HANCOCK JOHN VARIABLE LIFE ACCOUNT S
485BPOS, 1996-01-11
Previous: HANCOCK JOHN VARIABLE LIFE ACCOUNT S, 485BPOS, 1996-01-11
Next: US FIXED INCOME PORTFOLIO, N-30D, 1996-01-11



<PAGE>
 
   As filed with the Securities and Exchange Commission on January 11, 1996

                                                       Registration No. 33-64366

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


                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

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

                                   FORM S-6
                       Post-Effective Amendment No. 3 to
                         Registration Statement Under
                          THE SECURITIES ACT OF 1933

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

                     JOHN HANCOCK VARIABLE LIFE ACCOUNT S
                             (Exact name of trust)

                 JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
                              (Name of depositor)

                              JOHN HANCOCK PLACE
                          BOSTON, MASSACHUSETTS 02117
         (Complete address of depositor's principal executive offices)

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

                         FRANCIS C. CLEARY, JR., ESQ.
                  JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
                       JOHN HANCOCK PLACE, BOSTON, 02117
               (Name and complete address of agent for service)

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

                                   Copy to:
                           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)

 / X / immediately upon filing pursuant to paragraph (b) of Rule 485
 ----                                                              
 /   / on (date) 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 1994 pursuant to Rule 24f-2 on February 23, 1995.
<PAGE>
 
                             CROSS-REFERENCE TABLE

<TABLE> 
<CAPTION> 
Form N-8B-2 Item                 Caption in Prospectus
- ----------------                 ---------------------
<C>                              <S> 
1, 2                             Cover, The Account and The Series
                                 Funds, JHVLICO and John Hancock

3                                Inapplicable

4                                Cover, Distribution of Policies

5,6                              The Account and The Series Funds,
                                 State Regulation

7, 8, 9                          Inapplicable

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

10(f)                            Voting Privileges

10(g),(h)                        Changes that JHVLICO
                                 Can Make

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

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

13                               Summary, Charges and Expenses,
                                 Appendix--Illustration of Death
                                 Benefits, Surrender Values
                                 and Accumulated Premiums

14, 15                           Summary, Distribution of
                                 Policies, Premiums

16                               The Account and The Series Funds

17                               Summary, Principal Policy
                                 Provisions and Benefits

18                               The Account and The Series Funds,
                                 Tax Considerations

19                               Reports

20                               Changes that JHVLICO
                                 Can Make

21                               Principal Policy Provisions

22                               Principal Policy Provisions
</TABLE> 
<PAGE>
 
<TABLE> 
<C>                              <S> 
23                               Distribution of Policies

24                               Not Applicable

25                               JHVLICO and John Hancock

26                               Not Applicable

27,28,29,30                      JHVLICO and John Hancock, Board
                                 of Directors and Executive
                                 Officers of JHVLICO

31,32,33,34                      Not Applicable

35                               JHVLICO and John Hancock

37                               Not Applicable

38,39,40,41(a)                   Distribution of Policies,
                                 JHVLICO and John Hancock,
                                 Charges and Expenses

42, 43                           Not Applicable

44                               The Account and The Series Funds,
                                 Principal Policy Provisions,
                                 Appendix--Illustration of Death
                                 Benefits, Surrender Values
                                 and Accumulated Premiums

45                               Not Applicable

46                               The Account and The Series Funds,
                                 Principal Policy Provisions,
                                 Appendix--Illustration of Death
                                 Benefits, Surrender Values
                                 and Accumulated Values
 
47, 48, 49, 50                   Not Applicable

51                               Principal Policy Provisions,
                                 Appendix--Other Policy
                                 Provisions

52                               The Account and The Series Funds,
                                 Changes that JHVLICO
                                 Can Make

53,54,55                         Not Applicable

56,57,58                         Not Applicable

59                               Financial Statements
</TABLE> 
<PAGE>
 
- --------------------                       John Hancock Variable Life
                                               Insurance Company
      VARIABLE                                            (JHVLICO)
       ESTATE
     PROTECTION

- --------------------
  JOHN HANCOCK (R)
                        FLEXIBLE PREMIUM VARIABLE LIFE
                         SURVIVORSHIP INSURANCE POLICY
                     JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
                           LIFE AND ANNUITY SERVICES
                                 P.O. BOX 111
                          BOSTON, MASSACHUSETTS 02117
 
                  TELEPHONE 1-800-REAL LIFE (1-800-732-5543)
                               FAX 617-572-5410
 
                          PROSPECTUS JANUARY 12, 1996
 
  The flexible premium variable life survivorship policy ("Policy") described
in this Prospectus can be funded, at the discretion of the Owner, by any of
the twelve variable subaccounts of John Hancock Variable Life Account S (the
"Account"), by a fixed subaccount (the "Fixed Account"), or by any combination
of the Fixed Account and the variable subaccounts (collectively, the
"Subaccounts"). The assets of each variable Subaccount will be invested in a
corresponding investment portfolio ("Portfolio") of John Hancock Variable
Series Trust I, a mutual fund advised by John Hancock Mutual Life Insurance
Company ("John Hancock") or of M Fund, Inc., a mutual fund advised by M
Financial Investment Advisers, Inc. (collectively, the "Funds"). The assets of
the Fixed Account will be invested in the general account of John Hancock
Variable Life Insurance Company ("JHVLICO").
 
  The Prospectuses for the Funds, which are attached to this Prospectus,
describe the investment objectives, policies and risks of investing in the
twelve Portfolios of the Funds: Stock, Select Stock, Bond, Money Market,
Managed, Real Estate Equity, International, Short-Term U.S. Government,
Special Opportunities, Edinburgh Overseas Equity, Turner Core Growth and
Frontier Capital Appreciation. Other variable Subaccounts and Portfolios may
be added in the future.
 
  Replacing existing insurance with a Policy described in this Prospectus may
not be to your advantage.
 
  THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. IT IS NOT
         VALID UNLESS ATTACHED TO CURRENT PROSPECTUSES FOR THE FUNDS.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
SUMMARY...................................................................    1
JHVLICO and JOHN HANCOCK..................................................    6
THE ACCOUNT AND THE SERIES FUNDS..........................................    7
  The Account.............................................................    7
  The Series Funds........................................................    7
THE FIXED ACCOUNT.........................................................   10
POLICY PROVISIONS AND BENEFITS............................................   10
  Requirements for Issuance of Policy.....................................   10
  Premiums................................................................   10
  Account Value and Surrender Value.......................................   13
  Policy Split Option.....................................................   13
  Death Benefits..........................................................   14
  Transfers Among Subaccounts.............................................   16
  Telephone Transfers and Policy Loans....................................   16
  Loan Provisions and Indebtedness........................................   17
  Default.................................................................   18
  Exchange Privilege......................................................   18
CHARGES AND EXPENSES......................................................   19
  Charges Deducted from Premiums..........................................   19
  Sales Charge............................................................   19
  Reduced Charges for Eligible Groups.....................................   20
  Charges Deducted from Account Value or Assets...........................   20
  Guarantee of Premiums and Certain Charges...............................   23
DISTRIBUTION OF POLICIES..................................................   23
TAX CONSIDERATIONS........................................................   24
  Policy Proceeds.........................................................   24
  Charge for JHVLICO's Taxes..............................................   25
  Policy Split Option.....................................................   26
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO......................   26
REPORTS...................................................................   27
VOTING PRIVILEGES.........................................................   27
CHANGES THAT JHVLICO CAN MAKE.............................................   28
STATE REGULATION..........................................................   28
LEGAL MATTERS.............................................................   28
REGISTRATION STATEMENT....................................................   28
EXPERTS...................................................................   28
FINANCIAL STATEMENTS......................................................   29
APPENDIX--OTHER POLICY PROVISIONS.........................................  A-1
  Settlement Provisions...................................................  A-1
  Additional Insurance Benefits...........................................  A-1
  General Provisions......................................................  A-1
APPENDIX--ILLUSTRATION OF DEATH BENEFITS, SURRENDER VALUES AND ACCUMULATED
 PREMIUMS.................................................................  A-3
</TABLE>
 
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS.
<PAGE>
 
                      INDEX OF DEFINED WORDS AND PHRASES
 
  Below are listed certain words and phrases used in this Prospectus, together
with identification of the page on which each is defined or explained:
 
<TABLE>
<CAPTION>
                                                                           Page
     <S>                                                                   <C>
     Account..............................................................   7
     Account Value........................................................   1
     Additional Sum Insured...............................................  15
     Age.................................................................. A-2
     Basic Sum Insured....................................................   1
     DAC Tax..............................................................  19
     Death Benefit........................................................  14
     Fixed Account........................................................  10
     Funds......................................................... Front Cover
     Grace Period.........................................................  18
     Guaranteed Minimum Death Benefit.....................................  15
     Guaranteed Minimum Death Benefit Premium.............................  11
     Home Office................................................... Front Cover
     Indebtedness.........................................................  17
     Investment Rule......................................................  12
     Loan Account.........................................................  17
     Minimum First Premium................................................  11
     Planned Premium......................................................  11
     Policy Anniversary................................................... A-2
     Portfolio..................................................... Front Cover
     Subaccount.................................................... Front Cover
     Sum Insured..........................................................   5
     Surrender Value......................................................  13
     Target Premium.......................................................  19
     Valuation Date.......................................................   9
     Valuation Period.....................................................   9
     Variable Subaccounts.................................................   2
     7-Pay Limit..........................................................  12
</TABLE>
<PAGE>
 
                                    SUMMARY
 
WHAT IS THE VARIABLE LIFE POLICY BEING OFFERED?
 
  John Hancock Variable Life Insurance Company ("JHVLICO") issues variable
life insurance policies. The Policies described in this Prospectus provide
life insurance coverage on two insureds, with a death benefit payable only
when the last surviving insured dies. The Policies also provide for premium
flexibility. JHVLICO issues other variable life insurance policies. These
other policies are not funded by the Account and are offered by means of other
Prospectuses.
 
  As explained below, the death benefit and Surrender Value under the Policy
may increase or decrease daily. The Policies differ from ordinary fixed-
benefit life insurance in the way they work. However, the Policies are like
fixed-benefit survivorship life insurance in providing lifetime protection
against economic loss resulting from the death of the second of two persons
insured. The Policies are primarily insurance and not investments.
 
  The Policies work generally as follows: the Policy owner (the "Owner")
periodically gives JHVLICO a premium payment. JHVLICO takes from each premium
an amount for processing expenses, taxes, and sales expenses. JHVLICO then
places the rest of the premium into as many as thirteen Subaccounts as
directed by the Owner. The assets allocated to each variable Subaccount are
invested in shares of the corresponding Portfolio of the Funds. The currently
available Portfolios are Stock, Select Stock, Bond, Money Market, Managed,
Real Estate Equity, International, Short-Term U.S. Government, Special
Opportunities, Edinburgh Overseas Equity, Turner Core Growth and Frontier
Capital Appreciation. The assets allocated to the Fixed Account are invested
in the general account of JHVLICO. During the year, JHVLICO takes charges from
each Subaccount and credits or charges each Subaccount with its respective
investment performance. The insurance charge, which is deducted from the
invested assets attributable to each Policy ("Account Value"), varies monthly
with the then attained age of the insureds and with the amount of insurance
provided at the start of each month.
 
  The Policy provides for payment of death benefit proceeds when the last
surviving insured dies. The death benefit proceeds will equal the death
benefit, plus any additional benefit included by rider and then due, minus any
Indebtedness. The death benefit under Option A equals the Sum Insured less any
withdrawals that the Owner has made. The death benefit under Option B equals
the Sum Insured plus the Policy Account Value on the date of death of the last
surviving insured. Under Option A, the Owner may also elect an Extra Death
Benefit feature that may result in a higher death benefit in some cases. The
Policy also increases the death benefit if necessary to ensure that the Policy
will continue to qualify as life insurance under the Federal tax laws.
 
  Within limits prescribed by JHVLICO, the Owner may also elect whether to
purchase the survivorship coverage as part of the "Basic Sum Insured" or as an
"Additional Sum Insured." The Basic Sum Insured will not lapse during the
first ten Policy years, so long as (1) specified Guaranteed Minimum Death
Benefit Premiums have been paid, and (2) the Additional Sum Insured is not
scheduled to exceed the Basic Sum Insured at any time. The Owner may elect for
this Guaranteed Minimum Death Benefit feature to extend beyond ten years. The
Additional Sum Insured is subject to lapse, but has certain cost and other
advantages.
 
  The initial Account Value is the amount of the premium that JHVLICO credits
to the Policy, after deduction of the initial charges. The Account Value
increases or decreases daily depending on the investment experience of the
Subaccounts to which the amounts are allocated at the direction of the Owner.
JHVLICO does not guarantee a minimum amount of Account Value. Therefore, the
Owner bears the investment risk
 
                                       1
<PAGE>
 
for that portion of the Account Value allocated to the variable Subaccounts.
The Owner may surrender a Policy at any time while either of the insureds is
living. The Surrender Value is the Account Value less any Indebtedness. The
Owner may also make partial withdrawals from a Policy, subject to certain
restrictions and an administrative charge. If the Owner surrenders in the
early Policy years, the amount of Surrender Value would be low (as compared
with other investments without sales charges) and, consequently, the insurance
protection provided prior to surrender would be costly.
 
  The minimum Sum Insured that may be bought at issue is $1,000,000. All
persons insured must meet specified age limits and certain health and other
criteria called "underwriting standards." The smoking status of the insureds
is generally reflected in the insurance charges made. Policies issued in
certain jurisdictions will not directly reflect the sexes of the insureds in
either the premium rates or the charges and values under the Policy.
 
WHAT IS THE AMOUNT OF THE PREMIUMS?
 
  Premiums are flexible, and the Owner may choose the amount and frequency of
premium payments, so long as each premium payment is at least $100 and meets
certain other requirements.
 
  The minimum amount of premium required at the time of Policy issue is
determined by JHVLICO based on the characteristics of each insured, the
Policy's Sum Insured at issue, and the Policy options selected by the Owner.
Unless the Guaranteed Minimum Death Benefit is in effect, if the Policy
Account Value at the beginning of any Policy month is insufficient to pay the
monthly Policy charges then due, JHVLICO will estimate the amount of
additional premiums necessary to keep the Policy in force for three months.
The Owner will have a 61 day grace period to pay at least that amount or the
Policy will lapse.
 
  At the time of Policy issue, the Owner may designate the amount and
frequency of Planned Premium payments. The Owner may pay premiums other than
the Planned Premium payments, subject to certain limitations.
 
  The Policy has a Guaranteed Minimum Death Benefit provision, which
guarantees that the basic Sum Insured will not lapse during the first ten
Policy years if (1) prescribed amounts of premiums have been paid, based on
the characteristics of each insured and the amount of the Basic Sum Insured at
issue and (2) any Additional Sum Insured is not scheduled to exceed the Basic
Sum Insured at any time. The Owner may at the time of application elect for
this feature to be extended beyond the first ten Policy years for an
additional charge.
 
WHAT IS JOHN HANCOCK VARIABLE LIFE ACCOUNT S?
 
  The Account is a separate investment account of JHVLICO, operated as a unit
investment trust, which supports benefits payable under the Policies. There
are currently twelve variable Subaccounts within the Account. Each is invested
in a corresponding Portfolio of John Hancock Variable Series Trust I or of M
Fund, Inc., each of which is a "series" type of mutual fund. The Portfolios of
the Funds which are currently available are Stock, Select Stock, Bond, Money
Market, Managed, Real Estate Equity, International, Short-Term U.S.
Government, Special Opportunities, Edinburgh Overseas Equity, Turner Core
Growth and Frontier Capital Appreciation.
 
  John Hancock receives a fee from John Hancock Variable Series Trust I for
providing investment management services with respect to the Stock, Bond and
Money Market Portfolios at an annual rate of .25% of the average daily net
assets; with respect to the Select Stock and Managed Portfolios, at an annual
rate of .40% of the first $500 million of the average daily net assets and at
lesser percentages for amounts above $500 million; with respect to the Real
Estate Equity Portfolio, at an annual rate of .60% of the first $300 million
of the average daily net assets and at lesser percentages for amounts above
$300 million; with respect to the International
 
                                       2
<PAGE>
 
Portfolio, at an annual rate of .60% of the first $250 million of the average
daily net assets and at lesser percentages for amounts above $250 million;
with respect to the Short-Term U.S. Government Portfolio, at an annual rate of
 .50% for the first $250 million of average daily net assets and at lesser
percentages for amounts above $250 million; and with respect to the Special
Opportunities Portfolio, at an annual rate of .75% for the first $250 million
of average daily net assets and at lesser percentages for amounts above $250
million.
 
  M Financial Investment Advisers, Inc., receives a fee from M Fund, Inc. for
providing investment management services with respect to the International
Equity Portfolio at an annual rate of 1.05% of the first $10 million of the
average daily net assets and at an annual rate of .90% of the next $15 million
of the average daily net assets and at lesser percentages for amounts above
$25 million; with respect to the Core Growth Portfolio at an annual rate of
 .45% of the average daily net assets; and with respect to the Capital
Appreciation Portfolio at an annual rate of .90% of the average daily net
assets.
 
  For a full description of the Funds, see the Prospectuses for the Funds
attached to this Prospectus.
 
WHAT ARE THE CHARGES MADE BY JHVLICO?
 
  Premium Processing Charge. A 1.25% charge deducted from each premium
payment. This charge will be reduced for Policies with a Sum Insured at issue
of more than $5,000,000, subject to a minimum charge of .50%.
 
  State Premium Tax Charge and Federal DAC Tax Charge. Charges deducted from
each premium payment, currently 2.35% for state premium taxes and 1.25% as a
Federal deferred acquisition cost or "DAC Tax" charge.
 
  Sales Charge. A charge deducted from each premium payment in the amount of
30% of premiums paid in the first year up to the "target premium" and 3.5% of
premiums paid during the first year in excess of that target. The current
sales charge in subsequent years generally is: 15% of premiums paid up to the
target premium in each of years 2 through 5; 10% of premiums paid up to the
target premium in each of years 6 through 10; 3% of premiums paid up to the
target premium in years 11 through 20; and 0% of premiums paid up to the
target premium thereafter. The current sales charge for premiums paid in
excess of the target premium is 3.5% of such excess premiums paid in years 2
through 10; 3% of such excess premiums paid in years 11 through 20; and 0% of
such excess premiums paid thereafter. Subject to maximums set forth in the
Policy, certain of these charges may be increased after the tenth Policy year.
 
  Issue Charge. A charge deducted monthly from Account Value at the rate of
$55.55 per month for the first 5 Policy years, plus 2c per $1,000 of the Sum
Insured at issue for the first 3 Policy years, except that the charge per
$1,000 is guaranteed not to exceed $200 per month.
 
  Administrative Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $10 per Policy and 3c per $1,000 of the Sum
Insured at issue (currently $7.50 for all Policy years, plus 1c per $1,000 of
the Sum Insured at issue for the first 10 Policy years, except that the $7.50
charge currently is zero for any Policy with a Sum Insured at issue of at
least $5,000,000).
 
  Insurance Charge. A charge based upon the amount for which JHVLICO is at
risk, considering the attained age and risk classification of each of the
insureds and JHVLICO's then current monthly insurance rates (never to exceed
rates set forth in the Policy) deducted monthly from Account Value.
 
  Guaranteed Minimum Death Benefit Charge. If the Guaranteed Minimum Death
Benefit option is elected beyond the first 10 Policy years, a maximum charge
starting at the beginning of the eleventh Policy year not to exceed 3c
(currently 1c) per $1,000 of the basic Sum Insured at issue, deducted monthly
from Account Value.
 
 
                                       3
<PAGE>
 
  Charge for Mortality and Expense Risks. A charge made daily at a maximum
effective annual rate of .90% of the assets of the Account. The current
charges are: for a Policy with Sum Insured at issue of $1 million through
$4.999 million, .625% of assets; $5 million through $14.999 million, .575% of
assets; and $15 million or more, .525% of assets.
 
  Charge for Extra Mortality Risks. An additional charge, depending upon the
ages of the insureds and the degree of additional mortality risk, required if
either of the insureds does not qualify for the standard underwriting class.
This additional charge is deducted monthly from Account Value.
 
  Charge for Optional Rider Benefits. An additional charge required if the
Owner elects to purchase optional insurance benefits by rider. This additional
charge is deducted from premiums when paid or is deducted monthly from Account
Value.
 
  Charge for Partial Withdrawal. A charge of $20 made against Account Value at
the time of withdrawal.
 
  See "Charges and Expenses", for a fuller description of the charges under
the Policy.
 
IS THERE A CHARGE AGAINST THE ACCOUNT FOR FEDERAL INCOME TAX?
 
  Currently no charge is made against any Subaccount for Federal income taxes;
but if JHVLICO incurs, or expects to incur, income taxes attributable to any
Subaccount or this class of Policies in future years, it reserves the right to
make a charge. JHVLICO expects that it will continue to be taxed as a life
insurance company. See "Charge for JHVLICO's Taxes."
 
WHAT IS THE RELATIONSHIP BETWEEN THE PREMIUM AND THE AMOUNT ALLOCATED TO THE
SUBACCOUNTS?
 
  The initial net premium is allocated by JHVLICO from its general account to
the Money Market Subaccount on the date of issue of the Policy. The initial
net premium is the gross Minimum First Premium, plus any additional amount of
premium that has been paid prior to the date of issue, less the premium
processing charge, the charges deducted for sales expenses and state premium
taxes, and the Federal DAC Tax charge. These charges also apply to subsequent
premium payments. Twenty days after the date of issue, the amount in the Money
Market Subaccount is reallocated among the Subaccounts in accordance with the
Owner's election. Net premiums derived from payments received after this
reallocation date are allocated, generally on the date of receipt, to one or
more of the Subaccounts as elected by the Owner.
 
HOW ARE AMOUNTS ALLOCATED TO EACH SUBACCOUNT?
 
  At issue and subsequently thereafter, the Owner will provide us with the
rule ("Investment Rule") we will follow to invest net premiums or other
amounts in any of the Subaccounts. The Owner may change the Investment Rule
under which JHVLICO will allocate amounts to Subaccounts. See "Premiums--
Billing, Allocation of Premium Payments (Investment Rule)."
 
WHAT COMMISSIONS ARE PAID TO AGENTS?
 
  The Policies are sold through agents who are licensed by state authorities
to sell JHVLICO's insurance policies. Commissions payable to agents are
described under "Distribution of Policies." Sales expenses in any year are not
equal to the deduction for sales expenses in that year. Rather, total sales
expenses under the Policies are intended to be recovered over the lifetimes of
the insureds covered by the Policies.
 
 
                                       4
<PAGE>
 
WHAT IS THE DEATH BENEFIT?
 
  The death benefit proceeds, payable when the last insured dies, will equal
the death benefit of the Policy, plus any additional rider benefits included
and then due, minus any Indebtedness. The death benefit payable depends on the
Policy's Sum Insured and the death benefit option selected by the Owner at the
time the Policy is issued, as follows:
 
    OPTION A: The death benefit equals the Policy's current Sum Insured less
  any withdrawals of Account Value that the Owner has made. (The Sum Insured
  is the Basic Sum Insured plus the amount of any Additional Sum Insured.) If
  this option is elected, the Owner may also elect an optional Extra Death
  Benefit feature, under which the death benefit will increase if and when
  the Policy Account Value exceeds a certain predetermined amount.
 
    OPTION B: The death benefit is the Policy's current Sum Insured plus the
  Policy Account Value on the date of death of the last surviving insured,
  and varies in amount based on investment results.
 
  The death benefit of the Policy under either Option A or Option B will be
increased if necessary to ensure that the Policy will continue to qualify as
life insurance under the Federal tax law. See "Death Benefits" and "Tax
Considerations."
 
  Under the Guaranteed Minimum Death Benefit provision, the Policy is
guaranteed not to lapse during the first 10 Policy years, provided the amount
of premiums paid, accumulated at 4% interest, minus any withdrawals, also
accumulated at 4% interest, is at least equal to the Guaranteed Minimum Death
Benefit Premiums, accumulated at 4% interest. For an additional charge, the
Owner also may elect for this benefit to continue beyond the tenth Policy
year. However, the Guaranteed Minimum Death Benefit will not apply to any
Policy if the Additional Sum Insured is scheduled to exceed the Basic Sum
Insured at any time.
 
HOW DOES THE ACCOUNT VALUE OF A POLICY VARY IN RELATION TO THE SUBACCOUNTS'
INVESTMENT EXPERIENCE?
 
  In general, the Account Value for any day equals the Account Value for the
previous day, increased by any net premium placed in the Subaccounts for the
Policy, decreased by any charges made against the Account Value, and increased
or decreased by the investment experience of the Subaccounts. No minimum
Account Value for the Policy is guaranteed.
 
WHAT IS THE LOAN PROVISION AND HOW DOES A LOAN AFFECT THE DEATH BENEFIT,
ACCOUNT VALUE AND SURRENDER VALUE?
 
  The Owner may obtain a Policy loan in the maximum amount of 90% of the
Surrender Value. Interest charged on any loan will accrue daily at an annual
rate determined by JHVLICO at the start of each Policy year. This interest
rate will not exceed the greater of (1) the "Published Monthly Average" (see
"Loan Provision and Indebtedness") for the calendar month ending two months
before the calendar month of the Policy anniversary or (2) 5%. In
jurisdictions where a fixed loan rate is applicable, JHVLICO will charge
interest at an effective annual rate of 5% in the first 20 Policy years and
4.5% thereafter, accrued daily. A loan plus accrued interest ("Indebtedness")
may be repaid at the discretion of the Owner in whole or in part in accordance
with the terms of the Policy.
 
  While a loan is outstanding, the rate of interest credited to the Account
Value because of the loan will usually be different than the net investment
experience of the Subaccounts. Therefore, the Account Value, the Surrender
Value and any death benefit above the current Sum Insured are permanently
affected by any loan.
 
                                       5
<PAGE>
 
IS THERE A SHORT-TERM CANCELLATION RIGHT?
 
  The Owner may surrender a Policy by delivering or mailing it within 45 days
after the date Part A of the application has been completed for both insureds,
or within 10 days after receipt of the Policy by the Owner, or within 10 days
after mailing by JHVLICO of a Notice of Withdrawal Right, whichever is latest,
to JHVLICO's Home Office, or to the agent or agency office through which it
was delivered. Coverage under the Policy will be cancelled immediately as of
the date of such mailing or delivery. Any premium paid on it will be refunded.
If required by state law, the refund will equal the Account Value at the end
of the Valuation Period in which the Policy is received plus all charges or
deductions made against premiums plus an amount reflecting charges against the
Subaccounts and the investment management fee of the Fund.
 
WHAT INVESTMENT TRANSFERS ARE ALLOWED AN OWNER?
 
  The Owner may transfer the Account Value among the variable Subaccounts or
into the Fixed Account at any time. Transfers out of the Fixed Account,
however, are subject to restrictions.
 
ARE THE BENEFITS UNDER A POLICY SUBJECT TO FEDERAL INCOME TAX?
 
  The benefits under Policies described in this Prospectus are expected to
receive the same tax treatment under the Internal Revenue Code of 1986 as
benefits under traditional fixed-benefit life insurance policies. Thus, death
benefits payable under the Policies will not be included in the beneficiary's
gross income. Also, the Owner is not taxed on interest and gains under the
Policy unless and until values are actually received through withdrawal,
surrender, or other distributions.
 
  Under Federal tax law, distributions from Policies on which premiums greater
than a "7-pay" premium limit (as defined in the law) have been paid, will be
subject to special taxation. See "Premiums--7-Pay Premium Limit" and "Policy
Proceeds" for a discussion of how the "7-pay" premium limit may be exceeded
under a Policy. A distribution on such a Policy (called a "modified
endowment") will be taxed to the extent there is any income (gain) to the
Owner and an additional penalty tax may be imposed on the taxable amount.
 
                           JHVLICO AND JOHN HANCOCK
 
  JHVLICO, a stock life insurance company chartered in 1979 under
Massachusetts law, is authorized to transact a life insurance and annuity
business in Massachusetts and all other states, except New York. JHVLICO began
selling variable life insurance policies in 1980.
 
  JHVLICO is a wholly-owned subsidiary of John Hancock, a company chartered in
Massachusetts in 1862. Its Home Office is at John Hancock Place, Boston,
Massachusetts 02117. As of December 31, 1994, John Hancock's assets were over
$45 billion and it had invested over $380 million in JHVLICO in connection
with JHVLICO's organization and operations. It is anticipated that John
Hancock will from time to time make additional capital contributions to
JHVLICO to enable it to meet its reserve requirements and expenses in
connection with its business, and John Hancock is committed to make additional
capital contributions if necessary to ensure that JHVLICO maintains a positive
net worth.
 
                                       6
<PAGE>
 
                       THE ACCOUNT AND THE SERIES FUNDS
 
THE ACCOUNT
 
  The Account, a separate account established under Massachusetts law in 1993,
meets the definition of "separate account" under the Federal securities laws
and is registered as a unit investment trust under the Investment Company Act
of 1940 ("1940 Act").
 
  The Account's assets are the property of JHVLICO. Each Policy provides that
the portion of the Account's assets equal to the reserves and other
liabilities under the Policy shall not be chargeable with liabilities arising
out of any other business JHVLICO may conduct. In addition to the assets
attributable to variable life policies, the Account's assets include assets
derived from charges made by JHVLICO. From time to time these additional
assets may be transferred in cash by JHVLICO to its general account. Before
making any such transfer, JHVLICO will consider any possible adverse impact
the transfer might have on any Subaccount. Additional premiums are charged for
Policies where the insured is classified as a substandard risk and a portion
of these premiums is allocated to the Account.
 
  The Account is registered with the Securities and Exchange Commission (the
"Commission") under the 1940 Act. Such registration does not involve
supervision by the Commission of the management or policies of the Account,
JHVLICO or John Hancock.
 
  The assets in each variable Subaccount are invested in corresponding
Portfolios of the Funds, but the assets of one variable Subaccount are not
necessarily legally insulated from liabilities associated with another
variable Subaccount. New variable Subaccounts may be added or existing
variable Subaccounts may be deleted as new Portfolios are added to or deleted
from the Funds and made available to Owners.
 
THE SERIES FUNDS
 
  Each Fund is a "series" type of mutual fund registered with the Commission
under the 1940 Act as an open-end diversified management investment company.
Each Fund serves as the investment medium for the Account and other unit
investment trust separate accounts established for other variable life
insurance policies and variable annuity contracts. (See the attached Fund
Prospectuses for a description of a need to monitor for possible conflicts and
other consequences.) A very brief summary of the investment objectives of each
Portfolio is set forth below.
 
  Stock Portfolio. The investment objective of this Portfolio is to achieve
intermediate and long-term growth of capital, with income as a secondary
consideration. This objective will be pursued by investments principally in
common stocks (and in securities convertible into or with rights to purchase
common stocks) of companies believed by management to offer growth potential
over both the intermediate and long-term.
 
  Select Stock Portfolio. The investment objective of this Portfolio is to
achieve above-average capital appreciation through the ownership of common
stocks of companies believed by management to offer above-average capital
appreciation opportunities. Current income is not an objective of the
Portfolio.
 
  Bond Portfolio. The investment objective of this Portfolio is to provide as
high a level of long-term total rate of return as is consistent with prudent
investment risk, through investment in a diversified portfolio of freely
marketable debt securities. Total rate of return consists of current income,
including interest and discount accruals, and capital appreciation.
 
                                       7
<PAGE>
 
  Money Market Portfolio. The investment objective of this Portfolio is to
provide maximum current income consistent with capital preservation and
liquidity. It seeks to achieve this objective by investing in a managed
portfolio of high quality money market instruments.
 
  Managed Portfolio. The investment objective of this Portfolio is to achieve
maximum long-term total return consistent with prudent investment risk.
Investments will be made in common stocks, convertibles and other fixed income
securities and in money market instruments.
 
  Real Estate Equity Portfolio. The investment objective of this Portfolio is
to provide above-average income and long-term growth of capital by investment
principally in equity securities of companies in the real estate and related
industries.
 
  International Portfolio. The investment objective of this Portfolio is to
achieve long-term growth of capital by investing primarily in foreign equity
securities.
 
  Short-Term U.S. Government Portfolio. The investment objective of this
Portfolio is to provide a high level of current income consistent with the
maintenance of principal, through investment in a portfolio of short-term U.S.
Treasury securities and U.S. Government agency securities.
 
  Special Opportunities Portfolio. The investment objective of this Portfolio
is to achieve long-term capital appreciation by emphasizing investments in
equity securities of issuers in various economic sectors.
 
  John Hancock acts as the investment manager for the above portfolios, and
John Hancock's indirectly owned subsidiary, Independence Investment
Associates, Inc., with its principal place of business at 53 State Street,
Boston, Massachusetts, provides sub-investment advice with respect to the
Stock, Select Stock, Managed, Real Estate Equity and Short-Term U.S.
Government Portfolios. Another indirectly owned subsidiary, John Hancock
Advisers, Inc., located at 101 Huntington Avenue, Boston, Massachusetts,
provides sub-investment advice with respect to the Special Opportunities
Portfolio; and John Hancock Advisers and its subsidiary, John Hancock Advisers
International, Limited, located at 34 Dover Street, London, England, provide
sub-investment advice with respect to the Bond and International Portfolios.
 
  Edinburgh Overseas Equity Portfolio. Its investment objective is long-term
capital appreciation with reasonable investment risk through active management
and investment in common stock and common stock equivalents of foreign
issuers. Current income, if any, is incidental.
 
  Turner Core Growth Portfolio. The investment objective of this Portfolio is
long-term capital appreciation through a diversified portfolio of common stocks 
that show strong earnings potential with reasonable market
prices.
 
  Frontier Capital Appreciation Portfolio. This Portfolio seeks maximum
capital appreciation through investment in common stock of companies of all
sizes, with emphasis on stocks of small- to medium-capitalization companies.
Importance is placed on an evaluation of earnings per share growth and 
expectations of stock price appreciation, rather than income.
 
  M Financial Investment Advisers, Inc., acts as the investment manager for
the three Portfolios of M Fund, Inc. described above. Edinburgh Fund Managers
PLC, provides sub-investment advice to the Edinburgh Overseas Equity Portfolio;
Turner Investment Partners, Inc. provides sub-investment advice to the Turner
Core Growth Portfolio; and Frontier Capital Management Company, Inc., provides
sub-investment advice to the Frontier Capital Appreciation Portfolio.
 
                                       8
<PAGE>
 
  JHVLICO will purchase and redeem Fund shares for the Account at their net
asset value without any sales or redemption charges. Shares of the Fund
represent an interest in one of the Portfolios which corresponds to a variable
Subaccount of the Account. Any dividend or capital gains distributions
received by the Account will be reinvested in Fund shares at their net asset
value as of the dates paid.
 
  On each Valuation Date, shares of each Portfolio are purchased or redeemed
by JHVLICO for each variable Subaccount based on, among other things, the
amount of net premiums allocated to the variable Subaccount, distributions
reinvested, transfers to, from and among variable Subaccounts, all to be
effected as of that date. Such purchases and redemptions are effected at the
net asset value per Fund share for each Portfolio determined on that same
Valuation Date. A Valuation Date is any date on which JHVLICO is open for
business, the New York Stock Exchange is open for trading and on which the
Fund values its shares. A Valuation Period is that period of time from the
beginning of the day following a Valuation Date to the end of the next
following Valuation Date.
 
  A full description of each Fund, its investment objectives, policies and
restrictions, its charges, expenses and all other aspects of its operation is
contained in the attached Prospectuses and the statement of additional
information referred to therein, which should be read together with this
Prospectus.
 
                                       9
<PAGE>
 
                               THE FIXED ACCOUNT
 
  An Owner may allocate premiums to the Fixed Account or transfer all or a
part of the Account Value under a Policy to the Fixed Account. The amount so
allocated or transferred will become a part of JHVLICO's general account
assets. JHVLICO's general account consists of assets owned by JHVLICO other
than those in the Account and in other separate accounts that have been or may
be established by JHVLICO. Subject to applicable law, JHVLICO has sole
discretion over the investment of assets of the general account, and Owners do
not share in the investment experience of those assets. Instead, JHVLICO
guarantees that the Account Value allocated to the Fixed Account will accrue
interest daily at an effective annual rate of at least 4% without regard to
the actual investment experience of the general account. Transfers from the
Fixed Account are subject to certain limitations. See "Transfers Among
Subaccounts."
 
  The Account Value in the Fixed Account is equal to the portion of the net
premiums allocated to it, plus any amounts transferred to it and interest
credited to it, minus any charges deducted from it or partial withdrawals or
amounts transferred from it. JHVLICO guarantees that interest credited to the
Account Value in the Fixed Account will not be less than an effective annual
rate of 4%. JHVLICO may, in its sole discretion, credit higher rates although
it is not obligated to do so. The Owner assumes the risk that interest
credited will not exceed 4% per year. Upon request and in the annual
statement, JHVLICO will inform Owners of the then-applicable rates. The rate
of interest declared with respect to any amount in the Fixed Account may
depend on when that amount was first allocated to the Fixed Account.
 
  Because of exemptive and exclusionary provisions, interests in JHVLICO's
general account have not been registered under the Securities Act of 1933 and
the general account has not been registered as an investment company under the
1940 Act. Accordingly, neither the general account nor any interests therein
are subject to the provisions of these Acts, and JHVLICO has been advised that
the staff of the Securities and Exchange Commission has not reviewed the
disclosure in this Prospectus relating to the Fixed Account. Disclosure
regarding the Fixed Account may, however, be subject to certain generally-
applicable provisions of the Federal securities laws relating to accuracy and
completeness of statements made in prospectuses.
 
                        POLICY PROVISIONS AND BENEFITS
 
REQUIREMENTS FOR ISSUANCE OF POLICY
 
  The Policy is generally available with a minimum Sum Insured at issue of
$1,000,000 and a minimum Basic Sum Insured of $500,000. At the time of issue,
each insured must be age 20 through 80. All persons insured must meet certain
health and other criteria called "underwriting standards." The smoking status
of each insured is reflected in the insurance charges made. Policies issued in
certain jurisdictions will not directly reflect the sex of the insured in
either the premium rates or the charges or values under the Policy.
Accordingly, the illustrations set forth in this Prospectus may differ for
such Policies. Amounts of coverage that JHVLICO will accept under the Policies
may be limited by JHVLICO's underwriting and reinsurance procedures as in
effect from time to time.
 
PREMIUMS
 
  Payment Flexibility. Premiums are flexible. The Owner may choose the amount
and frequency of premium payments, so long as each premium payment is at least
$100 and meets the other requirements described below.
 
                                      10
<PAGE>
 
  Minimum First Premium. The amount of premium required at the time of issue
is determined by JHVLICO, and depends on the age, sex, smoking status, and
underwriting class of each of the insureds at issue, the Policy's Sum Insured
at issue, and any additional benefits selected. The Minimum First Premium must
be received by JHVLICO at its Home Office before the Policy is in full force
and effect. See "Death Benefits." There is no grace period for the payment of
the Minimum First Premium.
 
  Minimum Premiums. If the Policy's Surrender Value at the beginning of any
Policy month is insufficient to pay the monthly Policy charges then due,
JHVLICO will notify the Owner and the Policy will enter a grace period, unless
the Guaranteed Minimum Death Benefit is in effect. If premiums sufficient to
pay at least three months' estimated charges are not paid by the end of the
grace period, the Policy will lapse. See "Default."
 
  Planned Premium Schedule. At the time of issue, the Owner may designate a
Planned Premium schedule for the amount and frequency of premium payments.
JHVLICO will send billing statements for the amount chosen, at the frequency
chosen. The Owner may change the Planned Premium after issue. The Owner may
also pay a premium in excess of the Planned Premium, subject to the
limitations described below. At the time of Policy issuance, JHVLICO will
determine whether the Planned Premium schedule will exceed the 7-Pay limit
discussed below. If so, JHVLICO will not issue the Policy unless the Owner
signs a form acknowledging that fact.
 
  Other Premium Limitations. Federal tax law requires a minimum death benefit
in relation to Account Value. See "Death Benefits--Definition of Life
Insurance." The death benefit of the Policy will be increased if necessary to
ensure that the Policy will continue to satisfy this requirement. Also, as
described under "Death Benefits--Optional Extra Death Benefit Feature," the
optional Extra Death Benefit feature may result in a death benefit under
Option A that is higher than the Sum Insured. If the payment of a given
premium will cause the Policy Account Value to increase to such an extent that
an increase in death benefit is necessary to satisfy federal tax law
requirements, or pursuant to the Extra Death Benefit option, JHVLICO has the
right to not accept the excess portion of that premium payment, or to require
evidence of insurability before that portion is accepted. In no event,
however, will JHVLICO refuse to accept any premium necessary to maintain the
Guaranteed Minimum Death Benefit in effect under a Policy.
 
  Whether or not the Guaranteed Minimum Death Benefit is in effect, JHVLICO
also reserves the right to limit premium payments above the amount of the
cumulative Guaranteed Minimum Death Benefit premiums. JHVLICO will not,
however, refuse to accept any premium payment that is required to keep the
Policy from lapsing.
 
  Guaranteed Minimum Death Benefit Premiums. A Guaranteed Minimum Death
Benefit feature may apply during the first ten Policy years and, if the Owner
has elected, thereafter. See "Death Benefits." The Guaranteed Minimum Death
Benefit Premiums required to maintain this benefit in force depend on the
issue age, sex, smoking status, and underwriting class of each of the insureds
at issue and the Basic Sum Insured at issue. This premium will be higher than
the Minimum First Premium and is 85% of the target premium (discussed under
"Sales Charge"). To keep the Guaranteed Minimum Death Benefit in effect, the
amount of actual premiums paid, accumulated at 4% interest, minus any
withdrawals, also accumulated at 4% interest, must at each Policy anniversary
be at least equal to the Guaranteed Minimum Death Benefit Premiums due to date
accumulated at 4% interest. If this test is not satisfied on any Policy
anniversary, JHVLICO will notify the Owner of the shortfall and a 61-day grace
period will commence as of that anniversary. This notice will be mailed to the
Owner's last-known address at least 31 days prior to the end of the grace
period. If JHVLICO does not receive payment for the amount of the deficiency
by the end of the grace period, the Guaranteed Minimum Death Benefit feature
will lapse unless and until restored as described under "Default--
Reinstatement." The Guaranteed Minimum Death Benefit will not apply if the
Additional Sum Insured is scheduled to exceed the Basic Sum Insured at any
time.
 
                                      11
<PAGE>
 
  Billing, Allocation of Premium Payments (Investment Rule). The Owner may at
any time elect to be billed by JHVLICO for an amount of premium other than the
Guaranteed Minimum Death Benefit Premium. The Owner may also elect to be
billed for premiums on an annual, semi-annual or quarterly basis. An automatic
check-writing program may be available to an Owner interested in making
monthly premium payments. All premiums are payable at JHVLICO's Home Office.
 
  Any premium payment will be processed by JHVLICO as of the end of the
Valuation Period in which it is received, unless one of the three exceptions
noted below is applicable. Each premium payment will be reduced by the premium
processing charge, the state premium tax charge, the sales charge, and the
Federal DAC Tax charge. See "Charges and Expenses." The remainder is the net
premium.
 
  The Owner at the time of application must elect an Investment Rule which
will allocate net premiums and any credits to any of the ten Subaccounts. The
Owner must select allocation percentages in whole numbers, and the total
allocated must equal 100%. The Owner may thereafter change the Investment Rule
prospectively at any time. The change will be effective as to any net premiums
and credits applied after receipt at JHVLICO's Home Office of notice
satisfactory to JHVLICO. Notwithstanding the Investment Rule, all net premiums
credited to Account Value as of a date prior to the end of the Valuation
Period that includes the 20th day following the date of issue will
automatically be allocated to the Money Market Subaccount. At the end of that
Valuation Period, the Policy's Account Value will be reallocated automatically
among the Subaccounts in accordance with the Investment Rule chosen by the
Owner.
 
  There are three exceptions to the normal practice of processing a premium
payment as of the end of the Valuation Period in which it is received:
 
    (1) A payment received prior to a Policy's date of issue will be
        processed as if received on the Valuation Date immediately
        preceding the date of issue.
 
    (2) If the Minimum First Premium is not received prior to the date of
        issue, each payment received thereafter will be processed as if
        received on the Valuation Date immediately preceding the date of
        issue until all of the Minimum First Premium is received.
 
    (3) That portion of any premium that we delay accepting as described
        under "Other Premium Limitations" above, or "7-Pay Premium Limit"
        below, will be processed as of the end of the Valuation Period in
        which we accept that amount.
 
  7-Pay Premium Limit. Federal tax law modifies the tax treatment of certain
Policy distributions such as loans, surrenders, partial surrenders, and
withdrawals. The application of this modified treatment to any Owner depends
upon whether premiums have been paid at any time during the first 7 Policy
years that exceed a "7-pay" premium limit as defined in the law. The "7-pay"
premium is greater than the Guaranteed Minimum Death Benefit Premium but is
generally less than the amount an Owner may choose to pay and JHVLICO will
accept. The 7-pay limit is the total of net level premiums that would have
been payable at any time for the Policy to be fully paid-up after the payment
of 7 level annual premiums. If the total premiums paid exceed the 7-pay limit,
the Policy will be treated as a "modified endowment", which means that the
Owner will be subject to tax to the extent of any income (gain) on any
distributions made from the Policy. A material change in the Policy will
result in a new 7-pay limit and test period. A reduction in the Policy's
benefits within the 7-year period following issuance of, or a material change
in, the Policy may also result in the application of the modified endowment
treatment. See "Policy Proceeds" under "Tax Considerations." If JHVLICO
receives any premium payment that will cause a Policy to become a modified
endowment, the excess portion of that premium payment will not be accepted
unless the Owner signs an acknowledgment of that fact.
 
 
                                      12
<PAGE>
 
ACCOUNT VALUE AND SURRENDER VALUE
 
  Amount of Account Value. The Account Value increases or decreases depending
upon a number of factors, such as the applicable Subaccount's investment
experience, the proportion of the Account Value invested in each Subaccount
and the interest credited to any Loan Account established upon the making of a
Policy loan. In general the Account Value for any day equals the Account Value
for the previous day, decreased by charges against the Account Value,
increased or decreased by the investment experience of the Subaccounts and
increased by net premiums received. No minimum amount of Account Value is
guaranteed.
 
  A Policy loan will not affect the total amount of Account Value at the time
the loan is made but will result in a different rate of return being credited
to the Loan Account portion of the Account Value.
 
  Amount of Surrender Value. The Surrender Value will be the Account Value
less any Indebtedness.
 
  When Policy May Be Surrendered. A Policy may be surrendered for its
Surrender Value at any time while either of the insureds is living and the
Policy is not in a grace period. Surrender takes effect and the Surrender
Value is determined as of the end of the Valuation Period in which occurs the
later of receipt at JHVLICO's Home Office of a signed request or the
surrendered Policy.
 
  If a Policy is surrendered during the second Policy year, a portion of the
sales charge, equal to 5% of premiums paid in the second Policy year up to one
target premium, will be refunded to the Owner.
 
  Partial Withdrawal of Surrender Value. The Owner may request withdrawal of
part of the Surrender Value in accordance with JHVLICO's rules then in effect.
Any withdrawal must be at least $1,000 and is subject to an administrative
charge of $20.
 
  An Owner may request a partial withdrawal of Surrender Value at any time
when at least one of the insureds is still living, provided that the Policy is
not in a grace period. This privilege, which reduces the Account Value by the
amount of the withdrawal and the associated charge, may not be used to reduce
the Account Value below the amount JHVLICO estimates will be required to pay
three months' charges under the Policy as they fall due. The withdrawal will
be effective as of the end of the Valuation Period in which JHVLICO receives
written notice satisfactory to it at its Home Office.
 
  A withdrawal will reduce any Option A death benefit by the amount withdrawn.
JHVLICO reserves the right to refuse any withdrawal request that would cause
the Policy's death benefit to fall below $1,000,000.
 
  An amount equal to the Account Value withdrawn will be removed from each
Subaccount in the same proportion as the Account Value is then allocated among
the Subaccounts. A withdrawal is not a loan and, once made, cannot be repaid.
 
  A withdrawal may have significant tax consequences. See "Tax
Considerations."
 
POLICY SPLIT OPTION
 
  The Owner may elect a rider that permits the Policy's current Sum Insured to
be split on a "50/50" basis into two other individual life insurance policies
on the lives of the insured persons. Such a split will not require evidence of
insurability of either insured, but is permitted only upon the insureds'
divorce or the occurrence of certain Federal tax law changes. This rider must
be elected at the time of application for a Policy, but may be cancelled at
any time by the Owner. The monthly charge for the rider is 3c per $1000 of
current Sum Insured. Certain conditions, described in the rider, must be met
prior to effecting a Policy split. The rider automatically terminates on the
date of death of the first insured to die, the Policy anniversary nearest the
older insured's 80th birthday, or the date the Policy terminates, whichever is
earliest.
 
                                      13
<PAGE>
 
  Tax Considerations. See "Tax Considerations--Policy Split Option", for
possible tax consequences of a Policy split under the option described above.
 
DEATH BENEFITS
 
  The death benefit proceeds are payable when the last surviving insured dies
while the Policy is in effect. The death benefit proceeds will equal the death
benefit of the Policy, plus any additional rider benefits then due, minus any
Indebtedness. If the last surviving insured dies during a grace period,
JHVLICO will also deduct any overdue monthly deductions.
 
  The death benefit payable depends on the current Sum Insured and the death
benefit option selected by the Owner at the time the Policy is issued, as
follows:
 
    OPTION A: The death benefit equals the current Sum Insured, subject to
  any increases described below under "Optional Extra Death Benefit Feature"
  and "Definition of Life Insurance", and reduced by the amount of any
  partial withdrawals that have been made over the life of the Policy.
 
    OPTION B: The death benefit is the current Sum Insured, plus the Policy
  Account Value at the end of the Valuation Period in which the last
  surviving insured dies. This death benefit is a varying amount and
  fluctuates with the amount of the Account Value. This death benefit is also
  subject to any increase described below under "Definition of Life
  Insurance."
 
The Sum Insured is the Basic Sum Insured, plus the amount of any Additional
Sum Insured (discussed below).
 
  Owners who prefer to have favorable investment experience reflected in
increased insurance coverage should choose Option B. Owners who prefer to have
insurance coverage that generally does not vary in amount and lower cost of
insurance charges should choose Option A.
 
  Optional Extra Death Benefit Feature (Option M). If Option A is elected, the
Owner may also elect an optional Extra Death Benefit feature. Pursuant to this
feature the death benefit under Option A will be no less than the amount of
the Policy Account Value at the beginning of the Policy year in which the last
surviving insured dies, multiplied by a factor specified in the Policy. The
factor is based on the younger insured's age. The optional Extra Death Benefit
feature may result in an Option A death benefit that is higher than the
minimum death benefit required under Federal tax law, as described below under
"Definition of Life Insurance." Although there is no special charge for the
optional Extra Death Benefit, the monthly cost of insurance deductions will be
based on the amount of death benefit then in effect, including any additional
death benefit pursuant to this option. An election of this option must be made
at the time of application for the Policy, although the Owner may revoke the
election at any time. There may be tax consequences involved, if revoking the
Extra Death Benefit feature under Option A causes a reduction in death
benefit. See "Tax Considerations--Policy Proceeds."
 
  Definition of Life Insurance. Federal tax law requires a minimum death
benefit in relation to cash value for a Policy to qualify as life insurance.
The death benefit of a Policy will be increased if necessary to ensure that
the Policy will continue to qualify as life insurance. The higher death
benefit amount will be equal to the Policy Account Value on the date of death
of the last surviving insured, times a percentage based on the younger
insured's age at the beginning of the Policy year of the last surviving
insured's death. This percentage, which declines with age, is set out in the
Policy. The monthly deductions for the cost of insurance will be based on the
amount of death benefit then in effect, including any additional death benefit
required to satisfy the definition of life insurance.
 
 
                                      14
<PAGE>
 
  Guaranteed Minimum Death Benefit. During the first 10 Policy years (and
thereafter if the Owner elects), the Basic Sum Insured is guaranteed not to
lapse, provided that (1) the amount of premiums paid through each Policy
anniversary, accumulated at 4% interest, minus any withdrawals, also
accumulated at 4% interest, is at least equal to the Guaranteed Minimum Death
Benefit Premiums accumulated at 4% interest and (2) any Additional Sum Insured
under a Policy is not scheduled to exceed the Basic Sum Insured at any time.
At any time when this feature is not in force, the death benefit of the Policy
is not guaranteed. The election to extend the Guaranteed Minimum Death Benefit
beyond ten Policy years must be made at the time of Policy issuance, and the
Owner may revoke the election at any time. JHVLICO imposes a charge after the
tenth Policy year if the Owner elects to extend this benefit.
 
  Additional Sum Insured. The Owner may apply for an amount of Additional Sum
Insured under the Policy, pursuant to which an additional amount of death
benefit will be paid upon the death of the last surviving insured under the
Policy. Purchasers of a Policy should consider various factors in determining
whether to elect coverage in the form of Basic Sum Insured or in the form of
Additional Sum Insured.
 
  The Basic Sum Insured generally cannot be increased or decreased after
issue, whereas the amount of Additional Sum Insured can be decreased, or, upon
application and submission of evidence of insurability, increased subsequent
to Policy issuance. JHVLICO may refuse to accept any request to reduce the
Additional Sum Insured (a) that would cause the Policy's current Sum Insured
to fall below $1,000,000 or (b) if immediately following the reduction, the
Policy's current death benefit would reflect an increase necessary for the
Policy to continue to qualify as life insurance (see "Death Benefits--
Definition of Life Insurance") or an increase pursuant to the optional Extra
Death Benefit feature. Any increase or decrease in Additional Sum Insured will
become effective at the beginning of the first Policy month after JHVLICO
receives in good order at its Home Office all information necessary to process
the change, and, in the case of an increase in coverage, approves the change.
 
  Any decision by the Owner to modify the amount of Additional Sum Insured
coverage after issue can have significant tax consequences. See "Tax
Considerations--Policy Proceeds."
 
  Also, the Owner may elect among several forms of Additional Sum Insured
coverage at the time the Owner applies for it: a level amount of coverage; an
amount of coverage that increases on each Policy anniversary up to a
prescribed limit; an amount of coverage that increases on each Policy
anniversary to the amount of premiums paid during prior years plus the Planned
Premium for the current year, subject to certain limits; or a combination of
those forms of coverage.
 
  The amount of target premium under a Policy is not affected by the amount of
the Additional Sum Insured. Accordingly, the amount of sales charge paid by
the Owner and the amount of compensation paid to the selling insurance agent
may be less if coverage is included as Additional Sum Insured, rather than as
Basic Sum Insured.
 
  The amount of any Additional Sum Insured is not included in any Guaranteed
Minimum Death Benefit. Therefore, if the Policy's Account Value is
insufficient to pay the monthly charges as they fall due (including the
charges for the Additional Sum Insured) the Additional Sum Insured coverage
will lapse, even if the Basic Sum Insured stays in effect pursuant to the
Guaranteed Minimum Death Benefit feature.
 
                                      15
<PAGE>
 
  The Additional Sum Insured is limited to 400% of the Basic Sum Insured.
Generally, an Owner will incur lower sales charges and have more flexible
coverage with respect to the Additional Sum Insured than with respect to the
Basic Sum Insured. On the other hand, for Owners that wish to take advantage
of the Guaranteed Minimum Death Benefit, the proportion of the Policy's Sum
Insured that is guaranteed can be increased by taking out more coverage as
Basic Sum Insured at the time of Policy issue. The Guaranteed Minimum Death
Benefit does not apply to either the Basic Sum Insured or any Additional Sum
Insured if the Additional Sum Insured is scheduled to exceed the Basic Sum
Insured at any time. In such a case, it could be to the Owner's advantage
either to increase the amount of coverage applied for as Basic Sum Insured in
order that the Guaranteed Minimum Death Benefit will be available or, if such
guarantee is not of value to the Owner, to maximize the proportion of the
Additional Sum Insured.
 
  Temporary Coverage Prior to Policy Delivery. If a specified amount of
premium is paid with the application for a Policy, temporary survivorship term
coverage may be available prior to the time that coverage under the Policy
takes effect. Temporary term coverage under all applications with John Hancock
and its affiliates will not exceed $1,000,000, and is subject to the terms and
conditions described in the application for a Policy.
 
TRANSFERS AMONG SUBACCOUNTS
 
  The Owner may reallocate the amounts held for the Policy in the Subaccounts
with no charge at any time, except as noted below. The Owner may either (1)
use percentages (in whole numbers) to be transferred among Subaccounts or (2)
designate the dollar amount of funds to be transferred among Subaccounts. The
reallocation must be such that the total in the Subaccounts after reallocation
equals 100% of Account Value. Transfers out of a variable Subaccount will be
effective at the end of the Valuation Period in which JHVLICO receives at its
Home Office notice satisfactory to JHVLICO.
 
  Transfers out of the Fixed Account to the variable Subaccounts are permitted
only once each Policy year and only during the 31-day period beginning on the
Policy anniversary. Transfers out of the Fixed Account may be requested from
60 days before to 30 days after the Policy anniversary. If received on or
before the Policy anniversary, requests for transfer out of the Fixed Account
will be processed on the Policy anniversary (or the next Valuation Date if the
Policy anniversary does not occur on a Valuation Date); if received after the
Policy anniversary, they will be processed at the end of the Valuation Period
in which JHVLICO receives the request at its Home Office. (JHVLICO reserves
the right to defer such Fixed Account transfers for six months.) If an Owner
requests a transfer out of the Fixed Account 61 days or more prior to the
Policy anniversary, that portion of the reallocation will not be processed and
the Owner's confirmation statement will not reflect a transfer out of the
Fixed Account as to such request. Transfers among variable Subaccounts and
transfers into the Fixed Account may be requested at any time. A maximum of
20% of Fixed Account assets or, if greater, $500 may be transferred out of the
Fixed Account in any Policy year. Currently, there is no minimum amount limit
on transfers out of the Fixed Account, but JHVLICO reserves the right to
impose such a limit in the future. No transfers may be made while the Policy
is in a grace period.
 
  Telephone Transfers and Policy Loans. Once a written authorization is
completed by the Owner, the Owner may request a transfer or policy loan by
telephoning 1-800-732-5543. During periods of heavy telephone usage,
implementing a telephone transfer or policy loan may be difficult. If an Owner
is unable to reach JHVLICO via the above number, the Owner should send a
written request via fax to 1-800-621-0448. (Any requests via fax are
considered telephone requests and are bound by the conditions in the Owner's
signed telephone authorization form.) Any fax request should include the
Owner's name, daytime telephone number, Policy number and, in the case of
transfers, the names of the subaccounts from which and to which money will be
transferred. The right to discontinue telephone transactions at any time
without notice to Owners is specifically reserved.
 
                                      16
<PAGE>
 
  An Owner who authorizes telephone transactions will be liable for any loss,
expense or cost arising out of any unauthorized or fraudulent telephone
instructions which JHVLICO reasonably believes to be genuine, unless such
loss, expense or cost is the result of JHVLICO's mistake or negligence.
JHVLICO employs procedures which provide adequate 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.
 
LOAN PROVISIONS AND INDEBTEDNESS
 
  Loan Provisions. Loans may be made at any time a Loan Value is available,
either of the insureds is alive and the Policy is not in a grace period. The
Owner may borrow money, assigning the Policy as the only security for the
loan, by completion of a form satisfactory to JHVLICO or, if the telephone
transaction authorization form has been completed, by telephone. The Loan
Value will be 90% of the Surrender Value. Interest charged on any loan will
accrue and compound daily at an annual rate determined by JHVLICO at the start
of each Policy Year. This interest rate will not exceed the greater of (1) the
"Published Monthly Average" (defined below) for the calendar month ending 2
months before the calendar month of the Policy anniversary or (2) 5%. In
jurisdictions where a fixed loan rate is applicable, JHVLICO will charge
interest at an effective annual rate of 5% in the first 20 Policy years, and
4.5% thereafter, accrued daily. The "Published Monthly Average" means Moody's
Corporate Bond Yield Average-Monthly Average Corporates, as published by
Moody's Investors Service, Inc., or if the average is no longer published, a
substantially similar average established by the insurance regulator where the
Policy is issued.
 
  The amount of any outstanding loan plus accrued interest is called the
"Indebtedness." A loan will not be permitted unless it is at least $1,000. A
loan may be repaid in full or in part at any time before the last surviving
insured's death and while the Policy is not in a grace period. When a loan is
made, an amount equal to the loan proceeds will be transferred out of the
Account and the Fixed Account, as applicable. This amount is allocated to the
Loan Account, a portion of JHVLICO's general account. Each Subaccount will be
reduced in the same proportion as the Account Value is then allocated among
the Subaccounts. Upon each loan repayment, the same proportionate amount of
the entire loan as was borrowed from the Fixed Account will be repaid to the
Fixed Account. The remainder of the loan repayment will be allocated to the
appropriate Subaccounts as stipulated in the current Investment Rule. For
example, if the entire loan outstanding is $3000 of which $1000 was borrowed
from the Fixed Account, then upon a repayment of $1500, $500 would be
allocated to the Fixed Account and the remaining $1000 would be allocated to
the appropriate Subaccounts as stipulated in the current Investment Rule. If
an Owner wishes any payment to constitute a loan repayment (rather than a
premium payment), the Owner must so specify.
 
  Effect of Loan and Indebtedness. While the Indebtedness is outstanding, that
portion of the Account Value that is in the Loan Account is credited with
interest at a rate that is 1% less than the loan interest rate for the first
20 Policy years and, thereafter, .5% less than the loan interest rate. This
rate will usually be different than the net return for the Subaccounts. Since
the Loan Account and the remaining portion of the Account Value will generally
have different rates of investment return, any death benefit above the Sum
Insured, the Account Value, and the Surrender Value are permanently affected
by any Indebtedness, whether or not repaid in whole or in part. The amount of
any Indebtedness is subtracted from the amount otherwise payable when the
Policy proceeds become payable.
 
  Whenever the Indebtedness equals or exceeds 90% of the Account Value, the
Policy terminates 31 days after notice has been mailed by JHVLICO to the Owner
and any assignee of record at their last known addresses, unless a repayment
of the excess Indebtedness is made within that period.
 
                                      17
<PAGE>
 
  Tax Considerations. If the Policy is a modified endowment at the time a loan
is made, that loan may have significant tax consequences. See "Tax
Considerations."
 
DEFAULT
 
  Premium Grace Period, Default and Lapse. Unless the Guaranteed Minimum Death
Benefit is in force, at the beginning of each Policy month, JHVLICO determines
whether the Account Value, net of any Indebtedness, is sufficient to pay all
monthly charges then due under the Policy. If not, the Policy is in default
and JHVLICO will notify the Owner of the amount estimated to be necessary to
pay three months' deductions, and a grace period will be in effect until 61
days after the date the notice was mailed. If JHVLICO does not receive payment
of at least this amount by the end of the grace period, the Policy will lapse,
and any remaining amount owed to the Owner as of the date of lapse will be
paid to the Owner.
 
  If the Guaranteed Minimum Death Benefit is in effect and the Policy provides
for an Additional Sum Insured, the grace period and lapse procedures set forth
in the preceding paragraph will apply only to the Additional Sum Insured.
Lapse of the Additional Sum Insured can have significant tax consequences. See
"Tax Considerations--Policy Proceeds." If the Guaranteed Minimum Death Benefit
has been in effect and lapses at the end of a grace period (as described in
"Premiums--Guaranteed Minimum Death Benefit Premiums"), the usual default,
grace period and lapse procedures described in the preceding paragraph will be
applied commencing with the first day of the first Policy month following the
lapse of the Guaranteed Minimum Death Benefit.
 
  The insurance under the Policy continues in full force during any grace
period but, if the last surviving insured dies during the grace period, the
amount in default is deducted from the death benefit otherwise payable.
 
  Written notice will be furnished to the Owner at his or her last known
address, at least 31 days prior to the end of any grace period, specifying the
minimum amount which must be paid to continue the Policy in force on a premium
paying basis after the end of the grace period.
 
  Reinstatement. A lapsed Policy (or a lapsed Additional Sum Insured, if the
Basic Sum Insured remains in force or is reinstated) or the Guaranteed Minimum
Death Benefit may be reinstated in accordance with the Policy's terms.
Evidence of insurability satisfactory to JHVLICO will be required (except as
to a request to restore the Guaranteed Minimum Death Benefit within 1 year
after the beginning of its grace period) and payment of the required premium
and charges. The request must be received at JHVLICO's Home Office within 1
year after the beginning of the grace period (or 5 years if the request
relates only to the Guaranteed Minimum Death Benefit). JHVLICO reserves the
right to refuse Guaranteed Minimum Death Benefit restorations after the first.
A reinstatement of the Basic Sum Insured or the Additional Sum Insured will be
treated as a material change for Federal income tax purposes. See "Premiums--
7-Pay Premium Limit" and "Tax Considerations."
 
EXCHANGE PRIVILEGE
 
  The Owner may transfer the entire Account Value under the Policy to the
Fixed Account at any time, creating a non-variable policy. The exchange will
be effective at the end of the Valuation Period in which JHVLICO receives at
its Home Office notice of the transfer satisfactory to JHVLICO.
 
 
                                      18
<PAGE>
 
                               ----------------
 
  The foregoing description of Policy provisions is qualified by reference to
the specimen Policy which has been filed as an exhibit to the Registration
Statement.
 
                             CHARGES AND EXPENSES
 
CHARGES DEDUCTED FROM PREMIUMS
 
  In addition to the sales charge (see "Sales Charge" below), the following
charges are deducted from premiums:
 
  Premium Processing Charge. 1.25% of each premium payment will be deducted
from each premium payment for collection and Policy processing costs. This
charge will be reduced for a Policy with a Sum Insured at issue of more than
$5,000,000, subject to a minimum charge equal to .50%. The premium processing
charge for these larger Policies will be computed pursuant to a mathematical
formula which defines the percentage rate of the charge to be:
 
           1.25% X [1 -- (Sum Insured at Issue -- $5,000,000) X .25]
                         ------------------------------------
                                  $10,000,000
 
  State Premium Tax Charge. A charge currently equal to 2.35% of each premium
payment will be deducted from each premium payment. Premium taxes vary from
state to state. The 2.35% rate is the average rate currently expected to be
paid on premiums received in all states over the lifetimes of the insureds
covered by the Policies. JHVLICO will not increase this charge under
outstanding Policies, but reserves the right to change this charge for
Policies not yet issued in order to correspond with changes in the state
premium tax levels.
 
  Federal DAC Tax Charge. A charge currently equal to 1.25% of each premium
payment will be deducted from each premium payment to cover the estimated cost
to JHVLICO of the Federal income tax treatment of the Policies' deferred
acquisition costs--commonly referred to as the "DAC Tax." JHVLICO has
determined that this charge is reasonable in relation to JHVLICO's increased
Federal income tax burden under the Internal Revenue Code resulting from the
receipt of premiums. JHVLICO will not increase this charge under outstanding
Policies, but reserves the right, subject to any required regulatory approval,
to change this charge for Policies not yet issued in order to correspond with
changes in the Federal income tax treatment of the Policies' deferred
acquisition costs.
 
SALES CHARGE
 
  A charge is made to compensate JHVLICO for the cost of selling the Policy.
This cost includes agents' commissions, commission overrides, advertising, and
the printing of Prospectuses and sales literature. The amount of the charge in
any Policy year cannot be specifically related to sales expenses for that
year. JHVLICO expects to recover its total sales expenses over the period the
Policies are in effect. To the extent that sales charges are insufficient to
cover total sales expenses, the sales expenses may be recovered from other
sources, including gains from the charge for mortality and expense risks and
other gains with respect to the Policies, or from JHVLICO's general assets.
See "Distribution of Policies."
 
  The sales charge in the first Policy year is equal to 30% of the premiums
paid up to one "target premium" and 3.5% of all premiums in excess of the
target premium in that year. The target premium is established at issue and is
the amount of the level premium that would be necessary to support a whole
life insurance policy in the amount of the Basic Sum Insured at the maximum
guaranteed cost of insurance rates, assuming deductions or charges for the
other policy expenses at the maximum levels guaranteed under the Policies, a
state premium tax charge of 2.35%, a Federal DAC tax premium charge of 1.25%,
and a net interest rate of 5%. Target premiums will vary based on the issue
age, sex, smoking status and underwriting class of each of the insureds.
 
                                      19
<PAGE>
 
  The current sales charge for premiums paid up to one target premium in
subsequent Policy years is 15% in years 2 through 5, 10% in years 6 through
10, 3% for years 11 through 20 and 0% thereafter. The sales charge for
premiums paid in excess of the target premium is 3.5% in years 2 through 10,
3% in years 11 through 20 and 0% thereafter.
 
  The guaranteed maximum sales charges under the Policy are no higher than the
current sales charges, except that the guaranteed maximum sales charge for
premiums paid up to one target premium is 4% in years 11 through 20 and 3%
thereafter and, for premiums paid in excess of one target premium, is 3% after
year 20. Because the Policies were first offered only in 1993, sales charges
at the lower current rates are not yet applicable under any outstanding
Policy.
 
  Notwithstanding the foregoing, if the younger insured is age 71 or older at
the time of Policy issuance, the current and guaranteed sales charge is 0%,
commencing in Policy year 12 and thereafter.
 
  An Owner may structure the timing and amount of premium payments to minimize
the sales charges deducted from premium payments, although doing so involves
certain risks. Paying less than one target premium in the first Policy year or
paying more than one target premium in any Policy year could reduce the
Owner's total sales charges over time. For example, an Owner, paying ten
target premiums of $10,000 each, would pay total sales charges of $14,000 if
he paid $10,000 in each of the first ten Policy years, but only $9,750 if he
paid $20,000 (i.e., two times the target premium amount) in every other Policy
year up to the ninth Policy year. However, delaying the payment of target
premiums to later Policy years could increase the risk that the Account Value
will be insufficient to pay monthly Policy charges as they come due and that,
as a result, the Policy will lapse and eventually terminate. See "Default."
Conversely, accelerating the payment of target premiums to earlier Policy
years could cause aggregate premiums paid to exceed the Policy's 7-pay premium
limit and, as a result, cause the Policy to become a modified endowment, with
adverse tax consequences to the Owner upon receipt of Policy distributions.
See "Premiums--7-Pay Premium Limit."
 
REDUCED CHARGES FOR ELIGIBLE GROUPS
 
  The sales charge and issue charge (described below) otherwise applicable may
be reduced with respect to Policies issued to a class of associated
individuals or to a trustee, employer or similar entity where JHVLICO
anticipates that the sales to the members of the class will result in lower
than normal sales or administrative expenses. These reductions will be made in
accordance with JHVLICO's rules in effect at the time of the application for a
Policy. The factors considered by JHVLICO in determining the eligibility of a
particular group for reduced charges, and the level of the reduction, are as
follows: the nature of the association and its organizational framework; the
method by which sales will be made to the members of the class; the facility
with which premiums will be collected from the associated individuals and the
association's capabilities with respect to administrative tasks; the
anticipated persistency of the policies; the size of the class of associated
individuals and the number of years it has been in existence; and any other
such circumstances which justify a reduction in sales or administrative
expenses. Any reduction will be reasonable and will apply uniformly to all
prospective Policy purchasers in the class and will not be unfairly
discriminatory to the interests of any Policy Owner.
 
CHARGES DEDUCTED FROM ACCOUNT VALUE OR ASSETS
 
  The following charges are deducted from Account Value or assets:
 
  Issue Charge. JHVLICO will deduct an issue charge from Account Value,
currently at the rate of $55.55 per month for the first 5 Policy years, plus
2c per $1,000 of the Sum Insured at issue for the first 3 Policy years. The
charge per $1,000 of Sum Insured at issue is guaranteed not to exceed $200 per
month. Thus, for a Policy with a Sum Insured at issue of $1,000,000, the
aggregate amount deducted during the first 3 Policy years would be $2,719.80.
 
                                      20
<PAGE>
 
  The issue charge is to compensate JHVLICO for expenses incurred in
connection with the issuance of the Policy, other than sales expenses. Such
expenses include medical examinations, insurance underwriting costs and costs
incurred in processing applications and establishing permanent Policy records.
 
  Administrative Charge. JHVLICO will deduct from the Account Value a maximum
charge of $10 per Policy and 3c per $1,000 of the Sum Insured at issue. The
current monthly charge is $7.50 for all Policy years, plus 1c per $1,000 of
the Sum Insured at issue for the first 10 Policy years, except that the $7.50
charge currently is zero for any Policy with a Sum Insured at issue of at
least $5,000,000. Thus, for a Policy with a Sum Insured at issue of $1,000,000
and using the current administrative charge, the aggregate amount deducted
during the first 10 Policy years would be $2,100.
 
  This charge is to compensate JHVLICO for administrative expenses, including
recordkeeping, processing death claims and surrenders, making Policy changes,
reporting and other communications to Owners and other similar expense and
overhead costs.
 
  Insurance Charge. The insurance charge deducted monthly from Account Value
is based on the attained age of each of the insureds and the amount at risk.
The amount at risk is the difference between the current death benefit and the
Account Value. The amount of the insurance charge is determined by multiplying
JHVLICO's then current monthly rate for insurance by the amount at risk.
 
  Current monthly rates for insurance are based on the sex, age, smoking
status and underwriting class of each of the insureds and the length of time
the Policy has been in effect. JHVLICO will review these rates at least every
5 years, and may change these rates from time to time based on JHVLICO's
expectations of future experience. However, these rates will never be more
than the guaranteed maximum rates based on the 1980 Commissioners' Standard
Ordinary Mortality Tables, as set forth in the Policy. The insurance charge is
not affected by the death of the first insured to die.
 
  If an insured's underwriting risk classification has worsened, any
subsequently-added Additional Sum Insured coverage may have higher insurance
charge rates than the Basic Sum Insured. If an insured's underwriting risk
classification has improved, cost of insurance rates on the total Sum Insured
may be reduced, as may the target premium with respect to subsequent premium
payments.
 
  Lower current insurance rates are offered at most ages for insureds who
qualify as non-smokers. To qualify, an insured must meet additional
requirements that relate to smoking habits.
 
  Guaranteed Minimum Death Benefit Charge. There is no charge for any
Guaranteed Minimum Death Benefit during the first 10 Policy years. If the
Guaranteed Minimum Death Benefit option is elected for a period beyond the
first 10 Policy years, JHVLICO deducts a charge from Account Value beginning
in the eleventh Policy year. The maximum monthly charge is 3c per $1000 of the
Basic Sum Insured at issue and the current monthly charge is 1c per $1,000 of
the Basic Sum Insured at issue. If the Guaranteed Minimum Death Benefit lapses
due to failure to pay sufficient premiums, the charge will be discontinued.
Because the Policies were first offered only in 1993, no Guaranteed Minimum
Death Benefit charge is yet applicable to any Policy at the current rate.
 
 
                                      21
<PAGE>
 
  Charge for Mortality and Expense Risks. A daily charge is made for mortality
and expense risks assumed by JHVLICO at a maximum effective annual rate of
 .90% of the value of the Account's assets attributable to the Policies. The
effective annual rate of this charge will vary, depending upon the Sum Insured
at issue. The table below shows the current levels of this charge. This charge
begins when amounts under a Policy are first allocated to the Account. The
mortality risk assumed is that insureds may live for a shorter period of time
than estimated and, therefore, a greater amount of death benefit than expected
will be payable in relation to the amount of premiums received. The expense
risk assumed is that expenses incurred in issuing and administering the
Policies will be greater than estimated. JHVLICO will realize a gain from this
charge to the extent it is not needed to provide for benefits and expenses
under the Policies.
 
<TABLE>
<CAPTION>
                                                       Current Charge For
            Sum Insured at Issue                   Mortality and Expense Risks
            --------------------                   ---------------------------
            <S>                                    <C>
            $1- 4.999 million                            .625% of assets
             5-14.999 million                            .575% of assets
            15 million or more                           .525% of assets
</TABLE>
 
  Charges for Extra Mortality Risks. An insured who does not qualify for the
standard underwriting class must pay an additional charge because of the extra
mortality risk. The level of the charge depends upon the ages of the insureds
and the degree of extra mortality risk. This additional charge is deducted
monthly from Account Value.
 
  Charges for Optional Rider Benefits. An additional charge must be paid if
the Owner elects to purchase an optional insurance benefit by Policy rider.
This additional charge is deducted from premiums when paid or is deducted
monthly from Account Value.
 
  Charges for Taxes. Currently no charge is made against Account Value for
JHVLICO's Federal income taxes but if JHVLICO incurs, or expects to incur,
income taxes attributable to the Account or this class of Policies in future
years, it reserves the right to make a charge, and any charge would affect
what the Subaccounts earn. Charges for other taxes, if any, attributable to
the Subaccounts may also be made.
 
  Charge for Partial Withdrawal. JHVLICO will deduct a charge in the amount of
$20 on a partial withdrawal of Surrender Value, as described under "Account
Value and Surrender Value." The charge will be deducted from Account Value.
The charge is to compensate JHVLICO for the administrative expenses of
effecting the withdrawal.
 
  Fund Investment Management Fee. The Account purchases shares of the Funds at
net asset value, a value which reflects the deduction from the assets of each
Fund of its investment management fee, which is described briefly in the
Summary of this Prospectus, and of certain non-advisory operating expenses.
For a full description of these deductions, see the attached Prospectuses for
the Funds.
 
  The monthly deductions from Account Value described above are deducted on
the date of issue and on the first day of each Policy month thereafter. These
deductions are made from the Subaccounts in proportion to the amount of
Account Value in each. For each month that JHVLICO is unable to deduct any
charge because there is insufficient Account Value, the uncollected charges
will accumulate and be deducted when and if sufficient Account Value is
available.
 
 
                                      22
<PAGE>
 
GUARANTEE OF PREMIUMS AND CERTAIN CHARGES
 
  The Policy's Guaranteed Minimum Death Benefit Premium is guaranteed not to
increase. The premium processing charge, the state premium tax charge, the
Federal DAC Tax charge, the issue charge and the charge for partial
withdrawals are guaranteed not to increase over the life of the Policy. The
administrative charge, the Guaranteed Minimum Death Benefit Charge, the sales
charge, the mortality and expense risk charge, and the insurance charge are
guaranteed not to exceed the maximums set forth in the Policy.
 
                           DISTRIBUTION OF POLICIES
 
  Applications are solicited by agents who are licensed by state insurance
authorities to sell JHVLICO's Policies and who are also registered
representatives ("representatives") of John Hancock or other broker-dealer
firms, as discussed below. John Hancock performs insurance underwriting,
determines whether to accept or reject the application for a Policy and each
insured's risk classification and, pursuant to a sales agreement among John
Hancock, JHVLICO, and the Account, acts as the principal underwriter of the
Policies. The sales agreement will remain in effect until terminated upon
sixty days written notice by any party. JHVLICO will make the appropriate
refund if a Policy ultimately is not issued or is returned under the short-
term cancellation provision. Officers and employees of John Hancock and
JHVLICO are covered by a blanket bond by a commercial carrier in the amount of
$25 million.
 
  John Hancock's representatives are compensated for sales of the Policies on
a commission and service fee basis by John Hancock, and JHVLICO reimburses
John Hancock 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 John Hancock representative for selling
a Policy is 45% of the target premium paid in the first Policy year, 5% of the
target premium paid in the second through fifth Policy years, and 3% of the
target premium paid in each year thereafter. The maximum commission on any
premium paid in any year in excess of the target premium is 3%.
 
  Representatives with less than four years of service with John Hancock 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 JHVLICO
and John Hancock will be eligible for additional compensation.
 
  John Hancock is registered with the Commission under the Securities Exchange
Act of 1934 as a broker-dealer and is a member of the National Association of
Securities Dealers, Inc. John Hancock is not a member of the Securities
Investor Protection Corporation because it is exempt from membership in that
organization. The Policies are also sold through other registered broker-
dealers that have entered into selling agreements with John Hancock 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 John
Hancock'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. John Hancock will compensate the broker-dealers as provided in the
selling agreements, and JHVLICO will reimburse John Hancock for such amounts
and for certain other direct expenses in connection with marketing the
Policies through other broker-dealers.
 
                                      23
<PAGE>
 
  John Hancock serves as principal underwriter for six other separate accounts
registered under the 1940 Act: John Hancock Variable Annuity Accounts U, I and
V, John Hancock Mutual Variable Life Insurance Account UV and John Hancock
Variable Life Accounts U and V. John Hancock is also the principal investment
manager and principal underwriter for John Hancock Variable Series Trust I.
 
                              TAX CONSIDERATIONS
 
  The below description of Federal income tax consequences is only a brief
summary and is not intended as tax advice. For further information consult a
qualified tax advisor. Federal, state and local tax laws can change from time
to time and, as a result, the tax consequences to the Owner and beneficiary
may be altered.
 
POLICY PROCEEDS
 
  Although the Policy contains provisions not found in fixed benefit life
insurance policies, JHVLICO believes the Policy will receive the same Federal
income and estate tax treatment. Section 7702 of the Internal Revenue Code
("Code") defines life insurance for Federal tax purposes. See "Death
Benefits--Definition of Life Insurance." If certain standards are met at issue
and over the life of the Policy, the Policy will come within that definition.
JHVLICO will monitor compliance with these standards. Furthermore, JHVLICO
reserves the right to make any changes in the Policy necessary to ensure the
Policy is within the definition of life insurance.
 
  If the Policy complies with the definition of life insurance and the
investment diversification requirements mentioned below, as JHVLICO believes
it will, the death benefit under the Policy will be excludable from the
beneficiary's gross income under Section 101 of the Code. In addition,
increases in Account Value as a result of interest or investment experience
will not be subject to Federal income tax unless and until values are actually
received through withdrawal, surrender or other distributions.
 
  A surrender, lapse or partial withdrawal may have tax consequences. For
example, the Owner will be taxed on a surrender to the extent that the Account
Value exceeds the premiums paid under the Policy, ignoring premiums paid for
riders. But under certain circumstances within the first 15 Policy years, the
Owner may be taxed on a withdrawal of Policy values even if total withdrawals
do not exceed total premiums paid.
 
  JHVLICO also believes that, except as noted below, loans received under the
Policy will be treated as indebtedness of an Owner and that no part of any
loan will constitute income to the Owner. However, the amount of any loan
outstanding will be taxed to the Owner if a Policy lapses.
 
  Distributions under Policies on which premiums greater than the "7-pay"
limit (see "Premiums--7-Pay Premium Limit") have been paid will be treated as
distributions from a "modified endowment," which are subject to special
taxation based on Federal tax law. The Owner of such a Policy will be taxed on
distributions such as loans, surrenders and partial withdrawals to the extent
of any income (gain) to the Owner (income-first basis). The distributions
affected will be those made on or after, and within the two year period prior
to, the time the Policy becomes a modified endowment. Additionally, a 10%
penalty tax may be imposed on affected income distributed before the Owner
attains age 59 1/2.
 
 
                                      24
<PAGE>
 
  Furthermore, any time there is a "material change" in a Policy (such as an
increase in Additional Sum Insured, the addition of certain other Policy
benefits after issue, or reinstatement of a lapsed policy), the Policy will be
subject to a new "7-pay" test, with the possibility of a tax on distributions
if it were subsequently to become a modified endowment. Moreover, if benefits
under a Policy are reduced (such as a reduction in the Sum Insured or death
benefit or the reduction or cancellation of certain rider benefits, or Policy
termination) during the 7 years in which the 7-pay test is being applied, the
7-pay limit will be recalculated based on the reduced benefits. If the
premiums paid to date are greater than the recalculated 7-pay limit, the
policy will become a modified endowment.
 
  All modified endowments issued by the same insurer (or affiliates) to the
Owner during any calendar year generally will be treated as one contract for
the purpose of applying the modified endowment rules. Your tax advisor should
be consulted if you have questions regarding the possible impact of the 7-pay
limit on your Policy.
 
  The Code and Treasury Regulations set forth requirements for the
diversification of the investments underlying variable life insurance
policies. JHVLICO and the Portfolios intend to comply with these requirements
with respect to the Policy. Failure to meet these requirements would mean that
the Policy would not be treated as a life insurance contract, subjecting the
Owner to Federal income tax on the income and gains under the Policy.
 
  The Treasury Department has said in the past that it may issue a regulation
or a ruling prescribing the circumstances in which an Owner's control over
investments underlying a variable life insurance policy may cause the Owner,
rather than the insurance company, to be treated as the owner of the assets in
the Account, with the effect that income and gains from the Account would be
included in the Owner's income for Federal income tax purposes. Under current
law, we believe that JHVLICO, and not the Policy Owner, would be considered
the owner of the assets of the Account. However, JHVLICO has reserved certain
rights to alter the Policy and the investment alternatives of the Account if
necessary to comply with any such regulation or ruling.
 
  The United States Congress and the Treasury Department have in the past and
may in the future consider new legislation that, if enacted, could change the
Federal tax treatment of life insurance policy income or death benefits. Any
such change could have a retroactive effect. We suggest you consult with your
legal or tax adviser, if you have any questions about this.
 
  Federal estate and state and local estate, inheritance and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Owner or beneficiary.
 
CHARGE FOR JHVLICO'S TAXES
 
  Except for the DAC Tax charge, JHVLICO currently makes no charge for Federal
income taxes that may be attributable to this class of Policies. If JHVLICO
incurs, or expects to incur, income taxes attributable to this class of
Policies or any Subaccount in the future, it reserves the right to make a
charge for those taxes.
 
  Under current laws, JHVLICO may incur state and local taxes (in addition to
premium taxes) in several states. At present, these taxes are not significant.
If there is a material change in applicable state or local tax laws, charges
for such taxes may be made.
 
 
                                      25
<PAGE>
 
POLICY SPLIT OPTION
 
  An Owner may elect to split a Policy into two other individual life
insurance policies, as described under "Policy Split Option." A Policy split
could have adverse tax consequences including, but not limited to, the
recognition of taxable income in an amount up to any taxable gain in the
Policy at the time of the split.
 
             BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO
 
  The Directors and Executive Officers of JHVLICO and their principal
occupations during the past five years are as follows:
 
<TABLE>
<CAPTION>
   Directors--Officers                Principal Occupations
   -------------------                ---------------------
   <S>                     <C>
   David F. D'Alessandro   Chairman of the Board and Chief Executive
                           Officer of JHVLICO; Senior Executive Vice
                           President and Director, John Hancock Mutual
                           Life Insurance Company.
   Henry D. Shaw           Vice Chairman of the Board and President of
                           JHVLICO; Senior Vice President, John Han-
                           cock Mutual Life Insurance Company.
   Thomas J. Lee           Director of JHVLICO; Vice President, John
                           Hancock Mutual Life Insurance Company.
   Robert R. Reitano       Director of JHVLICO; Second Vice President,
                           John Hancock Mutual Life Insurance Company.
   Francis C. Cleary, Jr.  Director and Counsel, JHVLICO; Vice Presi-
                           dent and Counsel, John Hancock Mutual Life
                           Insurance Company.
   Joseph A. Tomlinson     Director and Vice President, JHVLICO; Vice
                           President, John Hancock Mutual Life Insur-
                           ance Company.
   Michele G. VanLeer      Director of JHVLICO; Vice President, John
                           Hancock Mutual Life Insurance Company.
   Robert S. Paster        Director and Actuary, JHVLICO; Second Vice
                           President, John Hancock Mutual Life Insur-
                           ance Company.
   Barbara L. Luddy        Director of JHVLICO; Second Vice President,
                           John Hancock Mutual Life Insurance Company.
   Daniel L. Ouellette     Vice President, Marketing, JHVLICO; Second
                           Vice President, John Hancock Mutual Life
                           Insurance Company.
   Patrick F. Smith        Controller of JHVLICO; Assistant Control-
                           ler, John Hancock Mutual Life Insurance
                           Company.
</TABLE>
 
  The business address of all Directors and officers of JHVLICO is John
Hancock Place, Boston, Massachusetts 02117.
 
 
                                      26
<PAGE>
 
                                    REPORTS
 
  At least once each Policy year a statement will be sent to the Owner setting
forth the amount of the death benefit, Basic Sum Insured, Additional Sum
Insured, Account Value, the portion of the Account Value in each Subaccount,
Surrender Value, premiums received and charges deducted from premiums since
the last report, and any outstanding Policy loan (and interest charged for the
preceding Policy year) as of the last day of such year. Moreover,
confirmations will be furnished to Owners of premium payments, transfers among
Subaccounts, Policy loans, partial withdrawals and certain other Policy
transactions.
 
  Owners will be sent semiannually a report containing the financial
statements of the Funds, including a list of securities held in each
Portfolio.
 
                               VOTING PRIVILEGES
 
  All of the assets in the variable Subaccounts of the Account, apart from
assets attributable to Policy loans, are invested in shares of the
corresponding Portfolios of the Funds. JHVLICO will vote the shares of each of
the Portfolios of the Funds which are deemed attributable to the Policies at
regular and special meetings of the Funds' shareholders in accordance with
instructions received from owners of all policies funded through the Account's
corresponding variable Subaccounts. Shares of the Funds held in the Account
which are not attributable to the Policies and shares for which instructions
from owners are not received will be represented by JHVLICO at the meeting and
will be voted for and against each matter in the same proportions as the votes
based upon the instructions received from the owners of all policies funded
through the Account's corresponding variable Subaccounts.
 
  The number of Fund shares held in each variable Subaccount deemed
attributable to each Owner is determined by dividing the amount of a Policy's
Account Value held in the variable Subaccount by the net asset value of one
share in the corresponding Fund Portfolio in which the assets of that variable
Subaccount are invested. Fractional votes will be counted. The number of
shares as to which the Owner may give instructions will be determined as of
the record date for the Funds' meetings.
 
  Owners of Policies may give instructions regarding the election of the Board
of Trustees of each Fund, ratification of the selection of independent
auditors, approval of Fund investment advisory agreements and other matters
requiring a vote under the 1940 Act. Owners will be furnished information and
forms by JHVLICO in order that voting instructions may be given.
 
  JHVLICO may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the shares be
voted so as to change the investment objectives of the Portfolios or to
approve or disapprove an investment advisory or underwriting contract for the
Funds. JHVLICO also may disregard voting instructions in favor of changes
initiated by an Owner or Fund's Board of Trustees in the investment policy,
investment adviser or principal underwriter of the Fund, if JHVLICO (i)
reasonably disapproves of such changes and (ii) in the case of a change of
investment policy or investment adviser, makes a good-faith determination that
the proposed change is contrary to state law or prohibited by state regulatory
authorities or that the change would be inconsistent with a variable
Subaccount's investment objectives or would result in the purchase of
securities which vary from the general quality and nature of investments and
investment techniques utilized by other separate accounts of JHVLICO or of an
affiliated life insurance company, which separate accounts have investment
objectives similar to those of the variable Subaccount. In the event JHVLICO
does disregard voting instructions, a summary of that action and the reasons
for such action will be included in the next semi-annual report to Owners.
 
                                      27
<PAGE>
 
                         CHANGES THAT JHVLICO CAN MAKE
 
  The voting privileges described in this Prospectus are afforded based on
JHVLICO's understanding of applicable Federal securities law requirements. To
the extent that applicable law, regulations or interpretations change to
eliminate or restrict the need for such voting privileges, JHVLICO reserves
the right to proceed in accordance with any such revised requirements. JHVLICO
also reserves the right, subject to compliance with applicable law, including
approval of Owners if so required, (1) to transfer assets determined by
JHVLICO to be associated with the class of policies to which the Policies
belong from the Account to another separate account or variable Subaccount by
withdrawing the same percentage of each investment in the Account with
appropriate adjustments to avoid odd lots and fractions, (2) to operate the
Account as a "management-type investment company" under the 1940 Act, or in
any other form permitted by law, the investment adviser of which would be
JHVLICO, an affiliate or John Hancock, (3) to deregister the Account under the
1940 Act, (4) to substitute for the Portfolio shares held by a Subaccount any
other investment permitted by law, and (5) to take any action necessary to
comply with or obtain any exemptions from the 1940 Act. JHVLICO would notify
Owners of any of the foregoing changes and, to the extent legally required,
obtain approval of Owners and any regulatory body prior thereto. Such notice
and approval, however, may not be legally required in all cases.
 
                               STATE REGULATION
 
  JHVLICO is subject to regulation and supervision by the Massachusetts
Commissioner of Insurance who periodically examines its affairs. It also is
subject to the applicable insurance laws and regulations of all jurisdictions
in which it is authorized to do business.
 
  JHVLICO is required to submit annual statements of its operations, including
financial statements, to the insurance departments of the various
jurisdictions in which it does business for purposes of determining solvency
and compliance with local insurance laws and regulations.
 
                                 LEGAL MATTERS
 
  Legal matters in connection with the Policies described in this Prospectus
have been passed on by Francis C. Cleary, Jr., Counsel for JHVLICO. Messrs.
Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised JHVLICO on
certain Federal securities law matters in connection with the Policies.
 
                            REGISTRATION STATEMENT
 
  This Prospectus omits certain information contained in the Registration
Statement which has been filed with the Commission. More details may be
obtained from the Securities and Exchange Commission upon payment of the
prescribed fee.
 
                                    EXPERTS
 
  The financial statements of the Account and JHVLICO 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.
 
 
                                      28
<PAGE>
 
  Actuarial matters included in this Prospectus have been examined by Deborah
A. Poppel, F.S.A., an Actuary of JHVLICO.
 
                             FINANCIAL STATEMENTS
 
  The financial statements of JHVLICO included herein should be distinguished
from the financial statements of the Account and should be considered only as
bearing upon the ability of JHVLICO to meet its obligations under the
Policies. The September 30, 1995 financial statements of JHVLICO are
unaudited.
 
 
  The September 30, 1995 financial statements of the Account are unaudited.
 
                                      29
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
 
SEPTEMBER 30, 1995
 
<TABLE>
<CAPTION>
                                                                   Real                             Short-Term
                   Select                              Money      Estate      Special                  U.S.
                   Stock       Bond    International   Market     Equity   Opportunities   Stock    Government  Managed
                 Subaccount Subaccount  Subaccount   Subaccount Subaccount  Subaccount   Subaccount Subaccount Subaccount
                 ---------- ---------- ------------- ---------- ---------- ------------- ---------- ---------- ----------
<S>              <C>        <C>        <C>           <C>        <C>        <C>           <C>        <C>        <C>
Assets
Investment in
 shares of
 portfolios of
 John Hancock
 Variable Series
 Trust I, at
 value (Note 2). $4,180,629 $1,067,480  $2,257,466   $2,127,396  $526,923   $1,181,786   $6,288,376 $2,169,031 $2,779,981
                 ---------- ----------  ----------   ----------  --------   ----------   ---------- ---------- ----------
Total assets....  4,180,629  1,067,480   2,257,466    2,127,396   526,923    1,181,786    6,288,376  2,169,031  2,779,981
Liabilities
Asset charges
 payable (Note
 2).............         63         16          35           34         8           19           93         14         36
                 ---------- ----------  ----------   ----------  --------   ----------   ---------- ---------- ----------
Total liabili-
 ties...........         63         16          35           34         8           19           93         14         36
                 ---------- ----------  ----------   ----------  --------   ----------   ---------- ---------- ----------
Net assets       $4,180,566 $1,067,464  $2,257,431   $2,127,362  $526,915   $1,181,767   $6,288,283 $2,169,017 $2,779,945
                 ========== ==========  ==========   ==========  ========   ==========   ========== ========== ==========
</TABLE>
 
See accompanying notes.
 
                                       30
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                                     Select
                                Stock Subaccount                             Bond Subaccount
                  -------------------------------------------- --------------------------------------------
                                              For the Period                               For the Period
                                                   from                                         from
                    Unaudited                  December 14,      Unaudited                  December 14,
                   Nine Month                      1993         Nine Month                      1993
                     Period                    (commencement      Period                    (commencement
                      ended      Year ended  of operations) to     ended      Year ended  of operations) to
                  September 30, December 31,   December 31,    September 30, December 31,   December 31,
                      1995          1994           1993            1995          1994           1993
                  ------------- ------------ ----------------- ------------- ------------ -----------------
<S>               <C>           <C>          <C>               <C>           <C>          <C>
Investment
 income:
 Distributions
  received from
  the portfolios
  of John Hancock
  Variable Series
  Trust I........   $ 54,365      $ 39,711         $ 541          $32,048      $ 7,083           --
                    --------      --------         -----          -------      -------           ---
Total investment
 income..........     54,365        39,711           541           32,048        7,083           --
Expenses:
 Mortality and
  expense risks..     10,465         2,688             4            2,347          509           --
                    --------      --------         -----          -------      -------           ---
Net investment
 income..........     43,900        37,023           537           29,701        6,574           --
Net realized and
 unrealized gain
 (loss) on
 investments:
 Net realized
  gains (losses).    100,217       (37,955)          --             7,883       (2,259)          --
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........    386,437       (24,086)         (447)          22,837       (3,839)          --
                    --------      --------         -----          -------      -------           ---
Net realized and
 unrealized gain
 (loss) on
 investments.....    486,654       (62,041)         (447)          30,720       (6,098)          --
                    --------      --------         -----          -------      -------           ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......   $530,554      $(25,018)        $  90          $60,421      $   476           --
                    ========      ========         =====          =======      =======           ===
<CAPTION>
                                 International
                                   Subaccount
                  --------------------------------------------
                                              For the Period
                                                   from
                    Unaudited                  December 14,
                   Nine Month                      1993
                     Period                    (commencement
                      ended      Year ended  of operations) to
                  September 30, December 31,   December 31,
                      1995          1994           1993
                  ------------- ------------ -----------------
<S>               <C>           <C>          <C>
Investment
 income:
 Distributions
  received from
  the portfolios
  of John Hancock
  Variable Series
  Trust I........    $19,256      $ 11,324          --
                     -------      --------          ---
Total investment
 income..........     19,256        11,324          --
Expenses:
 Mortality and
  expense risks..      6,983         2,129          --
                     -------      --------          ---
Net investment
 income..........     12,273         9,195          --
Net realized and
 unrealized gain
 (loss) on
 investments:
 Net realized
  gains (losses).    (20,969)        5,934          --
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........     94,687       (46,936)         --
                     -------      --------          ---
Net realized and
 unrealized gain
 (loss) on
 investments.....     73,718       (41,002)         --
                     -------      --------          ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......    $85,991      $(31,807)         --
                     =======      ========          ===
</TABLE>
 
See accompanying notes.
 
                                       31
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF OPERATIONS (CONTINUED)
 
<TABLE>
<CAPTION>
                                  Money Market                                 Real Estate
                                   Subaccount                               Equity Subaccount
                  -------------------------------------------- --------------------------------------------
                                              For the Period                               For the Period
                                                   from                                         from
                    Unaudited                  December 14,      Unaudited                  December 14,
                   Nine Month                      1993         Nine Month                      1993
                     Period                    (commencement      Period                    (commencement
                      ended      Year ended  of operations) to     ended      Year ended  of operations) to
                  September 30, December 31,   December 31,    September 30, December 31,   December 31,
                      1995          1994           1993            1995          1994           1993
                  ------------- ------------ ----------------- ------------- ------------ -----------------
<S>               <C>           <C>          <C>               <C>           <C>          <C>
Investment in-
 come:
 Distributions
  received from
  the portfolios
  of John Hancock
  Variable Series
  Trust I........    $80,579      $39,245           --            $21,360      $ 10,909          --
                     -------      -------           ---           -------      --------          ---
Total investment
 income..........     80,579       39,245           --             21,360        10,909          --
Expenses:
 Mortality and
  expense risks..      8,066        5,184           --              1,915           689          --
                     -------      -------           ---           -------      --------          ---
Net investment
 income..........     72,513       34,061           --             19,445        10,220          --
Net realized and
 unrealized gain
 (loss) on
 investments:
 Net realized
  gains (losses).        --           --            --             (5,581)      (10,840)         --
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........        --           --            --             31,560         9,936          --
                     -------      -------           ---           -------      --------          ---
Net realized and
 unrealized gain
 (loss) on
 investments.....        --           --            --             25,979          (904)         --
                     -------      -------           ---           -------      --------          ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......    $72,513      $34,061           --            $45,424      $  9,316          --
                     =======      =======           ===           =======      ========          ===
<CAPTION>
                              Special
                           Opportunities
                            Subaccount
                  -------------------------------
                                 For the Period
                                      from
                    Unaudited        May 6,
                   Nine Month         1994
                     Period       (commencement
                      ended     of operations) to
                  September 30,   December 31,
                      1995            1994
                  ------------- -----------------
<S>               <C>           <C>
Investment in-
 come:
 Distributions
  received from
  the portfolios
  of John Hancock
  Variable Series
  Trust I........   $    504         $1,493
                    --------         ------
Total investment
 income..........        504          1,493
Expenses:
 Mortality and
  expense risks..      2,971            607
                    --------         ------
Net investment
 income..........     (2,467)           886
Net realized and
 unrealized gain
 (loss) on
 investments:
 Net realized
  gains (losses).     11,636           (117)
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........    144,301          3,155
                    --------         ------
Net realized and
 unrealized gain
 (loss) on
 investments.....    155,937          3,038
                    --------         ------
Net increase
 (decrease) in
 net assets
 resulting from
 operations......   $153,470         $3,924
                    ========         ======
</TABLE>
 
See accompanying notes.
 
                                       32
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF OPERATIONS (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                         Short-Term
                                                                       U.S. Government
                                Stock Subaccount                         Subaccount
                  -------------------------------------------- -------------------------------
                                              For the Period
                                                   from                       For the Period
                    Unaudited                  December 14,      Unaudited         from
                   Nine Month                      1993         Nine Month      May 1, 1994
                     Period                    (commencement      Period       (commencement
                      ended      Year ended  of operations) to     ended     of operations) to
                  September 30, December 31,   December 31,    September 30,   December 31,
                      1995          1994           1993            1995            1994
                  ------------- ------------ ----------------- ------------- -----------------
<S>               <C>           <C>          <C>               <C>           <C>
Investment in-
 come:
 Distributions
  received from
  the portfolios
  of John Hancock
  Variable Series
  Trust I........   $ 74,533      $ 70,819          --            $30,210          $ 331
                    --------      --------          ---           -------          -----
Total investment
 income..........     74,533        70,819          --             30,210            331
Expenses:
 Mortality and
  expense risks..     14,287         3,073          --              1,596             25
                    --------      --------          ---           -------          -----
Net investment
 income..........     60,246        67,746          --             28,614            306
Net realized and
 unrealized gain
 (loss) on
 investments:
 Net realized
  gains (losses).     71,866        (1,272)         --              3,907             (1)
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........    624,107       (67,362)         --              3,148           (325)
                    --------      --------          ---           -------          -----
Net realized and
 unrealized gain
 (loss) on
 investments.....    695,973       (68,634)         --              7,055           (326)
                    --------      --------          ---           -------          -----
Net increase
 (decrease) in
 net assets
 resulting from
 operations......   $756,219      $   (888)         --            $35,669          $ (20)
                    ========      ========          ===           =======          =====
<CAPTION>
                               Managed Subaccount
                  --------------------------------------------
                                              For the Period
                                                   from
                    Unaudited                  December 14,
                   Nine Month                      1993
                     Period                    (commencement
                      ended      Year ended  of operations) to
                  September 30, December 31,   December 31,
                      1995          1994           1993
                  ------------- ------------ -----------------
<S>               <C>           <C>          <C>
Investment in-
 come:
 Distributions
  received from
  the portfolios
  of John Hancock
  Variable Series
  Trust I........   $ 69,742      $ 12,985          --
                    --------      --------          ---
Total investment
 income..........     69,742        12,985          --
Expenses:
 Mortality and
  expense risks..      6,864         1,318          --
                    --------      --------          ---
Net investment
 income..........     62,878        11,667          --
Net realized and
 unrealized gain
 (loss) on
 investments:
 Net realized
  gains (losses).    156,923        (4,727)         --
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........    154,367        (8,296)         --
                    --------       -------          ---
Net realized and
 unrealized gain
 (loss) on
 investments.....    311,290       (13,023)         --
                    --------       -------          ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......   $374,168      $ (1,356)         --
                    =======       ========          ===
</TABLE>
 
See accompanying notes.
 
                                       33
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF CHANGES IN NET ASSETS
 
<TABLE>
<CAPTION>
                             Select Stock Subaccount                           Bond Subaccount
                   --------------------------------------------- --------------------------------------------
                                                For the Period                               For the Period
                                                     from          Unaudited                      from
                     Unaudited                   December 14,        Nine                     December 14,
                    Nine Month                       1993            Month                        1993
                      Period                     (commencement      Period                    (commencement
                       ended      Year ended   of operations) to     ended      Year ended  of operations) to
                   September 30, December 31,    December 31,    September 30, December 31,   December 31,
                       1995          1994            1993            1995          1994           1993
                   ------------- ------------  ----------------- ------------- ------------ -----------------
<S>                <C>           <C>           <C>               <C>           <C>          <C>
Increase in net
 assets from
 operations:
 Net investment
  income.........   $   43,900   $    37,023        $   537       $   29,701     $  6,574          --
 Net realized
  gains (losses).      100,217       (37,955)           --             7,883       (2,259)         --
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........      386,437       (24,086)          (447)          22,837       (3,839)         --
                    ----------   -----------        -------       ----------     --------          ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......      530,554       (25,018)            90           60,421          476          --
From policyholder
 transactions:
 Net premiums
  from
  policyholders..    4,781,623     2,165,201         12,650          875,665      279,171          --
 Net benefits to
  policyholders..   (2,033,980)   (1,250,017)          (537)         (85,671)     (62,598)         --
                    ----------   -----------        -------       ----------     --------          ---
Net increase
 (decrease) in
 net assets from
 policyholder
 transactions....    2,747,643       915,184         12,113          789,994      216,573          --
                    ----------   -----------        -------       ----------     --------          ---
Net increase
 (decrease) in
 net assets......    3,278,197       890,166         12,203          850,415      217,049          --
Net assets at
 beginning of
 year............      902,369        12,203            --           217,049          --           --
                    ----------   -----------        -------       ----------     --------          ---
Net assets at end
 of period.......   $4,180,566   $   902,369        $12,203       $1,067,464     $217,049          --
                    ==========   ===========        =======       ==========     ========          ===
<CAPTION>
                             International Subaccount
                   --------------------------------------------
                                               For the Period
                                                    from
                     Unaudited                  December 14,
                    Nine Month                      1993
                      Period                    (commencement
                       ended      Year ended  of operations) to
                   September 30, December 31,   December 31,
                       1995          1994           1993
                   ------------- ------------ -----------------
<S>                <C>           <C>          <C>
Increase in net
 assets from
 operations:
 Net investment
  income.........   $   12,273    $   9,195          --
 Net realized
  gains (losses).      (20,969)       5,934          --
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........       94,687      (46,936)         --
                    ----------    ---------          ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......       85,991      (31,807)         --
From policyholder
 transactions:
 Net premiums
  from
  policyholders..    1,878,844    1,223,410          --
 Net benefits to
  policyholders..     (699,731)    (199,276)         --
                    ----------    ---------          ---
Net increase
 (decrease) in
 net assets from
 policyholder
 transactions....    1,179,113    1,024,134          --
                    ----------    ---------          ---
Net increase
 (decrease) in
 net assets......    1,265,104      992,327          --
Net assets at
 beginning of
 year............      992,327          --           --
                    ----------    ---------          ---
Net assets at end
 of period.......   $2,257,431    $ 992,327          --
                    ==========    =========          ===
</TABLE>
 
See accompanying notes.
 
                                       34
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
 
<TABLE>
<CAPTION>
                                   Money Market                                   Real Estate
                                    Subaccount                                 Equity Subaccount
                   ---------------------------------------------- --------------------------------------------
                                                 For the Period                               For the Period
                                                      from                                         from
                                                  December 14,                                 December 14,
                     Unaudited                        1993          Unaudited                      1993
                    Nine Month                    (commencement    Nine Month                  (commencement
                   Period ended    Year ended   of operations) to Period ended   Year ended  of operations) to
                   September 30,  December 31,    December 31,    September 30, December 31,   December 31,
                       1995           1994            1993            1995          1994           1993
                   -------------  ------------  ----------------- ------------- ------------ -----------------
<S>                <C>            <C>           <C>               <C>           <C>          <C>
Increase in net
 assets from
 operations:
 Net investment
  income.........  $     72,513   $    34,061          --           $ 19,445      $ 10,220          --
 Net realized
  gains (losses).           --            --           --             (5,581)      (10,840)         --
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........           --            --           --             31,560         9,936          --
                   ------------   -----------          ---          --------      --------          ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......        72,513        34,061          --             45,424         9,316          --
From policyholder
 transactions:
 Net premiums
  from
  policyholders..    12,819,682     7,344,361          --            292,428       525,631          --
 Net benefits to
  policyholders..   (13,019,966)   (5,123,289)         --           (230,821)     (115,063)         --
                   ------------   -----------          ---          --------      --------          ---
Net increase
 (decrease) in
 net assets from
 policyholder
 transactions....      (200,284)    2,221,072          --             61,607       410,568          --
                   ------------   -----------          ---          --------      --------          ---
Net increase
 (decrease) in
 net assets......      (127,771)    2,255,133          --            107,031       419,884          --
Net assets at
 beginning of
 year............     2,255,133           --           --            419,884           --           --
                   ------------   -----------          ---          --------      --------          ---
Net asset at end
 of year.........  $  2,127,362   $ 2,255,133          --           $526,915      $419,884          --
                   ============   ===========          ===          ========      ========          ===
<CAPTION>
                                 Special
                              Opportunities
                               Subaccount
                   -----------------------------------
                                  For the Period
                                       from
                                      May 6,
                     Unaudited         1994
                    Nine Month     (commencement
                   Period ended  of operations) to
                   September 30,   December 31,
                       1995            1994
                   ------------- -----------------
<S>                <C>           <C>               <C>
Increase in net
 assets from
 operations:
 Net investment
  income.........   $   (2,467)      $    886
 Net realized
  gains (losses).       11,636           (117)
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........      144,301          3,155
                    ----------       --------
Net increase
 (decrease) in
 net assets
 resulting from
 operations......      153,470          3,924
From policyholder
 transactions:
 Net premiums
  from
  policyholders..    1,017,198        333,168
 Net benefits to
  policyholders..    (321,791)         (4,202)
                    ---------        --------
Net increase
 (decrease) in
 net assets from
 policyholder
 transactions....      695,407        328,966
                    ----------       --------
Net increase
 (decrease) in
 net assets......      848,877        332,890
Net assets at
 beginning of
 year............      882,890            --
                    ----------       --------
Net asset at end
 of year.........   $1,181,767       $332,890
                    ==========       ========
</TABLE>
 
See accompanying notes.
 
                                       35
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                        Short-Term U.S.
                                                                          Government
                                 Stock Subaccount                         Subaccount
                   -------------------------------------------- -------------------------------
                                               For the Period                  For the Period
                                                    from                            from
                                                December 14,                       May 1,
                     Unaudited                      1993          Unaudited         1994
                    Nine Month                  (commencement    Nine Month     (commencement
                   Period ended   Year ended  of operations) to Period ended  of operations) to
                   September 30, December 31,   December 31,    September 30,   December 31,
                       1995          1994           1993            1995            1994
                   ------------- ------------ ----------------- ------------- -----------------
<S>                <C>           <C>          <C>               <C>           <C>
Increase in net
 assets from
 operations:
 Net investment
  income.........   $   60,246    $   67,746         --          $   28,614        $   306
 Net realized
  gains (losses).       71,866        (1,272)        --               3,907             (1)
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........      624,107       (67,362)        --               3,148           (325)
                    ----------    ----------         ---         ----------        -------
Net increase
 (decrease) in
 net assets
 resulting from
 operations......      756,219          (888)        --              35,669            (20)
From policyholder
 transactions:
 Net premiums
  from
  policyholders..    4,933,082     1,606,781         --           2,235,875         41,816
 Net benefits to
  policyholders..     (753,641)     (253,270)        --            (143,990)          (333)
                    ----------    ----------         ---         ----------        -------
Net increase in
 net assets from
 policyholder
 transactions....    4,179,441     1,353,511         --           2,091,885         41,483
                    ----------    ----------         ---         ----------        -------
Net increase in
 net assets......    4,935,660     1,352,623         --           2,127,554         41,463
Net assets at
 beginning of
 year............    1,352,623           --          --              41,463            --
                    ----------    ----------         ---         ----------        -------
Net asset at end
 of year.........   $6,288,283    $1,352,623         --          $2,169,017        $41,463
                    ==========    ==========         ===         ==========        =======
<CAPTION>
                                Managed Subaccount
                   --------------------------------------------
                                               For the Period
                                                    from
                                                December 14,
                     Unaudited                      1993
                    Nine Month                  (commencement
                   Period ended   Year ended  of operations) to
                   September 30, December 31,   December 31,
                       1995          1994           1993
                   ------------- ------------ -----------------
<S>                <C>           <C>          <C>
Increase in net
 assets from
 operations:
 Net investment
  income.........   $   62,878     $ 11,667          --
 Net realized
  gains (losses).      156,923       (4,727)         --
 Net unrealized
  appreciation
  (depreciation)
  during the
  period.........      154,367       (8,296)         --
                    ----------     --------          ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......      374,168       (1,356)         --
From policyholder
 transactions:
 Net premiums
  from
  policyholders..    4,142,912      859,794          --
 Net benefits to
  policyholders..   (2,383,868)    (211,705)         --
                    ----------     --------          ---
Net increase in
 net assets from
 policyholder
 transactions....    1,759,044      648,089          --
                    ----------     --------          ---
Net increase in
 net assets......    2,133,212      646,733          --
Net assets at
 beginning of
 year............      646,733          --           --
                    ----------     --------          ---
Net asset at end
 of year.........   $2,779,945     $646,733          --
                    ==========     ========          ===
</TABLE>
 
See accompanying notes.
 
                                       36
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
 
September 30, 1995
 
NOTE 1--ORGANIZATION
 
John Hancock Variable Life Account S (the Account) is a separate investment
account of John Hancock Variable Life Insurance Company (JHVLICO), a wholly-
owned subsidiary of John Hancock Mutual Life Insurance Company (John Hancock).
The Account was created on November 12, 1993. The Account commenced operations
on December 14, 1993 from the receipt of policy premiums. The Account was
formed to fund variable life insurance policies (Policies) issued by JHVLICO.
The Account is operated as a unit investment trust registered under the
Investment Company Act of 1940, as amended, and currently consists of nine
subaccounts. The assets of each subaccount are invested exclusively in shares
of a corresponding portfolio of John Hancock Variable Series Trust I (the
Fund). New subaccounts may be added as new portfolios are added to the Fund,
or as other investment options are developed, and made available to
policyowners. The nine portfolios of the Fund which are currently available
are Select Stock, Bond, International, Money Market, Real Estate Equity,
Special Opportunities, Stock, Short-Term U.S. Government and Managed. Each
portfolio has a different investment objective.
 
The net assets of the Account may not be less than the amount required under
state insurance law to provide for death benefits (without regard to the
minimum death benefit guarantee) and other policy benefits. Additional assets
are held in JHVLICO'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 JHVLICO. The portion of the
Account's assets applicable to the policies may not be charged with
liabilities arising out of any other business JHVLICO may conduct.
 
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
 
VALUATION OF INVESTMENTS
 
Investments in shares of the Fund are valued at the reported net asset values
of the respective portfolios. Investment transactions are recorded on the
trade date. Dividend income is recognized on the ex-dividend date. Realized
gains and losses on sales of fund shares are determined on the basis of
identified cost.
 
FEDERAL INCOME TAXES
 
The operations of the Account are included in the federal income tax return of
JHVLICO, which is taxed as a life insurance company under the Internal Revenue
Code. JHVLICO 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, JHVLICO 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.
 
                                      37
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
(UNAUDITED)
 
EXPENSES
 
JHVLICO assumes mortality and expense risks of the variable life insurance
policies for which asset charges are deducted at a maximum annual rate of .90%
of net assets (excluding policy loans) of the Account. In addition, a monthly
charge at varying levels for the cost of insurance is deducted from the net
assets of the Account.
 
JHVLICO makes certain deductions for administrative expenses and state premium
taxes from premium payments before amounts are transferred to the Account.
 
POLICY LOANS
 
Policy loans represent outstanding loans plus accrued interest. Interest is
accrued (net of a charge for policy loan administration determined at an
annual rate of .75% of the aggregate amount of policyowner indebtedness) and
compounded daily. At September 30, 1995, there were no outstanding policy
loans.
 
NOTE 3--TRANSACTION WITH AFFILIATES
 
John Hancock acts as the distributor, principal underwriter and investment
advisor for the Fund.
 
Certain officers of the Account are officers and directors of JHVLICO, the
Fund or John Hancock.
 
NOTE 4--DETAILS OF INVESTMENTS
 
The details of the shares owned and cost and value of investments in the
portfolios of the Fund at September 30, 1995 were as follows:
 
<TABLE>
<CAPTION>
Portfolio                                  Shares Owned    Cost        Value
- ---------                                  ------------    ----        -----
<S>                                        <C>          <C>         <C>
Select Stock..............................    234,873   $ 3,794,192 $ 4,180,629
Bond......................................    107,480     1,044,643   1,067,480
International.............................    144,956     2,162,779   2,257,466
Money Market..............................    212,683     2,127,396   2,127,396
Real Estate Equity........................     45,709       495,363     526,923
Special Opportunities.....................     93,711     1,037,484   1,181,786
Stock.....................................    436,615     5,664,269   6,288,376
Short-Term U.S. Government................    214,268     2,165,884   2,169,031
Managed...................................    198,209     2,625,614   2,779,981
                                            ---------   ----------- -----------
                                            1,688,504   $21,117,624 $22,579,068
                                            =========   =========== ===========
</TABLE>
 
 
                                      38
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 5--DETAILS OF INVESTMENTS--CONTINUED
(UNAUDITED)
 
Purchases, including reinvestment of dividend distributions and proceeds from
sales of shares in the portfolios of the Fund for the period ended September
30, 1995 were as follows:
 
<TABLE>
<CAPTION>
Portfolio                                                Purchases     Sales
- ---------                                                ---------     -----
<S>                                                     <C>         <C>
Select Stock........................................... $ 4,053,519 $ 1,286,446
Bond...................................................   1,018,140     202,268
International..........................................   1,759,940     615,455
Money Market...........................................   8,176,099   8,303,836
Real Estate Equity.....................................     317,700     226,704
Special Opportunities..................................     829,737     133,625
Stock..................................................   5,297,994   1,125,576
Short-Term U.S. Government.............................   2,326,096     205,907
Managed................................................   4,038,781   2,225,120
                                                        ----------- -----------
                                                        $27,818,006 $14,324,937
                                                        =========== ===========
</TABLE>
 
                                       39
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENT OF ASSETS AND LIABILITIES
 
DECEMBER 31, 1994
 
<TABLE>
<CAPTION>
                                                                   Real                             Short-Term
                   Select                              Money      Estate      Special                  U.S.
                   Stock       Bond    International   Market     Equity   Opportunities   Stock    Government  Managed
                 Subaccount Subaccount  Subaccount   Subaccount Subaccount  Subaccount   Subaccount Subaccount Subaccount
                 ---------- ---------- ------------- ---------- ---------- ------------- ---------- ---------- ----------
<S>              <C>        <C>        <C>           <C>        <C>        <C>           <C>        <C>        <C>
Assets
Investment in
 shares of
 portfolios of
 John Hancock
 Variable Series
 Trust I, at
 value (Notes 2
 and 3).........  $902,369   $217,049   $  992,327   $2,255,133  $419,884    $332,891    $1,352,623  $41,463    $646,733
Receivable from
 John Hancock
 Variable Series
 Trust I, for
 shares
 redeemed.......    10,064          7       16,164      268,706        31       4,029        10,093       57          77
                  --------   --------   ----------   ----------  --------    --------    ----------  -------    --------
Total assets....   912,433    217,056    1,008,491    2,523,839   419,915     336,920     1,362,716   41,520     646,810
Liabilities
Payable to John
 Hancock
 Variable Life
 Insurance
 Company........    10,035        --        16,132      268,641        17       4,019        10,050       56          56
Asset charges
 payable (Note
 2).............        29          7           32           65        14          11            43        1          21
                  --------   --------   ----------   ----------  --------    --------    ----------  -------    --------
Total liabili-
 ties...........    10,064          7       16,164      268,706        31       4,030        10,093       57          77
                  --------   --------   ----------   ----------  --------    --------    ----------  -------    --------
Net assets        $902,369   $217,049   $  992,327   $2,255,133  $419,884    $332,890    $1,352,623  $41,463    $646,733
                  ========   ========   ==========   ==========  ========    ========    ==========  =======    ========
</TABLE>
 
See accompanying notes.
 
                                       40
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF OPERATIONS
 
<TABLE>
<CAPTION>
                              Select                                                    International
                         Stock Subaccount               Bond Subaccount                   Subaccount
                  ------------------------------ ------------------------------ ------------------------------
                                For the Period                 For the Period                 For the Period
                                     from                           from                           from
                                 December 14,                   December 14,                   December 14,
                                     1993                           1993                           1993
                                 (commencement                  (commencement                  (commencement
                   Year ended  of operations) to  Year ended  of operations) to  Year ended  of operations) to
                  December 31,   December 31,    December 31,   December 31,    December 31,   December 31,
                      1994           1993            1994           1993            1994           1993
                  ------------ ----------------- ------------ ----------------- ------------ -----------------
<S>               <C>          <C>               <C>          <C>               <C>          <C>
Investment
 income:
 Distributions
  received from
  the portfolios
  of John Hancock
  Variable Series
  Trust I........   $ 39,711         $ 541         $ 7,083           --           $ 11,324          --
                    --------         -----         -------           ---          --------          ---
Total investment
 income..........     39,711           541           7,083           --             11,324          --
Expenses:
 Mortality and
  expense risks..      2,688             4             509           --              2,129          --
                    --------         -----         -------           ---          --------          ---
Net investment
 income..........     37,023           537           6,574           --              9,195          --
Net realized and
 unrealized gain
 (loss) on
 investments:
 Net realized
  gains (losses).    (37,955)          --           (2,259)          --              5,934          --
 Net unrealized
  depreciation
  during the
  year...........    (24,086)         (447)         (3,839)          --            (46,936)         --
                    --------         -----         -------           ---          --------          ---
Net realized and
 unrealized loss
 on investments..    (62,041)         (447)         (6,098)          --            (41,002)         --
                    --------         -----         -------           ---          --------          ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......   $(25,018)        $  90         $   476           --           $(31,807)         --
                    ========         =====         =======           ===          ========          ===
<CAPTION>
                           Money Market
                            Subaccount
                  ------------------------------
                                For the Period
                                     from
                                 December 14,
                                     1993
                                 (commencement
                   Year ended  of operations) to
                  December 31,   December 31,
                      1994           1993
                  ------------ -----------------
<S>               <C>          <C>
Investment
 income:
 Distributions
  received from
  the portfolios
  of John Hancock
  Variable Series
  Trust I........   $39,245           --
                    -------           ---
Total investment
 income..........    39,245           --
Expenses:
 Mortality and
  expense risks..     5,184           --
                    -------           ---
Net investment
 income..........    34,061           --
Net realized and
 unrealized gain
 (loss) on
 investments:
 Net realized
  gains (losses).       --            --
 Net unrealized
  depreciation
  during the
  year...........       --            --
                    -------           ---
Net realized and
 unrealized loss
 on investments..       --            --
                    -------           ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......   $34,061           --
                    =======           ===
</TABLE>
 
See accompanying notes.
 
                                       41
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF OPERATIONS (CONTINUED)
 
<TABLE>
<CAPTION>
                                                     Special                                     Short-Term
                            Real Estate           Opportunities                                U.S. Government
                         Equity Subaccount         Subaccount*         Stock Subaccount          Subaccount*
                   ------------------------------ ------------- ------------------------------ ---------------
                                 For the Period                               For the Period
                                      from                                         from
                                  December 14,                                 December 14,
                                      1993                                         1993
                                  (commencement                                (commencement
                    Year ended  of operations) to Period ended   Year ended  of operations) to  Period ended
                   December 31,   December 31,    December 31,  December 31,   December 31,     December 31,
                       1994           1993            1994          1994           1993             1994
                   ------------ ----------------- ------------- ------------ ----------------- ---------------
<S>                <C>          <C>               <C>           <C>          <C>               <C>
Investment in-
come:
 Distributions
 received from
 the portfolios
 of John Hancock
 Variable Series
 Trust I.........    $ 10,909          --            $1,493       $ 70,819          --              $ 331
                     --------          ---           ------       --------          ---             -----
Total investment
income...........      10,909          --             1,493         70,819          --                331
Expenses:
 Mortality and
 expense risks...         689          --               607          3,073          --                 25
                     --------          ---           ------       --------          ---             -----
Net investment
income...........      10,220          --               886         67,746          --                306
Net realized and
unrealized gain
(loss) on invest-
ments:
 Net realized
 losses..........     (10,840)         --              (117)        (1,272)         --                 (1)
 Net unrealized
 appreciation
 (depreciation)
 during the year.       9,936          --             3,155        (67,362)         --               (325)
                     --------          ---           ------       --------          ---             -----
Net realized and
unrealized gain
(loss) on
investments......        (904)         --             3,038        (68,634)         --               (326)
                     --------          ---           ------       --------          ---             -----
Net increase
(decrease) in net
assets resulting
from operations..    $  9,316          --            $3,924       $   (888)         --              $ (20)
                     ========          ===           ======       ========          ===             =====
<CAPTION>
                         Managed Subaccount
                   ------------------------------
                                 For the Period
                                      from
                                  December 14,
                                      1993
                                  (commencement
                    Year ended  of operations) to
                   December 31,   December 31,
                       1994           1993
                   ------------ -----------------
<S>                <C>          <C>
Investment in-
come:
 Distributions
 received from
 the portfolios
 of John Hancock
 Variable Series
 Trust I.........    $ 12,985          --
                     --------          ---
Total investment
income...........      12,985          --
Expenses:
 Mortality and
 expense risks...       1,318          --
                     --------          ---
Net investment
income...........      11,667          --
Net realized and
unrealized gain
(loss) on invest-
ments:
 Net realized
 losses..........      (4,727)         --
 Net unrealized
 appreciation
 (depreciation)
 during the year.      (8,296)         --
                     --------          ---
Net realized and
unrealized gain
(loss) on
investments......     (13,023)         --
                     --------          ---
Net increase
(decrease) in net
assets resulting
from operations..    $ (1,356)         --
                     ========          ===
</TABLE>
 
* The Short-Term U.S. Government and the Special Opportunities Subaccounts
  commenced operations on May 1 and May 6, 1994, respectively.
 
See accompanying notes.
 
                                       42
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF CHANGES IN NET ASSETS
 
<TABLE>
<CAPTION>
                      Select Stock Subaccount           Bond Subaccount          International Subaccount
                   ------------------------------ ---------------------------- -----------------------------
                                 For the Period               For the Period                For the Period
                                      from                         from                          from
                                  December 14,                 December 14,                  December 14,
                                      1993                         1993                          1993
                                  (commencement                (commencement                 (commencement
                   Year ended   of operations) to Year ended of operations) to Year ended  of operations) to
                    December      December 31,     December    December 31,     December     December 31,
                    31, 1994          1993         31, 1994        1993         31, 1994         1993
                   -----------  ----------------- ---------- ----------------- ----------  -----------------
<S>                <C>          <C>               <C>        <C>               <C>         <C>
Increase in net
 assets from
 operations:
 Net investment
  income.........  $    37,023       $   537       $  6,574         --         $    9,195         --
 Net realized
  gains (losses).      (37,955)          --          (2,259)        --              5,934         --
 Net unrealized
  depreciation
  during the
  year...........      (24,086)         (447)        (3,839)        --            (46,936)        --
                   -----------       -------       --------         ---        ----------         ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......      (25,018)           90            476         --            (31,807)        --
From policyholder
 transactions:
 Net premiums
  from
  policyholders..    2,165,201        12,650        279,171         --          1,223,410         --
 Net benefits to
  policyholders..   (1,250,017)         (537)       (62,598)        --           (199,276)        --
                   -----------       -------       --------         ---        ----------         ---
Net increase in
 net assets from
 policyholder
 transactions....      915,184        12,113        216,573         --          1,024,134         --
                   -----------       -------       --------         ---        ----------         ---
Net increase in
 net assets......      890,166        12,203        217,049         --            992,327         --
Net assets at
 beginning of
 year............       12,203           --             --          --                --          --
                   -----------       -------       --------         ---        ----------         ---
Net assets at end
 of year.........  $   902,369       $12,203       $217,049         --         $  992,237         --
                   ===========       =======       ========         ===        ==========         ===
<CAPTION>
                      Money Market Subaccount
                   ------------------------------
                                 For the Period
                                      from
                                  December 14,
                                      1993
                                  (commencement
                   Year ended   of operations) to
                    December      December 31,
                    31, 1994          1993
                   ------------ -----------------
<S>                <C>          <C>
Increase in net
 assets from
 operations:
 Net investment
  income.........  $    34,061         --
 Net realized
  gains (losses).          --          --
 Net unrealized
  depreciation
  during the
  year...........          --          --
                   -----------         ---
Net increase
 (decrease) in
 net assets
 resulting from
 operations......       34,061         --
From policyholder
 transactions:
 Net premiums
  from
  policyholders..    7,344,361         --
 Net benefits to
  policyholders..   (5,123,289)        --
                   -----------         ---
Net increase in
 net assets from
 policyholder
 transactions....    2,221,072         --
                   -----------         ---
Net increase in
 net assets......    2,255,133         --
Net assets at
 beginning of
 year............          --          --
                   -----------         ---
Net assets at end
 of year.........  $ 2,255,133         --
                   ===========         ===
</TABLE>
 
See accompanying notes.
 
                                       43
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                                              Short-
                                                   Special                                   Term U.S.
                           Real Estate          Opportunities                               Government
                        Equity Subaccount        Subaccount*        Stock Subaccount        Subaccount*
                   ---------------------------- ------------- ----------------------------- -----------
                               For the Period                              For the Period
                                    from                                        from
                                December 14,                                December 14,
                                    1993                                        1993
                     Year       (commencement                               (commencement     Period
                     ended    of operations) to Period ended  Year ended  of operations) to    ended
                   December     December 31,    December 31,   December     December 31,     December
                   31, 1994         1993            1994       31, 1994         1993         31, 1994
                   ---------  ----------------- ------------- ----------  ----------------- -----------
<S>                <C>        <C>               <C>           <C>         <C>               <C>
Increase in net
assets from
operations:
 Net investment
 income..........  $  10,220         --           $    886    $   67,746         --           $   306
 Net realized
 losses..........    (10,840)        --               (117)       (1,272)        --                (1)
 Net unrealized
 appreciation
 (depreciation)
 during the year.      9,936         --              3,155       (67,362)        --              (325)
                   ---------         ---          --------    ----------         ---          -------
Net increase
(decrease) in net
assets resulting
from operations..      9,316         --              3,924          (888)        --               (20)
From policyholder
transactions:
 Net premiums
 from
 policyholders...    525,631         --            333,168     1,606,781         --            41,816
 Net benefits to
 policyholders...   (115,063)        --             (4,202)     (253,270)        --              (333)
                   ---------         ---          --------    ----------         ---          -------
Net increase in
net assets from
policyholder
transactions.....    410,568         --            328,966     1,353,511         --            41,483
                   ---------         ---          --------    ----------         ---          -------
Net increase in
net assets.......    419,884         --            332,890     1,352,623         --            41,463
Net assets at
beginning of
year.............        --          --                --            --          --               --
                   ---------         ---          --------    ----------         ---          -------
Net asset at end
of year..........  $ 419,884         --           $332,890    $1,352,623         --           $41,463
                   =========         ===          ========    ==========         ===          =======
<CAPTION>
                       Managed Subaccount
                   ----------------------------
                               For the Period
                                    from
                                December 14,
                                    1993
                     Year       (commencement
                     ended    of operations) to
                   December     December 31,
                   31, 1994         1993
                   ---------- -----------------
<S>                <C>        <C>
Increase in net
assets from
operations:
 Net investment
 income..........  $  11,667         --
 Net realized
 losses..........     (4,727)        --
 Net unrealized
 appreciation
 (depreciation)
 during the year.     (8,296)        --
                   ---------         ---
Net increase
(decrease) in net
assets resulting
from operations..     (1,356)        --
From policyholder
transactions:
 Net premiums
 from
 policyholders...    859,794         --
 Net benefits to
 policyholders...   (211,705)        --
                   ---------         ---
Net increase in
net assets from
policyholder
transactions.....    648,089         --
                   ---------         ---
Net increase in
net assets.......    646,733         --
Net assets at
beginning of
year.............        --          --
                   ---------         ---
Net asset at end
of year..........  $ 646,733         --
                   =========         ===
</TABLE>
 
* The Short-Term U.S. Government and the Special Opportunities Subaccounts
  commenced operations on May 1 and May 6, 1994, respectively.
 
See accompanying notes.
 
                                       44
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
NOTES TO FINANCIAL STATEMENTS
 
December 31, 1994
 
NOTE 1--ORGANIZATION
 
John Hancock Variable Life Account S (the Account) is a separate investment
account of John Hancock Variable Life Insurance Company (JHVLICO), a wholly-
owned subsidiary of John Hancock Mutual Life Insurance Company (John Hancock).
The Account was created on November 12, 1993. The Account commenced operations
on December 14, 1993 from the receipt of policy premiums. The Account was
formed to fund variable life insurance policies (Policies) issued by JHVLICO.
The Account is operated as a unit investment trust registered under the
Investment Company Act of 1940, as amended, and currently consists of nine
subaccounts. The assets of each subaccount are invested exclusively in shares
of a corresponding portfolio of John Hancock Variable Series Trust I (the
Fund). New subaccounts may be added as new portfolios are added to the Fund,
or as other investment options are developed, and made available to
policyowners. The nine portfolios of the Fund which are currently available
are Select Stock, Bond, International, Money Market, Real Estate Equity,
Special Opportunities, Stock, Short-Term U.S. Government and Managed. Each
portfolio has a different investment objective.
 
The net assets of the Account may not be less than the amount required under
state insurance law to provide for death benefits (without regard to the
minimum death benefit guarantee) and other policy benefits. Additional assets
are held in JHVLICO'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 JHVLICO. The portion of the
Account's assets applicable to the policies may not be charged with
liabilities arising out of any other business JHVLICO may conduct.
 
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
 
VALUATION OF INVESTMENTS
 
Investments in shares of the Fund are valued at the reported net asset values
of the respective portfolios. Investment transactions are recorded on the
trade date. Dividend income is recognized on the ex-dividend date. Realized
gains and losses on sales of fund shares are determined on the basis of
identified cost.
 
FEDERAL INCOME TAXES
 
The operations of the Account are included in the federal income tax return of
JHVLICO, which is taxed as a life insurance company under the Internal Revenue
Code. JHVLICO 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, JHVLICO 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.
 
                                      45
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES--CONTINUED
 
EXPENSES
 
JHVLICO assumes mortality and expense risks of the variable life insurance
policies for which asset charges are deducted at a maximum annual rate of .90%
of net assets (excluding policy loans) of the Account. In addition, a monthly
charge at varying levels for the cost of insurance is deducted from the net
assets of the Account.
 
JHVLICO makes certain deductions for administrative expenses and state premium
taxes from premium payments before amounts are transferred to the Account.
 
POLICY LOANS
 
Policy loans represent outstanding loans plus accrued interest. Interest is
accrued (net of a charge for policy loan administration determined at an
annual rate of .75% of the aggregate amount of policyowner indebtedness) and
compounded daily. At December 31, 1994, there were no outstanding policy
loans.
 
NOTE 3--NET ASSETS
 
The net assets attributable to JHVLICO represent JHVLICO's funds deposited in
the Account. At its discretion, these amounts may be transferred by JHVLICO to
its general account. At December 31, 1994, there were no assets attributable
to JHVLICO in the Account.
 
NOTE 4--TRANSACTION WITH AFFILIATES
 
John Hancock acts as the distributor, principal underwriter and investment
advisor for the Fund.
 
Certain officers of the Account are officers and directors of JHVLICO, the
Fund or John Hancock.
 
NOTE 5--DETAILS OF INVESTMENTS
 
The details of the shares owned and cost and value of investments in the
portfolios of the Fund at December 31, 1994 were as follows:
 
<TABLE>
<CAPTION>
Portfolio                                    Shares Owned    Cost      Value
- ---------                                    ------------    ----      -----
<S>                                          <C>          <C>        <C>
Select Stock................................    62,636    $  926,902 $  902,369
Bond........................................    23,627       220,888    217,049
International...............................    67,885     1,039,263    992,327
Money Market................................   225,457     2,255,133  2,255,133
Real Estate Equity..........................    37,639       409,948    419,884
Special Opportunities.......................    33,480       329,736    332,891
Stock.......................................   117,597     1,419,985  1,352,623
Short-Term U.S. Government..................     4,291        41,788     41,463
Managed.....................................    54,065       655,030    646,733
                                               -------    ---------- ----------
                                               626,677    $7,298,673 $7,160,472
                                               =======    ========== ==========
</TABLE>
 
 
                                      46
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE ACCOUNT S
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 5--DETAILS OF INVESTMENTS--CONTINUED
 
Purchases, including reinvestment of dividend distributions, and proceeds from
sales of shares in the portfolios of the Fund during 1994 were as follows:
 
<TABLE>
<CAPTION>
Portfolio                                                  Purchases    Sales
- ---------                                                  ---------    -----
<S>                                                       <C>         <C>
Select Stock............................................. $ 2,345,698 $1,393,491
Bond.....................................................     285,533     62,386
International............................................   1,224,358    191,029
Money Market.............................................   7,455,168  5,200,035
Real Estate Equity.......................................     631,071    210,283
Special Opportunities....................................     334,391      4,538
Stock....................................................   1,673,086    251,829
Short-Term U.S. Government...............................      42,146        357
Managed..................................................     967,228    307,741
                                                          ----------- ----------
                                                          $14,958,679 $7,621,689
                                                          =========== ==========
</TABLE>
 
                                      47
<PAGE>
 
              REPORTS OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
 
Policyholders
John Hancock Variable Life Account S
 of John Hancock Variable Life Insurance Company
 
We have audited the accompanying statement of assets and liabilities of John
Hancock Variable Life Account S (comprising, respectively, the Select Stock,
Bond, International, Money Market, Real Estate Equity, Special Opportunities,
Stock, Short-Term U.S. Government and Managed Subaccounts) as of December 31,
1994, and the related statements of operations and statements of changes in
net assets for the year ended December 31, 1994, and the period from October
4, 1993 (commencement of operations) to December 31, 1993 for the Select
Stock, Bond, International, Money Market, Real Estate Equity, Stock, and
Managed Subaccounts; the related statement of operations and statement of
changes in net assets for the period from May 6, 1994 (commencement of
operations) to December 31, 1994 for the Special Opportunities Subaccount; and
the related statement of operations and statement of changes in net assets for
the period from May 1, 1994 (commencement of operations) to December 31, 1994
for the Short-Term U.S. Government Subaccount. These financial statements are
the responsibility of the Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Variable Life Account S at December 31,
1994, and the results of their operations and the changes in their net assets
for each of the periods indicated above, in conformity with generally accepted
accounting principles.
 
                                                              Ernst & Young LLP
 
Boston, Massachusetts
February 7, 1995
 
                               ----------------
 
Board of Directors
John Hancock Variable Life Insurance Company
 
We have audited the accompanying statements of financial position of John
Hancock Variable Life Insurance Company as of December 31, 1994 and 1993, and
the related statements of operations and unassigned deficit and cash flows for
each of the three years in the period ended December 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of John Hancock Variable Life
Insurance Company at December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted accounting principles
for a stock life insurance company wholly-owned by a mutual life insurance
company and with reporting practices prescribed or permitted by the
Commonwealth of Massachusetts Division of Insurance.
 
                                                              Ernst & Young LLP
 
Boston, Massachusetts
February 7, 1995
 
                                      48
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
 
STATEMENTS OF FINANCIAL POSITION
 
<TABLE>
<CAPTION>
                                               (Unaudited)
                                               September 30    December 31
                                               ------------ ------------------
                                                   1995       1994      1993
                                                   ----       ----      ----
                                                       (In millions)
<S>                                            <C>          <C>       <C>
Assets
Bonds--Note 7.................................   $  466.8   $  458.3  $  433.0
Preferred stocks..............................        5.2        5.3       6.4
Common stocks.................................        2.3        1.9       2.4
Investment in affiliate.......................       64.9       59.9      57.6
Mortgage loans on real estate--Note 7.........      138.0      148.5     163.1
Real estate...................................       43.0       27.8      16.7
Policy loans..................................       58.4       47.3      36.9
Cash items:
  Cash in banks...............................        0.0       29.3       5.7
  Temporary cash investments..................       52.4       46.7      17.6
                                                 --------   --------  --------
                                                     52.4       76.0      23.3
Premiums due and deferred.....................       38.6       43.9      47.3
Investment income due and accrued.............       16.0       14.7      14.4
Other general account assets..................       12.1       22.3       8.9
Assets held in separate accounts..............    2,210.0    1,721.0   1,568.6
                                                 --------   --------  --------
TOTAL ASSETS..................................   $3,107.7   $2,626.9  $2,378.6
                                                 ========   ========  ========
Obligations and Stockholder's Equity
OBLIGATIONS:
  Policy reserves.............................   $  658.1   $  638.6  $  600.3
  Federal income and other taxes payable--Note
   1..........................................        9.8       17.3      (1.2)
  Other accrued expenses......................      (14.9)      22.8       1.0
  Asset valuation reserve--Note 1.............       14.1       12.6      10.4
  Obligations related to separate accounts....    2,206.2    1,717.7   1,565.3
                                                 --------   --------  --------
TOTAL OBLIGATIONS.............................    2,873.3    2,409.0   2,175.8
Stockholder's Equity--Notes 2 and 6
  Common Stock, $50 par value; authorized
   50,000 shares;
   issued and outstanding 50,000 shares--1995;
   20,000 shares--1994 and 1993...............        2.5       25.0      25.0
  Paid-in capital.............................      377.5      355.0     355.0
  Unassigned deficit..........................     (145.6)    (162.1)   (177.2)
                                                 --------   --------  --------
TOTAL STOCKHOLDER'S EQUITY....................      234.4      217.9     202.8
                                                 --------   --------  --------
TOTAL OBLIGATIONS AND STOCKHOLDER'S EQUITY....   $3,107.7   $2,626.9  $2,378.6
                                                 ========   ========  ========
</TABLE>
 
The accompanying notes are an integral part of the financial statements.
 
                                       49
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
 
STATEMENTS OF OPERATIONS AND UNASSIGNED DEFICIT
 
 
<TABLE>
<CAPTION>
                                 (Unaudited)
                                 Nine months
                                    ended
                                September 30     Year ended December 31
                               ----------------  -------------------------
                                1995     1994     1994     1993     1992
                                ----     ----     ----     ----     ----
                                            (In millions)
<S>                            <C>      <C>      <C>      <C>      <C>
Income
  Premiums.................... $ 378.9  $ 345.2  $ 430.5  $ 398.8  $ 416.4
  Net investment income--Note
   4..........................    47.1     43.1     57.6     61.3     62.0
  Other, net..................    57.7      1.1     95.5     (4.0)    (3.9)
                               -------  -------  -------  -------  -------
                                 483.7    389.4    583.6    456.1    474.5
Benefits and Expenses
  Payments to policyholders
   and beneficiaries..........   161.3    138.7    187.5    190.8    199.0
  Additions to reserves to
   provide for future payments
   to policyholders and bene-
   ficiaries..................   165.3    124.4    185.3    111.5    120.9
  Expenses of providing
   service to policyholders
   and obtaining new
   insurance--Note 6..........   113.9    127.9    168.9    144.5    111.4
  Cost of restructuring.......     0.0      0.0      3.0      0.0      0.0
  State and miscellaneous tax-
   es.........................     8.8      8.2     11.3      9.8      9.5
                               -------  -------  -------  -------  -------
                                 449.3    399.2    556.0    456.6    440.8
                               -------  -------  -------  -------  -------
    GAIN (LOSS) FROM
     OPERATIONS BEFORE FEDERAL
     INCOME TAXES AND NET
     REALIZED CAPITAL GAINS
     (LOSSES).................    34.4     (9.8)    27.6     (0.5)    33.7
Federal income taxes (bene-
 fit)--Note 1.................    19.9     (1.4)    15.0      6.5     20.5
                               -------  -------  -------  -------  -------
    GAIN (LOSS) FROM
     OPERATIONS BEFORE NET
     REALIZED CAPITAL GAINS
     (LOSSES).................    14.5     (8.4)    12.6     (7.0)    13.2
Net realized capital gains
 (losses)--Note 5.............    (0.6)     1.2      0.4     (2.6)    (1.4)
                               -------  -------  -------  -------  -------
    NET GAIN (LOSS)...........    13.9     (7.2)    13.0     (9.6)    11.8
Unassigned deficit at begin-
 ning of year.................  (162.1)  (177.2)  (177.2)  (142.3)  (157.1)
Net unrealized capital gains
 (losses) and other adjust-
 ments--Note 5................     2.0     (3.7)    (1.5)    (3.2)    (2.2)
Valuation reserve changes--
 Note 1.......................     0.0      2.5      2.7      2.3      9.0
Change in separate account
 surplus......................     0.5      0.0      0.0      0.5      0.2
Other reserves and adjust-
 ments........................     0.1      0.4      0.9    (24.9)    (4.0)
                               -------  -------  -------  -------  -------
    UNASSIGNED DEFICIT AT END
     OF PERIOD................ $(145.6) $(185.2) $(162.1) $(177.2) $(142.3)
                               =======  =======  =======  =======  =======
</TABLE>
 
The accompanying notes are an integral part of the financial statements.
 
                                       50
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
 
STATEMENTS OF CASH FLOWS
 
<TABLE>
<CAPTION>
                                    (Unaudited)
                                 Nine months ended
                                   September 30      Year ended December 31
                                 -----------------   ----------------------
                                   1995      1994     1994     1993     1992
                                   ----      ----     ----     ----     ----
                                               (In millions)
<S>                              <C>       <C>       <C>      <C>      <C>
Cash Provided
  Insurance premiums............   $383.3    $352.3   $517.2   $411.4   $425.4
  Net investment income.........     46.1      43.2     57.9     63.0     62.0
  Other, net....................     66.2       0.4     (0.3)    (0.6)    (2.6)
                                 --------  --------  -------  -------  -------
                                    495.6     395.9    574.8    473.8    484.8
  Benefits to policyholders and
   beneficiaries................    150.3     132.6    175.3    176.6    186.4
  Dividends paid to policyhold-
   ers..........................      9.5       8.9     11.9     14.8     12.2
  Insurance expenses and other
   taxes........................    122.5     135.5    180.6    148.4    118.9
  Net transfers to separate ac-
   counts.......................    149.4      96.4    146.6     91.9     65.9
  Other, net....................     37.8       6.0      7.7     22.1     33.1
                                 --------  --------  -------  -------  -------
                                    469.5     379.4    522.1    453.8    416.5
                                 --------  --------  -------  -------  -------
      NET CASH PROVIDED FROM OP-
       ERATIONS.................     26.1      16.5     52.7     20.0     68.3
  Proceeds from the disposition,
   redemption and prepayment of:
    Bonds.......................     44.9      44.5     70.1    103.0     49.1
    Stocks......................      0.7       1.0      1.2      9.4      4.5
    Real estate.................      0.0       4.2     22.1      3.6      1.7
    Other invested assets.......      0.0       0.0      1.3      0.1      0.0
  Mortgage loan repayments......     16.3      26.0     35.2     80.1     13.9
  Other sources.................      0.0      11.2     21.8      0.0      0.0
                                 --------  --------  -------  -------  -------
      TOTAL CASH PROVIDED.......     88.0     103.4    204.4    216.2    137.5
Cash Applied
  Purchase of:
    Bonds.......................     53.3      81.0     94.1     92.3    132.5
    Stocks......................      1.7       1.5      1.5     59.8      1.4
    Real estate.................     15.5       0.0     18.4      0.5      0.3
    Other invested assets.......      0.0       0.9      0.9      4.2      0.2
  Mortgage loans issued.........      6.5      28.7     37.9     32.4     16.8
  Return of paid-in capital to
   John Hancock.................      0.0       0.0      0.0      1.8      0.0
  Other applications............     34.6       0.0     (1.1)    43.8     (0.3)
                                 --------  --------  -------  -------  -------
      TOTAL CASH APPLIED........    111.6     112.1    151.7    234.8    150.9
                                 --------  --------  -------  -------  -------
INCREASE (DECREASE) IN CASH AND
 TEMPORARY
 CASH INVESTMENTS...............    (23.6)     (8.7)    52.7    (18.6)   (13.4)
Cash and temporary cash invest-
 ments at beginning of year.....     76.0      23.3     23.3     41.9     55.3
                                 --------  --------  -------  -------  -------
CASH AND TEMPORARY CASH INVEST-
 MENTS AT
 END OF PERIOD.................. $   52.4  $   14.6  $  76.0  $  23.3  $  41.9
                                 ========  ========  =======  =======  =======
</TABLE>
 
 
The accompanying notes are an integral part of the financial statements.
 
                                       51
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
 
STATEMENTS OF STOCKHOLDER'S EQUITY
 
<TABLE>
<CAPTION>
                                           Common  Paid-in  Unassigned
                                           Stock   Capital   Deficit   Total
                                           ------  -------  ---------- ------
                                                    (In millions)
<S>                                        <C>     <C>      <C>        <C>
Balance at January 1, 1992................ $25.0   $356.8    $(157.1)  $224.7
1992 Transactions:
  Net gain................................                      11.8     11.8
  Net unrealized capital losses and other
   adjustments............................                      (2.2)    (2.2)
  Valuation reserve changes...............                       9.0      9.0
  Change in separate account surplus......                       0.2      0.2
  Other reserves and adjustments..........                      (4.0)    (4.0)
                                           -----   ------    -------   ------
Balance at December 31, 1992..............  25.0    356.8     (142.3)   239.5
1993 Transactions:
  Net loss................................                      (9.6)    (9.6)
  Net unrealized capital losses and other
   adjustments............................                      (3.2)    (3.2)
  Valuation reserve changes...............                       2.3      2.3
  Change in separate account surplus......                       0.5      0.5
  Other reserves and adjustments..........                     (24.9)   (24.9)
  Return of capital.......................           (1.8)               (1.8)
                                           -----   ------    -------   ------
Balance at December 31, 1993..............  25.0    355.0     (177.2)   202.8
1994 Transactions:
  Net gain................................                      13.0     13.0
  Net unrealized capital losses and other
   adjustments............................                      (1.5)    (1.5)
  Valuation reserve changes...............                       2.7      2.7
  Change in separate account surplus......                       0.0      0.0
  Other reserves and adjustments..........                       0.9      0.9
                                           -----   ------    -------   ------
Balance at December 31, 1994.............. $25.0   $355.0    $(162.1)  $217.9
                                           =====   ======    =======   ======
For the nine months ended September 30,
 1994 (unaudited)
Balance at January 1, 1994................ $25.0   $355.0    $(177.2)  $202.8
1994 Transactions:
  Net loss................................                      (7.2)    (7.2)
  Net unrealized capital losses and other
   adjustments............................                      (3.7)    (3.7)
  Valuation reserve changes...............                       2.5      2.5
  Change in separate account surplus......                       0.0      0.0
  Other reserves and adjustments..........                       0.4      0.4
                                           -----   ------    -------   ------
Balance at September 30, 1994............. $25.0   $355.0    $(185.2)  $194.8
                                           =====   ======    =======   ======
For the nine months ended September 30,
 1995 (unaudited)
Balance at January 1, 1995................ $25.0   $355.0    $(162.1)  $217.9
1995 Transactions:
  Net gain................................                      13.9     13.9
  Net unrealized capital gains and other
   adjustments............................                       2.0      2.0
  Valuation reserves changes..............                       0.0      0.0
  Change in separate account surplus......                       0.5      0.5
  Other reserves and adjustments..........                       0.1      0.1
  Reclassification of paid-in capital..... (22.5)    22.5                 0.0
                                           -----   ------    -------   ------
Balance at September 30, 1995............. $ 2.5   $377.5    $(145.6)  $234.4
                                           =====   ======    =======   ======
</TABLE>
 
                                       52
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY 
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 
IS UNAUDITED)
 
NOTES TO FINANCIAL STATEMENTS

NOTE 1--ACCOUNTING PRACTICES
 
John Hancock Variable Life Insurance Company (the Company) is a wholly-owned
subsidiary of John Hancock Mutual Life Insurance Company (John Hancock). The
financial statements have been prepared on the basis of accounting practices
prescribed or permitted by the Commonwealth of Massachusetts Division of
Insurance and in conformity with the practices of the National Association of
Insurance Commissioners which are currently considered generally accepted
accounting principles for a stock life insurance company wholly-owned by a
mutual life insurance company. Accordingly, the assets in the statements of
financial position are "admitted assets" as defined by regulatory authorities.
 
In January, 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 120, "Accounting and
Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises
for Certain Long-Duration Participating Contracts." This Statement extends the
requirements of Statements No. 60, 97 and 113 to mutual life insurance
enterprises and amends FASB Interpretation No. 40, "Applicability of Generally
Accepted Accounting Principles to Mutual Life Insurance and Other
Enterprises." SFAS No. 120 and Interpretation No. 40, as amended, require life
insurance companies to adopt certain accounting principles in their financial
statements in order to continue to be considered in accordance with generally
accepted accounting principles, effective for 1996 financial statements. The
manner in which policy reserves, new business acquisition costs, asset
valuation and the related tax effects are recorded will change. The
modifications to existing accounting practices which may be necessary have
been defined by the American Institute of Certified Public Accountants in
Statement of Position (SOP) 95-1, "Accounting for Certain Insurance Activities
of Mutual Life Insurance Enterprises." The Company has not yet determined the
effects of such modifications on its general purpose financial statements.
 
The significant accounting practices of the Company are as follows:
 
Revenues and Expenses: Premium revenues are recognized over the premium-paying
period of the policies whereas expenses, including the acquisition costs of
new business, are charged to operations as incurred and policyholder dividends
are provided as paid or accrued.
 
Cash and Temporary Cash Investments: Cash includes currency on hand and demand
deposits with financial institutions. Temporary cash investments are short-
term, highly-liquid investments both readily convertible to known amounts of
cash and so near maturity that there is insignificant risk of changes in value
because of changes in interest rates.
 
Valuation of Assets: General account investments are carried at amounts
determined on the following bases:
 
  Bonds and stock values are carried as prescribed by the National
  Association of Insurance Commissioners (NAIC): bonds generally at amortized
  amounts or cost, preferred stocks generally at cost and common stocks at
  market. The discount or premium on bonds is amortized using the interest
  method.
 
  Investments in affiliates are included on the statutory equity method.
 
  Goodwill is amortized on a straight line basis over a ten year period.
 
  Mortgage loans are carried at outstanding principal balance or amortized
  cost.
 
                                      53
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 1--ACCOUNTING PRACTICES--CONTINUED
 
  Investment real estate is carried at depreciated cost, less encumbrances.
  Depreciation on investment real estate is recorded on a straight line
  basis.
 
  Real estate acquired in satisfaction of debt and held for sale is carried
  at the lower of cost or market as of the date of foreclosure.
 
  Policy loans are carried at outstanding principal balance, not in excess of
  policy cash surrender value.
 
Asset Valuation and Interest Maintenance Reserves: Beginning in 1992, the
Company adopted the Asset Valuation Reserve (AVR) prescribed by the NAIC to
replace the Mandatory Securities Valuation Reserve (MSVR) previously required
by the NAIC and the additional Mortgage and Real Estate Valuation Reserve
(MRVR) provided by the Company. The AVR is computed in accordance with the
prescribed NAIC formula and represents a provision for possible fluctuations
in the value of bonds, equity securities, mortgage loans, real estate and
other invested assets. Changes to the AVR are charged or credited directly to
the unassigned deficit.
 
The Company also records the NAIC prescribed Interest Maintenance Reserve
(IMR) that represents the after tax net accumulated unamortized realized
capital gains and losses attributable to changes in the general level of
interest rates on sales of fixed income securities, principally bonds and
mortgage loans. Such gains and losses are deferred and amortized into income
over the remaining expected lives of the investments sold. At September 30,
1995, the IMR, net of 1995 amortization of $0.8 million, amounted to $6.5
million which is included in policy reserves. The corresponding amounts at
September 30, 1994 were $0.8 million and $7.4 million, respectively. At
December 31, 1994, the IMR, net of 1994 amortization of $1.1 million, amounted
to $7.1 million, which is included in policy reserves. The corresponding 1993
amounts were $0.5 million and $7.6 million, respectively.
 
Separate Accounts: Separate account assets (unit investment trusts valued at
market) and separate account obligations (principally policyholder account
values) are included as separate captions in the statements of financial
position. In 1995 and 1994, the change in separate account surplus is
recognized through direct charges or credits to unassigned deficit. In 1993
and 1992 separate account business was combined with the general account under
the appropriate captions in the consolidated summary of operations. The 1993
and 1992 presentation was reclassified to permit comparison with the
corresponding 1995 and 1994 amounts. The presentation has no effect on
unassigned deficit.
 
Fair Values of Financial Instruments: SFAS No. 107, "Disclosure about Fair
Value of Financial Instruments," requires disclosure of fair value information
about financial instruments, whether or not recognized in the statement of
financial position, for which it is practicable to estimate the value. In
situations where quoted market prices are not available, fair values are based
on estimates using present value or other valuation techniques. SFAS No. 107
excludes certain financial instruments and all nonfinancial instruments from
its disclosure requirements. Therefore, the aggregate fair value amounts
presented do not represent the underlying value of the Company.
 
                                      54
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 1--ACCOUNTING PRACTICES--CONTINUED
 
The methods and assumptions utilized by the Company in estimating its fair
value disclosures for financial instruments are as follows:
 
  The carrying amounts reported in the statement of financial position for
  cash and temporary cash investments approximate their fair values.
 
  Fair values for public bonds are obtained from an independent pricing
  service. Fair values for private placement securities and publicly traded
  bonds not provided by the independent pricing service are estimated by the
  Company by discounting expected future cash flows using current market
  rates applicable to the yield, credit quality and maturity of the
  investments. The fair values for common and preferred stocks, other than
  its 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 loans. Mortgage loans with similar characteristics
  and credit risks are aggregated into qualitative categories for purposes of
  the fair value calculations.
 
  The carrying amount in the statement of financial position for policy loans
  approximates its fair value.
 
  The fair value for outstanding commitments to purchase long-term bonds 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 the end of the period, respectively. The fair
  value for commitments to purchase real estate approximates the amount of
  the initial commitment.
 
Capital Gains and Losses: Realized capital gains and losses, net of taxes and
amounts transferred to the IMR, are included in net gain or loss. Unrealized
gains and losses, which consist of market value and book value adjustments,
are shown as adjustments to the unassigned deficit.
 
Policy Reserves: Reserves for variable life insurance policies are maintained
principally on the modified preliminary term method using the 1958 and 1980
Commissioner's Standard Ordinary (CSO) mortality tables, with an assumed
interest rate of 4% for policies issued prior to May 1, 1983 and 4 1/2% for
policies issued on or thereafter. Reserves for single premium policies are
determined by the net single premium method using the 1958 CSO mortality
table, with an assumed interest rate of 4%. Reserves for universal life
policies issued prior to 1985 are equal to the gross account value which at
all times exceeds minimum statutory requirements. Reserves for universal life
policies issued from 1985 through 1988 are maintained at the greater of the
Commissioner's Reserve Valuation Method (CRVM) using the 1958 CSO mortality
table, with 4 1/2% interest or the cash surrender value. Reserves for
universal life policies issued after 1988 and for flexible variable policies
are maintained using the greater of the cash surrender value or the CRVM
method with the 1980 CSO mortality table and 5 1/2% interest for policies
issued from 1988 through 1992; 5% interest for policies issued in 1993 and
1994; and 4 1/2% interest for policies issued in 1995.
 
Federal Income Taxes: Federal income taxes are provided in the financial
statements based on amounts determined to be payable as a result of operations
within the current accounting period. The operations of the Company are
consolidated with John Hancock, its Parent, in filing a consolidated federal
income tax return for the affiliated group. The federal income taxes of the
Company are allocated on a separate return basis with certain adjustments. The
Company made payments of $26.7 million for the nine months ended September 30,
1995 and
 
                                      55
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 1--ACCOUNTING PRACTICES--CONTINUED
 
received tax benefits of $1.8 million for the nine months ended September 30,
1994. The Company received federal tax benefits of $7.0 million in 1994 and
made payments of $17.0 million and $24.9 million in 1993 and 1992,
respectively.
 
Income before taxes differs from taxable income principally due to tax-exempt
investment income, the limitation placed on the tax deductibility of
policyholder dividends, accelerated depreciation, differences in policy
reserves for tax return and financial statement purposes, capitalization of
policy acquisition expenses for tax purposes and other adjustments prescribed
by the Internal Revenue Code.
 
No provision is generally recognized for timing differences that may exist
between financial reporting and taxable income or loss.
 
Adjustments to Policy Reserves: From time to time, the Company finds it
appropriate to modify certain required policy reserves because of changes in
actuarial assumptions or increased benefits. Reserve modifications resulting
from such determinations are recorded directly to the unassigned deficit.
During 1994, the Company refined certain actuarial assumptions inherent in the
calculation of preconversion yearly renewable term and gross premium
deficiency reserves, resulting in a $2.7 million decrease in the unassigned
deficit at December 31, 1994. Similar refinements to the actuarial assumptions
inherent in the calculation of active life waiver of premium disability
reserves were made during 1993 and 1992 resulting in a $2.3 million and $9.0
million decrease in the unassigned deficit at December 31, 1993 and December
31, 1992, respectively. During the nine months ended September 30, 1995, there
were no refinements in actuarial assumptions inherent in the calculation of
policy reserves. During the nine months ended September 30, 1994, the Company
refined actuarial assumptions inherent in the calculation of preconversion
yearly renewable term reserves, resulting in a $2.5 million decrease in the
unassigned deficit at September 30, 1994.
 
Reinsurance: Premiums, commissions, expense reimbursements, benefits and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies issued and the terms
of the reinsurance contracts. Premiums ceded to other companies have been
reported as a reduction of premium income. Amounts applicable to reinsurance
ceded for future policy benefits, unearned premium reserves and claim
liabilities have been reported as reductions of these items.
 
Reclassifications: Certain 1993 and 1992 amounts have been reclassified to
permit comparison with the corresponding 1995 and 1994 amounts.
 
NOTE 2--CAPITALIZATION
 
At December 31, 1994, the Company had 50,000 shares authorized with 20,000
shares issued and outstanding. On February 16, 1995, the Company issued the
remaining 30,000 shares to John Hancock and transferred $22.5 million from
common stock to paid-in capital. The par value per share is $50.
 
In prior years, the Company received capital contributions from John Hancock,
with a portion of the contributed capital being credited to common stock,
although no additional shares were issued. This practice had the effect of
stating the carrying value of issued shares of common stock at amounts other
than $50 per share par value with the offset reflected in paid-in capital.
 
During 1993, the Company returned $1.8 million of paid-in capital to John
Hancock.
 
                                      56
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)

NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
NOTE 3--ACQUISITION
 
On June 23, 1993, the Company acquired all of the outstanding shares of stock
of Colonial Penn Annuity and Life Insurance Company (CPAL) from Colonial Penn
Life Insurance Company, for an aggregate purchase price of approximately $42.5
million. At the date of acquisition, assets of CPAL were approximately $648.5
million, consisting principally of cash and temporary cash investments and
liabilities were approximately $635.2 million, consisting principally of
reserves related to a block of interest sensitive single-premium whole life
insurance business assumed by CPAL from Charter National Life Insurance
Company (Charter). The purchase price includes contingent payments of up to
approximately $7.3 million payable between 1994 and 1998 based on the actual
lapse experience of the business in force on June 23, 1993. The acquisition
was accounted for using the purchase method and the unamortized goodwill was
$17.9 million and $18.9 million at September 30, 1995 and December 31, 1994,
respectively. The Company made contingent payments to CPAL of $1.5 million for
the nine months ended September 30, 1995 and $1.5 million in 1994.
 
On June 24, 1993, the Company contributed $24.6 million in additional capital
to CPAL. CPAL was renamed John Hancock Life Insurance Company of America
(JHLICOA) on July 7, 1993. JHLICOA manages the business assumed from Charter
and does not currently issue new business.
 
NOTE 4--NET INVESTMENT INCOME
 
Investment income has been reduced by the following amounts:
 
<TABLE>
<CAPTION>
                                                Nine months ended
                                                  September 30
                                                -----------------
                                                  1995     1994   1994 1993 1992
                                                  ----     ----   ---- ---- ----
                                                         (In millions)
<S>                                             <C>      <C>      <C>  <C>  <C>
Investment expenses ........................... $    1.9 $    2.3 $3.4 $2.9 $2.8
Interest expense...............................      0.0      0.0  0.2  0.0  0.0
Depreciation expense...........................      0.7      0.4  0.6  0.6  0.5
Investment taxes...............................      0.4      0.2  0.2  0.3  0.2
                                                -------- -------- ---- ---- ----
                                                $    3.0 $    2.9 $4.4 $3.8 $3.5
                                                ======== ======== ==== ==== ====
</TABLE>
 
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS
 
Net realized capital gains (losses) consist of the following items:
 
<TABLE>
<CAPTION>
                                       Nine months ended
                                         September 30
                                       ------------------
                                         1995      1994    1994   1993   1992
                                         ----      ----    ----   ----   ----
                                                  (In millions)
<S>                                    <C>       <C>       <C>    <C>    <C>
Gains (losses) from asset sales....... $    0.1  $   (0.7) $(1.6) $ 9.6  $(2.1)
Less capital gains (tax) credit.......     (0.5)      2.5    2.5   (4.2)   0.8
Less net amounts transferred to IMR...     (0.2)     (0.6)  (0.5)  (8.0)  (0.1)
                                       --------  --------  -----  -----  -----
  Net Realized Capital Gains (Losses). $   (0.6) $    1.2  $ 0.4  $(2.6) $(1.4)
                                       ========  ========  =====  =====  =====
</TABLE>
 
                                      57
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
NOTE 5--NET CAPITAL GAINS (LOSSES) AND OTHER ADJUSTMENTS--CONTINUED
 
Net unrealized capital gains (losses) and other adjustments consist of the
following items:
 
<TABLE>
<CAPTION>
                                         Nine months ended
                                           September 30
                                         ------------------
                                           1995      1994    1994   1993   1992
                                           ----      ----    ----   ----   ----
                                                    (In millions)
<S>                                      <C>       <C>       <C>    <C>    <C>
Gains (losses) from changes in security
 values and book value adjustments.....  $    3.6  $   (2.0) $ 0.7  $(1.4) $ 1.4
Increase in asset valuation reserve....      (1.6)     (1.7)  (2.2)  (1.8)  (3.6)
                                         --------  --------  -----  -----  -----
  Net Unrealized Capital Gains (Losses)
   and Other
   Adjustments.........................  $    2.0  $   (3.7) $(1.5) $(3.2) $(2.2)
                                         ========  ========  =====  =====  =====
</TABLE>
 
NOTE 6--TRANSACTIONS WITH PARENT
 
The Company's Parent provides the Company with personnel, property and
facilities in carrying out certain of its corporate functions. The Parent
annually determines a fee for these services and facilities based on a number
of criteria which were revised in 1995, 1994, 1993 and 1992 to reflect
continuing changes in the Company's operations. The amount of the service fee
charged to the Company was $72.4 million, $88.5 million, $117.0 million, $98.2
million and $75.2 million for the nine months ended September 30, 1995 and
September 30, 1994, in 1994 and 1993, and 1992, respectively, which has been
included in insurance and investment expenses. The Parent has guaranteed that,
if necessary, it will make additional capital contributions to prevent the
Company's stockholder's equity from declining below $1.0 million.
 
In 1992, the National Association of Insurance Commissioners issued its
accounting policy for "Employers' Accounting for Postretirement Benefits Other
Than Pensions." The service fee charged to the Company by the Parent includes
$1.6 million, $2.0 million, $6.0 million and $1.4 million for the nine months
ended September 30, 1995 and September 30, 1994 and the years ended December
31, 1994 and 1993, respectively, representing the portion of the provision for
retiree benefit plans determined under the accrual method in accordance with
this policy, including a provision for the transition liability which is being
amortized over twenty years, that was allocated to the Company.
 
On October 1, 1993, the Company entered into an assumption reinsurance
agreement with John Hancock to cede a block of variable life, universal life
and flexible variable life insurance policies to John Hancock representing
substantially all of such policies written by the Company in the State of New
York. In connection with this agreement, general account assets consisting of
bonds, mortgage loans, policy loans, cash, investment income due and accrued
and deferred and uncollected premiums totalling $72.2 million were transferred
by the Company to John Hancock, along with policy reserves, unearned premiums
and dividend liabilities totalling $47.7 million and surplus totalling $24.5
million. Separate account assets consisting of common stock and policy loans
totalling $200.8 million were transferred to John Hancock's separate accounts
along with $200.8 million in separate account policyholder obligations.
 
 
                                      58
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)

NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 6--TRANSACTIONS WITH PARENT--CONTINUED
 
Effective January 1, 1994, the Company entered into a modified coinsurance
agreement with John Hancock to reinsure 50% of 1995 and 1994 issues of
flexible premium variable life insurance and scheduled premium variable life
insurance policies. In connection with this agreement, John Hancock
transferred $30.2 million of cash for tax, commission, and expense allowances
to the Company, which increased the Company's net gain from operations by
$13.6 million for the nine months ended September 30, 1995. The corresponding
amounts for the year ended December 31, 1994 were $29.5 million and $26.9
million, respectively.
 
NOTE 7--INVESTMENTS
 
The statement value and fair value of bonds are shown below:
 
<TABLE>
<CAPTION>
                                           Nine months ended September 30, 1995
                                          --------------------------------------
                                                      Gross      Gross
                                          Statement Unrealized Unrealized  Fair
                                            Value     Gains      Losses   Value
                                          --------- ---------- ---------- ------
                                                      (In millions)
<S>                                       <C>       <C>        <C>        <C>
U.S. treasury securities and obligations
 of U.S. government corporations and
 agencies...............................   $  4.4     $ 0.0      $ 0.1    $  4.3
Obligations of states and political sub-
 divisions..............................     12.9       1.1        0.0      14.0
Debt securities issued by foreign gov-
 ernments...............................      0.3       0.0        0.0       0.3
Corporate securities....................    442.6      38.5        0.6     480.5
Mortgage-backed securities..............      6.6       0.2        0.1       6.7
                                           ------     -----      -----    ------
Totals..................................   $466.8     $39.8      $ 0.8    $505.8
                                           ======     =====      =====    ======
<CAPTION>
                                               Year ended December 31, 1994
                                          --------------------------------------
                                                      Gross      Gross
                                          Statement Unrealized Unrealized  Fair
                                            Value     Gains      Losses   Value
                                          --------- ---------- ---------- ------
                                                      (In millions)
<S>                                       <C>       <C>        <C>        <C>
U.S. treasury securities and obligations
 of U.S. government corporations and
 agencies...............................   $ 10.4     $ 0.0      $ 0.5    $  9.9
Obligations of states and political sub-
 divisions..............................     11.6       0.2        0.1      11.7
Debt securities issued by foreign gov-
 ernments...............................      1.3       0.0        0.0       1.3
Corporate securities....................    431.9      10.5        9.9     432.5
Mortgage-backed securities..............      3.1       0.1        0.1       3.1
                                           ------     -----      -----    ------
Totals..................................   $458.3     $10.8      $10.6    $458.5
                                           ======     =====      =====    ======
</TABLE>
 
                                      59
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 7--INVESTMENTS--CONTINUED
 
<TABLE>
<CAPTION>
                                               Year ended December 31, 1993
                                          --------------------------------------
                                                      Gross      Gross
                                          Statement Unrealized Unrealized  Fair
                                            Value     Gains      Losses   Value
                                          --------- ---------- ---------- ------
                                                      (In millions)
<S>                                       <C>       <C>        <C>        <C>
U.S. treasury securities and obligations
 of U.S. government corporations and
 agencies...............................   $  3.5     $ 0.2       $0.0    $  3.7
Obligations of states and political sub-
 divisions..............................     10.6       1.3        0.0      11.9
Debt securities issued by foreign gov-
 ernments...............................      0.4       0.0        0.0       0.4
Corporate securities....................    413.5      47.3        0.8     460.0
Mortgage-backed securities..............      5.0       0.2        0.0       5.2
                                           ------     -----       ----    ------
Totals..................................   $433.0     $49.0       $0.8    $481.2
                                           ======     =====       ====    ======
</TABLE>
 
The statement value and fair value of bonds 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>
                                        September 30, 1995    December 31, 1994
                                        --------------------- -------------------
                                        Statement    Fair     Statement   Fair
                                          Value      Value      Value     Value
                                        ----------- --------- ---------- --------
                                                    (In millions)
<S>                                     <C>         <C>       <C>        <C>
Due in one year or less...............   $    14.5  $    14.8  $   28.5  $   28.6
Due after one year through five years.       133.0      139.1     163.1     165.7
Due after five years through ten
 years................................       177.1      188.4     167.7     162.5
Due after ten years...................       135.6      156.8      95.9      98.6
                                         ---------  ---------  --------  --------
                                             460.2      499.1     455.2     455.4
Mortgage-backed securities............         6.6        6.7       3.1       3.1
                                         ---------  ---------  --------  --------
                                            $466.8     $505.8    $458.3    $458.5
                                         =========  =========  ========  ========
</TABLE>
 
Proceeds from sales, maturities and prepayments of bonds during the nine
months ended September 30, 1995 and September 30, 1994 were $44.9 million and
$44.5 million, respectively. Gross gains of $0.6 million and $0.9 million and
gross losses of $0.1 million and $0.0 million were realized on these
transactions during the nine months ended September 30, 1995 and September 30,
1994, respectively.
 
Proceeds from sales, maturities, and prepayments of bonds during 1994, 1993
and 1992 were $70.1 million, $103.0 million and $49.1 million, respectively.
Gross gains of $1.1 million in 1994, $10.1 million in 1993, and $0.9 million
in 1992 and gross losses of $0.2 million in 1994, $0.0 million in 1993, and
$1.0 million in 1992 were realized on these transactions.
 
The cost of common stocks was $1.4 million at September 30, 1995, December 31,
1994 and December 31, 1993, respectively. Gross unrealized appreciation on
common stocks totaled $1.6 million at September 30, 1995
 
                                      60
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED

NOTE 7--INVESTMENTS--CONTINUED
 
and $1.6 million at December 31, 1994 and gross unrealized depreciation
totaled $0.7 million at September 30, 1995 and $1.2 million at December 31,
1994. The fair value of preferred stock totaled $5.4 million at September 30,
1995, $5.0 million at December 31, 1994, and $6.7 million at December 31,
1993.
 
Mortgage loans with outstanding principal balances of $1.1 million and bonds
with amortized cost of $0.0 million were nonincome producing for the nine
months ended September 30, 1995. The corresponding amounts for the twelve
months ended December 31, 1994 were $3.4 million and $0.2 million,
respectively.
 
The mortgage loan portfolio was diversified by geographic region and specific
collateral property type as displayed below. The Company controls credit risk
through credit approvals, limits and monitoring procedures.
 
<TABLE>
<CAPTION>
                                  September 30, 1995
- ---------------------------------------------------------------------------------------
                                Statement            Geographic             Statement
        Property Type             Value             Concentration             Value
        -------------           ---------           -------------           ---------
                              (In millions)                               (In millions)
<S>                           <C>           <C>                           <C>
Apartments..................     $ 44.9     East North Central..........     $ 24.9
Hotels......................        4.5     East South Central..........        4.9
Industrial..................       20.7     Middle Atlantic.............       11.2
Office buildings............       12.6     Mountain....................       11.8
Retail......................       12.1     New England.................       20.5
1-4 Family..................       20.4     Pacific.....................       37.7
Agricultural................       22.8     South Atlantic..............       27.0
                                 ------                                      ------
                                 $138.0                                      $138.0
                                 ======                                      ======
</TABLE>
 
<TABLE>
<CAPTION>
                                   December 31, 1994
- ---------------------------------------------------------------------------------------
                                Statement            Geographic             Statement
        Property Type             Value             Concentration             Value
        -------------           ---------           -------------           ---------
                              (In millions)                               (In millions)
<S>                           <C>           <C>                           <C>
Apartments..................     $ 53.7     East North Central..........     $ 25.3
Hotels......................        4.6     East South Central..........        5.5
Industrial..................       20.9     Middle Atlantic.............       16.1
Office buildings............       19.0     Mountain....................       14.4
Retail......................       17.1     New England.................       24.2
Agricultural................       26.3     Pacific.....................       38.2
Other.......................        6.9     South Atlantic..............       24.8
                                 ------                                      ------
                                 $148.5                                      $148.5
                                 ======                                      ======
</TABLE>
 
At September 30, 1995, the fair values of the commercial and agricultural
mortgage loans portfolios were $121.9 million and $29.3 million, respectively.
The corresponding amounts as of December 31, 1994 were approximately $118.8
million and $27.3 million, respectively. The corresponding amounts as of
December 31, 1993 were approximately $141.4 million and $31.4 million,
respectively.
 
                                      61
<PAGE>
 
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(INFORMATION AS OF, AND FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994 IS
UNAUDITED)
 
NOTES TO FINANCIAL STATEMENTS--CONTINUED
 
NOTE 8--REINSURANCE
 
The Company cedes business to reinsurers to share risks under variable life,
universal life and flexible variable life insurance policies for the purpose
of reducing exposure to large losses. Premiums, benefits and reserves ceded to
reinsurers during the nine months ended September 30, 1995 were $48.1 million,
$6.1 million, and $12.9 million, respectively. The corresponding amounts
during the nine months ended September 30, 1994 were $9.5 million, $9.3
million, and $15.9 million, respectively. The corresponding amounts in 1994
were $67.5 million, $12.3 million, and $16.3 million, respectively. The
corresponding amounts in 1993 were $74.9 million, $9.8 million, and $14.4
million, respectively. The corresponding amounts in 1992 were $15.5 million,
$5.8 million, and $18.4 million, respectively.
 
To the extent that an assuming reinsurance company in unable to meet its
obligations under a reinsurance agreement, the Company remains liable as the
direct insurer on all risks reinsured.
 
NOTE 9--COMMITMENTS AND CONTINGENCIES
 
The Company has extended commitments to purchase long-term bonds and issue
real estate mortgages totalling $9.0 million and $9.3 million, respectively,
at September 30, 1995. The corresponding amounts at December 31, 1994 were
$6.7 million and $5.0 million, respectively. The Company monitors the
creditworthiness of borrowers under long-term bond commitments and requires
collateral as deemed necessary. If funded, loans related to real estate
mortgages would be fully collateralized by the related properties. The fair
values of the commitments described above was $19.2 million at September 30,
1995 and $11.7 million at December 31, 1994. The majority of the commitments
at September 30, 1995 expire in 1996.
 
In the normal course of its business operations, the Company is involved in
litigation from time to time with claimants, beneficiaries and others, and a
number of litigation matters were pending as of September 30, 1995 and
December 31, 1994. It is the opinion of management, after consultation with
counsel, that the ultimate liability with respect to these claims, if any,
will not materially affect the financial position of the Company.
 
                                      62
<PAGE>
 
                       APPENDIX--OTHER POLICY PROVISIONS
 
SETTLEMENT PROVISIONS
 
  In place of a single payment, an amount of $1,000 or more payable under the
Policy as a benefit or as the Surrender Value, if any, may be left with
JHVLICO under the terms of a supplementary agreement. The agreement will be
issued when the proceeds are applied through the election of any one of the
options below.
 
  The following options are subject to the restrictions and limitations stated
in the Policy.
 
    Option 1--Interest Income at the declared rate but not less than 3 1/2% a
  year on proceeds held on deposit.
 
    Option 2A--Income of a Specified Amount, with payments each year totaling
  at least 1/12th of the proceeds, until the proceeds, with interest credited
  at the declared rate but not less than 3 1/2% a year on unpaid balances,
  are fully paid.
 
    Option 2B--Income for a Fixed Period, with each payment as declared.
 
    Option 3--Life Income with Payments for a Guaranteed Period.
 
    Option 4--Life Income without Refund at the death of the Payee of any
  part of the proceeds applied. Only one payment is made if the Payee dies
  before the second payment is due.
 
    Option 5--Life Income with Cash Refund at the death of the Payee of the
  amount, if any, equal to the proceeds applied less the sum of all income
  payments made.
 
  No election of an option may provide for income payments of less than $50.
 
  Other options may be arranged with JHVLICO's approval including optional
methods of settlement available from John Hancock.
 
  The tax treatment of the Policy proceeds may vary, depending on which
settlement option is chosen and when. You should consult your tax advisor in
this regard.
 
ADDITIONAL INSURANCE BENEFITS
 
  On payment of an additional premium or charge and subject to certain age and
insurance underwriting requirements, certain additional provisions, such as
the yearly renewable term benefits discussed below, which are subject to the
restrictions and limitations set forth therein, may be included in a Policy by
rider.
 
  YEARLY RENEWABLE TERM INSURANCE. This is term insurance on the life of one
of the insureds under the base Policy and payable upon the death of the
covered insured person. This insurance is level or decreasing in amount and
may be applied for, or increased, at any time upon evidence of insurability
and any other underwriting requirements. The yearly coverage also may be
cancelled by the Owner at any time. The charges for this coverage will be
separately billed to and paid by the Owner and not out of Account Value. An
increase or a decrease in this insurance may have significant tax
consequences. See "Premiums--7-Pay Premium Limit" and "Tax Considerations."
 
GENERAL PROVISIONS
 
  BENEFICIARY. The Beneficiary will be as shown in the application for the
Policy, unless thereafter changed by the Owner in accordance with the terms of
the Policy. In general, if on the death of the last
 
                                      A-1
<PAGE>
 
surviving insured there is no surviving Beneficiary, the Owner will be the
Beneficiary, but if the Owner was one of the insureds, his or her estate will
be the Beneficiary.
 
  OWNER AND ASSIGNMENT. The Owner's interest in the Policy may be assigned
without the consent of any revocable Beneficiary. JHVLICO will not be on
notice of any assignment unless it is in writing and until a duplicate of the
original assignment has been filed at JHVLICO's Home Office. JHVLICO assumes
no responsibility for the validity or sufficiency of any assignment.
 
  If a Policy has joint Owners, both Owners must join in any request or
instructions to JHVLICO under the Policy.
 
  MISSTATEMENT OF AGE OR SEX. If the age or sex of an insured has been
misstated, JHVLICO will adjust the benefits payable to reflect the correct age
or sex.
 
  SUICIDE.  If either insured commits suicide within 2 years (except where
state law requires a shorter period) from the date of issue shown in the
Policy, JHVLICO will pay in place of all other benefits an amount equal to the
premium paid less any Indebtedness on the date of death and any withdrawals.
If either insured commits suicide within 2 years (except where state law
requires a shorter period) from the date of any Policy change that increases
the death benefit, the death benefit will be limited as described in the
Policy. Subject to terms and conditions set forth in the Policy, we will make
coverage available to any surviving insured, if the surviving insured elects
such coverage within 60 days after the suicide.
 
  AGE AND POLICY ANNIVERSARIES. For purpose of the Policy, an insured's "age"
is his or her age on his or her nearest birthday. Policy months and Policy
years are calculated from the date of issue.
 
  INCONTESTABILITY. The Policy shall be incontestable other than for
nonpayment of premiums after it has been in force during the lifetime of an
insured for 2 years from its issue date. If, however, evidence of insurability
is required with respect to any increase in death benefit, such increase shall
be incontestable after the increase has been in force for 2 years from the
increase date.
 
  DEFERRAL OF DETERMINATIONS AND PAYMENTS. Payment of any death, surrender,
partial withdrawal or loan proceeds will ordinarily be made within seven days
after receipt at JHVLICO's Home Office of all documents required for any such
payment. Approximately two-thirds of the claims for death proceeds which are
made within two years after the date of issue of the Policy will be
investigated to determine whether the claim should be contested and payment of
these claims will therefore be delayed.
 
  JHVLICO may defer any transaction requiring a determination of Account Value
in any variable Subaccount for any period during which: (1) the disposal or
valuation of the Account's assets is not reasonably practicable because the
New York Stock Exchange is closed or conditions are such that, under the
Commission's rules and regulations, trading is restricted or an emergency is
deemed to exist or (2) the Commission by order permits postponement of such
actions for the protection of Owners.
 
  The foregoing description of Policy provisions is qualified by reference to
the specimen Policy which has been filed as an exhibit to the Registration
Statement.
 
                                      A-2
<PAGE>
 
                   APPENDIX--ILLUSTRATION OF DEATH BENEFITS,
                   SURRENDER VALUES AND ACCUMULATED PREMIUMS
 
  The following tables illustrate the changes in death benefit and Surrender
Value of the Policy, disregarding any Policy loans. Each table separately
illustrates the operation of a Policy for identified issue ages, Planned
Premium schedule and Sum Insured and shows how the death benefit and Surrender
Value may vary over an extended period of time assuming hypothetical rates of
investment return (i.e., investment income and capital gains and losses,
realized or unrealized) equivalent to constant gross annual rates of 0%, 6%
and 12%. The tables are based on given annual Planned Premiums paid at the
beginning of each Policy year and will assist in a comparison of the death
benefit and surrender value figures set forth in the tables with those under
other variable life insurance policies which may be issued by JHVLICO or other
companies. Tables are provided for Option A, without the Extra Death Benefit
feature, as well as for Option B death benefits. The death benefit and
Surrender Value for a Policy would be different from those shown if premiums
are paid in different amounts or at different times or if the actual gross
rates of investment return average 0%, 6% or 12% over a period of years, but
nevertheless fluctuate above or below the average for individual Policy years,
or if the Policy were issued in a state in which no distinctions are made
based on the gender of the insureds.
 
  The amounts shown for the death benefit and Surrender Value are as of the
end of each Policy year. The first two tables headed "Using Current Charges"
assume that the current rates for insurance, sales, risk, and expense charges
will apply in each year illustrated. The two tables headed "Using Maximum
Charges" assumes that the maximum (guaranteed) insurance, sales, risk, and
expense charges will be made in each year illustrated. The amounts shown in
all tables reflect an average asset charge for the daily investment advisory
expense charges to the Portfolios of the Fund (equivalent to an effective
annual rate of .53%) and an assumed average asset charge for the annual
nonadvisory operating expenses of each Portfolio of the Funds (equivalent to
an effective annual rate of .15%). For a description of expenses charged to
the Portfolios, see the attached Prospectuses for the Funds. The charges for
the daily investment management fee and the annual non-advisory operating
expenses are based on the hypothetical assumption that Policy values are
allocated equally among the variable Subaccounts. The actual Portfolio charges
and expenses associated with any Policy will vary depending upon the actual
allocation of Policy values among Subaccounts.
 
  The tables reflect that no charge is currently made to the Accounts for
Federal income taxes. However, JHVLICO reserves the right to make such a
charge in the future and any charge would require higher rates of investment
return in order to produce the same Policy values. All of the tables do,
however, reflect the imposition of a Federal DAC Tax charge in the amount of
1.25% of all premiums paid and a premium tax charge in the amount of 2.35% of
all premiums paid.
 
  The tables assume that the Guaranteed Minimum Death Benefit has not been
elected beyond the tenth Policy year and that no Additional Sum Insured or
optional rider benefits have been elected.
 
  The second column of each table shows the amount to which the total premiums
paid to the end of a Policy year during the premium paying period would
accumulate if an amount equal to those premiums were invested to earn
interest, after taxes, at 5% compounded annually.
 
  JHVLICO will furnish upon request a comparable illustration reflecting the
proposed insureds' ages, sexes, underwriting risk classifications and the Sum
Insured at issue and Planned Premium amount requested, and assuming annual
Planned Premiums.
 
                                      A-3
<PAGE>
 
PLAN:FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP
   $1,000,000 SUM INSURED
   MALE, ISSUE AGE 55, NONSMOKER UNDERWRITING CLASS
   FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING CLASS
   OPTION A DEATH BENEFIT
   NO GUARANTEED MINIMUM DEATH BENEFIT OPTION AFTER TENTH POLICY YEAR
   PLANNED PREMIUM: $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 $  9,128 $    9,708 $   10,288
   2            34,374      1,000,000  1,000,000  1,000,000   21,227     23,093     25,029
   3            52,861      1,000,000  1,000,000  1,000,000   31,492     35,370     39,548
   4            72,271      1,000,000  1,000,000  1,000,000   42,540     49,184     56,620
   5            92,653      1,000,000  1,000,000  1,000,000   53,312     63,503     75,357
   6           114,053      1,000,000  1,000,000  1,000,000   65,244     79,851     97,505
   7           136,524      1,000,000  1,000,000  1,000,000   77,005     96,941    121,980
   8           160,118      1,000,000  1,000,000  1,000,000   88,588    114,801    149,021
   9           184,891      1,000,000  1,000,000  1,000,000   99,991    133,461    178,898
  10           210,904      1,000,000  1,000,000  1,000,000  111,205    152,950    211,902
  11           238,217      1,000,000  1,000,000  1,000,000  123,496    174,640    249,770
  12           266,895      1,000,000  1,000,000  1,000,000  135,530    197,248    291,569
  13           297,008      1,000,000  1,000,000  1,000,000  147,286    220,797    337,706
  14           328,626      1,000,000  1,000,000  1,000,000  158,740    245,310    388,634
  15           361,825      1,000,000  1,000,000  1,000,000  169,867    270,813    444,862
  16           396,684      1,000,000  1,000,000  1,000,000  180,641    297,333    506,961
  17           433,286      1,000,000  1,000,000  1,070,229  190,996    324,869    575,434
  18           471,718      1,000,000  1,000,000  1,172,347  200,883    353,439    650,810
  19           512,072      1,000,000  1,000,000  1,281,201  210,249    383,067    733,743
  20           554,444      1,000,000  1,000,000  1,397,444  219,037    413,779    824,944
  25           800,279      1,000,000  1,000,000  2,122,051  253,431    587,459  1,437,008
  30         1,114,034      1,000,000  1,053,052  3,174,111  252,244    795,270  2,397,104
  35         1,514,473      1,000,000  1,257,923  4,708,745  166,986  1,030,857  3,858,776
</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.
 
                                      A-4
<PAGE>
 
PLAN:FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP
   $1,000,000 SUM INSURED
   MALE, ISSUE AGE 55, NONSMOKER UNDERWRITING CLASS
   FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING CLASS
   OPTION B DEATH BENEFIT
   NO GUARANTEED MINIMUM DEATH BENEFIT OPTION AFTER TENTH POLICY YEAR
   PLANNED PREMIUM: $15,969*
   USING CURRENT CHARGES
 
<TABLE>
<CAPTION>
                                         Death Benefit                 Surrender Value
                                -------------------------------- ----------------------------
                                     Assuming Hypothetical          Assuming Hypothetical
              Planned Premiums       Gross Annual Return of         Gross Annual Return of
   End of      Accumulated at   -------------------------------- ----------------------------
 Policy Year 5% Annual Interest     0%         6%        12%        0%       6%       12%
 ----------- ------------------ ---------- ---------- ---------- -------- -------- ----------
<S>          <C>                <C>        <C>        <C>        <C>      <C>      <C>
      1          $   16,768     $1,009,128 $1,009,707 $1,010,288 $  9,128 $  9,707 $   10,288
      2              34,374      1,020,426  1,022,291  1,024,227   21,224   23,090     25,025
      3              52,861      1,031,483  1,035,360  1,039,537   31,483   35,360     39,537
      4              72,271      1,042,517  1,049,158  1,056,589   42,517   49,158     56,589
      5              92,653      1,053,264  1,063,445  1,075,286   53,264   63,445     75,286
      6             114,053      1,065,155  1,079,739  1,097,365   65,155   79,739     97,365
      7             136,524      1,076,866  1,096,760  1,121,745   76,886   96,760    121,745
      8             160,118      1,088,389  1,114,530  1,148,657   88,389  114,530    148,657
      9             184,891      1,099,720  1,133,079  1,178,362   99,720  133,079    178,362
     10             210,904      1,110,848  1,152,428  1,211,140  110,848  152,428    211,140
     11             238,217      1,123,044  1,173,953  1,248,726  123,044  173,953    248,726
     12             266,895      1,134,957  1,196,345  1,290,143  134,957  196,345    290,143
     13             297,008      1,146,559  1,219,610  1,335,761  146,559  219,610    335,761
     14             328,626      1,157,818  1,243,753  1,385,984  157,818  243,753    385,984
     15             361,825      1,168,698  1,268,771  1,441,255  168,698  268,771    441,255
     16             396,684      1,179,161  1,294,681  1,502,061  179,161  294,661    502,061
     17             433,286      1,189,118  1,321,366  1,568,885  189,118  321,366    568,885
     18             471,718      1,198,500  1,348,845  1,642,280  198,500  348,845    642,280
     19             512,072      1,207,228  1,377,046  1,722,850  207,228  377,046    722,850
     20             554,444      1,215,220  1,405,906  1,811,251  215,220  405,906    811,251
     25             800,279      1,241,769  1,558,541  2,400,241  241,769  558,541  1,400,241
     30           1,114,034      1,220,483  1,697,283  3,312,652  220,483  697,283  2,312,652
     35           1,514,473      1,096,905  1,752,902  4,683,910   95,905  752,902  3,683,910
</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.
 
                                      A-5
<PAGE>
 
PLAN:FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP
   $1,000,000 SUM INSURED
   MALE, ISSUE AGE 55, NONSMOKER UNDERWRITING CLASS
   FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING CLASS
   OPTION A DEATH BENEFIT
   NO GUARANTEED MINIMUM DEATH BENEFIT OPTION AFTER TENTH POLICY YEAR
   PLANNED PREMIUM: $15,969*
   USING MAXIMUM CHARGES
 
<TABLE>
<CAPTION>
                                         Death Benefit                 Surrender Value
                                -------------------------------- ----------------------------
                                     Assuming hypothetical          Assuming hypothetical
              Planned Premiums       gross annual return of         gross annual return of
   End of      accumulated at   -------------------------------- ----------------------------
 Policy 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 $  8,834 $  9,403 $    9,973
      2              34,374      1,000,000  1,000,000  1,000,000   20,611   22,435     24,328
      3              52,861      1,000,000  1,000,000  1,000,000   30,529   34,308     38,380
      4              72,271      1,000,000  1,000,000  1,000,000   41,205   47,562     54,889
      5              92,653      1,000,000  1,000,000  1,000,000   51,581   61,460     72,952
      6             114,053      1,000,000  1,000,000  1,000,000   63,082   77,212     94,289
      7             136,524      1,000,000  1,000,000  1,000,000   74,216   93,460    117,628
      8             160,118      1,000,000  1,000,000  1,000,000   84,953  110,195    143,146
      9             184,891      1,000,000  1,000,000  1,000,000   95,266  127,406    171,044
     10             210,904      1,000,000  1,000,000  1,000,000  105,115  145,077    201,539
     11             238,217      1,000,000  1,000,000  1,000,000  115,399  164,181    235,926
     12             266,895      1,000,000  1,000,000  1,000,000  125,105  183,733    273,521
     13             297,008      1,000,000  1,000,000  1,000,000  134,161  203,687    314,627
     14             328,626      1,000,000  1,000,000  1,000,000  142,474  223,981    359,577
     15             361,825      1,000,000  1,000,000  1,000,000  149,936  244,544    408,753
     16             396,684      1,000,000  1,000,000  1,000,000  156,429  265,300    462,607
     17             433,266      1,000,000  1,000,000  1,000,000  161,767  286,116    521,634
     18             471,718      1,000,000  1,000,000  1,055,854  165,898  306,987    586,141
     19             512,072      1,000,000  1,000,000  1,145,741  168,614  327,784    656,165
     20             554,444      1,000,000  1,000,000  1,240,117  169,719  348,401    732,071
     25             800,279      1,000,000  1,000,000  1,792,055  140,977  444,252  1,213,541
     30           1,114,034         **      1,000,000  2,509,500    **     503,451  1,895,186
     35           1,514,473         **      1,000,000  3,450,988    **     465,407  2,828,055
</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.
 
                                      A-6
<PAGE>
 
PLAN:FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP
   $1,000,000 SUM INSURED
   MALE, ISSUE AGE 55, NONSMOKER UNDERWRITING CLASS
   FEMALE, ISSUE AGE 50, NONSMOKER UNDERWRITING CLASS
   OPTION B DEATH BENEFIT
   NO GUARANTEED MINIMUM DEATH BENEFIT OPTION AFTER TENTH POLICY YEAR
   PLANNED PREMIUM: $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     $1,008,834 $1,009,403 $1,009,973 $  8,834 $  9,403 $    9,973
   2            34,374      1,019,810  1,021,634  1,023,527   20,609   22,432     24,325
   3            52,861      1,030,520  1,034,298  1,038,369   30,520   34,298     38,369
   4            72,271      1,041,183  1,047,636  1,054,858   41,183   47,636     54,858
   5            92,653      1,051,534  1,061,404  1,072,884   51,534   61,404     72,884
   6           114,053      1,062,995  1,077,103  1,094,153   62,995   77,103     94,153
   7           136,524      1,074,066  1,093,266  1,117,376   74,066   93,266    117,376
   8           160,118      1,084,711  1,109,869  1,142,709   84,711  109,869    142,709
   9           184,891      1,094,892  1,128,885  1,170,320   94,892  126,885    170,320
  10           210,904      1,104,559  1,144,275  1,200,382  104,559  144,275    200,382
  11           238,217      1,114,596  1,162,982  1,234,130  114,596  162,982    234,130
  12           266,895      1,123,973  1,181,980  1,270,798  123,973  181,960    270,798
  13           297,008      1,132,596  1,201,177  1,310,577  132,596  201,177    310,577
  14           328,626      1,140,347  1,220,446  1,353,644  140,347  220,446    353,644
  15           361,825      1,147,087  1,239,631  1,400,175  147,087  239,631    400,175
  16           396,684      1,152,667  1,258,559  1,450,348  152,667  258,559    450,348
  17           433,286      1,156,851  1,276,959  1,504,267  156,851  276,959    504,267
  18           471,718      1,159,573  1,294,714  1,562,221  159,573  294,714    562,221
  19           512,072      1,160,581  1,311,512  1,624,330  160,581  311,512    624,330
  20           554,444      1,159,644  1,327,048  1,690,747  159,644  327,048    690,747
  25           800,279      1,114,979  1,370,928  2,090,644  114,979  370,928  1,090,644
  30         1,114,034         **      1,291,818  2,589,232    **     291,818  1,589,232
  35         1,514,473         **         *       3,136,191    **       *      2,136,191
</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.
 
                                      A-7
<PAGE>
 
                                    PART II

                          UNDERTAKING TO FILE REPORTS

      Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that Section.

                     UNDERTAKING REGARDING INDEMNIFICATION

      Pursuant to Section X of JHVLICO's Bylaws and Section 67 of the
Massachusetts Business Corporation Law, JHVLICO 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 JHVLICO.

      Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                       CONTENTS OF REGISTRATION STATEMENT

      This Registration Statement comprises the following Papers and Documents:

      The facing sheet.

      Cross-Reference Table.

      The prospectus consisting of 69 pages.

      The undertaking regarding indemnification.

      The undertaking to file reports.

      The signatures.

                                      II-1
<PAGE>
 
     The following exhibits:

<TABLE>
<C>       <S> 
1.A. (1)  JHVLICO Board Resolution establishing the separate account included 
          in the initial Form S-6 Registration Statement of this Account, filed
          June 11, 1993.
 
     (2)  Not Applicable.
 
     (3)  (a) Distribution Agreement between JHVLICO and John Hancock, 
              included in Pre-Effective Amendment No. 1 to this Form S-6 
              Registration Statement, filed October 29,1993.

          (b) Specimen Variable Contracts Selling Agreement between John Hancock
              and selling broker-dealers.

          (c) Schedule of Sales Commissions included in Pre-Effective Amendment
              No. 1 to this Form S-6 Registration Statement, filed October 29,
              1993.

     (4)  Not Applicable.

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

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

     (6)  Certificate of Incorporation and By-Laws of John Hancock Variable Life
          Insurance Company.,

     (7)  Not Applicable.

     (8)  Not Applicable.

     (9)  Not Applicable.

    (10)  Forms of applications for Policy, included in Pre-Effective Amendment
          No. 1 to this Form S-6 Registration Statement, filed October 29, 1993.
</TABLE> 

                                      II-2
<PAGE>
 
<TABLE> 
<C> <S> 
2.  Included as exhibit 1.A(5) above.

3.  Opinion and consent of counsel as to securities being registered, included 
    in Pre-Effective Amendment No. 1 to this Form S-6 Registration Statement 
    filed October 29, 1993.

4.  Not Applicable.

5.  Not Applicable.

6.  Opinion and consent of actuary.

7.  Consent of independent auditors.

8.  Memorandum describing John Hancock's issuance, transfer and redemption
    procedures for the survivorship policies pursuant to 
    Rule 6e-3(T)(b)(12)(iii), included in Pre-Effective Amendment No. 1 to this 
    Form S-6 Registration Statement filed October 29, 1993.

9.  Powers of attorney for Cleary, Tomlinson, D'Alessandro, Shaw, Luddy, Lee,
    Reitano, Van Leer and Paster, included in Post-Effective Amendment No. 2 to
    this Form S-6 Registration Statement, filed April, 1995.

10. Representations, Description and Undertaking pursuant to 
    Rule 6e-3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940, 
    included in the initial Form S-6 Registration Statement of this Account 
    filed June 11, 1993.

11. Representation of Counsel pursuant to Rule 485(b).
</TABLE> 

                                      II-3
<PAGE>
 
                                   SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the John
Hancock Variable Life Insurance Company has duly caused this 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 5 th day of January, 1996.

                                      JOHN HANCOCK VARIABLE LIFE
                                      INSURANCE COMPANY

(SEAL)

                                     By  /s/ HENRY D. SHAW
                                          Henry D. Shaw
                                           President



Attest:  /s/ FRANCIS C. CLEARY, JR.
           Francis C. Cleary, Jr.
               Counsel

                                      II-4
<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 Variable Life Insurance
Company and on the dates indicated.

<TABLE> 
<CAPTION> 
Signatures                    Title                                 Date
- ----------                    -----                                 ----
<S>                           <C>                                <C>  
                                                             
- --------------------------                                   
David F. D'Alessandro         Chairman of the Board                       , 1996
                                                             
/s/ HENRY D. SHAW             Vice Chairman of the Board       
Henry D. Shaw                 and President(Acting Principal   
                              Executive Officer)                 January 5, 1996
                                                             
/s/ ROBERT S. PASTER                                         
Robert S. Paster              Director                           January 5, 1996
                                                             
/s/ ROBERT R. REITANO         Director(Principal               
Robert R. Reitano             Financial Officer)                 January 5, 1996
                                                             
/s/ FRANCIS C. CLEARY, JR.                                   
Francis C. Cleary, Jr         Director                           January 5, 1996
                                                             
/s/ THOMAS J. LEE                                            
Thomas J. Lee                 Director                           January 5, 1996
                                                             
/s/ MICHELE VAN LEER                                         
Michele Van Leer              Director                           January 5, 1996
                                                             
                                                             
- --------------------------                                   
Joseph A. Tomlinson           Director                                    , 1996
                                                             
/s/ BARBARA L. LUDDY                                         
Barbara L. Luddy              Director                           January 5, 1996
                                                             
/s/ PATRICK F. SMITH          Controller (Principal            
Patrick F. Smith              Accounting Officer)                January 5, 1996
</TABLE>

                                      II-5
<PAGE>
 
      Pursuant to the requirements of the Securities Act of 1933, the
Registrant, John Hancock Variable Life Account S, 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 5th day of January, 1996.



                     JOHN HANCOCK VARIABLE LIFE ACCOUNT S
                                 (Registrant)

                 By John Hancock Mutual Life Insurance Company
                                  (Depositor)



(SEAL)



                                 By   /s/ HENRY D. SHAW
                                       Henry D. Shaw
                                        President



Attest  /s/ FRANCIS C. CLEARY, JR.
         Francis C. Cleary, Jr.
                Counsel

                                      II-6

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 001
   <NAME> SELECT STOCK SUBACCOUNT
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                       4,180,629
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               4,180,629
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           63
<TOTAL-LIABILITIES>                                 63
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 4,180,566
<DIVIDEND-INCOME>                               54,365
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                  10,465
<NET-INVESTMENT-INCOME>                         43,900
<REALIZED-GAINS-CURRENT>                       100,217
<APPREC-INCREASE-CURRENT>                      386,437
<NET-CHANGE-FROM-OPS>                          530,554
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                       3,278,197
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                 10,465
<AVERAGE-NET-ASSETS>                                 0
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 002
   <NAME> BOND SUBACCOUNT
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                       1,067,480
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               1,067,480
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           16
<TOTAL-LIABILITIES>                                 16
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 1,067,464
<DIVIDEND-INCOME>                               32,048
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                   2,347
<NET-INVESTMENT-INCOME>                         29,701
<REALIZED-GAINS-CURRENT>                         7,883
<APPREC-INCREASE-CURRENT>                       22,837
<NET-CHANGE-FROM-OPS>                           60,421
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         850,415
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  2,347
<AVERAGE-NET-ASSETS>                                 0
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 003
   <NAME> INTERNATIONAL SUBACCOUNT
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                       2,257,466
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               2,257,466
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           35
<TOTAL-LIABILITIES>                                 35
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 2,257,431
<DIVIDEND-INCOME>                               19,256
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                   6,983
<NET-INVESTMENT-INCOME>                         12,273
<REALIZED-GAINS-CURRENT>                      (20,969)
<APPREC-INCREASE-CURRENT>                       94,687
<NET-CHANGE-FROM-OPS>                           85,991
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                       1,265,104
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  6,983
<AVERAGE-NET-ASSETS>                                 0
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 004
   <NAME> MONEY MARKET SUBACCOUNT
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                       2,127,396
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               2,127,396
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           34
<TOTAL-LIABILITIES>                                 34
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 2,127,362
<DIVIDEND-INCOME>                               80,579
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                   8,066
<NET-INVESTMENT-INCOME>                         72,513
<REALIZED-GAINS-CURRENT>                             0
<APPREC-INCREASE-CURRENT>                            0
<NET-CHANGE-FROM-OPS>                           72,513
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                       (127,771)
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  8,066
<AVERAGE-NET-ASSETS>                                 0
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 005
   <NAME>  REAL ESTATE EQUITY SUBACCOUNT
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                         526,923
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 526,923
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                            8
<TOTAL-LIABILITIES>                                  8
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                   526,915
<DIVIDEND-INCOME>                               21,360
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                   1,915
<NET-INVESTMENT-INCOME>                         19,445
<REALIZED-GAINS-CURRENT>                       (5,581)
<APPREC-INCREASE-CURRENT>                       31,560
<NET-CHANGE-FROM-OPS>                           45,424
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         107,031
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  1,915
<AVERAGE-NET-ASSETS>                                 0
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 006
   <NAME> SPECIAL OPPORTUNITIES
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                       1,181,786
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               1,181,786
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           19
<TOTAL-LIABILITIES>                                 19
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 1,181,767
<DIVIDEND-INCOME>                                  504
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                   2,971
<NET-INVESTMENT-INCOME>                        (2,467)
<REALIZED-GAINS-CURRENT>                        11,636
<APPREC-INCREASE-CURRENT>                      144,301
<NET-CHANGE-FROM-OPS>                          153,470
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         848,877
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                      0
<AVERAGE-NET-ASSETS>                             2,971
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 007
   <NAME> STOCK SUBACCOUNT
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                       6,288,376
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               6,288,376
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           93
<TOTAL-LIABILITIES>                                 93
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 6,288,283
<DIVIDEND-INCOME>                               74,533
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                  14,287
<NET-INVESTMENT-INCOME>                         60,246
<REALIZED-GAINS-CURRENT>                        71,866
<APPREC-INCREASE-CURRENT>                      624,107
<NET-CHANGE-FROM-OPS>                          756,219
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                       4,935,660
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                 14,287
<AVERAGE-NET-ASSETS>                                 0
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 008
   <NAME> SHORT TERM GOVERNMENT SUBACCOUNT
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                       2,169,031
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               2,169,031
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           14
<TOTAL-LIABILITIES>                                 14
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 2,169,017
<DIVIDEND-INCOME>                               30,210
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                   1,596
<NET-INVESTMENT-INCOME>                         28,614
<REALIZED-GAINS-CURRENT>                         3,907
<APPREC-INCREASE-CURRENT>                        3,148
<NET-CHANGE-FROM-OPS>                           35,669
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                       2,127,554
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  1,596
<AVERAGE-NET-ASSETS>                                 0
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<PAGE>
 
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JOHN HANCOCK
VARIABLE LIFE ACCOUNTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
   <NUMBER> 009
   <NAME>  MANAGED SUBACCOUNT
       
<S>                             <C>
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1994
<PERIOD-START>                             JAN-01-1995
<PERIOD-END>                               SEP-30-1995
<INVESTMENTS-AT-COST>                                0
<INVESTMENTS-AT-VALUE>                       2,779,981
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                       0
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                               2,779,981
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                           36
<TOTAL-LIABILITIES>                                 36
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                             0
<SHARES-COMMON-STOCK>                                0
<SHARES-COMMON-PRIOR>                                0
<ACCUMULATED-NII-CURRENT>                            0
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                              0
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                             0
<NET-ASSETS>                                 2,779,945
<DIVIDEND-INCOME>                               69,742
<INTEREST-INCOME>                                    0
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                   6,864
<NET-INVESTMENT-INCOME>                         62,878
<REALIZED-GAINS-CURRENT>                       156,923
<APPREC-INCREASE-CURRENT>                      154,367
<NET-CHANGE-FROM-OPS>                          374,168
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                              0
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                       2,133,212
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                                0
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  6,864
<AVERAGE-NET-ASSETS>                                 0
<PER-SHARE-NAV-BEGIN>                                0
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                              0
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                                  0
<EXPENSE-RATIO>                                      0
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<PAGE>
 
                                                            EXHIBIT I A. (3) (b)


                               VARIABLE CONTRACTS

                               SELLING AGREEMENT

John Hancock Mutual Life Insurance Company ("JHMLICO"), as the distributor and
principal underwriter, and                ("the Broker/Dealer"), enter into this
agreement effective with its execution by the Broker/Dealer for the purpose of
authorizing the Broker/Dealer to solicit applications for variable life
insurance and annuity contracts ("Contracts") distributed by JHMLICO on its own
behalf and on behalf of John Hancock Variable Life Insurance Company
("JHVLICO"), a subsidiary of JHMLICO.  The parties represent as follows:

1.   JHMLICO is engaged in the issuance of variable annuity contracts and
     JHVLICO is engaged in the issuance of variable life insurance contracts,
     both in accordance with Federal securities laws and the applicable laws of
     those states in which the Contracts have been qualified for sale.  The
     Contracts are considered securities under the Securities Act of 1933;
     therefore, distribution of the Contracts is made through JHMLICO as a
     registered broker/dealer under the Securities Act of 1934 and as a member
     of the National Association of Securities Dealers, Inc. ("NASD").

2.   The Broker/Dealer certifies that it is a registered Broker/Dealer under the
     Securities Exchange Act of 1934 and a member of the NASD.  The
     Broker/Dealer agrees to abide by all rules and regulations of the NASD,
     including its Rules of Fair Practice, and to comply with all applicable
     state and Federal laws and the rules and regulations of authorized
     regulatory agencies affecting the sale of the Contracts.

3.   The Broker/Dealer will select persons to be registered and supervised by it
     who will be trained and qualified to solicit applications for the Contracts
     in conformance with applicable state and Federal laws and regulations.
     Persons so trained and qualified will be registered representatives of the
     Broker/Dealer in accordance with the rules of the NASD and they will be
     properly licensed to represent JHMLICO or JHVLICO or both in accordance
     with the state insurance laws of those jurisdictions in which the Contracts
     may lawfully be distributed and in which they solicit applications for such
     Contracts.

4.   The Broker/Dealer will take reasonable steps to ensure that its registered
     representatives shall not make recommendations to applicants to purchase
     Contracts in the absence of reasonable grounds to believe the purchase of
     each Contract is suitable for the applicant.  The procedure will include
     review of all proposals and applications for Contracts for suitability and
     completeness and correctness as to form as well as review and endorsement
     on an internal record of the Broker/Dealer of the transactions.  The
     Broker/Dealer will promptly forward to JHMLICO all applications found
     suitable, together with any payments received with the applications,
     without deduction or reduction.  JHMLICO reserves the right to reject any
     Contract application and return any payment made in connection with an
     application which is rejected.  Contracts issued on applications accepted
     by JHMLICO or JHVLICO will be forwarded to the 
<PAGE>
 
     registered representative of the Broker/Dealer for delivery to the Contract
     owner.

5.   The Broker/Dealer will perform the selling functions required by this
     agreement only in accordance with the terms and conditions of the then
     current prospectus applicable to the Contracts and will make no
     representations not included in the prospectus or in any authorized
     supplemental material.  Any material prepared or used by the Broker/Dealer
     or its registered representatives, which describes or must describe the
     Contracts, or uses the name of JHVLICO, JHMLICO or the logos or Service
     Marks of either must be approved by JHMLICO in writing prior to any such
     use.

6.   JHMLICO will provide Broker/Dealer with prospectuses, and any supplements
     or amendments thereto, describing the Contracts subject to this Agreement.
     JHMLICO is responsible for maintaining in effect in accordance with the
     requirements of the Securities and Exchange Commission each Registration
     Statement of which the prospectus is part.  JHMLICO will immediately notify
     Broker/Dealer of the issuance of any stop order or any Federal or state
     regulatory proceeding which would prevent the sale of Contracts in any
     state or jurisdiction.

7.   Compensation payable on sales of the Contracts solicited by the
     Broker/Dealer will be paid to the Broker/Dealer by JHMLICO in accordance
     with the compensation schedules defined under the John Hancock Mutual Life
     Insurance Company Producer Agreements related thereto, as in effect at the
     time the contract premiums or considerations are received by JHMLICO or
     JHVLICO.  Compensation to the registered representative for contracts
     solicited by the registered representative will be governed by an agreement
     between the Broker/Dealer and its registered representative.  To the extent
     requested by Broker/Dealer, registered representative compensation may be
     paid directly to such registered representative by JHMLICO or JHVLICO

8.   In the event of any surrender of a Contract within the 10 day "free look"
     period or, in the case of a variable life insurance policy, within 10 days
     after the mailing of the Notice of Withdrawal Right, any compensation
     payable to Broker/Dealer or its registered representatives will not be
     payable or will be refunded if priorly paid, in accordance with the terms
     of the Producer's Contract.

9.   This agreement may not be assigned except by mutual consent and will
     continue for an indefinite term, subject to the termination by either party
     by ten days advance written notice to the other party, except that in the
     event JHMLICO or the Broker/Dealer ceases to be a registered broker/dealer
     or a member of the NASD, this agreement will immediately terminate.  Upon
     its termination, all authorizations, rights and obligations shall cease,
     except the agreement in Section 11, the indemnifications in Section 12 and
     the payment of any accrued but unpaid compensation to the Broker/Dealer.

10.  For the purpose of compliance with any applicable Federal or state
     securities laws or regulations, the Broker/Dealer acknowledges and agrees
     that in performing the services covered by this agreement, it is acting in
     the capacity of an independent "broker" or "dealer" as defined by the By-
     Laws of the NASD and not as an agent or employee of 
<PAGE>
 
     either JHMLICO or JHVLICO or any registered investment company. In
     furtherance of its responsibilities as a broker or dealer, the
     Broker/Dealer acknowledges that it is responsible for statutory and
     regulatory compliance in securities transactions involving any business
     produced by its registered representatives concerning the Contracts.

     For the purpose of compliance with any applicable state insurance laws or
     regulations, the Broker/Dealer acknowledges and agrees that only while
     performing the insurance selling functions reflected by this agreement are
     the Broker/Dealer's registered representatives acting as the licensed
     insurance agents of JHMLICO or JHVLICO or both and in that capacity are
     authorized only to solicit applications for the Contracts which will not
     become effective until acceptance by JHMLICO or JHVLICO.

11.  The Broker/Dealer and JHMLICO jointly agree to cooperate fully in any
     insurance or securities regulatory investigation or proceeding or judicial
     proceeding arising in connection with any Contract.  Without limiting the
     foregoing:

        a.  Broker/Dealer will be notified promptly of any customer complaint or
            notice of any regulatory authority investigation or proceeding or
            judicial proceeding received by JHMLICO with respect to any
            Contract.

        b.  Broker/Dealer will promptly notify JHMLICO of any customer complaint
            or notice of any regulatory authority investigation or proceeding or
            judicial proceeding received by Broker/Dealer with respect to any
            Contract.

12. (1) JHMLICO agrees to indemnify and hold harmless Broker/Dealer and each
        person who controls or is associated with Broker/Dealer against any
        losses, claims, damages or liabilities, joint or several, to which
        Broker/Dealer or such controlling or associated person may become
        subject under the 1933 Act or otherwise insofar as such losses, claims,
        damages, or liabilities (or actions in respect thereof) arise out of or
        are based upon any untrue statement or alleged untrue statement of a
        material fact required to be stated therein or necessary to make the
        statements therein not misleading contained (i) in any Registration
        Statement, any Prospectus or any document executed by JHMLICO or JHVLICO
        specifically for the purpose of qualifying a Contract for sale under the
        laws of any jurisdiction or (ii) in any written information or sales
        material authorized for and supplied or furnished to Broker/Dealer and
        its agents or representatives by

        JHMLICO, its employees or agents, in connection with the sale of the
        Contract and JHMLICO will reimburse Broker/Dealer and each such
        controlling person for legal or other expenses reasonably incurred by
        Broker/Dealer or such controlling person in connection with
        investigating or defending any such loss, claim, damage, liability or
        action.
<PAGE>
 
    (2) Broker/Dealer agrees to indemnify and hold harmless JHMLICO and each of
        its directors and officers against any losses, claims, damages or
        liabilities to which JHMLICO and any such director or officer may become
        subject under the 1933 Act and state insurance laws or otherwise insofar
        as such losses, claims, damages or liabilities (or actions in respect
        thereof) arise out of or are based upon:

            (a) any unauthorized use of sales materials or any verbal or written
                misrepresentations or any unlawful sales practices concerning a
                Contract by Broker/Dealer or

            (b) claims by agents or representatives or employees of
                Broker/Dealer for commissions or other compensation or
                remuneration of any type or

            (c) failure by agents, representatives or employees of Broker/Dealer
                to comply with all applicable state insurance laws and
                regulations including but not limited to state licensing
                requirements, rebate statutes and replacement regulations, and
                the provisions of this Agreement; and Broker will reimburse
                JHMLICO and any director or officer for any legal or other
                expenses reasonably incurred by JHMLICO or such director or
                officer in connection with investigating or defending any such
                loss, claim, damage, liability or action.

    (3) After receipt by a party entitled to indemnification of notice of the
        commencement of any action, if a claim in respect thereof is to be made
        against any person obligated to provide indemnification, such
        indemnified party will notify the indemnifying party in writing of the
        commencement thereof as soon as practicable thereafter, and the omission
        so to notify the indemnifying party will not relieve it from any
        liability except to the extent that the omission results in a failure of
        actual notice to the indemnifying party, and such indemnifying party is
        damaged solely as a result of the failure to give such notice.


13. All notices to JHMLICO should be mailed to:


                           , Senior Vice President
        John Hancock Mutual Life Insurance Company
        John Hancock Place
        P. O. Box 111
        Boston, MA  02117

    All notices to the Broker/Dealer will be duly given if mailed to the
    address shown below.

14. This agreement shall be governed by and construed in accordance with the
    laws of the Commonwealth of Massachusetts.
<PAGE>
 
     In reliance on the representations set forth and in consideration of the
undertakings described, the parties represented below do hereby contract
and agree.

John Hancock Mutual Life
Insurance Company                                                 .
 
 
By:                              By:
   -----------------------          ----------------------------

Title:                           Title:
      --------------------             ------------------------- 

Date of Execution                Date of Execution
                                                  --------------

<PAGE>
 
                                                           EXHIBIT 1. A. (6) (a)


                                                                     NO. D-30612
                       THE COMMONWEALTH OF MASSACHUSETTS

                      DEPARTMENT OF BANKING AND INSURANCE

                             Division of Insurance

CERTIFICATE OF AUTHORITY                               DATE: March 5, 1979
- ------------------------                                      



THIS IS TO CERTIFY THAT THE

    JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

    BOSTON                               MASSACHUSETTS

is duly organized under the laws of this Commonwealth, has fully complied with
the requirements of said laws applicable to it and that it is authorized to
issue policies and transact the kinds of business authorized under the Sections
of Chapter 175 of the General Laws of Massachusetts and amendments thereto
described by the following designations: (See Reverse Side for Legend)

   6B  16A

This Certificate shall remain in effect for an indefinite term unless said
authority is amended or revoked in accordance with Law.


                  SEAL

                              IN WITNESS WHEREOF, I have
                              hereunto set my hand and
                              affixed the official seal of
                              this Division, at the City
                              of Boston, the date appearing
                              above.



                              MICHAEL J. SABBAGH
                              ------------------
                              Michael J. Sabbagh
                              Commissioner of Insurance
<PAGE>
 
                       THE COMMONWEALTH OF MASSACHUSETTS

                             DIVISION OF INSURANCE

                      100 Cambridge Street, Boston 02202

    MICHAEL J. SABBAGH
COMMISSIONER OF INSURANCE

                                                       F 2975

 TO WHOM IT MAY CONCERN:

         I, Michael J. Sabbagh, Commissioner of Insurance for the Commonwealth
 of Massachusetts, hereby certify that the

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

 of Boston, in the Commonwealth of Massachusetts, having no liabilities, except
 reasonable organization expenses and having complied with the requirements of
 the Laws of this Commonwealth relating to insurance companies, adopted a proper
 system of accounting, employed a competent accountant, a competent claim
 manager, a competent and experienced underwriter, and a competent and
 experienced actuary, and that its officers and directors are of good repute and
 competent to manage said company, is fully authorized to insure upon the stock
 plan the business of health and life insurance now or hereafter described or
 permitted by Clauses Sixth and Sixteenth of Section Forty-Seven, Chapter One
 Hundred and Seventy-Five of the General Laws of the Commonwealth of
 Massachusetts and the acts in amendment thereof and in addition thereto.

         IN WITNESS WHEREOF, I have here-unto set my hand and affixed the
   official seal of this Division at the City of Boston, this Fifth Day of
   March, A.D. 1979.


                                  MICHAEL J. SABBAGH
                                  ------------------
                                  Michael J. Sabbagh
                                  Commissioner of Insurance
         SEAL

<PAGE>
 
                                                           EXHIBIT 1. A. (6) (b)


                                    BY-LAWS

                                      OF

                   JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY

                                   ARTICLE I

                                    OFFICES

      The principal office and principal place of business of the Company in the
Commonwealth of Massachusetts shall be located in the City of Boston, Suffolk
County.

                                  ARTICLE II

                                 SHAREHOLDERS

      SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders shall be
held on the 2nd Wednesday following the 2nd Monday in April in each year at the
hour of 2:00 P.M., for the purpose of electing directors and for the transaction
of such other business as may come before the meeting. If the day fixed for the
annual meeting shall be a legal holiday, such meeting shall be held on the next
succeeding business day. If the election of directors shall not be held on the
day designated herein for any annual meeting, or at any adjournment thereof, the
board of directors shall cause the election to be held at a meeting of the
shareholders as soon thereafter as conveniently may be.

      SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be
called by the chairman of the board, the vice chairman of the board, the
president, a majority of the board of directors or by the holders of not less
than one-fifth of all the outstanding shares of the corporation.

      SECTION 3. PLACE OF MEETING. The board of directors may designate any
place, either within or without the Commonwealth of Massachusetts as the place
of meeting for any annual meeting or for any special meeting. A waiver of notice
signed by all shareholders may designate any place, either within or without the
Commonwealth of Massachusetts, as the place for the holding of such meeting. If
no designation is made, or if a special meeting be otherwise called, the place
of meeting shall be the principal office of the corporation in the Commonwealth
of Massachusetts.

      SECTION 4. NOTICE OF MEETINGS. Written or printed notice stating the
place, day and hour of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten nor more than forty days before the date of the meeting, or in the case
of a merger or consolidation not less than twenty nor more than forty days
before the meeting, either personally or by mail, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the shareholder
at his address as it appears on the records of the corporation, with postage
thereon prepaid.

                                                                               1
<PAGE>
 
       SECTION 5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders, or shareholders entitled to receive payment of any
dividend, or in order to make determination of shareholders for any other proper
purpose, the board of directors of the corporation may provide that the stock
transfer books shall be closed for a stated period but not to exceed, in any
case, forty days. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten days, or in the case
of a merger or consolidation, at least twenty days, immediately preceding such
meeting. In lieu of closing the stock transfer books, the board of directors may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than forty days and, for a
meeting of shareholders, not less than ten days, or in the case of a merger or
consolidation, not less than twenty days, immediately preceding such meeting. If
the stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the board of directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.

       SECTION 6. VOTING LISTS. The agent having charge of the transfer books
for shares of the corporation shall make, at least ten days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting, arranged in alphabetical order, with the address of and the number of
shares held by each, which list, for a period of ten days prior to such meeting,
shall be kept on file at the principal office of the corporation and shall be
subject to inspection by any shareholder at any time during usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any shareholder during the
whole time of the meeting. The original share ledger or transfer book, or a
duplicate thereof kept in this Commonwealth, shall be prima facie evidence as to
who are the shareholders entitled to examine such list or share ledger or
transfer book or to vote at any meeting of shareholders.

       SECTION 7. QUORUM. A majority of the outstanding shares of the
corporation, represented in person or by proxy, shall constitute a quorum at any
meeting of shareholders; provided, that if less than a majority of the
outstanding shares are represented at said meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. If
a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting shall be the act of the shareholders.

       SECTION 8. PROXIES. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the corporation before or at
the time of the meeting. No proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy.

        SECTION 9. VOTING OF SHARES. Each outstanding share shall be entitled to
one vote upon each matter submitted to vote at a meeting of shareholders.

        SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as the by-laws of such corporation may prescribe, or, in the
absence of such provision, as the board of directors of such corporation may
determine.

         Shares standing in the name of a deceased person, a minor ward or an
incompetent person, may be voted by his administrator, executor, court appointed
guardian or conservator, 

                                                                               2
<PAGE>
 
either in person or by proxy without a transfer of such shares into the name of
such administrator, executor, court appointed guardian or conservator. Shares
standing in the name of a trustee may be voted by him, either in person or by
proxy.

         Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.

         A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

         Shares of its own stock belonging to this corporation shall not be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time, but shares
of its own stock held by it in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares at any given time.

        SECTION 11. INSPECTORS. At any meeting of shareholders, the chairman of
the meeting may, or upon the request of any shareholder shall, appoint one or
more persons as inspectors for such meeting.

        Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity and
effect of proxies; count all votes and report the results; and do such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the shareholders.

        Each report of an inspector shall be in writing and signed by him or by
a majority of them if there be more than one inspector acting at such meeting.
If there is more than one inspector, the report of a majority shall be the
report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.

        SECTION 12. VOTING BY BALLOT. Voting on any question or in any election
may be viva voce unless the presiding officer shall order or any shareholder
shall demand that voting be by ballot.

                                  ARTICLE III

                                   DIRECTORS

        SECTION 1. GENERAL POWERS. The business and affairs of the corporation
shall be managed by its board of directors. The board of directors shall
annually elect a chairman of the board, a vice chairman of the board, a
president, a secretary, a treasurer and such other officers as these by-laws may
provide. The board of directors shall at each annual meeting of the corporation
submit a full statement of the transactions of the corporation during the
previous year and of its financial condition.

        SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors
of the corporation shall be not less than five nor more than nine. Each director
shall hold office until the next annual meeting of shareholders or until his
successor shall have been elected and qualified.

                                                                               3
<PAGE>
 
        SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors
shall be held without other notice than this by-law, immediately after, and at
the same place as, the annual meeting of shareholders. The board of directors
may provide, by resolution, the time and place, either within or without the
Commonwealth of Massachusetts, for the holding of additional regular meetings
without other notice than such resolution.

        SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors
may be called by or at the request of the chairman of the board, the vice
chairman of the board, the president or any two directors. The person or persons
authorized to call special meetings of the board of directors may fix any place,
either within or without the Commonwealth of Massachusetts, as the place for
holding any special meeting of the board of directors called by them.

         SECTION 5. NOTICE. Notice of any special meeting shall be given at
least five days previous thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegram company. Any director may waive notice of any meeting. The attendance
of a director at any meeting shall constitute a waiver of notice of such
meeting, except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the board of directors need be specified
in the notice or waiver of notice of such meeting.
 
         SECTION 6. QUORUM. A majority of the number of directors then in
office, but no less than four in number, shall constitute a quorum for
transaction of business at any meeting of the board of directors, provided, that
if less than majority of such number of directors is present at said meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.

         SECTION 7. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors.

         SECTION 8. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken at any meeting of the board of directors may be taken without a
meeting if written consents thereto are signed by all members of the board of
directors and such written consents are filed with the minutes of proceedings of
the board.

         SECTION 9. VACANCIES. Any vacancy occurring in the board of directors

and any directorship to be filled by reason of an increase in the number of
directors, may be filled by the directors or by the shareholders at an annual
meeting or at a special meeting of shareholders called for that purpose.

         SECTION 10. COMPENSATION. The board of directors, by the affirmative
vote of a majority of directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for service to the corporation as directors,
officers or otherwise. By resolution of the board of directors the directors may
be paid their expenses, if any, of attendance at each meeting of the board.

                                                                               4
<PAGE>
 
                                  ARTICLE IV

                   EXECUTIVE COMMITTEE AND OTHER COMMITTEES

         SECTION 1. HOW CONSTITUTED. By resolution adopted by the board of
directors, the board may designate one or more committees, including an
executive committee, each consisting of at least three directors. Each member of
a committee shall be a director and shall hold office during the pleasure of the
board. The chairman of the board, the vice chairman of the board and the
president shall be members of the executive committee.

     SECTION 2. POWERS OF THE EXECUTIVE COMMITTEE. Unless otherwise provided by
resolution of the board of directors, the executive committee shall, during the
intervals between meetings of the board of directors, have and may exercise all
of the powers of the board of directors in the management of the business and
affairs of the corporation except the power to declare a dividend, to authorize
the issuance of stock, or to recommend to shareholders any action requiring
shareholders' approval.

     SECTION 3. OTHER COMMITTEES OF THE BOARD OF DIRECTORS. To the extent
provided by resolution of the board, other committees shall have and may
exercise any of the powers that may lawfully be granted to the executive
committee.

     SECTION 4. PROCEEDINGS, QUORUM AND MANNER OF ACTING. In the absence of
appropriate resolution of the board of directors, each committee may adopt such
rules and regulations governing its proceedings, quorum and manner of acting as
it shall deem proper and desirable, provided that the quorum shall not be less
than two directors. In the absence of any member of any such committee, the
members thereof present at any meeting, whether or not they constitute a quorum,
may appoint a member of the board of directors to act in the place of such
absent member.

     SECTION 5. OTHER COMMITTEES. The board of directors may appoint other
committees, each consisting of one or more persons, who need not be directors.
Each such committee shall have such powers and perform such duties as may be
assigned to it from time to time by the board of directors, but shall not
exercise any power which may lawfully be exercised only by the board of
directors or a committee thereof.


                                   ARTICLE V

                                   OFFICERS

     SECTION 1. NUMBER. The officers of the corporation shall be a chairman of
the board, a vice chairman of the board, a president, one or more vice
presidents (the number thereof to be determined by the board of directors), a
controller, a treasurer, and a secretary, and such assistant controllers,
treasurers, secretaries or other officers as may be elected or appointed by the
board of directors. Any two or more offices may be held by the same person
except that the chairman, vice chairman and president cannot also serve
simultaneously as secretary of the corporation, but no person shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument is required by law, the Articles of Organization or these by-laws to
be executed, acknowledged or verified by two or more officers. The chairman of
the board, vice chairman and the president shall be selected from among the
directors and may hold such offices only so long as they continue to be
directors. No other officer need be a director.

                                                                               5
<PAGE>
 
     SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation
shall be elected annually by the board of directors at the first meeting of the
board of directors held after each annual meeting of shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as conveniently may be. Vacancies may be filled or new
offices filled at any meeting of the board of directors. Each officer shall hold
office until his successor shall have been duly elected and shall have qualified
or until his death or until he shall resign or shall have been removed in the
manner hereinafter provided. Election or appointment of an officer or agent
shall not of itself create contract rights.

     SECTION 3. REMOVAL. Any officer or agent elected or appointed by the board
of directors may be removed by the board of directors whenever in its judgment
the best interest of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, or the person so
removed.

     SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the board
of directors for the unexpired portion of the term.

     SECTION 5. CHAIRMAN OF THE BOARD. The chairman of the board shall be the
chief executive officer of the corporation, shall preside at all shareholders'
meetings and at all meetings of the board of directors and shall be ex officio a
                                                                    -- -------  
member of all committees of the board of directors, except the audit committee,
if any. Subject to the supervision of the board of directors, he shall have
general charge of the business, affairs and property of the corporation and its
officers, employees and agents. He shall sign (unless the vice chairman of the
board, the president or a vice president shall have signed) certificates
representing the stock of the corporation authorized for issuance by the board
of directors and shall have such other powers and perform such other duties as
may be assigned to him from time to time by the board of directors.

     SECTION 6. VICE CHAIRMAN OF THE BOARD. The vice chairman of the board shall
assist the chief executive officer of the corporation in his duties and, at the
request of or in the absence or disability of the chairman of the board, he
shall preside at all shareholders' meetings and at all meetings of the board of
directors and shall in general exercise the powers and perform the duties of the
chairman of the board. He shall sign (unless the chairman of the board, the
president or a vice president shall have signed) certificates representing the
stock of the corporation authorized for issuance by the board of directors and
shall have such other powers and perform such other duties as may be assigned to
him from time to time by the chairman of the board or the board of directors.

     SECTION 7. PRESIDENT. The president shall be the chief operating officer of
the corporation. In the event of the absence or disability of both the chairman
of the board and the vice chairman of the board, he shall preside at all
shareholders' meetings and at all meetings of the board of directors and shall
in general exercise the powers and perform the duties of both. Subject to the
supervision of the board of directors and such direction and control as the
chairman of the board and the vice chairman of the board may exercise, he shall
have general charge of the operations of the corporation and its officers,
employees and agents. He shall sign (unless the chairman or the vice chairman of
the board or a vice president shall have signed) certificates representing the
stock of the corporation authorized the board of directors may for issuance by
the board of directors. Except as otherwise order, he may sign in the name and
on behalf of the corporation all deeds, mortgages, bonds, contracts, instruments
or agreements. He shall exercise such other powers and perform such other duties
as from time to time may be assigned to him by the board of directors.

                                                                               6
<PAGE>
 
         SECTION 8. VICE PRESIDENT. The board of directors shall, from time to
time, designate and elect one or more vice presidents who shall have such powers
and perform such duties as from time to time may be assigned to them by the
board of directors or the president. At the request or in the absence or
disability of the president, the vice president (or, if there are two or more
vice presidents, then the senior of the vice presidents present and able to act)
may perform all the duties of the president and, when so acting, shall have all
the powers of and be subject to all the restrictions upon the president. Any
vice president may sign (unless the president or another vice president shall
have signed) certificates representing stock of the corporation authorized for
issuance by the board of directors.

     SECTION 9. CONTROLLER AND ASSISTANT CONTROLLERS. The controller shall be
the principal accounting officer of the corporation and shall have general
charge of the books of account of the corporation. He shall cause to be prepared
annually a full and correct statement of the affairs of the corporation,
including a balance sheet and a financial statement of operations for the
preceding fiscal year. He shall perform all the duties incident to the office of
controller and such other duties as from time to time may be assigned to him by
the chairman or by the board of directors.

     Any assistant controller may perform such duties of the controller as the
controller or the board of directors may assign and, in the absence of the
controller, he may perform all of the duties of the controller.

     SECTION 10. TREASURER AND ASSISTANT TREASURER. The treasurer shall be the
principal financial officer of the corporation and shall have general charge of
the finances of the corporation. Except as otherwise provided by the board of
directors, he shall have general supervision of the funds and property of the
corporation. He shall sign (unless an assistant treasurer or secretary or
assistant secretary shall have signed) all certificates of stock of the
corporation authorized for issuance by the board of directors. He shall render
to the board of directors, whenever directed by the board, a report relating to
his custody of the funds and property of the corporation and of all his
transactions as treasurer; and as soon as possible after the close of each
fiscal year he shall make and submit to the board of directors a like report for
such fiscal year. He shall perform all the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him by
the chairman or the board of directors.

         Any assistant treasurer may perform such duties of the treasurer as the
treasurer or the board of directors may assign, and, in the absence of the
treasurer, he may perform all the duties of the treasurer.

          SECTION 11. SECRETARY AND ASSISTANT SECRETARY. The secretary shall (a)
keep the minutes of the shareholders' and of the board of directors' meetings in
one or more books provided for that purpose; (b) see that all notices are duly
given in accordance with the provisions of these by-laws or as required by law;
(c) be custodian of the corporate records and of the seal of the corporation and
see the seal of the corporation is affixed to all certificates for shares prior
to the issue thereof and to all documents, the execution of which on behalf of
the corporation under its seal is duly authorized in accordance with the
provisions of these by-laws;(d) keep a register of the post-office address of
each shareholder which shall be furnished to the secretary by such shareholder;
(e) sign with the chairman, vice chairman, president, or a vice president,
certificates for shares of the corporation, the issue of which shall have been
authorized by resolution of the board of directors; (f) have general charge of
the stock transfer books of the corporation; (g) in general perform all duties
incident to the office of secretary and such other duties as from time to time
may be assigned to him by the chairman or by the board of directors.

                                                                               7
<PAGE>
 
          Any assistant secretary may perform such duties of the secretary as
the secretary or the board of directors may assign, and, in the absence of the
secretary, he may perform all the duties of the secretary.

     SECTION 12. SUBORDINATE OFFICERS. The board of directors from time to time
may appoint such other officers or agents as it may deem advisable, each of whom
shall have such title, hold office for such period, have such authority and
perform such duties as the board of directors may determine. The board of
directors from time to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties.

     SECTION 13. REMUNERATION. The salaries or other compensation of the
officers of the corporation shall be fixed from time to time by resolution of
the board of directors, except that the board of directors may by resolution
delegate to any person or group of persons the power to fix the salaries or
other compensation of any subordinate officers or agents appointed in accordance
with the provisions of Section 12 hereof. No officer shall be prevented from
receiving a salary by reason of the fact that he is also a director of the
corporation.

     SECTION 14. The board of directors may require any officer or agent of the
corporation to execute a bond to the corporation in such sum and with such
surety or sureties as the board of directors may determine, conditioned upon the
faithful performance of his duties to the corporation, Any secretary, treasurer,
assistant secretary and assistant treasurer of the corporation shall, in
accordance with the applicable provisions of the Massachusetts General Laws,
give a bond, with surety, payable to the corporation conditioned upon the
faithful performance of his or her duties and that such bond be executed by such
officer before performing any duties of his or her office.
 
     SECTION 15. COMMISSIONS. No person shall be eligible as an elective or
appointed officer who has any interest in commissions or other compensation
based on premiums or considerations paid to the corporation on any policy or
contract, or on any extension of conversion thereof, unless such policy,
contract, extension or conversion was written and effective prior to his
election or appointment.

                                   ARTICLE VI

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

     SECTION 1. CONTRACTS. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver and
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.

     SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the board of directors. Such authority may be general or
confined to specific instances.

     SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation, shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
resolution of the board of directors.

                                                                               8
<PAGE>
 
     SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the board of directors may
select.

                                  ARTICLE VII

                  CERTIFICATES FOR SHARES AND THEIR TRANSFER

     SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of the
corporation shall be in such form as may be determined by the board of
directors. Such certificates shall be signed by the chairman of the board, the
vice chairman of the board, the president or a vice president and by the
secretary or an assistant secretary and shall be sealed with the seal of the
corporation. All certificates for shares shall be consecutively numbered or
otherwise identified. The name of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the books of the corporation. All certificates surrendered to the
corporation for transfer shall be cancelled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been
surrendered and cancelled, except that in case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such terms and indemnity to
the corporation as the board of directors may prescribe.

     SECTION 2. TRANSFERS OF SHARES. Transfers of shares of the corporation
shall be made only on the books of the corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the secretary of the corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the corporation shall be deemed the
owner thereof for all purposes as regards the corporation.

                                 ARTICLE VIII

                                  FISCAL YEAR

         The fiscal year of the corporation shall begin on the first day of
January in each year and end on the last day of December in each year.

                                   ARTICLE IX

                                WAIVER OF NOTICE

         Whenever any notice whatever is required to be given under the
provisions of these by-laws or under the provisions of the Articles of
Incorporation, a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice.

                                   ARTICLE X

                                INDEMNIFICATION

         The corporation shall, except as hereinafter provided and subject to
limitations of law, indemnify each director, former director, officer and former
officer, and his heirs and legal representatives, for and against all loss,
liability and expense, whether heretofore or hereafter imposed upon or incurred
by him in connection with any pending or future action, suit, proceeding 

                                                                               9
<PAGE>
 
or claim in which he may be involved, or with which he may be threatened, by
reason of any alleged act or omission as a director or officer of the
corporation. Such loss, liability and expense shall include, but not be limited
to, judgments, fines, court costs, reasonable attorneys' fees and the cost of
reasonable settlements. Such indemnification shall not cover (a) loss, liability
or expense imposed or incurred in connection with any item or matter as to which
such director or officer shall be finally adjudicated not to have acted in good
faith in the reasonable belief that his action was in the best interest of the
corporation or (h) loss, liability or expense imposed or incurred in connection
with any item or matter which shall be settled without final adjudication unless
such settlement shall have been approved as in the best interests of the
corporation by vote of the board of directors at a meeting in which no director
participates against whom any suit, proceeding or claim on the same or similar
grounds is then pending or threatened, or in the event no such vote can be
taken, unless, in the opinion of independent counsel selected by or in a manner
determined by the board of directors, there is no reasonable ground not to
approve such settlement as being in the best interests of the corporation. As
part of such indemnification, the corporation may pay expenses incurred in
defending any such action, suit, proceeding or claim in advance of the final
disposition thereof upon receipt of an undertaking by the person indemnified to
repay such payment if he should be determined not to be entitled to
indemnification hereunder. The foregoing rights of indemnification shall be in
addition to any rights to which any director, former director, officer, or
former officer, heirs or legal representatives may otherwise be lawfully
entitled.


                                  ARTICLE XI

                                  AMENDMENTS

      These by-laws may not be altered, amended or repealed prior to the
issuance of a certificate of authority to the company, except by written consent
of subscribers representing at least two-thirds of the shares subscribed, and
the approval of the Commissioner of Insurance of Massachusetts. After a
certificate of authority is issued, the power to make, amend or repeal these 
by-laws shall be vested in the board of directors.

      Adopted this 25th day of February, 1979.

      Certified to be a true copy of the By-Laws of John Hancock Variable Life
Insurance Company as adopted at the Initial Meeting of Incorporators and as
amended from time to time, up to and including the date set forth below.

                                                                              10

<PAGE>
 
                                                                       Exhibit 6



                                                                 January 5, 1996



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

      Subject:  Actuarial Opinion

Gentlemen:

This opinion is furnished with the filing of this post-Effective Amendment to
the Registration Statement on Form S-6 (File Number 33-64366) which covers
certain flexible premium joint and last survivor variable life insurance
Contracts issued by John Hancock Variable Life Insurance Company, under which
amounts will be allocated by JHVLICO to one or more of the twelve subaccounts of
John Hancock Variable Life Account S.

The Prospectus included in the amended Registration Statement describes
Contracts which are issued by the Company. The Contract forms were prepared
under my direction, and I am familiar with the amended Registration Statement
and exhibits thereto. In my opinion:

     1   The "sales load" (as defined in paragraph (c)(4) of Rule 6e-3(T) under
         the Investment Company Act of 1940) will not exceed 9% of "payments"
         (as defined in the first sentence of paragraph (c)(7) of the Rule)
         equal to the sum of the guideline annual premiums (as defined in
         paragraph (c)(8) of the Rule) that would be paid during the period
         equal to the lesser of 20 years or the anticipated joint life
         expectancy of the named insureds based on the 1980 Commissioner's
         Standard Ordinary Smoker/Nonsmoker Mortality Table. The sales load on
         payments made in excess of such sum will not exceed 9%.

         Sales load in excess of (1) 30% of payments made which are less than or
         equal to one guideline annual premium, plus (2) 10% of
<PAGE>
 
                                      -2-

         payments greater than one but no greater than two guideline annual
         premiums; plus (3) 9% of payments in excess of two guideline annual
         premiums, will be refunded if the Contract is surrendered during the
         first 24 months after issue. Except to the extent that

         exemptive relief is being applied for, the proportionate amount of
         sales load deducted from any payment will not exceed the proportionate
         amount deducted from any prior payment, unless an increase is caused by
         reductions in the annual cost of insurance or a reduction in the sales
         load deducted from amounts transferred to a Contract from another plan
         of insurance.

     2.  The death benefits, surrender values, and accumulated premiums of the
         Contract as illustrated in the amended Registration Statement are based
         on the assumptions stated in the illustrations and are consistent with
         the provisions of the Contract. Such assumptions, including the current
         rates of cost of insurance and other current charges, are reasonable.
         The Contract has not been designed so as to make the relationship
         between premiums and benefits, as shown in the illustrations, appear
         more favorable to a prospective purchaser of a Contract for joint
         insureds who are non-smoker males age 55 and non-smoker females age 50,
         than to purchasers of a Contract for joint insureds who have different
         underwriting characteristics. Nor were the particular illustrations
         shown selected for the purpose of making the relationship appear more
         favorable.

     3.  The charge for federal taxes that is imposed under the Contracts is
         reasonable in relation to the Company's increased tax burden under
         Section 848 of the Internal Revenue Code of 1986, resulting from the
         Company's receipt of such premiums. The cost to the Company of capital
         used to satisfy its increased federal tax burden under Section 848 is,
         in essence, the Company's targeted rate of return. The targeted rate of
         return that is used in calculating the level of such charge is
         reasonable, and the factors taken into account by the Company in
         determining such targeted rate of return are the appropriate factors to
         consider in determining such targeted rate of return.

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

                                                /s/Deborah A. Poppel, FSA

<PAGE>
 
                                                                       EXHIBIT 7



               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" in the
Prospectus and to the use of our reports dated February 7, 1995, with respect to
the financial statements of John Hancock Variable Life Account S and with
respect to the financial statements of John Hancock Variable Life Insurance
Company, included in this Post-Effective Amendment No. 3 to the Registration
Statement (Form S-6, No. 33-64366).



                                            /s/Ernst & Young LLP
                                            ERNST & YOUNG LLP


Boston, Massachusetts
January 10, 1996

<PAGE>
 
                                                                      EXHIBIT 11



                                           January 5, 1996


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

Gentlemen:

      This opinion is being furnished with respect to the filing of this 
post-effective amendment of the Registrant's Registration Statement with the
Securities and Exchange Commission as required by Rule 485 under the Securities
Act of 1933.

      We have acted as counsel to Registrant for the purpose of preparing this
post-effective amendment which is being filed pursuant to paragraph (b) of 
Rule 485 and hereby represent to the Commission that in our opinion this 
post-effective amendment does not contain disclosures which would render it
ineligible to become effective pursuant to paragraph (b).

      We hereby consent to the filing of this opinion with and as a part of this
post-effective amendment to Registrant's Registration Statement with the
Commission.

                                             Very truly yours,



                                             /s/ Francis C. Cleary Jr.

                                             Francis C. Cleary, Jr.
                                             Vice President and Counsel


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission