
beginning of period... 5,531,008 4,874,710 3,644,506
------------------------------ ----------- -----------
Net assets at end of
period................ $ 4,030,100 $ 5,531,008 $ 4,874,710
============================== =========== ===========
<CAPTION>
GROWTH & INCOME SUBACCOUNT
------------------------------------------------------------
1999 1998 1997
---------------------------- ------------- ---------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 35,556,691 $ 26,835,871 $ 25,969,260
Net realized gain 5,502,422 3,223,935 1,982,518
(loss)..............
Net unrealized
appreciation 2,405,417 32,918,552 18,247,212
(depreciation) --------------------------- ------------ ------------
during the period...
Net increase 43,464,530 62,978,358 46,198,990
(decrease) in net
assets resulting from
operations...........
From policyholder
transactions:
Net premiums from 34,593,082 35,108,834 30,351,780
policyholders.......
Net benefits to (34,650,911) (29,649,984) (24,619,851)
policyholders.......
Net increase
(decrease) in policy --
loans............... --------------------------- 3,672,137 3,346,307
------------ ------------
Net increase
(decrease) in net (57,829) 9,130,987 9,078,236
assets resulting from --------------------------- ------------ ------------
policyholder
transactions.........
Net increase 43,406,701 72,109,345 55,277,226
(decrease) in net
assets...............
Net assets at
beginning of period 297,093,396 224,984,051 169,706,825
--------------------------- ------------ ------------
Net assets at end of
period............... $ 340,500,097 $297,093,396 $224,984,051
=========================== ============ ============
</TABLE>
See accompanying notes.
104
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MANAGED SUBACCOUNT SHORT-TERM BOND SUBACCOUNT
------------------------------------------ -----------------------------------------
1999 1998 1997 1999 1998 1997
------------- ------------- ------------ ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income...................... $ 10,302,317 $ 9,624,999 $ 8,162,423 $ 14,042 $ 24,670 $ 915,175
Net realized gain (loss)................... 996,546 791,245 437,661 (8,638) 265 (27,616)
Net unrealized appreciation (depreciation)
during the period......................... (2,108,530) 6,629,458 4,941,061 (2,442) (4,247) 226,435
------------ ------------ ------------ ---------- ---------- ------------
Net increase in net assets resulting from
operations................................. 9,190,333 17,045,702 13,541,145 2,962 20,688 1,113,994
From policyholder transactions:
Net premiums from policyholders............ 13,430,282 13,116,210 13,194,907 109,732 420,697 116,602
Net benefits to policyholders.............. (14,305,859) (14,539,301) (14,539,295) (370,270) (71,999) (26,168,835)
Net increase in policy loans............... -- 1,134,137 1,257,640 -- -- --
------------ ------------ ------------ ---------- ---------- ------------
Net increase (decrease) in net assets
resulting from policyholder transactions... (875,577) (288,954) (86,748) (260,538) 348,698 (26,052,233)
------------ ------------ ------------ ---------- ---------- ------------
Net increase (decrease) in net assets....... 8,314,756 16,756,748 13,454,397 (257,576) 369,386 (24,938,239)
Net assets at beginning of period........... 110,814,663 94,057,915 80,603,518 496,489 127,103 25,065,342
------------ ------------ ------------ ---------- ---------- ------------
Net assets at end of period................. $119,129,419 $110,814,663 $ 94,057,915 $ 238,913 $ 496,489 $ 127,103
============ ============ ============ ========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE SUBACCOUNT INTERNATIONAL OPPORTUNITIES SUBACCOUNT
------------------------------------ -----------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income.......................... $ 61,905 $ 822 $ 92,574 $ 223,214 $ 11,862 $ 3,587
Net realized gain (loss)....................... (33,134) 29,257 19,812 155,412 33,474 3,191
Net unrealized appreciation (depreciation)
during the period............................. (148,401) (105,331) (12,804) 387,412 272,314 (12,223)
---------- ---------- ---------- ----------- ---------- --------
Net increase (decrease) in net assets resulting
from operations................................ (119,630) (75,252) 99,582 766,038 317,650 (5,445)
From policyholder transactions:
Net premiums from policyholders................ 1,483,922 1,644,666 1,224,547 2,354,681 3,814,201 295,915
Net benefits to policyholders.................. (447,402) (270,585) (137,364) (3,673,500) (339,134) (46,736)
Net increase in policy loans................... -- -- -- -- -- --
---------- ---------- ---------- ----------- ---------- --------
Net increase (decrease) in net assets resulting
from policyholder transactions................. 1,036,520 1,374,081 1,087,183 (1,318,819) 3,475,067 249,179
---------- ---------- ---------- ----------- ---------- --------
Net increase (decrease) in net assets........... 916,890 1,298,829 1,186,765 (552,781) 3,792,717 243,734
Net assets at beginning of period............... 2,550,502 1,251,673 64,908 4,181,724 389,007 145,273
---------- ---------- ---------- ----------- ---------- --------
Net assets at end of period..................... $3,467,392 $2,550,502 $1,251,673 $ 3,628,943 $4,181,724 $389,007
========== ========== ========== =========== ========== ========
</TABLE>
See accompanying notes.
105
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY INDEX SUBACCOUNT GLOBAL BOND SUBACCOUNT
------------------------------------- ----------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income. $ 529,375 $ 158,126 $ 49,255 $ 33,778 $ 17,649 $ 8,742
Net realized gain
(loss)............... 271,978 443,879 14,525 (151) 3,991 348
Net unrealized
appreciation
(depreciation)
during the period.... 1,282,937 585,673 146,714 (52,953) 4,308 1,260
----------- ---------- ---------- --------- -------- --------
Net increase
(decrease) in net
assets resulting from
operations............ 2,084,290 1,187,678 210,494 (19,326) 25,948 10,350
From policyholder
transactions:
Net premiums from
policyholders........ 6,697,385 4,822,053 1,827,052 696,619 381,024 161,548
Net benefits to
policyholders........ (1,623,429) (885,493) (149,826) (317,999) (83,865) (37,799)
Net increase in
policy loans......... -- -- -- -- -- --
----------- ---------- ---------- --------- -------- --------
Net increase in net
assets resulting from
policyholder
transactions.......... 5,073,956 3,936,560 1,677,226 378,620 297,159 123,749
----------- ---------- ---------- --------- -------- --------
Net increase in net
assets................ 7,158,246 5,124,238 1,887,720 359,294 323,107 134,099
Net assets at
beginning of period... 7,247,833 2,123,595 235,875 470,424 147,317 13,218
----------- ---------- ---------- --------- -------- --------
Net assets at end of
period................ $14,406,079 $7,247,833 $2,123,595 $ 829,718 $470,424 $147,317
=========== ========== ========== ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
TURNER CORE GROWTH SUBACCOUNT BRANDES INTERNATIONAL EQUITY SUBACCOUNT
------------------------------ ------------------------------------------
1999 1998 1997 1999 1998 1997
--------- --------- -------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income. $ 18,189 $ 1,666 $ 6,072 $ 14,188 $ 13,286 $ 1,112
Net realized gain..... 26,736 2,780 839 11,526 600 888
Net unrealized
appreciation
(depreciation)
during the period.... 23,628 22,686 6,487 122,734 8,581 (1,473)
-------- -------- ------- -------- -------- --------
Net increase in net
assets resulting from
operations............ 68,553 27,132 13,398 148,448 22,467 527
From policyholder
transactions:
Net premiums from
policyholders........ 109,802 39,070 33,658 152,629 141,892 82,259
Net benefits to
policyholders........ (45,555) (9,835) (7,208) (31,332) (34,941) (45,350)
Net increase in
policy loans......... -- -- -- -- -- --
-------- -------- ------- -------- -------- --------
Net increase in net
assets resulting from
policyholder
transactions.......... 64,247 29,235 26,450 121,297 106,951 36,909
-------- -------- ------- -------- -------- --------
Net increase in net
assets................ 132,800 56,367 39,848 269,745 129,418 37,436
Net assets at
beginning of period... 125,007 68,640 28,792 255,757 126,339 88,903
-------- -------- ------- -------- -------- --------
Net assets at end of
period................ $257,807 $125,007 $68,640 $525,502 $255,757 $126,339
======== ======== ======= ======== ======== ========
</TABLE>
See accompanying notes.
106
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FRONTIER CAPITAL APPRECIATION
SUBACCOUNT
---------------------------------------------------------
1999 1998 1997
---------------------------------- ----------- ---------
<S> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss)............. $ 8,771 $ (614) $ 5,054
Net realized gain (loss)................. (59,550) 23,061 8,970
Net unrealized appreciation
(depreciation) during the period........ 89,369 (840) 32,469
--------------------------------- ---------- --------
Net increase (decrease) in net assets
resulting from operations................ 38,590 21,607 46,493
From policyholder transactions:
Net premiums from policyholders.......... 103,675 2,465,299 138,553
Net benefits to policyholders............ (2,221,410) (227,386) (70,647)
Net increase in policy loans............. -- -- --
--------------------------------- ---------- --------
Net increase (decrease) in net assets
resulting from policyholder transactions. (2,117,735) 2,237,913 67,906
--------------------------------- ---------- --------
Net increase (decrease) in net assets..... (2,079,145) 2,259,520 114,399
Net assets at beginning of period......... 2,533,128 273,608 159,209
--------------------------------- ---------- --------
Net assets at end of period............... $ 453,983 $2,533,128 $273,608
================================= ========== ========
<CAPTION>
EMERGING MARKETS EQUITY GLOBAL EQUITY
SUBACCOUNT SUBACCOUNT
------------------------------------- ----------------------------------
1999 1998* 1999 1998*
---------------------------- -------- ------------------------- ----------
<S>....................................... <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss)............. $ 15,170 $ 1 $ 438 $ 57
Net realized gain (loss)................. 1,838 (1) 196 (16)
Net unrealized appreciation
(depreciation) during the period........ 92,713 (48) 20,203 (303)
--------------------------- ------- ------------------------ -------
Net increase (decrease) in net assets..... 109,721 (48) 20,837 (262)
resulting from operations
From policyholder transactions:
Net premiums from policyholders.......... 336,277 784 125,955 17,519
Net benefits to policyholders............ (8,915) (7) (15,572) (762)
Net increase in policy loans............. -- -- -- --
--------------------------- ------- ------------------------ -------
Net increase (decrease) in net assets
resulting from policyholder transactions. 327,362 777 110,383 16,757
--------------------------- ------- ------------------------ -------
Net increase (decrease) in net assets..... 437,083 729 131,220 16,495
Net assets at beginning of period......... 729 0 16,495 0
--------------------------- ------- ------------------------ -------
Net assets at end of period............... $ 437,812 $ 729 $ 147,715 $16,495
=========================== ======= ======================== =======
</TABLE>
<TABLE>
<CAPTION>
BOND INDEX SMALL/MID CAP CORE
SUBACCOUNT SUBACCOUNT
--------------------- ----------------------------------------
1999 1998* 1999 1998*
------------ -------- ------------------------------ ---------
<S> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss)....................... $ 2,701 $ 285 $ 6,364 $ (48)
Net realized gain
(loss)....................... (1,613) (26) 1,093 (1,957)
Net unrealized
appreciation
(depreciation)
during the period............ (1,753) (147) 4,719 1,888
----------- ------- ----------------------------- --------
Net increase
(decrease) in net
assets resulting from
operations.................... (665) 112 12,176 (117)
From policyholder
transactions:
Net premiums from
policyholders................ 80,921 16,730 44,493 52,673
Net benefits to
policyholders................ (20,596) (2,293) (12,003) (19,857)
Net increase in
policy loans................. -- -- -- --
----------- ------- ----------------------------- --------
Net increase in net
assets resulting from
policyholder
transactions.................. 60,325 14,437 32,490 32,816
----------- ------- ----------------------------- --------
Net increase in net
assets........................ 59,660 14,549 44,666 32,699
Net assets at
beginning of period........... 14,549 0 32,699 0
----------- ------- ----------------------------- --------
Net assets at end of
period........................ $ 74,209 $14,549 $ 77,365 $ 32,699
=========== ======= ============================= ========
<CAPTION>
ENHANCED
HIGH YIELD BOND U.S. EQUITY
SUBACCOUNT SUBACCOUNT
-------------------------------------- -------------
1999 1998* 1999
--------------------------- ---------- -------------
<S>............................ <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income......... $ 2,791 $ 48 $ 1,374
(loss)
Net realized gain............. (396) (108) 11
(loss)
Net unrealized
appreciation................. (1,172) (19) 1,285
(depreciation)............... -------------------------- --------- -------
during the period
Net increase................... 1,223 (79) 2,670
(decrease) in net
assets resulting from
operations
From policyholder
transactions:
Net premiums from............. 69,375 108,274 15,505
policyholders
Net benefits to............... -- (102,742) --
policyholders
Net increase in
policy loans................. -- -- --
-------------------------- --------- -------
Net increase in net
assets resulting from......... 69,375 5,532 15,505
policyholder.................. -------------------------- --------- -------
transactions
Net increase in net............ 70,598 5,453 18,175
assets
Net assets at
beginning of period........... 5,453 0 0
-------------------------- --------- -------
Net assets at end of
period........................ $ 76,051 $ 5,453 $18,175
========================== ========= =======
</TABLE>
---------
* From May 1, 1998 (commencement of operations).
See accompanying notes.
107
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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-seven 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-seven Portfolios
of the Fund and M Fund which are currently available are the Large Cap Growth,
Sovereign Bond, International Equity Index, Small Cap Growth, International
Balanced, Mid Cap Growth, Large Cap Value, Money Market, Mid Cap Value,
Small/Mid Cap Growth (formerly, Diversified Mid Cap Growth), Real Estate Equity,
Growth & Income, Managed, Short-Term Bond, Small Cap Value, International
Opportunities, Equity Index, Global Bond (formerly, Strategic Bond), Turner Core
Growth, Brandes International Equity, Frontier Capital Appreciation, Emerging
Markets Equity, Global Equity, Bond Index, Small/Mid Cap CORE, High Yield Bond
and Enhanced U.S. Equity 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.
108
<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.
109
<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, 1999 were as follows:
<TABLE>
<CAPTION>
PORTFOLIO SHARES OWNED COST VALUE
--------- ------------ ------------ --------------
<S> <C> <C> <C>
Large Cap Growth............... 1,516,913 $ 33,840,498 $ 41,460,815
Sovereign Bond................. 7,742,962 76,567,490 70,640,632
International Equity Index..... 348,907 5,723,159 6,854,257
Small Cap Growth............... 236,036 3,094,500 4,511,934
International Balanced......... 18,717 200,046 200,368
Mid Cap Growth................. 465,615 9,063,619 13,609,575
Large Cap Value................ 612,481 8,613,285 8,262,786
Money Market................... 1,835,117 18,351,172 18,351,172
Mid Cap Value.................. 367,982 4,828,927 4,701,632
Small/Mid Cap Growth........... 390,884 6,039,184 5,486,044
Real Estate Equity............. 331,185 4,719,779 3,800,017
Growth & Income................ 15,384,863 241,740,472 307,871,384
Managed........................ 6,873,184 96,391,658 106,178,553
Short-Term Bond................ 24,575 245,749 238,913
Small Cap Value................ 317,611 3,731,225 3,467,391
International Opportunities.... 239,181 2,974,200 3,628,943
Equity Index................... 704,179 12,384,477 14,406,079
Global Bond.................... 84,502 877,096 829,719
Turner Core Growth............. 11,243 204,222 257,807
Brandes International Equity... 33,860 396,716 525,501
Frontier Capital Appreciation.. 21,495 331,669 453,983
Emerging Markets Equity........ 35,704 345,147 437,812
Global Equity.................. 12,173 127,815 147,715
Bond Index..................... 7,964 76,110 74,210
Small/Mid Cap CORE............. 7,882 70,758 77,365
High Yield Bond................ 8,463 77,242 76,051
Enhanced U.S. Equity........... 867 16,890 18,175
</TABLE>
110
<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 1999,
were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
--------- ----------- -------------
<S> <C> <C>
Large Cap Growth..................... $13,422,273 $ 2,517,136
Sovereign Bond....................... 13,709,441 4,426,503
International Equity Index........... 1,206,222 553,307
Small Cap Growth..................... 1,705,289 169,682
International Balanced............... 102,061 104,527
Mid Cap Growth....................... 8,451,704 1,019,989
Large Cap Value...................... 6,131,213 1,266,291
Money Market......................... 17,249,777 46,141,311
Mid Cap Value........................ 1,774,841 3,233,006
Small/Mid Cap Growth................. 1,914,302 771,153
Real Estate Equity................... 859,997 1,976,566
Growth & Income...................... 47,518,686 15,480,980
Managed.............................. 14,747,572 6,118,076
Short-Term Bond...................... 116,133 362,629
Small Cap Value...................... 1,396,171 297,748
International Opportunities.......... 2,979,658 4,075,263
Equity Index......................... 7,159,058 1,555,726
Global Bond.......................... 695,939 283,540
Turner Core Growth................... 142,622 60,186
Brandes International Equity......... 181,255 45,768
Frontier Capital Appreciation........ 91,263 2,200,227
Emerging Markets Equity.............. 351,448 8,915
Global Equity........................ 113,648 2,828
Bond Index........................... 86,949 23,921
Small/Mid Cap CORE................... 58,717 19,864
High Yield Bond...................... 85,583 13,417
Enhanced U.S. Equity................. 17,418 539
</TABLE>
111
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
5. NET ASSETS
Accumulation shares attributable to net assets of policyholders and
accumulation share values for each portfolio at December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
VLI CLASS #1 MVL CLASS #3 FLEX CLASS #4
---------------------------- ---------------------------- ----------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES SHARES SHARES VALUES SHARES SHARES VALUES
--------- ------------ -------------- ------------ -------------- ------------ ----------------
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth................. -- -- 30,422 $79.68 303,522 $79.68
Sovereign Bond................... -- -- 13,276 23.69 1,236,413 23.69
International Equity Index....... -- -- 12,251 27.55 147,364 27.55
Small Cap Growth................. -- -- 38,152 21.70 144,335 21.70
International Balanced........... -- -- 6,210 13.29 3,652 13.29
Mid Cap Growth................... -- -- 95,740 35.59 245,163 35.59
Large Cap Value.................. -- -- 50,345 16.17 406,006 16.17
Money Market..................... -- -- 31,966 18.10 535,048 18.10
Mid Cap Value.................... -- -- 54,325 14.06 234,907 14.06
Small/Mid Cap Growth............. -- -- 23,443 18.80 240,110 19.80
Real Estate Equity............... -- -- 8,437 22.14 111,094 22.14
Growth & Income.................. -- -- 102,216 68.13 1,902,118 68.13
Managed.......................... -- -- 45,437 39.65 1,203,335 39.65
Short-Term Bond.................. -- -- 2,066 12.99 14,631 12.99
Small Cap Value.................. -- -- 29,974 12.32 222,258 12.32
International Opportunities...... -- -- 14,160 16.54 183,229 16.54
Equity Index..................... -- -- 173,452 23.08 367,259 23.08
Global Bond...................... -- -- 16,532 12.16 39,548 12.16
Turner Core Growth............... -- -- 1,897 26.33 7,888 26.33
Brandes International Equity..... -- -- 5,884 17.14 20,691 17.14
Frontier Capital Appreciation.... -- -- 1,074 21.11 18,559 21.11
Emerging Markets Equity.......... -- -- 2,490 12.77 25,395 12.77
Global Equity.................... -- -- 3,549 12.23 264 12.23
Bond Index....................... -- -- 4,208 10.34 2,651 10.34
Small/Mid Cap CORE............... -- -- 794 10.76 201 10.76
High Yield Bond.................. -- -- 4,951 10.10 551 10.10
Enhanced U.S. Equity............. -- -- 1,372 13.25 -- 13.25
</TABLE>
112
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
FLEX II CLASS #5 VEP CLASS #7 VEP CLASS #8
---------------------------- ---------------------------- ----------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES SHARES SHARES VALUES SHARES SHARES VALUES
--------- ------------ -------------- ------------ -------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth............... 18,120 $79.68 11,630 $34.19 14,305 $34.28
Sovereign Bond................. 7,625 23.69 6,071 13.80 5,831 13.84
International Equity Index..... 7,387 27.55 8,217 17.52 2,077 17.58
Small Cap Growth............... 19,575 21.70 5,119 21.68 778 21.71
International Balanced......... 2,567 13.29 2,650 13.28 -- 13.30
Mid Cap Growth................. 25,572 35.60 8,683 35.56 7,218 35.62
Large Cap Value................ 32,808 16.17 8,456 16.15 10,743 16.18
Money Market................... 8,023 18.10 13,653 13.08 10,717 13.12
Mid Cap Value.................. 21,416 14.06 19,817 14.05 3,847 14.08
Small/Mid Cap Growth........... 5,669 19.80 3,944 19.77 3,887 19.83
Real Estate Equity............. 5,693 22.14 1,424 14.40 -- 14.44
Growth & Income................ 54,684 68.13 57,852 30.90 23,997 31.00
Managed........................ 23,610 39.65 11,858 20.88 9,588 20.94
Short-Term Bond................ 1,526 12.99 52 12.97 -- 13.00
Small Cap Value................ 18,339 12.32 7,072 12.30 3,899 12.33
International Opportunities.... 9,070 16.54 7,208 16.52 5,805 16.55
Equity Index................... 50,932 23.08 22,543 23.06 7,757 23.10
Global Bond.................... 5,693 12.16 3,685 12.15 2,757 12.17
Turner Core Growth............. -- -- -- -- -- --
Brandes International Equity... -- -- 581 16.91 3,546 16.94
Frontier Capital Appreciation.. -- -- 185 22.75 1,528 22.80
Emerging Markets Equity........ 2,886 12.77 3,505 12.77 -- --
Global Equity.................. 147 12.23 3,346 12.22 -- --
Bond Index..................... 177 10.34 140 10.34 -- --
Small/Mid Cap CORE............. 57 10.76 6,139 10.76 -- --
High Yield Bond................ 1,033 10.10 997 10.10 -- --
Enhanced U.S. Equity........... -- -- -- -- -- --
</TABLE>
113
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
VEP CLASS #9
----------------------------
ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES
--------- ------------ ----------------
-------------------------------------------------------------------
<S> <C> <C>
Large Cap Growth.................. 3,240 $34.39
Sovereign Bond.................... -- --
International Equity Index........ -- --
Small Cap Growth.................. -- --
International Balanced............ -- --
Mid Cap Growth.................... -- --
Large Cap Value................... 2,782 16.21
Money Market...................... -- --
Mid Cap Value..................... -- --
Small/Mid Cap Growth.............. -- --
Real Estate Equity................ -- --
Growth & Income................... 3,934 31.09
Managed........................... -- --
Short-Term Bond................... -- --
Small Cap Value................... -- --
International Opportunities....... -- --
Equity Index...................... 2,213 23.14
Global Bond....................... -- --
Turner Core Growth................ -- --
Brandes International Equity...... -- --
Frontier Capital Appreciation..... -- --
Emerging Markets Equity........... -- --
Global Equity..................... 4,771 12.24
Bond Index........................ -- --
Small/Mid Cap CORE................ -- --
High Yield Bond................... -- --
Enhanced U.S. Equity.............. -- --
</TABLE>
114
<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.................. 27 29
account value............ 7 8
attained age............. 8 13
beneficiary.............. 37 8
business day............. 28 4
changing Option 1or 2.... 14 12
changing the face
amount.................. 14 9
charges.................. 7 15
Code..................... 33 5
cost of insurance rates.. 8 29
date of issue............ 29 29
death benefit............ 4 4
deductions............... 7 2
dollar cost averaging.... 11 17
expenses of the Trust.... 9 6
face amount.............. 13 7
fixed investment option.. 28 2
full surrender........... 12 27
fund..................... 2 1
1
grace period............. 6 3
guaranteed death
benefit feature......... 6 27
Guaranteed Death
Benefit Premium......... 6 12
insurance charge......... 8 9
insured person........... 4 12
investment options....... 1 7
John Hancock............. 27 33
John Hancock Variable
Series Trust............ 2 18
lapse.................... 6 11
loan..................... 12 1
loan interest............ 12 27
maximum premiums......... 5 12
Minimum Initial Premium.. 28 9
minimum insurance
amount.................. 14 4
modified endowment
contract................ 34
</TABLE>
115
<PAGE>
PROSPECTUS DATED NOVEMBER 1, 2000
MEDALLION VARIABLE LIFE
a flexible premium variable life insurance policy
issued by
JOHN HANCOCK LIFE INSURANCE COMPANY
("JOHN HANCOCK")
JOHN HANCOCK LIFE SERVICING OFFICE
----------------------------------
EXPRESS DELIVERY
----------------
529 Main Street (X-4)
Charlestown, MA 02129
U.S. MAIL
---------
P.O. Box 111
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 variable investment options:
<TABLE>
<CAPTION>
VARIABLE INVESTMENT OPTION MANAGED BY
-------------------------- ----------
-----------------------------------------------------------------------------------------------------------------
<S> <C>
Managed. . . . . . . . . . . . . . . . . . . . . . . . . Independence Investment Associates, Inc. and
Capital Guardian Trust Company
Growth & Income . . . . . Independence Investment Associates, Inc. and Putnam
Investment Management, 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. and Morgan
Stanley Dean Witter Investment Management Inc.
Small/Mid Cap CORE /SM/ . Goldman Sachs Asset Management
Small/Mid Cap Growth. . . Wellington Management Company, LLP
Small Cap Equity . . . . . Capital Guardian Trust Company
Small Cap Growth . . . . John Hancock Advisers, Inc.
Global Balanced . . . . . Capital Guardian Trust Company
International Equity Index . . . . . . . . . . . . . . . . Independence International Associates, Inc.
International Opportunities . . . . . . . . . . . . . . . T. Rowe Price International, Inc.
Morgan Stanley Dean Witter Investment Management
Emerging Markets Equity . . . . . . . . . . . . . . . . . Inc.
Short-Term Bond . . . . . Independence Investment Associates, Inc.
Bond Index . . . . . . . . Mellon Bond Associates, LLP
Active Bond . . . . . . . . . . . . . . . . . . . . . . . John Hancock Advisers, Inc.
Global Bond . . . . . . . . . . . . . . . . . . . . . . . Capital Guardian Trust Company
High Yield Bond . . . . . Wellington Management Company, LLP
Money Market . . . . . . . John Hancock Life Insurance Company
-----------------------------------------------------------------------------------------------------------------
</TABLE>
We may add, modify or delete variable investment options in the future.
<PAGE>
When you select one or more of these variable investment options, we invest
your money in the corresponding investment option(s) of the John Hancock
Variable Series Trust I (the "Trust"). The Trust is a mutual fund that offers a
number of different investment options (which are called "funds"). The
investment results of each variable investment option you select will depend on
those of the corresponding fund of the Trust. Attached to this prospectus is a
prospectus for the Trust that contains detailed information about each fund
offered under the policy. Be sure to read the prospectus for the Trust before
selecting any of the variable investment options shown on page 1.
GUIDE TO THIS PROSPECTUS
This prospectus contains information that you should know before you buy a
policy or exercise any of your rights under the policy. However, please keep in
mind that this is a prospectus - - it is not the policy. The prospectus
---
simplifies many policy provisions to better communicate the policy's essential
features. Your rights and obligations under the policy will be determined by the
language of the policy itself. When you receive your policy, read it carefully.
This prospectus is arranged in the following way:
. The section which follows is called "Basic Information". It is in a
question and answer format. We suggest you read the Basic Information
section before reading any other section of the prospectus.
. Behind the Basic Information section are illustrations of
hypothetical policy benefits that help clarify how the policy works.
These start on page 19.
. 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
26.
. Behind the Additional Information section are the financial
statements for John Hancock and Separate Account UV. These start on
page 39.
. Finally, there is an Alphabetical Index of Key Words and Phrases at
the back of the prospectus on page 114.
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.
<TABLE>
<CAPTION>
<S> <C>
QUESTION BEGINNING ON PAGE
--------
.What is the policy?. . . . . . . . . . . . . . . 4
.Who owns the policy?. . . . . . . . . . . . . . 4
.How can I invest money in the policy?. . . . . . 4
.Is there a minimum amount I must invest?. . . . 5
.How will the value of my investment in the policy change 6
over time?. . . . . . . . . . . . . . . . . . . .
.What charges will John Hancock deduct from my investment 7
in the policy?. . . . . . . . . . . . . . . . . .
.What charges will the Trust deduct from my investment in 9
the policy?. . . . . . . . . . . . . . . . . . .
.What other charges could John Hancock impose in the 10
future?. . . . . . . . . . . . . . . . . . . . .
.How can I change my policy's investment allocations? 11
.How can I access my investment in the policy?. . 12
.How much will John Hancock pay when the insured person 13
dies?. . . . . . . . . . . . . . . . . . . . . .
.How can I change my policy's insurance coverage? 14
.Can I cancel my policy after it's issued?. . . . 15
.Can I choose the form in which John Hancock pays out 15
policy proceeds?. . . . . . . . . . . . . . . . .
.To what extent can John Hancock vary the terms and
conditions of its policies in particular cases?. 16
.How will my policy be treated for income tax purposes? 16
.How do I communicate with John Hancock?. . . . . 17
</TABLE>
Here are the page numbers where the questions and answers appear:
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 or withdraw amounts you have in the investment options
. Change the beneficiary who will receive the death benefit
. Change the amount of insurance
. Turn in (i.e., "surrender") the policy for the full amount of its
surrender value
. 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". The amount we require as your first premium depends upon the
-----
specifics of your policy and the insured person. Except as noted below, you can
make any other premium payments you wish at any time. That's why the policy is
called a "flexible premium" policy.
4
<PAGE>
Maximum premium payments
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
32. 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.
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 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?
Planned Premiums
The Policy Specifications page of your policy will show the "Planned Premium"
for the policy. You choose this amount in the policy application. The premium
reminder notice we send you is based on this amount. You will also choose how
often to pay premiums-- annually, semi-annually, quarterly or monthly. The date
on which such a payment is "due" is referred to in the policy as a "modal
processing date." However, payment of Planned Premiums is not necessarily
required. You need only invest enough to keep the policy in force (see "Lapse
and reinstatement" and "Guaranteed death benefit feature" below).
5
<PAGE>
Lapse and reinstatement
If the policy's surrender value is not sufficient to pay the charges and the
guaranteed death benefit feature is not in effect, we will notify you of how
much you will need to pay to keep the policy in force. You will have a 61 day
"grace period" 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).
All coverage under the policy will then cease. Even if the policy terminates in
this way, you can still reactivate (i.e., "reinstate") it within 1 year from the
beginning of the grace period. 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. 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.
Guaranteed death benefit feature
This feature is available only if the insured person meets certain
underwriting requirements. The feature guarantees that your policy will not
lapse during the first 5 policy years, regardless of adverse investment
performance, if on each modal processing date during that 5 year period the
amount of cumulative premiums you have paid (less all withdrawals taken from the
policy) equals or exceeds the sum of all Guaranteed Death Benefit Premiums due
to date. The Guaranteed Death Benefit Premium (or "GDB Premium) is defined in
the policy and is "due" on each modal processing date. (The term "modal
processing date" is defined under "Planned Premiums" on page 5.)
No GDB Premium will ever be greater than the so-called "guideline premium" for
the policy as defined in Section 7702 of the Internal Revenue Code. Also, the
GDB Premiums may change in the event of any change in the face amount of the
policy or any change in the death benefit option (see "How much will John
Hancock pay when the insured person dies?" on page 13).
If the Guaranteed Death Benefit test is not satisfied on any modal processing
date, we will notify you immediately and tell you how much you will need to pay
to keep the feature in effect. You will have until the second monthly deduction
date after default to make that payment. If you don't pay at least the required
amount by the end of that period, the feature will permanently lapse. You cannot
restore the feature once it has lapsed.
If there are monthly charges that remain unpaid because of this feature, we
will deduct such charges when there is sufficient surrender value to pay them.
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.
6
<PAGE>
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 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,
. 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 12.
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 4% of a certain portion of the premium you pay. The portion of
each year's premium that is subject to the charge is called the "Target
Premium". It's determined at the time the policy is issued and will appear
in the "Policy Specifications" section of the policy. We currently waive
one half of this charge for policies with a face amount 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.
7
<PAGE>
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 the maximum rates shown in the policy. The
table of rates we use will depend on the insurance risk characteristics
and (usually) gender of the insured person, the face amount of insurance
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.) We currently apply a lower insurance charge
for policies with a face amount 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, but
such a reduction is not guaranteed either. Because policies of this type
were first offered for sale in 1994, no reductions have yet been made.
. Extra mortality charge - A monthly charge specified in your policy for
------------------------
additional mortality risk if the insured person is subject to certain
types of special insurance risk.
. 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 benefits charge - Monthly charges for any optional insurance
--------------------------
benefits added to the policy by means of a rider. We currently offer a
number of optional riders, such as the accidental death benefit rider.
. 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 face amount at that time. The maximum charge is $5 per $1,000 of
face amount in policy years 1 through 7, $4 per $1,000 in policy year 8
and $3 per $1,000 in policy year 9.
8
<PAGE>
. Contingent deferred sales charge ("CDSC") - A charge we deduct if the
-------------------------------------------
policy lapses or is surrendered within the first 12 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 charge
is a percentage of premiums received that do not exceed the Target
Premium. ("Target Premium" is described above under "Deductions from
premium payments.") In policy years 1 through 3, the charge is a
percentage of premiums received prior to the end of the policy year in
question. Thereafter, it's a percentage of only those premiums received in
policy years 1 through 3. The charge reaches its maximum at the end of the
third policy year, stays level through the seventh policy year, and is
reduced by an equal amount at the beginning of each policy year thereafter
until it reaches zero. This is shown in the following table (where the
percentages are rounded to one decimal place):
FOR SURRENDERS OR LAPSES DURING PERCENTAGE
------------------------------------------
Policy years 1-7 26.0%
Policy year 8 21.7%
Policy year 9 17.3%
Policy year 10 13.0%
Policy year 11 8.7%
Policy year 12 4.3%
Policy year 13 and later 0.0%
The above table applies only if the insured person is less than attained
age 55 at issue. For older issue ages, the maximum is reached earlier and
the percentage may decrease to zero in fewer than 12 policy years.
Regardless of issue age, there is a further limitation on the CDSC that
can be charged if surrender or lapse occurs in the second policy year. The
CDSC cannot exceed 32% of one year's Target Premium.
----------
. Partial withdrawal charge - A charge for each partial withdrawal of
---------------------------
account value to compensate us for the administrative expenses of
processing the withdrawal. The charge is equal to the lesser of $20 or 2%
of the withdrawal amount.
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 1999 (rounded to two decimal places).
9
<PAGE>
<TABLE>
<CAPTION>
Investment Other Operating Total Fund Other Operating
Management Expenses* With Operating Expenses Absent
Fund Name Fee* Reimbursement Expenses Reimbursement
--------- ---------- --------------- ---------- ----------------
<S> <C> <C> <C> <C>
Managed. . . . . . . 0.67% 0.03% 0.70% 0.03%
Growth & Income . . . 0.67% 0.03% 0.70% 0.03%
Equity Index . . . . . 0.14% 0.00% 0.14% 0.08%
Large Cap Value . . . 0.74% 0.10% 0.84% 0.11%
Large Cap Growth . . . 0.36% 0.03% 0.39% 0.03%
Mid Cap Value . . . . 0.80% 0.10% 0.90% 0.12%
Mid Cap Growth . . . . 0.82% 0.10% 0.92% 0.11%
Real Estate Equity . . 1.01% 0.10% 1.11% 0.10%
Small/Mid Cap CORE/
SM/ . . . . . . . . . 0.80% 0.10% 0.90% 0.66%
Small/Mid Cap Growth . 0.75% 0.10% 0.85% 0.10%
Small Cap Equity * . . 0.90% 0.10% 1.00% 0.16%
Small Cap Growth . . . 0.75% 0.10% 0.85% 0.14%
Global Balanced * . . 1.05% 0.10% 1.15% 0.46%
International Equity
Index . . . . . . . . 0.16% 0.10% 0.26% 0.22%
International
Opportunities . . . . 0.87% 0.10% 0.97% 0.29%
Emerging Markets
Equity . . . . . . . 1.27% 0.10% 1.37% 2.17%
Short-Term Bond . . . 0.30% 0.10% 0.40% 0.13%
Bond Index . . . . . . 0.15% 0.10% 0.25% 0.20%
Active Bond * . . . . 0.61% 0.03% 0.64% 0.03%
Global Bond . . . . . 0.85% 0.10% 0.95% 0.15%
High Yield Bond . . . 0.65% 0.10% 0.75% 0.39%
Money Market . . . . . 0.25% 0.06% 0.31% 0.06%
</TABLE>
* John Hancock Variable Series Trust I funds' percentages for "other fund
expenses" are based on the allocation methodology and expense
reimbursement policy adopted April 23, 1999, and are calculated as if that
allocation methodology and expense reimbursement policy had been in effect
for all of 1999. Under the expense reimbursement policy, John Hancock
Life Insurance Company voluntarily reimburses a fund when the fund's
"other fund expenses" exceed 0.10% of the fund's average daily net assets
(0.00% for Equity Index). Shareholders of the Managed, Growth & Income,
Real Estate Equity, Small Cap Equity, Global Balanced, Active Bond, and
Global Bond funds have approved new management fee schedules, which apply
to these funds effective November 1, 2000. The investment management fee
percentages for each of these funds are calculated as if those new fee
schedules had been in effect for all of 1999. The investment management
fee percentages for all other funds reflect the investment management fees
that were actually payable for 1999.
** Small Cap Equity was formerly "Small Cap Value", Global Balanced was
formerly "International Balanced" and Active Bond was formerly "Sovereign
Bond".
"CORE /SM"/ IS A SERVICE MARK OF GOLDMAN, SACHS & CO.
WHAT OTHER CHARGES COULD JOHN HANCOCK IMPOSE IN THE FUTURE?
Except for the DAC tax charge, we currently make no charge for our Federal
income taxes. However, if we incur, or expect to incur, additional income taxes
attributable to any subaccount of the Account or this class of policies in
future years, we reserve the right to make a charge for such taxes. Any such
charge would reduce what you earn on any affected investment options. However,
we expect that no such charge will be necessary.
10
<PAGE>
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.
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.
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
total 100%.
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. We also reserve the right to impose limits on the
number and frequency of transfers out of the variable investment options.
Limitation on number of investment options
Whether through the allocation of premium or through the transfer of existing
account value, you can never be invested in more than ten investment options at
any one time.
Dollar cost averaging
This is a program of automatic monthly transfers out of the Money Market
investment option into one or more of the other variable investment options. You
choose the investment options and the dollar amount and timing of the transfers.
The program is designed to reduce the risks that result from market
fluctuations. It does this by spreading out the allocation of your
11
<PAGE>
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
You may make a partial withdrawal of your surrender value at any time. Each
partial withdrawal must be at least $1,000. There is a charge (usually $20) 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. We will not permit a partial withdrawal if it would cause
your surrender value to fall below 3 months' worth of monthly charges (see
"Deductions from account value" on page 8). We also reserve the right to refuse
any partial withdrawal that would cause the policy's face amount to fall below
$100,000. Under the Option 1 or Option 3 death benefit, the reduction of your
account value occasioned by a partial withdrawal could cause the minimum
insurance amount to become less than your face amount of insurance (see "How
much will John Hancock pay when the insured person dies?" on page 13). If that
happens, we will automatically reduce your face amount of insurance. The
calculation of that reduction is explained in the policy. If such a face amount
reduction would cause your policy to fail the Code's definition of life
insurance, we will not permit the partial withdrawal.
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 your account value that is in the fixed investment
option plus one of the following:
. In policy years 2 and 3 - - 75% of your account value that is in the
variable investment options
. In all later policy years - - 90% of your account value that is in
the variable investment options
The minimum amount of each loan is $300. The interest charged on any loan is
an effective annual rate of 5.0% in the first 20 policy years and 4.5%
thereafter. 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
12
<PAGE>
value is then allocated among them and is placed in a special loan account. This
special loan account will earn interest at an effective annual rate of 4.0%.
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 the "face
amount" of insurance. 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 face
amount 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 face
amount plus your policy's account value 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 face
amount 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.
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
13
<PAGE>
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?
Increase in coverage
Increases in the face amount of insurance coverage are generally not permitted
under our current administrative rules. We expect to be able to allow such
increases in the future, but that is not guaranteed.
Decrease in coverage
After the first policy year, you may request a reduction in the face amount of
insurance coverage at any time, but only if:
. the remaining face amount will be at least $100,000, and
. the remaining face amount will at least equal the minimum required by
the tax laws to maintain the policy's life insurance status.
As to when an approved decrease would take effect, see "Effective date of
other policy transactions" on page 30.
Change of death benefit option
You may request to change your coverage from death benefit Option 1 to Option
2 or vice-versa. If you request a 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
14
<PAGE>
increases our insurance risk exposure. If you have chosen death benefit Option
3, you can never change to either Option 1 or Option 2.
Tax consequences
Please read "Tax considerations" starting on page 32 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 John Hancock at one of the addresses shown
on page 1, or to the John Hancock representative who delivered the policy to
you.
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
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
15
<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 of your
insurance coverage may vary from the terms and conditions described in this
prospectus, 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 32. 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.
16
<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 on page 32.
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. They
include the following:
. loans, 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
. increase or decrease in face amount
. 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
17
<PAGE>
information. Any communication that arrives after the close of our business day,
or on a day that is not a business day, will be considered "received" by us on
the next following business day. Our business day currently closes at 4:00 p.m.
Eastern Standard Time, but special circumstances (such as suspension of trading
on a major exchange) may dictate an earlier closing time.
Telephone Transactions
If you complete a special authorization form, you can request loans, transfers
among investment options and changes of allocation among investment options
simply by telephoning us at 1-800-732-5543 or by faxing us at 1-617-886-3048.
Any fax request should include your name, daytime telephone number, policy
number and, in the case of transfers and changes of allocation, the names of the
investment options involved. We will honor telephone instructions from anyone
who provides the correct identifying information, so there is a risk of loss to
you if this service is used by an unauthorized person. However, you will receive
written confirmation of all telephone transactions. There is also a risk that
you will be unable to place your request due to equipment malfunction or heavy
phone line usage. If this occurs, you should submit your request in writing.
The policies are not designed for professional market timing organizations or
other persons or entities that use programmed orfrequent 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.
18
<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
face amount. 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% (i.e., before any fees or
expenses deducted from Trust assets). After the deduction of average fees and
expenses at the Trust level (as described below) the corresponding net annual
rates of return would be -0.74%, 5.22% and 11.17%. Investment return reflects
investment income and all realized and unrealized capital gains and losses. The
tables assume annual Planned 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 two 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 intended
waiver of the premium sales charge after the tenth policy year and the intended
reduction in the insurance charge after the tenth policy year. The tables headed
"Maximum Charges" are the same, except that the maximum permitted rates for all
years are used for all charges. The tables do not reflect any charge that we
reserve the right to make but are not currently making.
With respect to fees and expenses deducted from Trust assets, the amounts
shown in all tables reflect (1) investment management fees equivalent to an
effective annual rate of .66%, and (2) an assumed average asset charge for all
other Trust operating expenses equivalent to an effective annual rate of .08%.
These rates are the arithmetic average for all funds of the Trust. In other
words, they are based on the hypothetical assumption that policy account values
are allocated equally among the variable investment options. The actual rates
associated with any policy will vary depending upon the actual allocation of
policy values among the investment options. The charge shown above for all other
Trust operating expenses reflects reimbursements to certain funds as described
in the footnote to the table on page 10. We currently expect those reimbursement
arrangements to continue indefinitely, but that is not guaranteed.
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 Planned 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 face amount and annual Planned Premium amount requested.
19
<PAGE>
DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 218 244 270 0 0 0
2 1,636 100,000 100,000 100,000 663 737 815 0 0 72
3 2,516 100,000 100,000 100,000 1,093 1,243 1,406 0 150 313
4 3,439 100,000 100,000 100,000 1,506 1,761 2,048 413 668 956
5 4,409 100,000 100,000 100,000 1,900 2,289 2,745 807 1,196 1,652
6 5,428 100,000 100,000 100,000 2,276 2,828 3,501 1,183 1,736 2,408
7 6,497 100,000 100,000 100,000 2,631 3,376 4,321 1,538 2,283 3,228
8 7,620 100,000 100,000 100,000 2,964 3,932 5,211 2,070 3,038 4,317
9 8,799 100,000 100,000 100,000 3,274 4,496 6,176 2,579 3,801 5,481
10 10,037 100,000 100,000 100,000 3,568 5,076 7,240 3,272 4,780 6,944
11 11,337 100,000 100,000 100,000 3,866 5,695 8,432 3,669 5,497 8,234
12 12,702 100,000 100,000 100,000 4,142 6,325 9,736 4,043 6,226 9,637
13 14,135 100,000 100,000 100,000 4,392 6,965 11,163 4,392 6,965 11,163
14 15,640 100,000 100,000 100,000 4,615 7,612 12,725 4,615 7,612 12,725
15 17,220 100,000 100,000 100,000 4,809 8,267 14,437 4,809 8,267 14,437
16 18,879 100,000 100,000 100,000 4,972 8,928 16,315 4,972 8,928 16,315
17 20,621 100,000 100,000 100,000 5,105 9,595 18,379 5,105 9,595 18,379
18 22,450 100,000 100,000 100,000 5,197 10,260 20,644 5,197 10,260 20,644
19 24,370 100,000 100,000 100,000 5,247 10,920 23,132 5,247 10,920 23,132
20 26,387 100,000 100,000 100,000 5,258 11,581 25,875 5,258 11,581 25,875
25 38,086 100,000 100,000 100,000 4,777 14,946 44,737 4,777 14,946 44,737
30 53,018 100,000 100,000 100,000 3,271 18,411 77,172 3,271 18,411 77,172
35 72,076 ** 100,000 152,466 ** 21,031 132,579 ** 21,031 132,579
40 96,398 ** 100,000 236,015 ** 21,024 224,777 ** 21,024 224,777
45 127,441 ** 100,000 398,132 ** 15,461 379,174 ** 15,461 379,174
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
20
<PAGE>
DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 610 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,011 1,154 1,308 0 61 216
4 3,439 100,000 100,000 100,000 1,396 1,636 1,907 303 543 815
5 4,409 100,000 100,000 100,000 1,760 2,126 2,554 668 1,033 1,461
6 5,428 100,000 100,000 100,000 2,106 2,623 3,253 1,013 1,531 2,160
7 6,497 100,000 100,000 100,000 2,430 3,126 4,007 1,337 2,033 2,914
8 7,620 100,000 100,000 100,000 2,731 3,633 4,821 1,837 2,739 3,927
9 8,799 100,000 100,000 100,000 3,008 4,142 5,700 2,313 3,447 5,004
10 10,037 100,000 100,000 100,000 3,269 4,664 6,664 2,972 4,368 6,367
11 11,337 100,000 100,000 100,000 3,503 5,187 7,707 3,305 4,990 7,510
12 12,702 100,000 100,000 100,000 3,709 5,710 8,838 3,610 5,611 8,739
13 14,135 100,000 100,000 100,000 3,885 6,232 10,064 3,885 6,232 10,064
14 15,640 100,000 100,000 100,000 4,031 6,749 11,395 4,031 6,749 11,395
15 17,220 100,000 100,000 100,000 4,142 7,261 12,841 4,142 7,261 12,841
16 18,879 100,000 100,000 100,000 4,218 7,763 14,412 4,218 7,763 14,412
17 20,621 100,000 100,000 100,000 4,251 8,251 16,119 4,251 8,251 16,119
18 22,450 100,000 100,000 100,000 4,236 8,716 17,971 4,236 8,716 17,971
19 24,370 100,000 100,000 100,000 4,168 9,153 19,983 4,168 9,153 19,983
20 26,387 100,000 100,000 100,000 4,038 9,553 22,167 4,038 9,553 22,167
25 38,086 100,000 100,000 100,000 2,214 10,690 36,392 2,214 10,690 36,392
30 53,018 ** 100,000 100,000 ** 9,097 59,060 ** 9,097 59,060
35 72,076 ** 100,000 112,441 ** 1,145 97,774 ** 1,145 97,774
40 96,398 ** ** 170,374 ** ** 162,261 ** ** 162,261
45 127,441 ** ** 281,214 ** ** 267,823 ** ** 267,823
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
21
<PAGE>
DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ ------------------------------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ ------------------------------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,217 100,243 100,270 217 243 270 0 0 0
2 1,636 100,661 100,735 100,812 661 735 812 0 0 69
3 2,516 101,088 101,238 101,401 1,088 1,238 1,401 0 145 308
4 3,439 101,498 101,752 102,038 1,498 1,752 2,038 405 659 945
5 4,409 101,888 102,274 102,727 1,888 2,274 2,727 795 1,182 1,634
6 5,428 102,259 102,806 103,473 2,259 2,806 3,473 1,166 1,714 2,380
7 6,497 102,607 103,344 104,279 2,607 3,344 4,279 1,514 2,252 3,186
8 7,620 102,932 103,888 105,150 2,932 3,888 5,150 2,038 2,994 4,256
9 8,799 103,233 104,437 106,092 3,233 4,437 6,092 2,538 3,742 5,396
10 10,037 103,516 104,998 107,124 3,516 4,998 7,124 3,220 4,702 6,827
11 11,337 103,802 105,594 108,274 3,802 5,594 8,274 3,604 5,396 8,077
12 12,702 104,063 106,196 109,527 4,063 6,196 9,527 3,964 6,097 9,428
13 14,135 104,297 106,802 110,888 4,297 6,802 10,888 4,297 6,802 10,888
14 15,640 104,501 107,411 112,368 4,501 7,411 12,368 4,501 7,411 12,368
15 17,220 104,674 108,018 113,978 4,674 8,018 13,978 4,674 8,018 13,978
16 18,879 104,814 108,624 115,729 4,814 8,624 15,729 4,814 8,624 15,729
17 20,621 104,922 109,228 117,637 4,922 9,228 17,637 4,922 9,228 17,637
18 22,450 104,987 109,818 119,709 4,987 9,818 19,709 4,987 9,818 19,709
19 24,370 105,006 110,391 121,958 5,006 10,391 21,958 5,006 10,391 21,958
20 26,387 104,985 110,951 124,409 4,985 10,951 24,409 4,985 10,951 24,409
25 38,086 104,321 113,575 140,622 4,321 13,575 40,622 4,321 13,575 40,622
30 53,018 102,626 115,737 166,563 2,626 15,737 66,563 2,626 15,737 66,563
35 72,076 ** 116,022 207,355 ** 16,022 107,355 ** 16,022 107,355
40 96,398 ** 111,961 270,843 ** 11,961 170,843 ** 11,961 170,843
45 127,441 ** 100,300 370,102 ** 300 270,102 ** 300 270,102
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
22
<PAGE>
DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,191 100,216 100,242 191 216 242 0 0 0
2 1,636 100,608 100,678 100,752 608 678 752 0 0 9
3 2,516 101,007 101,149 101,303 1,007 1,149 1,303 0 56 210
4 3,439 101,389 101,628 101,897 1,389 1,628 1,897 296 535 805
5 4,409 101,749 102,112 102,537 1,749 2,112 2,537 657 1,019 1,444
6 5,428 102,090 102,603 103,227 2,090 2,603 3,227 997 1,510 2,134
7 6,497 102,407 103,096 103,968 2,407 3,096 3,968 1,315 2,003 2,875
8 7,620 102,702 103,592 104,765 2,702 3,592 4,765 1,808 2,698 3,871
9 8,799 102,970 104,087 105,620 2,970 4,087 5,620 2,275 3,392 4,925
10 10,037 103,221 104,592 106,555 3,221 4,592 6,555 2,924 4,295 6,259
11 11,337 103,443 105,094 107,561 3,443 5,094 7,561 3,245 4,896 7,364
12 12,702 103,635 105,591 108,644 3,635 5,591 8,644 3,537 5,492 8,545
13 14,135 103,797 106,082 109,810 3,797 6,082 9,810 3,797 6,082 9,810
14 15,640 103,926 106,564 111,066 3,926 6,564 11,066 3,926 6,564 11,066
15 17,220 104,019 107,033 112,418 4,019 7,033 12,418 4,019 7,033 12,418
16 18,879 104,074 107,486 113,873 4,074 7,486 13,873 4,074 7,486 13,873
17 20,621 104,086 107,915 115,435 4,086 7,915 15,435 4,086 7,915 15,435
18 22,450 104,046 108,311 117,108 4,046 8,311 17,108 4,046 8,311 17,108
19 24,370 103,952 108,669 118,899 3,952 8,669 18,899 3,952 8,669 18,899
20 26,387 103,793 108,976 120,809 3,793 8,976 20,809 3,793 8,976 20,809
25 38,086 101,820 109,401 132,376 1,820 9,401 32,376 1,820 9,401 32,376
30 53,018 ** 106,560 147,696 ** 6,560 47,696 ** 6,560 47,696
35 72,076 ** ** 166,326 ** ** 66,326 ** ** 66,326
40 96,398 ** ** 185,847 ** ** 85,847 ** ** 85,847
45 127,441 ** ** 198,800 ** ** 98,800 ** ** 98,800
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
23
<PAGE>
DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 218 244 270 0 0 0
2 1,636 100,000 100,000 100,000 663 737 815 0 0 72
3 2,516 100,000 100,000 100,000 1,093 1,243 1,406 0 150 313
4 3,439 100,000 100,000 100,000 1,506 1,761 2,048 413 668 956
5 4,409 100,000 100,000 100,000 1,900 2,289 2,745 807 1,196 1,652
6 5,428 100,000 100,000 100,000 2,276 2,828 3,501 1,183 1,736 2,408
7 6,497 100,000 100,000 100,000 2,631 3,376 4,321 1,538 2,283 3,228
8 7,620 100,000 100,000 100,000 2,964 3,932 5,211 2,070 3,038 4,317
9 8,799 100,000 100,000 100,000 3,274 4,496 6,176 2,579 3,801 5,481
10 10,037 100,000 100,000 100,000 3,568 5,076 7,240 3,272 4,780 6,944
11 11,337 100,000 100,000 100,000 3,866 5,695 8,432 3,669 5,497 8,234
12 12,702 100,000 100,000 100,000 4,142 6,325 9,736 4,043 6,226 9,637
13 14,135 100,000 100,000 100,000 4,392 6,965 11,163 4,392 6,965 11,163
14 15,640 100,000 100,000 100,000 4,615 7,612 12,725 4,615 7,612 12,725
15 17,220 100,000 100,000 100,000 4,809 8,267 14,437 4,809 8,267 14,437
16 18,879 100,000 100,000 100,000 4,972 8,928 16,315 4,972 8,928 16,315
17 20,621 100,000 100,000 100,000 5,105 9,595 18,379 5,105 9,595 18,379
18 22,450 100,000 100,000 100,000 5,197 10,260 20,644 5,197 10,260 20,644
19 24,370 100,000 100,000 100,000 5,247 10,920 23,132 5,247 10,920 23,132
20 26,387 100,000 100,000 100,000 5,258 11,581 25,875 5,258 11,581 25,875
25 38,086 100,000 100,000 100,000 4,777 14,946 44,737 4,777 14,946 44,737
30 53,018 100,000 100,000 130,207 3,271 18,411 76,502 3,271 18,411 76,502
35 72,076 ** 100,000 193,078 ** 21,031 127,562 ** 21,031 127,562
40 96,398 ** 100,000 285,457 ** 21,024 208,545 ** 21,024 208,545
45 127,441 ** 100,000 425,000 ** 15,461 336,607 ** 15,461 336,607
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
24
<PAGE>
DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ----------------------------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ----------------------------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 610 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,011 1,154 1,308 0 61 216
4 3,439 100,000 100,000 100,000 1,396 1,636 1,907 303 543 815
5 4,409 100,000 100,000 100,000 1,760 2,126 2,554 668 1,033 1,461
6 5,428 100,000 100,000 100,000 2,106 2,623 3,253 1,013 1,531 2,160
7 6,497 100,000 100,000 100,000 2,430 3,126 4,007 1,337 2,033 2,914
8 7,620 100,000 100,000 100,000 2,731 3,633 4,821 1,837 2,739 3,927
9 8,799 100,000 100,000 100,000 3,008 4,142 5,700 2,313 3,447 5,004
10 10,037 100,000 100,000 100,000 3,269 4,664 6,664 2,972 4,368 6,367
11 11,337 100,000 100,000 100,000 3,503 5,187 7,707 3,305 4,990 7,510
12 12,702 100,000 100,000 100,000 3,709 5,710 8,838 3,610 5,611 8,739
13 14,135 100,000 100,000 100,000 3,885 6,232 10,064 3,885 6,232 10,064
14 15,640 100,000 100,000 100,000 4,031 6,749 11,395 4,031 6,749 11,395
15 17,220 100,000 100,000 100,000 4,142 7,261 12,841 4,142 7,261 12,841
16 18,879 100,000 100,000 100,000 4,218 7,763 14,412 4,218 7,763 14,412
17 20,621 100,000 100,000 100,000 4,251 8,251 16,119 4,251 8,251 16,119
18 22,450 100,000 100,000 100,000 4,236 8,716 17,971 4,236 8,716 17,971
19 24,370 100,000 100,000 100,000 4,168 9,153 19,983 4,168 9,153 19,983
20 26,387 100,000 100,000 100,000 4,038 9,553 22,167 4,038 9,553 22,167
25 38,086 100,000 100,000 100,000 2,214 10,690 36,392 2,214 10,690 36,392
30 53,018 ** 100,000 100,504 ** 9,097 59,050 ** 9,097 59,050
35 72,076 ** 100,000 142,444 ** 1,145 94,109 ** 1,145 94,109
40 96,398 ** ** 198,634 ** ** 145,115 ** ** 145,115
45 127,441 ** ** 274,231 ** ** 217,195 ** ** 217,195
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
25
<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 18.
<TABLE>
<CAPTION>
CONTENTS OF THIS SECTION BEGINNING ON PAGE
------------------------ -----------------
<S> <C>
Description of John Hancock................. 27
How we support the policy and investment options 27
Procedures for issuance of a policy......... 28
Commencement of investment performance...... 29
How we process certain policy transactions.. 29
Effects of policy loans..................... 31
Additional information about how certain policy charges 31
work........................................
How we market the policies.................. 32
Tax considerations.......................... 32
Reports that you will receive............... 34
Voting privileges that you will have........ 35
Changes that John Hancock can make as to your policy 35
Adjustments we make to death benefits....... 36
When we pay policy proceeds................. 36
Other details about exercising rights and paying benefits 36
Legal matters............................... 37
Registration statement filed with the SEC... 37
Accounting and actuarial experts............ 37
Financial statements of John Hancock and the Account 37
List of Directors and Executive Officers of John Hancock 38
</TABLE>
26
<PAGE>
DESCRIPTION OF JOHN HANCOCK
We are John Hancock Life Insurance Company, a Massachusetts stock life
insuarnce company. On February 1, 2000, John Hancock Mutual Life Insurance
Company (which was chartered in Massachusetts in 1862) converted to a stock
company by "demutualizing" and changed its name to John Hancock Life Insurance
Company. As part of the demutualization process, John Hancock Life Insurance
Company became a subsidiary of John Hancock Financial Services, Inc., a newly
formed publicly-traded corporation. 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 the
Trust. New subaccounts may be added as new funds are added to the Trust and made
available to policy owners. Existing subaccounts may be deleted if existing
funds are deleted from the Trust.
We will purchase and redeem Trust shares for the Account at their net asset
value without any sales or redemption charges. Shares of the Trust represent an
interest in one of the funds of the Trust which corresponds to a subaccount of
the Account. Any dividend or capital gains distributions received by the Account
will be reinvested in shares of that same fund at their net asset value as of
the dates paid.
On each business day, shares of each fund are purchased or redeemed by us for
each subaccount based on, among other things, the amount of net premiums
allocated to the subaccount, distributions reinvested, and transfers to, from
and among subaccounts, all to be effected as of that date. Such purchases and
redemptions are effected at each fund's net asset value per share determined for
that same date. A "business day" is any date on which the New York Stock
Exchange is open for trading. We compute policy values for each business day as
of the close of that day (usually 4:00 p.m. Eastern Standard Time).
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
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applicable law, we have sole discretion over the investment of assets of the
general account and policy owners do not share in the investment experience of,
or have any preferential claim on, those assets. Instead, we guarantee that the
account value allocated to the fixed investment option will accrue interest
daily at an effective annual rate of at least 4% without regard to the actual
investment experience of the general account.
Because of exemptive and exclusionary provisions, interests in our fixed
investment option have not been registered under the Securities Act of 1933 and
our general account has not been registered as an investment company under the
1940 Act. Accordingly, neither the general account nor any interests therein are
subject to the provisions of these acts, and we have been advised that the staff
of the SEC has not reviewed the disclosure in this prospectus relating to the
fixed investment option. Disclosure regarding the fixed investment option may,
however, be subject to certain generally-applicable provisions of the Federal
securities laws relating to accuracy and completeness of statements made in
prospectuses.
PROCEDURES FOR ISSUANCE OF A POLICY
Generally, the policy is available with a minimum face amount at issue of
$100,000. At the time of issue, the insured person must have an attained age of
at least 20 and no more than 75. 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.
Minimum Initial Premium
The Minimum Initial Premium must be received by us at our Life Servicing
Office in order for the policy to be in full force and effect. There is no grace
period for the payment of the Minimum Initial Premium. The minimum amount of
premium required at the time of policy issue is equal to three monthly
Guaranteed Death Benefit Premiums (see "Guaranteed death benefit feature" in the
Basic Information section of this prospectus). However, if an owner has chosen
to pay premiums on a monthly basis, the minimum amount required is only equal to
one monthly Guaranteed Death Benefit Premium.
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 29).
The policy will take effect only if all of the following conditions are
satisfied:
. The policy is delivered to and received by the applicant.
. The Minimum Initial 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.
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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
always takes effect retroactively. Backdating results in a lower insurance
charge (because of the insured person's younger age at issue), but monthly
charges begin earlier than would otherwise be the case. Those monthly charges
will be deducted as soon as we receive premiums sufficient to pay them.
Temporary coverage prior to policy delivery
If a specified amount of premium is paid with the application for a policy and
other conditions are met, we will provide temporary term life insurance coverage
on the insured person for a period prior to the time coverage under the policy
takes effect. Such temporary term coverage will be subject to the terms and
conditions described in the application for the policy, including limits on
amount and duration of coverage.
Monthly deduction dates
Each charge that we deduct monthly is assessed against your account value or
the subaccounts at the close of business on the date of issue and at the close
of the first business day in each subsequent policy month.
COMMENCEMENT OF INVESTMENT PERFORMANCE
All premium payments will be allocated among the investment options you have
chosen as soon as they are processed.
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 date of issue.
(2) If the Minimum Initial 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 Minimum
Initial Premium is received.
(3) 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.
(4) If we receive any premium payment that we think 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
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acknowledgment. We will then process it accordingly.
(5) 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 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 policy anniversary on or next
following the date we approve your request:
. Face amount increases, when and if permitted by our administrative rules
. Change of death benefit option
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Face amount decreases or reinstatements of lapsed policies take effect on the
monthly deduction date on or next following the date we approve the request for
decrease or reinstatement.
We process loans, surrenders, partial withdrawals 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 face
amount are permanently affected by any loan, whether or not it is repaid in
whole or in part. This is because the amount of the loan is deducted from the
investment options and placed in a special loan account. The investment options
and the special loan account will generally have different rates of investment
return.
The amount of the outstanding loan (which includes accrued and unpaid
interest) is subtracted from the amount otherwise payable when the policy
proceeds become payable.
Whenever the outstanding loan equals or exceeds the surrender value, 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.
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 32.)
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 less than one
Target Premium in the first policy year or paying more than one Target Premium
in any policy year could reduce your total sales charges over time. For example,
if the Target Premium was $1,000 and you paid a premium of $1,000 in each of the
first ten policy years, you would pay total premium sales charges of $400 and be
subject to a maximum CDSC of $780. If you paid $2,000 (i.e., two times the
Target Premium amount) in every other policy year up to the tenth policy year,
you would pay total premium sales charges of only $200 and be subject to a
maximum CDSC of only $520. However, delaying the payment of Target Premiums to
later policy years could increase the risk that the account value will be
insufficient to pay monthly policy charges as they come due and that, as a
result, the policy will lapse and eventually terminate. Conversely, accelerating
the payment of Target Premiums to earlier policy years could cause aggregate
premiums paid to exceed the policy's 7-pay premium limit and, as a result, cause
the policy to become a modified endowment, with adverse tax consequences to you
upon receipt of policy distributions. (See "Tax considerations" beginning on
page 32.)
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
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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
John Hancock Funds, Inc. ("JHFI"), an indirect wholly-owned subsidiary of John
Hancock located at 101 Huntington Avenue, Boston, MA 02199, 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. JHFI acts as principal
underwriter and principal distributor of the policies sold through the use of
this prospectus. JHFI also serves as principal underwriter for John Hancock
Variable Annuity Accounts H and JF, John Hancock Variable Life Accounts S and U,
and Investors Partner Life Account L, all of which are registered under the 1940
Act.
The policies may be purchased through broker-dealers and certain financial
institutions who have entered into selling agreements with JHFI and John
Hancock, and whose representatives are authorized by applicable law to sell
variable life insurance policies.Gross first year commissions plus any expense
allowance payments paid to such broker-dealers and financial institutions is not
expected to exceed 80% of premiums paid up to the Target Premium plus 3% of any
excess premium payments. Gross renewal commissions (i.e., after the first year)
are not expected to exceed 3% of total premiums paid in policy years 2 through 5
plus 0.15% of account value less loans in policy years 2 and thereafter. In some
situations where the broker dealer provides some or all of the marketing
services required, we may pay an additional gross first year commission of up to
20% of premiums paid up to the Target Premium. In such instances, we may also
pay an additional gross renewal commission. The additional gross renewal
commission would not be expected to exceed 0.10% of account value less loans in
policy years 2 and thereafter.
We reimburse JHFI for direct and indirect expenses actually incurred in
connection with the marketing and sale of the policies.
The offering of the policies is intended to be continuous, but neither John
Hancock nor JHFI 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
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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 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 the policy. But under certain circumstances within the
first 15 policy years, the owner may be taxed on a distribution even if total
withdrawals do not exceed total premiums paid. Any taxable distribution will be
ordinary income to the owner (rather than capital gains).
We also believe that, except as noted below, loans received under the policy
will be treated as indebtedness of an owner and that no part of any loan will
constitute income to the owner. However, the amount of any outstanding loan that
was not previously considered income (as discussed below) will be treated as if
it had been distributed to the owner if the policy terminates for any reason.
It is possible that, despite our monitoring, a policy might fail to qualify as
life insurance under Section 7702 of the Code. This could happen, for example,
if we inadvertently failed to return to you any premium payments that were in
excess of permitted amounts, or if the Trust failed to meet certain investment
diversification or other requirements of the Code. If this were to occur, you
would be subject to income tax on the income and gains under the policy for the
period of the disqualification and for subsequent periods.
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.
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7-pay premium limit
At the time of policy issuance, we will determine whether the Planned Premium
schedule 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 until maturity, 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 591/2.
Furthermore, any time there is a "material change" in a policy (such as a face
amount increase, the addition of certain other policy benefits after issue, a
change in death benefit option, or reinstatement of a lapsed policy), the policy
will have a new 7-pay limit as if it were a newly-issued policy. If a prescribed
portion of the policy's then account value, plus all other premiums paid within
7 years after the material change, at any time exceed the new 7-pay limit, the
policy will become a modified endowment.
Moreover, if benefits under a policy are reduced (such as a reduction in the
face amount or 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 the following
information as of the end of the most recent reporting period: the amount of the
death benefit and 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 premium payments, transfers among investment options, policy
loans, partial withdrawals and certain other policy transactions.
Semiannually we will send you a report containing the financial statements of
the Trust, including a list of securities held in each fund.
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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 Trustees
of the Trust, ratification of the selection of independent auditors, approval of
Trust investment advisory agreements and other matters requiring a shareholder
vote. We will furnish owners with information and forms to enable owners to give
voting instructions.
However, we may, in certain limited circumstances permitted by the SEC's
rules, disregard voting instructions. If we do disregard voting instructions,
you will receive a summary of that action and the reasons for it in the next
semi-annual report to owners.
CHANGES THAT 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
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:
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. 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 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
36
<PAGE>
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.
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 certain of the financial
statements of 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 Todd G.
Engelsen, F.S.A., an Actuary and Second Vice President 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.
In addition to those financial statements of the Account included herein that
have been audited by Ernst & Young LLP, this prospectus also contains unaudited
financial statements of the Account for a period subsequent to the audited
financial statements.
The most current financial statements for John Hancock are those as of
December 31, 1999. We do not prepare such financial statements more often than
annually. Moreover, we believe that any additional benefit you would get from
more recent financial statements would not justify our cost in preparing them.
(This is true even though we would not necessarily have to incur the expense of
an independant audit of those financial statements.) In this connection, we
represent that there have been no material adverse changes in our financial
condition or operations between December 31, 1999 and the date of this
prospectus.
37
<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>
Stephen L. Brown. . . Chairman of the Board, John Hancock
David F. D'Alessandro President and Chief Executive Officer, John Hancock
Foster L. Aborn . . . Director, formerly Vice Chairman of the Board and Chief
Investment Officer, John Hancock
Samuel W. Bodman. . . Chairman of the Board and Chief Executive Officer,
Cabot Corporation (chemicals)
I. MacAllister Booth. Retired Chairman of the Board and Chief Executive
Officer, Polaroid Corporation (photographic products)
Wayne A. Budd . . . . Executive Vice President and General Counsel, John
Hancock
John M. Connors, Jr.. Chairman and Chief Executive Officer and Director,
Hill, Holliday, Connors, Cosmopoulos, Inc.
(advertising).
Robert E. Fast. . . . Senior Partner, Hale and Dorr (law firm).
Kathleen F. Feldstein President, Economic Studies, Inc. (economic
consulting).
Nelson S. Gifford . . Principal, Fleetwing Capital Management (financial
services)
Michael C. Hawley . . Chairman and Chief Executive Officer, The Gillette
Company (razors, etc.)
Edward H. Linde . . . President and Chief Executive Officer, Boston
Properties, Inc. (real estate)
Judith A, McHale. . . President and Chief Operating Officer, Discovery
Communications, Inc. (multimedia communications)
E. James Morton . . . Director, formerly Chairman of the Board and Chief
Executive Officer, John Hancock
R. Robert Popeo . . . Chairman, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo
(law firm)
Richard F. Syron. . . Chairman of the Board, President and Chief Executive
Officer, Thermo Electron Corp. (scientific and
industrial instruments)
Robert J. Tarr, Jr. . Former President, Chief Executive Officer and Chief
Operations Officer, Harcourt General, Inc. (publishing)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Other Executive
---------------
Officers
--------
Thomas E. Moloney . . Chief Financial Officer
Derek Chilvers. . . . Chairman and Chief Executive Officer of John Hancock
International Holdings, Inc.
John M. DeCiccio. . . Executive Vice President and Chief Investment Officer
Maureen R. Ford . . . President, Broker-Dealer Distribution and Financial
Advisory Network
Kathleen M. Graveline Executive Vice President - Retail
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.
38
<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, 1999
and 1998, 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 auditing standards generally
accepted in the United States. 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 accounting principles generally accepted in the United
States. The variances between such practices and accounting principles generally
accepted in the United States 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 accounting principles generally accepted in the
United States, the financial position of John Hancock Mutual Life Insurance
Company at December 31, 1999 and 1998 or the results of its operations or its
cash flows for the years then ended.
However, 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, 1999 and 1998, 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
March 10, 2000
39
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
December 31
---------------------
1999 1998
---------- -----------
(in millions)
<S> <C> <C>
ASSETS
Bonds--Note 6 . . . . . . . . . . . . . . . . . . $26,188.1 $23,353.0
Stocks:
Preferred . . . . . . . . . . . . . . . . . . . 926.6 844.7
Common . . . . . . . . . . . . . . . . . . . . 458.4 269.3
Investments in affiliates . . . . . . . . . . . 1,465.8 1,520.3
--------- ---------
2,850.8 2,634.3
Mortgage loans on real estate--Note 6 . . . . . . 9,165.9 8,223.7
Real estate:
Company occupied . . . . . . . . . . . . . . . 366.6 372.2
Investment properties . . . . . . . . . . . . . 501.7 1,472.1
--------- ---------
868.3 1,844.3
Policy loans . . . . . . . . . . . . . . . . . . 1,577.8 1,573.8
Cash items:
Cash in banks and offices . . . . . . . . . . . 292.6 241.5
Temporary cash investments . . . . . . . . . . 868.0 1,107.4
--------- ---------
1,160.6 1,348.9
Premiums due and deferred . . . . . . . . . . . . 234.8 253.4
Investment income due and accrued . . . . . . . . 574.8 527.5
Other general account assets . . . . . . . . . . 1,364.7 1,156.6
Assets held in separate accounts . . . . . . . . 16,746.0 17,447.0
--------- ---------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . $60,731.8 $58,362.5
========= =========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
40
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
December 31
---------------------
1999 1998
---------- -----------
(in millions)
<S> <C> <C>
OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY RESERVES
OBLIGATIONS
Policy reserves . . . . . . . . . . . . . . . . $20,574.1 $19,804.8
Policyholders' and beneficiaries' funds . . . . 16,128.3 14,216.9
Dividends payable to policyholders . . . . . . . 464.8 449.1
Policy benefits in process of payment . . . . . 132.3 111.4
Other policy obligations . . . . . . . . . . . . 304.7 322.6
Asset valuation reserve--Note 1 . . . . . . . . 1,242.9 1,289.6
Federal income and other accrued Taxes--Note 1 . (12.1) 211.5
Other general account obligations . . . . . . . 1,695.0 1,109.3
Obligations related to separate accounts . . . . 16,745.1 17,458.6
--------- ---------
TOTAL OBLIGATIONS . . . . . . . . . . . . . . . . 57,275.1 54,973.8
POLICYHOLDERS' CONTINGENCY RESERVES
Surplus note--Note 2 . . . . . . . . . . . . . . 450.0 450.0
Special contingency reserve for group insurance 153.4 160.0
General contingency reserve . . . . . . . . . . 2,853.3 2,778.7
--------- ---------
TOTAL POLICYHOLDERS' CONTINGENCY RESERVES . . . . 3,456.7 3,388.7
--------- ---------
TOTAL OBLIGATIONS AND POLICYHOLDERS' CONTINGENCY
RESERVES. . . . . . . . . . . . . . . . . . . . . $60,731.8 $58,362.5
========= =========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
41
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF OPERATIONS AND CHANGES IN POLICYHOLDERS'
CONTINGENCY RESERVES
<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1999 1998
----------- -------------
(In millions)
<S> <C> <C>
INCOME
Premiums, annuity considerations and pension fund
contributions. . . . . . . . . . . . . . . . . $ 9,622.9 $ 8,844.0
Net investment income--Note 4 . . . . . . . . . 3,033.4 2,956.2
Other, net . . . . . . . . . . . . . . . . . . . 241.9 233.8
--------- ---------
12,898.2 12,034.0
BENEFITS AND EXPENSES
Payments to policyholders and beneficiaries:
Death benefits . . . . . . . . . . . . . . . 675.6 582.9
Accident and health benefits . . . . . . . . 94.4 76.9
Annuity benefits . . . . . . . . . . . . . . 1,734.3 1,612.4
Surrender benefits and annuity fund
withdrawals. . . . . . . . . . . . . . . . . 7,410.6 6,712.4
Matured endowments . . . . . . . . . . . . . 18.6 20.7
--------- ---------
9,933.5 9,005.3
Additions to reserves to provide for future
payments to policyholders and beneficiaries . 1,238.9 1,106.7
Expenses of providing service to policyholders
and obtaining new insurance:
Field sales compensation and expenses . . . . 248.8 290.7
Home office and general expenses . . . . . . 717.8 529.0
Payroll, state premium and miscellaneous taxes . 48.9 52.0
--------- ---------
12,187.9 10,983.7
--------- ---------
GAIN FROM OPERATIONS BEFORE DIVIDENDS TO
POLICYHOLDERS, FEDERAL INCOME TAXES AND
NET REALIZED CAPITAL GAINS . . . . . . . 710.3 1,050.3
Dividends to policyholders . . . . . . . . . . . . 461.1 446.0
Federal income tax credit--Note 1 . . . . . . . . (216.9) (2.8)
--------- ---------
244.2 443.2
--------- ---------
GAIN FROM OPERATIONS BEFORE NET REALIZED
CAPITAL GAINS . . . . . . . . . . . . . . 466.1 607.1
Net realized capital gains--Note 5 . . . . . . . . 29.0 0.7
--------- ---------
NET INCOME . . . . . . . . . . . . . . . . 495.1 607.8
Other increases/(decreases) in policyholders'
contingency reserves:
Net unrealized capital losses and other
adjustments--Note 5 . . . . . . . . . . . . . (147.0) (214.5)
Prior years' federal income taxes . . . . . . . (21.9) (25.5)
Other reserves and adjustments, net--Notes 1, 7
and 13 . . . . . . . . . . . . . . . . . . . . (258.2) (136.9)
--------- ---------
NET INCREASE IN POLICYHOLDERS' CONTINGENCY
RESERVES. . . . . . . . . . . . . . . . . 68.0 230.9
Policyholders' contingency reserves at beginning of
year. . . . . . . . . . . . . . . . . . . . . . . 3,388.7 3,157.8
--------- ---------
POLICYHOLDERS' CONTINGENCY RESERVES AT END OF YEAR $ 3,456.7 $ 3,388.7
========= =========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
42
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
STATUTORY-BASIS STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31
-----------------------
1999 1998
----------- -------------
(In millions)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Insurance premiums, annuity considerations and
deposits . . . . . . . . . . . . . . . . . . . $ 9,816.6 $ 8,945.5
Net investment income . . . . . . . . . . . . . 2,966.1 2,952.8
Benefits to policyholders and beneficiaries . . (10,047.9) (9,190.4)
Dividends paid to policyholders . . . . . . . . (445.4) (396.6)
Insurance expenses and taxes . . . . . . . . . . (1,015.3) (874.4)
Net transfers from separate accounts . . . . . . 1,436.6 131.1
Other, net . . . . . . . . . . . . . . . . . . . (264.2) (181.7)
---------- ----------
NET CASH PROVIDED FROM OPERATIONS . . . . . . 2,446.5 1,386.3
---------- ----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Bond purchases . . . . . . . . . . . . . . . . . (15,946.3) (12,403.6)
Bond sales . . . . . . . . . . . . . . . . . . . 10,098.5 8,447.8
Bond maturities and scheduled redemptions . . . 2,443.9 2,537.7
Bond prepayments . . . . . . . . . . . . . . . . 644.9 1,202.7
Stock purchases . . . . . . . . . . . . . . . . (2,546.2) (623.2)
Proceeds from stock sales . . . . . . . . . . . 2,174.0 378.4
Real estate purchases . . . . . . . . . . . . . (188.7) (147.6)
Real estate sales . . . . . . . . . . . . . . . 1,258.4 630.5
Other invested assets purchases . . . . . . . . (127.9) (185.3)
Proceeds from the sale of other invested assets 358.4 120.5
Mortgage loans issued . . . . . . . . . . . . . (2,254.2) (1,978.5)
Mortgage loan repayments . . . . . . . . . . . . 1,267.3 1,575.6
Other, net . . . . . . . . . . . . . . . . . . . 183.1 (38.6)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES . . . . (2,634.8) (483.6)
---------- ----------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Net decrease in short-term note payable . . . . 0.0 (75.0)
Repayment of REMIC notes payable . . . . . . . . 0.0 (203.6)
---------- ----------
NET CASH USED IN FINANCING ACTIVITIES . . . . 0.0 (278.6)
---------- ----------
(DECREASE) INCREASE IN CASH AND TEMPORARY CASH
INVESTMENTS . . . . . . . . . . . . . . . . . . . (188.3) 624.1
Cash and temporary cash investments at beginning of
year. . . . . . . . . . . . . . . . . . . . . . . 1,348.9 724.8
---------- ----------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR $ 1,160.6 $ 1,348.9
========== ==========
</TABLE>
The accompanying notes are an integral part of the statutory-basis financial
statements.
43
<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. Pursuant to a Plan of
Reorganization, effective February 1, 2000, the Company converted from a mutual
life insurance company to a stock life insurance company and became a wholly
owned subsidiary of John Hancock Financial Services, Inc., which is a holding
company. See Note 15--Subsequent Events.
The Company offers financial products in two major groups: (i) its retail
business, which offers protection and asset gathering products primarily to
retail consumers; and (ii) the investment and pension business, which offers
guaranteed and structured financial products primarily to institutional
customers. In addition, there is a corporate business unit. The Company's
reportable business units are strategic business units offering different
products and services. The reportable business units are managed separately, as
they focus on different products, markets or distribution channels.
In the Retail-Protection business unit, the Company offers a variety of
individual life insurance and individual and group long-term care insurance
products, including participating whole life, term life, and retail and group
long-term care insurance. Products are distributed through multiple distribution
channels, including insurance agents and brokers and alternative distribution
channels that include banks, financial planners, direct marketing and the
Internet.
In the Retail-Asset Gathering business unit, the Company offers individual
annuities, consisting of fixed deferred annuities, fixed immediate annuities,
single premium immediate annuities, and variable annuities. This business unit
distributes its products through distribution channels including insurance
agents and brokers affiliated with the Company, securities brokerage firms,
financial planners, and banks.
In the Investment and Pension business unit, the Company offers a variety of
retirement products to qualified defined benefit plans, defined contribution
plans and non-qualified buyers. The Company's products include guaranteed
investment contracts, funding agreements, single premium annuities, and general
account participating annuities and fund type products. These contracts provide
non-guaranteed, partially guaranteed, and fully guaranteed investment options
through general and separate account products. The business unit distributes its
products through a combination of dedicated regional representatives, pension
consultants and investment professionals.
The Corporate business unit primarily consists of certain corporate operations
and businesses that are either disposed or in run-off. Corporate operations
primarily include certain financing activities, income on capital not
specifically allocated to the business units and certain non-recurring expenses
not allocated to the business units. The disposed businesses primarily consist
of group health operations.
The Company established a "corporate account" as part of the Corporate business
unit to facilitate the capital management process. The corporate account
contains capital not allocated to support the operations of the Company's
business units.
Late in the fourth quarter of 1999, the Company transferred certain assets from
the business units to the corporate account. These assets include investments in
certain subsidiaries and the home office real estate complex (collectively
referred to as "corporate purpose assets"). Historically, the Company has
allocated the investment performance or other earnings of corporate purpose
assets among all of the business units. However, subsequent to the conversion to
a stock life insurance company, the Company will centrally manage the
performance of corporate purpose assets through the corporate account.
The asset transfer directly affected certain group pension participating
contractholders because those contracts have participating features under which
crediting rates and dividends are affected directly by portfolio earnings.
Certain participating contractholders participate in contract experience related
to net investment income and realized capital gains and losses in the general
account. These participating contractholders were compensated for transferred
assets
44
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
based on the fair value of the assets transferred, which amounted to $771.7
million. These participating contractholders were credited with their portion of
the difference between the fair value and carrying value of the assets
transferred through the crediting rates and dividends on their contracts. The
after-tax amount of the transfer was $170.8 million which was charged directly
to policyholders' contingency reserve.
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 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 or future estimated gross profits or gross
margins; (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 codified
statutory accounting principles ("Codification") effective January 1, 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
Commonwealth of Massachusetts must adopt Codification as the prescribed basis of
accounting on which domestic insurers must report their statutory-basis results
to the Division of Insurance. At this time, it is anticipated that the
Commonwealth of Massachusetts will adopt Codification effective January 1, 2001.
The impact of any such changes on the Company's statutory surplus is not
expected to be material.
45
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of new
business, are charged to operations as incurred and policyholder dividends are
provided as paid or accrued.
Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-term,
highly liquid investments both readily convertible to known amounts of cash and
so near maturity that there is insignificant risk of changes in value because of
changes in interest rates.
Valuation of Assets: General account investments are carried at amounts
determined on the following bases:
Bond and stock values are carried as prescribed by the 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 $1,057.3 million and $533.8 million
were sold in 1999 and 1998, respectively, and an additional $125.3 million of
real estate is expected to be sold in 2000. Net gains on the properties sold
amounted to $140.8 million and $64.3 million in 1999 and 1998, respectively.
Those properties to be sold subsequent to December 31, 1999 are carried at the
lower of depreciated cost at the date a determination to sell was made or fair
value. Accumulated depreciation amounted to $254.4 million and $370.0 million
at December 31, 1999 and 1998, 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
46
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 1--NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING PRACTICES--CONTINUED
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. In connection
with the Company's plans to dispose of certain real estate holdings, during
1998, an additional contribution was recorded that resulted in the AVR exceeding
the prescribed maximum reserve level by $48.0 million and $111.3 million at
December 31, 1999 and 1998, respectively. 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.
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, 1999, the IMR, net of 1999 amortization of $51.4 million, amounted to $261.7
million that is included in other policy obligations. The corresponding 1998
amounts were $34.9 million and $261.6 million, respectively.
Property and Equipment: Data processing equipment, which amounted to $29.2
million in 1999 and $31.4 million in 1998 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 $19.7 million in 1999 and $20.1 million
in 1998.
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.
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 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.
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, 1999. 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 21/2% 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 83/4%.
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
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.
The statement value and fair value for investment-type insurance contracts are
as follows:
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
-------------------- --------------------
Statement Fair Statement Fair
Value Value Value Value
--------- --------- --------- -----------
(in millions)
<S> <C> <C> <C> <C>
Guaranteed investment contracts $13,111.6 $12,617.2 $12,666.9 $12,599.7
Fixed rate deferred and immediate
annuities . . . . . . . . . . . 4,685.7 4,656.9 4,375.0 4,412.2
Supplementary contracts without
life contingencies . . . . . . 55.7 55.7 42.7 44.7
--------- --------- --------- ---------
$17,853.0 $17,329.8 $17,084.6 $17,056.6
========= ========= ========= =========
</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 Internal Revenue Service sets the DER 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 $115.0 million in 1999 and $74.9
million in 1998.
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. No such refinements were made during 1999 or 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.
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
Guaranty Fund Assessments: Guaranty fund assessments are accrued when the
Company receives knowledge of an insurance insolvency.
NOTE 2--SURPLUS NOTES
On February 25, 1994, the Company issued $450 million of surplus notes that bear
interest at7 3/8% and are scheduled to mature on February 15, 2024. The issuance
of the surplus notes was approved by the Commonwealth of Massachusetts and any
payment of interest on and principal of the notes may be made only with the
prior approval of the Commissioner of Insurance of the Commonwealth of
Massachusetts. Surplus notes are reported as part of policyholders' contingency
reserves rather than liabilities. Interest of $33.2 million was paid on the
notes during 1999 and 1998.
NOTE 3--BORROWED MONEY
At December 31, 1999, the Company had two syndicated lines of credit with a
group of banks totaling $1.0 billion, $500.0 million of which expire on July 29,
2000 and $500.0 million of which expire on June 30, 2001. The banks will commit,
when requested, to loan funds at prevailing interest rates as determined in
accordance within each line of credit agreement. Under the terms of the
agreements, the Company is required to maintain certain minimum levels of net
worth and comply with certain other covenants, which were met at December 31,
1999. At December 31, 1999, the Company had no outstanding borrowings under
either agreement.
Interest paid on borrowed money was $7.9 million and $6.6 million during 1999
and 1998, respectively.
NOTE 4--NET INVESTMENT INCOME
Investment income has been reduced by the following amounts:
<TABLE>
<CAPTION>
1999 1998
------- ---------
(In millions)
<S> <C> <C>
Investment expenses . . . . . . . . . . . . . . . . . $277.1 $317.5
Interest expense . . . . . . . . . . . . . . . . . . 41.4 44.3
Depreciation on real estate and other invested assets 22.9 41.6
Real estate and other investment taxes . . . . . . . 41.8 60.1
------ ------
$383.2 $463.5
====== ======
</TABLE>
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS
Net realized capital gains consist of the following items:
<TABLE>
<CAPTION>
1999 1998
-------- ----------
(In millions)
<S> <C> <C>
Net gains from asset sales and foreclosures $ 260.3 $ 303.3
Capital gains tax . . . . . . . . . . . . . (179.8) (171.7)
Net capital gains transferred to the IMR . (51.5) (130.9)
------- -------
Net Realized Capital Gains . . . . . . . $ 29.0 $ 0.7
======= =======
</TABLE>
50
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS--CONTINUED
Net unrealized capital losses and other adjustments consist of the following
items:
<TABLE>
<CAPTION>
1999 1998
-------- ----------
(In millions)
<S> <C> <C>
Net losses from changes in security values and book value
adjustments. . . . . . . . . . . . . . . . . . . . . . . $(193.7) $ (90.6)
Decrease (increase) in asset valuation reserve . . . . . 46.7 (123.9)
------- -------
Net Unrealized Capital Losses and Other Adjustments . . . $(147.0) (214.5)
======= =======
</TABLE>
NOTE 6--INVESTMENTS
The statement value and fair value of bonds are shown below:
<TABLE>
<CAPTION>
Gross Gross
Statement Unrealized Unrealized
December 31, 1999 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 . . . . . . . . . . $ 162.3 $ 0.4 $ 2.5 $ 160.2
Obligations of states and
political subdivisions . . . 111.3 6.6 4.4 113.5
Debt securities issued by
foreign governments . . . . 510.0 56.4 7.0 559.4
Corporate securities . . . . 20,460.3 587.1 970.8 20,076.6
Mortgage-backed securities . 4,944.2 22.1 167.7 4,798.6
--------- -------- -------- ---------
Total bonds . . . . . . . . $26,188.1 $ 672.6 $1,152.4 $25,708.3
========= ======== ======== =========
December 31, 1998
----------------
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>
The statement value and fair value of bonds at December 31, 1999, 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 . . . . . . . $ 1,515.9 $ 1,513.2
Due after one year through five years 5,876.1 5,871.2
Due after five years through ten years 6,801.3 6,684.9
Due after ten years . . . . . . . . . 7,050.6 6,840.4
--------- ---------
21,243.9 20,909.7
Mortgage-backed securities . . . . . . 4,944.2 4,798.6
--------- ---------
$26,188.1 $25,708.3
========= =========
</TABLE>
51
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 6--INVESTMENTS--CONTINUED
Gross gains of $99.1 million in 1999 and $126.4 million in 1998 and gross losses
of $94.4 million in 1999 and $62.3 million in 1998 were realized from the sale
of bonds.
At December 31, 1999, bonds with an admitted asset value of $26.6 million were
on deposit with state insurance departments to satisfy regulatory requirements.
The cost of common stocks was $345.3 million and $258.4 million at December 31,
1999 and 1998, respectively. At December 31, 1999, gross unrealized appreciation
on common stocks totaled $177.7 million, and gross unrealized depreciation
totaled $64.6 million. The fair value of preferred stock totaled $926.7 million
at December 31, 1999 and $832.4 million at December 31, 1998.
The Company participates in a security-lending program for the purpose of
enhancing income on securities held. At December 31, 1999 and 1998, $277.7
million and $421.5 million, respectively, of the Company's bonds and stocks were
on loan to various brokers/dealers, but were fully collateralized by cash and
U.S. government securities in an account held in trust for the Company. Such
assets reflect the extent of the Company's involvement in securities lending,
not the Company's risk of loss.
Mortgage loans with outstanding principal balances of $19.3 million, bonds with
amortized cost of $54.4 million and real estate with depreciated cost of $9.9
million were non-income as of December 31, 1999.
Restructured commercial mortgage loans aggregated $120.3 million and $230.5
million as of December 31, 1999 and 1998, 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
-----------------------
1999 1998
----------- -------------
(In millions)
<S> <C> <C>
Expected . . . . . . . . . . . . . . . . $10.8 $22.5
Actual . . . . . . . . . . . . . . . . . 6.9 11.6
</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, 1999, 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.
52
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 6--INVESTMENTS--CONTINUED
<TABLE>
<CAPTION>
Statement Geographic Statement
Property Type Value Concentration Value
------------- ------------- ------------- ---------------
(In millions) (In millions)
<S> <C> <S> <C>
Apartments . . . . . $1,809.1 East North Central . . $1,039.8
Hotels . . . . . . . 404.0 East South Central . . 289.7
Industrial . . . . . 816.8 Middle Atlantic . . . 1,657.5
Office buildings . . 2,309.1 Mountain . . . . . . . 326.7
Retail . . . . . . . 1,619.4 New England . . . . . 836.1
1-4 Family . . . . . 3.4 Pacific . . . . . . . 2,025.0
Agricultural . . . . 1,803.6 South Atlantic . . . . 1,823.5
Other . . . . . . . . 400.5 West North Central . . 362.7
West South Central . . 701.9
Other . . . . . . . . 103.0
-------- --------
$9,165.9 $9,165.9
======== ========
</TABLE>
At December 31, 1999, the fair values of the commercial and agricultural
mortgage loan portfolios were $7.2 billion and $1.8 billion, respectively. The
corresponding amounts as of December 31, 1998 were approximately $7.3 billion
and $1.3 billion, respectively.
The maximum and minimum lending rates for mortgage loans during 1999 were 14.24%
and 6.84% for agricultural loans, 9.0% and 6.50% for other properties, and 10.0%
and 7.125% 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 1999 were
$673.5 million, $42.8 million, and $153.1 million, respectively. The
corresponding amounts in 1998 were $784.0 million, $310.0 million, and $7.7
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 1999 were $1,018.3
million, $488.5 million and $823.7 million, respectively. The corresponding
amounts in 1998 were $873.9 million, $772.5 million and $712.2 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 $463.9 million, $449.0 million, and $231.7 million, respectively, at
December 31, 1999. The corresponding amounts in 1998 were $458.2 million, $481.2
million, and $238.6 million, respectively.
53
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--REINSURANCE--CONTINUED
Amounts recoverable on paid claims and funds withheld from reinsurers were as
follows:
<TABLE>
<CAPTION>
December 31
--------------
1999 1998
------- --------
(In millions)
<S> <C> <C>
Reinsurance recoverables . . . . . . . . $ 27.5 $18.6
Funds withheld from reinsurers . . . . . 227.3 49.5
</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 $245.7 million at December 31, 1999 and $251.1
million at December 31, 1998.
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 1999 issues of flexible premium variable life
insurance and scheduled premium variable life insurance policies. In connection
with this agreement, the Company transferred $44.5 million and $4.9 million of
cash to Variable Life in 1999 and 1998, respectively, for tax, commission, and
expense allowances to Variable Life, which decreased the Company's net gain from
operations by $20.6 million and $22.2 million in 1999 and 1998, respectively.
Variable Life also has a modified coinsurance agreement with the Company to
reinsure 50% of Variable Life's 1995 inforce block and 50% of 1996 and all
future issue years of certain retail annuity contracts. In connection with this
agreement, the Company made a net cash payment of $40.0 million and $12.7
million in 1999 and 1998, respectively, for surrender benefits, taxes, reserve
increase, commission expense allowances and premiums. This agreement decreased
the Company's net gain from operations by $26.9 million and $8.4 million in 1999
and 1998, 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 1999 and 1998 for all policies that are not reinsured under any other
indemnity agreement. In connection with the agreement, the Company received $0.8
million and $1.0 million in 1999 and 1998, respectively, for mortality claims
from Variable Life. This agreement increased the Company's net gain from
operations in both 1999 and 1998 by $0.5 million.
John Hancock Reassurance Company of Bermuda (JHReCo, a wholly-owned affiliate)
has a modified coinsurance agreement with the Company to reinsure 50% of the
Company's 1997 through 1999 issues of retail long-term care insurance policies.
In connection with this agreement, the Company transferred $22.6 million and
$1.9 million of cash to JHReCo in 1999 and 1998, respectively, for tax,
commission, and expense allowances to JHReCo. This agreement increased the
Company's net gain from operations by $17.4 million and $11.7 million in 1999
and 1998, respectively.
JHReCo has a modified coinsurance agreement with the Company to reinsure 30% of
the Company's issues prior to January 1, 1997 and 50% of the Company's 1997
through 1999 issues of group long-term care insurance policies. In connection
with this agreement, the Company transferred $49.9 million and $38.0 million of
cash to JHReCo in 1999 and 1998, respectively, for tax, commission, and expense
allowances to JHReCo. This agreement increased the Company's net gain from
operations by $3.6 million and $3.9 million in 1999 and 1998, respectively.
JHReCo also has a modified coinsurance agreement with the Company to reinsure
50% of one of the Company's single premium annuity contracts sold in 1999.
Premiums, benefits, and reserves ceded to JHReCo in 1999 were
54
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--REINSURANCE--CONTINUED
$169.4 million, $15.6 million and $166.1 million, respectively. This agreement
increased the Company's net gain from operations by $12.6 million in 1999.
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 were transferred to UNICARE in connection
with the sale. The insurance business sold was transferred to UNICARE through a
100% 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 remains
liable to its policyholders to the extent that UNICARE does not meet its
contractual obligations under the coinsurance agreement.
Through the Company's group health insurance operations, the Company entered
into a number of reinsurance arrangements in respect of personal accident
insurance and the occupational accident component of workers compensation
insurance, a portion of which was originated through a pool managed by Unicover
Managers, Inc. Under these arrangements, the Company both assumed risks as a
reinsurer, and also passed 95% of these risks on to other companies. This
business had originally been reinsured by a number of different companies, and
has become the subject of widespread disputes. The disputes concern the
placement of the business with reinsurers and recovery of the reinsurance. The
Company is engaged in disputes, including a number of legal proceedings, in
respect of this business. The risk to the Company is that other companies that
reinsured the business from the Company may seek to avoid their reinsurance
obligations. However, the Company believes that it has a reasonable legal
position in this matter. During the fourth quarter of 1999 and early 2000, the
Company received additional information about its exposure to losses under the
various reinsurance programs. As a result of this additional information and in
connection with global settlement discussions initiated in late 1999 with other
parties involved in the reinsurance programs, during the fourth quarter the
Company recognized a charge to policyholders' contingency reserves for
uncollectible reinsurance of $186.1 million, aftertax, as its best estimate of
its remaining loss exposure. The Company believes that any exposure to loss from
this issue, in addition to amounts already provided for as of December 31, 1999,
would not be material.
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, controls, 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
55
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 7--REINSURANCE--CONTINUED
company which is controlled, either directly or indirectly, by a party not
primarily engaged in the business of insurance.
The Company has not entered into any reinsurance agreements in which the
reinsurer may unilaterally cancel any reinsurance for reasons other than
nonpayment of premiums or other similar credits. The Company does not have any
reinsurance agreements in effect in which the amount of losses paid or accrued
through December 31, 1999 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 pension benefits to substantially all employees and general
agency personnel. These benefits are provided through both qualified defined
benefit and defined contribution pension plans. In addition, through
nonqualified plans, the Company provided supplemental pension benefits to
employees with salaries and/ or pension benefits in excess of the qualified plan
limits imposed by federal tax law. 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 $97.6 million in 1999 and $92.6
million in 1998. Plan assets consist principally of listed equity securities,
corporate obligations and U.S. government securities.
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. Because the qualified defined benefit plans are overfunded, no amounts
were contributed to these plans in 1999 or 1998. The funding policy for
nonqualified defined benefit plans is to contribute the amount of the benefit
payments made during the year. The projected benefit obligation and accumulated
benefit obligation for the non-qualified defined benefit pension plans, which
are underfunded, for which accumulated benefit obligations are in excess of plan
assets were $257.4 million and $239.3 million, respectively, at December 31,
1999 and $221.3 million and $194.8 million, respectively, at December 31, 1998.
Non-qualified plan assets, at fair value, were $1.0 million and $1.2 million at
December 31, 1999 and 1998, respectively.
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 pre-tax 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 $8.5 million and $8.1 million in
1999 and 1998, 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.
56
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 8--BENEFITS PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS--CONTINUED
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.
The Company's policy is to fund postretirement benefits in amounts at or below
the annual tax qualified limits. As of December 31, 1999 and 1998, plan assets
related to non-union employees were comprised of an irrevocable health insurance
contract to provide future health benefits to retirees. Plan assets related to
union employees were comprised of approximately 70% equity securities and 30%
fixed income investments.
The changes in benefit obligation and plan assets are summarized as follows:
<TABLE>
<CAPTION>
Year ended December 31
-------------------------------------------
Pension Benefits Other Benefits
----------------------- -----------------
1999 1998 1999 1998
----------- ----------- -------- ----------
(In millions)
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning
of year . . . . . . . . . . . $1,808.4 $1,704.0 $ 366.9 $ 381.0
Service cost . . . . . . . . . 33.8 32.8 6.6 6.8
Interest cost . . . . . . . . 119.0 115.5 23.9 24.4
Actuarial loss/(gain) . . . . 30.7 55.5 (0.3) (16.8)
Amendments . . . . . . . . . . 19.9 0.0 0.0 0.0
Benefits paid . . . . . . . . (106.5) (99.4) (29.0) (28.5)
-------- -------- ------- -------
Benefit obligation at end of
year. . . . . . . . . . . . . 1,905.3 1,808.4 368.1 366.9
-------- -------- ------- -------
Change in plan assets:
Fair value of plan assets at
beginning of year . . . . . . 2,202.2 1,995.5 215.2 172.7
Actual return on plan assets . 277.7 296.1 17.7 39.9
Employer contribution . . . . 10.9 10.0 0.0 2.6
Benefits paid . . . . . . . . (106.5) (99.4) 0.0 0.0
-------- -------- ------- -------
Fair value of plan assets at
end of year . . . . . . . . . 2,384.3 2,202.2 232.9 215.2
-------- -------- ------- -------
Funded status . . . . . . . . 479.0 393.8 (135.2) (151.7)
Unrecognized actuarial loss . (349.7) (292.0) (155.7) (163.0)
Unrecognized prior service cost 39.1 23.1 16.0 17.8
Unrecognized net transition
(asset) obligation . . . . . (11.8) (23.9) 273.3 294.3
-------- -------- ------- -------
Net amount recognized . . . . $ 156.6 $ 101.0 $ (1.6) $ (2.6)
-------- -------- ------- -------
</TABLE>
57
<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 assumptions used in accounting for the benefit plans were as follows:
<TABLE>
<CAPTION>
Year ended December 31
----------------------------------------
Pension Benefits Other Benefits
----------------------- ---------------
1999 1998 1999 1998
----------- ----------- ------- ---------
<S> <C> <C> <C> <C>
Discount rate . . . . . . . . . 7.00% 6.75% 7.00% 6.75%
Expected return on plan assets . 8.50% 8.50% 8.50% 8.50%
Rate of compensation increase . 4.77% 4.56% 4.77% 4.00%
</TABLE>
For measurement purposes, a 5.50 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2000. The rate was
assumed to decrease gradually to 5.25 percent in 2001 and remain at that level
thereafter.
Net periodic benefit (credit) cost includes the following components:
<TABLE>
<CAPTION>
Year ended December 31
-----------------------------------------
Pension Benefits Other Benefits
----------------------- ---------------
1999 1998 1999 1998
----------- ----------- ------- ---------
(In millions)
<S> <C> <C> <C> <C>
Service cost . . . . . . . . . . $ 33.8 $ 32.8 $ 6.6 $ 6.8
Interest cost . . . . . . . . . 119.0 115.5 23.9 24.4
Expected return on plan assets . (182.9) (165.6) (18.2) (39.9)
Amortization of transition
(assets) obligation . . . . . . (12.1) (11.6) 21.0 20.9
Amortization of prior service
cost. . . . . . . . . . . . . . 3.9 6.5 1.8 1.9
Recognized actuarial (gain) loss (6.3) (2.6) (7.1) 19.0
------- ------- ------ ------
Net periodic benefit (credit)
cost . . . . . . . . . . . . $ (44.6) $ (25.0) $ 28.0 $ 33.1
======= ======= ====== ======
</TABLE>
Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. A one-percentage point change in assumed
health care cost trend rates would have the following effects:
<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 $ (2.6)
Effect on postretirement benefit
obligations . . . . . . . . . . . . 29.0 (26.1)
</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
service entities.
Total assets of unconsolidated majority-owned affiliates amounted to $16.0
billion at December 31, 1999 and $13.8 billion at December 31, 1998; total
liabilities amounted to $14.5 billion at December 31, 1999 and $12.5 billion at
December 31, 1998; and total net income was $99.5 million in 1999 and $148.5
million in 1998.
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).
58
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 9--AFFILIATES--CONTINUED
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 $129.0 million and $62.2 million in 1999 and
1998, respectively, from unconsolidated affiliates.
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>
Assets (Liabilities)
Number of Contracts/ ----------------------------------------
Notional Amounts 1999 1998
--------------------- --------------------- -----------------
Carrying Fair Carrying Fair
1999 1998 Value Value Value Value
---------- ---------- ---------- --------- -------- ----------
(In millions)
<S> <C> <C> <C> <C> <C> <C>
Futures contracts to
sell securities . . $18,805 $11,286 $31.5 $ 31.5 $(3.1) $ (3.1)
Futures contracts to
acquire securities . 4,006 1,464 (0.9) (0.9) (0.3) (0.3)
Interest rate swap
agreements . . . . . 9,194.0 7,684.0 -- (27.2) -- (159.1)
Interest rate cap
agreements . . . . . 115.0 115.0 0.2 0.2 0.4 0.4
Interest rate floor
agreements . . . . . 125.0 125.0 0.1 0.1 0.7 0.7
Interest rate swaption
agreements . . . . . 30.0 0.0 (3.6) (3.6) -- 0.0
Currency rate swap
agreements . . . . . 5,797.0 2,881.5 -- (44.8) -- 16.2
Equity collar
agreements . . . . . -- -- 53.0 53.0 28.6 28.6
</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 2000.
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 2000 to 2029. The interest rate cap
agreements expire in 2000 to 2008. Interest rate floor agreements expire in
2003. Interest rate swaption agreements expire in 2025. The currency rate swap
agreements expire in 2000 to 2021. The equity collar agreements expire in 2003.
The Company's exposure to credit risk is the risk of loss from 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
59
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 10--FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK--CONTINUED
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.
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 $24.3 million in 1999 and $26.2 million in 1998.
Future minimum rental commitments under noncancellable operating leases for
office space and furniture and equipment are as follows:
<TABLE>
<CAPTION>
December 31, 1999
-------------------
(In millions)
<S> <C>
2000 . . . . . . . . . . . . . . . . . . . . $19.1
2001 . . . . . . . . . . . . . . . . . . . . 15.9
2002 . . . . . . . . . . . . . . . . . . . . 12.8
2003 . . . . . . . . . . . . . . . . . . . . 8.9
2004 . . . . . . . . . . . . . . . . . . . . 5.3
Thereafter . . . . . . . . . . . . . . . . . 7.0
-----
Total minimum payments . . . . . . . . . . . $69.0
=====
</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, 1999 Percent
----------------- ----------
(In millions)
<S> <C> <C>
Subject to discretionary withdrawal (with
adjustment):
With market value adjustment . . . . . . . . $ 1,126.3 2.8%
At book value less surrender charge . . . . . 2,845.0 7.1
--------- -----
Total with adjustment . . . . . . . . . . . . 3,971.3 9.9
Subject to discretionary withdrawal (without
adjustment) at book
value . . . . . . . . . . . . . . . . . . . 1,535.8 3.8
Subject to discretionary withdrawal--separate
accounts. . . . . . . . . . . . . . . . . . 14,287.3 35.4
Not subject to discretionary withdrawal:
General account . . . . . . . . . . . . . . . 19,320.6 48.0
Separate accounts . . . . . . . . . . . . . . 1,175.7 2.9
--------- -----
Total annuity reserves, deposit fund liabilities
and separate accounts--before reinsurance . . 40,290.7 100.0%
=====
Less reinsurance ceded . . . . . . . . . . . . (0.1)
---------
Net annuity reserves, deposit fund liabilities
and separate accounts . . . . . . . . . . . . $40,290.6
=========
</TABLE>
60
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 12--POLICY RESERVES, POLICYHOLDERS' AND BENEFICIARIES' FUNDS AND
OBLIGATIONS RELATED TO SEPARATE ACCOUNTS--CONTINUED
Any liquidation costs associated with the $14.3 billion of separate accounts
subject to discretionary withdrawal are sustained by the separate account
contractholders and not by the general account.
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 $706.7 million, $6.0 million, $281.1 million and $194.6 million,
respectively, at December 31, 1999. 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 $1.2 billion at December 31, 1999. The majority
of these commitments expire in 2000.
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, 1999, the aggregate
outstanding principal balance of all the remaining pools of loans from 1991,
1993, and 1996 was $493.4 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
1999 and 1998 amounted to $3.4 million and $4.6 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, 1999, the
aggregate outstanding principal balance of the pools of loans was $365.2
million. There were no mortgage loans buy-backs in 1999 and 1998.
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, 1999 were $380.6 million for short-term borrowings
and $163.0 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
61
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 13--COMMITMENTS AND CONTINGENCIES--CONTINUED
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, 1999. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.
During 1997, the Company entered into a court-approved settlement relating to a
class action lawsuit involving certain individual life insurance policies sold
from 1979 through 1996. In entering into the settlement, the Company
specifically denied any wrongdoing. The reserve held in connection with the
settlement to provide relief to class members and for legal and administrative
costs associated with the settlement amounted to $322.8 million and $283.8
million at December 31, 1999 and 1998, respectively. Costs incurred related to
the settlement were $91.1 million and $150.0 million in 1999 and 1998,
respectively, which were charged directly to policyholders' contingency
reserves. The estimated reserve is based on a number of factors, including the
estimated number of claims, the expected type of relief to be sought by class
members (general relief or alternative dispute resolution), the estimated cost
per claim and the estimated costs to administer the claims.
During 1999, the Company transferred $194.9 million of reserves related to the
settlement to Variable Life representing Variable Life's share of the
settlement. The Company also contributed $194.9 million of capital to Variable
Life during 1999. If Variable Life's share of the settlement increases, the
Company will contribute additional capital to Variable Life so that Variable
Life's total stockholder's equity would not be impacted.
During 1996, management determined that it was probable that a settlement would
occur and that a minimum loss amount could be reasonably estimated. Accordingly,
the Company recorded its best estimate based on the information available at the
time. The terms of the settlement agreement were negotiated throughout 1997 and
approved by the court on December 31, 1997. In accordance with the terms of the
settlement agreement, the Company contacted class members during 1998 to
determine the actual type of relief to be sought by class members. The majority
of the responses from class members were received by the fourth quarter of 1998.
The type of relief sought by class members differed from the Company's previous
estimates, primarily due to additional outreach activities by regulatory
authorities during 1998 encouraging class members to consider alternative
dispute resolution relief. In 1999, the Company updated its estimate of the cost
of claims subject to alternative dispute resolution relief and revised its
reserve estimate accordingly.
Given the uncertainties associated with estimating the reserve, it is reasonably
possible that the final cost of the settlement could differ materially from the
amounts presently provided for by the Company. The Company will continue to
update its estimate of the final cost of the settlement as the claims are
processed and more specific information is developed, particularly as the actual
cost of the claims subject to alternative dispute resolution becomes available.
However, based on information available at this time, and the uncertainties
associated with the final claim processing and alternative dispute resolution,
the range of any additional costs related to the settlement cannot be reasonably
estimated.
62
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
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
--------------------------------------------
1999 1998
-------------------- ---------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------- ---------- ---------- ------------
(In millions)
<S> <C> <C> <C> <C>
Assets
Bonds--Note 6 . . . . . . . $26,188.1 $25,708.3 $23,353.0 $24,839.3
Preferred stocks--Note 6 . 926.6 926.7 844.7 832.4
Common stocks--Note 6 . . . 458.4 458.4 269.3 269.3
Mortgage loans on real
estate--Note 6 . . . . . 9,165.9 9,009.5 8,223.7 8,619.7
Policy loans--Note 1 . . . 1,577.8 1,577.8 1,573.8 1,573.8
Cash and cash
equivalents--Note 1 . . . 1,160.6 1,160.6 1,348.9 1,348.9
Liabilities
Guaranteed investment
contracts--Note 1 . . . . 13,111.6 12,617.2 12,666.9 12,599.7
Fixed rate deferred and
immediate annuities--Note
1 . . . . . . . . . . . . 4,685.7 4,656.9 4,375.0 4,412.2
Supplementary contracts
without life
contingencies--
Note 1 . . . . . . . . . 55.7 55.7 42.7 44.7
Derivatives assets
(liabilities) relating
to:--Note 10
Futures contracts . . . . . 30.6 30.6 (3.4) (3.4)
Interest rate swaps . . . . -- (27.2) -- (159.1)
Currency rate swaps . . . . -- (44.8) -- 16.2
Interest rate caps . . . . 0.2 0.2 0.4 0.4
Interest rate floors . . . 0.1 0.1 0.7 0.7
Equity collar agreements . 53.0 53.0 28.6 28.6
Commitments--Note 13 . . . . -- 1,195.0 -- 1,114.2
</TABLE>
The carrying amounts in the table are included in the statutory-basis statements
of financial position. The methods and assumptions utilized by the Company in
estimating its fair value disclosures are described in Note 1.
NOTE 15--SUBSEQUENT EVENTS
Reorganization and Initial Public Offering
Pursuant to a Plan of Reorganization approved by the policyholders and the
Commonwealth of Massachusetts Division of Insurance, effective February 1, 2000,
the Company converted from a mutual life insurance company to a stock life
insurance company (i.e., demutualized) and became a wholly owned subsidiary of
John Hancock Financial Services, Inc., which is a holding company. All
policyholder membership interests in the Company were extinguished on that date
and eligible policyholders of the Company received, in the aggregate,
approximately 212.8 million shares of common stock, $1,438.7 million of cash and
$43.7 million policy credits as compensation. In connection with the
reorganization, the Company changed its name to John Hancock Life Insurance
Company.
In addition, on February 1, 2000, John Hancock Financial Services, Inc.
completed its initial public offering and 102 million shares of common stock
were issued at an initial public offering price of $17 per share. Net proceeds
from the offering were $1,657.7 million, of which $105.7 million was retained by
John Hancock Financial Services, Inc. and $1,552.0 million was contributed to
the Company.
63
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
NOTES TO STATUTORY-BASIS FINANCIAL STATEMENTS--CONTINUED
NOTE 15--SUBSEQUENT EVENTS--CONTINUED
Establishment of the Closed Block
Under the Plan of Reorganization, effective February 1, 2000, the Company
created a closed block for the benefit of policies included therein. The
policies included in the closed block are individual and joint traditional whole
life insurance policies of the Company that are paying or are expected to pay
dividends, and individual term life insurance policies that were in force on
February 1, 2000. The purpose of the closed block is to protect the policy
dividend expectations of these policies after the demutualization. Unless the
Commonwealth of Massachusetts Commissioner of Insurance and, in certain
circumstances, the New York Superintendent of Insurance consents to an earlier
termination, the closed block will continue in effect until the date none of
such policies is in force.
Acquisition of Long-Term Care Business
On January 3, 2000, the Company signed an agreement to purchase the individual
long-term care insurance business of Fortis, Inc. ("Fortis"). The business to be
acquired had earned premiums of approximately $124.4 million in 1999 and
included approximately 97,000 policies in force as of December 31, 1999. During
1999 the Company's individual long-term care earned premium was $177.3 million
and approximately 164,000 individual long-term care policies were in force.
NOTE 16--IMPACT OF YEAR 2000 (UNAUDITED)
By late 1999, the Company completed its Year 2000 readiness plan to address
issues that could result from computer programs being written using two digits
to define the applicable year rather than four to define the applicable year and
century. As a result the Company prepared for the transition to the Year 2000
and did not experience any significant Year 2000 problems with respect to its
mission critical information technology ("IT") or non-IT systems, applications
or infrastructure. During the date rollover to the year 2000, the Company
implemented and monitored its millennium rollover plan and conducted business as
usual on Monday, January 3, 2000.
Since January 3, 2000, the Company's information systems, including its mission
critical systems, which in the event of a Year 2000 failure would have the
greatest impact on its operations, have functioned properly. In addition, the
Company has not experienced any significant Year 2000 issues related to
interactions with its material business partners. The Company has experienced no
disruption in its ability to process claims, update customer accounts, process
financial transactions, report accurate data to management and no business
interruptions due to Year 2000 issues. While the Company continues to monitor
its systems, and those of its material business partners closely to ensure that
no unexpected Year 2000 issues develop, the Company has no reason to expect any
such issues.
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, 1999, the Company has incurred and expensed approximately
$20.8 million in related payroll costs for internal IT personnel on the project.
The estimated remaining IT personnel costs of the project are approximately $1.0
million. Through December 31, 1999, the Company incurred and expensed
approximately $47.0 million in external costs for the project. The estimated
remaining external cost of the project is approximately $2.0 million. The total
costs of the Year 2000 project, based on management's best estimates, include
approximately $21.7 million in internal IT personnel, $14.6 million in the
external modification of software, $18.3 million for external solution
providers, $9.1 million in replacement costs of non-compliant IT systems and
$6.9 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 $70 to $72.5 million. The Company's total Year 2000 project
costs include the estimated impact of external solution providers based on
presently available information.
64
<PAGE>
UNAUDITED FINANCIAL STATEMENTS
FOR
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
SECOND QUARTER 2000
65
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
INTERNATIONAL
LARGE CAP ACTIVE EQUITY SMALL CAP
GROWTH BOND INDEX GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash . . . . . . . . . $ -- $ -- $ -- $ --
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value . . . . . . . . 48,724,465 73,025,493 7,123,296 7,666,668
Investments in shares
of portfolios of M
Fund Inc., at value . -- -- -- --
Policy loans and
accrued interest
receivable. . . . . . 3,043,428 10,375,346 411,737 --
Receivable from:
John Hancock Variable
Series Trust I . . . 2,872 432,039 13,115 --
M Fund Inc. . . . . . -- -- -- --
----------- ----------- ---------- -----------
Total assets . . . . . 51,770,765 83,832,878 7,548,148 7,666,668
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance
Company. . . . . . . 742 1,092 110 124
Asset charges payable 62 213 8 --
----------- ----------- ---------- -----------
Total liabilities. . . 804 1,305 118 124
----------- ----------- ---------- -----------
Net assets . . . . . . $51,769,961 $83,831,573 $7,548,030 $ 7,666,544
=========== =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL MID CAP LARGE CAP MONEY
BALANCED GROWTH VALUE MARKET
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash. . . . . . . . . . . $ -- $ -- $ -- $ (1,285)
Investments in shares of
portfolios of John
Hancock Variable Series
Trust I, at value. . . . 177,025 17,365,257 9,694,756 21,053,018
Investments in shares of
portfolios of M Fund
Inc., at value. . . . . -- -- -- --
Policy loans and accrued
interest receivable. . . -- -- -- 2,186,507
Receivable from:
John Hancock Variable
Series Trust I 389 -- 12,607 11,026
M Fund Inc.. -- -- -- --
-------- ----------- ---------- -----------
Total assets. . . . . . . 177,414 17,365,257 9,707,363 23,249,266
LIABILITIES
Payable to:
John Hancock Mutual Life
Insurance Company. . . 3 280 161 977
Asset charges payable. . -- -- -- 134
-------- ----------- ---------- -----------
Total liabilities. . . . 3 280 161 1,111
-------- ----------- ---------- -----------
Net assets. . . . . . . . $177,411 $17,364,977 $9,707,202 $23,248,155
======== =========== ========== ===========
</TABLE>
See accompanying notes.
66
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
JUNE 30, 2000
<TABLE>
<CAPTION>
MID CAP SMALL/MID CAP REAL ESTATE GROWTH &
VALUE GROWTH EQUITY INCOME
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash. . . . . . . . . $ -- $ -- $ 3 $ --
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . 6,233,979 5,570,881 4,294,336 303,554,525
Investments in shares
of portfolios of M
Fund Inc., at value
Policy loans and
accrued interest
receivable . . . . . -- -- 271,964 33,042,947
Receivable from:
John Hancock Variable
Series Trust I. . . 4,448 -- -- 205,141
M Fund Inc.. . . . . -- -- -- --
------------ ---------- ---------- ------------
Total assets. . . . . 6,238,427 5,570,881 4,566,303 336,802,613
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance
Company . . . . . . 103 91 70 4,515
Asset charges payable -- -- 6 677
------------ ---------- ---------- ------------
Total liabilities . . 103 91 76 5,192
------------ ---------- ---------- ------------
Net assets. . . . . . $ 6,238,324 $5,570,790 $4,566,227 $336,797,421
============ ========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM SMALL CAP INTERNATIONAL
MANAGED BOND VALUE OPPORTUNITIES
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Cash. . . . . . . . . $ (685) $ -- $ -- $ --
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . 105,001,203 264,753 4,036,903 8,034,392
Investments in shares
of portfolios of M
Fund Inc., at value
Policy loans and
accrued interest
receivable. . . . . . 13,318,794 -- -- --
Receivable from:
John Hancock Variable
Series Trust I. . . 249,236 1,368 5,121 6,446
M Fund Inc.. . . . . -- -- -- --
------------ -------- ---------- ----------
Total assets. . . . . 118,568,548 266,121 4,042,024 8,040,838
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance
Company. . . . . . . 1,571 4 68 131
Asset charges payable . 273 -- -- --
------------ -------- ---------- ----------
Total liabilities. . . 1,844 4 68 131
------------ -------- ---------- ----------
Net assets. . . . . . $118,566,704 $266,117 $4,041,956 $8,040,707
============ ======== ========== ==========
</TABLE>
See accompanying notes.
67
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
JUNE 30, 2000
<TABLE>
<CAPTION>
TURNER BRANDES
EQUITY GLOBAL CORE INTERNATIONAL
INDEX BOND GROWTH EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
ASSETS
Cash . . . . . . . . . . $ -- $ -- $ -- $ --
Investments in shares of
portfolios of John
Hancock Variable Series
Trust I, at value . . . 18,094,530 962,569 410,353 954,757
Investments in shares of
portfolios of M Fund
Inc., at value. . . . .
Policy loans and accrued
interest receivable . . -- -- -- --
Receivable from: -- --
John Hancock Variable
Series Trust I . . . . 11,425 4,156 -- --
M Fund Inc. . . . . . . -- -- -- --
----------- ---------- -------- --------
Total assets . . . . . . 18,105,955 966,725 410,353 954,757
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance Company 294 16 7 15
Asset charges payable . -- -- -- --
----------- ---------- -------- --------
Total liabilities. . . . 294 16 7 15
----------- ---------- -------- --------
Net assets . . . . . . . $18,105,661 $ 966,709 $410,346 $954,742
=========== ========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
FRONTIER EMERGING INTERNATIONAL
CAPITAL MARKETS OPPORTUNITIES BOND
APPRECIATION EQUITY II INDEX
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------ ---------- ------------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash. . . . . . . . . $ -- $ -- $ -- $ --
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . 695,498 1,067,137 254,192 86,010
Investments in shares
of portfolios of M
Fund Inc., at value. -- -- -- --
Policy loans and
accrued interest
receivable. . . . . . -- -- -- --
Receivable from:
John Hancock Variable
Series Trust I. . . -- -- 176 470
M Fund Inc.. . . . . -- -- -- --
-------- ---------- -------- -------
Total assets. . . . . 695,498 1,067,137 254,368 86,480
LIABILITIES
Payable to:
John Hancock Mutual
Life Insurance
Company. . . . . . . 11 17 4 1
Asset charges payable . -- -- -- --
-------- ---------- -------- -------
Total liabilities. . . 11 17 4 1
-------- ---------- -------- -------
Net assets. . . . . . $695,487 $1,067,120 $254,364 $86,479
======== ========== ======== =======
</TABLE>
See accompanying notes.
68
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
JUNE 30, 2000
<TABLE>
<CAPTION>
CLIFTON
SMALL/MID CAP HIGH YIELD ENHANCED
CORE BOND U.S. EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ---------- -----------
<S> <C> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . $ -- $ -- $ --
Investments in shares of portfolios
of John Hancock Variable Series
Trust I, at value . . . . . . . . . 170,344 1,346,012 25,816
Investments in shares of portfolios
of M Fund Inc., at value. . . . . . -- -- --
Policy loans and accrued interest
receivable. . . . . . . . . . . . . -- -- --
Receivable from:
John Hancock Variable Series Trust I 257 9,204 --
M Fund Inc. . . . . . . . . . . . . -- -- --
-------- ---------- -------
Total assets . . . . . . . . . . . . 170,601 1,355,216 25,816
LIABILITIES
Payable to:
John Hancock Mutual Life Insurance
Company. . . . . . . . . . . . . . 3 22 --
Asset charges payable . . . . . . . -- -- --
-------- ---------- -------
Total liabilities. . . . . . . . . . 3 22 --
-------- ---------- -------
Net assets . . . . . . . . . . . . . $170,598 $1,355,194 $25,816
======== ========== =======
</TABLE>
See accompanying notes.
69
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
LARGE CAP GROWTH ACTIVE BOND
SUBACCOUNT SUBACCOUNT
---------------------------------- -------------------------------------
2000 1999 1998 2000 1999 1998
---------- ---------- ---------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 52,930 $6,381,711 $2,836,032 $2,251,408 $ 5,184,234 $5,266,576
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . 105,837 1161,454 128,186 379,195 750,673 727,807
---------- ---------- ---------- ---------- ----------- -----------
Total investment
income . . . . . . . 158,767 6,543,165 2,964,218 2,630,603 5,934,907
Expenses:
Mortality and expense
risks . . . . . . . 137,840 213,770 143,859 234,304 452,925 415,570
---------- ---------- ---------- ---------- ----------- -----------
Net investment income 20,927 6,329,395 2,820,359 2,396,299 5,481,982 5,578,813
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 520,755 1,146,308 433,509 (541,856) (388,883) (142,628)
Net unrealized
appreciation
(depreciation)
during the period . 2,094,997 320,087 4,558,660 690,472 (5,439,148) (102,600)
---------- ---------- ---------- ---------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments 2,615,752 1,466,395 4,992,169 148,616 (5,828,031) (245,228)
---------- ---------- ---------- ---------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $2,636,679 $7,795,790 $7,812,528 $2,544,915 $ (346,049) $5,333,585
========== ========== ========== ========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX SMALL CAP GROWTH
SUBACCOUNT SUBACCOUNT
-------------------------------- -------------------------------
2000 1999 1998 2000 1999 1998
---------- ---------- -------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 60,914 $ 212,869 $743,339 $ -- $ 543,433 $ --
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans. . . . 13,946 20,538 17,802 -- -- --
--------- ---------- -------- -------- ---------- --------
Total investment
income. . . . . . . 74,860 233,407 761,141 543,433 --
Expenses:
Mortality and expense
risks. . . . . . . 21,217 32,838 26,542 18,198 15,809 8,233
--------- ---------- -------- -------- ---------- --------
Net investment income
(loss). . . . . . . 53,643 200,569 734,599 (18,198) 527,624 (8,233)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain. . 57,135 62,140 52,891 61,745 48,210 21,741
Net unrealized
appreciation
(depreciation)
during the period. (479,838) 1,295,768 13,239 108,434 1,125,829 204,674
--------- ---------- -------- -------- ---------- --------
Net realized and
unrealized gain
(loss) on investments (422,703) 1,357,908 66,130 170,179 1,174,415 226,415
--------- ---------- -------- -------- ---------- --------
Net increase
(decrease) in net
assets resulting from
operations. . . . . $(369,060) $1,558,477 $800,729 $151,981 $1,701,663 $218,182
========= ========== ======== ======== ========== ========
</TABLE>
See accompanying notes.
70
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
GLOBAL BALANCED MID CAP GROWTH
SUBACCOUNT SUBACCOUNT
------------------------------- ------------------------------------
2000 1999 1998 2000 1999 1998
---------- --------- -------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 2,424 $ 17,211 $ 12,240 $ -- $1,373,009 $ 130,303
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
--------- -------- -------- ----------- ---------- ----------
Total investment
income . . . . . . . 2,424 17,211 12,240 -- 1,373,009 130,303
Expenses:
Mortality and expense
risks . . . . . . . 516 1,267 826 49,211 34,834 5,242
--------- -------- -------- ----------- ---------- ----------
Net investment income
(loss) . . . . . . . 1,908 15,944 11,414 (49,211) 1,338,175 125,061
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain. . (1,775) 1,061 1,050 987,117 420,826 26,192
Net unrealized
appreciation
(depreciation)
during the period . (9,345) (8,559) 12,294 (1,782,512) 4,283,452 193,946
--------- -------- -------- ----------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments (11,120) (7,498) 13,344 (795,395) 4,704,278 220,138
--------- -------- -------- ----------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ (9,212) $ 8,446 $ 24,758 $ (844,606) $6,042,453 $ 345,199
========= ======== ======== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP VALUE MONEY MARKET
SUBACCOUNT SUBACCOUNT
-------------------------------- --------------------------------
2000 1999 1998 2000 1999 1998
---------- ---------- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 104,294 $ 511,132 $185,232 $633,676 $1,134,371 $2,249,510
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans. . . . -- -- -- -- 155,491 154,162
--------- --------- -------- -------- ---------- ----------
Total investment
income. . . . . . . 104,294 511,132 185,232 633,676 1,289,862 2,403,672
Expenses:
Mortality and expense
risks. . . . . . . 27,912 36,983 15,356 61,140 146,758 263,735
--------- --------- -------- -------- ---------- ----------
Net investment income
(loss). . . . . . . 76,382 474,149 169,876 572,536 1,143,104 2,139,937
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain. . (83,486) 123,242 68,953 -- -- --
Net unrealized
appreciation
(depreciation)
during the period. (266,949) (499,454) 64,132 -- -- --
--------- --------- -------- -------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments (350,435) (376,212) 133,085 -- -- --
--------- --------- -------- -------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations. . . . . $(274,053) $ 97,937 $302,961 $572,536 $1,143,104 $2,139,937
========= ========= ======== ======== ========== ==========
</TABLE>
See accompanying notes.
71
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
MID CAP VALUE SMALL/MID CAP GROWTH
SUBACCOUNT SUBACCOUNT
--------------------------------- ---------------------------------------
2000 1999 1998 2000 1999 1998
--------- ---------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 11,919 $ 30,563 $ 53,920 $ -- $ 840,786 $ 93,281
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
-------- --------- ---------- ----------- ----------- -----------
Total investment
income . . . . . . . 11,919 30,563 53,920 -- 840,786 93,281
Expenses:
Mortality and expense
risks . . . . . . . 14,736 28,106 34,857 15,760 30,491 26,942
-------- --------- ---------- ----------- ----------- -----------
Net investment income (2,817) 2,457 19,063 (15,760) 810,295 66,339
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . (51,073) (547,518) 74,634 (149,393) 16,952 33,249
Net unrealized
appreciation
(depreciation)
during the period . 304,436 657,486 (944,401) 575,021 (590,295) 126,465
-------- --------- ---------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments 253,363 109,968 (869,767) 425,628 (573,343) 159,714
-------- --------- ---------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $250,546 $ 112,425 $ (850,704) $ 409,868 $ 236,952 $ 226,053
======== ========= ========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY GROWTH & INCOME
SUBACCOUNT SUBACCOUNT
---------------------------------- --------------------------------------
2000 1999 1998 2000 1999 1998
--------- ---------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $108,322 $ 262,930 $ 343,976 $ 1,526,055 $35,057,066 $26,306,209
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans. . . . 9,674 17,361 17,260 1,190,757 2,279,107 1,996,131
-------- --------- ----------- ----------- ----------- -----------
Total investment
income. . . . . . . 117,996 280,291 361,236 2,716,812 37,336,173 28,302,340
Expenses:
Mortality and expense
risks. . . . . . . 12,119 24,900 33,890 934,682 1,779,482 1,466,469
-------- --------- ----------- ----------- ----------- -----------
Net investment income 105,877 255,391 327,346 1,782,130 35,556,691 26,835,871
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . (91,535) (168,994) 158,205 2,647,435 5,502,422 3,223,935
Net unrealized
appreciation
(depreciation)
during the period. 483,848 (220,380) (1,546,717) (5,596,868) 2,405,417 32,918,552
-------- --------- ----------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments 392,313 (389,374) (1,388,512) (2,949,433) 7,907,839 36,142,487
-------- --------- ----------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations. . . . . $498,190 $(133,983) $(1,061,166) $(1,167,303) $43,464,530 $62,978,358
======== ========= =========== =========== =========== ===========
</TABLE>
See accompanying notes.
72
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
MANAGED SHORT-TERM BOND
SUBACCOUNT SUBACCOUNT
--------------------------------------- --------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 1,592,291 $ 9,998,433 $ 9,347,788 $ 7,923 $ 15,539 $ 27,350
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . 483,211 953,686 854,487 -- -- --
----------- ----------- ----------- --------- --------- --------
Total investment
income . . . . . . . 2,075,502 10,952,119 10,202,275 7,923 15,539 27,350
Expenses:
Mortality and expense
risks . . . . . . . 330,081 649,802 577,276 744 1,497 2,680
----------- ----------- ----------- --------- --------- --------
Net investment income 1,745,421 10,302,317 9,624,999 7,179 14,042 24,670
Net realized and
unrealized gain
(loss) on
investments: . . . .
Net realized gain
(loss). . . . . . . 602,334 996,546 791,245 (1,357) (8,638) 265
Net unrealized
appreciation
(depreciation)
during the period . (1,028,010) (2,108,530) 6,629,458 885 (2,442) (4,247)
----------- ----------- ----------- --------- --------- --------
Net realized and
unrealized gain
(loss) on investments (425,676) (1,111,984) 7,420,703 (472) (11,080) (3,982)
----------- ----------- ----------- --------- --------- --------
Net increase in net
assets resulting from
operations . . . . . $ 1,319,745 $ 9,190,333 $17,045,702 $ 6,707 $ 2,962 $ 20,688
=========== =========== =========== ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE INTERNATIONAL OPPORTUNITIES
SUBACCOUNT SUBACCOUNT
-------------------------------- ------------------------------
2000 1999 1998 2000 1999 1998
--------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 30,875 $ 79,585 $ 12,675 $ 29,144 $241,151 $ 33,443
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
-------- --------- --------- --------- -------- --------
Total investment
income . . . . . . . 30,875 79,585 12,675 29,144 241,151 33,443
Expenses:
Mortality and expense
risks . . . . . . . 10,390 17,680 11,853 22,685 17,937 21,581
-------- --------- --------- --------- -------- --------
Net investment income 20,485 61,905 822 6,459 223,214 11,862
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . (86,055) (33,134) 29,257 70,837 155,412 33,474
Net unrealized
appreciation
(depreciation)
during the period . 89,421 (148,401) (105,331) (218,272) 387,412 272,314
-------- --------- --------- --------- -------- --------
Net realized and
unrealized gain
(loss) on investments 3,366 (181,535) (76,074) (147,435) 542,824 305,788
-------- --------- --------- --------- -------- --------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ 23,851 $(119,630) $ (75,252) $(140,976) $766,038 $317,650
======== ========= ========= ========= ======== ========
</TABLE>
See accompanying notes.
73
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
EQUITY INDEX GLOBAL BOND
SUBACCOUNT SUBACCOUNT
---------------------------------- ----------------------------
2000 1999 1998 2000 1999 1998
---------- ---------- ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 94,492 $ 593,325 $ 185,267 $14,627 $ 37,862 $19,628
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
--------- ---------- ---------- ------- -------- -------
Total investment
income . . . . . . . 94,492 593,325 185,267 14,627 37,862 19,628
Expenses:
Mortality and expense
risks . . . . . . . 49,956 63,950 27,141 2,553 4,084 1,979
--------- ---------- ---------- ------- -------- -------
Net investment income 44,536 529,375 158,126 12,074 33,778 17,649
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 165,284 271,978 443,879 (9,422) (151) 3,991
Net unrealized
appreciation
(depreciation)
during
the period. . . . . (305,128) 1,282,937 585,673 22,501 (52,953) 4,308
--------- ---------- ---------- ------- -------- -------
Net realized and
unrealized gain
(loss) on investments (139,844) 1,554,915 1,029,552 13,079 (53,104) 8,299
--------- ---------- ---------- ------- -------- -------
Net increase
(decrease) in net
assets resulting
from operations. . . $ (95,308) $2,084,290 $1,187,678 $25,153 $(19,326) $25,948
========= ========== ========== ======= ======== =======
</TABLE>
<TABLE>
<CAPTION>
TURNER CORE GROWTH BRANDES INTERNATIONAL
SUBACCOUNT EQUITY SUBACCOUNT
-------------------------- --------------------------
2000 1999 1998 2000 1999 1998
-------- ------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 4,669 $19,328 $ 2,231 $11,821 $ 16,354 $14,444
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans. . . . -- -- -- -- -- --
------- ------- ------- ------- -------- -------
Total investment
income. . . . . . . 4,669 19,328 2,231 11,821 16,354 14,444
Expenses:
Mortality and expense
risks. . . . . . . 1,010 1,139 565 2,033 2,166 1,158
------- ------- ------- ------- -------- -------
Net investment income 3,659 18,189 1,666 9,788 14,188 13,286
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain . . 15,398 26,736 2,780 4,917 11,526 600
Net unrealized
appreciation
(depreciation)
during
the period. . . . . (2,617) 23,628 22,686 38,205 122,734 8,581
------- ------- ------- ------- -------- -------
Net realized and
unrealized gain on
investments. . . . . 12,781 50,364 25,466 43,122 134,260 9,181
------- ------- ------- ------- -------- -------
Net increase in net
assets resulting from
operations. . . . . $16,440 $68,553 $27,132 $52,910 $148,448 $22,467
======= ======= ======= ======= ======== =======
</TABLE>
See accompanying notes.
74
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
FRONTIER CAPITAL APPRECIATION EMERGING MARKETS
SUBACCOUNT EQUITY SUBACCOUNT
------------------------------- ---------------------------
2000 1999 1998 2000 1999 1998*
-------- ---------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $18,679 $ 13,028 $12,832 $ -- $ 15,636 $ 1
M Fund Inc.. . . . . -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
------- -------- ------- --------- -------- -----
Total investment
income . . . . . . . 18,679 13,028 12,832 -- 15,636 1
Expenses:
Mortality and expense
risks . . . . . . . 1,765 4,257 13,446 2,493 466 0
------- -------- ------- --------- -------- -----
Net investment income
(loss) . . . . . . . 16,914 8,771 (614) (2,493) 15,170 1
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 6,835 (59,550) 23,061 25,714 1,838 (1)
Net unrealized
appreciation
(depreciation)
during the period . 40,060 89,369 (840) (121,684) 92,713 (48)
------- -------- ------- --------- -------- -----
Net realized and
unrealized gain
(loss) on investments 46,895 29,819 22,221 (95,970) 94,551 (49)
------- -------- ------- --------- -------- -----
Net increase
(decrease) in net
assets resulting from
operations . . . . . $63,809 $ 38,590 $21,607 $ (98,463) $109,721 $ (48)
======= ======== ======= ========= ======== =====
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL OPPORTUNITIES II BOND INDEX
SUBACCOUNT SUBACCOUNT
------------------------------- --------------------------
2000 1999 1998* 2000 1999 1998*
---------- ---------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 2,847 $ 816 $ 117 $3,551 $ 2,971 $ 296
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans. . . . -- -- -- -- -- --
-------- --------- ----- ------ --------- -----
Total investment
income. . . . . . . 2,847 816 117 3,551 2,971 296
Expenses:
Mortality and expense
risks. . . . . . . 591 378 60 274 270 11
-------- --------- ----- ------ --------- -----
Net investment income
(loss). . . . . . . 2,256 438 57 3,277 2,701 285
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 1,228 196 (16) (875) (1,613) (26)
Net unrealized
appreciation
(depreciation)
during the period. (3,402) 20,203 (303) 2,959 (1,753) (147)
-------- --------- ----- ------ --------- -----
Net realized and
unrealized gain
(loss) on investments (2,174) 20,399 (319) 2,084 (3,366) (173)
-------- --------- ----- ------ --------- -----
Net increase
(decrease) in net
assets resulting from
operations. . . . . $ 82 $ 20,837 $(262) $5,361 $ (665) $ 112
======== ========= ===== ====== ========= =====
</TABLE>
---------
* May 1, 1998 (commencement of operations).
See accompanying notes.
75
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF OPERATIONS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
SMALL/MID CAP CORE HIGH YIELD BOND
SUBACCOUNT SUBACCOUNT
-------------------------- -------------------------
2000 1999 1998* 2000 1999 1998*
-------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I. . . $ 267 $ 6,699 $ -- $20,885 $ 3,011 $ 50
M Fund Inc.. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
------- ------- ------- ------- ------- -----
Total investment
income . . . . . . . 267 6,699 -- 20,885 3,011 50
Expenses:
Mortality and expense
risks . . . . . . . 385 335 48 1,272 220 2
------- ------- ------- ------- ------- -----
Net investment income
(loss) . . . . . . . (118) 6,364 (48) 19,613 2,791 48
Net realized gain
(loss). . . . . . . 426 1,093 (1,957) (9,114) (396) (108)
Net unrealized
appreciation
(depreciation)
during the period . (2,399) 4,719 1,888 1,038 (1,172) (19)
------- ------- ------- ------- ------- -----
Net realized and
unrealized gain (loss)
on investments (1,973) 5,812 (69) (8,076) (1,568) (127)
------- ------- ------- ------- ------- -----
Net increase
(decrease) in net
assets resulting from
operations $(2,091) $12,176 $ (117) $11,537 $ 1,223 $ (79)
======= ======= ======= ======= ======= =====
</TABLE>
<TABLE>
<CAPTION>
CLIFTON
ENHANCED U.S.
EQUITY SUBACCOUNT
------------------
2000 1999**
-------- ----------
<S> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I. . . . . . . . . . $ 676 $1,435
M Fund Inc. . . . . . . . . . . . . . . . . . . . . . . -- --
Interest income on policy loans. . . . . . . . . . . . . -- --
----- ------
Total investment income. . . . . . . . . . . . . . . . . 676 1,435
Expenses:
Mortality and expense risks . . . . . . . . . . . . . . 62 61
----- ------
Net investment income. . . . . . . . . . . . . . . . . . 614 1,374
Net realized and unrealized gain (loss) on investments:
Net realized gain . . . . . . . . . . . . . . . . . . . 292 11
Net unrealized appreciation (depreciation) during the
period . . . . . . . . . . . . . . . . . . . . . . . . (958) 1,285
----- ------
Net realized and unrealized gain (loss) on investments . (666) 1,296
----- ------
Net increase (decrease) in net assets resulting from
operations. . . . . . . . . . . . . . . . . . . . . . . $ (52) $2,670
===== ======
</TABLE>
---------
* From May 1, 1998 (commencement of operations).
** From May 1, 1999 (commencement of operations).
See accompanying notes.
76
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
LARGE CAP GROWTH SUBACCOUNT ACTIVE BOND SUBACCOUNT
--------------------------------------- ---------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . . . . $ 20,927 $ 6,329,395 $ 2,820,359 $ 2,396,299 $ 5,481,982 $ 5,578,813
Net realized gain (loss). . . . . . . . . . 520,755 1,146,308 433,509 (541,856) (388,883) (142,628)
Net unrealized appreciation (depreciation)
during the period. . . . . . . . . . . . . 2,094,997 320,087 4,558,660 690,472 (5,439,148) (102,600)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . 2,636,679 7,795,790 7,812,528 2,544,915 (346,049) 5,333,585
From policyholder transactions:
Net premiums from policyholders . . . . . . 8,986,828 10,950,682 6,922,934 5,920,660 11,668,600 10,038,753
Net benefits to policyholders . . . . . . . (4,313,445) (5,776,293) (3,869,320) (5,631,307) (7,543,864) (7,974,328)
Net increase in policy loans . . . . . . . 431,462 -- -- 107,723 -- --
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting from
policyholder transactions . . . . . . . . . 5,104,845 5,174,389 3,053,614 397,076 4,124,736 2,064,425
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets . . . . . . . . . 7,741,524 12,970,179 10,866,142 2,941,991 3,778,687 7,398,010
Net assets at beginning of period. . . . . . 44,028,437 31,058,258 20,192,116 80,889,582 77,110,895 69,712,885
----------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period. . . . . . . . . $51,769,961 $44,028,437 $31,058,258 $83,831,573 $80,889,582 $77,110,895
=========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX SUBACCOUNT SMALL CAP GROWTH SUBACCOUNT
--------------------------------------- ----------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) $ 53,643 $ 200,569 $ 734,599 $ (18,198) $ 527,624 $ (8,233)
Net realized gain . 57,135 62,140 52,891 61,745 48,210 21,741
Net unrealized appreciation (depreciation)
during the period. (479,838) 1,295,768 13,239 108,434 1,125,829 204,674
----------- ----------- ----------- ---------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations (369,060) 1,558,477 800,729 151,981 1,701,663 218,182
From policyholder transactions:
Net premiums from policyholders 1,421,418 1,634,643 1,489,281 3,292,714 1,398,160 891,480
Net benefits to policyholders (762,883) (1,119,500) (1,347,312) (290,085) (390,180) (269,586)
Net increase in policy loans 77,561 -- -- -- -- --
----------- ----------- ----------- ---------- ------------ ------------
Net increase in net assets resulting from
policyholder transactions 736,096 515,143 141,969 3,002,629 1,007,980 621,894
----------- ----------- ----------- ---------- ------------ ------------
Net increase in net assets 367,036 2,073,620 942,698 3,154,610 2,709,643 840,076
Net assets at beginning of period 7,180,994 5,107,374 4,164,676 4,511,934 1,802,291 962,215
----------- ----------- ----------- ---------- ------------ ------------
Net assets at end of period $ 7,548,030 $ 7,180,994 $ 5,107,374 $7,666,544 $ 4,511,934 $ 1,802,291
=========== =========== =========== ========== ============ ============
</TABLE>
See accompanying notes.
77
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
GLOBAL BALANCED SUBACCOUNT MID CAP GROWTH SUBACCOUNT
------------------------------------ -----------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . $ 1,908 $ 15,944 $ 11,414 $ (49,211) $ 1,338,175 $ 125,061
Net realized gain (loss) . . . . . . . . . (1,775) 1,061 1,050 987,117 420,826 26,192
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . (9,345) (8,559) 12,294 (1,782,512) 4,283,452 193,946
---------- ---------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations. . . . . . . . . (9,212) 8,446 24,758 (844,606) 6,042,453 345,199
From policyholder transactions:
Net premiums from policyholders. . . . . . 46,281 115,573 150,466 7,441,238 7,041,199 772,359
Net benefits to policyholders. . . . . . . (60,026) (133,983) (50,204) (2,841,229) (947,660) (211,806)
Net increase (decrease) in policy loans . -- -- -- -- -- --
---------- ---------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder transactions . (13,745) (18,410) 100,262 4,600,009 6,093,539 560,553
---------- ---------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets . . . (22,957) (9,964) 125,020 3,755,403 12,135,992 905,752
Net assets at beginning of period . . . . . 200,368 210,332 85,312 13,609,574 1,473,582 567,830
---------- ---------- ---------- ----------- ------------ ------------
Net assets at end of period . . . . . . . . $ 177,411 $ 200,368 $ 210,332 $17,364,977 $ 13,609,574 $ 1,473,582
========== ========== ========== =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP VALUE SUBACCOUNT MONEY MARKET SUBACCOUNT
-------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ----------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income $ 76,382 $ 474,149 $ 169,876 $ 572,536 $ 1,143,104 $ 2,139,937
Net realized gain (loss) (83,486) 123,242 68,953 -- -- --
Net unrealized appreciation (depreciation)
during the period (266,949) (499,454) 64,132 -- -- --
----------- ----------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations (274,053) 97,937 302,961 572,536 1,143,104 2,139,937
From policyholder transactions:
Net premiums from policyholders 2,956,833 5,449,922 2,321,440 5,773,700 16,733,655 55,692,824
Net benefits to policyholders (1,238,365) (1,059,147) (528,449) (3,624,978) (46,642,184) (22,850,788)
Net increase (decrease) in policy loans -- -- -- 23,791 -- (198,682)
----------- ----------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder transactions 1,718,468 4,390,775 1,792,991 2,172,513 (29,908,529) 32,643,354
----------- ----------- ---------- ----------- ------------ ------------
Net increase (decrease) in net assets 1,444,415 4,488,712 2,095,952 2,745,049 (28,765,425) 34,783,291
Net assets at beginning of period 8,262,787 3,774,075 1,678,123 20,503,106 49,268,531 14,485,240
----------- ----------- ---------- ----------- ------------ ------------
Net assets at end of period $ 9,707,202 $ 8,262,787 $3,774,075 $23,248,155 $ 20,503,106 $ 49,268,531
=========== =========== ========== =========== ============ ============
</TABLE>
See accompanying notes.
78
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
MID CAP VALUE SUBACCOUNT SMALL/MID CAP GROWTH SUBACCOUNT
-------------------------------------- -------------------------------------------
2000 1999 1998 2000 1999 1998
----------- ------------ ------------ ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . $ (2,817) $ 2,457 $ 19,063 $ (15,760) $ 810,295 $ 66,339
Net realized gain (loss). . . . . . . (51,073) (547,518) 74,634 (149,393) 16,952 33,249
Net unrealized appreciation
(depreciation) during the period . . 304,436 657,486 (944,401) 575,021 (590,295) 126,465
---------- ----------- ----------- ------------ ------------ -------------
Net increase (decrease) in net assets
resulting from operations . . . . . . 250,546 112,425 (850,704) 409,868 236,952 226,053
From policyholder transactions:
Net premiums from policyholders . . . 1,577,789 2,086,192 5,639,732 (115,753) 1,533,102 1,812,713
Net benefits to policyholders . . . . (291,643) (3,546,814) (775,357) (209,369) (1,200,248) (1,214,489)
Net increase (decrease) in policy
loans. . . . . . . . . . . . . . . . -- -- -- -- -- --
---------- ----------- ----------- ------------ ------------ -------------
Net increase (decrease) in net assets
resulting from policyholder
transactions. . . . . . . . . . . . . 1,286,146 (1,460,622) 4,864,375 (325,122) 332,854 598,224
---------- ----------- ----------- ------------ ------------ -------------
Net increase (decrease) in net assets. 1,536,692 (1,348,197) 4,013,671 84,746 569,806 824,277
Net assets at beginning of period. . . 4,701,632 6,049,829 2,036,158 5,486,044 4,916,238 4,091,961
---------- ----------- ----------- ------------ ------------ -------------
Net assets at end of period. . . . . . $6,238,324 $ 4,701,632 $ 6,049,829 $ 5,570,790 $ 5,486,044 $ 4,916,238
========== =========== =========== ============ ============ =============
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY SUBACCOUNT GROWTH & INCOME SUBACCOUNT
-------------------------------------- ------------------------------------------
2000 1999 1998 2000 1999 1998
----------- ------------ ------------ ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income $ 105,877 $ 255,391 $ 327,346 $ 1,782,130 $ 35,556,691 $ 26,835,871
Net realized gain (loss) (91,535) (168,994) 158,205 2,647,435 5,502,422 3,223,935
Net unrealized appreciation
(depreciation) during the period 483,848 (220,380) (1,546,717) (5,596,868) 2,405,417 32,918,552
---------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations 498,190 (133,983) (1,061,166) (1,167,303) 43,464,530 62,978,358
From policyholder transactions:
Net premiums from policyholders 555,720 968,627 3,382,263 15,901,284 34,593,082 35,108,834
Net benefits to policyholders (554,815) (2,335,552) (1,663,696) (18,823,645) (34,650,911) (29,649,984)
Net increase (decrease) in policy
loans. . . . . . 37,032 -- (1,103) 386,988 -- 3,672,137
---------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from policyholder
transactions. . . 37,937 (1,366,925) 1,717,464 (2,535,373) (57,829) 9,130,987
---------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net assets 536,127 (1,500,908) 656,298 (3,702,676) 43,406,701 72,109,345
Net assets at beginning of period 4,030,100 5,531,008 4,874,710 340,500,097 297,093,396 224,984,051
---------- ----------- ----------- ------------ ------------ ------------
Net assets at end of period $4,566,227 $ 4,030,100 $ 5,531,008 $336,797,421 $340,500,097 $297,093,396
========== =========== =========== ============ ============ ============
</TABLE>
See accompanying notes.
79
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
MANAGED SUBACCOUNT SHORT-TERM BOND SUBACCOUNT
------------------------------------------ -----------------------------------------
2000 1999 1998 2000 1999 1998
------------- ------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . $ 1,745,421 $ 10,302,317 $ 9,624,999 $ 7,179 $ 14,042 $ 24,670
Net realized gain (loss) . . . . . . . 602,334 996,546 791,245 (1,357) (8,638) 265
Net unrealized appreciation
(depreciation) during the period. . . (1,028,010) (2,108,530) 6,629,458 885 (2,442) (4,247)
------------ ------------ ------------ ------------ ------------- ----------
Net increase in net assets resulting
from operations. . . . . . . . . . . . 1,319,745 9,190,333 17,045,702 6,707 2,962 20,688
From policyholder transactions:
Net premiums from policyholders. . . . 6,612,464 13,430,282 13,116,210 62,306 109,732 420,697
Net benefits to policyholders. . . . . (8,783,955) (14,305,859) (14,539,301) (41,809) (370,270) (71,999)
Net increase in policy loans . . . . . 289,031 -- 1,134,137 -- -- --
------------ ------------ ------------ ------------ ------------- ----------
Net increase (decrease) in net assets
resulting from policyholder
transactions . . . . . . . . . . . . . (1,882,460) (875,577) (288,954) 20,497 (260,538) 348,698
------------ ------------ ------------ ------------ ------------- ----------
Net increase (decrease) in net assets . (562,715) 8,314,756 16,756,748 27,204 (257,576) 369,386
Net assets at beginning of period . . . 119,129,419 110,814,663 94,057,915 238,913 496,489 127,103
------------ ------------ ------------ ------------ ------------- ----------
Net assets at end of period . . . . . . $118,566,704 $119,129,419 $110,814,663 $ 266,117 $ 238,913 $ 496,489
============ ============ ============ ============ ============= ==========
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE SUBACCOUNT INTERNATIONAL OPPORTUNITIES SUBACCOUNT
------------------------------------ ---------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income $ 20,485 $ 61,905 $ 822 $ 6,459 $ 223,214 $ 11,862
Net realized gain (loss) (86,055) (33,134) 29,257 70,837 155,412 33,474
Net unrealized appreciation
(depreciation) during the period 89,421 (148,401) (105,331) (218,272) 387,412 272,314
---------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations 23,851 (119,630) (75,252) (140,976) 766,038 317,650
From policyholder transactions:
Net premiums from policyholders 760,849 1,483,922 1,644,666 4,733,164 2,354,681 3,814,201
Net benefits to policyholders (210,136) (447,402) (270,585) (180,424) (3,673,500) (339,134)
Net increase in policy loans -- -- -- -- -- --
---------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets
resulting from policyholder
transactions. . . 550,713 1,036,520 1,374,081 4,552,740 (1,318,819) 3,475,067
---------- ---------- ---------- ---------- ----------- ----------
Net increase (decrease) in net assets 574,564 916,890 1,298,829 4,411,764 (552,781) 3,792,717
Net assets at beginning of period 3,467,392 2,550,502 1,251,673 3,628,943 4,181,724 389,007
---------- ---------- ---------- ---------- ----------- ----------
Net assets at end of period $4,041,956 $3,467,392 $2,550,502 $8,040,707 $ 3,628,943 $4,181,724
========== ========== ========== ========== =========== ==========
</TABLE>
See accompanying notes.
80
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
EQUITY INDEX GLOBAL BOND
SUBACCOUNT SUBACCOUNT
-------------------------------------- -------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ----------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 44,536 $ 529,375 $ 158,126 $ 12,074 $ 33,778 $ 17,649
Net realized gain
(loss). . . . . . . 165,284 271,978 443,879 (9,422) (151) 3,991
Net unrealized
appreciation
(depreciation)
during the period . (305,128) 1,282,937 585,673 22,501 (52,953) 4,308
----------- ----------- ---------- -------- --------- --------
Net increase
(decrease) in net
assets resulting from
operations . . . . . (95,308) 2,084,290 1,187,678 25,153 (19,326) 25,948
From policyholder
transactions:
Net premiums from
policyholders . . . 5,310,072 6,697,385 4,822,053 205,433 696,619 381,025
Net benefits to
policyholders . . . (1,515,182) (1,623,429) (885,493) (93,595) (317,999) (83,865)
Net increase in
policy loans. . . . -- -- -- -- -- --
----------- ----------- ---------- -------- --------- --------
Net increase in net
assets resulting from
policyholder
transactions . . . . 3,794,890 5,073,956 3,936,560 111,838 378,620 297,159
----------- ----------- ---------- -------- --------- --------
Net increase in net
assets . . . . . . . 3,699,582 7,158,246 5,124,238 136,991 359,294 323,107
Net assets at
beginning of period. 14,406,079 7,247,833 2,123,595 829,718 470,424 147,317
----------- ----------- ---------- -------- --------- --------
Net assets at end of
period . . . . . . . $18,105,661 $14,406,079 $7,247,833 $966,709 $ 829,718 $470,424
=========== =========== ========== ======== ========= ========
</TABLE>
<TABLE>
<CAPTION>
TURNER CORE GROWTH
SUBACCOUNT BRANDES INTERNATIONAL EQUITY SUBACCOUNT
------------------------------ ----------------------------------------
2000 1999 1998 2000 1999 1998
--------- --------- --------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 3,659 $ 18,189 $ 1,666 $ 9,788 $ 14,188 $ 13,286
Net realized gain. 15,398 26,736 2,780 4,917 11,526 600
Net unrealized
appreciation
(depreciation)
during the period. (2,617) 23,628 22,686 38,205 122,734 8,581
-------- -------- -------- -------- -------- --------
Net increase in net
assets resulting from
operations. . . . . 16,440 68,553 27,132 52,910 148,448 22,467
From policyholder
transactions:
Net premiums from
policyholders. . . 152,961 109,802 39,070 389,836 152,629 141,892
Net benefits to
policyholders. . . (16,862) (45,555) (9,835) (13,506) (31,332) (34,941)
Net increase in
policy loans. . . -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net increase in net
assets resulting from
policyholder
transactions. . . . 136,099 64,247 29,235 376,330 121,297 106,951
-------- -------- -------- -------- -------- --------
Net increase in net
assets. . . . . . . 152,539 132,800 56,367 429,240 269,745 129,418
Net assets at
beginning of period 257,807 125,007 68,640 525,502 255,757 126,339
-------- -------- -------- -------- -------- --------
Net assets at end of
period. . . . . . . $410,346 $257,807 $125,007 $954,742 $525,502 $255,757
======== ======== ======== ======== ======== ========
</TABLE>
See accompanying notes.
81
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
FRONTIER CAPITAL APPRECIATION EMERGING MARKETS EQUITY
SUBACCOUNT SUBACCOUNT
----------------------------------- -------------------------------
2000 1999 1998 2000 1999 1998*
--------- ------------ ----------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss). . . . . . . $ 16,914 $ 8,771 $ (614) $ (2,493) $ 15,170 $ 1
Net realized gain
(loss). . . . . . . 6,835 (59,550) 23,061 25,714 1,838 (1)
Net unrealized
appreciation
(depreciation)
during the period . 40,060 89,369 (840) (121,684) 92,713 (48)
-------- ----------- ---------- ---------- -------- -------
Net increase
(decrease) in net
assets resulting from
operations . . . . . 63,809 38,590 21,607 (98,463) 109,721 (48)
From policyholder
transactions:
Net premiums from
policyholders . . . 181,850 103,675 2,465,299 853,330 336,277 784
Net benefits to
policyholders . . . (4,155) (2,221,410) (227,386) (125,559) (8,915) (7)
Net increase in
policy loans. . . . -- -- -- -- -- --
-------- ----------- ---------- ---------- -------- -------
Net increase
(decrease) in net
assets resulting from
policyholder
transactions . . . . 177,695 (2,117,735) 2,237,913 727,771 327,362 777
-------- ----------- ---------- ---------- -------- -------
Net increase in net
assets . . . . . . . 241,504 (2,079,145) 2,259,520 629,308 437,083 729
Net assets at
beginning of period. 453,983 2,533,128 273,608 437,812 729 --
-------- ----------- ---------- ---------- -------- -------
Net assets at end of
period . . . . . . . $695,487 $ 453,983 $2,533,128 $1,067,120 $437,812 $ 729
======== =========== ========== ========== ======== =======
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL OPPORTUNITIES II BOND INDEX
SUBACCOUNT SUBACCOUNT
----------------------------------------------------- --------------------------------
2000 1999 1998* 2000 1999 1998*
-------------------------------- -------- ------- ----------- -------- --------
Increase (decrease) in net assets from
operations:
Net investment income. . $ 2,256 $ 438 $ 57 $ 3,277 $ 2,701 $ 285
Net realized gain (loss) 1,228 196 (16) (875) (1,613) (26)
Net unrealized appreciation
(depreciation) during the period (3,402) 20,203 (303) 2,959 (1,753) (147)
-------------------------------- -------- ------- ----------- -------- -------
Net increase (decrease) in net assets
resulting from operations 82 20,837 (262) 5,361 (665) 112
From policyholder transactions:
Net premiums from policyholders 163,951 125,955 17,519 13,572 80,921 16,730
Net benefits to policyholders (57,384) (15,572) (762) (6,663) (20,596) (2,293)
Net increase in policy loans -- -- -- -- -- --
-------------------------------- -------- ------- ----------- -------- -------
Net increase in net assets resulting
from policyholder transactions 106,567 110,383 16,757 6,909 60,325 14,437
-------------------------------- -------- ------- ----------- -------- -------
Net increase in net assets 106,649 131,220 16,495 12,270 59,660 14,549
Net assets at beginning of period 147,715 16,495 -- 74,209 14,549 --
-------------------------------- -------- ------- ----------- -------- -------
Net assets at end of period $ 254,364 $147,715 $16,495 $ 86,479 $ 74,209 $14,549
================================ ======== ======= =========== ======== =======
</TABLE>
---------
* From May 1, 1998 (commencement of operations).
See accompanying notes.
82
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
YEARS AND PERIODS ENDED JUNE 30,
<TABLE>
<CAPTION>
SMALL/MID CAP CORE HIGH YIELD BOND
SUBACCOUNT SUBACCOUNT
------------------------------ --------------------------------
2000 1999 1998* 2000 1999 1998*
--------- --------- --------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss). . . . . . . $ (118) $ 6,364 $ (48) $ 19,613 $ 2,791 $ 48
Net realized gain
(loss). . . . . . . 426 1,093 (1,957) (9,114) (396) (108)
Net unrealized
appreciation
(depreciation)
during the period. . (2,399) 4,719 1,888 1,038 (1,172) (19)
-------- -------- -------- ---------- ------- ---------
Net increase
(decrease) in net
assets resulting from
operations . . . . . (2,091) 12,176 (117) 11,537 1,223 (79)
From policyholder
transactions:
Net premiums from
policyholders . . . 94,470 44,493 52,673 1,328,320 69,375 108,274
Net benefits to
policyholders . . . 854 (12,003) (19,857) (60,714) -- (102,742)
Net increase in
policy loans. . . . -- -- -- -- -- --
-------- -------- -------- ---------- ------- ---------
Net increase in net
assets resulting from
policyholder
transactions . . . . 95,324 32,490 32,816 1,267,606 69,375 5,532
-------- -------- -------- ---------- ------- ---------
Net increase in net
assets . . . . . . . 93,232 44,666 32,699 1,279,143 70,598 5,453
Net assets at
beginning of period. 77,365 32,699 -- 76,051 5,453 --
-------- -------- -------- ---------- ------- ---------
Net assets at end of
period . . . . . . . $170,598 $ 77,365 $ 32,699 $1,355,194 $76,051 $ 5,543
======== ======== ======== ========== ======= =========
</TABLE>
<TABLE>
<CAPTION>
CLIFTON ENHANCED
U.S. EQUITY SUBACCOUNT
-----------------------
2000 1999**
----------- ------------
<S> <C> <C>
Increase (decrease) in net assets from operations:
Net investment income. . . . . . . . . . . . . . . $ 614 $ 1,374
Net realized gain. . . . . . . . . . . . . . . . . 292 11
Net unrealized appreciation (depreciation) during
the period. . . . . . . . . . . . . . . . . . . . (958) 1,285
------- -------
Net increase (decrease) in net assets resulting from
operations . . . . . . . . . . . . . . . . . . . . (52) 2,670
From policyholder transactions:
Net premiums from policyholders. . . . . . . . . . 15,980 15,505
Net benefits to policyholders. . . . . . . . . . . (8,287) --
Net increase in policy loans . . . . . . . . . . . -- --
------- -------
Net increase in net assets resulting from
policyholder transactions. . . . . . . . . . . . . 7,693 15,505
------- -------
Net increase in net assets. . . . . . . . . . . . . 7,641 18,175
Net assets at beginning of period . . . . . . . . . 18,175 --
------- -------
Net assets at end of period . . . . . . . . . . . . $25,816 $18,175
======= =======
</TABLE>
---------
* From May 1, 1998 (commencement of operations).
** From May 1, 1999 (commencement of operations).
See accompanying notes.
83
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
YEARS AND PERIODS ENDED JUNE 30, 2000
1. ORGANIZATION
John Hancock Mutual Variable Life Insurance Account UV (the Account) is a
separate investment account of John Hancock Life Insurance Company (JHLICO or
John Hancock). John Hancock Mutual Variable Life Insurance Account UV was formed
to fund variable life insurance policies (Policies) issued by JHLICO. The
Account is operated as a unit investment trust registered under the Investment
Company Act of 1940, as amended, and currently consists of twenty-seven
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-seven Portfolios of the Fund and
M Fund which are currently available are the Large Cap Growth, Active Bond
(formerly, Sovereign Bond), International Equity Index, Small Cap Growth, Global
Balanced (formerly, International Balanced), Mid Cap Growth, Large Cap Value,
Money Market, Mid Cap Value, Small/Mid Cap Growth (formerly, Diversified Mid Cap
Growth), Real Estate Equity, Growth & Income, Managed, Short-Term Bond, Small
Cap Value, International Opportunities, Equity Index, Global Bond (formerly,
Strategic Bond), Turner Core Growth, Brandes International Equity, Frontier
Capital Appreciation, Emerging Markets Equity, International Opportunities II
(formerly, Global Equity), Bond Index, Small/Mid Cap CORE, High Yield Bond and
Clifton Enhanced U.S. Equity Portfolios (formerly, Enhanced U.S. Equity
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 JHLICO'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 JHLICO. The portion of the
Account's assets applicable to the policies may not be charged with liabilities
arising out of any other business JHLICO 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
JHLICO, which is taxed as a life insurance company under the Internal Revenue
Code. JHLICO 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, JHLICO 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.
84
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Expenses
JHLICO 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.
JHLICO 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
JHLICO acts as the distributor, principal underwriter and investment advisor
for the Fund.
Certain officers of the Account are officers and directors of JHLICO or the
Fund.
85
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (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 June 30, 2000 were as follows:
<TABLE>
<CAPTION>
PORTFOLIO SHARES OWNED COST VALUE
--------- ------------ ----------- --------------
<S> <C> <C> <C>
Large Cap Growth. . . . . . . 1,688,303 37,865,715 $ 48,724,465
Active Bond . . . . . . . . . 7,988,760 79,082,802 73,025,493
International Equity Index. . 385,177 6,423,009 7,123,296
Small Cap Growth. . . . . . . 380,180 4,812,891 7,666,668
Global Balanced . . . . . . . 17,540 185,375 177,025
Mid Cap Growth. . . . . . . . 619,812 14,180,987 17,365,257
Large Cap Value . . . . . . . 743,931 10,201,568 9,694,756
Money Market. . . . . . . . . 2,105,302 21,064,045 21,053,018
Mid Cap Value . . . . . . . . 462,517 6,608,805 6,233,979
Small/Mid Cap Growth. . . . . 365,644 5,532,048 5,570,881
Real Estate Equity. . . . . . 338,700 4,899,244 4,294,336
Growth & Income . . . . . . . 15,313,823 237,723,202 303,554,525
Managed . . . . . . . . . . . 6,819,945 95,495,007 105,001,203
Short-Term U.S Government . . 27,289 280,710 264,753
Small Cap Value . . . . . . . 368,648 4,249,570 4,036,903
International Opportunities . 552,795 7,448,954 8,034,392
Equity Index. . . . . . . . . 893,927 16,117,504 18,094,530
Global Bond . . . . . . . . . 96,559 991,751 962,569
Turner Core Growth. . . . . . 17,213 192,884 410,353
Brandes International Equity. 59,822 390,107 954,757
Frontier Capital Appreciation 29,358 398,053 695,498
Emerging Markets Equity . . . 93,465 1,094,319 1,067,137
International Opportunities II 21,167 237,674 254,192
Bond Index. . . . . . . . . . 9,198 87,036 86,010
Small/Mid Cap Core. . . . . . 16,556 159,144 170,344
High Yield Bond . . . . . . . 159,321 1,355,765 1,346,012
Clifton Enhanced US Equity. . 1,297 17,171 25,816
</TABLE>
86
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
4. DETAILS OF INVESTMENTS (CONTINUED)
Purchases, including reinvestment of dividend distributions and proceeds from
the sales of shares in the Portfolios of the Fund and of M Fund during 1999,
were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
--------- --------- -----------
<S> <C> <C>
Large Cap Growth . . . . . . . . . . . . . 5,805,669 1,154,899
Active Bond. . . . . . . . . . . . . . . . 6,550,840 3,882,555
International Equity Index . . . . . . . . 1,023,224 318,367
Small Cap Growth . . . . . . . . . . . . . 3,126,744 1,421,888
Global Balanced. . . . . . . . . . . . . . 43,815 55,650
Mid Cap Growth . . . . . . . . . . . . . . 6,467,261 1,916,183
Large Cap Value. . . . . . . . . . . . . . 2,921,252 1,126,241
Money Market . . . . . . . . . . . . . . . 5,277,891 2,565,018
Mid Cap Value. . . . . . . . . . . . . . . 1,847,890 564,458
Small/Mid Cap Growth . . . . . . . . . . . 426,328 767,119
Real Estate Equity . . . . . . . . . . . . 457,831 355,824
Growth & Income. . . . . . . . . . . . . . 6,927,550 8,089,835
Managed. . . . . . . . . . . . . . . . . . 4,713,065 5,215,503
Short-Term U.S Government. . . . . . . . . 57,738 30,057
Small Cap Value. . . . . . . . . . . . . . 880,388 309,121
International Opportunities. . . . . . . . 4,915,259 355,929
Equity Index . . . . . . . . . . . . . . . 4,825,408 985,688
Global Bond. . . . . . . . . . . . . . . . 238,197 114,270
Turner Core Growth . . . . . . . . . . . . 0 0
Brandes International Equity . . . . . . . 0 0
Frontier Capital Appreciation. . . . . . . 0 0
Emerging Markets Equity. . . . . . . . . . 812,522 87,227
International Opportunities II . . . . . . 115,810 6,982
Bond Index . . . . . . . . . . . . . . . . 146,866 136,679
Small/Mid Cap Core . . . . . . . . . . . . 98,036 8,982
High Yield Bond. . . . . . . . . . . . . . 1,527,409 240,168
Clifton Enhanced US Equity . . . . . . . . 0 0
</TABLE>
87
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. NET ASSETS
Accumulation shares attributable to net assets of policyholders and
accumulation share values for each subaccount at December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
VLI CLASS #1 MVL CLASS #3 FLEX CLASS #4
--------------------------- --------------------------- ----------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES SHARES SHARES VALUES SHARES SHARESVALUES
--------- ------------ ------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth . . . . . 0 0 40,237 $83.98 331,963 $ 83.98
Active Bond. . . . . . . . 0 0 17,005 24.41 1,308,502 24.41
International Equity Index 0 0 18,140 26.08 148,553 26.08
Small Cap Growth . . . . . 0 0 65,672 22.82 231,279 22.82
Global Balanced. . . . . . 0 0 7,023 12.67 3,583 12.67
Mid Cap Growth . . . . . . 0 0 130,455 34.02 318,089 34.02
Large Cap Value. . . . . . 0 0 56,833 15.74 500,501 15.74
Money Market . . . . . . . 0 0 74,235 18.58 622,010 18.58
Mid Cap Value. . . . . . . 0 0 54,304 14.82 316,883 14.82
Small/Mid Cap Growth . . . 0 0 24,651 21.43 221,741 21.43
Real Estate Equity . . . . 0 0 12,087 25.09 106,985 25.09
Growth & Income. . . . . . 0 0 118,112 67.63 1,905,323 67.63
Managed. . . . . . . . . . 0 0 49,090 41.02 1,192,354 40.02
Short-Term Bond. . . . . . 0 0 226 13.34 13,886 13.34
Small Cap Value. . . . . . 0 0 34,134 12.43 259,898 12.43
International Opportunities 0 0 19,177 15.85 462,709 15.85
Equity Index . . . . . . . 0 0 213,813 22.90 468,851 22.90
Global Bond. . . . . . . . 0 0 24,481 12.51 40,686 12.51
Turner Core Growth . . . . 0 0 3,464 27.61 11,391 27.61
Brandes International
Equity. . . . . . . . . . 0 0 14,801 17.80 27,349 17.80
Frontier Capital
Appreciation. . . . . . . 0 0 1,424 24.26 21,994 24.26
Emerging Markets Equity. . 0 0 18,570 11.88 59,253 11.88
International
Opportunities II. . . . . 0 0 7,894 12.21 2,796 12.21
Bond Index . . . . . . . . 0 0 5,047 10.72 2,752 10.72
Small/Mid Cap CORE . . . . 0 0 2,148 11.27 535 11.27
High Yield Bond. . . . . . 0 0 14,488 9.88 119,283 9.88
Clifton Enhanced U.S.
Equity. . . . . . . . . . 0 0 2,006 12.87 0 12.87
</TABLE>
88
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
FLEX II CLASS #5 VEP CLASS #7 VEP CLASS #8
--------------------------------------------- --------------------------- ---------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARESVALUES SHARES SHARES VALUES SHARES SHARES VALUES
--------- ------------ ------------ ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth. . . . 22,632 $ 83.98 15,704 $36.03 14,153 $36.15
Active Bond . . . . . . 10,373 24.41 8,570 14.22 5,773 14.26
International Equity
Index. . . . . . . . . 8,993 26.08 13,138 16.58 6,389 16.64
Small Cap Growth. . . . 28,326 22.82 8,805 22.80 1,870 22.84
Global Balanced . . . . 3,145 12.67 251 12.66 0 12.68
Mid Cap Growth. . . . . 35,455 34.02 1,417 33.98 12,104 34.05
Large Cap Value . . . . 37,255 15.74 11,308 15.73 10,691 15.76
Money Market. . . . . . 7,353 18.58 40,065 13.43 20,590 13.45
Mid Cap Value . . . . . 25,255 14.82 23,636 14.81 747 14.84
Small/Mid Cap Growth. . 6,480 21.43 2,422 21.40 4,637 21.46
Real Estate Equity. . . 7,129 25.09 588 16.32 0 16.37
Growth & Income . . . . 62,231 67.63 68,339 30.67 25,579 30.77
Managed . . . . . . . . 27,064 40.02 15,758 21.07 9,908 23.14
Short-Term Bond . . . . 2,818 13.34 904 13.32 0 13.36
Small Cap Value . . . . 21,123 12.43 8,537 12.41 1,607 12.44
International
Opportunities. . . . . 10,708 15.85 8,879 15.83 5,760 15.87
Equity Index. . . . . . 62,333 22.90 27,531 22.87 18,207 22.92
Global Bond 7,666 12.51 4,409 12.50 0 12.53
Turner Core Growth. . . 0 27.61 0 29.67 0 29.74
Brandes International
Equity . . . . . . . . 550 17.80 741 17.55 10,326 17.59
Frontier Capital
Appreciation . . . . . 288 24.26 231 26.14 4,347 26.20
Emerging Markets Equity 5,669 11.88 6,450 11.87 0 11.88
International
Opportunities II . . . 252 12.21 3,813 12.21 0 12.21
Bond Index. . . . . . . 147 10.72 104 10.71 19 10.72
Small/Mid Cap CORE. . . 124 11.27 12,342 11.26 0 11.27
High Yield Bond . . . . 1,696 9.88 1,716 9.87 21 9.88
Clifton Enhanced U.S.
Equity . . . . . . . . 0 12.87 0 16.98 0 17.00
</TABLE>
89
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
VEP CLASS #9
---------------------------
ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES
--------- ------------ -------------
<S> <C> <C>
Large Cap Growth. . . . . . . . . . . . . . . . 2,006 $36.26
Active Bond . . . . . . . . . . . . . . . . . . 0 14.31
International Equity Index. . . . . . . . . . . 0 16.70
Small Cap Growth. . . . . . . . . . . . . . . . 0 22.89
Global Balanced . . . . . . . . . . . . . . . . 0 12.71
Mid Cap Growth. . . . . . . . . . . . . . . . . 0 34.12
Large Cap Value . . . . . . . . . . . . . . . . 0 15.79
Money Market. . . . . . . . . . . . . . . . . . 0 13.51
Mid Cap Value . . . . . . . . . . . . . . . . . 0 14.87
Small/Mid Cap Growth. . . . . . . . . . . . . . 0 21.58
Real Estate Equity. . . . . . . . . . . . . . . 17 16.43
Growth & Income . . . . . . . . . . . . . . . . 3,218 30.87
Managed . . . . . . . . . . . . . . . . . . . . 0 21.20
Short-Term Bond . . . . . . . . . . . . . . . . 0 13.40
Small Cap Value . . . . . . . . . . . . . . . . 0 12.46
International Opportunities . . . . . . . . . . 0 15.90
Equity Index. . . . . . . . . . . . . . . . . . 0 22.97
Global Bond . . . . . . . . . . . . . . . . . . 12.55
Turner Core Growth. . . . . . . . . . . . . . . 0 29.80
Brandes International Equity. . . . . . . . . . 0 17.64
Frontier Capital Appreciation . . . . . . . . . 0 26.25
Emerging Markets Equity . . . . . . . . . . . . 0 11.89
International Opportunities II. . . . . . . . . 6,073 12.23
Bond Index. . . . . . . . . . . . . . . . . . . 0 10.73
Small/Mid Cap CORE. . . . . . . . . . . . . . . 0 11.28
High Yield Bond . . . . . . . . . . . . . . . . 0 9.89
Clifton Enhanced U.S. Equity. . . . . . . . . . 0 17.03
</TABLE>
90
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Policyholders of
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,
Small Cap Growth, International Balanced, Mid Cap Growth, Large Cap Value, Money
Market, Mid Cap Value, Small/Mid Cap Growth (formerly, Diversified Mid Cap
Growth), Real Estate Equity, Growth & Income, Managed, Short-Term Bond, Small
Cap Value, International Opportunities, Equity Index, Global Bond (formerly,
Strategic Bond), Turner Core Growth, Brandes International Equity, Frontier
Capital Appreciation, Emerging Markets Equity, Global Equity, Bond Index,
Small/Mid Cap CORE, High-Yield Bond and Enhanced U.S. Equity Subaccounts) as of
December 31, 1999, and the related statements of operations and changes in net
assets for each of the periods indicated therein. These financial statements are
the responsibility of the Account's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Mutual Variable Life Insurance Account UV
at December 31, 1999, the results of their operations and changes in their net
assets for each of the periods indicated, in conformity with accounting
principles generally accepted in the United States.
ERNST & YOUNG LLP
Boston, Massachusetts
February 11, 2000
91
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
LARGE CAP SOVEREIGN INTERNATIONAL SMALL CAP INTERNATIONAL
GROWTH BOND EQUITY INDEX GROWTH BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ----------- ------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash . . . . . . . . $ 4,878 $ 8,824 $ 777 $ 493 $ 23
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . 41,460,815 70,640,632 6,854,257 4,511,934 200,368
Investments in shares
of portfolios of M
Fund Inc., at value -- -- -- -- --
Policy loans and
accrued interest
receivable . . . . . 2,567,621 10,248,950 326,736 -- --
Receivable from:
John Hancock Variable
Series Trust I . . 12,029 21,016 3,262 2,588 3
M Fund Inc. . . . . -- -- -- -- --
----------- ----------- ----------- ---------- ----------
Total assets. . . . . 44,045,343 80,919,422 7,185,032 4,515,015 200,394
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company. . 11,330 19,753 3,148 2,515 --
Asset charges payable 5,576 10,087 890 566 26
----------- ----------- ----------- ---------- ----------
Total liabilities . . 16,906 29,840 4,038 3,081 26
----------- ----------- ----------- ---------- ----------
Net assets . . . . . $44,028,437 $80,889,582 $ 7,180,994 $4,511,934 $ 200,368
=========== =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MID CAP LARGE CAP MONEY MID CAP SMALL/MID CAP
GROWTH VALUE MARKET VALUE GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ---------- ----------- ---------- -----------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . $ 1,515 $ 941 $ 11 $ 532 $ 612
Investments in shares of portfolios of
John Hancock Variable Series Trust I,
at value . . . . . . . . . . . . . . 13,609,575 8,262,786 18,351,172 4,701,632 5,486,044
Investments in shares of portfolios of
M Fund Inc., at value . . . . . . . -- -- -- -- --
Policy loans and accrued interest
receivable . . . . . . . . . . . . . -- -- 2,153,219 -- --
Receivable from:
John Hancock Variable Series Trust I 5,644 1,207 7,868 2,755 2,116
M Fund Inc. . . . . . . . . . . . . -- -- -- -- --
----------- ---------- ----------- ---------- ---------------------------------------
Total assets . . . . . . . . . . . . 13,616,734 8,264,934 20,512,270 4,704,919 5,488,772
LIABILITIES
Payable to John Hancock Mutual Life
Insurance Company . . . . . . . . . 5,423 1,072 7,543 2,678 2,026
Asset charges payable . . . . . . . . 1,737 1,075 1,621 609 702
----------- ---------- ----------- ---------- ---------------------------------------
Total liabilities . . . . . . . . . . 7,160 2,147 9,164 3,287 2,728
----------- ---------- ----------- ---------- ---------------------------------------
Net assets . . . . . . . . . . . . . $13,609,574 $8,262,787 $20,503,106 $4,701,632 $5,486,044
=========== ========== =========== ========== =======================================
</TABLE>
See accompanying notes.
92
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
REAL ESTATE GROWTH& SHORT-TERM SMALL CAP
EQUITY INCOME MANAGED BOND VALUE
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash . . . . . . . . $ 444 $ 36,737 $ 12,274 $ 27 $ 387
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . 3,800,017 307,871,384 106,178,553 238,913 3,467,391
Investments in shares
of portfolios of M
Fund Inc.,
at value . . . . . . -- -- -- -- --
Policy loans and
accrued interest
receivable . . . . . 230,080 32,628,714 12,951,552 -- --
Receivable from: . .
John Hancock Variable
Series Trust I . . 1,091 56,249 48,999 64 103
M Fund Inc. . . . . -- -- -- -- --
---------- ------------ ------------ -------- ----------
Total assets . . . . 4,031,632 340,593,084 119,191,378 239,004 3,467,881
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance
Company . . . . . . 1,027 50,987 47,141 60 46
Asset charges payable 505 42,000 14,818 31 443
---------- ------------ ------------ -------- ----------
Total liabilities . . 1,532 92,987 61,959 91 489
---------- ------------ ------------ -------- ----------
Net assets . . . . . $4,030,100 $340,500,097 $119,129,419 $238,913 $3,467,392
========== ============ ============ ======== ==========
</TABLE>
<TABLE>
<CAPTION>
BRANDES
INTERNATIONAL EQUITY GLOBAL TURNER INTERNATIONAL
OPPORTUNITIES INDEX BOND CORE GROWTH EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ----------- ---------------------------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . . . . $ 406 $ 1,634 $ 87 $ 29 $ 59
Investments in shares of portfolios of John
Hancock Variable Series Trust I, at value 3,628,943 14,406,079 829,719 -- --
Investments in shares of portfolios of M
Fund Inc.,
at value . . . . . . . . . . . . . . . . -- -- -- 257,807 525,501
Policy loans and accrued interest
receivable. . . . . . . . . . . . . . . . -- -- -- -- --
Receivable from: . . . . . . . . . . . . .
John Hancock Variable Series Trust I . . 1,276 7,201 28 -- --
M Fund Inc. . . . . . . . . . . . . . . . -- -- -- 4 9
---------- ----------- ---------------------------- -------- --------
Total assets . . . . . . . . . . . . . . . 3,630,625 14,414,914 829,834 257,840 525,569
LIABILITIES
Payable to John Hancock Mutual Life
Insurance
Company . . . . . . . . . . . . . . . . . 1,217 6,965 15 -- --
Asset charges payable . . . . . . . . . . 465 1,870 101 33 67
---------- ----------- ---------------------------- -------- --------
Total liabilities . . . . . . . . . . . . 1,682 8,835 116 33 67
---------- ----------- ---------------------------- -------- --------
Net assets . . . . . . . . . . . . . . . . $3,628,943 $14,406,079 $829,718 $257,807 $525,502
========== =========== ============================ ======== ========
</TABLE>
See accompanying notes.
93
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
FRONTIER CAPITAL EMERGING
APPRECIATION MARKETS EQUITY GLOBAL EQUITY BOND INDEX
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
ASSETS
Cash . . . . . . . . $ 50 $ 48 $ 16 $ 8
Investments in shares
of portfolios of John
Hancock Variable
Series Trust I, at
value. . . . . . . . -- 437,812 147,715 74,210
Investments in shares
of portfolios of M
Fund Inc., at value 453,983 -- -- --
Policy loans and
accrued interest
receivable . . . . . -- -- -- --
Receivable from: . .
John Hancock Variable
Series Trust I . . -- 1,808 2 1
M Fund Inc. . . . . 7 -- -- --
-------- -------- -------- -------
Total assets . . . . 454,040 439,668 147,733 74,219
LIABILITIES
Payable to John
Hancock Mutual Life
Insurance Company . -- 1,801 -- --
Asset charges payable 57 55 18 10
-------- -------- -------- -------
Total liabilities . . 57 1,856 18 10
-------- -------- -------- -------
Net assets . . . . . $453,983 $437,812 $147,715 $74,209
======== ======== ======== =======
</TABLE>
<TABLE>
<CAPTION>
SMALL/MID CAP HIGH YIELD ENHANCED U.S.
CORE BOND EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ---------- ---------------
<S> <C> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . $ 9 $ 9 $ 2
Investments in shares of portfolios
of John Hancock Variable Series
Trust I, at value . . . . . . . . 77,365 76,051 --
Investments in shares of portfolios
of M Fund Inc., at value . . . . -- -- 18,175
Policy loans and accrued interest
receivable. . . . . . . . . . . . -- -- --
Receivable from: . . . . . . . . .
John Hancock Variable Series Trust
I. . . . . . . . . . . . . . . . 1 1 --
M Fund Inc. . . . . . . . . . . . -- -- --
------- ------- -------
Total assets . . . . . . . . . . . 77,375 76,061 18,177
LIABILITIES
Payable to John Hancock Mutual Life
Insurance Company . . . . . . . . -- -- --
Asset charges payable . . . . . . 10 10 2
------- ------- -------
Total liabilities . . . . . . . . 10 10 2
------- ------- -------
Net assets . . . . . . . . . . . . $77,365 $76,051 $18,175
======= ======= =======
</TABLE>
See accompanying notes.
94
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
LARGE CAP GROWTH SUBACCOUNT SOVEREIGN BOND SUBACCOUNT
---------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $6,381,711 $2,836,032 $1,686,429 $ 5,184,234 $5,266,576 $4,454,173
M Fund Inc. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . 161,454 128,186 103,747 750,673 727,807 696,074
---------- ---------- ---------- ----------- ---------- ----------
Total investment
income . . . . . . . 6,543,165 2,964,218 1,790,176 5,934,907 5,994,383 5,150,247
Expenses:
Mortality and expense
risks . . . . . . . 213,770 143,859 99,710 452,925 415,570 370,612
---------- ---------- ---------- ----------- ---------- ----------
Net investment income 6,329,395 2,820,359 1,690,466 5,481,982 5,578,813 4,779,635
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 1,146,308 433,509 292,430 (388,883) (142,628) (230,607)
Net unrealized
appreciation
(depreciation)
during the period . 320,087 4,558,660 2,142,494 (5,439,148) (102,600) 1,277,686
---------- ---------- ---------- ----------- ---------- ----------
Net realized and
unrealized gain
(loss) on investments 1,466,395 4,992,169 2,434,924 (5,828,031) (245,228) 1,047,079
---------- ---------- ---------- ----------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $7,795,790 $7,812,528 $4,125,390 $ (346,049) $5,333,585 $5,826,714
========== ========== ========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX SUBACCOUNT SMALL CAP GROWTH SUBACCOUNT
-------------------------------------- ------------------------------
1999 1998 1997 1999 1998 1997
------------ ---------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 212,869 $743,339 $ 195,240 $ 543,433 $ -- $ 436
M Fund Inc. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . 20,538 17,802 15,746 -- -- --
---------- -------- --------- ---------- -------- -------
Total investment
income . . . . . . . 233,407 761,141 210,986 543,433 -- 436
Expenses:
Mortality and expense
risks . . . . . . . 32,838 26,542 24,261 15,809 8,233 4,231
---------- -------- --------- ---------- -------- -------
Net investment income
(loss) . . . . . . . 200,569 734,599 186,725 527,624 (8,233) (3,795)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain . 62,140 52,891 50,829 48,210 21,741 6,475
Net unrealized
appreciation
(depreciation)
during the period . 1,295,768 13,239 (463,778) 1,125,829 204,674 92,108
---------- -------- --------- ---------- -------- -------
Net realized and
unrealized gain
(loss) on investments 1,357,908 66,130 (412,949) 1,174,039 226,415 98,583
---------- -------- --------- ---------- -------- -------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $1,558,477 $800,729 $(226,224) $1,701,663 $218,182 $94,788
========== ======== ========= ========== ======== =======
</TABLE>
See accompanying notes.
95
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
INTERNATIONAL BALANCED SUBACCOUNT MID CAP GROWTH SUBACCOUNT
---------------------------------- --------------------------------
1999 1998 1997 1999 1998 1997
---------- --------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 17,211 $ 12,240 $ 3,972 $1,373,009 $ 130,303 --
M Fund Inc. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
-------- -------- --------- ---------- ---------- --------
Total investment
income . . . . . . . 17,211 12,240 3,972 1,373,009 130,303 --
Expenses:
Mortality and expense
risks . . . . . . . 1,267 826 392 34,834 5,242 2,164
-------- -------- --------- ---------- ---------- --------
Net investment income
(loss) . . . . . . . 15,944 11,414 3,580 1,338,175 125,061 (2,164)
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain . 1,061 1,050 429 420,826 26,192 5,866
Net unrealized
appreciation
(depreciation)
during the period . (8,559) 12,294 (4,312) 4,283,452 193,946 66,874
-------- -------- --------- ---------- ---------- --------
Net realized and
unrealized gain
(loss) on investments (7,498) 13,344 (3,883) 4,704,278 220,138 72,740
-------- -------- --------- ---------- ---------- --------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ 8,446 $ 24,758 $ (303) $6,042,453 $ 345,199 $ 70,576
======== ======== ========= ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP VALUE SUBACCOUNT MONEY MARKET SUBACCOUNT
------------------------------ --------------------------------
1999 1998 1997 1999 1998 1997
---------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 511,132 $185,232 $ 57,265 $1,134,371 $2,249,510 $641,356
M Fund Inc. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- 155,491 154,162 148,802
--------- -------- -------- ---------- ---------- --------
Total investment
income . . . . . . . 511,132 185,232 57,265 1,289,862 2,403,672 790,158
Expenses:
Mortality and expense
risks . . . . . . . 36,983 15,356 3,303 146,758 263,735 81,437
--------- -------- -------- ---------- ---------- --------
Net investment income 474,149 169,876 53,962 1,143,104 2,139,937 708,721
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain . 123,242 68,953 17,858 -- -- --
Net unrealized
appreciation
(depreciation)
during the period . (499,454) 64,132 80,036 -- -- --
--------- -------- -------- ---------- ---------- --------
Net realized and
unrealized gain
(loss) on investments (376,212) 133,085 97,894 -- -- --
--------- -------- -------- ---------- ---------- --------
Net increase in net
assets resulting from
operations . . . . . $ 97,937 $302,961 $151,856 $1,143,104 $2,139,937 $708,721
========= ======== ======== ========== ========== ========
</TABLE>
See accompanying notes.
96
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MID CAP VALUE SUBACCOUNT SMALL/MID CAP GROWTH SUBACCOUNT
---------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
---------- ------------ -------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 30,563 $ 53,920 $150,951 $ 840,786 $ 93,281 $ 407,765
M Fund Inc. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
--------- ----------- -------- ----------- ----------- -----------
Total investment
income . . . . . . . 30,563 53,920 150,951 840,786 93,281 407,765
Expenses:
Mortality and expense
risks . . . . . . . 28,106 34,857 7,632 30,491 26,942 22,030
--------- ----------- -------- ----------- ----------- -----------
Net investment income 2,457 19,063 143,319 810,295 66,339 385,735
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . (547,518) 74,634 10,646 16,952 33,249 276,956
Net unrealized
appreciation
(depreciation)
during the period . 657,486 (944,401) 145,409 (590,295) 126,465 (477,912)
--------- ----------- -------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments 109,968 (869,767) 156,055 (573,343) 159,714 (200,956)
--------- ----------- -------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ 112,425 $ (850,704) $299,374 $ 236,952 $ 226,953 $ 184,779
========= =========== ======== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY SUBACCOUNT GROWTH & INCOME SUBACCOUNT
---------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
---------- ------------ -------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 262,930 $ 343,976 $330,296 $35,057,066 $26,306,209 $25,377,474
M Fund Inc. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . 17,361 17,260 15,261 2,279,107 1,996,131 1,728,054
--------- ----------- -------- ----------- ----------- -----------
Total investment
income . . . . . . . 280,291 361,236 345,557 37,336,173 28,302,340 27,105,528
Expenses:
Mortality and expense
risks . . . . . . . 24,900 33,890 25,420 1,779,482 1,466,469 1,136,268
--------- ----------- -------- ----------- ----------- -----------
Net investment income 255,391 327,346 320,137 35,556,691 26,835,871 25,969,260
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . (168,994) 158,205 181,015 5,502,422 3,223,935 1,982,518
Net unrealized
appreciation
(depreciation)
during the period . (220,380) (1,546,717) 165,392 2,405,417 32,918,552 18,247,212
--------- ----------- -------- ----------- ----------- -----------
Net realized and
unrealized gain
(loss) on investments (389,374) (1,388,512) 346,407 7,907,839 36,142,487 20,229,730
--------- ----------- -------- ----------- ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $(133,983) $(1,061,166) $666,544 $43,464,530 $62,978,358 $46,198,990
========= =========== ======== =========== =========== ===========
</TABLE>
See accompanying notes.
97
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MANAGED SUBACCOUNT SHORT-TERM BOND SUBACCOUNT
-------------------------------------- ---------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ----------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 9,998,433 $ 9,347,788 $ 7,891,222 $ 15,539 $ 27,350 $1,036,747
M Fund Inc. . . . . -- -- -- -- --
Interest income on
policy loans . . . . 953,686 854,487 768,231 -- -- --
----------- ----------- ----------- --------- -------- ----------
Total investment
income . . . . . . . 10,952,119 10,202,275 8,659,453 15,539 27,350 1,036,747
Expenses:
Mortality and expense
risks . . . . . . . 649,802 577,276 497,030 1,497 2,680 121,572
----------- ----------- ----------- --------- -------- ----------
Net investment income 10,302,317 9,624,999 8,162,423 14,042 24,670 915,175
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 996,546 791,245 437,661 (8,638) 265 (27,616)
Net unrealized
appreciation
(depreciation)
during the period . (2,108,530) 6,629,458 4,941,061 (2,442) (4,247) 226,435
----------- ----------- ----------- --------- -------- ----------
Net realized and
unrealized gain
(loss) on
investments . . . . (1,111,984) 7,420,703 5,378,722 (11,080) (3,982) 198,819
----------- ----------- ----------- --------- -------- ----------
Net increase in net
assets resulting from
operations . . . . . $ 9,190,333 $17,045,702 $13,541,145 $ 2,962 $ 20,688 $1,113,994
=========== =========== =========== ========= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE SUBACCOUNT INTERNATIONAL OPPORTUNITIES SUBACCOUNT
-------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- --------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 79,585 $ 12,675 $ 95,844 $241,151 $ 33,443 $ 5,284
M Fund Inc. . . . . -- -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
--------- --------- -------- -------- -------- --------
Total investment
income . . . . . . . 79,585 12,675 95,844 241,151 33,443 5,284
Expenses:
Mortality and expense
risks . . . . . . . 17,680 11,853 3,270 17,937 21,581 1,697
--------- --------- -------- -------- -------- --------
Net investment income 61,905 822 92,574 223,214 11,862 3,587
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . (33,134) 29,257 19,812 155,412 33,474 3,191
Net unrealized
appreciation
(depreciation)
during the period . (148,401) (105,331) (12,804) 387,412 272,314 (12,223)
--------- --------- -------- -------- -------- --------
Net realized and
unrealized gain
(loss) on
investments . . . . (181,535) (76,074) 7,008 542,824 305,788 (9,032)
--------- --------- -------- -------- -------- --------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $(119,630) $ (75,252) $ 99,582 $766,038 $317,650 $ (5,445)
========= ========= ======== ======== ======== ========
</TABLE>
See accompanying notes.
98
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY INDEX SUBACCOUNT GLOBAL BOND SUBACCOUNT
-------------------------------- ---------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- -------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ 593,325 $ 185,267 $ 54,601 $ 37,862 $19,628 $ 9,400
M Fund Inc. . . . . -- -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- --
---------- ---------- -------- -------- ------- -------
Total investment
income . . . . . . . 593,325 185,267 54,601 37,862 19,628 9,400
Expenses:
Mortality and expense
risks . . . . . . . 63,950 27,141 5,346 4,084 1,979 658
---------- ---------- -------- -------- ------- -------
Net investment income 529,375 158,126 49,255 33,778 17,649 8,742
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . 271,978 443,879 14,525 (151) 3,991 348
Net unrealized
appreciation
(depreciation)
during the period . 1,282,937 585,673 146,714 (52,953) 4,308 1,260
---------- ---------- -------- -------- ------- -------
Net realized and
unrealized gain
(loss) on investments 1,554,915 1,029,552 161,239 (53,104) 8,299 1,608
---------- ---------- -------- -------- ------- -------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $2,084,290 $1,187,678 $210,494 $(19,326) $25,948 $10,350
========== ========== ======== ======== ======= =======
</TABLE>
<TABLE>
<CAPTION>
TURNER CORE GROWTH SUBACCOUNT BRANDES INTERNATIONAL EQUITY SUBACCOUNT
------------------------------ ----------------------------------------
1999 1998 1997 1999 1998 1997
--------- --------- --------- ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ -- $ -- $ -- $ -- $ -- $ --
M Fund Inc. . . . . 19,328 2,231 6,373 16,354 14,444 1,796
Interest income on
policy loans . . . . -- -- -- -- -- --
------- ------- ------- -------- ------- -------
Total investment
income . . . . . . . 19,328 2,231 6,373 16,354 14,444 1,796
Expenses:
Mortality and expense
risks . . . . . . . 1,139 565 301 2,166 1,158 684
------- ------- ------- -------- ------- -------
Net investment income 18,189 1,666 6,072 14,188 13,286 1,112
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain . 26,736 2,780 839 11,526 600 888
Net unrealized
appreciation
(depreciation)
during the period . 23,628 22,686 6,487 122,734 8,581 (1,473)
------- ------- ------- -------- ------- -------
Net realized and
unrealized gain
(loss) on investments 50,364 25,466 7,326 134,260 9,181 (585)
------- ------- ------- -------- ------- -------
Net increase in net
assets resulting from
operations . . . . . $68,553 $27,132 $13,398 $148,448 $22,467 $ 527
======= ======= ======= ======== ======= =======
</TABLE>
See accompanying notes.
99
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENT OF OPERATIONS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FRONTIER CAPITAL APPRECIATION EMERGING MARKETS EQUITY GLOBAL EQUITY
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------ ------------------------ ---------------
1999 1998 1997 1999 1998* 1999 1998*
---------- --------- -------- ------------ ----------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Distributions received
from:
John Hancock Variable
Series Trust I . . $ -- $ -- $ -- $ 15,636 $ 1 $ 816 $ 117
M Fund Inc. . . . . 13,028 12,832 6,463 -- -- -- --
Interest income on
policy loans . . . . -- -- -- -- -- -- --
-------- ------- ------- -------- ------ ------- ------
Total investment
income . . . . . . . 13,028 12,832 6,463 15,636 1 816 117
Expenses:
Mortality and expense
risks . . . . . . . 4,257 13,446 1,409 466 0 378 60
-------- ------- ------- -------- ------ ------- ------
Net investment income
(loss) . . . . . . . 8,771 (614) 5,054 15,170 1 438 57
Net realized and
unrealized gain
(loss) on
investments:
Net realized gain
(loss). . . . . . . (59,550) 23,061 8,970 1,838 (1) 196 (16)
Net unrealized
appreciation
(depreciation)
during the period . 89,369 (840) 32,469 92,713 (48) 20,203 (303)
-------- ------- ------- -------- ------ ------- ------
Net realized and
unrealized gain
(loss) on
investments . . . . 29,819 22,221 41,439 94,551 (49) 20,399 (319)
-------- ------- ------- -------- ------ ------- ------
Net increase
(decrease) in net
assets resulting from
operations . . . . . $ 38,590 $21,607 $46,493 $109,721 $ (48) $20,837 $ (262)
======== ======= ======= ======== ====== ======= ======
</TABLE>
<TABLE>
<CAPTION>
BOND INDEX SMALL/MID CAP CORE
SUBACCOUNT SUBACCOUNT
----------------------------- --------------------------------------
1999 1998* 1999 1998*
---------------------- ------ ----------------------------- --------
<S> <C> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . . . . . . $ 2,971 $ 296 $ 6,699 $ --
M Fund Inc. . . . . . . . . . . . . . . . . . . . . -- -- -- --
Interest income on policy loans . . . . . . . . . . -- -- -- --
--------------------- ----- ----------------------------- -------
Total investment income . . . . . . . . . . . . . . 2,971 296 6,699 --
Expenses:
Mortality and expense risks . . . . . . . . . . . . 270 11 335 48
--------------------- ----- ----------------------------- -------
Net investment income (loss) . . . . . . . . . . . . 2,701 285 6,364 (48)
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . . . . . (1,613) (26) 1,093 (1,957)
Net unrealized appreciation (depreciation) during
the period . . . . . . . . . . . . . . . . . . . . (1,753) (147) 4,719 1,888
--------------------- ----- ----------------------------- -------
Net realized and unrealized gain (loss) on
investments . . . . . . . . . . . . . . . . . . . . (3,366) (173) 5,812 (69)
--------------------- ----- ----------------------------- -------
Net increase (decrease) in net assets resulting from
operations. . . . . . . . . . . . . . . . . . . . . $ (665) $ 112 $ 12,176 $ (117)
===================== ===== ============================= =======
<CAPTION>
ENHANCED
HIGH YIELD BOND U.S. EQUITY
SUBACCOUNT SUBACCOUNT
---------------------------------- --------------------------------------
1999 1998* 1999**
--------------------------- ------ --------------------------------------
<S> <C> <C> <C>
Investment income:
Distributions received from:
John Hancock Variable Series Trust I . . . . . . . $ 3,011 $ 50 $ --
M Fund Inc. . . . . . . . . . . . . . . . . . . . . -- -- 1,435
Interest income on policy loans . . . . . . . . . . -- -- --
-------------------------- ----- ------------------------------------
Total investment income . . . . . . . . . . . . . . 3,011 50 1,435
Expenses:
Mortality and expense risks . . . . . . . . . . . . 220 2 61
-------------------------- ----- ------------------------------------
Net investment income (loss) . . . . . . . . . . . . 2,791 48 1,374
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss) . . . . . . . . . . . . . (396) (108) 11
Net unrealized appreciation (depreciation) during
the period . . . . . . . . . . . . . . . . . . . . (1,172) (19) 1,285
-------------------------- ----- ------------------------------------
Net realized and unrealized gain (loss) on
investments . . . . . . . . . . . . . . . . . . . . (1,568) (127) 1,296
-------------------------- ----- ------------------------------------
Net increase (decrease) in net assets resulting from
operations. . . . . . . . . . . . . . . . . . . . . $ 1,223 $ (79) $ 2,670
========================== ===== ====================================
</TABLE>
---------
* From May 1, 1998 (commencement of operations).
** From May 1, 1999 (commencement of operations).
See accompanying notes.
100
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
LARGE CAP GROWTH SUBACCOUNT SOVEREIGN BOND SUBACCOUNT
-------------------------------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
----------------------------- ------------ ------------ ------------ ------------ --------------
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets from operations:
Net investment income . . $ 6,329,395 $ 2,820,359 $ 1,690,466 $ 5,481,982 $ 5,578,813 $ 4,779,635
Net realized gain (loss) . 1,146,308 433,509 292,430 (388,883) (142,628) (230,607)
Net unrealized appreciation
(depreciation) during the
period. . . . . . . . . . 320,087 4,558,660 2,142,494 (5,439,148) (102,600) 1,277,686
---------------------------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
net assets resulting from
operations . . . . . . . . 7,795,790 7,812,528 4,125,390 (346,049) 5,333,585 5,826,714
From policyholder
transactions:
Net premiums from
policyholders . . . . . . 10,950,682 6,922,934 5,387,401 11,668,600 10,038,753 10,001,325
Net benefits to
policyholders . . . . . . (5,776,293) (3,869,320) (3,401,593) (7,543,864) (7,974,428) (8,051,538)
Net increase in policy
loans . . . . . . . . . . -- -- -- -- -- --
---------------------------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from policyholder
transactions . . . . . . . 5,174,389 3,053,614 1,985,808 4,124,736 2,064,425 1,949,787
---------------------------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets 12,970,179 10,866,142 6,111,198 3,778,687 7,398,010 7,776,501
Net assets at beginning of
period . . . . . . . . . . 31,058,258 20,192,116 14,080,918 77,110,895 69,712,885 61,936,384
---------------------------- ----------- ----------- ----------- ----------- -----------
Net assets at end of period $ 44,028,437 $31,058,258 $20,192,116 $80,889,582 $77,110,895 $69,712,885
============================ =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY INDEX SUBACCOUNT
----------------------------------------------------------------
1999 1998 1997
--------------------------------------- ----------- -----------
-------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss). . . . . . . $ 200,569 $ 734,599 $ 186,725
Net realized gain . 62,140 52,891 50,829
Net unrealized
appreciation
(depreciation)
during the period . 1,295,768 13,239 (463,778)
-------------------------------------- ---------- ----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . 1,558,477 800,729 (226,224)
From policyholder
transactions:
Net premiums from
policyholders . . . 1,634,643 1,489,281 1,504,962
Net benefits to
policyholders . . . (1,119,500) (269,586) (199,118)
Net increase in
policy loans . . . -- -- --
-------------------------------------- ---------- ----------
Net increase in net
assets resulting from
policyholder
transactions . . . . 515,143 141,969 427,597
-------------------------------------- ---------- ----------
Net increase in net
assets . . . . . . . 2,073,620 942,698 201,373
Net assets at
beginning of period 5,107,374 4,164,676 3,963,303
-------------------------------------- ---------- ----------
Net assets at end of
period . . . . . . . $ 7,180,994 $5,107,374 $4,164,676
====================================== ========== ==========
<CAPTION>
SMALL CAP GROWTH SUBACCOUNT
------------------------------------------------------
1999 1998 1997
------------------------------ ----------- ------------
---------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 527,624 $ (8,233) $ (3,795)
(loss). . . . . . .
Net realized gain . 48,210 21,741 6,475
Net unrealized
appreciation 1,125,829 204,674 92,108
(depreciation) ---------------------------- ---------- ---------
during the period .
Net increase 1,701,663 218,182 94,788
(decrease) in net
assets resulting from
operations . . . . .
From policyholder
transactions:
Net premiums from 1,398,160 891,480 809,492
policyholders . . .
Net benefits to (390,180) -- --
policyholders . . .
Net increase in
policy loans . . . -- -- --
---------------------------- ---------- ---------
Net increase in net
assets resulting from 1,007,980 621,894 610,374
policyholder ---------------------------- ---------- ---------
transactions . . . .
Net increase in net 2,709,643 840,076 705,162
assets . . . . . . .
Net assets at
beginning of period 1,802,291 962,215 257,053
---------------------------- ---------- ---------
Net assets at end of
period . . . . . . . $ 4,511,934 $1,802,291 $ 962,215
============================ ========== =========
</TABLE>
See accompanying notes.
101
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
INTERNATIONAL BALANCED SUBACCOUNT MID CAP GROWTH SUBACCOUNT
------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ----------- ------------- ------------- --------------
--------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . . $ 15,944 $ 11,414 $ 3,580 $ 1,338,175 $ 125,061 $ (2,164)
Net realized gain . . . . . . . . . . . . . 1,061 1,050 429 420,826 26,192 5,866
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . (8,559) 12,294 (4,312) 4,283,452 193,946 66,874
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . 8,446 24,758 (303) 6,042,453 345,199 70,576
From policyholder transactions:
Net premiums from policyholders . . . . . . 115,573 150,466 62,380 7,041,199 772,359 457,341
Net benefits to policyholders . . . . . . . (133,983) (50,214) (9,531) (947,660) (211,806) (125,239)
Net increase in policy loans . . . . . . . -- -- -- -- -- --
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from policyholder transactions . (18,410) 100,262 52,849 6,093,539 560,553 332,102
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets . . . (9,964) 125,020 52,546 12,135,992 905,752 402,678
Net assets at beginning of period . . . . . 210,332 85,312 32,766 1,473,582 567,830 165,152
----------- ---------- ---------- ------------ ------------ -----------
Net assets at end of period . . . . . . . . $ 200,368 $ 210,332 $ 85,312 $ 13,609,574 $ 1,473,582 $ 567,830
=========== ========== ========== ============ ============ ===========
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP VALUE SUBACCOUNT MONEY MARKET SUBACCOUNT
------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ----------- ------------- ------------- --------------
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . . . . $ 474,149 $ 169,876 $ 53,962 $ 1,143,104 $ 2,139,937 $ 708,721
Net realized gain . . . . . . . . . . . . . 123,242 68,953 17,858 -- -- --
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . (499,454) 64,132 80,036 -- -- --
----------- ---------- ---------- ------------ ------------ -----------
Net increase in net assets resulting from
operations. . . . . . . . . . . . . . . . . 97,937 302,961 151,856 1,143,104 2,139,937 708,721
From policyholder transactions:
Net premiums from policyholders . . . . . . 5,449,922 2,321,440 1,506,756 16,733,655 55,692,824 11,210,536
Net benefits to policyholders . . . . . . . (1,059,147) (528,449) (85,021) (46,642,184) (22,850,788) (9,620,370)
Net increase (decrease) in policy loans . . -- -- -- -- (198,682) 103,247
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets
resulting from policyholder transactions . 4,390,775 1,792,991 1,421,735 (29,908,529) 32,643,354 1,693,413
----------- ---------- ---------- ------------ ------------ -----------
Net increase (decrease) in net assets . . . 4,488,712 2,095,952 1,573,591 (28,765,425) 34,783,291 2,402,134
Net assets at beginning of period . . . . . 3,774,075 1,678,123 104,532 49,268,531 14,485,240 12,083,106
----------- ---------- ---------- ------------ ------------ -----------
Net assets at end of period . . . . . . . . $ 8,262,787 $3,774,075 $1,678,123 $ 20,503,106 $ 49,268,531 $14,485,240
=========== ========== ========== ============ ============ ===========
</TABLE>
See accompanying notes.
102
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MIDCAP VALUE SUBACCOUNT
----------------------------------------------------
1999 1998 1997
------------------------- ------------ ------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 2,457 $ 19,063 $ 143,319
Net realized gain
(loss). . . . . . . (547,518) 74,634 10,646
Net unrealized
appreciation
(depreciation)
during the period . 657,486 (944,401) 145,409
------------------------ ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . 112,425 (850,704) 299,374
From policyholder
transactions:
Net premiums from
policyholders . . . 2,086,192 5,639,732 1,620,752
Net benefits to
policyholders . . . (3,546,814) (775,357) (112,395)
Net increase in
policy loans . . . -- -- --
------------------------ ----------- -----------
Net increase
(decrease) in net
assets resulting from
policyholder
transactions . . . . (1,460,622) 4,864,375 1,508,357
------------------------ ----------- -----------
Net increase
(decrease) in net
assets . . . . . . . (1,348,197) 4,013,671 1,807,731
Net assets at
beginning of period 6,049,829 2,036,158 228,427
------------------------ ----------- -----------
Net assets at end of
period . . . . . . . $ 4,701,632 $ 6,049,829 $ 2,036,158
======================== =========== ===========
<CAPTION>
SMALL/MID CAP GROWTH SUBACCOUNT
----------------------------------------------------------------
1999 1998 1997
--------------------------------- -------------- ----------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 810,295 $ 66,339 $ 385,735
Net realized gain 16,952 33,249 276,956
(loss). . . . . . .
Net unrealized
appreciation (590,295) 126,465 (477,912)
(depreciation) -------------------------------- ------------- -------------
during the period .
Net increase 236,952 226,053 184,779
(decrease) in net
assets resulting from
operations . . . . .
From policyholder
transactions:
Net premiums from 1,533,102 1,812,713 2,554,133
policyholders . . .
Net benefits to (1,200,248) (1,214,489) (1,628,677)
policyholders . . .
Net increase in
policy loans . . . -- -- --
-------------------------------- ------------- -------------
Net increase
(decrease) in net 332,854 598,224 925,456
assets resulting from -------------------------------- ------------- -------------
policyholder
transactions . . . .
Net increase 569,806 824,277 1,110,235
(decrease) in net
assets . . . . . . .
Net assets at
beginning of period 4,916,238 4,091,961 2,981,726
-------------------------------- ------------- -------------
Net assets at end of
period . . . . . . . $ 5,486,044 $ 4,916,238 $ 4,091,961
================================ ============= =============
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE EQUITY SUBACCOUNT
----------------------------------------------------------
1999 1998 1997
------------------------------- ------------ ------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 255,391 $ 327,346 $ 320,137
Net realized gain
(loss). . . . . . . (168,994) 158,205 181,015
Net unrealized
appreciation
(depreciation)
during the period . (220,380) (1,546,717) 165,392
------------------------------ ----------- -----------
Net increase
(decrease) in net
assets resulting from
operations . . . . . (133,983) (1,061,166) 666,544
From policyholder
transactions:
Net premiums from
policyholders . . . 968,627 3,382,263 1,748,132
Net benefits to
policyholders . . . (2,335,552) (1,663,696) (1,218,783)
Net increase
(decrease) in policy
loans . . . . . . . -- (1,103) 34,311
------------------------------ ----------- -----------
Net increase
(decrease) in net
assets resulting from
policyholder
transactions . . . . (1,366,925) 1,717,464 563,660
------------------------------ ----------- -----------
Net increase
(decrease) in net
assets . . . . . . . (1,500,908) 656,298 1,230,204
Net assets at
beginning of period 5,531,008 4,874,710 3,644,506
------------------------------ ----------- -----------
Net assets at end of
period . . . . . . . $ 4,030,100 $ 5,531,008 $ 4,874,710
============================== =========== ===========
<CAPTION>
GROWTH & INCOME SUBACCOUNT
---------------------------------------------------------
1999 1998 1997
---------------------------- ------------- ---------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 35,556,691 $ 26,835,871 $ 25,969,260
Net realized gain 5,502,422 3,223,935 1,982,518
(loss). . . . . . .
Net unrealized
appreciation 2,405,417 32,918,552 18,247,212
(depreciation) --------------------------- ------------ ------------
during the period .
Net increase 43,464,530 62,978,358 46,198,990
(decrease) in net
assets resulting from
operations . . . . .
From policyholder
transactions:
Net premiums from 34,593,082 35,108,834 30,351,780
policyholders . . .
Net benefits to (34,650,911) (29,649,984) (24,619,851)
policyholders . . .
Net increase
(decrease) in policy --
loans . . . . . . . --------------------------- 3,672,137 3,346,307
------------ ------------
Net increase
(decrease) in net (57,829) 9,130,987 9,078,236
assets resulting from --------------------------- ------------ ------------
policyholder
transactions . . . .
Net increase 43,406,701 72,109,345 55,277,226
(decrease) in net
assets . . . . . . .
Net assets at
beginning of period 297,093,396 224,984,051 169,706,825
--------------------------- ------------ ------------
Net assets at end of
period . . . . . . . $ 340,500,097 $297,093,396 $224,984,051
=========================== ============ ============
</TABLE>
See accompanying notes.
103
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MANAGED SUBACCOUNT SHORT-TERM BOND SUBACCOUNT
------------------------------------------ --------------------------------------
1999 1998 1997 1999 1998 1997
------------- ------------- ------------- ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . . . $ 10,302,317 $ 9,624,999 $ 8,162,423 $ 14,042 $ 24,670 $ 915,175
Net realized gain (loss) . . . . . . . . 996,546 791,245 437,661 (8,638) 265 (27,616)
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . (2,108,530) 6,629,458 4,941,061 (2,442) (4,247) 226,435
------------ ------------ ------------ ---------- ---------- ------------
Net increase in net assets resulting from
operations. . . . . . . . . . . . . . . . 9,190,333 17,045,702 13,541,145 2,962 20,688 1,113,994
From policyholder transactions:
Net premiums from policyholders . . . . . 13,430,282 13,116,210 13,194,907 109,732 420,697 116,602
Net benefits to policyholders . . . . . . (14,305,859) (14,539,301) (14,539,295) (370,270) (71,999) (26,168,835)
Net increase in policy loans . . . . . . -- 1,134,137 1,257,640 -- -- --
------------ ------------ ------------ ---------- ---------- ------------
Net increase (decrease) in net assets
resulting from policyholder transactions (875,577) (288,954) (86,748) (260,538) 348,698 (26,052,233)
------------ ------------ ------------ ---------- ---------- ------------
Net increase (decrease) in net assets . . 8,314,756 16,756,748 13,454,397 (257,576) 369,386 (24,938,239)
Net assets at beginning of period . . . . 110,814,663 94,057,915 80,603,518 496,489 127,103 25,065,342
------------ ------------ ------------ ---------- ---------- ------------
Net assets at end of period . . . . . . . $119,129,419 $110,814,663 $ 94,057,915 $ 238,913 $ 496,489 $ 127,103
============ ============ ============ ========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP VALUE SUBACCOUNT INTERNATIONAL OPPORTUNITIES SUBACCOUNT
------------------------------------ ---------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ----------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income . . . . . . . . . . . . . $ 61,905 $ 822 $ 92,574 $ 223,214 $ 11,862 $ 3,587
Net realized gain (loss) . . . . . . . . . . . (33,134) 29,257 19,812 155,412 33,474 3,191
Net unrealized appreciation (depreciation)
during the period . . . . . . . . . . . . . . (148,401) (105,331) (12,804) 387,412 272,314 (12,223)
---------- ---------- ---------- ----------- ---------- --------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . . (119,630) (75,252) 99,582 766,038 317,650 (5,445)
From policyholder transactions:
Net premiums from policyholders . . . . . . . . 1,483,922 1,644,666 1,224,547 2,354,681 3,814,201 295,915
Net benefits to policyholders . . . . . . . . . (447,402) (270,585) (137,364) (3,673,500) (339,134) (46,736)
Net increase in policy loans . . . . . . . . . -- -- -- -- -- --
---------- ---------- ---------- ----------- ---------- --------
Net increase (decrease) in net assets resulting
from policyholder transactions . . . . . . . . 1,036,520 1,374,081 1,087,183 (1,318,819) 3,475,067 249,179
---------- ---------- ---------- ----------- ---------- --------
Net increase (decrease) in net assets . . . . . 916,890 1,298,829 1,186,765 (552,781) 3,792,717 243,734
Net assets at beginning of period . . . . . . . 2,550,502 1,251,673 64,908 4,181,724 389,007 145,273
---------- ---------- ---------- ----------- ---------- --------
Net assets at end of period . . . . . . . . . . $3,467,392 $2,550,502 $1,251,673 $ 3,628,943 $4,181,724 $389,007
========== ========== ========== =========== ========== ========
</TABLE>
See accompanying notes.
104
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY INDEX SUBACCOUNT GLOBAL BOND SUBACCOUNT
------------------------------------- -------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 529,375 $ 158,126 $ 49,255 $ 33,778 $ 17,649 $ 8,742
Net realized gain
(loss). . . . . . . 271,978 443,879 14,525 (151) 3,991 348
Net unrealized
appreciation
(depreciation)
during the period . 1,282,937 585,673 146,714 (52,953) 4,308 1,260
----------- ---------- ---------- --------- -------- --------
Net increase
(decrease) in net
assets resulting from
operations . . . . . 2,084,290 1,187,678 210,494 (19,326) 25,948 10,350
From policyholder
transactions:
Net premiums from
policyholders . . . 6,697,385 4,822,053 1,827,052 696,619 381,024 161,548
Net benefits to
policyholders . . . (1,623,429) (885,493) (149,826) (317,999) (83,865) (37,799)
Net increase in
policy loans . . . -- -- -- -- -- --
----------- ---------- ---------- --------- -------- --------
Net increase in net
assets resulting from
policyholder
transactions . . . . 5,073,956 3,936,560 1,677,226 378,620 297,159 123,749
----------- ---------- ---------- --------- -------- --------
Net increase in net
assets . . . . . . . 7,158,246 5,124,238 1,887,720 359,294 323,107 134,099
Net assets at
beginning of period 7,247,833 2,123,595 235,875 470,424 147,317 13,218
----------- ---------- ---------- --------- -------- --------
Net assets at end of
period . . . . . . . $14,406,079 $7,247,833 $2,123,595 $ 829,718 $470,424 $147,317
=========== ========== ========== ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
TURNER CORE GROWTH SUBACCOUNT BRANDES INTERNATIONAL EQUITY SUBACCOUNT
------------------------------ ----------------------------------------
1999 1998 1997 1999 1998 1997
--------- --------- -------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 18,189 $ 1,666 $ 6,072 $ 14,188 $ 13,286 $ 1,112
Net realized gain . 26,736 2,780 839 11,526 600 888
Net unrealized
appreciation
(depreciation)
during the period . 23,628 22,686 6,487 122,734 8,581 (1,473)
-------- -------- ------- -------- -------- --------
Net increase in net
assets resulting from
operations . . . . . 68,553 27,132 13,398 148,448 22,467 527
From policyholder
transactions:
Net premiums from
policyholders . . . 109,802 39,070 33,658 152,629 141,892 82,259
Net benefits to
policyholders . . . (45,555) (9,835) (7,208) (31,332) (34,941) (45,350)
Net increase in
policy loans . . . -- -- -- -- -- --
-------- -------- ------- -------- -------- --------
Net increase in net
assets resulting from
policyholder
transactions . . . . 64,247 29,235 26,450 121,297 106,951 36,909
-------- -------- ------- -------- -------- --------
Net increase in net
assets . . . . . . . 132,800 56,367 39,848 269,745 129,418 37,436
Net assets at
beginning of period 125,007 68,640 28,792 255,757 126,339 88,903
-------- -------- ------- -------- -------- --------
Net assets at end of
period . . . . . . . $257,807 $125,007 $68,640 $525,502 $255,757 $126,339
======== ======== ======= ======== ======== ========
</TABLE>
See accompanying notes.
105
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
YEARS AND PERIODS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FRONTIER CAPITAL APPRECIATION
SUBACCOUNT
----------------------------------------------------------------
1999 1998 1997
----------------------------------------- ----------- ---------
<S> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . $ 8,771 $ (614) $ 5,054
Net realized gain (loss) . . . . . . . . (59,550) 23,061 8,970
Net unrealized appreciation
(depreciation) during the period . . . 89,369 (840) 32,469
---------------------------------------- ---------- --------
Net increase (decrease) in net assets
resulting from operations . . . . . . . 38,590 21,607 46,493
From policyholder transactions:
Net premiums from policyholders . . . . 103,675 2,465,299 138,553
Net benefits to policyholders . . . . . (2,221,410) (227,386) (70,647)
Net increase in policy loans . . . . . . -- -- --
---------------------------------------- ---------- --------
Net increase (decrease) in net assets
resulting from policyholder transactions (2,117,735) 2,237,913 67,906
---------------------------------------- ---------- --------
Net increase (decrease) in net assets . . (2,079,145) 2,259,520 114,399
Net assets at beginning of period . . . . 2,533,128 273,608 159,209
---------------------------------------- ---------- --------
Net assets at end of period . . . . . . . $ 453,983 $2,533,128 $273,608
======================================== ========== ========
<CAPTION>
EMERGING MARKETS EQUITY GLOBAL EQUITY
SUBACCOUNT SUBACCOUNT
-------------------------------------------- ----------------------------------
1999 1998* 1999 1998*
----------------------------------- -------- ------------------------- ----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets from
operations:
Net investment income (loss) . . . . . . $ 15,170 $ 1 $ 438 $ 57
Net realized gain (loss) . . . . . . . . 1,838 (1) 196 (16)
Net unrealized appreciation
(depreciation) during the period . . . 92,713 (48) 20,203 (303)
---------------------------------- ------- ------------------------ -------
Net increase (decrease) in net assets 109,721 (48) 20,837 (262)
resulting from operations . . . . . . .
From policyholder transactions:
Net premiums from policyholders . . . . 336,277 784 125,955 17,519
Net benefits to policyholders . . . . . (8,915) (7) (15,572) (762)
Net increase in policy loans . . . . . . -- -- -- --
---------------------------------- ------- ------------------------ -------
Net increase (decrease) in net assets
resulting from policyholder transactions 327,362 777 110,383 16,757
---------------------------------- ------- ------------------------ -------
Net increase (decrease) in net assets . . 437,083 729 131,220 16,495
Net assets at beginning of period . . . . 729 0 16,495 0
---------------------------------- ------- ------------------------ -------
Net assets at end of period . . . . . . . $ 437,812 $ 729 $ 147,715 $16,495
================================== ======= ======================== =======
</TABLE>
<TABLE>
<CAPTION>
BOND INDEX SMALL/MID CAP CORE
SUBACCOUNT SUBACCOUNT
--------------------- ----------------------------------------
1999 1998* 1999 1998*
------------ -------- ------------------------------ ---------
<S> <C> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income
(loss). . . . . . . $ 2,701 $ 285 $ 6,364 $ (48)
Net realized gain
(loss). . . . . . . (1,613) (26) 1,093 (1,957)
Net unrealized
appreciation
(depreciation)
during the period . (1,753) (147) 4,719 1,888
----------- ------- ----------------------------- --------
Net increase
(decrease) in net
assets resulting from
operations . . . . . (665) 112 12,176 (117)
From policyholder
transactions:
Net premiums from
policyholders . . . 80,921 16,730 44,493 52,673
Net benefits to
policyholders . . . (20,596) (2,293) (12,003) (19,857)
Net increase in
policy loans . . . -- -- -- --
----------- ------- ----------------------------- --------
Net increase in net
assets resulting from
policyholder
transactions . . . . 60,325 14,437 32,490 32,816
----------- ------- ----------------------------- --------
Net increase in net
assets . . . . . . . 59,660 14,549 44,666 32,699
Net assets at
beginning of period 14,549 0 32,699 0
----------- ------- ----------------------------- --------
Net assets at end of
period . . . . . . . $ 74,209 $14,549 $ 77,365 $ 32,699
=========== ======= ============================= ========
<CAPTION>
ENHANCED
HIGH YIELD BOND U.S. EQUITY
SUBACCOUNT SUBACCOUNT
-------------------------------------- -------------
1999 1998* 1999
--------------------------- ---------- -------------
<S> <C> <C> <C>
Increase (decrease) in
net assets from
operations:
Net investment income $ 2,791 $ 48 $ 1,374
(loss). . . . . . .
Net realized gain (396) (108) 11
(loss). . . . . . .
Net unrealized
appreciation (1,172) (19) 1,285
(depreciation) -------------------------- --------- -------
during the period .
Net increase 1,223 (79) 2,670
(decrease) in net
assets resulting from
operations . . . . .
From policyholder
transactions:
Net premiums from 69,375 108,274 15,505
policyholders . . .
Net benefits to -- (102,742) --
policyholders . . .
Net increase in
policy loans . . . -- -- --
-------------------------- --------- -------
Net increase in net
assets resulting from 69,375 5,532 15,505
policyholder -------------------------- --------- -------
transactions . . . .
Net increase in net 70,598 5,453 18,175
assets . . . . . . .
Net assets at
beginning of period 5,453 0 0
-------------------------- --------- -------
Net assets at end of
period . . . . . . . $ 76,051 $ 5,453 $18,175
========================== ========= =======
</TABLE>
---------
* From May 1, 1998 (commencement of operations).
See accompanying notes.
106
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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-seven 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-seven Portfolios
of the Fund and M Fund which are currently available are the Large Cap Growth,
Sovereign Bond, International Equity Index, Small Cap Growth, International
Balanced, Mid Cap Growth, Large Cap Value, Money Market, Mid Cap Value,
Small/Mid Cap Growth (formerly, Diversified Mid Cap Growth), Real Estate Equity,
Growth & Income, Managed, Short-Term Bond, Small Cap Value, International
Opportunities, Equity Index, Global Bond (formerly, Strategic Bond), Turner Core
Growth, Brandes International Equity, Frontier Capital Appreciation, Emerging
Markets Equity, Global Equity, Bond Index, Small/Mid Cap CORE, High Yield Bond
and Enhanced U.S. Equity 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.
107
<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.
108
<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, 1999 were as follows:
<TABLE>
<CAPTION>
PORTFOLIO SHARES OWNED COST VALUE
--------- ------------ ------------ --------------
<S> <C> <C> <C>
Large Cap Growth . . . . . . 1,516,913 $ 33,840,498 $ 41,460,815
Sovereign Bond . . . . . . . 7,742,962 76,567,490 70,640,632
International Equity Index . 348,907 5,723,159 6,854,257
Small Cap Growth . . . . . . 236,036 3,094,500 4,511,934
International Balanced . . . 18,717 200,046 200,368
Mid Cap Growth . . . . . . . 465,615 9,063,619 13,609,575
Large Cap Value . . . . . . . 612,481 8,613,285 8,262,786
Money Market . . . . . . . . 1,835,117 18,351,172 18,351,172
Mid Cap Value . . . . . . . . 367,982 4,828,927 4,701,632
Small/Mid Cap Growth . . . . 390,884 6,039,184 5,486,044
Real Estate Equity . . . . . 331,185 4,719,779 3,800,017
Growth & Income . . . . . . . 15,384,863 241,740,472 307,871,384
Managed . . . . . . . . . . . 6,873,184 96,391,658 106,178,553
Short-Term Bond . . . . . . . 24,575 245,749 238,913
Small Cap Value . . . . . . . 317,611 3,731,225 3,467,391
International Opportunities . 239,181 2,974,200 3,628,943
Equity Index . . . . . . . . 704,179 12,384,477 14,406,079
Global Bond . . . . . . . . . 84,502 877,096 829,719
Turner Core Growth . . . . . 11,243 204,222 257,807
Brandes International Equity 33,860 396,716 525,501
Frontier Capital Appreciation 21,495 331,669 453,983
Emerging Markets Equity . . . 35,704 345,147 437,812
Global Equity . . . . . . . . 12,173 127,815 147,715
Bond Index . . . . . . . . . 7,964 76,110 74,210
Small/Mid Cap CORE . . . . . 7,882 70,758 77,365
High Yield Bond . . . . . . . 8,463 77,242 76,051
Enhanced U.S. Equity . . . . 867 16,890 18,175
</TABLE>
109
<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 1999,
were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
--------- ----------- -------------
<S> <C> <C>
Large Cap Growth . . . . . . . . . . $13,422,273 $ 2,517,136
Sovereign Bond . . . . . . . . . . . 13,709,441 4,426,503
International Equity Index . . . . . 1,206,222 553,307
Small Cap Growth . . . . . . . . . . 1,705,289 169,682
International Balanced . . . . . . . 102,061 104,527
Mid Cap Growth . . . . . . . . . . . 8,451,704 1,019,989
Large Cap Value . . . . . . . . . . . 6,131,213 1,266,291
Money Market . . . . . . . . . . . . 17,249,777 46,141,311
Mid Cap Value . . . . . . . . . . . . 1,774,841 3,233,006
Small/Mid Cap Growth . . . . . . . . 1,914,302 771,153
Real Estate Equity . . . . . . . . . 859,997 1,976,566
Growth & Income . . . . . . . . . . . 47,518,686 15,480,980
Managed . . . . . . . . . . . . . . . 14,747,572 6,118,076
Short-Term Bond . . . . . . . . . . . 116,133 362,629
Small Cap Value . . . . . . . . . . . 1,396,171 297,748
International Opportunities . . . . . 2,979,658 4,075,263
Equity Index . . . . . . . . . . . . 7,159,058 1,555,726
Global Bond . . . . . . . . . . . . . 695,939 283,540
Turner Core Growth . . . . . . . . . 142,622 60,186
Brandes International Equity . . . . 181,255 45,768
Frontier Capital Appreciation . . . . 91,263 2,200,227
Emerging Markets Equity . . . . . . . 351,448 8,915
Global Equity . . . . . . . . . . . . 113,648 2,828
Bond Index . . . . . . . . . . . . . 86,949 23,921
Small/Mid Cap CORE . . . . . . . . . 58,717 19,864
High Yield Bond . . . . . . . . . . . 85,583 13,417
Enhanced U.S. Equity . . . . . . . . 17,418 539
</TABLE>
110
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
5. NET ASSETS
Accumulation shares attributable to net assets of policyholders and
accumulation share values for each portfolio at December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
VLI CLASS #1 MVL CLASS #3 FLEX CLASS #4
---------------------------- ---------------------------- ----------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES SHARES SHARES VALUES SHARES SHARES VALUES
--------- ------------ -------------- ------------ -------------- ------------ ----------------
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth . . . . . . -- -- 30,422 $79.68 303,522 $79.68
Sovereign Bond . . . . . . . -- -- 13,276 23.69 1,236,413 23.69
International Equity Index . -- -- 12,251 27.55 147,364 27.55
Small Cap Growth . . . . . . -- -- 38,152 21.70 144,335 21.70
International Balanced . . . -- -- 6,210 13.29 3,652 13.29
Mid Cap Growth . . . . . . . -- -- 95,740 35.59 245,163 35.59
Large Cap Value . . . . . . . -- -- 50,345 16.17 406,006 16.17
Money Market . . . . . . . . -- -- 31,966 18.10 535,048 18.10
Mid Cap Value . . . . . . . . -- -- 54,325 14.06 234,907 14.06
Small/Mid Cap Growth . . . . -- -- 23,443 18.80 240,110 19.80
Real Estate Equity . . . . . -- -- 8,437 22.14 111,094 22.14
Growth & Income . . . . . . . -- -- 102,216 68.13 1,902,118 68.13
Managed . . . . . . . . . . . -- -- 45,437 39.65 1,203,335 39.65
Short-Term Bond . . . . . . . -- -- 2,066 12.99 14,631 12.99
Small Cap Value . . . . . . . -- -- 29,974 12.32 222,258 12.32
International Opportunities . -- -- 14,160 16.54 183,229 16.54
Equity Index . . . . . . . . -- -- 173,452 23.08 367,259 23.08
Global Bond . . . . . . . . . -- -- 16,532 12.16 39,548 12.16
Turner Core Growth . . . . . -- -- 1,897 26.33 7,888 26.33
Brandes International Equity -- -- 5,884 17.14 20,691 17.14
Frontier Capital Appreciation -- -- 1,074 21.11 18,559 21.11
Emerging Markets Equity . . . -- -- 2,490 12.77 25,395 12.77
Global Equity . . . . . . . . -- -- 3,549 12.23 264 12.23
Bond Index . . . . . . . . . -- -- 4,208 10.34 2,651 10.34
Small/Mid Cap CORE . . . . . -- -- 794 10.76 201 10.76
High Yield Bond . . . . . . . -- -- 4,951 10.10 551 10.10
Enhanced U.S. Equity . . . . -- 1,372 13.25 -- 13.25
</TABLE>
111
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
FLEX II CLASS #5 VEP CLASS #7 VEP CLASS #8
---------------------------- ---------------------------- ----------------------------
ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES SHARES SHARES VALUES SHARES SHARES VALUES
--------- ------------ -------------- ------------ -------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Large Cap Growth . . . . . . 18,120 $79.68 11,630 $34.19 14,305 $34.28
Sovereign Bond . . . . . . . 7,625 23.69 6,071 13.80 5,831 13.84
International Equity Index . 7,387 27.55 8,217 17.52 2,077 17.58
Small Cap Growth . . . . . . 19,575 21.70 5,119 21.68 778 21.71
International Balanced . . . 2,567 13.29 2,650 13.28 -- 13.30
Mid Cap Growth . . . . . . . 25,572 35.60 8,683 35.56 7,218 35.62
Large Cap Value . . . . . . . 32,808 16.17 8,456 16.15 10,743 16.18
Money Market . . . . . . . . 8,023 18.10 13,653 13.08 10,717 13.12
Mid Cap Value . . . . . . . . 21,416 14.06 19,817 14.05 3,847 14.08
Small/Mid Cap Growth . . . . 5,669 19.80 3,944 19.77 3,887 19.83
Real Estate Equity . . . . . 5,693 22.14 1,424 14.40 -- 14.44
Growth & Income . . . . . . . 54,684 68.13 57,852 30.90 23,997 31.00
Managed . . . . . . . . . . . 23,610 39.65 11,858 20.88 9,588 20.94
Short-Term Bond . . . . . . . 1,526 12.99 52 12.97 -- 13.00
Small Cap Value . . . . . . . 18,339 12.32 7,072 12.30 3,899 12.33
International Opportunities . 9,070 16.54 7,208 16.52 5,805 16.55
Equity Index . . . . . . . . 50,932 23.08 22,543 23.06 7,757 23.10
Global Bond . . . . . . . . . 5,693 12.16 3,685 12.15 2,757 12.17
Turner Core Growth . . . . . -- -- -- -- -- --
Brandes International Equity -- -- 581 16.91 3,546 16.94
Frontier Capital Appreciation -- -- 185 22.75 1,528 22.80
Emerging Markets Equity . . . 2,886 12.77 3,505 12.77 -- --
Global Equity . . . . . . . . 147 12.23 3,346 12.22 -- --
Bond Index . . . . . . . . . 177 10.34 140 10.34 -- --
Small/Mid Cap CORE . . . . . 57 10.76 6,139 10.76 -- --
High Yield Bond . . . . . . . 1,033 10.10 997 10.10 -- --
Enhanced U.S. Equity . . . . -- -- -- -- -- --
</TABLE>
112
<PAGE>
JOHN HANCOCK MUTUAL VARIABLE LIFE INSURANCE ACCOUNT UV
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
VEP CLASS #9
----------------------------
ACCUMULATION ACCUMULATION
PORTFOLIO SHARES SHARES VALUES
--------- ------------ ----------------
-------------------------------------------------------------------
<S> <C> <C>
Large Cap Growth . . . . . . . . . 3,240 $34.39
Sovereign Bond . . . . . . . . . . -- --
International Equity Index . . . . -- --
Small Cap Growth . . . . . . . . . -- --
International Balanced . . . . . . -- --
Mid Cap Growth . . . . . . . . . . -- --
Large Cap Value . . . . . . . . . 2,782 16.21
Money Market . . . . . . . . . . . -- --
Mid Cap Value . . . . . . . . . . -- --
Small/Mid Cap Growth . . . . . . . -- --
Real Estate Equity . . . . . . . . -- --
Growth & Income . . . . . . . . . 3,934 31.09
Managed . . . . . . . . . . . . . -- --
Short-Term Bond . . . . . . . . . -- --
Small Cap Value . . . . . . . . . -- --
International Opportunities . . . -- --
Equity Index . . . . . . . . . . . 2,213 23.14
Global Bond . . . . . . . . . . . -- --
Turner Core Growth . . . . . . . . -- --
Brandes International Equity . . . -- --
Frontier Capital Appreciation . . -- --
Emerging Markets Equity . . . . . -- --
Global Equity . . . . . . . . . . 4,771 12.24
Bond Index . . . . . . . . . . . . -- --
Small/Mid Cap CORE . . . . . . . . -- --
High Yield Bond . . . . . . . . . -- --
Enhanced U.S. Equity . . . . . . . -- --
</TABLE>
113
<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> <C>
Account. . . . . . . . 27 29
account value. . . . . 7 8
attained age . . . . . 8 13
beneficiary. . . . . . 37 8
business day . . . . . 28 4
changing Option 1or 2. 14 12
changing the face
amount. . . . . . . . 14 9
charges. . . . . . . . 7 15
Code . . . . . . . . . 33 5
cost of insurance rates 8 29
date of issue. . . . . 29 29
death benefit. . . . . 4 4
deductions . . . . . . 7 2
dollar cost averaging. 11 17
expenses of the Trust. 9 6
face amount. . . . . . 13 7
fixed investment option 28 2
full surrender . . . . 12 27
fund . . . . . . . . . 2 1
grace period . . . . . 6 13
guaranteed death
benefit feature . . . 6 27
Guaranteed Death
Benefit Premium . . . 6 12
insurance charge . . . 8 9
insured person . . . . 4 12
investment options . . 1 7
John Hancock . . . . . 27 32
John Hancock Variable
Series Trust . . . . 2 18
lapse. . . . . . . . . 6 11
loan . . . . . . . . . 12 1
loan interest. . . . . 12 27
maximum premiums . . . 5 12
Minimum Initial Premium 28 9
minimum insurance
amount. . . . . . . . 14 4
modified endowment
contract. . . . . . . 34
</TABLE>
114
<PAGE>
SUPPLEMENT DATED NOVEMBER 1, 2000
TO
PROSPECTUSES DATED NOVEMBER 1, 2000
__________________________
This Supplement is intended to be distributed with certain prospectuses dated
November 1, 2000 for variable life insurance policies issued by John Hancock
Life Insurance Company or John Hancock Variable Life Insurance Company. The
prospectuses involved bear the title "Medallion Variable Life", "Medallion
Variable Universal Life II", "Medallion Executive Variable Life", "Medallion
Executive Variable Life III", "Variable Estate Protection", "Variable Estate
Protection II", "Flex V-1" or "Flex V-2". We refer to these prospectuses as the
"Product Prospectuses."
This Supplement will be used only with policies sold through the Product
Prospectuses and through registered representatives affiliated with the M
Financial Group.
__________________________
GUIDE TO THIS SUPPLEMENT
. Page 2 of this Supplement contains amendments to the Product Prospectuses
relating to FOUR ADDITIONAL VARIABLE INVESTMENT OPTIONS.
. Starting on Page 3 of this Supplement, we provide REVISED ILLUSTRATIONS of
death benefits, account values, surrender values and accumulated premiums to
replace the illustration contained in each of the following Product
Prospectuses.
<TABLE>
<CAPTION>
Product Prospectus: Revised illustration begins on page:
------------------- ------------------------------------
<S> <C>
Medallion Variable Life ............... 3
Medallion Variable Universal Life II .. 17
Medallion Executive Variable Life ..... 25
Medallion Executive Variable Life III . 33
Variable Estate Protection ............ 41
Variable Estate Protection II .........
Flex V-2 ..............................
Flex V-1 .............................. 75
</TABLE>
THIS SUPPLEMENT IS ACCOMPANIED WITH A PROSPECTUS DATED MAY 1, 2000 FOR THE M
FUND, INC. THAT CONTAINS DETAILED INFORMATION ABOUT THE FUNDS. BE SURE TO READ
THAT PROSPECTUS BEFORE SELECTING ANY OF THE FOUR ADDITIONAL VARIABLE INVESTMENT
OPTIONS.
1
<PAGE>
AMENDMENTS TO PRODUCT PROSPECTUSES
----------------------------------
1. The table on the cover page of each Product Prospectus is amended to
include the following four additional variable investment options:
<TABLE>
<CAPTION>
VARIABLE INVESTMENT OPTION MANAGED BY:
-------------------------- --------- -
<S> <C>
Brandes International Equity . . . . . . . . . . . . . . . . . . Brandes Investment Partners, L.P.
Turner Core Growth . . . . Turner Investment Partners, Inc.
Frontier Capital Appreciation Frontier Capital Managment Company, LLC
Clifton Enhanced U.S. Equity . . . . . . . . . . . . . . . . . . The Clifton Group
------------------------------------------------------------------------------ --------------------------------
</TABLE>
2. The second paragraph on page 2 of each Product Prospectus is amended to
include the following:
"If you select one or more of the Brandes International Equity, Turner
Core Growth, Frontier Capital Appreciation or Clifton Enhanced U.S. Equity
variable investment options, we will invest your money in the corresponding
investment option(s) of the M Fund, Inc. M Fund, Inc. is a so-called "series"
type mutual fund registered with the SEC. In the prospectus, the term 'Trusts'
includes M Fund, Inc., and the term 'funds' includes the corresponding
investment options of M Fund, Inc. We may modify or delete the variable
investment options in the future."
3. The fund expense table appearing in the section of each Product Prospectus
entitled "What charges will the Trusts deduct from my investment in the policy?"
is amended to include the following:
<TABLE>
<CAPTION>
Investment Distribution Other Operating Total Fund Other Operating
Management and Service Expenses With Operating Expenses Absent
Fund Name Fee (12b-1) Fees Reimbursement Expenses Reimbursement*
--------- ---------- ------------- - -------------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
M FUND, INC.:
Brandes International Equity 0.96% N/A 0.25% 1.21% 0.97%
Turner Core Growth . . 0.45% N/A 0.25% 0.70% 0.95%
Frontier Capital Appreciation 0.90% N/A 0.25% 1.15% 0.57%
Clifton Enhanced U.S. Equity 0.55% N/A 0.25% 0.80% 1.08%
</TABLE>
* M Financial Advisers, Inc. reimburses a fund when the fund's other operating
expenses exceed 0.25% of the fund's average daily net assets.
2
<PAGE>
MEDALLION VARIABLE LIFE
REVISED ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables on pages 4 TO 9 replace the illustration in the John
Hancock Life Insurance Company ("JOHN HANCOCK") Medallion Variable Life Product
Prospectus. The tables on pages 10 TO 15 replace the illustration in the John
Hancock Variable Life Insurance Company ("JHVLICO") Medallion Variable Life
Product Prospectus.
The assumptions used for the revised illustrations are generally the same as
those described in the respective Medallion Variable Life Product Prospectus.
With respect to fees and expenses deducted from Trust assets, however, the
amounts shown in all tables reflect (1) investment management fees equivalent to
an effective annual rate of .66, and (2) an assumed average asset charge for all
other Trust-level operating expenses equivalent to an effective annual rate of
.11%. These rates are the arithmetic average for all funds that are available
as investment options. In other words, they are based on the hypothetical
assumption that policy account values are allocated equally among the variable
investment options.
Each table separately illustrates the operation of a policy for a specified
issue age, premium payment schedule and face amount. 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% (i.e., before any fees or expenses deducted from Trust assets). After
deduction of the average Trust-level fees and expenses (as described above) the
corresponding net annual rates of return would be -.77%, 5.18% and 11.14%.
Investment return reflects investment income and all realized and unrealized
capital gains and losses.
The actual rates associated with any policy will vary depending upon the
actual allocation of policy values among the investment options. The charge
shown above for all other Trust-level operating expenses reflects reimbursements
to certain funds as described in the footnotes to the Fund expense table. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed.
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 Planned 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 face amount and annual Planned Premium amount requested.
3
<PAGE>
JOHN HANCOCK MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ --------------------- ---------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ --------------------- ---------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 218 244 270 0 0 0
2 1,636 100,000 100,000 100,000 663 737 814 0 0 71
3 2,516 100,000 100,000 100,000 1,092 1,242 1,405 0 149 312
4 3,439 100,000 100,000 100,000 1,504 1,759 2,047 412 667 954
5 4,409 100,000 100,000 100,000 1,898 2,287 2,742 805 1,194 1,649
6 5,428 100,000 100,000 100,000 2,273 2,825 3,497 1,181 1,732 2,405
7 6,497 100,000 100,000 100,000 2,627 3,372 4,315 1,534 2,279 3,223
8 7,620 100,000 100,000 100,000 2,960 3,927 5,203 2,066 3,033 4,309
9 8,799 100,000 100,000 100,000 3,269 4,489 6,166 2,574 3,793 5,471
10 10,037 100,000 100,000 100,000 3,562 5,067 7,227 3,266 4,771 6,931
11 11,337 100,000 100,000 100,000 3,859 5,684 8,415 3,661 5,486 8,218
12 12,702 100,000 100,000 100,000 4,133 6,311 9,715 4,035 6,213 9,616
13 14,135 100,000 100,000 100,000 4,382 6,948 11,136 4,382 6,948 11,136
14 15,640 100,000 100,000 100,000 4,604 7,593 12,692 4,604 7,593 12,692
15 17,220 100,000 100,000 100,000 4,796 8,244 14,396 4,796 8,244 14,396
16 18,879 100,000 100,000 100,000 4,958 8,901 16,265 4,958 8,901 16,265
17 20,621 100,000 100,000 100,000 5,088 9,563 18,318 5,088 9,563 18,318
18 22,450 100,000 100,000 100,000 5,180 10,224 20,571 5,180 10,224 20,571
19 24,370 100,000 100,000 100,000 5,227 10,879 23,043 5,227 10,879 23,043
20 26,387 100,000 100,000 100,000 5,237 11,534 25,769 5,237 11,534 25,769
25 38,086 100,000 100,000 100,000 4,749 14,862 44,492 4,749 14,862 44,492
30 53,018 100,000 100,000 100,000 3,236 18,271 76,634 3,236 18,271 76,634
35 72,076 ** 100,000 151,226 ** 20,805 131,500 ** 20,805 131,500
40 96,398 ** 100,000 233,818 ** 20,665 222,684 ** 20,665 222,684
45 127,441 ** 100,000 393,938 ** 14,885 375,179 ** 14,885 375,179
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
4
<PAGE>
JOHN HANCOCK MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ --------------------- ---------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ --------------------- ---------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 609 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,011 1,153 1,308 0 60 215
4 3,439 100,000 100,000 100,000 1,395 1,635 1,906 302 542 813
5 4,409 100,000 100,000 100,000 1,759 2,124 2,552 666 1,031 1,459
6 5,428 100,000 100,000 100,000 2,104 2,621 3,249 1,011 1,528 2,157
7 6,497 100,000 100,000 100,000 2,426 3,122 4,002 1,334 2,029 2,909
8 7,620 100,000 100,000 100,000 2,727 3,627 4,814 1,833 2,733 3,920
9 8,799 100,000 100,000 100,000 3,003 4,135 5,690 2,308 3,440 4,995
10 10,037 100,000 100,000 100,000 3,263 4,656 6,651 2,967 4,359 6,355
11 11,337 100,000 100,000 100,000 3,496 5,177 7,692 3,298 4,979 7,494
12 12,702 100,000 100,000 100,000 3,700 5,698 8,818 3,602 5,599 8,719
13 14,135 100,000 100,000 100,000 3,876 6,216 10,039 3,876 6,216 10,039
14 15,640 100,000 100,000 100,000 4,020 6,731 11,365 4,020 6,731 11,365
15 17,220 100,000 100,000 100,000 4,130 7,240 12,803 4,130 7,240 12,803
16 18,879 100,000 100,000 100,000 4,205 7,739 14,367 4,205 7,739 14,367
17 20,621 100,000 100,000 100,000 4,237 8,223 16,063 4,237 8,223 16,063
18 22,450 100,000 100,000 100,000 4,221 8,684 17,904 4,221 8,684 17,904
19 24,370 100,000 100,000 100,000 4,152 9,117 19,904 4,152 9,117 19,904
20 26,387 100,000 100,000 100,000 4,020 9,511 22,072 4,020 9,511 22,072
25 38,086 100,000 100,000 100,000 2,190 10,618 36,178 2,190 10,618 36,178
30 53,018 ** 100,000 100,000 ** 8,982 58,591 ** 8,982 58,591
35 72,076 ** ** 111,311 ** 970 96,793 ** 970 96,793
40 96,398 ** ** 168,479 ** ** 160,456 ** ** 160,456
45 127,441 ** ** 277,758 ** ** 264,531 ** ** 264,531
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
5
<PAGE>
JOHN HANCOCK MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ --------------------- ---------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ --------------------- ---------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,217 100,243 100,270 217 243 270 0 0 0
2 1,636 100,661 100,734 100,812 661 734 812 0 0 69
3 2,516 101,088 101,237 101,400 1,088 1,237 1,400 0 144 307
4 3,439 101,497 101,750 102,036 1,497 1,750 2,036 404 658 943
5 4,409 101,886 102,272 102,724 1,886 2,272 2,724 794 1,180 1,632
6 5,428 102,256 102,803 103,469 2,256 2,803 3,469 1,164 1,711 2,377
7 6,497 102,604 103,340 104,274 2,604 3,340 4,274 1,511 2,247 3,181
8 7,620 102,928 103,883 105,143 2,928 3,883 5,143 2,034 2,989 4,249
9 8,799 103,228 104,430 106,082 3,228 4,430 6,082 2,533 3,734 5,387
10 10,037 103,510 104,989 107,111 3,510 4,989 7,111 3,214 4,693 6,814
11 11,337 103,794 105,583 108,258 3,794 5,583 8,258 3,597 5,385 8,060
12 12,702 104,054 106,183 109,506 4,054 6,183 9,506 3,956 6,084 9,407
13 14,135 104,287 106,786 110,862 4,287 6,786 10,862 4,287 6,786 10,862
14 15,640 104,490 107,392 112,336 4,490 7,392 12,336 4,490 7,392 12,336
15 17,220 104,661 107,996 113,938 4,661 7,996 13,938 4,661 7,996 13,938
16 18,879 104,800 108,598 115,681 4,800 8,598 15,681 4,800 8,598 15,681
17 20,621 104,907 109,198 117,579 4,907 9,198 17,579 4,907 9,198 17,579
18 22,450 104,970 109,784 119,639 4,970 9,784 19,639 4,970 9,784 19,639
19 24,370 104,988 110,352 121,874 4,988 10,352 21,874 4,988 10,352 21,874
20 26,387 104,965 110,907 124,310 4,965 10,907 24,310 4,965 10,907 24,310
25 38,086 104,295 113,499 140,400 4,295 13,499 40,400 4,295 13,499 40,400
30 53,018 102,596 115,615 166,099 2,596 15,615 66,099 2,596 15,615 66,099
35 72,076 ** 115,840 206,427 ** 15,840 106,427 ** 15,840 106,427
40 96,398 ** 111,705 269,046 ** 11,705 169,046 ** 11,705 169,046
45 127,441 ** ** 366,706 ** ** 266,706 ** ** 266,706
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
6
<PAGE>
JOHN HANCOCK MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,191 100,216 100,242 191 216 242 0 0 0
2 1,636 100,607 100,678 100,752 607 678 752 0 0 9
3 2,516 101,007 101,148 101,302 1,007 1,148 1,302 0 55 209
4 3,439 101,387 101,626 101,896 1,387 1,626 1,896 295 534 803
5 4,409 101,748 102,110 102,535 1,748 2,110 2,535 655 1,017 1,442
6 5,428 102,088 102,600 103,223 2,088 2,600 3,223 995 1,507 2,130
7 6,497 102,404 103,092 103,963 2,404 3,092 3,963 1,312 1,999 2,870
8 7,620 102,698 103,586 104,758 2,698 3,586 4,758 1,804 2,692 3,864
9 8,799 102,965 104,080 105,611 2,965 4,080 5,611 2,270 3,385 4,916
10 10,037 103,215 104,583 106,543 3,215 4,583 6,543 2,918 4,287 6,247
11 11,337 103,436 105,084 107,546 3,436 5,084 7,546 3,239 4,886 7,348
12 12,702 103,628 105,579 108,625 3,628 5,579 8,625 3,529 5,480 8,526
13 14,135 103,788 106,067 109,786 3,788 6,067 9,786 3,788 6,067 9,786
14 15,640 103,916 106,546 111,036 3,916 6,546 11,036 3,916 6,546 11,036
15 17,220 104,008 107,012 112,381 4,008 7,012 12,381 4,008 7,012 12,381
16 18,879 104,062 107,462 113,829 4,062 7,462 13,829 4,062 7,462 13,829
17 20,621 104,072 107,888 115,382 4,072 7,888 15,382 4,072 7,888 15,382
18 22,450 104,031 108,281 117,045 4,031 8,281 17,045 4,031 8,281 17,045
19 24,370 103,936 108,635 118,824 3,936 8,635 18,824 3,936 8,635 18,824
20 26,387 103,776 108,937 120,721 3,776 8,937 20,721 3,776 8,937 20,721
25 38,086 101,799 109,337 132,184 1,799 9,337 32,184 1,799 9,337 32,184
30 53,018 ** 106,465 147,310 ** 6,465 47,310 ** 6,465 47,310
35 72,076 ** ** 165,588 ** ** 65,588 ** ** 65,588
40 96,398 ** ** 184,493 ** ** 84,493 ** ** 84,493
45 127,441 ** ** 196,398 ** ** 96,398 ** ** 96,398
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
7
<PAGE>
JOHN HANCOCK MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 218 244 270 0 0 0
2 1,636 100,000 100,000 100,000 663 737 814 0 0 71
3 2,516 100,000 100,000 100,000 1,092 1,242 1,405 0 149 312
4 3,439 100,000 100,000 100,000 1,504 1,759 2,047 412 667 954
5 4,409 100,000 100,000 100,000 1,898 2,287 2,742 805 1,194 1,649
6 5,428 100,000 100,000 100,000 2,273 2,825 3,497 1,181 1,732 2,405
7 6,497 100,000 100,000 100,000 2,627 3,372 4,315 1,534 2,279 3,223
8 7,620 100,000 100,000 100,000 2,960 3,927 5,203 2,066 3,033 4,309
9 8,799 100,000 100,000 100,000 3,269 4,489 6,166 2,574 3,793 5,471
10 10,037 100,000 100,000 100,000 3,562 5,067 7,227 3,266 4,771 6,931
11 11,337 100,000 100,000 100,000 3,859 5,684 8,415 3,661 5,486 8,218
12 12,702 100,000 100,000 100,000 4,133 6,311 9,715 4,035 6,213 9,616
13 14,135 100,000 100,000 100,000 4,382 6,948 11,136 4,382 6,948 11,136
14 15,640 100,000 100,000 100,000 4,604 7,593 12,692 4,604 7,593 12,692
15 17,220 100,000 100,000 100,000 4,796 8,244 14,396 4,796 8,244 14,396
16 18,879 100,000 100,000 100,000 4,958 8,901 16,265 4,958 8,901 16,265
17 20,621 100,000 100,000 100,000 5,088 9,563 18,318 5,088 9,563 18,318
18 22,450 100,000 100,000 100,000 5,180 10,224 20,571 5,180 10,224 20,571
19 24,370 100,000 100,000 100,000 5,227 10,879 23,043 5,227 10,879 23,043
20 26,387 100,000 100,000 100,000 5,237 11,534 25,769 5,237 11,534 25,769
25 38,086 100,000 100,000 100,000 4,749 14,862 44,492 4,749 14,862 44,492
30 53,018 100,000 100,000 129,345 3,236 18,271 75,996 3,236 18,271 75,996
35 72,076 ** 100,000 191,588 ** 20,805 126,577 ** 20,805 126,577
40 96,398 ** 100,000 282,918 ** 20,665 206,691 ** 20,665 206,691
45 127,441 ** 100,000 420,701 ** 14,885 333,202 ** 14,885 333,202
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
8
<PAGE>
JOHN HANCOCK MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 609 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,011 1,153 1,308 0 60 215
4 3,439 100,000 100,000 100,000 1,395 1,635 1,906 302 542 813
5 4,409 100,000 100,000 100,000 1,759 2,124 2,552 666 1,031 1,459
6 5,428 100,000 100,000 100,000 2,104 2,621 3,249 1,011 1,528 2,157
7 6,497 100,000 100,000 100,000 2,426 3,122 4,002 1,334 2,029 2,909
8 7,620 100,000 100,000 100,000 2,727 3,627 4,814 1,833 2,733 3,920
9 8,799 100,000 100,000 100,000 3,003 4,135 5,690 2,308 3,440 4,995
10 10,037 100,000 100,000 100,000 3,263 4,656 6,651 2,967 4,359 6,355
11 11,337 100,000 100,000 100,000 3,496 5,177 7,692 3,298 4,979 7,494
12 12,702 100,000 100,000 100,000 3,700 5,698 8,818 3,602 5,599 8,719
13 14,135 100,000 100,000 100,000 3,876 6,216 10,039 3,876 6,216 10,039
14 15,640 100,000 100,000 100,000 4,020 6,731 11,365 4,020 6,731 11,365
15 17,220 100,000 100,000 100,000 4,130 7,240 12,803 4,130 7,240 12,803
16 18,879 100,000 100,000 100,000 4,205 7,739 14,367 4,205 7,739 14,367
17 20,621 100,000 100,000 100,000 4,237 8,223 16,063 4,237 8,223 16,063
18 22,450 100,000 100,000 100,000 4,221 8,684 17,904 4,221 8,684 17,904
19 24,370 100,000 100,000 100,000 4,152 9,117 19,904 4,152 9,117 19,904
20 26,387 100,000 100,000 100,000 4,020 9,511 22,072 4,020 9,511 22,072
25 38,086 100,000 100,000 100,000 2,190 10,618 36,178 2,190 10,618 36,178
30 53,018 ** 100,000 100,000 ** 8,982 58,586 ** 8,982 58,586
35 72,076 ** 100,000 141,182 ** 970 93,276 ** 970 93,276
40 96,398 ** ** 196,656 ** ** 143,670 ** ** 143,670
45 127,441 ** ** 271,181 ** ** 214,780 ** ** 214,780
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
9
<PAGE>
JHVLICO MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ --------------------- ---------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ --------------------- ---------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 218 244 270 0 0 0
2 1,636 100,000 100,000 100,000 663 737 815 0 0 72
3 2,516 100,000 100,000 100,000 1,093 1,243 1,406 0 150 313
4 3,439 100,000 100,000 100,000 1,506 1,761 2,048 413 668 956
5 4,409 100,000 100,000 100,000 1,900 2,289 2,745 807 1,196 1,652
6 5,428 100,000 100,000 100,000 2,276 2,828 3,501 1,183 1,736 2,408
7 6,497 100,000 100,000 100,000 2,631 3,376 4,321 1,538 2,283 3,228
8 7,620 100,000 100,000 100,000 2,964 3,932 5,211 2,070 3,038 4,317
9 8,799 100,000 100,000 100,000 3,274 4,496 6,176 2,579 3,801 5,481
10 10,037 100,000 100,000 100,000 3,568 5,076 7,240 3,272 4,780 6,944
11 11,337 100,000 100,000 100,000 3,866 5,695 8,432 3,669 5,497 8,234
12 12,702 100,000 100,000 100,000 4,142 6,325 9,736 4,043 6,226 9,637
13 14,135 100,000 100,000 100,000 4,392 6,965 11,163 4,392 6,965 11,163
14 15,640 100,000 100,000 100,000 4,615 7,612 12,725 4,615 7,612 12,725
15 17,220 100,000 100,000 100,000 4,809 8,267 14,437 4,809 8,267 14,437
16 18,879 100,000 100,000 100,000 4,972 8,928 16,315 4,972 8,928 16,315
17 20,621 100,000 100,000 100,000 5,105 9,595 18,379 5,105 9,595 18,379
18 22,450 100,000 100,000 100,000 5,197 10,260 20,644 5,197 10,260 20,644
19 24,370 100,000 100,000 100,000 5,247 10,920 23,132 5,247 10,920 23,132
20 26,387 100,000 100,000 100,000 5,258 11,581 25,875 5,258 11,581 25,875
25 38,086 100,000 100,000 100,000 4,777 14,946 44,737 4,777 14,946 44,737
30 53,018 100,000 100,000 100,000 3,271 18,411 77,172 3,271 18,411 77,172
35 72,076 ** 100,000 152,466 ** 21,031 132,579 ** 21,031 132,579
40 96,398 ** 100,000 236,015 ** 21,024 224,777 ** 21,024 224,777
45 127,441 ** 100,000 398,132 ** 15,461 379,174 ** 15,461 379,174
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
10
<PAGE>
JHVLICO MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 1: LEVEL DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ --------------------- ---------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ --------------------- ---------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 609 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,011 1,153 1,308 0 60 215
4 3,439 100,000 100,000 100,000 1,395 1,635 1,906 302 542 813
5 4,409 100,000 100,000 100,000 1,759 2,124 2,552 666 1,031 1,459
6 5,428 100,000 100,000 100,000 2,104 2,621 3,249 1,011 1,528 2,157
7 6,497 100,000 100,000 100,000 2,426 3,122 4,002 1,334 2,029 2,909
8 7,620 100,000 100,000 100,000 2,727 3,627 4,814 1,833 2,733 3,920
9 8,799 100,000 100,000 100,000 3,003 4,135 5,690 2,308 3,440 4,995
10 10,037 100,000 100,000 100,000 3,256 4,646 6,638 2,960 4,349 6,341
11 11,337 100,000 100,000 100,000 3,481 5,156 7,660 3,284 4,958 7,462
12 12,702 100,000 100,000 100,000 3,677 5,662 8,763 3,579 5,563 8,664
13 14,135 100,000 100,000 100,000 3,843 6,164 9,955 3,843 6,164 9,955
14 15,640 100,000 100,000 100,000 3,978 6,660 11,243 3,978 6,660 11,243
15 17,220 100,000 100,000 100,000 4,078 7,146 12,636 4,078 7,146 12,636
16 18,879 100,000 100,000 100,000 4,141 7,620 14,144 4,141 7,620 14,144
17 20,621 100,000 100,000 100,000 4,162 8,075 15,773 4,162 8,075 15,773
18 22,450 100,000 100,000 100,000 4,134 8,504 17,531 4,134 8,504 17,531
19 24,370 100,000 100,000 100,000 4,052 8,901 19,431 4,052 8,901 19,431
20 26,387 100,000 100,000 100,000 3,908 9,255 21,481 3,908 9,255 21,481
25 38,086 100,000 100,000 100,000 2,023 10,088 34,554 2,023 10,088 34,554
30 53,018 ** 100,000 100,000 ** 8,044 54,575 ** 8,044 54,575
35 72,076 ** ** 100,671 ** ** 87,540 ** ** 87,540
40 96,398 ** ** 149,796 ** ** 142,663 ** ** 142,663
45 127,441 ** ** 242,576 ** ** 231,025 ** ** 231,025
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
11
<PAGE>
JHVLICO MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
------------------------------ --------------------- ---------- -------------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ------------------------------ --------------------- ---------- -------------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- --------- --------- --------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,217 100,243 100,270 217 243 270 0 0 0
2 1,636 100,661 100,734 100,812 661 734 812 0 0 69
3 2,516 101,088 101,237 101,400 1,088 1,237 1,400 0 144 307
4 3,439 101,497 101,750 102,036 1,497 1,750 2,036 404 658 943
5 4,409 101,886 102,272 102,724 1,886 2,272 2,724 794 1,180 1,632
6 5,428 102,256 102,803 103,469 2,256 2,803 3,469 1,164 1,711 2,377
7 6,497 102,604 103,340 104,274 2,604 3,340 4,274 1,511 2,247 3,181
8 7,620 102,928 103,883 105,143 2,928 3,883 5,143 2,034 2,989 4,249
9 8,799 103,228 104,430 106,082 3,228 4,430 6,082 2,533 3,734 5,387
10 10,037 103,510 104,989 107,111 3,510 4,989 7,111 3,214 4,693 6,814
11 11,337 103,794 105,583 108,258 3,794 5,583 8,258 3,597 5,385 8,060
12 12,702 104,054 106,183 109,506 4,054 6,183 9,506 3,956 6,084 9,407
13 14,135 104,287 106,786 110,862 4,287 6,786 10,862 4,287 6,786 10,862
14 15,640 104,490 107,392 112,336 4,490 7,392 12,336 4,490 7,392 12,336
15 17,220 104,661 107,996 113,938 4,661 7,996 13,938 4,661 7,996 13,938
16 18,879 104,800 108,598 115,681 4,800 8,598 15,681 4,800 8,598 15,681
17 20,621 104,907 109,198 117,579 4,907 9,198 17,579 4,907 9,198 17,579
18 22,450 104,970 109,784 119,639 4,970 9,784 19,639 4,970 9,784 19,639
19 24,370 104,988 110,352 121,874 4,988 10,352 21,874 4,988 10,352 21,874
20 26,387 104,965 110,907 124,310 4,965 10,907 24,310 4,965 10,907 24,310
25 38,086 104,295 113,499 140,400 4,295 13,499 40,400 4,295 13,499 40,400
30 53,018 102,596 115,615 166,099 2,596 15,615 66,099 2,596 15,615 66,099
35 72,076 ** 115,840 206,427 ** 15,840 106,427 ** 15,840 106,427
40 96,398 ** 111,705 269,046 ** 11,705 169,046 ** 11,705 169,046
45 127,441 ** ** 366,706 ** ** 266,706 ** ** 266,706
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
12
<PAGE>
JHVLICO MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 2: VARIABLE DEATH BENEFIT
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,191 100,216 100,242 191 216 242 0 0 0
2 1,636 100,607 100,678 100,752 607 678 752 0 0 9
3 2,516 101,007 101,148 101,302 1,007 1,148 1,302 0 55 209
4 3,439 101,387 101,626 101,896 1,387 1,626 1,896 295 534 803
5 4,409 101,748 102,110 102,535 1,748 2,110 2,535 655 1,017 1,442
6 5,428 102,088 102,600 103,223 2,088 2,600 3,223 995 1,507 2,130
7 6,497 102,404 103,092 103,963 2,404 3,092 3,963 1,312 1,999 2,870
8 7,620 102,698 103,586 104,758 2,698 3,586 4,758 1,804 2,692 3,864
9 8,799 102,965 104,080 105,611 2,965 4,080 5,611 2,270 3,385 4,916
10 10,037 103,208 104,574 106,530 3,208 4,574 6,530 2,912 4,277 6,233
11 11,337 103,422 105,062 107,515 3,422 5,062 7,515 3,224 4,865 7,317
12 12,702 103,605 105,544 108,571 3,605 5,544 8,571 3,506 5,445 8,472
13 14,135 103,757 106,016 109,704 3,757 6,016 9,704 3,757 6,016 9,704
14 15,640 103,875 106,477 110,919 3,875 6,477 10,919 3,875 6,477 10,919
15 17,220 103,957 106,922 112,220 3,957 6,922 12,220 3,957 6,922 12,220
16 18,879 104,000 107,348 113,615 4,000 7,348 13,615 4,000 7,348 13,615
17 20,621 104,000 107,746 115,104 4,000 7,746 15,104 4,000 7,746 15,104
18 22,450 103,948 108,109 116,690 3,948 8,109 16,690 3,948 8,109 16,690
19 24,370 103,841 108,430 118,377 3,841 8,430 18,377 3,841 8,430 18,377
20 26,387 103,670 108,695 120,165 3,670 8,695 20,165 3,670 8,695 20,165
25 38,086 101,650 108,862 130,731 1,650 8,862 30,731 1,650 8,862 30,731
30 53,018 ** 105,698 144,000 ** 5,698 44,000 ** 5,698 44,000
35 72,076 ** ** 158,787 ** ** 58,787 ** ** 58,787
40 96,398 ** ** 171,547 ** ** 71,547 ** ** 71,547
45 127,441 ** ** 173,065 ** ** 73,065 ** ** 73,065
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
13
<PAGE>
JHVLICO MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES CURRENT CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 218 244 270 0 0 0
2 1,636 100,000 100,000 100,000 663 737 814 0 0 71
3 2,516 100,000 100,000 100,000 1,092 1,242 1,405 0 149 312
4 3,439 100,000 100,000 100,000 1,504 1,759 2,047 412 667 954
5 4,409 100,000 100,000 100,000 1,898 2,287 2,742 805 1,194 1,649
6 5,428 100,000 100,000 100,000 2,273 2,825 3,497 1,181 1,732 2,405
7 6,497 100,000 100,000 100,000 2,627 3,372 4,315 1,534 2,279 3,223
8 7,620 100,000 100,000 100,000 2,960 3,927 5,203 2,066 3,033 4,309
9 8,799 100,000 100,000 100,000 3,269 4,489 6,166 2,574 3,793 5,471
10 10,037 100,000 100,000 100,000 3,562 5,067 7,227 3,266 4,771 6,931
11 11,337 100,000 100,000 100,000 3,859 5,684 8,415 3,661 5,486 8,218
12 12,702 100,000 100,000 100,000 4,133 6,311 9,715 4,035 6,213 9,616
13 14,135 100,000 100,000 100,000 4,382 6,948 11,136 4,382 6,948 11,136
14 15,640 100,000 100,000 100,000 4,604 7,593 12,692 4,604 7,593 12,692
15 17,220 100,000 100,000 100,000 4,796 8,244 14,396 4,796 8,244 14,396
16 18,879 100,000 100,000 100,000 4,958 8,901 16,265 4,958 8,901 16,265
17 20,621 100,000 100,000 100,000 5,088 9,563 18,318 5,088 9,563 18,318
18 22,450 100,000 100,000 100,000 5,180 10,224 20,571 5,180 10,224 20,571
19 24,370 100,000 100,000 100,000 5,227 10,879 23,043 5,227 10,879 23,043
20 26,387 100,000 100,000 100,000 5,237 11,534 25,769 5,237 11,534 25,769
25 38,086 100,000 100,000 100,000 4,749 14,862 44,492 4,749 14,862 44,492
30 53,018 100,000 100,000 129,345 3,236 18,271 75,996 3,236 18,271 75,996
35 72,076 ** 100,000 191,588 ** 20,805 126,577 ** 20,805 126,577
40 96,398 ** 100,000 282,918 ** 20,665 206,691 ** 20,665 206,691
45 127,441 ** 100,000 420,701 ** 14,885 333,202 ** 14,885 333,202
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
14
<PAGE>
JHVLICO MEDALLION VARIABLE LIFE
DEATH BENEFIT OPTION 3: LEVEL DEATH BENEFIT WITH GREATER FUNDING
ILLUSTRATION ASSUMES MAXIMUM CHARGES
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK
FACE AMOUNT: $100,000
$760 PLANNED PREMIUM*
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 217 242 0 0 0
2 1,636 100,000 100,000 100,000 609 680 754 0 0 11
3 2,516 100,000 100,000 100,000 1,011 1,153 1,308 0 60 215
4 3,439 100,000 100,000 100,000 1,395 1,635 1,906 302 542 813
5 4,409 100,000 100,000 100,000 1,759 2,124 2,552 666 1,031 1,459
6 5,428 100,000 100,000 100,000 2,104 2,621 3,249 1,011 1,528 2,157
7 6,497 100,000 100,000 100,000 2,426 3,122 4,002 1,334 2,029 2,909
8 7,620 100,000 100,000 100,000 2,727 3,627 4,814 1,833 2,733 3,920
9 8,799 100,000 100,000 100,000 3,003 4,135 5,690 2,308 3,440 4,995
10 10,037 100,000 100,000 100,000 3,256 4,646 6,638 2,960 4,349 6,341
11 11,337 100,000 100,000 100,000 3,481 5,156 7,660 3,284 4,958 7,462
12 12,702 100,000 100,000 100,000 3,677 5,662 8,763 3,579 5,563 8,664
13 14,135 100,000 100,000 100,000 3,843 6,164 9,955 3,843 6,164 9,955
14 15,640 100,000 100,000 100,000 3,978 6,660 11,243 3,978 6,660 11,243
15 17,220 100,000 100,000 100,000 4,078 7,146 12,636 4,078 7,146 12,636
16 18,879 100,000 100,000 100,000 4,141 7,620 14,144 4,141 7,620 14,144
17 20,621 100,000 100,000 100,000 4,162 8,075 15,773 4,162 8,075 15,773
18 22,450 100,000 100,000 100,000 4,134 8,504 17,531 4,134 8,504 17,531
19 24,370 100,000 100,000 100,000 4,052 8,901 19,431 4,052 8,901 19,431
20 26,387 100,000 100,000 100,000 3,908 9,255 21,481 3,908 9,255 21,481
25 38,086 100,000 100,000 100,000 2,023 10,088 34,554 2,023 10,088 34,554
30 53,018 ** 100,000 100,000 ** 8,044 54,575 ** 8,044 54,575
35 72,076 ** ** 129,243 ** ** 85,388 ** ** 85,388
40 96,398 ** ** 176,949 ** ** 129,273 ** ** 129,273
45 127,441 ** ** 239,696 ** ** 189,843 ** ** 189,843
</TABLE>
---------
* If premiums are paid more frequently than annually, the above values shown
would be affected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
15
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK.]
16
<PAGE>
MEDALLION VARIABLE UNIVERSAL LIFE II
REVISED ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables on pages 18 TO 23 replace the illustration in the John
Hancock Variable Life Insurance Company Medallion Variable Universal Life II
Product Prospectus.
The assumptions used for the revised illustration are generally the same as
those described in the Medallion Variable Universal Life II Product Prospectus.
With respect to fees and expenses deducted from Trust assets, however, the
amounts shown in all tables reflect (1) investment management fees equivalent to
an effective annual rate of .71, and (2) an assumed average asset charge for all
other Trust-level operating expenses equivalent to an effective annual rate of
.11%. These rates are the arithmetic average for all funds that are available as
investment options. In other words, they are based on the hypothetical
assumption that policy account values are allocated equally among the variable
investment options.
Each table separately illustrates the operation of a policy for a specified
issue age, premium payment schedule and face amount. 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% (i.e., before any fees or expenses deducted from Trust assets). After
deduction of the average Trust-level fees and expenses (as described above) the
corresponding net annual rates of return would be -.82%, 5.13% and 11.08%.
Investment return reflects investment income and all realized and unrealized
capital gains and losses.
The actual rates associated with any policy will vary depending upon the
actual allocation of policy values among the investment options. The charge
shown above for all other Trust-level operating expenses reflects reimbursements
to certain funds as described in the footnotes to the Fund expense table. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed.
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 Planned 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 Basic Sum Insured, Additional Sum Insured and annual
Planned Premium amount requested.
17
<PAGE>
MEDALLION VARIABLE UNIVERSAL LIFE II (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK CLASS
OPTION A DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $ 760 *
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 243 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 813 0 0 53
3 2,516 100,000 100,000 100,000 1,090 1,240 1,403 330 480 643
4 3,439 100,000 100,000 100,000 1,502 1,756 2,043 742 996 1,283
5 4,409 100,000 100,000 100,000 1,894 2,283 2,737 1,134 1,523 1,977
6 5,428 100,000 100,000 100,000 2,268 2,819 3,489 1,660 2,211 2,881
7 6,497 100,000 100,000 100,000 2,620 3,363 4,304 2,088 2,831 3,772
8 7,620 100,000 100,000 100,000 2,951 3,916 5,188 2,495 3,460 4,732
9 8,799 100,000 100,000 100,000 3,258 4,475 6,146 2,954 4,171 5,842
10 10,037 100,000 100,000 100,000 3,542 5,040 7,186 3,390 4,888 7,034
11 11,337 100,000 100,000 100,000 3,835 5,650 8,363 3,835 5,650 8,363
12 12,702 100,000 100,000 100,000 4,106 6,271 9,649 4,106 6,271 9,649
13 14,135 100,000 100,000 100,000 4,351 6,901 11,054 4,351 6,901 11,054
14 15,640 100,000 100,000 100,000 4,569 7,537 12,591 4,569 7,537 12,591
15 17,220 100,000 100,000 100,000 4,757 8,179 14,273 4,757 8,179 14,273
16 18,879 100,000 100,000 100,000 4,973 8,883 16,171 4,973 8,883 16,171
17 20,621 100,000 100,000 100,000 5,147 9,585 18,245 5,147 9,585 18,245
18 22,450 100,000 100,000 100,000 5,269 10,275 20,507 5,269 10,275 20,507
19 24,370 100,000 100,000 100,000 5,334 10,947 22,977 5,334 10,947 22,977
20 26,387 100,000 100,000 100,000 5,345 11,604 25,684 5,345 11,604 25,684
25 38,086 100,000 100,000 100,000 4,837 14,911 44,218 4,837 14,911 44,218
30 53,018 100,000 100,000 100,000 3,309 18,290 75,967 3,309 18,290 75,967
35 72,076 ** 100,000 149,549 ** 20,768 130,043 ** 20,768 130,043
40 96,398 ** 100,000 230,677 ** 20,542 219,692 ** 20,542 219,692
45 127,441 ** 100,000 387,694 ** 14,631 369,232 ** 14,631 369,232
</TABLE>
---------
* The illustrations assume that Planned Premiums are equal to the Target
Premium and are paid at the start of each Policy Year. The Death Benefit and
Surrender Value will differ if premiums are paid in different amounts or
frequencies, if policy loans are taken, or if Additional Sum Insured or
optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
18
<PAGE>
MEDALLION VARIABLE UNIVERSAL LIFE II (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK CLASS
OPTION A DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $ 760 *
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 216 242 0 0 0
2 1,636 100,000 100,000 100,000 608 679 753 0 0 0
3 2,516 100,000 100,000 100,000 1,009 1,151 1,305 249 391 545
4 3,439 100,000 100,000 100,000 1,392 1,632 1,902 632 872 1,142
5 4,409 100,000 100,000 100,000 1,755 2,119 2,546 995 1,359 1,786
6 5,428 100,000 100,000 100,000 2,099 2,614 3,241 1,491 2,006 2,633
7 6,497 100,000 100,000 100,000 2,420 3,113 3,990 1,888 2,581 3,458
8 7,620 100,000 100,000 100,000 2,719 3,616 4,799 2,263 3,160 4,343
9 8,799 100,000 100,000 100,000 2,993 4,121 5,670 2,689 3,817 5,366
10 10,037 100,000 100,000 100,000 3,244 4,628 6,611 3,092 4,476 6,459
11 11,337 100,000 100,000 100,000 3,467 5,134 7,626 3,467 5,134 7,626
12 12,702 100,000 100,000 100,000 3,661 5,636 8,721 3,661 5,636 8,721
13 14,135 100,000 100,000 100,000 3,825 6,134 9,903 3,825 6,134 9,903
14 15,640 100,000 100,000 100,000 3,957 6,624 11,180 3,957 6,624 11,180
15 17,220 100,000 100,000 100,000 4,055 7,105 12,559 4,055 7,105 12,559
16 18,879 100,000 100,000 100,000 4,116 7,572 14,050 4,116 7,572 14,050
17 20,621 100,000 100,000 100,000 4,134 8,020 15,661 4,134 8,020 15,661
18 22,450 100,000 100,000 100,000 4,104 8,441 17,398 4,104 8,441 17,398
19 24,370 100,000 100,000 100,000 4,020 8,830 19,272 4,020 8,830 19,272
20 26,387 100,000 100,000 100,000 3,873 9,175 21,293 3,873 9,175 21,293
25 38,086 100,000 100,000 100,000 1,978 9,951 34,140 1,978 9,951 34,140
30 53,018 ** 100,000 100,000 ** 7,827 53,695 ** 7,827 53,695
35 72,076 ** ** 100,000 ** ** 85,669 ** ** 85,669
40 96,398 ** ** 146,316 ** ** 139,349 ** ** 139,349
45 127,441 ** ** 236,445 ** ** 225,186 ** ** 225,186
</TABLE>
---------
* The illustrations assume that Planned Premiums are equal to the Target
Premium and are paid at the start of each Policy Year. The Death Benefit and
Surrender Value will differ if premiums are paid in different amounts or
frequencies, if policy loans are taken, or if Additional Sum Insured or
optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
19
<PAGE>
MEDALLION VARIABLE UNIVERSAL LIFE II (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK CLASS
OPTION B DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $ 760 *
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,216 100,243 100,269 216 243 269 0 0 0
2 1,636 100,660 100,733 100,811 660 733 811 0 0 51
3 2,516 101,086 101,235 101,398 1,086 1,235 1,398 326 475 638
4 3,439 101,494 101,747 102,033 1,494 1,747 2,033 734 987 1,273
5 4,409 101,882 102,268 102,719 1,882 2,268 2,719 1,122 1,508 1,959
6 5,428 102,251 102,797 103,461 2,251 2,797 3,461 1,643 2,189 2,853
7 6,497 102,597 103,332 104,262 2,597 3,332 4,262 2,065 2,800 3,730
8 7,620 102,920 103,872 105,128 2,920 3,872 5,128 2,464 3,416 4,672
9 8,799 103,218 104,416 106,062 3,218 4,416 6,062 2,914 4,112 5,758
10 10,037 103,490 104,963 107,070 3,490 4,963 7,070 3,338 4,811 6,918
11 11,337 103,771 105,550 108,206 3,771 5,550 8,206 3,771 5,550 8,206
12 12,702 104,028 106,144 109,441 4,028 6,144 9,441 4,028 6,144 9,441
13 14,135 104,257 106,740 110,782 4,257 6,740 10,782 4,257 6,740 10,782
14 15,640 104,456 107,337 112,238 4,456 7,337 12,238 4,456 7,337 12,238
15 17,220 104,624 107,933 113,819 4,624 7,933 13,819 4,624 7,933 13,819
16 18,879 104,820 108,589 115,602 4,820 8,589 15,602 4,820 8,589 15,602
17 20,621 104,972 109,233 117,533 4,972 9,233 17,533 4,972 9,233 17,533
18 22,450 105,068 109,853 119,614 5,068 9,853 19,614 5,068 9,853 19,614
19 24,370 105,104 110,441 121,857 5,104 10,441 21,857 5,104 10,441 21,857
20 26,387 105,082 111,000 124,282 5,082 11,000 24,282 5,082 11,000 24,282
25 38,086 104,389 113,578 140,238 4,389 13,578 40,238 4,389 13,578 40,238
30 53,018 102,673 115,675 165,666 2,673 15,675 65,666 2,673 15,675 65,666
35 72,076 ** 115,866 205,411 ** 15,866 105,411 ** 15,866 105,411
40 96,398 ** 111,691 266,881 ** 11,691 166,881 ** 11,691 166,881
45 127,441 ** ** 362,348 ** ** 262,348 ** ** 262,348
</TABLE>
---------
* The illustrations assume that Planned Premiums are equal to the Target
Premium and are paid at the start of each Policy Year. The Death Benefit and
Surrender Value will differ if premiums are paid in different amounts or
frequencies, if policy loans are taken, or if Additional Sum Insured or
optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
20
<PAGE>
MEDALLION VARIABLE UNIVERSAL LIFE II (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK CLASS
OPTION B DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $ 760 *
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,190 100,215 100,241 190 215 241 0 0 0
2 1,636 100,606 100,677 100,750 606 677 750 0 0 0
3 2,516 101,005 101,146 101,300 1,005 1,146 1,300 245 386 540
4 3,439 101,385 101,623 101,892 1,385 1,623 1,892 625 863 1,132
5 4,409 101,744 102,105 102,529 1,744 2,105 2,529 984 1,345 1,769
6 5,428 102,082 102,593 103,215 2,082 2,593 3,215 1,474 1,985 2,607
7 6,497 102,398 103,083 103,951 2,398 3,083 3,951 1,866 2,551 3,419
8 7,620 102,690 103,575 104,742 2,690 3,575 4,742 2,234 3,119 4,286
9 8,799 102,955 104,066 105,591 2,955 4,066 5,591 2,651 3,762 5,287
10 10,037 103,196 104,556 106,503 3,196 4,556 6,503 3,044 4,404 6,351
11 11,337 103,408 105,041 107,482 3,408 5,041 7,482 3,408 5,041 7,482
12 12,702 103,589 105,519 108,530 3,589 5,519 8,530 3,589 5,519 8,530
13 14,135 103,739 105,987 109,653 3,739 5,987 9,653 3,739 5,987 9,653
14 15,640 103,855 106,442 110,857 3,855 6,442 10,857 3,855 6,442 10,857
15 17,220 103,935 106,881 112,145 3,935 6,881 12,145 3,935 6,881 12,145
16 18,879 103,976 107,301 113,524 3,976 7,301 13,524 3,976 7,301 13,524
17 20,621 103,973 107,693 114,996 3,973 7,693 14,996 3,973 7,693 14,996
18 22,450 103,919 108,049 116,562 3,919 8,049 16,562 3,919 8,049 16,562
19 24,370 103,811 108,362 118,227 3,811 8,362 18,227 3,811 8,362 18,227
20 26,387 103,637 108,620 119,989 3,637 8,620 19,989 3,637 8,620 19,989
25 38,086 101,608 108,739 130,359 1,608 8,739 30,359 1,608 8,739 30,359
30 53,018 ** 105,518 143,271 ** 5,518 43,271 ** 5,518 43,271
35 72,076 ** ** 157,431 ** ** 57,431 ** ** 57,431
40 96,398 ** ** 169,120 ** ** 69,120 ** ** 69,120
45 127,441 ** ** 168,868 ** ** 68,868 ** ** 68,868
</TABLE>
---------
* The illustrations assume that Planned Premiums are equal to the Target
Premium and are paid at the start of each Policy Year. The Death Benefit and
Surrender Value will differ if premiums are paid in different amounts or
frequencies, if policy loans are taken, or if Additional Sum Insured or
optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
21
<PAGE>
MEDALLION VARIABLE UNIVERSAL LIFE II (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK CLASS
OPTION A DEATH BENEFIT
CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $ 760 *
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 217 243 270 0 0 0
2 1,636 100,000 100,000 100,000 662 736 813 0 0 53
3 2,516 100,000 100,000 100,000 1,090 1,240 1,403 330 480 643
4 3,439 100,000 100,000 100,000 1,502 1,756 2,043 742 996 1,283
5 4,409 100,000 100,000 100,000 1,894 2,283 2,737 1,134 1,523 1,977
6 5,428 100,000 100,000 100,000 2,268 2,819 3,489 1,660 2,211 2,881
7 6,497 100,000 100,000 100,000 2,620 3,363 4,304 2,088 2,831 3,772
8 7,620 100,000 100,000 100,000 2,951 3,916 5,188 2,495 3,460 4,732
9 8,799 100,000 100,000 100,000 3,258 4,475 6,146 2,954 4,171 5,842
10 10,037 100,000 100,000 100,000 3,542 5,040 7,186 3,390 4,888 7,034
11 11,337 100,000 100,000 100,000 3,835 5,650 8,363 3,835 5,650 8,363
12 12,702 100,000 100,000 100,000 4,106 6,271 9,649 4,106 6,271 9,649
13 14,135 100,000 100,000 100,000 4,351 6,901 11,054 4,351 6,901 11,054
14 15,640 100,000 100,000 100,000 4,569 7,537 12,591 4,569 7,537 12,591
15 17,220 100,000 100,000 100,000 4,757 8,179 14,273 4,757 8,179 14,273
16 18,879 100,000 100,000 100,000 4,973 8,883 16,171 4,973 8,883 16,171
17 20,621 100,000 100,000 100,000 5,147 9,585 18,245 5,147 9,585 18,245
18 22,450 100,000 100,000 100,000 5,269 10,275 20,507 5,269 10,275 20,507
19 24,370 100,000 100,000 100,000 5,334 10,947 22,977 5,334 10,947 22,977
20 26,387 100,000 100,000 100,000 5,345 11,604 25,684 5,345 11,604 25,684
25 38,086 100,000 100,000 100,000 4,837 14,911 44,218 4,837 14,911 44,218
30 53,018 100,000 100,000 128,276 3,309 18,290 75,368 3,309 18,290 75,368
35 72,076 ** 100,000 189,568 ** 20,768 125,243 ** 20,768 125,243
40 96,398 ** 100,000 279,270 ** 20,542 204,026 ** 20,542 204,026
45 127,441 ** 100,000 414,264 ** 14,631 328,104 ** 14,631 328,104
</TABLE>
---------
* The illustrations assume that Planned Premiums are equal to the Target
Premium and are paid at the start of each Policy Year. The Death Benefit and
Surrender Value will differ if premiums are paid in different amounts or
frequencies, if policy loans are taken, or if Additional Sum Insured or
optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
22
<PAGE>
MEDALLION VARIABLE UNIVERSAL LIFE II (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED
MALE, ISSUE AGE 35, STANDARD NONSMOKER UNDERWRITING RISK CLASS
OPTION A DEATH BENEFIT
CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $ 760 *
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Account Value Surrender Value
----------------------------- ---------------------- ------- -----------------------------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- ------- -----------------------------
Year Per Year 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------ -------------- -------- -------- --------- -------- -------- -- ------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 798 100,000 100,000 100,000 191 216 242 0 0 0
2 1,636 100,000 100,000 100,000 608 679 753 0 0 0
3 2,516 100,000 100,000 100,000 1,009 1,151 1,305 249 391 545
4 3,439 100,000 100,000 100,000 1,392 1,632 1,902 632 872 1,142
5 4,409 100,000 100,000 100,000 1,755 2,119 2,546 995 1,359 1,786
6 5,428 100,000 100,000 100,000 2,099 2,614 3,241 1,491 2,006 2,633
7 6,497 100,000 100,000 100,000 2,420 3,113 3,990 1,888 2,581 3,458
8 7,620 100,000 100,000 100,000 2,719 3,616 4,799 2,263 3,160 4,343
9 8,799 100,000 100,000 100,000 2,993 4,121 5,670 2,689 3,817 5,366
10 10,037 100,000 100,000 100,000 3,244 4,628 6,611 3,092 4,476 6,459
11 11,337 100,000 100,000 100,000 3,467 5,134 7,626 3,467 5,134 7,626
12 12,702 100,000 100,000 100,000 3,661 5,636 8,721 3,661 5,636 8,721
13 14,135 100,000 100,000 100,000 3,825 6,134 9,903 3,825 6,134 9,903
14 15,640 100,000 100,000 100,000 3,957 6,624 11,180 3,957 6,624 11,180
15 17,220 100,000 100,000 100,000 4,055 7,105 12,559 4,055 7,105 12,559
16 18,879 100,000 100,000 100,000 4,116 7,572 14,050 4,116 7,572 14,050
17 20,621 100,000 100,000 100,000 4,134 8,020 15,661 4,134 8,020 15,661
18 22,450 100,000 100,000 100,000 4,104 8,441 17,398 4,104 8,441 17,398
19 24,370 100,000 100,000 100,000 4,020 8,830 19,272 4,020 8,830 19,272
20 26,387 100,000 100,000 100,000 3,873 9,175 21,293 3,873 9,175 21,293
25 38,086 100,000 100,000 100,000 1,978 9,951 34,140 1,978 9,951 34,140
30 53,018 ** 100,000 100,000 ** 7,827 53,695 ** 7,827 53,695
35 72,076 ** ** 126,861 ** ** 83,814 ** ** 83,814
40 96,398 ** ** 173,350 ** ** 126,644 ** ** 126,644
45 127,441 ** ** 234,330 ** ** 185,593 ** ** 185,593
</TABLE>
---------
* The illustrations assume that Planned Premiums are equal to the Target
Premium and are paid at the start of each Policy Year. The Death Benefit and
Surrender Value will differ if premiums are paid in different amounts or
frequencies, if policy loans are taken, or if Additional Sum Insured or
optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
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. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY PERIOD OF TIME.
23
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK.]
24
<PAGE>
MEDALLION EXECUTIVE VARIABLE LIFE
REVISED ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables on pages 26 TO 31 replace the illustration in the John
Hancock Variable Life Insurance Company Medallion Executive Variable Life
Product Prospectus.
The assumptions used for the revised illustration are generally the same as
those described in the Medallion Executive Variable Life Product Prospectus.
With respect to fees and expenses deducted from Trust assets, however, the
amounts shown in all tables reflect (1) investment management fees equivalent to
an effective annual rate of .71%, and (2) an assumed average asset charge for
all other Trust-level operating expenses equivalent to an effective annual rate
of .11%. These rates are the arithmetic average for all funds that are
available as investment options. In other words, they are based on the
hypothetical assumption that policy account values are allocated equally among
the variable investment options.
Each table separately illustrates the operation of a policy for a specified
issue age, premium payment schedule and Total Sum Insured. 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% (i.e., before any fees or expenses deducted from Trust assets).
After deduction of the average Trust-level fees and expenses (as described
above) the corresponding net annual rates of return would be -.82%, 5.13% and
11.08%. Investment return reflects investment income and all realized and
unrealized capital gains and losses.
The actual rates associated with any policy will vary depending upon the
actual allocation of policy values among the investment options. The charge
shown above for all other Trust-level operating expenses reflects reimbursements
to certain funds as described in the footnotes to the Fund expense table. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed.
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 Planned 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 Total Sum Insured and annual Planned Premium amount
requested.
25
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT
UNDERWRITING CLASS OPTION A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE
CORRIDOR TEST PLANNED PREMIUM: $2,000* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- --
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- --
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------- ----- ----
<S> <S> <S> <S> <S> <S> <S> <C>
1 2,100 100,000 100,000 100,000 926 1,006 1,086
2 4,305 100,000 100,000 100,000 2,224 2,448 2,683
3 6,620 100,000 100,000 100,000 3,168 3,611 4,094
4 9,051 100,000 100,000 100,000 4,239 4,976 5,810
5 11,604 100,000 100,000 100,000 5,274 6,382 7,686
6 14,284 100,000 100,000 100,000 6,666 8,235 10,154
7 17,098 100,000 100,000 100,000 8,014 10,150 12,859
8 20,053 100,000 100,000 100,000 9,318 12,127 15,826
9 23,156 100,000 100,000 100,000 10,575 14,167 19,081
10 26,414 100,000 100,000 100,000 11,807 16,305 22,700
11 29,834 100,000 100,000 100,000 13,111 18,642 26,822
12 33,426 100,000 100,000 100,000 14,363 21,063 31,368
13 37,197 100,000 100,000 100,000 15,562 23,568 36,390
14 41,157 100,000 100,000 100,000 16,702 26,162 41,942
15 45,315 100,000 100,000 100,000 17,781 28,847 48,092
16 49,681 100,000 100,000 100,000 18,794 31,628 54,912
17 54,265 100,000 100,000 100,000 19,737 34,510 62,491
18 59,078 100,000 100,000 100,000 20,604 37,496 70,928
19 64,132 100,000 100,000 100,000 21,389 40,594 80,341
20 69,439 100,000 100,000 108,963 22,084 43,811 90,802
25 100,227 100,000 100,000 186,337 23,994 62,110 162,032
30 139,522 100,000 100,000 294,031 22,180 85,977 280,029
35 189,673 100,000 124,505 500,517 13,328 118,576 476,683
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, or optional rider benefits are
elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
26
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT
UNDERWRITING CLASS OPTION A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE
CORRIDOR TEST PLANNED PREMIUM: $2,000* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefits Surrender Value
------------------------- ---------------------- -
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- -
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------ ------ ---
<S> <S> <S> <S> <S> <S> <S> <C>
1 2,100 100,000 100,000 100,000 607 676 746
2 4,305 100,000 100,000 100,000 1,568 1,753 1,946
3 6,620 100,000 100,000 100,000 2,161 2,512 2,896
4 9,051 100,000 100,000 100,000 2,865 3,434 4,081
5 11,604 100,000 100,000 100,000 3,516 4,354 5,347
6 14,284 100,000 100,000 100,000 4,505 5,677 7,118
7 17,098 100,000 100,000 100,000 5,429 7,008 9,024
8 20,053 100,000 100,000 100,000 6,283 8,342 11,075
9 23,156 100,000 100,000 100,000 7,059 9,674 13,281
10 26,414 100,000 100,000 100,000 7,751 10,997 15,655
11 29,834 100,000 100,000 100,000 8,414 12,368 18,280
12 33,426 100,000 100,000 100,000 8,983 13,724 21,117
13 37,197 100,000 100,000 100,000 9,455 15,063 24,191
14 41,157 100,000 100,000 100,000 9,827 16,380 27,532
15 45,315 100,000 100,000 100,000 10,091 17,671 31,172
16 49,681 100,000 100,000 100,000 10,237 18,926 35,146
17 54,265 100,000 100,000 100,000 10,251 20,133 39,495
18 59,078 100,000 100,000 100,000 10,117 21,278 44,265
19 64,132 100,000 100,000 100,000 9,813 22,342 49,514
20 69,439 100,000 100,000 100,000 9,318 23,308 55,310
25 100,227 100,000 100,000 110,519 3,191 26,010 96,104
30 139,522 ** 100,000 171,247 ** 21,767 163,092
35 189,673 ** ** 283,683 ** ** 270,174
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
27
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT
UNDERWRITING CLASS OPTION B DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE
CORRIDOR TEST PLANNED PREMIUM: $2,000* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- -
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- -
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------ ------ ---
<S> <S> <S> <S> <S> <S> <S> <C>
1 2,100 100,924 101,004 101,084 924 1,004 1,084
2 4,305 102,057 102,281 102,516 2,217 2,441 2,676
3 6,620 103,155 103,597 104,077 3,155 3,597 4,077
4 9,051 104,216 104,949 105,778 4,216 4,949 5,778
5 11,604 105,239 106,338 107,632 5,239 6,338 7,632
6 14,284 106,613 108,167 110,067 6,613 8,167 10,067
7 17,098 107,937 110,048 112,724 7,937 10,048 12,724
8 20,053 109,211 111,980 115,625 9,211 11,980 15,625
9 23,156 110,430 113,961 118,788 10,430 13,961 18,788
10 26,414 111,616 116,022 122,283 11,616 16,022 22,283
11 29,834 112,861 118,261 126,237 12,861 18,261 26,237
12 33,426 114,043 120,556 130,563 14,043 20,556 30,563
13 37,197 115,157 122,905 135,294 15,157 22,905 35,294
14 41,157 116,196 125,302 140,467 16,196 25,302 40,467
15 45,315 117,156 127,745 146,124 17,156 27,745 46,124
16 49,681 118,030 130,228 152,310 18,030 30,228 52,310
17 54,265 118,809 132,744 159,072 18,809 32,744 59,072
18 59,078 119,487 135,286 166,465 19,487 35,286 66,465
19 64,132 120,053 137,844 174,546 20,053 37,844 74,546
20 69,439 120,498 140,408 183,379 20,498 40,408 83,379
25 100,227 120,593 152,960 241,625 20,593 52,960 141,625
30 139,522 115,859 163,432 332,991 15,859 63,432 232,991
35 189,673 103,378 167,620 475,677 3,378 67,620 375,677
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, or optional rider benefits are
elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
28
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT
UNDERWRITING CLASS OPTION B DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE
CORRIDOR TEST PLANNED PREMIUM: $2,000* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- --
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- --
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------- ----- ----
<S> <S> <S> <S> <S> <S> <S> <C>
1 2,100 100,602 100,670 100,740 602 670 740
2 4,305 101,394 101,577 101,768 1,554 1,737 1,928
3 6,620 102,133 102,480 102,858 2,133 2,480 2,858
4 9,051 102,818 103,378 104,014 2,818 3,378 4,014
5 11,604 103,445 104,265 105,236 3,445 4,265 5,236
6 14,284 104,403 105,544 106,946 4,403 5,544 6,946
7 17,098 105,286 106,815 108,765 5,286 6,815 8,765
8 20,053 106,089 108,072 110,699 6,089 8,072 10,699
9 23,156 106,803 109,304 112,748 6,803 9,304 12,748
10 26,414 107,421 110,501 114,913 7,421 10,501 14,913
11 29,834 107,996 111,717 117,267 7,996 11,717 17,267
12 33,426 108,462 112,882 119,752 8,462 12,882 19,752
13 37,197 108,818 113,989 122,379 8,818 13,989 22,379
14 41,157 109,058 115,030 125,154 9,058 15,030 25,154
15 45,315 109,176 115,992 128,082 9,176 15,992 28,082
16 49,681 109,160 116,859 131,166 9,160 16,859 31,166
17 54,265 108,998 117,611 134,406 8,998 17,611 34,406
18 59,078 108,673 118,224 137,795 8,673 18,224 37,795
19 64,132 108,166 118,668 141,327 8,166 18,668 41,327
20 69,439 107,458 118,914 144,991 7,458 18,914 44,991
25 100,227 100,389 116,186 165,067 389 16,186 65,067
30 139,522 ** 102,778 186,009 ** 2,778 86,009
35 189,673 ** ** 200,295 ** ** 100,295
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
29
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT
UNDERWRITING CLASS OPTION A DEATH BENEFIT CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $2,000* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- --
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- --
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------- ----- ----
<S> <S> <S> <S> <S> <S> <S> <C>
1 2,100 100,000 100,000 100,000 926 1,006 1,086
2 4,305 100,000 100,000 100,000 2,224 2,448 2,683
3 6,620 100,000 100,000 100,000 3,168 3,611 4,094
4 9,051 100,000 100,000 100,000 4,239 4,976 5,810
5 11,604 100,000 100,000 100,000 5,274 6,382 7,686
6 14,284 100,000 100,000 100,000 6,666 8,235 10,154
7 17,098 100,000 100,000 100,000 8,014 10,150 12,859
8 20,053 100,000 100,000 100,000 9,318 12,127 15,826
9 23,156 100,000 100,000 100,000 10,575 14,167 19,081
10 26,414 100,000 100,000 100,000 11,807 16,305 22,700
11 29,834 100,000 100,000 100,000 13,111 18,642 26,822
12 33,426 100,000 100,000 100,000 14,363 21,063 31,368
13 37,197 100,000 100,000 100,000 15,562 23,568 36,390
14 41,157 100,000 100,000 100,000 16,702 26,162 41,942
15 45,315 100,000 100,000 100,000 17,781 28,847 48,092
16 49,681 100,000 100,000 100,314 18,794 31,628 54,909
17 54,265 100,000 100,000 111,201 19,737 34,510 62,409
18 59,078 100,000 100,000 122,814 20,604 37,496 70,636
19 64,132 100,000 100,000 135,222 21,389 40,594 79,655
20 69,439 100,000 100,000 148,492 22,084 43,811 89,539
25 100,227 100,000 100,000 230,654 23,994 62,110 155,009
30 139,522 100,000 115,032 349,000 22,180 84,920 257,641
35 189,673 100,000 139,931 522,847 13,328 111,410 416,280
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, or optional rider benefits are
elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
30
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT
UNDERWRITING CLASS OPTION A DEATH BENEFIT CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $2,000* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- -
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- -
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------ ------ ---
<S> <S> <S> <S> <S> <S> <S> <C>
1 2,100 100,000 100,000 100,000 607 676 746
2 4,305 100,000 100,000 100,000 1,568 1,753 1,946
3 6,620 100,000 100,000 100,000 2,161 2,512 2,896
4 9,051 100,000 100,000 100,000 2,865 3,434 4,081
5 11,604 100,000 100,000 100,000 3,516 4,354 5,347
6 14,284 100,000 100,000 100,000 4,505 5,677 7,118
7 17,098 100,000 100,000 100,000 5,429 7,008 9,024
8 20,053 100,000 100,000 100,000 6,283 8,342 11,075
9 23,156 100,000 100,000 100,000 7,059 9,674 13,281
10 26,414 100,000 100,000 100,000 7,751 10,997 15,655
11 29,834 100,000 100,000 100,000 8,414 12,368 18,280
12 33,426 100,000 100,000 100,000 8,983 13,724 21,117
13 37,197 100,000 100,000 100,000 9,455 15,063 24,191
14 41,157 100,000 100,000 100,000 9,827 16,380 27,532
15 45,315 100,000 100,000 100,000 10,091 17,671 31,172
16 49,681 100,000 100,000 100,000 10,237 18,926 35,146
17 54,265 100,000 100,000 100,000 10,251 20,133 39,495
18 59,078 100,000 100,000 100,000 10,117 21,278 44,265
19 64,132 100,000 100,000 100,000 9,813 22,342 49,514
20 69,439 100,000 100,000 100,000 9,318 23,308 55,310
25 100,227 100,000 100,000 138,229 3,191 26,010 92,896
30 139,522 ** 100,000 198,224 ** 21,767 146,334
35 189,673 ** ** 276,280 ** ** 219,968
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
31
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK.]
32
<PAGE>
MEDALLION EXECUTIVE VARIABLE LIFE III
REVISED ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables on pages 34 TO 39 replace the illustration in the John
Hancock Variable Life Insurance Company Medallion Executive Variable Life III
Product Prospectus.
The assumptions used for the revised illustration are generally the same as
those described in the Medallion Executive Variable Life III Product Prospectus.
With respect to fees and expenses deducted from Trust assets, however, the
amounts shown in all tables reflect (1) investment management fees equivalent to
an effective annual rate of .71%, and (2) an assumed average asset charge for
all other Trust-level operating expenses equivalent to an effective annual rate
of .11%. These rates are the arithmetic average for all funds that are
available as investment options. In other words, they are based on the
hypothetical assumption that policy account values are allocated equally among
the variable investment options.
Each table separately illustrates the operation of a policy for a specified
issue age, premium payment schedule and Total Sum Insured. 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% (i.e., before any fees or expenses deducted from Trust assets).
After deduction of the average Trust-level fees and expenses (as described
above) the corresponding net annual rates of return would be -.82%, 5.13% and
11.08%. Investment return reflects investment income and all realized and
unrealized capital gains and losses.
The actual rates associated with any policy will vary depending upon the
actual allocation of policy values among the investment options. The charge
shown above for all other Trust-level operating expenses reflects reimbursements
to certain funds as described in the footnotes to the Fund expense table. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed.
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 Planned 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 Total Sum Insured and annual Planned Premium amount
requested.
33
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE III (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN NONTOBACCO
UNDERWRITING CLASS OPTION A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE
CORRIDOR TEST PLANNED PREMIUM: $5,649 FOR SEVEN POLICY YEARS, GUIDELINE
PREMIUM LIMIT THEREAFTER* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------ ----------------------- -
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------ ----------------------- -
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------ ------ ------- ------ ---
<S> <S> <S> <S> <S> <S> <S> <C>
1 5,931 100,000 100,000 4,915 5,214 5,512 100,000
2 12,159 100,000 100,000 9,625 10,522 11,455 100,000
3 18,699 100,000 100,000 14,239 16,041 17,989 100,000
4 25,565 100,000 100,000 18,775 21,798 25,197 100,000
5 32,775 100,000 100,000 19,789 24,153 29,290 100,000
6 40,345 100,000 100,000 19,176 24,909 32,018 100,000
7 48,294 100,000 100,000 18,543 25,677 35,013 100,000
8 50,709 100,000 100,000 17,888 26,454 38,307 100,000
9 53,244 100,000 100,000 17,237 27,265 41,953 100,000
10 55,906 100,000 100,000 16,588 28,112 45,990 100,000
11 58,702 100,000 100,000 16,074 29,169 50,696 100,000
12 61,637 100,000 100,000 15,524 30,246 55,901 100,000
13 64,718 100,000 100,000 14,929 31,337 61,663 100,000
14 67,954 100,000 100,000 14,293 32,450 68,052 100,000
15 71,352 100,000 100,000 13,616 33,585 75,147 100,000
16 74,920 100,000 106,264 12,902 34,750 83,019 106,264
17 78,666 100,000 115,553 12,125 35,926 91,709 115,553
18 82,599 100,000 125,613 11,277 37,113 101,301 125,613
19 86,729 100,000 136,506 10,352 38,309 111,890 136,506
20 91,065 100,000 148,297 9,338 39,509 123,581 148,297
25 95,619 100,000 235,874 3,125 46,318 205,108 235,874
30 100,400 ** 357,747 ** 53,553 340,711 357,747
35 105,420 ** 595,833 ** 60,851 567,460 595,833
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each of the first seven Policy Years and that
premuims equal to the Guideline Premium Limit are paid at the start of each
Policy Year thereafter. The Death Benefit and Surrender Value will differ if
premiums are paid in different amounts or frequencies, if policy loans are
taken, or if Additional Sum Insured, Guaranteed Minimum Death benefit after
the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
34
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE III (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN NONTOBACCO
UNDERWRITING CLASS OPTION A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE
CORRIDOR TEST PLANNED PREMIUM: $5,649 FOR SEVEN POLICY YEARS, GUIDELINE
PREMIUM LIMIT THEREAFTER* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefits Surrender Value
------------------------- ---------------------- -
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- -
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------ ------ ---
<S> <S> <S> <S> <S> <S> <S> <C>
1 5,931 100,000 100,000 100,000 4,356 4,635 4,914
2 12,159 100,000 100,000 100,000 8,623 9,451 10,313
3 18,699 100,000 100,000 100,000 12,803 14,459 16,249
4 25,565 100,000 100,000 100,000 16,900 19,669 22,785
5 32,775 100,000 100,000 100,000 17,490 21,464 26,152
6 40,345 100,000 100,000 100,000 16,460 21,639 28,082
7 48,294 100,000 100,000 100,000 15,391 21,775 30,176
8 50,709 100,000 100,000 100,000 14,276 21,865 32,450
9 53,244 100,000 100,000 100,000 13,108 21,899 34,921
10 55,906 100,000 100,000 100,000 11,874 21,865 37,607
11 58,702 100,000 100,000 100,000 10,569 21,757 40,533
12 61,637 100,000 100,000 100,000 9,184 21,562 43,726
13 64,718 100,000 100,000 100,000 7,711 21,273 47,222
14 67,954 100,000 100,000 100,000 6,142 20,877 51,059
15 71,352 100,000 100,000 100,000 4,466 20,362 55,281
16 74,920 100,000 100,000 100,000 2,666 19,708 59,938
17 78,666 100,000 100,000 100,000 723 18,892 65,090
18 82,599 ** 100,000 100,000 ** 17,886 70,804
19 86,729 ** 100,000 100,000 ** 16,654 77,164
20 91,065 ** 100,000 101,116 ** 15,159 84,264
25 95,619 ** 100,000 151,046 ** 2,074 131,344
30 100,400 ** ** 215,959 ** ** 205,676
35 105,420 ** ** 340,938 ** ** 324,703
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each of the first seven Policy Years and that
premuims equal to the Guideline Premium Limit are paid at the start of each
Policy Year thereafter. The Death Benefit and Surrender Value will differ if
premiums are paid in different amounts or frequencies, if policy loans are
taken, or if Additional Sum Insured, Guaranteed Minimum Death benefit after
the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
35
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE III (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN NONTOBACCO
UNDERWRITING CLASS OPTION B DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE
CORRIDOR TEST PLANNED PREMIUM: $5,649 FOR SEVEN POLICY YEARS, GUIDELINE
PREMIUM LIMIT THEREAFTER* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- -
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- -
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------ ------ ---
<S> <S> <S> <S> <S> <S> <S> <C>
1 5,931 104,915 105,214 105,512 4,915 5,214 5,512
2 12,159 109,610 110,506 111,437 9,610 10,506 11,437
3 18,699 114,196 115,992 117,934 14,196 15,992 17,934
4 25,565 118,691 121,699 125,080 18,691 21,699 25,080
5 32,775 123,109 127,648 132,956 23,109 27,648 32,956
6 40,345 127,431 133,831 141,617 27,431 33,831 41,617
7 48,294 131,659 140,258 151,144 31,659 40,258 51,144
8 50,709 130,758 141,601 155,987 30,758 41,601 55,987
9 53,244 129,865 143,001 161,331 29,865 43,001 61,331
10 55,906 128,979 144,457 167,225 28,979 44,457 67,225
11 58,702 128,258 146,180 174,005 28,258 46,180 74,005
12 61,637 127,498 147,935 181,460 27,498 47,935 81,460
13 64,718 126,688 149,713 189,649 26,688 49,713 89,649
14 67,954 125,836 151,522 198,658 25,836 51,522 98,658
15 71,352 124,941 153,363 208,575 24,941 53,363 108,575
16 74,920 124,011 155,245 219,503 24,011 55,245 119,503
17 78,666 123,013 157,136 231,518 23,013 57,136 131,518
18 82,599 121,945 159,031 244,728 21,945 59,031 144,728
19 86,729 120,799 160,924 259,255 20,799 60,924 159,255
20 91,065 119,566 162,803 275,228 19,566 62,803 175,228
25 95,619 112,487 172,968 385,977 12,487 72,968 285,977
30 100,400 102,334 182,021 567,406 2,334 82,021 467,406
35 105,420 ** 187,153 864,596 ** 87,153 764,596
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each of the first seven Policy Years and that
premuims equal to the Guideline Premium Limit are paid at the start of each
Policy Year thereafter. The Death Benefit and Surrender Value will differ if
premiums are paid in different amounts or frequencies, if policy loans are
taken, or if Additional Sum Insured, Guaranteed Minimum Death benefit after
the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
36
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE III (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN NONTOBACCO
UNDERWRITING CLASS OPTION B DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE
CORRIDOR TEST PLANNED PREMIUM: $5,649 FOR SEVEN POLICY YEARS, GUIDELINE
PREMIUM LIMIT THEREAFTER* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- -
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- -
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------ ------ ---
<S> <S> <S> <S> <S> <S> <S> <C>
1 5,931 104,335 104,612 104,890 4,335 4,612 4,890
2 12,159 108,558 109,379 110,234 8,558 9,379 10,234
3 18,699 112,670 114,305 116,075 12,670 14,305 16,075
4 25,565 116,670 119,394 122,460 16,670 19,394 22,460
5 32,775 120,554 124,648 129,439 20,554 24,648 29,439
6 40,345 124,322 130,070 137,068 24,322 30,070 37,068
7 48,294 127,967 135,658 145,404 27,967 35,658 45,404
8 50,709 126,520 136,151 148,952 26,520 36,151 48,952
9 53,244 125,023 136,588 152,777 25,023 36,588 52,777
10 55,906 123,467 136,955 156,898 23,467 36,955 56,898
11 58,702 121,848 137,244 161,338 21,848 37,244 61,338
12 61,637 120,156 137,443 166,120 20,156 37,443 66,120
13 64,718 118,391 137,544 171,276 18,391 37,544 71,276
14 67,954 116,547 137,536 176,833 16,547 37,536 76,833
15 71,352 114,615 137,405 182,825 14,615 37,405 82,825
16 74,920 112,586 137,134 189,282 12,586 37,134 89,282
17 78,666 110,444 136,700 196,233 10,444 36,700 96,233
18 82,599 108,174 136,077 203,709 8,174 36,077 103,709
19 86,729 105,754 135,233 211,738 5,754 35,233 111,738
20 91,065 103,165 134,137 220,353 3,165 34,137 120,353
25 95,619 ** 123,804 273,755 ** 23,804 173,755
30 100,400 ** 101,058 348,556 ** 1,058 248,556
35 105,420 ** ** 449,885 ** ** 349,885
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each of the first seven Policy Years and that
premuims equal to the Guideline Premium Limit are paid at the start of each
Policy Year thereafter. The Death Benefit and Surrender Value will differ if
premiums are paid in different amounts or frequencies, if policy loans are
taken, or if Additional Sum Insured, Guaranteed Minimum Death benefit after
the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
37
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE III (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN NONTOBACCO
UNDERWRITING CLASS OPTION A DEATH BENEFIT CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $5,649 FOR SEVEN POLICY YEARS, GUIDELINE PREMIUM LIMIT
THEREAFTER* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- --
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- --
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------- ----- ----
<S> <S> <S> <S> <S> <S> <S> <C>
1 5,931 100,000 100,000 100,000 4,915 5,214 5,512
2 12,159 100,000 100,000 100,000 9,625 10,522 11,455
3 18,699 100,000 100,000 100,000 14,239 16,041 17,989
4 25,565 100,000 100,000 100,000 18,775 21,798 25,197
5 32,775 100,000 100,000 100,000 23,247 27,818 33,163
6 40,345 100,000 100,000 100,731 27,642 34,101 41,957
7 48,294 100,000 100,000 120,360 31,964 40,664 51,619
8 50,709 100,000 100,000 128,249 31,164 42,168 56,612
9 53,244 100,000 100,000 136,763 30,370 43,743 62,111
10 55,906 100,000 100,000 145,959 29,581 45,392 68,167
11 58,702 100,000 100,000 156,489 28,965 47,340 75,123
12 61,637 100,000 100,080 167,806 28,320 49,361 82,765
13 64,718 100,000 101,574 179,949 27,638 51,451 91,151
14 67,954 100,000 103,102 192,994 26,923 53,615 100,361
15 71,352 100,000 104,679 207,037 26,173 55,859 110,479
16 74,920 100,000 106,307 222,155 25,394 58,190 121,602
17 78,666 100,000 107,972 238,406 24,560 60,597 133,801
18 82,599 100,000 109,683 255,891 23,667 63,084 147,174
19 86,729 100,000 111,449 274,727 22,708 65,651 161,833
20 91,065 100,000 113,269 295,013 21,673 68,300 177,890
25 95,619 100,000 124,870 428,289 15,639 83,918 287,829
30 100,400 100,000 138,961 627,651 6,384 102,585 463,348
35 105,420 ** 156,538 931,089 ** 124,632 741,313
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each of the first seven Policy Years and that
premuims equal to the Guideline Premium Limit are paid at the start of each
Policy Year thereafter. The Death Benefit and Surrender Value will differ if
premiums are paid in different amounts or frequencies, if policy loans are
taken, or if Additional Sum Insured, Guaranteed Minimum Death benefit after
the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
38
<PAGE>
PLAN: MEDALLION EXECUTIVE VARIABLE LIFE III (FLEXIBLE PREMIUM VARIABLE LIFE)
$100,000 TOTAL SUM INSURED MALE, ISSUE AGE 45, FULLY UNDERWRITTEN NONTOBACCO
UNDERWRITING CLASS OPTION A DEATH BENEFIT CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $5,649 FOR SEVEN POLICY YEARS, GUIDELINE PREMIUM LIMIT
THEREAFTER* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------- ---------------------- -
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------- ---------------------- -
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------ ------------------ ------- ------- ------- ------ ------ ------ ---
<S> <S> <S> <S> <S> <S> <S> <C>
1 5,931 100,000 100,000 100,000 4,356 4,635 4,914
2 12,159 100,000 100,000 100,000 8,623 9,451 10,313
3 18,699 100,000 100,000 100,000 12,803 14,459 16,249
4 25,565 100,000 100,000 100,000 16,900 19,669 22,785
5 32,775 100,000 100,000 100,000 20,912 25,092 29,985
6 40,345 100,000 100,000 100,000 24,844 30,741 37,927
7 48,294 100,000 100,000 108,746 28,692 36,628 46,638
8 50,709 100,000 100,000 114,646 27,455 37,464 50,607
9 53,244 100,000 100,000 120,901 26,174 38,293 54,907
10 55,906 100,000 100,000 127,531 24,841 39,110 59,561
11 58,702 100,000 100,000 134,556 23,449 39,913 64,594
12 61,637 100,000 100,000 141,997 21,989 40,698 70,035
13 64,718 100,000 100,000 149,879 20,457 41,461 75,919
14 67,954 100,000 100,000 158,220 18,842 42,200 82,278
15 71,352 100,000 100,000 167,066 17,136 42,910 89,149
16 74,920 100,000 100,000 176,422 15,323 43,583 96,569
17 78,666 100,000 100,000 186,328 13,385 44,211 104,573
18 82,599 100,000 100,000 196,818 11,299 44,780 113,198
19 86,729 100,000 100,000 207,922 9,038 45,276 122,480
20 91,065 100,000 100,000 219,668 6,572 45,685 132,458
25 95,619 ** 100,000 289,482 ** 45,847 194,544
30 100,400 ** 100,000 381,983 ** 39,909 281,990
35 105,420 ** 100,000 504,349 ** 17,046 401,552
</TABLE>
---------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each of the first seven Policy Years and that
premuims equal to the Guideline Premium Limit are paid at the start of each
Policy Year thereafter. The Death Benefit and Surrender Value will differ if
premiums are paid in different amounts or frequencies, if policy loans are
taken, or if Additional Sum Insured, Guaranteed Minimum Death benefit after
the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
39
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK.]
40
<PAGE>
VARIABLE ESTATE PROTECTION
REVISED ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables on pages 42 TO 45 replace the illustration in the John
Hancock Life Insurance Company ("JOHN HANCOCK") Variable Estate Protection
Product Prospectus. The tables on pages 46 TO 49 replace the illustration in
the John Hancock Variable Life Insurance Company ("JHVLICO") Variable Estate
Protection Product Prospectus.
The assumptions used for the revised illustration are generally the same as
those described in the respective Variable Estate Protection Product Prospectus.
With respect to fees and expenses deducted from Trust assets, however, the
amounts shown in all tables reflect (1) investment management fees equivalent to
an effective annual rate of .71%, and (2) an assumed average asset charge for
all other Trust-level operating expenses equivalent to an effective annual rate
of .11%. These rates are the arithmetic average for all funds that are available
as investment options. In other words, they are based on the hypothetical
assumption that policy account values are allocated equally among the variable
investment options.
Tables are provided for each of the two death benefit options. 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% (i.e., before any fees or expenses deducted from Trust
assets). After deduction of the average Trust-level fees and expenses (as
described above) the corresponding net annual rates of return would be -.82%,
5.13% and 11.08%. Investment return reflects investment income and all realized
and unrealized capital gains and losses.
The actual rates associated with any policy will vary depending upon the
actual allocation of policy values among the investment options. The charge
shown above for all other Trust-level operating expenses reflects reimbursements
to certain funds as described in the footnotes to the Fund expense table. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed.
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 Planned 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 persons' issue ages, sex and underwriting risk
classification, and the Total Sum Insured and annual Planned Premium amount
requested.
41
<PAGE>
PLAN: JOHN HANCOCK VARIABLE ESTATE PROTECTION (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $1,000,000 SUM INSURED ($500,000 BASIC SUM INSURED; $500,000
ADDITIONAL SUM INSURED) MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS
FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION A DEATH BENEFIT NO
GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$15,969* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------- ---------------- -------------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------------- ---------------- -------------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ --------- --------- --------- ------- ------- -- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,768 1,000,000 1,000,000 1,000,000 11,200 11,904 12,609
2 34,374 1,000,000 1,000,000 1,000,000 23,392 25,562 27,821
3 52,861 1,000,000 1,000,000 1,000,000 35,408 39,831 44,613
4 72,271 1,000,000 1,000,000 1,000,000 47,487 54,981 63,401
5 92,653 1,000,000 1,000,000 1,000,000 59,387 70,805 84,137
6 114,053 1,000,000 1,000,000 1,000,000 72,165 88,429 108,166
7 136,524 1,000,000 1,000,000 1,000,000 84,750 106,832 134,684
8 160,118 1,000,000 1,000,000 1,000,000 97,138 126,044 163,944
9 184,891 1,000,000 1,000,000 1,000,000 109,329 146,096 196,227
10 210,904 1,000,000 1,000,000 1,000,000 121,315 167,017 231,841
11 238,217 1,000,000 1,000,000 1,000,000 133,853 189,637 271,960
12 266,895 1,000,000 1,000,000 1,000,000 146,158 213,221 316,208
13 297,008 1,000,000 1,000,000 1,000,000 158,219 237,799 365,006
14 328,626 1,000,000 1,000,000 1,000,000 170,017 263,398 418,818
15 361,825 1,000,000 1,000,000 1,000,000 181,533 290,045 478,163
16 396,684 1,000,000 1,000,000 1,044,599 192,738 317,766 543,590
17 433,286 1,000,000 1,000,000 1,145,037 203,600 346,584 615,656
18 471,718 1,000,000 1,000,000 1,251,940 214,076 376,522 694,995
19 512,072 1,000,000 1,000,000 1,365,979 224,119 407,601 782,295
20 554,444 1,000,000 1,000,000 1,487,825 233,667 439,841 878,299
25 800,279 1,000,000 1,000,000 2,249,218 274,084 622,750 1,523,123
30 1,114,034 1,000,000 1,115,312 3,366,197 288,814 842,289 2,542,168
35 1,514,473 1,000,000 1,338,337 5,034,083 252,846 1,096,756 4,125,388
</TABLE>
* The illustrations assume that Planned Premiums equal to $15,969.34 are paid at
the start of each Policy Year. The Death Benefit and Surrender Value will
differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Guaranteed Minimum Death Benefit after the tenth Policy
Year, or optional rider benefits are elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
42
<PAGE>
PLAN: JOHN HANCOCK VARIABLE ESTATE PROTECTION (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $1,000,000 SUM INSURED ($500,000 BASIC SUM INSURED; $500,000
ADDITIONAL SUM INSURED) MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS
FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION B DEATH BENEFIT NO
GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$15,969* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------- ---------------- -----------
Assuming Hypothetical Assuming Hypothetical
End of Planned Premiums Gross Annual Return of Gross Annual Return of
Policy Accumulated at ------------------------------- ---------------- -----------
Year 5% Annual Interest 0% 6% 12% 0% 6% 12%
------- ------------------ --------- --------- --------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,768 1,011,200 1,011,903 1,012,608 11,200 11,903 12,608
2 34,374 1,023,390 1,025,560 1,027,818 23,390 25,560 27,818
3 52,861 1,035,404 1,039,826 1,044,607 35,404 39,826 44,608
4 72,271 1,047,479 1,054,973 1,063,391 47,479 54,973 63,391
5 92,653 1,059,376 1,070,791 1,084,120 59,376 70,791 84,120
6 114,053 1,072,148 1,088,407 1,108,139 72,148 88,407 108,139
7 136,524 1,084,725 1,106,800 1,134,642 84,725 106,800 134,642
8 160,118 1,097,104 1,125,997 1,163,880 97,104 125,997 163,880
9 184,891 1,109,281 1,146,027 1,196,130 109,281 146,027 196,130
10 210,904 1,121,247 1,166,917 1,231,695 121,247 166,917 231,695
11 238,217 1,133,765 1,189,504 1,271,757 133,765 189,504 271,757
12 266,895 1,146,040 1,213,036 1,315,916 146,040 213,036 315,916
13 297,008 1,158,055 1,237,534 1,364,574 158,055 237,534 364,574
14 328,626 1,169,786 1,263,013 1,418,169 169,786 263,013 418,169
15 361,825 1,181,203 1,289,480 1,477,178 181,203 289,480 477,178
16 396,684 1,192,268 1,316,938 1,542,120 192,268 316,938 542,120
17 433,286 1,202,935 1,345,375 1,613,554 202,935 345,375 613,554
18 471,718 1,213,142 1,374,768 1,692,085 213,142 374,768 692,085
19 512,072 1,222,818 1,405,080 1,778,367 222,819 405,080 778,367
20 554,444 1,231,875 1,436,249 1,873,102 231,875 436,249 873,102
25 800,279 1,266,737 1,605,056 2,506,535 266,737 605,056 1,506,535
30 1,114,034 1,265,989 1,777,283 3,501,773 265,989 777,283 2,501,773
35 1,514,473 1,196,987 1,913,469 5,043,925 196,988 913,469 4,043,925
</TABLE>
* The illustrations assume that Planned Premiums equal to $15,969.34 are paid at
the start of each Policy Year. The Death Benefit and Surrender Value will
differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Guaranteed Minimum Death Benefit after the tenth Policy
Year, or optional rider benefits are elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
43
<PAGE>
PLAN: JOHN HANCOCK VARIABLE ESTATE PROTECTION (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $1,000,000 SUM INSURED ($500,000 BASIC SUM INSURED; $500,000
ADDITIONAL SUM INSURED) MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS
FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION A DEATH BENEFIT NO
GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$15,969* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------- ---------------- -----------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------------- ---------------- -----------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ --------- --------- --------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,768 1,000,000 1,000,000 1,000,000 10,901 11,594 12,287
2 34,374 1,000,000 1,000,000 1,000,000 22,718 24,846 27,053
3 52,861 1,000,000 1,000,000 1,000,000 34,245 38,562 43,214
4 72,271 1,000,000 1,000,000 1,000,000 45,703 52,986 61,144
5 92,653 1,000,000 1,000,000 1,000,000 56,834 67,882 80,746
6 114,053 1,000,000 1,000,000 1,000,000 68,671 84,342 103,310
7 136,524 1,000,000 1,000,000 1,000,000 80,120 101,308 127,969
8 160,118 1,000,000 1,000,000 1,000,000 91,155 118,771 154,907
9 184,891 1,000,000 1,000,000 1,000,000 101,747 136,720 184,335
10 210,904 1,000,000 1,000,000 1,000,000 111,860 155,140 216,477
11 238,217 1,000,000 1,000,000 1,000,000 121,960 174,547 252,154
12 266,895 1,000,000 1,000,000 1,000,000 131,474 194,393 291,127
13 297,008 1,000,000 1,000,000 1,000,000 140,331 214,633 333,707
14 328,626 1,000,000 1,000,000 1,000,000 148,441 235,207 380,234
15 361,825 1,000,000 1,000,000 1,000,000 155,697 256,044 431,104
16 396,684 1,000,000 1,000,000 1,000,000 161,984 277,072 486,780
17 433,286 1,000,000 1,000,000 1,018,580 167,116 298,160 547,664
18 471,718 1,000,000 1,000,000 1,105,725 171,044 319,305 613,826
19 512,072 1,000,000 1,000,000 1,197,018 173,563 340,382 685,532
20 554,444 1,000,000 1,000,000 1,292,741 174,480 361,291 763,136
25 800,279 1,000,000 1,000,000 1,849,337 144,641 458,581 1,252,332
30 1,114,034 1,000,000 1,000,000 2,567,693 2,132 521,335 1,939,134
35 1,514,473 ** 1,000,000 3,503,540 ** 494,468 2,871,120
</TABLE>
* The illustrations assume that Planned Premiums equal to $15,969.34 are paid
at the start of each Policy Year. The Death Benefit and Surrender Value will
differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Guaranteed Minimum Death Benefit after the tenth Policy
Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
44
<PAGE>
PLAN: JOHN HANCOCK VARIABLE ESTATE PROTECTION (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $1,000,000 SUM INSURED ($500,000 BASIC SUM INSURED; $500,000
ADDITIONAL SUM INSURED) MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS
FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION B DEATH BENEFIT NO
GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$15,969* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------- ---------------- -----------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at ------------------------------- ---------------- -----------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ --------- --------- --------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,768 1,010,900 1,011,594 1,012,287 10,900 11,594 12,287
2 34,374 1,022,715 1,024,843 1,027,050 22,715 24,843 27,050
3 52,861 1,034,235 1,038,551 1,043,202 34,235 38,551 43,202
4 72,271 1,045,678 1,052,957 1,061,110 45,678 52,957 61,110
5 92,653 1,056,783 1,067,819 1,080,670 56,783 67,819 80,670
6 114,053 1,068,576 1,084,222 1,103,160 68,576 84,222 103,160
7 136,524 1,079,958 1,101,096 1,127,693 79,958 101,096 127,693
8 160,118 1,090,893 1,118,417 1,154,431 90,893 118,417 154,431
9 184,891 1,101,345 1,136,158 1,183,550 101,345 136,158 183,550
10 210,904 1,111,265 1,154,278 1,215,228 111,265 154,278 215,228
11 238,217 1,121,105 1,173,262 1,250,222 121,105 173,263 250,222
12 266,895 1,130,274 1,192,525 1,288,210 130,274 192,525 288,210
13 297,008 1,138,681 1,211,970 1,329,383 138,681 211,970 329,383
14 328,626 1,146,208 1,231,469 1,373,923 146,208 231,469 373,923
15 361,825 1,152,719 1,250,869 1,422,009 152,719 250,869 422,009
16 396,684 1,158,064 1,269,994 1,473,820 158,064 269,994 473,820
17 433,286 1,162,012 1,288,572 1,529,465 162,012 288,572 529,465
18 471,718 1,164,496 1,306,488 1,589,234 164,496 306,488 589,234
19 512,072 1,165,268 1,323,431 1,653,251 165,268 323,431 653,251
20 554,444 1,164,099 1,339,095 1,721,671 164,099 339,095 721,671
25 800,279 1,118,067 1,382,982 2,132,594 118,067 382,982 1,132,594
30 1,114,034 ** 1,303,944 2,644,892 ** 303,944 1,644,892
35 1,514,473 ** ** 3,209,172 ** ** 2,209,172
</TABLE>
* The illustrations assume that Planned Premiums equal to $15,969.34 are paid
at the start of each Policy Year. The Death Benefit and Surrender Value will
differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Guaranteed Minimum Death Benefit after the tenth Policy
Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
45
<PAGE>
PLAN: JHVLICO VARIABLE ESTATE PROTECTION (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
A DEATH BENEFIT NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR
PLANNED PREMIUM: $8,156* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- -------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- -------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------- ------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 500,000 500,000 500,000 4,292 4,576 4,860
2 17,556 500,000 500,000 500,000 10,122 11,028 11,970
3 26,998 500,000 500,000 500,000 15,058 16,934 18,960
4 36,912 500,000 500,000 500,000 20,443 23,652 27,251
5 47,322 500,000 500,000 500,000 25,749 30,669 36,402
6 58,252 500,000 500,000 500,000 32,037 39,104 47,655
7 69,728 500,000 500,000 500,000 38,231 47,913 60,073
8 81,779 500,000 500,000 500,000 44,328 57,107 73,774
9 94,432 500,000 500,000 500,000 50,328 66,703 88,890
10 107,717 500,000 500,000 500,000 56,226 76,714 105,564
11 121,667 500,000 500,000 500,000 62,669 87,839 124,672
12 136,314 500,000 500,000 500,000 68,993 99,437 145,746
13 151,694 500,000 500,000 500,000 75,192 111,522 168,983
14 167,843 500,000 500,000 500,000 81,258 124,107 194,606
15 184,799 500,000 500,000 500,000 87,179 137,206 222,858
16 202,603 500,000 500,000 500,000 92,941 150,830 254,012
17 221,297 500,000 500,000 536,277 98,530 164,990 288,342
18 240,926 500,000 500,000 587,493 103,922 179,696 326,137
19 261,536 500,000 500,000 642,094 109,095 194,957 367,727
20 283,177 500,000 500,000 700,402 114,016 210,781 413,464
25 408,735 500,000 500,000 1,064,419 134,937 300,440 720,802
30 568,983 500,000 540,508 1,597,663 142,923 408,194 1,206,563
35 773,504 500,000 650,986 2,393,352 125,472 533,477 1,961,331
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit
after the tenth Policy Year, or optional rider benefits are elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
46
<PAGE>
PLAN: JHVLICO VARIABLE ESTATE PROTECTION (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
B DEATH BENEFIT NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR
PLANNED PREMIUM: $8,156* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- -------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- -------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------- ------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 504,292 504,576 504,860 4,292 4,576 4,860
2 17,556 509,714 510,619 511,561 10,122 11,027 11,969
3 26,998 515,057 516,932 518,957 15,057 16,932 18,957
4 36,912 520,440 523,649 527,247 20,440 23,649 27,247
5 47,322 525,744 530,663 536,395 25,744 30,663 36,395
6 58,252 532,030 539,095 547,643 32,030 39,095 47,643
7 69,728 538,220 547,898 560,054 38,220 47,898 60,054
8 81,779 544,313 557,086 573,745 44,313 57,086 73,745
9 94,432 550,306 566,673 588,846 50,306 66,673 88,847
10 107,717 556,195 576,670 605,498 56,195 76,670 105,498
11 121,667 562,629 587,779 624,581 62,629 87,779 124,581
12 136,314 568,939 599,352 645,614 68,939 99,352 145,614
13 151,694 575,116 611,400 668,787 75,116 111,400 168,787
14 167,843 581,149 623,929 694,309 81,149 123,929 194,309
15 184,799 587,023 636,943 722,406 87,023 136,943 222,406
16 202,603 592,718 650,442 753,322 92,718 150,442 253,322
17 221,297 598,212 664,421 787,323 98,212 164,421 287,323
18 240,926 603,473 678,867 824,694 103,473 178,867 324,694
19 261,536 608,467 693,761 865,744 108,467 193,761 365,744
20 283,177 613,149 709,073 910,803 113,149 209,073 410,803
25 408,735 631,340 791,944 1,211,876 131,340 291,944 711,876
30 568,983 631,672 876,151 1,683,852 131,672 376,151 1,183,852
35 773,504 597,828 941,871 2,412,890 97,828 441,872 1,912,891
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit
after the tenth Policy Year, or optional rider benefits are elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
47
<PAGE>
PLAN: JHVLICO VARIABLE ESTATE PROTECTION (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
A DEATH BENEFIT NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR
PLANNED PREMIUM: $8,156* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- ------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- ------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------ ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 500,000 500,000 500,000 4,131 4,409 4,688
2 17,556 500,000 500,000 500,000 9,764 10,647 11,563
3 26,998 500,000 500,000 500,000 14,447 16,268 18,227
4 36,912 500,000 500,000 500,000 19,515 22,615 26,081
5 47,322 500,000 500,000 500,000 24,430 29,161 34,659
6 58,252 500,000 500,000 500,000 30,243 37,008 45,172
7 69,728 500,000 500,000 500,000 35,863 45,091 56,654
8 81,779 500,000 500,000 500,000 41,277 53,403 69,187
9 94,432 500,000 500,000 500,000 46,469 61,938 82,867
10 107,717 500,000 500,000 500,000 51,422 70,687 97,794
11 121,667 500,000 500,000 500,000 56,595 80,147 114,619
12 136,314 500,000 500,000 500,000 61,470 89,811 132,982
13 151,694 500,000 500,000 500,000 66,013 99,656 153,022
14 167,843 500,000 500,000 500,000 70,178 109,650 174,895
15 184,799 500,000 500,000 500,000 73,910 119,755 198,778
16 202,603 500,000 500,000 500,000 77,153 129,930 224,879
17 221,297 500,000 500,000 500,000 79,813 140,108 253,425
18 240,926 500,000 500,000 512,772 81,864 150,283 284,658
19 261,536 500,000 500,000 556,201 83,204 160,387 318,536
20 283,177 500,000 500,000 601,713 83,736 170,364 355,206
25 408,735 500,000 500,000 866,439 69,251 215,884 586,734
30 568,983 ** 500,000 1,207,606 ** 240,694 911,990
35 773,504 ** 500,000 1,651,719 ** 210,051 1,353,569
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death
Benefit after the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
48
<PAGE>
PLAN: JHVLICO VARIABLE ESTATE PROTECTION (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
B DEATH BENEFIT NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR
PLANNED PREMIUM: $8,156* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- ----
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- ----
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------ ------- --- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 504,130 504,409 504,687 4,130 4,409 4,687
2 17,556 509,355 510,238 511,154 9,763 10,646 11,561
3 26,998 514,443 516,263 518,222 14,443 16,263 18,222
4 36,912 519,505 522,603 526,067 19,505 22,603 26,067
5 47,322 524,408 529,134 534,626 24,408 29,134 34,626
6 58,252 530,202 536,956 545,107 30,202 36,956 45,107
7 69,728 535,792 544,997 556,534 35,792 44,997 56,534
8 81,779 541,160 553,246 568,977 41,160 53,246 68,977
9 94,432 546,288 561,687 582,518 46,288 61,687 82,518
10 107,717 551,152 570,299 597,236 51,152 70,299 97,236
11 121,667 556,204 579,565 613,752 56,204 79,565 113,752
12 136,314 560,918 588,960 631,666 60,918 88,960 131,666
13 151,694 565,249 598,436 651,063 65,249 98,436 151,063
14 167,843 569,137 607,930 672,025 69,137 107,930 172,025
15 184,799 572,515 617,363 694,627 72,515 117,363 194,627
16 202,603 575,309 626,647 718,946 75,309 126,647 218,946
17 221,297 577,401 635,646 745,023 77,401 135,646 245,023
18 240,926 578,760 644,302 772,986 78,760 144,302 272,986
19 261,536 579,260 652,459 802,879 79,260 152,459 302,879
20 283,177 578,789 659,963 834,760 78,789 159,963 334,760
25 408,735 556,505 680,285 1,024,827 56,505 180,285 524,827
30 568,983 ** 638,775 1,256,092 ** 138,775 756,092
35 773,504 ** ** 1,498,010 ** ** 998,010
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death
Benefit after the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
49
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK.]
50
<PAGE>
VARIABLE ESTATE PROTECTION II
REVISED ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables on pages 52 TO 61 replace the illustration in the John
Hancock Variable Life Insurance Company Variable Estate Protection II Product
Prospectus.
The assumptions used for the revised illustration are generally the same as
those described in the Variable Estate Protection II Product Prospectus. With
respect to fees and expenses deducted from Trust assets, however, the amounts
shown in all tables reflect (1) investment management fees equivalent to an
effective annual rate of .71%, and (2) an assumed average asset charge for all
other Trust-level operating expenses equivalent to an effective annual rate of
.11%. These rates are the arithmetic average for all funds that are available
as investment options. In other words, they are based on the hypothetical
assumption that policy account values are allocated equally among the variable
investment options.
Tables are provided for each of the two death benefit options. 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% (i.e., before any fees or expenses deducted from Trust
assets). After deduction of the average Trust-level fees and expenses (as
described above) the corresponding net annual rates of return would be -.82%,
5.13% and 11.08%. Investment return reflects investment income and all realized
and unrealized capital gains and losses.
The actual rates associated with any policy will vary depending upon the
actual allocation of policy values among the investment options. The charge
shown above for all other Trust-level operating expenses reflects reimbursements
to certain funds as described in the footnotes to the Fund expense table. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed.
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 Planned 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 the issue age, sex and underwriting risk classification of each of
your proposed insured persons, and the Total Sum Insured and annual Planned
Premium amount requested.
51
<PAGE>
PLAN: VARIABLE ESTATE PROTECTION II (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$8,156* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- -------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- -------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------- ------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 500,000 500,000 500,000 4,283 4,566 4,850
2 17,556 500,000 500,000 500,000 10,095 10,998 11,936
3 26,998 500,000 500,000 500,000 15,004 16,873 18,887
4 36,912 500,000 500,000 500,000 20,352 23,546 27,121
5 47,322 500,000 500,000 500,000 25,612 30,504 36,192
6 58,252 500,000 500,000 500,000 31,847 38,864 47,337
7 69,728 500,000 500,000 500,000 37,976 47,579 59,614
8 81,779 500,000 500,000 500,000 43,999 56,660 73,136
9 94,432 500,000 500,000 500,000 49,915 66,121 88,026
10 107,717 500,000 500,000 500,000 55,721 75,974 104,422
11 121,667 500,000 500,000 500,000 62,061 86,914 123,189
12 136,314 500,000 500,000 500,000 68,274 98,299 143,849
13 151,694 500,000 500,000 500,000 74,352 110,141 166,589
14 167,843 500,000 500,000 500,000 80,287 122,452 191,616
15 184,799 500,000 500,000 500,000 86,069 135,241 219,160
16 202,603 500,000 500,000 500,000 92,148 149,267 250,736
17 221,297 500,000 500,000 500,000 98,068 163,896 285,673
18 240,926 500,000 500,000 500,000 103,807 179,142 324,340
19 261,536 500,000 500,000 500,000 109,339 195,020 367,157
20 283,177 500,000 500,000 500,000 114,633 211,545 414,601
25 408,735 500,000 500,000 778,830 137,609 306,250 741,743
30 568,983 500,000 500,000 1,349,037 147,952 423,789 1,284,797
35 773,504 500,000 604,624 2,288,241 133,255 575,832 2,179,277
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit
after the tenth Policy Year, or optional rider benefits are elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
52
<PAGE>
PLAN: VARIABLE ESTATE PROTECTION II (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
B DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$8,156* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- -------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- -------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------- ------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 504,283 504,566 504,850 4,283 4,566 4,850
2 17,556 509,686 510,590 511,527 10,094 10,997 11,935
3 26,998 515,002 516,871 518,885 15,002 16,871 18,885
4 36,912 520,349 523,542 527,117 20,349 23,542 27,117
5 47,322 525,608 530,498 536,185 25,608 30,498 36,185
6 58,252 531,840 538,855 547,325 31,840 38,855 47,325
7 69,728 537,966 547,565 559,596 37,966 47,565 59,596
8 81,779 543,984 556,639 573,107 43,984 56,639 73,107
9 94,432 549,893 566,090 587,983 49,893 66,090 87,983
10 107,717 555,690 575,929 604,357 55,690 75,929 104,357
11 121,667 562,022 586,854 623,100 62,022 86,854 123,100
12 136,314 568,220 598,216 643,719 68,220 98,216 143,719
13 151,694 574,277 610,021 666,395 74,277 110,021 166,395
14 167,843 580,180 622,276 691,324 80,180 122,276 191,324
15 184,799 585,915 634,982 718,716 85,915 134,982 218,716
16 202,603 591,927 648,884 750,056 91,927 148,884 250,056
17 221,297 597,752 663,332 784,636 97,752 163,332 284,636
18 240,926 603,359 678,317 822,770 103,359 178,317 322,770
19 261,536 608,711 693,826 864,798 108,711 193,826 364,798
20 283,177 613,762 709,832 911,087 113,762 209,832 411,087
25 408,735 633,937 797,588 1,223,749 133,937 297,588 723,749
30 568,983 636,301 889,538 1,722,895 136,301 389,538 1,222,895
35 773,504 604,121 966,478 2,509,427 104,121 466,478 2,009,427
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit
after the tenth Policy Year, or optional rider benefits are elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
53
<PAGE>
PLAN: VARIABLE ESTATE PROTECTION II (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$8,156* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- ------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- ------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------ ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 500,000 500,000 500,000 4,130 4,408 4,687
2 17,556 500,000 500,000 500,000 9,762 10,644 11,561
3 26,998 500,000 500,000 500,000 14,444 16,263 18,224
4 36,912 500,000 500,000 500,000 19,511 22,608 26,077
5 47,322 500,000 500,000 500,000 24,424 29,151 34,654
6 58,252 500,000 500,000 500,000 30,236 36,995 45,167
7 69,728 500,000 500,000 500,000 35,855 45,074 56,647
8 81,779 500,000 500,000 500,000 41,267 53,381 69,179
9 94,432 500,000 500,000 500,000 46,457 61,911 82,857
10 107,717 500,000 500,000 500,000 51,409 70,654 97,783
11 121,667 500,000 500,000 500,000 56,579 80,107 114,606
12 136,314 500,000 500,000 500,000 61,451 89,762 132,967
13 151,694 500,000 500,000 500,000 65,992 99,598 153,005
14 167,843 500,000 500,000 500,000 70,153 109,581 174,875
15 184,799 500,000 500,000 500,000 73,882 119,674 198,754
16 202,603 500,000 500,000 500,000 77,121 129,835 224,851
17 221,297 500,000 500,000 500,000 79,775 139,997 253,392
18 240,926 500,000 500,000 500,000 81,822 150,154 284,703
19 261,536 500,000 500,000 500,000 83,156 160,237 319,124
20 283,177 500,000 500,000 500,000 83,680 170,191 357,087
25 408,735 500,000 500,000 648,337 69,143 215,534 617,464
30 568,983 ** 500,000 1,086,910 ** 239,964 1,035,152
35 773,504 ** 500,000 1,769,417 ** 208,337 1,685,159
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death
Benefit after the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
54
<PAGE>
PLAN: VARIABLE ESTATE PROTECTION II (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
B DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$8,156* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- ----
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- ----
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------ ------- --- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 504,129 504,408 504,686 4,129 4,408 4,686
2 17,556 509,353 510,235 511,152 9,761 10,643 11,560
3 26,998 514,440 516,258 518,219 14,440 16,258 18,219
4 36,912 519,500 522,596 526,063 19,500 22,596 26,063
5 47,322 524,402 529,124 534,621 24,402 29,124 34,621
6 58,252 530,195 536,943 545,101 30,195 36,943 45,101
7 69,728 535,783 544,981 556,527 35,783 44,981 56,527
8 81,779 541,150 553,224 568,969 41,150 53,224 68,969
9 94,432 546,276 561,660 582,509 46,276 61,660 82,509
10 107,717 551,139 570,267 597,225 51,139 70,267 97,225
11 121,667 556,188 579,525 613,739 56,188 79,525 113,739
12 136,314 560,899 588,912 631,651 60,899 88,912 131,651
13 151,694 565,227 598,379 651,046 65,227 98,379 151,046
14 167,843 569,113 607,862 672,005 69,113 107,862 172,005
15 184,799 572,487 617,283 694,603 72,487 117,283 194,603
16 202,603 575,277 626,554 718,919 75,277 126,554 218,919
17 221,297 577,365 635,539 744,990 77,365 135,539 244,990
18 240,926 578,719 644,178 772,947 78,719 144,178 272,947
19 261,536 579,214 652,316 802,833 79,214 152,316 302,833
20 283,177 578,736 659,800 834,706 78,736 159,800 334,706
25 408,735 556,409 679,984 1,024,700 56,409 179,984 524,700
30 568,983 ** 638,257 1,255,794 ** 138,257 755,794
35 773,504 ** ** 1,497,344 ** ** 997,344
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death
Benefit after the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
55
<PAGE>
PLAN: VARIABLE ESTATE PROTECTION II (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
A DEATH BENEFIT CASH VALUE ACCUMULATION TEST
NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$8,156* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- -------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- -------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------- ------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 500,000 500,000 500,000 4,283 4,566 4,850
2 17,556 500,000 500,000 500,000 10,095 10,998 11,936
3 26,998 500,000 500,000 500,000 15,004 16,873 18,887
4 36,912 500,000 500,000 500,000 20,352 23,546 27,121
5 47,322 500,000 500,000 500,000 25,612 30,504 36,192
6 58,252 500,000 500,000 500,000 31,847 38,864 47,337
7 69,728 500,000 500,000 500,000 37,976 47,579 59,614
8 81,779 500,000 500,000 500,000 43,999 56,660 73,136
9 94,432 500,000 500,000 500,000 49,915 66,121 88,026
10 107,717 500,000 500,000 500,000 55,721 75,974 104,422
11 121,667 500,000 500,000 500,000 62,061 86,914 123,189
12 136,314 500,000 500,000 500,000 68,274 98,299 143,849
13 151,694 500,000 500,000 500,000 74,352 110,141 166,589
14 167,843 500,000 500,000 500,000 80,287 122,452 191,616
15 184,799 500,000 500,000 500,000 86,069 135,241 219,160
16 202,603 500,000 500,000 500,000 92,148 149,267 250,736
17 221,297 500,000 500,000 531,271 98,068 163,896 285,650
18 240,926 500,000 500,000 584,030 103,807 179,142 324,215
19 261,536 500,000 500,000 640,460 109,339 195,020 366,791
20 283,177 500,000 500,000 700,916 114,633 211,545 413,767
25 408,735 500,000 500,000 1,082,040 137,609 306,250 732,734
30 568,983 500,000 558,933 1,649,014 147,952 422,109 1,245,344
35 773,504 500,000 682,220 2,508,108 133,255 559,074 2,055,373
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit
after the tenth Policy Year, or optional rider benefits are elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
56
<PAGE>
PLAN: VARIABLE ESTATE PROTECTION II (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
B DEATH BENEFIT CASH VALUE ACCUMULATION TEST
NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$8,156* USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- -------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- -------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------- ------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 504,283 504,566 504,850 4,283 4,566 4,850
2 17,556 509,686 510,590 511,527 10,094 10,997 11,935
3 26,998 515,002 516,871 518,885 15,002 16,871 18,885
4 36,912 520,349 523,542 527,117 20,349 23,542 27,117
5 47,322 525,608 530,498 536,185 25,608 30,498 36,185
6 58,252 531,840 538,855 547,325 31,840 38,855 47,325
7 69,728 537,966 547,565 559,596 37,966 47,565 59,596
8 81,779 543,984 556,639 573,107 43,984 56,639 73,107
9 94,432 549,893 566,090 587,983 49,893 66,090 87,983
10 107,717 555,690 575,929 604,357 55,690 75,929 104,357
11 121,667 562,022 586,854 623,100 62,022 86,854 123,100
12 136,314 568,220 598,216 643,719 68,220 98,216 143,719
13 151,694 574,277 610,021 666,395 74,277 110,021 166,395
14 167,843 580,180 622,276 691,324 80,180 122,276 191,324
15 184,799 585,915 634,982 718,716 85,915 134,982 218,716
16 202,603 591,927 648,884 750,056 91,927 148,884 250,056
17 221,297 597,752 663,332 784,636 97,752 163,332 284,636
18 240,926 603,359 678,317 822,770 103,359 178,317 322,770
19 261,536 608,711 693,826 864,798 108,711 193,826 364,798
20 283,177 613,762 709,832 911,087 113,762 209,832 411,087
25 408,735 633,937 797,588 1,223,749 133,937 297,588 723,749
30 568,983 636,301 889,538 1,722,895 136,301 389,538 1,222,895
35 773,504 604,121 966,478 2,509,427 104,121 466,478 2,009,427
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium are
paid at the start of each Policy Year. The Death Benefit and Surrender Value
will differ if premiums are paid in different amounts or frequencies, if policy
loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit
after the tenth Policy Year, or optional rider benefits are elected.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
57
<PAGE>
PLAN: VARIABLE ESTATE PROTECTION II (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
A DEATH BENEFIT CASH VALUE ACCUMULATION TEST
NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$8,156* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- ------
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- ------
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------ ------- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 500,000 500,000 500,000 4,130 4,408 4,687
2 17,556 500,000 500,000 500,000 9,762 10,644 11,561
3 26,998 500,000 500,000 500,000 14,444 16,263 18,224
4 36,912 500,000 500,000 500,000 19,511 22,608 26,077
5 47,322 500,000 500,000 500,000 24,424 29,151 34,654
6 58,252 500,000 500,000 500,000 30,236 36,995 45,167
7 69,728 500,000 500,000 500,000 35,855 45,074 56,647
8 81,779 500,000 500,000 500,000 41,267 53,381 69,179
9 94,432 500,000 500,000 500,000 46,457 61,911 82,857
10 107,717 500,000 500,000 500,000 51,409 70,654 97,783
11 121,667 500,000 500,000 500,000 56,579 80,107 114,606
12 136,314 500,000 500,000 500,000 61,451 89,762 132,967
13 151,694 500,000 500,000 500,000 65,992 99,598 153,005
14 167,843 500,000 500,000 500,000 70,153 109,581 174,875
15 184,799 500,000 500,000 500,000 73,882 119,674 198,754
16 202,603 500,000 500,000 500,000 77,121 129,835 224,851
17 221,297 500,000 500,000 500,000 79,775 139,997 253,392
18 240,926 500,000 500,000 512,706 81,822 150,154 284,621
19 261,536 500,000 500,000 556,132 83,156 160,237 318,497
20 283,177 500,000 500,000 601,642 83,680 170,191 355,164
25 408,735 500,000 500,000 866,359 69,143 215,534 586,680
30 568,983 ** 500,000 1,207,522 ** 239,964 911,926
35 773,504 ** 500,000 1,651,637 ** 208,337 1,353,503
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death
Benefit after the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
58
<PAGE>
PLAN: VARIABLE ESTATE PROTECTION II (FLEXIBLE PREMIUM VARIABLE LIFE
SURVIVORSHIP) $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED
UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION
B DEATH BENEFIT CASH VALUE ACCUMULATION TEST
NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM:
$8,156* USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
--------------------------- -------------------- ----
Assuming hypothetical Assuming hypothetical
End of Planned Premiums gross annual return of gross annual return of
Policy accumulated at --------------------------- -------------------- ----
Year 5% annual interest 0% 6% 12% 0% 6% 12%
------- ------------------ ------- ------- --------- ------ ------- --- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1 8,564 504,129 504,408 504,686 4,129 4,408 4,686
2 17,556 509,353 510,235 511,152 9,761 10,643 11,560
3 26,998 514,440 516,258 518,219 14,440 16,258 18,219
4 36,912 519,500 522,596 526,063 19,500 22,596 26,063
5 47,322 524,402 529,124 534,621 24,402 29,124 34,621
6 58,252 530,195 536,943 545,101 30,195 36,943 45,101
7 69,728 535,783 544,981 556,527 35,783 44,981 56,527
8 81,779 541,150 553,224 568,969 41,150 53,224 68,969
9 94,432 546,276 561,660 582,509 46,276 61,660 82,509
10 107,717 551,139 570,267 597,225 51,139 70,267 97,225
11 121,667 556,188 579,525 613,739 56,188 79,525 113,739
12 136,314 560,899 588,912 631,651 60,899 88,912 131,651
13 151,694 565,227 598,379 651,046 65,227 98,379 151,046
14 167,843 569,113 607,862 672,005 69,113 107,862 172,005
15 184,799 572,487 617,283 694,603 72,487 117,283 194,603
16 202,603 575,277 626,554 718,919 75,277 126,554 218,919
17 221,297 577,365 635,539 744,990 77,365 135,539 244,990
18 240,926 578,719 644,178 772,947 78,719 144,178 272,947
19 261,536 579,214 652,316 802,833 79,214 152,316 302,833
20 283,177 578,736 659,800 834,706 78,736 159,800 334,706
25 408,735 556,409 679,984 1,024,700 56,409 179,984 524,700
30 568,983 ** 638,257 1,255,794 ** 138,257 755,794
35 773,504 ** ** 1,497,344 ** ** 997,344
</TABLE>
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies, if
policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death
Benefit after the tenth Policy Year, or optional rider benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
59
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK.]
60
<PAGE>
FLEX-V2
REVISED ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables on pages 62 TO 67 replace the illustration in the John
Hancock Life Insurance Company ("JOHN HANCOCK") Flex V-2 Product Prospectus.
The tables on pages 68 TO 73 replace the illustration in the John Hancock
Variable Life Insurance Company ("JHVLICO") Flex V-2 Product Prospectus.
The assumptions used for the revised illustrations are generally the same as
those described in the respective Flex V-1 Product Prospectus. With respect to
fees and expenses deducted from Trust assets, however, the amounts shown in all
tables reflect (1) investment management fees equivalent to an effective annual
rate of .66%, and (2) an assumed average asset charge for all other Trust- level
operating expenses equivalent to an effective annual rate of .11%. These rates
are the arithmetic average for all funds that are available as investment
options. In other words, they are based on the hypothetical assumption that
policy account values are allocated equally among the variable investment
options.
Tables are provided for each of the three death benefit options. 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% (i.e., before any fees or expenses deducted from Trust
assets). After deduction of the average Trust-level fees and expenses (as
described above) the corresponding net annual rates of return would be -.77%,
5.18% and 11.14%. Investment return reflects investment income and all realized
and unrealized capital gains and losses.
The actual rates associated with any policy will vary depending upon the
actual allocation of policy values among the investment options. The charge
shown above for all other Trust-level operating expenses reflects reimbursements
to certain funds as described in the footnotes to the Fund expense table. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed.
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.
61
<PAGE>
JOHN HANCOCK FLEX V-2
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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,066 303 397 496
3 2,979 100,000 100,000 100,000 1,406 1,596 1,803 701 891 1,098
4 4,073 100,000 100,000 100,000 1,920 2,243 2,606 1,080 1,403 1,766
5 5,222 100,000 100,000 100,000 2,415 2,906 3,481 1,740 2,231 2,806
6 6,428 100,000 100,000 100,000 2,891 3,587 4,434 2,081 2,777 3,624
7 7,694 100,000 100,000 100,000 3,343 4,282 5,472 2,533 3,472 4,662
8 9,024 100,000 100,000 100,000 3,774 4,994 6,604 3,054 4,274 5,884
9 10,420 100,000 100,000 100,000 4,179 5,719 7,837 3,549 5,089 7,207
10 11,886 100,000 100,000 100,000 4,571 6,473 9,202 4,031 5,933 8,662
11 13,425 100,000 100,000 100,000 4,982 7,292 10,747 4,532 6,842 10,297
12 15,042 100,000 100,000 100,000 5,369 8,131 12,441 5,054 7,816 12,126
13 16,739 100,000 100,000 100,000 5,729 8,991 14,303 5,549 8,811 14,123
14 18,521 100,000 100,000 100,000 6,063 9,872 16,350 6,063 9,872 16,350
15 20,392 100,000 100,000 100,000 6,367 10,773 18,602 6,367 10,773 18,602
16 22,356 100,000 100,000 100,000 6,641 11,694 21,083 6,641 11,694 21,083
17 24,419 100,000 100,000 100,000 6,875 12,628 23,811 6,875 12,628 23,811
18 26,585 100,000 100,000 100,000 7,064 13,569 26,813 7,064 13,569 26,813
19 28,859 100,000 100,000 100,000 7,201 14,515 30,119 7,201 14,515 30,119
20 31,247 100,000 100,000 100,000 7,281 15,460 33,762 7,281 15,460 33,762
25 45,102 100,000 100,000 100,000 6,602 20,007 58,691 6,602 20,007 58,691
30 62,785 100,000 100,000 121,542 3,204 23,538 101,285 3,204 23,538 101,285
35 85,353 100,000 100,000 197,338 0 23,973 171,598 0 23,973 171,598
40 142,504 100,000 100,000 301,256 0 35,006 286,910 0 35,006 286,910
45 215,445 100,000 100,000 502,783 0 29,472 478,841 0 29,472 478,841
</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 $5,751 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%, $5,751 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.
62
<PAGE>
JOHN HANCOCK FLEX V-2
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 1,937 100,000 100,000 100,000 778 866 959 8 96 189
3 2,979 100,000 100,000 100,000 1,264 1,441 1,634 359 536 729
4 4,073 100,000 100,000 100,000 1,733 2,031 2,368 693 991 1,328
5 5,222 100,000 100,000 100,000 2,182 2,635 3,167 1,007 1,460 1,992
6 6,428 100,000 100,000 100,000 2,613 3,254 4,036 1,303 1,944 2,726
7 7,694 100,000 100,000 100,000 3,021 3,884 4,980 1,811 2,674 3,770
8 9,024 100,000 100,000 100,000 3,407 4,527 6,009 2,287 3,407 4,889
9 10,420 100,000 100,000 100,000 3,769 5,181 7,126 2,839 4,251 6,196
10 11,886 100,000 100,000 100,000 4,116 5,858 8,362 3,576 5,318 7,822
11 13,425 100,000 100,000 100,000 4,437 6,547 9,710 3,987 6,097 9,260
12 15,042 100,000 100,000 100,000 4,729 7,245 11,184 4,414 6,930 10,869
13 16,739 100,000 100,000 100,000 4,993 7,953 12,795 4,813 7,773 12,615
14 18,521 100,000 100,000 100,000 5,226 8,670 14,560 5,226 8,670 14,560
15 20,392 100,000 100,000 100,000 5,425 9,392 16,493 5,425 9,392 16,493
16 22,356 100,000 100,000 100,000 5,589 10,120 18,613 5,589 10,120 18,613
17 24,419 100,000 100,000 100,000 5,711 10,848 20,937 5,711 10,848 20,937
18 26,585 100,000 100,000 100,000 5,785 11,568 23,486 5,785 11,568 23,486
19 28,859 100,000 100,000 100,000 5,807 12,279 26,284 5,807 12,279 26,284
20 31,247 100,000 100,000 100,000 5,766 12,971 29,356 5,766 12,971 29,356
25 45,102 100,000 100,000 100,000 4,407 15,918 50,141 4,407 15,918 50,141
30 62,785 100,000 100,000 102,564 88 16,986 85,470 88 16,986 85,470
35 85,353 100,000 100,000 166,579 0 13,263 144,852 0 13,263 144,852
40 149,286 100,000 100,000 253,979 0 18,578 241,885 0 18,578 241,885
45 230,884 100,000 100,000 423,713 0 0 403,536 0 0 403,536
</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 $7,184 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%, $7,184 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.
63
<PAGE>
JOHN HANCOCK FLEX V-2
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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,066 303 397 496
3 2,979 100,000 100,000 100,000 1,406 1,596 1,803 701 891 1,098
4 4,073 100,000 100,000 100,000 1,920 2,243 2,606 1,080 1,403 1,766
5 5,222 100,000 100,000 100,000 2,415 2,906 3,481 1,740 2,231 2,806
6 6,428 100,000 100,000 100,000 2,891 3,587 4,434 2,081 2,777 3,624
7 7,694 100,000 100,000 100,000 3,343 4,282 5,472 2,533 3,472 4,662
8 9,024 100,000 100,000 100,000 3,774 4,994 6,604 3,054 4,274 5,884
9 10,420 100,000 100,000 100,000 4,179 5,719 7,837 3,549 5,089 7,207
10 11,886 100,000 100,000 100,000 4,571 6,473 9,202 4,031 5,933 8,662
11 13,425 100,000 100,000 100,000 4,982 7,292 10,747 4,532 6,842 10,297
12 15,042 100,000 100,000 100,000 5,369 8,131 12,441 5,054 7,816 12,126
13 16,739 100,000 100,000 100,000 5,729 8,991 14,303 5,549 8,811 14,123
14 18,521 100,000 100,000 100,000 6,063 9,872 16,350 6,063 9,872 16,350
15 20,392 100,000 100,000 100,000 6,367 10,773 18,602 6,367 10,773 18,602
16 22,356 100,000 100,000 100,216 6,641 11,694 21,083 6,641 11,694 21,083
17 24,419 100,000 100,000 101,325 6,875 12,628 23,809 6,875 12,628 23,809
18 26,585 100,000 100,000 102,665 7,064 13,569 26,802 7,064 13,569 26,802
19 28,859 100,000 100,000 104,266 7,201 14,515 30,087 7,201 14,515 30,087
20 31,247 100,000 100,000 106,159 7,281 15,460 33,693 7,281 15,460 33,693
25 45,102 100,000 100,000 121,336 6,602 20,007 57,835 6,602 20,007 57,835
30 62,785 100,000 100,000 150,904 3,204 23,538 96,853 3,204 23,538 96,853
35 85,353 100,000 100,000 204,781 0 23,973 160,210 0 23,973 160,210
40 142,504 100,000 100,746 293,184 0 34,517 266,241 0 34,517 266,241
45 215,445 100,000 100,000 464,388 0 28,568 442,274 0 28,568 442,274
</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 $5,751 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%, $5,751 at 6% and $0 at 12%, subject to any maximum 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.
64
<PAGE>
JOHN HANCOCK FLEX V-2
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 1,937 100,000 100,000 100,000 778 866 959 8 96 189
3 2,979 100,000 100,000 100,000 1,264 1,441 1,634 359 536 729
4 4,073 100,000 100,000 100,000 1,733 2,031 2,368 693 991 1,328
5 5,222 100,000 100,000 100,000 2,182 2,635 3,167 1,007 1,460 1,992
6 6,428 100,000 100,000 100,000 2,613 3,254 4,036 1,303 1,944 2,726
7 7,694 100,000 100,000 100,000 3,021 3,884 4,980 1,811 2,674 3,770
8 9,024 100,000 100,000 100,000 3,407 4,527 6,009 2,287 3,407 4,889
9 10,420 100,000 100,000 100,000 3,769 5,181 7,126 2,839 4,251 6,196
10 11,886 100,000 100,000 100,000 4,116 5,858 8,362 3,576 5,318 7,822
11 13,425 100,000 100,000 100,000 4,437 6,547 9,710 3,987 6,097 9,260
12 15,042 100,000 100,000 100,000 4,729 7,245 11,184 4,414 6,930 10,869
13 16,739 100,000 100,000 100,000 4,993 7,953 12,795 4,813 7,773 12,615
14 18,521 100,000 100,000 100,000 5,226 8,670 14,560 5,226 8,670 14,560
15 20,392 100,000 100,000 100,000 5,425 9,392 16,493 5,425 9,392 16,493
16 22,356 100,000 100,000 100,000 5,589 10,120 18,613 5,589 10,120 18,613
17 24,419 100,000 100,000 100,000 5,711 10,848 20,937 5,711 10,848 20,937
18 26,585 100,000 100,000 100,000 5,785 11,568 23,486 5,785 11,568 23,486
19 28,859 100,000 100,000 100,463 5,807 12,279 26,284 5,807 12,279 26,284
20 31,247 100,000 100,000 101,818 5,766 12,971 29,351 5,766 12,971 29,351
25 45,102 100,000 100,000 113,242 4,407 15,918 49,741 4,407 15,918 49,741
30 62,785 100,000 100,000 136,411 88 16,986 82,360 88 16,986 82,360
35 85,353 100,000 100,000 179,413 0 13,263 134,842 0 13,263 134,842
40 149,286 100,000 100,000 249,271 0 18,334 222,328 0 18,334 222,328
45 230,884 100,000 100,000 388,038 0 0 367,240 0 0 367,240
</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 $7,184 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%, $7,184 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.
65
<PAGE>
JOHN HANCOCK FLEX V-2
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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,066 303 397 496
3 2,979 100,000 100,000 100,000 1,406 1,596 1,803 701 891 1,098
4 4,073 100,000 100,000 100,000 1,920 2,243 2,606 1,080 1,403 1,766
5 5,222 100,000 100,000 100,000 2,415 2,906 3,481 1,740 2,231 2,806
6 6,428 100,000 100,000 100,000 2,891 3,587 4,434 2,081 2,777 3,624
7 7,694 100,000 100,000 100,000 3,343 4,282 5,472 2,533 3,472 4,662
8 9,024 100,000 100,000 100,000 3,774 4,994 6,604 3,054 4,274 5,884
9 10,420 100,000 100,000 100,000 4,179 5,719 7,837 3,549 5,089 7,207
10 11,886 100,000 100,000 100,000 4,571 6,473 9,202 4,031 5,933 8,662
11 13,425 100,000 100,000 100,000 4,982 7,292 10,747 4,532 6,842 10,297
12 15,042 100,000 100,000 100,000 5,369 8,131 12,441 5,054 7,816 12,126
13 16,739 100,000 100,000 100,000 5,729 8,991 14,303 5,549 8,811 14,123
14 18,521 100,000 100,000 100,000 6,063 9,872 16,350 6,063 9,872 16,350
15 20,392 100,000 100,000 100,000 6,367 10,773 18,602 6,367 10,773 18,602
16 22,356 100,000 100,000 100,000 6,641 11,694 21,083 6,641 11,694 21,083
17 24,419 100,000 100,000 100,000 6,875 12,628 23,811 6,875 12,628 23,811
18 26,585 100,000 100,000 100,000 7,064 13,569 26,813 7,064 13,569 26,813
19 28,859 100,000 100,000 100,000 7,201 14,515 30,119 7,201 14,515 30,119
20 31,247 100,000 100,000 100,000 7,281 15,460 33,762 7,281 15,460 33,762
25 45,102 100,000 100,000 113,707 6,602 20,007 58,518 6,602 20,007 58,518
30 62,785 100,000 100,000 165,800 3,204 23,538 97,415 3,204 23,538 97,415
35 85,353 100,000 100,000 236,943 0 23,973 156,542 0 23,973 156,542
40 142,504 100,000 100,000 335,122 16,227 35,006 244,829 16,227 35,006 244,829
45 215,445 100,000 100,000 472,183 31,005 50,394 373,977 31,005 50,394 373,977
</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 $5,751 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%, $5,751 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.
66
<PAGE>
JOHN HANCOCK FLEX V-2
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 1,937 100,000 100,000 100,000 778 866 959 8 96 189
3 2,979 100,000 100,000 100,000 1,264 1,441 1,634 359 536 729
4 4,073 100,000 100,000 100,000 1,733 2,031 2,368 693 991 1,328
5 5,222 100,000 100,000 100,000 2,182 2,635 3,167 1,007 1,460 1,992
6 6,428 100,000 100,000 100,000 2,613 3,254 4,036 1,303 1,944 2,726
7 7,694 100,000 100,000 100,000 3,021 3,884 4,980 1,811 2,674 3,770
8 9,024 100,000 100,000 100,000 3,407 4,527 6,009 2,287 3,407 4,889
9 10,420 100,000 100,000 100,000 3,769 5,181 7,126 2,839 4,251 6,196
10 11,886 100,000 100,000 100,000 4,116 5,858 8,362 3,576 5,318 7,822
11 13,425 100,000 100,000 100,000 4,437 6,547 9,710 3,987 6,097 9,260
12 15,042 100,000 100,000 100,000 4,729 7,245 11,184 4,414 6,930 10,869
13 16,739 100,000 100,000 100,000 4,993 7,953 12,795 4,813 7,773 12,615
14 18,521 100,000 100,000 100,000 5,226 8,670 14,560 5,226 8,670 14,560
15 20,392 100,000 100,000 100,000 5,425 9,392 16,493 5,425 9,392 16,493
16 22,356 100,000 100,000 100,000 5,589 10,120 18,613 5,589 10,120 18,613
17 24,419 100,000 100,000 100,000 5,711 10,848 20,937 5,711 10,848 20,937
18 26,585 100,000 100,000 100,000 5,785 11,568 23,486 5,785 11,568 23,486
19 28,859 100,000 100,000 100,000 5,807 12,279 26,284 5,807 12,279 26,284
20 31,247 100,000 100,000 100,000 5,766 12,971 29,356 5,766 12,971 29,356
25 45,102 100,000 100,000 100,000 4,407 15,918 50,141 4,407 15,918 50,141
30 62,785 100,000 100,000 141,847 88 16,986 83,341 88 16,986 83,341
35 85,353 100,000 100,000 202,116 0 13,263 133,533 0 13,263 133,533
40 149,286 100,000 100,000 283,727 6,763 26,332 207,282 6,763 26,332 207,282
45 230,884 100,000 100,000 395,986 12,058 44,092 313,628 12,058 44,092 313,628
</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 $7,184 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%, $7,184 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.
67
<PAGE>
JHVLICO FLEX V-2
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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,066 303 397 496
3 2,979 100,000 100,000 100,000 1,406 1,596 1,803 701 891 1,098
4 4,073 100,000 100,000 100,000 1,920 2,243 2,606 1,080 1,403 1,766
5 5,222 100,000 100,000 100,000 2,415 2,906 3,481 1,740 2,231 2,806
6 6,428 100,000 100,000 100,000 2,891 3,587 4,434 2,081 2,777 3,624
7 7,694 100,000 100,000 100,000 3,343 4,282 5,472 2,533 3,472 4,662
8 9,024 100,000 100,000 100,000 3,774 4,994 6,604 3,054 4,274 5,884
9 10,420 100,000 100,000 100,000 4,179 5,719 7,837 3,549 5,089 7,207
10 11,886 100,000 100,000 100,000 4,571 6,473 9,202 4,031 5,933 8,662
11 13,425 100,000 100,000 100,000 4,982 7,292 10,747 4,532 6,842 10,297
12 15,042 100,000 100,000 100,000 5,369 8,131 12,441 5,054 7,816 12,126
13 16,739 100,000 100,000 100,000 5,729 8,991 14,303 5,549 8,811 14,123
14 18,521 100,000 100,000 100,000 6,063 9,872 16,350 6,063 9,872 16,350
15 20,392 100,000 100,000 100,000 6,367 10,773 18,602 6,367 10,773 18,602
16 22,356 100,000 100,000 100,000 6,641 11,694 21,083 6,641 11,694 21,083
17 24,419 100,000 100,000 100,000 6,875 12,628 23,811 6,875 12,628 23,811
18 26,585 100,000 100,000 100,000 7,064 13,569 26,813 7,064 13,569 26,813
19 28,859 100,000 100,000 100,000 7,201 14,515 30,119 7,201 14,515 30,119
20 31,247 100,000 100,000 100,000 7,281 15,460 33,762 7,281 15,460 33,762
25 45,102 100,000 100,000 100,000 6,602 20,007 58,691 6,602 20,007 58,691
30 62,785 100,000 100,000 121,542 3,204 23,538 101,285 3,204 23,538 101,285
35 85,353 100,000 100,000 197,338 0 23,973 171,598 0 23,973 171,598
40 142,504 100,000 100,000 301,256 0 35,006 286,910 0 35,006 286,910
45 215,445 100,000 100,000 502,783 0 29,472 478,841 0 29,472 478,841
</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 $5,751 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%, $5,751 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.
68
<PAGE>
JHVLICO FLEX V-2
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 1,937 100,000 100,000 100,000 778 866 959 8 96 189
3 2,979 100,000 100,000 100,000 1,264 1,441 1,634 359 536 729
4 4,073 100,000 100,000 100,000 1,733 2,031 2,368 693 991 1,328
5 5,222 100,000 100,000 100,000 2,182 2,635 3,167 1,007 1,460 1,992
6 6,428 100,000 100,000 100,000 2,613 3,254 4,036 1,303 1,944 2,726
7 7,694 100,000 100,000 100,000 3,021 3,884 4,980 1,811 2,674 3,770
8 9,024 100,000 100,000 100,000 3,407 4,527 6,009 2,287 3,407 4,889
9 10,420 100,000 100,000 100,000 3,769 5,181 7,126 2,839 4,251 6,196
10 11,886 100,000 100,000 100,000 4,107 5,846 8,344 3,567 5,306 7,804
11 13,425 100,000 100,000 100,000 4,418 6,520 9,671 3,968 6,070 9,221
12 15,042 100,000 100,000 100,000 4,700 7,200 11,114 4,385 6,885 10,799
13 16,739 100,000 100,000 100,000 4,952 7,887 12,688 4,772 7,707 12,508
14 18,521 100,000 100,000 100,000 5,172 8,579 14,406 5,172 8,579 14,406
15 20,392 100,000 100,000 100,000 5,358 9,273 16,280 5,358 9,273 16,280
16 22,356 100,000 100,000 100,000 5,507 9,968 18,327 5,507 9,968 18,327
17 24,419 100,000 100,000 100,000 5,613 10,657 20,563 5,613 10,657 20,563
18 26,585 100,000 100,000 100,000 5,671 11,335 23,003 5,671 11,335 23,003
19 28,859 100,000 100,000 100,000 5,675 11,997 25,670 5,675 11,997 25,670
20 31,247 100,000 100,000 100,000 5,617 12,633 28,584 5,617 12,633 28,584
25 45,102 100,000 100,000 100,000 4,168 15,192 47,965 4,168 15,192 47,965
30 62,785 100,000 100,000 100,000 0 15,626 79,940 0 15,626 79,940
35 85,353 100,000 100,000 153,083 0 10,932 133,116 0 10,932 133,116
40 150,406 100,000 100,000 229,191 0 14,560 218,277 0 14,560 218,277
45 233,433 100,000 100,000 375,346 0 0 357,472 0 0 357,472
</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 $7,184 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%, $7,184 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.
69
<PAGE>
JHVLICO FLEX V-2
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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,066 303 397 496
3 2,979 100,000 100,000 100,000 1,406 1,596 1,803 701 891 1,098
4 4,073 100,000 100,000 100,000 1,920 2,243 2,606 1,080 1,403 1,766
5 5,222 100,000 100,000 100,000 2,415 2,906 3,481 1,740 2,231 2,806
6 6,428 100,000 100,000 100,000 2,891 3,587 4,434 2,081 2,777 3,624
7 7,694 100,000 100,000 100,000 3,343 4,282 5,472 2,533 3,472 4,662
8 9,024 100,000 100,000 100,000 3,774 4,994 6,604 3,054 4,274 5,884
9 10,420 100,000 100,000 100,000 4,179 5,719 7,837 3,549 5,089 7,207
10 11,886 100,000 100,000 100,000 4,571 6,473 9,202 4,031 5,933 8,662
11 13,425 100,000 100,000 100,000 4,982 7,292 10,747 4,532 6,842 10,297
12 15,042 100,000 100,000 100,000 5,369 8,131 12,441 5,054 7,816 12,126
13 16,739 100,000 100,000 100,000 5,729 8,991 14,303 5,549 8,811 14,123
14 18,521 100,000 100,000 100,000 6,063 9,872 16,350 6,063 9,872 16,350
15 20,392 100,000 100,000 100,000 6,367 10,773 18,602 6,367 10,773 18,602
16 22,356 100,000 100,000 100,216 6,641 11,694 21,083 6,641 11,694 21,083
17 24,419 100,000 100,000 101,325 6,875 12,628 23,809 6,875 12,628 23,809
18 26,585 100,000 100,000 102,665 7,064 13,569 26,802 7,064 13,569 26,802
19 28,859 100,000 100,000 104,266 7,201 14,515 30,087 7,201 14,515 30,087
20 31,247 100,000 100,000 106,159 7,281 15,460 33,693 7,281 15,460 33,693
25 45,102 100,000 100,000 121,336 6,602 20,007 57,835 6,602 20,007 57,835
30 62,785 100,000 100,000 150,904 3,204 23,538 96,853 3,204 23,538 96,853
35 85,353 100,000 100,000 204,781 0 23,973 160,210 0 23,973 160,210
40 142,504 100,000 100,746 293,184 0 34,517 266,241 0 34,517 266,241
45 215,445 100,000 100,000 464,388 0 28,568 442,274 0 28,568 442,274
</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 $5,751 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%, $5,751 at 6% and $0 at 12%, subject to any maximum 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.
70
<PAGE>
JHVLICO FLEX V-2
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 1,937 100,000 100,000 100,000 778 866 959 8 96 189
3 2,979 100,000 100,000 100,000 1,264 1,441 1,634 359 536 729
4 4,073 100,000 100,000 100,000 1,733 2,031 2,368 693 991 1,328
5 5,222 100,000 100,000 100,000 2,182 2,635 3,167 1,007 1,460 1,992
6 6,428 100,000 100,000 100,000 2,613 3,254 4,036 1,303 1,944 2,726
7 7,694 100,000 100,000 100,000 3,021 3,884 4,980 1,811 2,674 3,770
8 9,024 100,000 100,000 100,000 3,407 4,527 6,009 2,287 3,407 4,889
9 10,420 100,000 100,000 100,000 3,769 5,181 7,126 2,839 4,251 6,196
10 11,886 100,000 100,000 100,000 4,107 5,846 8,344 3,567 5,306 7,804
11 13,425 100,000 100,000 100,000 4,418 6,520 9,671 3,968 6,070 9,221
12 15,042 100,000 100,000 100,000 4,700 7,200 11,114 4,385 6,885 10,799
13 16,739 100,000 100,000 100,000 4,952 7,887 12,688 4,772 7,707 12,508
14 18,521 100,000 100,000 100,000 5,172 8,579 14,406 5,172 8,579 14,406
15 20,392 100,000 100,000 100,000 5,358 9,273 16,280 5,358 9,273 16,280
16 22,356 100,000 100,000 100,000 5,507 9,968 18,327 5,507 9,968 18,327
17 24,419 100,000 100,000 100,000 5,613 10,657 20,563 5,613 10,657 20,563
18 26,585 100,000 100,000 100,000 5,671 11,335 23,003 5,671 11,335 23,003
19 28,859 100,000 100,000 100,000 5,675 11,997 25,670 5,675 11,997 25,670
20 31,247 100,000 100,000 101,049 5,617 12,633 28,582 5,617 12,633 28,582
25 45,102 100,000 100,000 111,157 4,168 15,192 47,656 4,168 15,192 47,656
30 62,785 100,000 100,000 131,408 0 15,626 77,357 0 15,626 77,357
35 85,353 100,000 100,000 168,465 0 10,932 123,894 0 10,932 123,894
40 150,406 100,000 100,000 226,803 0 14,403 199,860 0 14,403 199,860
45 233,433 100,000 100,000 343,701 0 0 322,902 0 0 322,902
</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 $7,184 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%, $7,184 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.
71
<PAGE>
JHVLICO FLEX V-2
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>
1 945 100,000 100,000 100,000 323 356 390 0 0 0
2 1,937 100,000 100,000 100,000 873 967 1,066 303 397 496
3 2,979 100,000 100,000 100,000 1,406 1,596 1,803 701 891 1,098
4 4,073 100,000 100,000 100,000 1,920 2,243 2,606 1,080 1,403 1,766
5 5,222 100,000 100,000 100,000 2,415 2,906 3,481 1,740 2,231 2,806
6 6,428 100,000 100,000 100,000 2,891 3,587 4,434 2,081 2,777 3,624
7 7,694 100,000 100,000 100,000 3,343 4,282 5,472 2,533 3,472 4,662
8 9,024 100,000 100,000 100,000 3,774 4,994 6,604 3,054 4,274 5,884
9 10,420 100,000 100,000 100,000 4,179 5,719 7,837 3,549 5,089 7,207
10 11,886 100,000 100,000 100,000 4,571 6,473 9,202 4,031 5,933 8,662
11 13,425 100,000 100,000 100,000 4,982 7,292 10,747 4,532 6,842 10,297
12 15,042 100,000 100,000 100,000 5,369 8,131 12,441 5,054 7,816 12,126
13 16,739 100,000 100,000 100,000 5,729 8,991 14,303 5,549 8,811 14,123
14 18,521 100,000 100,000 100,000 6,063 9,872 16,350 6,063 9,872 16,350
15 20,392 100,000 100,000 100,000 6,367 10,773 18,602 6,367 10,773 18,602
16 22,356 100,000 100,000 100,000 6,641 11,694 21,083 6,641 11,694 21,083
17 24,419 100,000 100,000 100,000 6,875 12,628 23,811 6,875 12,628 23,811
18 26,585 100,000 100,000 100,000 7,064 13,569 26,813 7,064 13,569 26,813
19 28,859 100,000 100,000 100,000 7,201 14,515 30,119 7,201 14,515 30,119
20 31,247 100,000 100,000 100,000 7,281 15,460 33,762 7,281 15,460 33,762
25 45,102 100,000 100,000 113,707 6,602 20,007 58,518 6,602 20,007 58,518
30 62,785 100,000 100,000 165,800 3,204 23,538 97,415 3,204 23,538 97,415
35 85,353 100,000 100,000 236,943 0 23,973 156,542 0 23,973 156,542
40 142,504 100,000 100,000 335,122 16,227 35,006 244,829 16,227 35,006 244,829
45 215,445 100,000 100,000 472,183 31,005 50,394 373,977 31,005 50,394 373,977
</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 $5,751 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%, $5,751 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.
72
<PAGE>
JHVLICO FLEX V-2
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 1,937 100,000 100,000 100,000 778 866 959 8 96 189
3 2,979 100,000 100,000 100,000 1,264 1,441 1,634 359 536 729
4 4,073 100,000 100,000 100,000 1,733 2,031 2,368 693 991 1,328
5 5,222 100,000 100,000 100,000 2,182 2,635 3,167 1,007 1,460 1,992
6 6,428 100,000 100,000 100,000 2,613 3,254 4,036 1,303 1,944 2,726
7 7,694 100,000 100,000 100,000 3,021 3,884 4,980 1,811 2,674 3,770
8 9,024 100,000 100,000 100,000 3,407 4,527 6,009 2,287 3,407 4,889
9 10,420 100,000 100,000 100,000 3,769 5,181 7,126 2,839 4,251 6,196
10 11,886 100,000 100,000 100,000 4,107 5,846 8,344 3,567 5,306 7,804
11 13,425 100,000 100,000 100,000 4,418 6,520 9,671 3,968 6,070 9,221
12 15,042 100,000 100,000 100,000 4,700 7,200 11,114 4,385 6,885 10,799
13 16,739 100,000 100,000 100,000 4,952 7,887 12,688 4,772 7,707 12,508
14 18,521 100,000 100,000 100,000 5,172 8,579 14,406 5,172 8,579 14,406
15 20,392 100,000 100,000 100,000 5,358 9,273 16,280 5,358 9,273 16,280
16 22,356 100,000 100,000 100,000 5,507 9,968 18,327 5,507 9,968 18,327
17 24,419 100,000 100,000 100,000 5,613 10,657 20,563 5,613 10,657 20,563
18 26,585 100,000 100,000 100,000 5,671 11,335 23,003 5,671 11,335 23,003
19 28,859 100,000 100,000 100,000 5,675 11,997 25,670 5,675 11,997 25,670
20 31,247 100,000 100,000 100,000 5,617 12,633 28,584 5,617 12,633 28,584
25 45,102 100,000 100,000 100,000 4,168 15,192 47,965 4,168 15,192 47,965
30 62,785 100,000 100,000 133,466 0 15,626 78,417 0 15,626 78,417
35 85,353 100,000 100,000 186,862 0 10,932 123,455 0 10,932 123,455
40 150,406 100,000 100,000 257,599 6,442 23,377 188,193 6,442 23,377 188,193
45 233,433 100,000 100,000 352,995 11,276 39,390 279,578 11,276 39,390 279,578
</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 $7,184 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%, $7,184 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.
73
<PAGE>
[THIS PAGE IS INTENTIONALLY LEFT BLANK.]
74
<PAGE>
FLEX-V1
REVISED ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS
The following tables on pages 76 TO 83 replace the illustration in the John
Hancock Life Insurance Company ("JOHN HANCOCK") Flex V-2 Product Prospectus.
The tables on pages 84 TO 91 replace the illustration in the John Hancock
Variable Life Insurance Company ("JHVLICO") Flex V-2 Product Prospectus.
The assumptions used for the revised illustration are generally the same as
those described in the Flex V-1 Product Prospectus. With respect to fees and
expenses deducted from Trust assets, however, the amounts shown in all tables
reflect (1) investment management fees equivalent to an effective annual rate of
.66%, and (2) an assumed average asset charge for all other Trust-level
operating expenses equivalent to an effective annual rate of .11%. These rates
are the arithmetic average for all funds that are available as investment
options. In other words, they are based on the hypothetical assumption that
policy account values are allocated equally among the variable investment
options.
Tables are provided for each of the three death benefit options. 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% (i.e., before any fees or expenses deducted from Trust
assets). After deduction of the average Trust-level fees and expenses (as
described above) the corresponding net annual rates of return would be -.77%,
5.18% and 11.14%. Investment return reflects investment income and all realized
and unrealized capital gains and losses.
The actual rates associated with any policy will vary depending upon the
actual allocation of policy values among the investment options. The charge
shown above for all other Trust-level operating expenses reflects reimbursements
to certain funds as described in the footnotes to the Fund expense table. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed.
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 face amount and annual Required Premium amount
requested.
75
<PAGE>
PLAN: JOHN HANCOCK FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE
AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT ISSUE
(GUARANTEED DEATH BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,113 BASIC
PREMIUM (1) USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,169 100,000 100,000 100,000 364 414 464
2 2,396 100,000 100,000 100,000 1,010 1,154 1,304
3 3,684 100,000 100,000 100,000 1,651 1,934 2,240
4 5,037 100,000 100,000 100,000 2,285 2,753 3,280
5 6,458 100,000 100,000 100,000 2,910 3,613 4,438
6 7,949 100,000 100,000 100,000 3,558 4,551 5,763
7 9,515 100,000 100,000 100,000 4,265 5,604 7,304
8 11,160 100,000 100,000 100,000 5,022 6,766 9,067
9 12,886 100,000 100,000 100,000 5,834 8,042 11,075
10 14,699 100,000 100,000 100,000 6,630 9,366 13,276
11 16,603 100,000 100,000 100,000 7,408 10,735 15,687
12 18,602 100,000 100,000 100,000 8,168 12,153 18,331
13 20,700 100,000 100,000 100,000 8,773 13,485 21,099
14 22,904 100,000 100,000 100,000 9,356 14,865 24,148
15 25,218 100,000 100,000 100,000 9,914 16,294 27,510
16 27,647 100,000 100,000 101,910 10,446 17,775 31,214
17 30,198 100,000 100,000 111,532 10,950 19,305 35,269
18 32,877 100,000 100,000 121,644 11,424 20,888 39,706
19 35,689 100,000 100,000 132,291 11,867 22,524 44,559
20 38,643 100,000 100,000 143,502 12,278 24,217 49,864
25 55,776 100,000 100,000 209,494 13,796 33,601 84,720
30 77,644 100,000 100,000 296,548 14,137 44,736 138,496
35 105,553 100,000 108,035 412,423 12,573 57,650 220,077
40 141,173 100,000 119,415 567,541 7,999 72,006 342,222
45 186,634 100,000 129,968 774,964 0 87,344 520,809
50 244,655 100,000 139,909 1,053,024 0 103,284 777,369
55 318,706 100,000 149,431 1,426,430 0 118,974 1,135,692
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$556.50 semiannually, $278.25 quarterly, or $92.75 on a special monthly basis.
The death benefits and surrender values shown would be affected by the more
frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
76
<PAGE>
PLAN: JOHN HANCOCK FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE
AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT ISSUE
(GUARANTEED DEATH BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--MODIFIED $708
INITIAL BASIC PREMIUM AT ISSUE (1) USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 743 100,000 100,000 100,000 0 22 50
2 1,524 100,000 100,000 100,000 275 351 431
3 2,344 100,000 100,000 100,000 554 700 859
4 3,204 100,000 100,000 100,000 831 1,068 1,338
5 4,108 100,000 100,000 100,000 1,103 1,456 1,874
6 5,057 100,000 100,000 100,000 1,403 1,901 2,511
7 6,053 100,000 100,000 100,000 1,765 2,436 3,290
8 7,099 100,000 100,000 100,000 2,182 3,055 4,211
9 8,197 100,000 100,000 100,000 2,657 3,763 5,286
10 9,350 100,000 100,000 100,000 3,121 4,490 6,452
11 10,561 100,000 100,000 100,000 3,568 5,234 7,718
12 11,833 100,000 100,000 100,000 4,003 5,996 9,094
13 13,168 100,000 100,000 100,000 4,285 6,640 10,455
14 14,570 100,000 100,000 100,000 4,547 7,298 11,946
15 16,042 100,000 100,000 100,000 4,787 7,969 13,578
16 17,587 100,000 100,000 100,000 5,005 8,652 15,366
17 19,210 100,000 100,000 100,000 5,195 9,343 17,325
18 20,914 100,000 100,000 100,000 5,357 10,043 19,471
19 22,703 100,000 100,000 100,000 5,490 10,750 21,826
20 24,581 100,000 100,000 100,000 5,591 11,462 24,411
25 35,480 100,000 100,000 103,312 5,560 15,062 41,779
30 49,391 100,000 100,000 147,727 4,296 18,440 68,993
35 67,144 100,000 100,000 206,682 932 20,803 110,289
40 89,803 100,000 100,000 285,469 0 20,877 172,135
45 118,721 100,000 100,000 390,718 0 15,451 262,579
50 181,776 100,000 100,000 528,397 12,596 24,214 390,076
55 281,934 100,000 100,000 711,379 26,721 48,846 566,384
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$354.00 semiannually, $177.00 quarterly, or $59.00 on a special monthly basis.
The death benefits and surrender values shown would be affected by the more
frequent premium payments. The basic premium (annual) after a recalculation at
age 72 will be as follows: $9,973.00 for a hypothetical gross investment
return of 0%, $8,658 for a gross return of 6%, and $0 for a gross return of
12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
77
<PAGE>
PLAN: JOHN HANCOCK FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE
AGE 40, PREFERRED UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED DEATH
BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--MODIFIED $1,305 INITIAL BASIC
PREMIUM AT ISSUE (1) USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,370 100,000 100,000 100,000 460 521 583
2 2,809 100,000 100,000 100,000 1,184 1,360 1,544
3 4,320 100,000 100,000 100,000 1,884 2,232 2,608
4 5,906 100,000 100,000 100,000 2,561 3,136 3,785
5 7,571 100,000 100,000 100,000 3,216 4,079 5,091
6 9,320 100,000 100,000 100,000 3,901 5,115 6,597
7 11,157 100,000 100,000 100,000 4,693 6,323 8,396
8 13,085 100,000 100,000 100,000 5,569 7,682 10,479
9 15,109 100,000 100,000 100,000 6,541 9,206 12,880
10 17,235 100,000 100,000 100,000 7,469 10,756 15,478
11 19,467 100,000 100,000 100,000 8,352 12,331 18,294
12 21,810 100,000 100,000 100,000 9,204 13,949 21,368
13 24,271 100,000 100,000 100,000 9,766 15,352 24,470
14 26,855 100,000 100,000 100,000 10,286 16,789 27,880
15 29,568 100,000 100,000 100,000 10,752 18,254 31,627
16 32,417 100,000 100,000 100,000 11,167 19,748 35,750
17 35,408 100,000 100,000 100,000 11,518 21,265 40,289
18 38,548 100,000 100,000 100,000 11,807 22,806 45,297
19 41,846 100,000 100,000 100,000 12,021 24,366 50,826
20 45,309 100,000 100,000 106,634 12,163 25,947 56,902
25 65,398 100,000 100,000 160,357 11,563 34,136 96,694
30 91,038 100,000 100,000 233,694 7,048 41,974 157,052
35 133,056 100,000 100,000 330,155 20,358 58,314 243,729
40 193,680 100,000 108,193 464,660 45,514 86,141 369,952
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$652.50 semiannually, $326.25 quarterly, or $108.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by the
more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,488 for a hypothetical gross
investment return of 0%, $4,148 for a gross return of 6%, and $0 for a gross
return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
78
<PAGE>
PLAN: JOHN HANCOCK FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE
AGE 40, PREFERRED UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED DEATH
BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,954 BASIC PREMIUM (1) USING
CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,052 100,000 100,000 100,000 1,053 1,150 1,247
2 4,206 100,000 100,000 100,000 2,363 2,647 2,944
3 6,468 100,000 100,000 100,000 3,643 4,209 4,822
4 8,843 100,000 100,000 100,000 4,893 5,837 6,900
5 11,337 100,000 100,000 100,000 6,114 7,537 9,205
6 13,955 100,000 100,000 100,000 7,360 9,369 11,818
7 16,705 100,000 100,000 100,000 8,707 11,412 14,843
8 19,592 100,000 100,000 100,000 10,133 13,647 18,287
9 22,623 100,000 100,000 100,000 11,652 16,093 22,198
10 25,806 100,000 100,000 100,000 13,122 18,611 26,474
11 29,148 100,000 100,000 100,000 14,544 21,208 31,156
12 32,657 100,000 100,000 100,000 15,932 23,899 36,304
13 36,342 100,000 100,000 100,000 17,028 26,434 41,713
14 40,211 100,000 100,000 104,978 18,080 29,066 47,676
15 44,273 100,000 100,000 116,060 19,079 31,793 54,203
16 48,538 100,000 100,000 127,793 20,026 34,624 61,348
17 53,017 100,000 100,000 140,217 20,913 37,557 69,158
18 57,719 100,000 100,000 153,386 21,740 40,602 77,695
19 62,657 100,000 100,000 167,337 22,499 43,762 87,019
20 67,841 100,000 100,000 182,157 23,191 47,048 97,202
25 97,922 100,000 108,623 271,781 25,501 65,499 163,881
30 136,313 100,000 128,684 394,313 24,582 86,481 264,995
35 185,310 100,000 149,287 566,051 19,076 110,208 417,873
40 247,845 100,000 171,543 811,796 4,562 136,579 646,334
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.83 on a special monthly
basis. The death benefits and surrender values shown would be affected by the
more frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
79
<PAGE>
PLAN: JOHN HANCOCK FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE
AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT ISSUE
(GUARANTEED DEATH BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,113 BASIC
PREMIUM (1) USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,169 100,000 100,000 100,000 340 389 439
2 2,396 100,000 100,000 100,000 963 1,104 1,251
3 3,684 100,000 100,000 100,000 1,581 1,856 2,156
4 5,037 100,000 100,000 100,000 2,192 2,647 3,161
5 6,458 100,000 100,000 100,000 2,793 3,477 4,281
6 7,949 100,000 100,000 100,000 3,420 4,385 5,564
7 9,515 100,000 100,000 100,000 4,104 5,405 7,058
8 11,160 100,000 100,000 100,000 4,839 6,533 8,770
9 12,886 100,000 100,000 100,000 5,629 7,774 10,721
10 14,699 100,000 100,000 100,000 6,404 9,060 12,859
11 16,603 100,000 100,000 100,000 7,160 10,389 15,199
12 18,602 100,000 100,000 100,000 7,898 11,765 17,765
13 20,700 100,000 100,000 100,000 8,480 13,051 20,443
14 22,904 100,000 100,000 100,000 9,038 14,383 23,394
15 25,218 100,000 100,000 100,000 9,573 15,761 26,647
16 27,647 100,000 100,000 100,000 10,080 17,185 30,231
17 30,198 100,000 100,000 108,029 10,558 18,657 34,162
18 32,877 100,000 100,000 117,831 11,007 20,179 38,462
19 35,689 100,000 100,000 128,146 11,424 21,750 43,163
20 38,643 100,000 100,000 139,011 11,810 23,374 48,303
25 55,776 100,000 100,000 202,893 13,191 32,348 82,050
30 77,644 100,000 100,000 287,031 13,370 42,919 134,052
35 105,553 100,000 103,540 398,833 11,597 55,251 212,824
40 141,173 100,000 114,434 548,172 6,710 69,002 330,543
45 186,634 100,000 124,620 748,276 0 83,750 502,874
50 244,655 100,000 134,261 1,016,841 0 99,115 750,658
55 318,706 100,000 143,495 1,377,491 0 114,247 1,096,728
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$556.50 semiannually, $278.25 quarterly, or $92.75 on a special monthly basis.
The death benefits and surrender values shown would be affected by the more
frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
80
<PAGE>
PLAN: JOHN HANCOCK FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE
AGE 25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT ISSUE
(GUARANTEED DEATH BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--MODIFIED $708
INITIAL BASIC PREMIUM AT ISSUE (1) USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 743 100,000 100,000 100,000 0 0 24
2 1,524 100,000 100,000 100,000 227 301 378
3 2,344 100,000 100,000 100,000 484 623 775
4 3,204 100,000 100,000 100,000 738 963 1,219
5 4,108 100,000 100,000 100,000 987 1,321 1,717
6 5,057 100,000 100,000 100,000 1,264 1,734 2,312
7 6,053 100,000 100,000 100,000 1,604 2,237 3,044
8 7,099 100,000 100,000 100,000 1,999 2,822 3,914
9 8,197 100,000 100,000 100,000 2,453 3,494 4,931
10 9,350 100,000 100,000 100,000 2,894 4,184 6,035
11 10,561 100,000 100,000 100,000 3,321 4,889 7,230
12 11,833 100,000 100,000 100,000 3,733 5,609 8,528
13 13,168 100,000 100,000 100,000 3,991 6,206 9,799
14 14,570 100,000 100,000 100,000 4,230 6,815 11,191
15 16,042 100,000 100,000 100,000 4,446 7,434 12,713
16 17,587 100,000 100,000 100,000 4,637 8,061 14,377
17 19,210 100,000 100,000 100,000 4,802 8,693 16,197
18 20,914 100,000 100,000 100,000 4,939 9,331 18,191
19 22,703 100,000 100,000 100,000 5,045 9,971 20,375
20 24,581 100,000 100,000 100,000 5,121 10,615 22,771
25 35,480 100,000 100,000 100,000 4,950 13,794 38,823
30 49,391 100,000 100,000 137,384 3,518 16,586 64,162
35 67,144 100,000 100,000 192,206 0 18,095 102,564
40 89,803 100,000 100,000 265,292 0 16,840 159,969
45 118,721 100,000 100,000 363,109 0 9,339 244,025
50 184,937 100,000 100,000 490,744 12,519 17,531 362,279
55 291,510 100,000 100,000 660,458 26,469 42,807 525,842
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$354.00 semiannually, $177.00 quarterly, or $59.00 on a special monthly basis.
The death benefits and surrender values shown would be affected by the more
frequent premium payments. The basic premium (annual) after a recalculation at
age 72 will be as follows: $9,973 for a hypothetical gross investment return
of 0%, $9,608 for a gross return of 6%, and $0 for a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
81
<PAGE>
PLAN: JOHN HANCOCK FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE
AGE 40, PREFERRED UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED DEATH
BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,954 BASIC PREMIUM (1) USING
MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,052 100,000 100,000 100,000 896 988 1,080
2 4,206 100,000 100,000 100,000 2,040 2,305 2,582
3 6,468 100,000 100,000 100,000 3,145 3,667 4,232
4 8,843 100,000 100,000 100,000 4,209 5,071 6,045
5 11,337 100,000 100,000 100,000 5,231 6,523 8,043
6 13,955 100,000 100,000 100,000 6,273 8,090 10,312
7 16,705 100,000 100,000 100,000 7,402 9,838 12,941
8 19,592 100,000 100,000 100,000 8,602 11,756 15,941
9 22,623 100,000 100,000 100,000 9,887 13,860 19,354
10 25,806 100,000 100,000 100,000 11,122 16,019 23,081
11 29,148 100,000 100,000 100,000 12,306 18,235 27,157
12 32,657 100,000 100,000 100,000 13,432 20,507 31,618
13 36,342 100,000 100,000 100,000 14,249 22,585 36,261
14 40,211 100,000 100,000 100,000 14,997 24,716 41,383
15 44,273 100,000 100,000 100,709 15,670 26,900 47,034
16 48,538 100,000 100,000 110,814 16,265 29,138 53,197
17 53,017 100,000 100,000 121,436 16,775 31,431 59,895
18 57,719 100,000 100,000 132,615 17,199 33,786 67,174
19 62,657 100,000 100,000 144,381 17,532 36,206 75,081
20 67,841 100,000 100,000 156,791 17,768 38,695 83,667
25 97,922 100,000 100,000 229,885 17,034 52,259 138,619
30 136,313 100,000 101,534 326,360 11,354 68,236 219,328
35 185,310 100,000 116,276 454,680 0 85,838 335,656
40 247,845 100,000 130,272 626,113 0 103,720 498,498
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.83 on a special monthly
basis. The death benefits and surrender values shown would be affected by the
more frequent premium payments.
(2) The premium accumulated at 5% interest in Column 2 are those payable is the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
82
<PAGE>
PLAN: JOHN HANCOCK FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE
AGE 40, PREFERRED UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED DEATH
BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--MODIFIED $1,305 INITIAL BASIC
PREMIUM AT ISSUE (1) USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of Annual Investment Return of
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year(2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,370 100,000 100,000 100,000 302 358 415
2 2,809 100,000 100,000 100,000 859 1,015 1,179
3 4,320 100,000 100,000 100,000 1,381 1,683 2,012
4 5,906 100,000 100,000 100,000 1,868 2,359 2,916
5 7,571 100,000 100,000 100,000 2,318 3,046 3,906
6 9,320 100,000 100,000 100,000 2,792 3,807 5,055
7 11,157 100,000 100,000 100,000 3,357 4,708 6,439
8 13,085 100,000 100,000 100,000 3,996 5,733 8,053
9 15,109 100,000 100,000 100,000 4,721 6,895 9,923
10 17,235 100,000 100,000 100,000 5,400 8,060 11,930
11 19,467 100,000 100,000 100,000 6,028 9,226 14,088
12 21,810 100,000 100,000 100,000 6,598 10,386 16,407
13 24,271 100,000 100,000 100,000 6,858 11,286 18,654
14 26,855 100,000 100,000 100,000 7,046 12,167 21,092
15 29,568 100,000 100,000 100,000 7,155 13,019 23,740
16 32,417 100,000 100,000 100,000 7,179 13,838 26,620
17 35,408 100,000 100,000 100,000 7,110 14,615 29,761
18 38,548 100,000 100,000 100,000 6,947 15,347 33,195
19 41,846 100,000 100,000 100,000 6,681 16,026 36,961
20 45,309 100,000 100,000 100,000 6,304 16,643 41,102
25 65,398 100,000 100,000 114,493 2,168 18,212 69,038
30 91,038 100,000 100,000 164,967 0 14,843 110,865
35 147,723 100,000 100,000 225,382 12,519 24,566 166,382
40 238,108 100,000 100,000 302,880 26,469 48,896 241,146
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$652.50 semiannually, $326.25 quarterly, or $108.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by the
more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,973 for a hypothetical gross
investment return of 0%, $8,568 for a gross return of 6%, and $0 for a gross
return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
83
<PAGE>
PLAN: JHVLICO FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE AGE
25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED
DEATH BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,113 BASIC PREMIUM (1)
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,169 100,000 100,000 100,000 369 420 471
2 2,396 100,000 100,000 100,000 1,021 1,166 1,317
3 3,684 100,000 100,000 100,000 1,668 1,952 2,261
4 5,037 100,000 100,000 100,000 2,307 2,778 3,309
5 6,458 100,000 100,000 100,000 2,936 3,644 4,476
6 7,949 100,000 100,000 100,000 3,555 4,555 5,776
7 9,515 100,000 100,000 100,000 4,160 5,509 7,221
8 11,160 100,000 100,000 100,000 4,788 6,545 8,863
9 12,886 100,000 100,000 100,000 5,399 7,624 10,680
10 14,699 100,000 100,000 100,000 6,066 8,822 12,761
11 16,603 100,000 100,000 100,000 6,834 10,186 15,175
12 18,602 100,000 100,000 100,000 7,656 11,670 17,895
13 20,700 100,000 100,000 100,000 8,457 13,204 20,874
14 22,904 100,000 100,000 100,000 9,236 14,786 24,138
15 25,218 100,000 100,000 100,000 9,989 16,418 27,716
16 27,647 100,000 100,000 102,672 10,527 17,910 31,447
17 30,198 100,000 100,000 112,361 11,035 19,452 35,531
18 32,877 100,000 100,000 122,543 11,514 21,048 40,000
19 35,689 100,000 100,000 133,264 11,962 22,699 44,887
20 38,643 100,000 100,000 144,553 12,377 24,405 50,229
25 55,776 100,000 100,000 211,006 13,917 33,876 85,331
30 77,644 100,000 100,000 298,669 14,282 45,126 139,487
35 105,553 100,000 108,958 415,358 12,746 58,142 221,643
40 141,173 100,000 120,412 571,567 8,204 72,607 344,650
45 186,634 100,000 131,034 780,450 0 88,061 524,496
50 244,655 100,000 141,040 1,060,468 0 104,119 782,865
55 318,706 100,000 150,626 1,436,505 0 119,925 1,143,714
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$556.50 semiannually, $278.25 quarterly, or $92.75 on a special monthly basis.
The death benefits and surrender values shown would be affected by the more
frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
84
<PAGE>
PLAN: JHVLICO FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE AGE
25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED
DEATH BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--MODIFIED $708 INITIAL
BASIC PREMIUM AT ISSUE (1) USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 743 100,000 100,000 100,000 0 25 54
2 1,524 100,000 100,000 100,000 281 358 439
3 2,344 100,000 100,000 100,000 565 712 872
4 3,204 100,000 100,000 100,000 845 1,084 1,356
5 4,108 100,000 100,000 100,000 1,120 1,477 1,898
6 5,057 100,000 100,000 100,000 1,388 1,890 2,506
7 6,053 100,000 100,000 100,000 1,647 2,324 3,186
8 7,099 100,000 100,000 100,000 1,933 2,814 3,980
9 8,197 100,000 100,000 100,000 2,206 3,322 4,859
10 9,350 100,000 100,000 100,000 2,538 3,920 5,901
11 10,561 100,000 100,000 100,000 2,975 4,655 7,163
12 11,833 100,000 100,000 100,000 3,468 5,481 8,608
13 13,168 100,000 100,000 100,000 3,945 6,322 10,173
14 14,570 100,000 100,000 100,000 4,402 7,178 11,870
15 16,042 100,000 100,000 100,000 4,836 8,047 13,709
16 17,587 100,000 100,000 100,000 5,056 8,737 15,516
17 19,210 100,000 100,000 100,000 5,249 9,437 17,494
18 20,914 100,000 100,000 100,000 5,414 10,145 19,663
19 22,703 100,000 100,000 100,000 5,550 10,861 22,042
20 24,581 100,000 100,000 100,000 5,654 11,582 24,655
25 35,480 100,000 100,000 104,379 5,638 15,237 42,211
30 49,391 100,000 100,000 149,219 4,389 18,688 69,689
35 67,144 100,000 100,000 208,742 1,041 21,153 111,389
40 89,803 100,000 100,000 288,291 0 21,380 173,837
45 118,721 100,000 100,000 394,560 0 16,207 265,161
50 181,385 100,000 100,000 533,590 12,758 25,187 393,910
55 280,751 100,000 100,000 718,377 27,259 50,163 571,956
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$354.00 semiannually, $177.00 quarterly, or $59.00 on a special monthly basis.
The death benefits and surrender values shown would be affected by the more
frequent premium payments. The basic premium (annual) after a recalculation at
age 72 will be as follows: $9,973 for a hypothetical gross investment return
of 0%, $8,541 for a gross return of 6%, and $0 for a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
85
<PAGE>
PLAN: JHVLICO FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE AGE
40, PREFERRED UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED DEATH
BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,954 BASIC PREMIUM (1) USING
CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,052 100,000 100,000 100,000 1,063 1,160 1,258
2 4,206 100,000 100,000 100,000 2,382 2,668 2,967
3 6,468 100,000 100,000 100,000 3,671 4,241 4,858
4 8,843 100,000 100,000 100,000 4,931 5,880 6,950
5 11,337 100,000 100,000 100,000 6,161 7,594 9,272
6 13,955 100,000 100,000 100,000 7,351 9,373 11,837
7 16,705 100,000 100,000 100,000 8,512 11,234 14,686
8 19,592 100,000 100,000 100,000 9,699 13,235 17,905
9 22,623 100,000 100,000 100,000 10,847 15,317 21,462
10 25,806 100,000 100,000 100,000 12,078 17,603 25,517
11 29,148 100,000 100,000 100,000 13,483 20,190 30,204
12 32,657 100,000 100,000 100,000 14,985 23,004 35,489
13 36,342 100,000 100,000 100,000 16,442 25,910 41,289
14 40,211 100,000 100,000 105,680 17,855 28,913 47,643
15 44,273 100,000 100,000 116,832 19,215 32,013 54,564
16 48,538 100,000 100,000 128,639 20,170 34,865 61,754
17 53,017 100,000 100,000 141,142 21,066 37,822 69,614
18 57,719 100,000 100,000 154,394 21,902 40,891 78,206
19 62,657 100,000 100,000 168,434 22,669 44,077 87,589
20 67,841 100,000 100,000 183,347 23,370 47,391 97,837
25 97,922 100,000 109,419 273,541 25,728 65,979 164,942
30 136,313 100,000 129,603 396,852 24,867 87,099 266,702
35 185,310 100,000 150,335 569,684 19,441 110,981 420,555
40 247,845 100,000 172,732 816,995 5,057 137,525 650,474
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.83 on a special monthly
basis. The death benefits and surrender values shown would be affected by the
more frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
86
<PAGE>
PLAN: JHVLICO FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE AGE
40, PREFERRED UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED DEATH
BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--MODIFIED $1,305 INITIAL BASIC
PREMIUM AT ISSUE (1) USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,370 100,000 100,000 100,000 466 528 590
2 2,809 100,000 100,000 100,000 1,196 1,374 1,560
3 4,320 100,000 100,000 100,000 1,903 2,253 2,632
4 5,906 100,000 100,000 100,000 2,587 3,165 3,819
5 7,571 100,000 100,000 100,000 3,248 4,116 5,136
6 9,320 100,000 100,000 100,000 3,873 5,095 6,589
7 11,157 100,000 100,000 100,000 4,476 6,118 8,205
8 13,085 100,000 100,000 100,000 5,109 7,238 10,055
9 15,109 100,000 100,000 100,000 5,709 8,394 12,094
10 17,235 100,000 100,000 100,000 6,395 9,705 14,462
11 19,467 100,000 100,000 100,000 7,258 11,266 17,272
12 21,810 100,000 100,000 100,000 8,220 13,000 20,473
13 24,271 100,000 100,000 100,000 9,140 14,767 23,952
14 26,855 100,000 100,000 100,000 10,018 16,570 27,743
15 29,568 100,000 100,000 100,000 10,843 18,401 31,873
16 32,417 100,000 100,000 100,000 11,263 19,909 36,031
17 35,408 100,000 100,000 100,000 11,620 21,442 40,609
18 38,548 100,000 100,000 100,000 11,914 22,999 45,660
19 41,846 100,000 100,000 100,000 12,135 24,576 51,237
20 45,309 100,000 100,000 107,491 12,282 26,176 57,359
25 65,398 100,000 100,000 161,618 11,714 34,479 97,454
30 91,038 100,000 100,000 235,509 7,238 42,490 158,272
35 132,791 100,000 100,000 332,717 20,650 58,901 245,620
40 192,878 100,000 108,820 468,270 45,991 86,640 372,826
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$652.50 semiannually, $326.25 quarterly, or $108.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by the
more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,461 for a hypothetical gross
investment return of 0%, $4,068 for a gross return of 6%, and $0 for a gross
return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
87
<PAGE>
PLAN: JHVLICO FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE AGE
25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED
DEATH BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,113 BASIC PREMIUM (1)
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,169 100,000 100,000 100,000 345 395 445
2 2,396 100,000 100,000 100,000 974 1,116 1,264
3 3,684 100,000 100,000 100,000 1,597 1,874 2,176
4 5,037 100,000 100,000 100,000 2,213 2,672 3,190
5 6,458 100,000 100,000 100,000 2,820 3,509 4,319
6 7,949 100,000 100,000 100,000 3,416 4,389 5,577
7 9,515 100,000 100,000 100,000 3,999 5,311 6,976
8 11,160 100,000 100,000 100,000 4,605 6,312 8,566
9 12,886 100,000 100,000 100,000 5,195 7,356 10,326
10 14,699 100,000 100,000 100,000 5,840 8,516 12,344
11 16,603 100,000 100,000 100,000 6,587 9,841 14,687
12 18,602 100,000 100,000 100,000 7,387 11,283 17,329
13 20,700 100,000 100,000 100,000 8,164 12,770 20,219
14 22,904 100,000 100,000 100,000 8,919 14,303 23,384
15 25,218 100,000 100,000 100,000 9,649 15,884 26,853
16 27,647 100,000 100,000 100,000 10,160 17,321 30,465
17 30,198 100,000 100,000 108,860 10,643 18,805 34,424
18 32,877 100,000 100,000 118,733 11,097 20,339 38,756
19 35,689 100,000 100,000 129,122 11,519 21,924 43,491
20 38,643 100,000 100,000 140,065 11,909 23,563 48,669
25 55,776 100,000 100,000 204,407 13,313 32,623 82,662
30 77,644 100,000 100,000 289,154 13,516 43,309 135,043
35 105,553 100,000 104,501 401,767 11,770 55,764 214,390
40 141,173 100,000 115,469 552,192 6,916 69,627 332,967
45 186,634 100,000 125,725 753,751 0 84,493 506,553
50 244,655 100,000 135,433 1,024,271 0 99,980 756,143
55 318,706 100,000 144,730 1,387,546 0 115,231 1,104,734
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$556.50 semiannually, $278.25 quarterly, or $92.75 on a special monthly basis.
The death benefits and surrender values shown would be affected by the more
frequent premium payments.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
88
<PAGE>
PLAN: JHVLICO FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE AGE
25, STANDARD NON-SMOKER UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED
DEATH BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--MODIFIED $708 INITIAL
BASIC PREMIUM AT ISSUE (1) USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 743 100,000 100,000 100,000 0 1 28
2 1,524 100,000 100,000 100,000 234 308 386
3 2,344 100,000 100,000 100,000 494 634 788
4 3,204 100,000 100,000 100,000 751 979 1,237
5 4,108 100,000 100,000 100,000 1,004 1,341 1,741
6 5,057 100,000 100,000 100,000 1,249 1,724 2,307
7 6,053 100,000 100,000 100,000 1,486 2,125 2,941
8 7,099 100,000 100,000 100,000 1,750 2,581 3,683
9 8,197 100,000 100,000 100,000 2,001 3,053 4,504
10 9,350 100,000 100,000 100,000 2,312 3,614 5,483
11 10,561 100,000 100,000 100,000 2,727 4,310 6,675
12 11,833 100,000 100,000 100,000 3,199 5,093 8,041
13 13,168 100,000 100,000 100,000 3,651 5,888 9,517
14 14,570 100,000 100,000 100,000 4,084 6,695 11,115
15 16,042 100,000 100,000 100,000 4,494 7,513 12,844
16 17,587 100,000 100,000 100,000 4,689 8,147 14,526
17 19,210 100,000 100,000 100,000 4,856 8,787 16,367
18 20,914 100,000 100,000 100,000 4,996 9,433 18,383
19 22,703 100,000 100,000 100,000 5,105 10,082 20,591
20 24,581 100,000 100,000 100,000 5,184 10,735 23,015
25 35,480 100,000 100,000 100,000 5,028 13,969 39,260
30 49,391 100,000 100,000 138,898 3,611 16,834 64,869
35 67,144 100,000 100,000 194,294 41 18,446 103,679
40 89,803 100,000 100,000 268,148 0 17,345 161,691
45 118,721 100,000 100,000 366,995 0 10,098 246,637
50 184,543 100,000 100,000 495,997 12,681 18,526 366,158
55 290,317 100,000 100,000 667,537 27,007 44,196 531,478
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$354.00 semiannually, $177.00 quarterly, or $59.00 on a special monthly basis.
The death benefits and surrender values shown would be affected by the more
frequent premium payments. The basic premium (annual) after a recalculation at
age 72 will be as follows: $9,973 for a hypothetical gross investment return
of 0%, $9,490 for a gross return of 6%, and $0 for a gross return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
89
<PAGE>
PLAN: JHVLICO FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE AGE
40, PREFERRED UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED DEATH
BENEFIT) $100,000 PREMIUM SCHEDULE--LEVEL $1,954 BASIC PREMIUM (1) USING
MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,052 100,000 100,000 100,000 906 998 1,091
2 4,206 100,000 100,000 100,000 2,060 2,326 2,605
3 6,468 100,000 100,000 100,000 3,174 3,699 4,268
4 8,843 100,000 100,000 100,000 4,247 5,115 6,096
5 11,337 100,000 100,000 100,000 5,278 6,580 8,110
6 13,955 100,000 100,000 100,000 6,265 8,094 10,332
7 16,705 100,000 100,000 100,000 7,207 9,661 12,785
8 19,592 100,000 100,000 100,000 8,168 11,345 15,560
9 22,623 100,000 100,000 100,000 9,083 13,086 18,620
10 25,806 100,000 100,000 100,000 10,079 15,013 22,127
11 29,148 100,000 100,000 100,000 11,246 17,221 26,208
12 32,657 100,000 100,000 100,000 12,486 19,614 30,808
13 36,342 100,000 100,000 100,000 13,664 22,064 35,842
14 40,211 100,000 100,000 100,000 14,774 24,568 41,360
15 44,273 100,000 100,000 101,512 15,809 27,125 47,409
16 48,538 100,000 100,000 111,689 16,413 29,387 53,617
17 53,017 100,000 100,000 122,387 16,932 31,705 60,363
18 57,719 100,000 100,000 133,645 17,366 34,086 67,696
19 62,657 100,000 100,000 145,496 17,709 36,534 75,661
20 67,841 100,000 100,000 157,995 17,954 39,053 84,309
25 97,922 100,000 100,000 231,613 17,276 52,812 139,661
30 136,313 100,000 102,727 328,785 11,669 69,037 220,957
35 185,310 100,000 117,568 458,033 0 86,792 338,132
40 247,845 100,000 131,658 630,709 0 104,823 502,157
</TABLE>
---------
(1) If premiums are paid more frequently than annually the payments would be
$977.00 semiannually, $488.50 quarterly, or $162.83 on a special monthly
basis. The death benefits and surrender values shown would be affected by the
more frequent premium payments.
(2) The premium accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
90
<PAGE>
PLAN: JHVLICO FLEX V-1 (SCHEDULED PREMIUM VARIABLE WHOLE LIFE) MALE, ISSUE AGE
40, PREFERRED UNDERWRITING RISK SUM INSURED AT ISSUE (GUARANTEED DEATH
BENEFIT) $100,000 PREMIUM SCHEDULE AT ISSUE--MODIFIED $1,305 INITIAL BASIC
PREMIUM AT ISSUE (1) USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
----------------------------- ---------------------- -------
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End of Accumulated Annual Investment Return of: Annual Investment Return of:
Policy At 5% Interest ----------------------------- ---------------------- -------
Year Per Year (2) 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross
------- -------------- -------- -------- --------- -------- -------- -- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,370 100,000 100,000 100,000 308 365 422
2 2,809 100,000 100,000 100,000 871 1,029 1,194
3 4,320 100,000 100,000 100,000 1,401 1,705 2,036
4 5,906 100,000 100,000 100,000 1,893 2,388 2,950
5 7,571 100,000 100,000 100,000 2,349 3,084 3,951
6 9,320 100,000 100,000 100,000 2,765 3,788 5,047
7 11,157 100,000 100,000 100,000 3,140 4,502 6,248
8 13,085 100,000 100,000 100,000 3,537 5,289 7,629
9 15,109 100,000 100,000 100,000 3,890 6,083 9,138
10 17,235 100,000 100,000 100,000 4,326 7,011 10,916
11 19,467 100,000 100,000 100,000 4,935 8,163 13,068
12 21,810 100,000 100,000 100,000 5,615 9,439 15,514
13 24,271 100,000 100,000 100,000 6,233 10,704 18,140
14 26,855 100,000 100,000 100,000 6,780 11,951 20,960
15 29,568 100,000 100,000 100,000 7,247 13,170 23,992
16 32,417 100,000 100,000 100,000 7,277 14,004 26,910
17 35,408 100,000 100,000 100,000 7,215 14,797 30,091
18 38,548 100,000 100,000 100,000 7,058 15,547 33,572
19 41,846 100,000 100,000 100,000 6,799 16,245 37,391
20 45,309 100,000 100,000 100,000 6,428 16,882 41,591
25 65,398 100,000 100,000 115,923 2,329 18,582 69,901
30 91,038 100,000 100,000 166,958 0 15,424 112,203
35 147,419 100,000 100,000 228,092 12,681 25,357 168,383
40 237,186 100,000 100,000 306,532 27,007 50,053 244,054
</TABLE>
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(1) If premiums are paid more frequently than annually the payments would be
$652.50 semiannually, $326.25 quarterly, or $108.75 on a special monthly
basis. The death benefits and surrender values shown would be affected by the
more frequent premium payments. The basic premium (annual) after a
recalculation at age 72 will be as follows: $9,973 for a hypothetical gross
investment return of 0%, $8,477 for a gross return of 6%, and $0 for a gross
return of 12%.
(2) The premiums accumulated at 5% interest in Column 2 are those payable if the
gross investment return is 6%.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS.
ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE
DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6% OR 12% OVER
A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL
POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT
RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
91
