<PAGE>
As filed with the Securities and Exchange Commission on January , 1996
Registration No. 33-
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-6
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
_______________________
Approximate date of proposed public offering: as soon as practicable after the
effective date of this Registration Statement.
Title and amount of securities being registered: interests under flexible
premium variable life insurance policies.
<PAGE>
An indefinite amount of the Registrant's securities has been registered pursuant
to a declaration under Rule 24f-2, under the Investment Company Act of 1940, set
out in the two previously filed Form S-6 Registration Statements of Registrant
and Registrant's Depositor (File Nos. 33-79108 and 33-64366). Registrant filed
its Rule 24f-2 Notice for the December 31, 1994 fiscal year on February 20,
1995.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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CROSS-REFERENCE TABLE
Form N-8B-2 Item Caption in Prospectus
- ---------------- ---------------------
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1, 2 Cover, The Account and The Series
Fund, JHVLICO and John Hancock
3 Inapplicable
4 Cover, Distribution of Policies
5,6 The Account and The Series Fund,
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 Fund
11, 12 Summary, The Account and The Series
Fund, 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 Fund
17 Summary, Principal Policy
Provisions and Benefits
18 The Account and The Series Fund,
Tax Considerations
19 Reports
20 Changes that JHVLICO
Can Make
21 Principal Policy Provisions
22 Principal Policy Provisions
</TABLE>
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<TABLE>
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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 Fund,
Principal Policy Provisions,
Appendix--Illustration of Death
Benefits, Surrender Values
and Accumulated Premiums
45 Not Applicable
46 The Account and The Series Fund,
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 Fund,
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
[PASTE-UP LOGO]
(JHVLICO)
FLEXIBLE PREMIUM VARIABLE LIFE 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 MAY 1, 1996
This Prospectus describes a flexible premium variable life policy ("Policy")
which can be funded, at the discretion of the Owner, by any of the nine
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
(the "Fund"), a mutual fund advised by John Hancock Mutual Life Insurance
Company ("John Hancock"). The assets of the Fixed Account will be invested in
the general account of John Hancock Variable Life Insurance Company
("JHVLICO").
The Prospectus for the Fund, which is attached to this Prospectus, describes
the investment objectives, policies and risks of investing in the nine
Portfolios of the Fund: Stock, Select Stock, Bond, Money Market, Managed, Real
Estate Equity, International, Short-Term U.S. Government and Special
Opportunities. Other variable Subaccounts and Portfolios may be added in the
future.
Replacing existing insurance with a Policy described in this Prospectus may
not be to your advantage.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
IT IS NOT VALID UNLESS ATTACHED TO A CURRENT PROSPECTUS FOR THE FUND.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
<S> <C>
SUMMARY................................................................... 1
JHVLICO and JOHN HANCOCK.................................................. 5
THE ACCOUNT AND SERIES FUND............................................... 6
The Account............................................................. 6
Series Fund............................................................. 6
THE FIXED ACCOUNT......................................................... 8
POLICY PROVISIONS AND BENEFITS............................................ 8
Requirements for Issuance of Policy..................................... 8
Premiums................................................................ 9
Account Value and Surrender Value....................................... 11
Death Benefits.......................................................... 12
Transfers Among Subaccounts............................................. 14
Telephone Transfers and Policy Loans.................................... 14
Loan Provisions and Indebtedness........................................ 15
Default................................................................. 16
Exchange Privilege...................................................... 16
CHARGES AND EXPENSES...................................................... 17
Charges Deducted from Premiums.......................................... 17
Sales Charges........................................................... 17
Reduced Charges for Eligible Groups..................................... 18
Charges Deducted from Account Value or Assets........................... 18
Guarantee of Certain Charges............................................ 20
DISTRIBUTION OF POLICIES.................................................. 20
TAX CONSIDERATIONS........................................................ 21
Policy Proceeds......................................................... 22
Charge for JHVLICO's Taxes.............................................. 22
Corporate and H.R. 10 Plans............................................. 23
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO...................... 23
REPORTS................................................................... 24
VOTING PRIVILEGES......................................................... 24
CHANGES THAT JHVLICO CAN MAKE............................................. 25
LEGAL MATTERS............................................................. 25
REGISTRATION STATEMENT.................................................... 25
EXPERTS................................................................... 25
FINANCIAL STATEMENTS...................................................... 26
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............................................... 14
Age.................................................................. A-2
Basic Sum Insured.................................................... 1
DAC Tax.............................................................. 18
Death Benefit........................................................ 12
Fixed Account........................................................ 9
Fund.......................................................... Front Cover
Grace Period......................................................... 16
Guaranteed Death Benefit............................................. 13
Guaranteed Death Benefit Premium..................................... 10
Home Office................................................... Front Cover
Indebtedness......................................................... 15
Investment Rule...................................................... 11
Loan Account......................................................... 16
Minimum First Premium................................................ 9
Modal Processing Date................................................ 10
Planned Premium...................................................... 9
Policy Anniversary................................................... A-2
Portfolio..................................................... Front Cover
Subaccount.................................................... Front Cover
Sum Insured.......................................................... 4
Surrender Value...................................................... 11
Target Premium....................................................... 18
Valuation Date....................................................... 8
Valuation Period..................................................... 8
Variable Subaccounts................................................. 2
7-Pay Limit.......................................................... 11
</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 when the insured dies. The Policies also provide for
premium flexibility. JHVLICO issues other variable life insurance policies.
These other policies are offered by means of other Prospectuses, but use the
same underlying Fund.
As explained below, the death benefit and Surrender Value under the Policy
may increase or decrease daily. The Policies differ from ordinary fixed-
benefit life insurance in the way they work. However, the Policies are like
fixed-benefit life insurance in providing lifetime protection against economic
loss resulting from the death of the insured. The Policies are primarily
insurance and not investments.
The Policies work generally as follows: the Policy owner (the "Owner")
periodically gives JHVLICO a premium payment. JHVLICO takes from each premium
an amount for taxes and sales expenses. JHVLICO then places the rest of the
premium into as many as ten Subaccounts as directed by the Owner. The assets
allocated to each variable Subaccount are invested in shares of the
corresponding Portfolio of the Fund. The currently available Portfolios are
Stock, Select Stock, Bond, Money Market, Managed, Real Estate Equity,
International, Short-Term U.S. Government and Special Opportunities. 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 insured and with the amount of insurance provided at the start of each
month.
The Policy provides for payment of death benefit proceeds when the insured
dies. The death benefit proceeds will equal the death benefit, plus any
additional benefit included by rider and then due, minus any Indebtedness. The
death benefit 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 insured. 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 coverage as part of the "Basic Sum Insured" or as an "Additional
Sum Insured". The Basic Sum Insured will not lapse during the first five
Policy years, so long as the Guaranteed Death Benefit Premiums specified in
the Policy have been paid. 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 for that portion of the Account Value
allocated to the variable Subaccounts. The Owner may surrender a Policy at any
time while the insured is living. The Surrender Value is the Account Value
less any Indebtedness plus, in the first two Policy years, any Sales Charge
Refund. 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.
1
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The minimum Sum Insured that may be bought at issue is $100,000. All persons
insured must meet specified age limits and certain health and other criteria
called "underwriting standards." The smoking status of the insured is
generally reflected in the insurance charges made. Policies issued in certain
jurisdictions and in connection with certain employer-sponsored plans will not
directly reflect the sex of the insured 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 $50 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 the insured, the
Policy's Sum Insured at issue, and the Policy options selected by the Owner.
Unless the Guaranteed 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.
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 nine variable Subaccounts within the Account. Each is invested
in a corresponding Portfolio of John Hancock Variable Series Trust I, a
"series" type of mutual fund. The Portfolios of the Fund which are currently
available are Stock, Select Stock, Bond, Money Market, Managed, Real Estate
Equity, International, Short-Term U.S. Government and Special Opportunities.
Each Portfolio has a different investment objective and is managed by John
Hancock. John Hancock receives a fee from the Fund 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 Short-Term
U.S. Government Portfolio, at an annual rate of .50% of the first $250 million
of the average daily net assets and at lesser percentages for amounts above
$250 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 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; and with respect to the Special Opportunities Portfolio, at an
annual rate of .75% of the first $250 million of the average daily net assets
and at lesser percentages for amounts above $250 million.
For a full description of the Fund, see the Prospectus for the Fund attached
to this Prospectus.
WHAT ARE THE CHARGES MADE BY JHVLICO?
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.
2
<PAGE>
Sales Charge Deduction from Premium. A charge equal to no more than 6% of
the Target Premium received in Policy years 1 through 10 and no more than 3%
of the Target Premium in any year after Policy year 10. JHVLICO currently
intends to waive this deduction from premiums received after the first 10
Policy years.
Sales Charge Deduction from Account Value. A charge deducted monthly from
Account Value, for the first 5 Policy years, in an amount set forth in the
Policy that varies by age and sex per $1,000 of Basic Sum Insured at issue.
For example, this monthly amount for a 45 year old male is 30c per $1,000 of
Basic Sum Insured.
Issue Charge. A charge deducted monthly from Account Value at the rate of
$20 per month for the first 12 Policy months, plus, for the first 5 Policy
years, an amount set forth in the Policy that varies by age and sex per $1,000
of the Basic Sum Insured at issue. For example, this additional monthly amount
for a 45 year old male is 3c per $1,000 of Basic Sum Insured.
Maintenance Charge. A charge deducted monthly from Account Value in an
amount equal to no more than $8 (currently $6) per Policy.
Insurance Charge. A charge based upon the amount for which JHVLICO is at
risk, considering the attained age and risk classification of the insured and
JHVLICO's then current monthly insurance rates (never to exceed rates set
forth in the Policy) deducted monthly from Account Value.
Charge for Mortality and Expense Risks. A charge made daily at a maximum
effective annual rate of .90% (currently .60%) of the assets of the Account.
Charge for Extra Mortality Risks. An additional charge, depending upon the
age of the insured and the degree of additional mortality risk, required if
the insured does not qualify for the standard 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 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 full 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 charges
deducted for sales expenses, 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
3
<PAGE>
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 ten 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.
WHAT IS THE DEATH BENEFIT?
The death benefit proceeds 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 (the Sum Insured
is the Basic Sum Insured plus the amount of any Additional 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.
OPTION B: The death benefit is the Policy's current Sum Insured plus the
Policy Account Value on the date of death of the insured, and varies in
amount based on investment results.
The death benefit of the Policy under Options A or 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 Death Benefit provision, the Policy is guaranteed not
to lapse during the first 5 Policy years, provided that, on each Modal
processing date, the amount of cumulative premiums paid, minus any
withdrawals, is at least equal to the cumulative amount of Guaranteed Death
Benefit Premiums due to date.
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.
4
<PAGE>
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 that
portion of the Account Value attributable to the variable Subaccount
investments plus 100% of that portion of the Account Value attributable to
Fixed Account investments. 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 4.5% in the first 20 Policy years and
4.25% 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.
IS THERE A SHORT-TERM CANCELLATION RIGHT?
The Owner may surrender a Policy by delivering or mailing it within 45 days
after the date Part A of the application has been completed, or within at
least 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.
5
<PAGE>
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, 1995, 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.
THE ACCOUNT AND SERIES FUND
THE ACCOUNT
The Account, a separate account established under Massachusetts law, meets
the definition of "separate account" under the Federal securities laws and is
registered as a unit investment trust under the Investment Company Act of 1940
("1940 Act").
The Account's assets are the property of 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.
There currently are nine variable Subaccounts in the Account. The assets in
each are invested in corresponding Portfolios of the Fund, but the assets of
one variable Subaccount are not necessarily legally insulated from liabilities
associated with another variable Subaccount. New variable Subaccounts may be
added or existing variable Subaccounts may be deleted as new Portfolios are
added to or deleted from the Fund and made available to Owners.
SERIES FUND
The Fund is a "series" type of mutual fund registered with the Commission
under the 1940 Act as an open-end diversified management investment company.
The Fund serves as the investment medium for the Account and other unit
investment trust separate accounts established for other variable life
insurance policies and variable annuity contracts. (See the attached Fund
Prospectus for a description of a need to monitor for possible conflicts and
other consequences.) A very brief summary of the investment objectives of each
Portfolio is set forth below.
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.
6
<PAGE>
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.
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.
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.
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.
John Hancock acts as the investment manager for the Fund, and John Hancock's
indirectly owned subsidiary, Independence Investment Associates, Inc., with
its principal place of business at 53 State Street, Boston, 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, and its subsidiary, John Hancock
Advisers International, Limited, located at 34 Dover Street, London, England,
provide sub-investment advice with respect to the International Portfolio, and
John Hancock Advisers, Inc. does likewise with respect to the Bond and Special
Opportunities Portfolios.
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 of the Fund which corresponds
to a variable Subaccount of the Account. Any dividend or capital gains
distributions received by the Account will be reinvested in Fund shares at
their net asset value as of the dates paid.
On each Valuation Date, shares of each Portfolio are purchased or redeemed
by 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.
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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 the Fund, its investment objectives, policies and
restrictions, its charges, expenses and all other aspects of its operation is
contained in the attached Prospectus and the statement of additional
information referred to therein, which should be read together with this
Prospectus.
THE FIXED ACCOUNT
An Owner may allocate premiums to the Fixed Account or transfer all or a
part of the Account Value under a Policy to the Fixed Account. The amount so
allocated or transferred will become a part of 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 Basic Sum Insured at issue
of $100,000. At the time of issue, the insured must be age 20 through 75. All
persons insured must meet certain health and other criteria called
"underwriting standards". The smoking status of the insured is reflected in
the insurance charges made.
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Policies issued in certain jurisdictions or in connection with certain
employee benefit plans 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
$50 and meets the other requirements described below.
Minimum First Premium. The amount of premium required at the time of issue
is determined by JHVLICO, and depends on the age, sex, and underwriting class
of the insured at issue, the Policy's Sum Insured at issue, and any additional
benefits selected. The Minimum First Premium must be received by 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 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. 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, 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 Death Benefit in effect under
a Policy. Also, if an owner has elected to use the "guideline premium and cash
value corridor" test for Federal income tax premium limitation purposes,
JHVLICO will not accept the portion of the premium which exceeds the maximum
amount permitted under that test.
Guaranteed Death Benefit Premiums. A Guaranteed Death Benefit feature may
apply during the first five Policy years. See "Death Benefits". The Guaranteed
Death Benefit Premiums required to maintain this benefit in force depend on
the issue age, sex, underwriting class of the insured at issue, the Basic Sum
Insured at issue, the ratio of Basic Sum Insured to Total Sum Insured at issue
and any additional benefits selected. 1/12th of the Guaranteed Death Benefit
Premium is required for Owners electing a monthly premium payment mode; 1/4 of
the Guaranteed Death Benefit Premium is required for Owners electing the
quarterly mode; 1/2 of the Guaranteed Death Benefit Premium is required for
Owners electing the semi-annual mode; and the full Guaranteed Death
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Benefit Premium is required for Owners electing the annual mode. The due date
for each premium is referred to as the Modal processing date. To keep the
Guaranteed Death Benefit in effect, the amount of actual premiums paid minus
any withdrawals must at each Modal processing date be at least equal to the
Guaranteed Death Benefit Premiums due to date. If this test is not satisfied on
any Modal processing date, JHVLICO will notify the Owner of the shortfall
immediately and a Guaranteed Death Benefit grace period will commence as of
that anniversary. The Guaranteed Death Benefit grace period will end on the
second monthly processing date after the determination of the shortfall. This
notice will be mailed to the Owner's last-known address at least 31 days prior
to the end of the Guaranteed Death Benefit grace period. If JHVLICO does not
receive payment for the amount of the deficiency by the end of the Guaranteed
Death Benefit grace period, the Guaranteed Death Benefit feature will lapse.
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 Death Benefit Premium. The Owner may also elect to be billed for
premiums on an annual, semi-annual, quarterly or monthly basis. 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 state
premium tax charge, any applicable 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 Death Benefit Premium . The 7-pay limit
is the total of net level premiums that would have been payable at any time for
the
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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. When it identifies such an excess premium, JHVLICO sends the
Owner immediate notice and refunds the excess premium if it has not received
notice of the acknowledgment by the time the premium payment has had a
reasonable time to clear the banking system, but in no case longer than two
weeks.
ACCOUNT VALUE AND SURRENDER VALUE
Amount of Account Value. The Account Value increases or decreases depending
upon a number of factors, such as the applicable Subaccount's investment
experience, the proportion of the Account Value invested in each Subaccount
and the interest credited to any Loan Account established upon the making of a
Policy loan. In general the Account Value for any day equals the Account Value
for the previous day, decreased by charges against the Account Value,
increased or decreased by the investment experience of the Subaccounts 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. Upon a full surrender during the first two Policy
years, JHVLICO will add to the Surrender Value an amount equal to the excess
of (a) the total sales charges that have been deducted (whether from premiums
or Account Value) under the Policy to date over (b) the sum of 30% of premiums
paid under the Policy that do not exceed one "SEC Guideline Annual Premium",
plus 10% of any additional premiums paid that do not exceed a second SEC
Guideline Annual Premium, plus 9% of any premiums paid in excess of two such
SEC Guideline Annual Premiums. This excess amount is the "Sales Charge
Refund". The SEC Guideline Annual premium is the level annual premium that
would be required for a fixed life insurance policy on the life of the insured
with a face amount equal to the Basic Sum Insured, plus any Additional Sum
Insured, and having the same optional insurance riders, if any, as the Policy,
based on certain assumptions prescribed by the Commission for this purpose.
When Policy May Be Surrendered. A Policy may be surrendered for its
Surrender Value at any time while the insured is living and the Policy is not
in a 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.
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
while the insured is 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.
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A withdrawal will reduce any Option A Sum Insured by the amount withdrawn. A
withdrawal will not reduce any Option B Sum Insured but, because Account Value
will be reduced, the death benefit under this option also will be reduced.
JHVLICO reserves the right to refuse any withdrawal request that would cause
the Policy's Sum Insured to fall below $100,000.
An amount equal to the Account Value withdrawn will be removed from each
Subaccount in the same proportion as the Account Value is then allocated among
the Subaccounts. A withdrawal is not a loan and, once made, cannot be repaid.
A surrender or withdrawal may have significant tax consequences. See "Tax
Considerations".
DEATH BENEFITS
The death benefit proceeds are payable when the 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 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 "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 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.
Definition of Life Insurance. Federal tax law requires a minimum death
benefit in relation to cash value for a Policy to qualify as life insurance.
The death benefit of a Policy will be increased if necessary to ensure that the
Policy will continue to qualify as life insurance. One of two tests under
current Federal tax law can be used to determine if a Policy complies with the
definition of life insurance in Section 7702 of the Code.
The "guideline premium and cash value corridor" test limits the amount of
premiums payable under a Policy to a certain amount for an insured of a
particular age and sex. The test also applies a prescribed "Corridor Factor" to
determine a minimum ratio of death benefit to Account Value. The Corridor
Factor depends upon the attained age of the insured. The Corridor Factor
decreases slightly (or remains the same at older and younger ages) from year to
year as the attained age of the insured increases. A complete list of Corridor
Factors is set forth in the Policy. All Option B Policies will be subject to
the "guideline premium and cash value corridor" test.
The Owner may, at the time an Option A death benefit is applied for, choose
either the "guideline premium and cash value corridor" test discussed above or
may elect for the Policy to be governed by the "cash value accumulation test"
under Section 7702.
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The "cash value accumulation test" also limits the amount of premiums payable
under a Policy to a prescribed amount, using a minimum ratio of death benefit
to a Policy's Account Value, but employs as a standard a "net single premium"
computed in compliance with the Code. If the Account Value under a Policy is at
any time greater than the net single premium at the insured's age and sex for
the proposed death benefit, the death benefit will be increased automatically
by multiplying the Account Value by a "Death Benefit Factor" computed in
compliance with the Code. The Death Benefit Factor depends upon the sex and
then attained age of the insured. The Death Benefit Factor decreases slightly
from year to year as the attained age of the insured increases. A complete list
of Death Benefit Factors is set forth in the Policy. An Option A death benefit
using the cash value accumulation test will offer the best opportunity for the
Owner who is looking for an increasing death benefit in later Policy year
and/or would like to fund the Policy at the "7-pay" limit for the full 7 years.
An Option A death benefit using the guideline premium and cash value corridor
test will offer the best opportunity for the Account Value under a Policy to
increase without increasing the death benefit as quickly as it might under the
other options.
If the Account Value is reduced (e.g. by withdrawals, charges or adverse
investment performance) at a time when a minimum death benefit under Section
7702 is in effect, such minimum death benefit will also be reduced.
Guaranteed Death Benefit. During the first 5 Policy years the Policy is
guaranteed not to lapse, provided that the amount of premiums paid through each
Modal processing date minus any withdrawals is at least equal to the sum of the
cumulative Guaranteed Death Benefit Premiums due to date. At any time when this
feature is not in force, the death benefit of the Policy is not guaranteed and
the Policy may lapse if the Account Value falls to a low level.
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 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 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
$100,000 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").
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 sales charge deducted from premiums and from Account Value and
the amount of compensation paid to the selling insurance agent will be less if
coverage is included as Additional Sum Insured,
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rather than as Basic Sum Insured. The Guaranteed Death Benefit Premium will be
affected by the amount of any Additional Sum Insured elected relative to the
Total Sum Insured.
The amount of any Additional Sum Insured is not included in any Guaranteed
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 Death Benefit feature.
The Additional Sum Insured at issue 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 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. 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 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 term coverage may
be available prior to the time that coverage under the Policy takes effect.
Temporary term coverage 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
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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.
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. If JHVLICO does not employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, it may be
liable for any loss due to unauthorized or fraudulent instructions.
LOAN PROVISIONS AND INDEBTEDNESS
Loan Provisions. Loans may be made at any time a Loan Value is available, the
insured 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 that
portion of the Account Value attributable to the variable Subaccount
investments plus 100% of that portion of the Account Value attributable to
Fixed Account investments. 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 4.5% in the first 20 Policy years, and
4.25% 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". The amount of the loan available will be the Loan Value less
any existing 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
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.
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<PAGE>
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 .5% less than the loan interest rate for the first
20 Policy years and, thereafter, .25% 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.
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 Death Benefit
is in force, at the beginning of each Policy month JHVLICO determines whether
the Surrender Value 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 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 Death Benefit has been in
effect and lapses at the end of a grace period (as described in "Premiums--
Guaranteed 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 Death Benefit.
The insurance under the Policy continues in full force during any grace
period but, if the 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 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 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. A reinstatement of the Basic Sum Insured or the Additional
Sum Insured may be deemed a material change for Federal income tax purposes.
See "Premiums--7-Pay Premium Limit" and "Tax Considerations".
16
<PAGE>
EXCHANGE PRIVILEGE
The Owner may transfer the entire Account Value under the Policy to the Fixed
Account at any time, creating a non-variable policy. The exchange will be
effective at the end of the Valuation Period in which JHVLICO receives at its
Home Office notice of the transfer satisfactory to JHVLICO.
----------------
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 Charges" below), the following
charges are deducted from premiums:
State Premium Tax Charge. A charge currently equal to 2.35% of each premium
payment will be deducted from each premium payment. Premium taxes vary from
state to state, ranging from zero to 4% currently. A charge of 2.35% is made,
regardless of the premium tax imposed by any 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 CHARGES
Charges are 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".
From Premiums. Part of the sales charge is deducted from premiums received.
The amount is 6% of the premiums received in Policy years 1 through 10 that do
not exceed that year's total Target Premium and 3% of the premiums received in
Policy years 11 and later that do not exceed each year's Target Premium. The
Target Premium is established at issue and is the sum of Base Policy Target
Premium and any rider premium. The Base Policy Target Premium is set forth in
the Policy. Target Premiums will vary based on the issue age, sex, and
17
<PAGE>
underwriting class of the insured. JHVLICO currently intends to make this
deduction only in the first 10 Policy years, but this is not contractually
guaranteed and the right is reserved to continue deductions over a longer
period. Because the Policies were first offered for sale in 1996, no Policies
have yet been outstanding for more than 10 years.
No sales charge is deducted from a premium payment received in excess of one
Target Premium in any Policy year.
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 $6,000 if he
paid $10,000 in each of the first ten Policy years, but only $3,000 if he paid
$20,000 (i.e., two times the target premium amount) in every other Policy year
up to the ninth Policy year. However, delaying the payment of target premiums
to later Policy years could increase the risk that the Guaranteed Death
Benefit will lapse and that the Surender Value will be insufficient to pay
monthly Policy charges as they come due. As a result, the Policy or any
Additional Sum Insured may lapse 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".
From Account Value. The remainder of the sales charge is deducted monthly
from Account Value, for the first 5 Policy years, in an amount set forth in
the Policy that varies by age and sex per $1,000 of the Basic Sum Insured at
issue. For example, this monthly amount for a male age 45 is 30c per $1,000 of
Basic Sum Insured.
REDUCED CHARGES FOR ELIGIBLE GROUPS
The sales charges 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. The charge for mortality and
expense risks (described below) otherwise applicable may be reduced with
respect to Policies issued to a trustee, employer or similar entity where
JHVLICO anticipates that, because of the nature of the group on whose behalf
the Policies are purchased, there will be a lower than normal risk of the
mortality and expense charge not being sufficient to cover actual mortality
and expense costs. 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; the aggregate amount of premiums to
be paid by or for the class of associated individuals; and any other such
circumstances which justify a reduction in sales or administrative charges or
mortality and expense risk charges. Any reduction will be reasonable and will
apply uniformly to all prospective Policy purchasers in the class and will not
be unfairly discriminatory to the interests of any Owner.
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<PAGE>
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, at the
rate of $20 per month for the first 12 Policy months, plus, for the first 5
Policy years, an amount set forth in the Policy that varies by age and sex per
$1,000 of the Basic Sum Insured at issue. For example, this additional monthly
amount for a 45 year old male is 3c per $1000 of Basic Sum Insured.
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.
Maintenance charge. JHVLICO will deduct from the Account Value a monthly
charge not to exceed $8 per Policy. The current monthly charge is $6 per
Policy.
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 the insured and the amount at risk. The amount at
risk is the difference between the current death benefit and the Account Value
(after reflecting all charges against 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 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.
Lower current insurance rates are offered at most ages for insureds who
qualify for the standard or select underwriting class and whose applications
are fully underwritten, i.e. subject to evidence of insurability on the part of
the insured, a process which may involve a medical examination. On the other
hand, higher current insurance rates are generally applicable if the Policies
are issued on a guaranteed issue basis, where evidence of insurability is not
required.
Policies issued to trustees, employers and similar entities are often issued
on a guaranteed issue basis. Because only limited underwriting information is
obtained in this alternative underwriting procedure, Policies in this class may
present additional mortality expense to JHVLICO relative to Policies which are
fully underwritten. This additional insurance risk is generally reflected in
higher insurance rates, nevertheless guaranteed not to exceed the 1980
Commissioners' Standard Ordinary Mortality Tables.
A reduction in the insurance charge may be made to a Policy beginning on the
first day of the first month in the tenth Policy year. This reduction is not
guaranteed but it is JHVLICO's present intention to effect this reduction in
the tenth and following Policy years as long as the Policy is in force.
The amount of the reduction will depend upon the length of time the Policy
has been in force. In the tenth Policy year the monthly insurance charge will
be reduced by an amount equal to a percentage of the then Account
19
<PAGE>
Value. This percentage will begin at an annual effective rate of .20% in the
tenth Policy year and increase annually by .01% through and including the
thirtieth Policy year. Thereafter the percentage reduction each year the Policy
remains in force will be at an annual effective rate of .40%.
For example, it is expected that the reduction percentage in Policy year 11
would be at an effective annual rate of .21%, in Policy year 20 would be .30%
and in Policy year 30 would be .40%.
JHVLICO reserves the right to modify or discontinue this reduction. Because
the Policies were first offered for sale in 1996, no reductions have yet been
made.
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 current
charge is at an effective annual rate of .60%. This charge begins when amounts
under a Policy are first allocated to the Account. The mortality risk assumed
is that insureds may live for a shorter period of time than estimated and,
therefore, a greater amount of death benefit than expected will be payable in
relation to the amount of premiums received. The expense risk assumed is that
expenses incurred in issuing and administering the Policies will be greater
than estimated. JHVLICO will realize a gain from this charge to the extent it
is not needed to provide for benefits and expenses under the Policies.
Charges for Extra Mortality Risks. An insured who does not qualify for the
standard or select underwriting class must pay an additional charge because of
the extra mortality risk. The level of the charge depends upon the age of the
insured and the degree of extra mortality risk. This additional charge is
deducted monthly from Account Value.
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 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 Fund at
net asset value, a value which reflects the deduction from the assets of the
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 Prospectus for the
Fund.
The monthly deductions from Account Value described above are deducted on the
date of issue and on the first day of each Policy month thereafter. These
deductions are made from the Subaccounts in proportion to the amount of Account
Value in each. For each month that 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.
20
<PAGE>
GUARANTEE OF CERTAIN CHARGES
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 sales charges, 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 20% of the Target Premium paid in the first Policy year plus an
amount equal to 6% of the first Policy year's Target Premium which will be
payable to the representative in each of Policy years 2 through 4; 6% of the
Target Premium paid in Policy years 2 through 4; and 3% of the Target Premium
paid in each year thereafter. The maximum commission on any premium paid in
any Policy year in excess of the Target Premium is 3%.
Representatives with less than four years of service with 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
21
<PAGE>
John Hancock for such amounts and for certain other direct expenses in
connection with marketing the Policies through other broker-dealers.
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 the Fund.
TAX CONSIDERATIONS
The below description of Federal income tax consequences is only a brief
summary and is not intended as tax advice. For further information consult a
qualified tax advisor. Federal, state and local tax laws can change from time
to time and, as a result, the tax consequences to the Owner and beneficiary may
be altered.
POLICY PROCEEDS
Although the Policy contains provisions not found in fixed benefit life
insurance policies, 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, JHVLICO
believes the death benefit under the Policy will be excludable from the
beneficiary's gross income under Section 101 of the Code. In addition,
increases in Account Value as a result of interest or investment experience
will not be subject to Federal income tax unless and until values are actually
received through withdrawal, surrender or other distributions.
A surrender, lapse or partial withdrawal may have tax consequences. For
example, the Owner will be taxed on a surrender to the extent that the Account
Value exceeds the premiums paid under the Policy, ignoring premiums paid for
riders. But under certain circumstances within the first 15 Policy years, the
Owner may be taxed on a withdrawal of Policy values even if total withdrawals
do not exceed total premiums paid.
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.
Furthermore, any time there is a "material change" in a Policy (such as the
addition of certain other Policy benefits after issue, or reinstatement of a
lapsed Policy), the Policy will be subject to a new "7-pay" test, with the
possibility of a tax on distributions if it were subsequently to become a
modified endowment. Moreover, if
22
<PAGE>
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.
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.
CORPORATE AND H.R. 10 PLANS
The Policy may be acquired in connection with the funding of retirement plans
satisfying the qualification requirements of Section 401 of the Code. If so,
the Code provisions relating to such plans and life insurance benefits
thereunder should be carefully scrutinized.
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
Hancock Mutual Life Insurance Company.
Thomas J. Lee Director of JHVLICO; Vice President, John
Hancock Mutual Life Insurance Company.
Michele G. Van Leer Director of JHVLICO; Second Vice President,
John Hancock Mutual Life Insurance Company.
Francis C. Cleary, Jr. Director and Counsel, JHVLICO; Vice
President and Counsel, John Hancock Mutual
Life Insurance Company.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Directors--Officers Principal Occupations
------------------- ---------------------
<S> <C>
Joseph A. Tomlinson Director and Vice President, JHVLICO; Vice
President, John Hancock Mutual Life
Insurance Company.
Robert R. Reitano Director of JHVLICO; Second Vice President,
John Hancock Mutual Life Insurance Company.
Robert S. Paster Director of JHVLICO; Second Vice President,
John Hancock Mutual Life Insurance Company.
Barbara L. Luddy Director and Actuary, JHVLICO; Second Vice
President, John Hancock Mutual Life
Insurance Company.
Daniel L. Ouellette Vice President, Marketing, JHVLICO; Vice
President, John Hancock Mutual Life
Insurance Company.
Patrick F. Smith Controller of JHVLICO; Assistant
Controller, John Hancock Mutual Life
Insurance Company.
</TABLE>
The business address of all Directors and officers of JHVLICO is John Hancock
Place, Boston, Massachusetts 02117.
REPORTS
At least once each Policy year a statement will be sent to the Owner setting
forth the amount of the death benefit, Basic Sum Insured, Additional Sum
Insured, Account Value, the portion of the Account Value in each Subaccount,
Surrender Value, premiums received and charges deducted from premiums since the
last report, and any outstanding Policy loan (and interest charged for the
preceding Policy year) as of the last day of such year. Moreover, confirmations
will be furnished to Owners of premium payments, transfers among Subaccounts,
Policy loans, partial withdrawals and certain other Policy transactions.
Owners will be sent semiannually a report containing the financial statements
of the Fund, including a list of securities held in each Portfolio.
VOTING PRIVILEGES
All of the assets in the variable Subaccounts of the Account are invested in
shares of the corresponding Portfolios of the Fund. JHVLICO will vote the
shares of each of the Portfolios of the Fund which are deemed attributable to
policies at regular and special meetings of the Fund's shareholders in
accordance with instructions received from owners of such policies. Shares of
the Fund held in the Account which are not attributable to 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
24
<PAGE>
invested. Fractional votes will be counted. The number of shares as to which
the Owner may give instructions will be determined as of the record date for
the Fund's meeting.
Owners of Policies may give instructions regarding the election of the Board
of Trustees of the Fund, ratification of the selection of independent auditors,
approval of Fund investment advisory agreements and other matters requiring a
vote under the 1940 Act. Owners will be furnished information and forms by
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 of the Fund
or to approve or disapprove an investment advisory or underwriting contract for
the Fund. JHVLICO also may disregard voting instructions in favor of changes
initiated by an Owner or the 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.
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.
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.
25
<PAGE>
REGISTRATION STATEMENT
This Prospectus omits certain information contained in the Registration
Statement which has been filed with the Commission. More details may be
obtained from the Securities and Exchange Commission upon payment of the
prescribed fee.
EXPERTS
The financial statements of 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.
Actuarial matters included in this Prospectus have been examined by Randi M.
Sterrn, F.S.A., an Actuary of JHVLICO.
FINANCIAL STATEMENTS
[To be filed by amendment]
26
<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.
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 an
Accidental Death Benefit, which are subject to the restrictions and
limitations set forth therein, may be included in a Policy by rider.
GENERAL PROVISIONS
BENEFICIARY. The Beneficiary will be as shown in the application for the
Policy, unless thereafter changed by the Owner in accordance with the terms of
the Policy. If the insured dies and there is no surviving Beneficiary, the
Owner will be the Beneficiary, but if the insured was the Owner, the Owner's
estate will be the Beneficiary.
OWNER AND ASSIGNMENT. The Owner's interest in the Policy may be assigned
without the consent of any revocable Beneficiary. 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.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the insured has been
misstated, JHVLICO will adjust the benefits payable to reflect the correct age
or sex.
A-1
<PAGE>
SUICIDE. If the insured commits suicide within 2 years (except where state
law requires a shorter period) from the date of issue shown in the Policy,
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 the
suicide is within 2 years (except where state law requires a shorter period)
from the date of any Policy change that increases the death benefit, the death
benefit will be limited as set forth in the Policy.
AGE AND POLICY ANNIVERSARIES. For purpose of the Policy, an insured's "age"
is his or her age on his or her nearest birthday. Policy months and Policy
years are calculated from the date of issue.
AVIATION ACTIVITY EXCLUSION. If the insured dies in an aviation accident
while a crew member on other than a commercial aircraft and the Policy
provides at the request of the Owner for a limited benefit in such situation,
JHVLICO will pay in place of all other benefits an amount equal to the greater
of the premium paid or the Surrender Value, less any Indebtedness.
INCONTESTABILITY. The Policy shall be incontestable other than for
nonpayment of premiums after it has been in force during the lifetime of 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 an identified issue age, 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 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. Tables are provided for Options A and B. The
death benefit and Surrender Value for a Policy would be different 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 insured.
The amounts shown for the death benefit and Surrender Value are as of the
end of each Policy year. The first three tables headed "Using Current Charges"
assume that the current rates for insurance, sales, risk, and expense charges
will apply in each year illustrated, including the planned reductions after
the first 10 Policy years in cost of insurance charges and sales charges
deducted from premiums. The three tables headed "Using Maximum Charges" assume
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 .44%) and an
assumed average asset charge for the annual nonadvisory operating expenses of
each Portfolio of the Fund (equivalent to an effective annual rate of .12%).
For a description of expenses charged to the Portfolios, including the
reimbursement of any Portfolio for annual non-advisory operating expenses in
excess of an effective annual rate of .25%, a continuing obligation of the
Fund's investment adviser, see the attached Prospectus for the Fund. The
charges for the daily investment management fee and the annual non-advisory
operating expenses are based on the hypothetical assumption that Policy values
are allocated equally among the nine variable Subaccounts. The actual
Portfolio charges and expenses associated with any Policy will vary depending
upon the actual allocation of Policy values among Subaccounts.
The tables reflect that no charge is currently made to the 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 and a premium tax
charge.
The tables assume that no Additional Sum Insured or optional rider benefits
have been elected, that the application for the Policy has been fully
underwritten and that the insured has qualified for JHVLICO's select
underwriting class.
The second column of each table shows the amount to which the total premiums
paid to the end of a Policy year 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 insured's age, sex, underwriting risk classification and the Sum
Insured at issue and Planned Premium amount requested, and assuming annual
Planned Premiums.
A-3
<PAGE>
PLAN: FLEXIBLE PREMIUM VARIABLE LIFE
$100,000 SUM INSURED
MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT UNDERWRITING CLASS
OPTION A DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $5,267*
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
-------------------------------------------------------------------------------------------
Planned Premiums Assuming hypothetical gross annual return of Assuming hypothetical 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 $ 5,530 $ 100,000 $100,000 $100,000 $ 4,409 $ 4,663 $ 4,917
2 11,337 100,000 100,000 100,000 8,286 9,042 9,829
3 17,434 100,000 100,000 100,000 12,106 13,622 15,263
4 23,836 100,000 100,000 100,000 15,557 18,108 20,980
5 30,559 100,000 100,000 100,000 19,443 23,321 27,863
6 37,617 100,000 100,000 100,000 23,295 28,808 35,526
7 45,028 100,000 100,000 111,765 27,124 34,594 44,040
8 47,280 100,000 100,000 118,970 26,340 35,833 48,364
9 49,644 100,000 100,000 126,746 25,543 37,129 53,141
10 52,126 100,000 100,000 135,134 24,727 38,479 58,414
11 54,732 100,000 100,000 144,703 24,106 40,108 64,462
12 57,469 100,000 100,000 154,952 23,434 41,788 71,108
13 60,342 100,000 100,000 165,998 22,735 43,544 78,442
14 63,359 100,000 100,000 177,946 22,021 45,391 86,550
15 66,527 100,000 100,000 190,843 21,280 47,326 95,502
16 69,853 100,000 100,000 204,723 20,486 49,339 105,359
17 73,346 100,000 100,000 219,654 19,628 51,432 116,201
18 77,013 100,000 100,000 235,720 18,698 53,608 128,122
19 80,864 100,000 100,105 253,026 17,691 55,874 141,229
20 84,907 100,000 101,657 271,690 16,595 58,233 155,634
25 108,366 100,000 110,325 389,405 9,204 71,283 251,603
30 138,305 ** 120,485 561,496 ** 86,413 402,708
35 176,516 ** 133,207 819,420 ** 103,946 639,423
</TABLE>
- --------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies,
if policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-4
<PAGE>
PLAN: FLEXIBLE PREMIUM VARIABLE LIFE
$100,000 SUM INSURED
MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT UNDERWRITING CLASS
OPTION A DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $5,267*
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------------------------------------------------------------------
Planned Premiums Assuming hypothetical gross annual return of Assuming hypothetical 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 $ 5,530 $ 100,000 $ 100,000 $ 100,000 $ 4,246 $ 4,494 $ 4,744
2 11,337 100,000 100,000 100,000 7,969 8,704 9,469
3 17,434 100,000 100,000 100,000 11,645 13,113 14,704
4 23,836 100,000 100,000 100,000 14,948 17,414 20,192
5 30,559 100,000 100,000 100,000 18,678 22,420 26,805
6 37,617 100,000 100,000 100,000 22,360 27,672 34,149
7 45,028 100,000 100,000 107,327 25,992 33,183 42,291
8 47,280 100,000 100,000 113,576 24,987 34,105 46,171
9 49,644 100,000 100,000 120,257 23,943 35,041 50,420
10 52,126 100,000 100,000 127,397 22,851 35,986 55,069
11 54,732 100,000 100,000 135,512 21,910 37,147 60,367
12 57,469 100,000 100,000 144,163 20,906 38,324 66,157
13 60,342 100,000 100,000 153,391 19,834 39,516 72,484
14 63,359 100,000 100,000 163,237 18,687 40,721 79,395
15 66,527 100,000 100,000 173,728 17,452 41,935 86,938
16 69,853 100,000 100,000 184,912 16,117 43,155 95,163
17 73,346 100,000 100,000 196,831 14,666 44,376 104,127
18 77,013 100,000 100,000 209,523 13,080 45,591 113,884
19 80,864 100,000 100,000 223,038 11,334 46,791 124,491
20 84,907 100,000 100,000 237,430 9,400 47,967 136,008
25 108,366 ** 100,000 324,848 ** 53,230 209,891
30 138,305 ** 100,000 444,401 ** 56,083 318,727
35 176,516 ** 100,000 608,179 ** 51,968 474,584
</TABLE>
- --------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies,
if policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-5
<PAGE>
PLAN: FLEXIBLE PREMIUM VARIABLE LIFE
$100,000 SUM INSURED
MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT UNDERWRITING CLASS
OPTION B DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $5,267*
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------------------------------------------------------------------
Planned Premiums Assuming hypothetical gross annual return of Assuming hypothetical 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 $ 5,530 $ 103,925 $ 104,178 $ 104,432 $ 4,399 $ 4,652 $ 4,906
2 11,337 107,780 108,532 109,315 8,254 9,006 9,789
3 17,434 111,561 113,066 114,696 12,035 13,540 15,170
4 23,836 115,430 117,956 120,800 15,430 17,956 20,800
5 30,559 119,240 123,070 127,555 19,240 23,070 27,555
6 37,617 122,997 128,424 135,036 22,997 28,424 35,036
7 45,028 126,712 134,042 143,336 26,712 34,042 43,336
8 47,280 125,813 135,093 147,428 25,813 35,093 47,428
9 49,644 124,901 136,177 151,955 24,901 36,177 51,955
10 52,126 123,967 137,288 156,955 23,967 37,288 56,955
11 54,732 123,228 138,650 162,713 23,228 38,650 62,713
12 57,469 122,427 140,013 169,041 22,427 40,013 69,041
13 60,342 121,595 141,409 176,036 21,595 41,409 76,036
14 63,359 120,748 142,856 183,787 20,748 42,856 83,787
15 66,527 119,872 144,341 192,366 19,872 44,341 92,366
16 69,853 118,935 145,834 201,829 18,935 45,834 101,829
17 73,346 117,926 147,322 212,262 17,926 47,322 112,262
18 77,013 116,837 148,797 227,694 16,837 48,797 123,760
19 80,864 115,662 150,252 244,402 15,662 50,252 136,416
20 84,907 114,394 151,677 262,427 14,394 51,677 150,328
25 108,366 106,126 157,691 376,111 6,126 57,691 243,013
30 138,305 ** 159,545 542,310 ** 59,545 388,948
35 176,516 ** 153,256 791,406 ** 53,256 617,563
</TABLE>
- --------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies,
if policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-6
<PAGE>
PLAN: FLEXIBLE PREMIUM VARIABLE LIFE
$100,000 SUM INSURED
MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT UNDERWRITING CLASS
OPTION B DEATH BENEFIT
GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST
PLANNED PREMIUM: $5,267*
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------------------------------------------------------------------
Planned Premiums Assuming hypothetical gross annual return of Assuming hypothetical 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 $ 5,530 $103,758 $104,006 $104,254 $ 4,232 $ 4,480 $ 4,728
2 11,337 107,453 108,184 108,944 7,927 8,658 9,418
3 17,434 111,084 112,540 114,117 11,558 13,014 14,591
4 23,836 114,799 117,236 119,980 14,799 17,236 19,980
5 30,559 118,443 122,129 126,447 18,443 22,129 26,447
6 37,617 122,016 127,229 133,582 22,016 27,229 33,582
7 45,028 125,510 132,538 141,449 25,510 32,538 41,449
8 47,280 124,361 133,226 145,016 24,361 33,226 45,016
9 49,644 123,166 133,890 148,913 23,166 33,890 48,913
10 52,126 121,917 134,519 153,164 21,917 34,519 53,164
11 54,732 120,809 135,313 158,019 20,809 35,313 58,019
12 57,469 119,632 136,064 163,319 19,632 36,064 63,319
13 60,342 118,379 136,763 169,106 18,379 36,763 69,106
14 63,359 117,046 137,401 175,426 17,046 37,401 75,426
15 66,527 115,620 137,962 182,325 15,620 37,962 82,325
16 69,853 114,090 138,430 189,854 14,090 38,430 89,854
17 73,346 112,445 138,787 198,066 12,445 38,787 98,066
18 77,013 110,666 139,008 207,018 10,666 39,008 107,018
19 80,864 108,735 139,064 216,766 8,735 39,064 116,766
20 84,907 106,629 138,925 227,375 6,629 38,925 127,375
25 108,366 ** 134,195 303,432 ** 34,195 196,054
30 138,305 ** 118,203 415,036 ** 18,203 297,666
35 176,516 ** ** 567,929 ** ** 443,175
</TABLE>
- --------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies,
if policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-7
<PAGE>
PLAN: FLEXIBLE PREMIUM VARIABLE LIFE
$100,000 SUM INSURED MALE, ISSUE AGE
45, FULLY UNDERWRITTEN SELECT UNDERWRITING CLASS
OPTION A DEATH BENEFIT
CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $5,267*
USING CURRENT CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------------------------------------------------------------------
Planned Premiums Assuming hypothetical gross annual return of Assuming hypothetical 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 $ 5,530 $ 100,000 $ 100,000 $1 00,000 $ 4,409 $ 4,663 $ 4,917
2 11,337 100,000 100,000 100,000 8,286 9,042 9,829
3 17,434 100,000 100,000 100,000 12,106 13,622 15,263
4 23,836 101,233 117,536 135,882 15,544 18,047 20,864
5 30,559 135,877 162,211 192,999 19,279 23,015 27,383
6 37,617 152,868 187,719 230,054 22,901 28,121 34,463
7 45,028 167,131 211,156 266,729 26,430 33,392 42,181
8 47,280 152,222 204,325 273,187 25,404 34,100 45,592
9 49,644 138,692 197,899 280,141 24,418 34,841 49,321
10 52,126 126,373 191,797 287,528 23,462 35,608 53,380
11 54,732 116,269 187,206 296,686 22,750 36,631 58,053
12 57,469 106,876 182,581 305,907 22,030 37,635 63,057
13 60,342 100,000 178,183 315,623 21,331 38,671 68,500
14 63,359 100,000 174,103 326,055 20,618 39,765 74,471
15 66,527 100,000 170,242 337,087 19,878 40,900 80,984
16 69,853 100,000 166,450 348,465 19,084 42,042 88,016
17 73,346 100,000 162,709 360,158 18,225 43,183 95,586
18 77,013 100,000 159,022 372,178 17,294 44,320 103,729
19 80,864 100,000 155,401 384,562 16,283 45,455 112,485
20 84,907 100,000 151,869 397,376 15,183 46,586 121,894
25 108,366 100,000 135,072 467,135 7,737 51,959 179,695
30 138,305 ** 119,369 545,688 ** 56,538 258,461
35 176,516 ** 106,089 641,065 ** 60,594 366,155
</TABLE>
- --------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies,
if policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-8
<PAGE>
PLAN: FLEXIBLE PREMIUM VARIABLE LIFE
$100,000 SUM INSURED
MALE, ISSUE AGE 45, FULLY UNDERWRITTEN SELECT UNDERWRITING CLASS
OPTION A DEATH BENEFIT
CASH VALUE ACCUMULATION TEST
PLANNED PREMIUM: $5,267*
USING MAXIMUM CHARGES
<TABLE>
<CAPTION>
Death Benefit Surrender Value
------------------------------------------------------------------------------------------
Planned Premiums Assuming hypothetical gross annual return of Assuming hypothetical 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 $ 5,530 $ 100,000 $ 100,000 $ 100,000 $ 4,246 $ 4,494 $ 4,744
2 11,337 100,000 100,000 100,000 7,969 8,704 9,469
3 17,434 100,000 100,000 100,000 11,645 13,113 14,704
4 23,836 100,000 113,061 130,746 14,945 17,360 20,075
5 30,559 130,522 155,798 185,332 18,519 22,105 26,296
6 37,617 146,546 179,840 220,252 21,954 26,941 32,995
7 45,028 159,642 201,457 254,186 25,246 31,859 40,197
8 47,280 143,599 192,666 257,447 23,965 32,154 42,965
9 49,644 129,014 184,186 260,757 22,714 32,427 45,908
10 52,126 115,749 175,985 264,069 21,489 32,672 49,025
11 54,732 104,723 169,122 268,479 20,491 33,092 52,534
12 57,469 100,000 162,434 272,837 19,489 33,483 56,240
13 60,342 100,000 155,941 277,172 18,417 33,844 60,155
14 63,359 100,000 149,640 281,476 17,269 34,178 64,289
15 66,527 100,000 143,511 285,708 16,031 34,478 68,640
16 69,853 100,000 137,545 289,844 14,692 34,742 73,210
17 73,346 100,000 131,748 293,885 13,235 34,966 77,997
18 77,013 100,000 126,099 297,780 11,640 35,145 82,993
19 80,864 100,000 120,586 301,483 9,883 35,271 88,184
20 84,907 100,000 115,211 304,981 7,935 35,341 93,553
25 108,366 ** 100,000 319,573 ** 34,405 122,931
30 138,305 ** 100,000 327,710 ** 26,124 155,217
35 176,516 ** ** 328,827 ** ** 187,815
</TABLE>
- --------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each Policy Year. The Death Benefit and Surrender
Value will differ if premiums are paid in different amounts or frequencies,
if policy loans are taken, or if Additional Sum Insured, or optional rider
benefits are elected.
** Policy lapses unless additional premium payments are made.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY
THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN
AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR
BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE
THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-9
<PAGE>
APPENDIX--HISTORICAL INVESTMENT EXPERIENCE
JOHN HANCOCK VARIABLE SERIES TRUST I RATES OF RETURN
The rates of return shown below are based on actual performance of the Trust's
portfolios, after deductions for investment management fees, direct operating
expenses of the Trust and the current mortality and expense risk charge for
the indicated periods.
POLICY VALUES DEPEND NOT ONLY ON THE INVESTMENT PERFORMANCE OF THE TRUST, BUT
ALSO ON THE ADMINISTRATIVE, COST OF INSURANCE, TAX AND SALES CHARGES
APPLICABLE UNDER A POLICY AS NOTED IN THE "CHARGES AND EXPENSES" SECTION OF
THIS PROSPECTUS.
AVERAGE ANNUALIZED RATES OF RETURN
(PERIODS ENDING SEPTEMBER 31, 1995)
<TABLE>
<CAPTION>
Year to Since Inception
Portfolio Date One Year Five Year Ten Year Inception Date
- --------- ------- -------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Stock................... 26.58% 26.20% 15.20% 15.08% 14.39% 9/80
Bond.................... 13.81 14.18 9.34 9.23 10.43 9/80
Money Market............ 3.83 3.83 3.97 5.62 6.69 5/81
Select Stock............ 24.73 23.93 15.38 N/A 12.76 3/86
Managed................. 20.38 20.14 12.31 N/A 10.62 3/86
Real Estate Equity...... 7.58 7.96 14.52 N/A 7.16 5/88
International*.......... 6.77 0.68 9.85 N/A 7.54 5/88
Short Term US Govt...... 8.14 7.52 N/A N/A 5.61 5/94
Special Opportunities... 24.52 23.58 N/A N/A 17.01 5/94
</TABLE>
- --------
* Historical performance prior to 5/1/94 based on the predecessor Global
Portfolio which had a different investment objective.
These rates of return are not illustrative of how actual investment
performance will affect the benefits of a Policy. Moreover, these rates of
return are not an estimate or guarantee of future performance. Policy values
and actual investment return of the subaccounts will fluctuate in response to
market conditions and the subaccounts chosen.
A-10
<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 36 pages.
The undertaking regarding indemnification.
The undertaking to file reports.
The signatures.
The following exhibits:
<PAGE>
I.A. (1) JHVLICO Board Resolution establishing the separate account.
(2) Not Applicable.
(3) (a) Distribution Agreement and Amendment.
(b) Specimen Variable Contracts Selling Agreement between John
Hancock Mutual Life Insurance Company and selling broker-
dealers.
(c) Schedule of sales commissions included in the text under the
heading "Distribution of Policies" in the prospectus.
(4) Not Applicable
(5) Form of flexible premium variable life insurance policy (to be filed
by amendment).
(6) (a) JHVLICO Certificate of Incorporation.
(b) JHVLICO By-laws.
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Form of application for Policy (to be filed by amendment).
.
<PAGE>
Page *
------
2. Included as exhibit 1.A(5) above.
3. Opinion and consent of counsel as to securities being registered (to be
filed by amendment).
4. Not Applicable
5. Not Applicable
6. Opinion and consent of actuary (to be filed by amendment).
7. Consent of independent auditors (to be filed by amendment).
8. Memorandum describing JHVLICO's issuance, transfer and redemption procedures
for the flexible policy pursuant to Rule 6e-3(T)(b)(12)(iii).
9. Powers of attorney for Cleary, Tomlinson, D'Alessandro, Shaw, Luddy, Lee,
Reitano, Van Leer and Paster.
10. Representations, Description and Undertaking pursuant to Rule 6e-
3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940.
11. Exemptive Relief Relied Upon.
________________________________________________________________________________
*Page numbers inserted in manually-signed copies only
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the John
Hancock Variable Life Insurance Company has duly caused this 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 7th day of December, 1995.
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
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
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 , 1995
/s/HENRY D. SHAW Vice Chairman of the Board
- -------------------------
Henry D. Shaw and President(Acting Principal
Executive Officer) December 7, 1995
/s/ROBERT S. PASTER
- -------------------------
Robert S. Paster Director(Acting Principal
Accounting Officer) December 7, 1995
Director
- -------------------------
Robert R. Reitano , 1995
/s/FRANCIS C. CLEARY, JR.
- -------------------------
Francis C. Cleary, Jr Director December 7, 1995
/s/THOMAS J. LEE
- -------------------------
Thomas J. Lee Director December 7, 1995
/s/MICHELE VAN LEER
- -------------------------
Michele Van Leer Director December 7, 1995
- -------------------------
Joseph A. Tomlinson Director , 1995
/s/BARBARA L. LUDDY
- -------------------------
Barbara L. Luddy Director December 7, 1995
/s/PATRICK F. SMITH Controller (Principal
- -------------------------
Patrick F. Smith Accounting Officer) December 7, 1995
</TABLE>
<PAGE>
-3-
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, John Hancock Variable Life Account S, has duly caused this
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 7th day of December, 1995.
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
<PAGE>
EXHIBIT 1. A.(1)
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
Boston, Massachusetts
VOTE OF BOARD OF DIRECTORS
Meeting of May 27, 1993
VOTED, with respect to separate investment accounts:
(a) To establish one or more separate investment accounts (the
"Account"), pursuant to Section 132 G of Chapter 175 of the Massachusetts
General Laws, as amended, for the funds attributable to individual life policies
on a variable basis to be issued by the Company. The Officers of the Company
may determine the designation of each Account and may from time to time change
its designation as they deem necessary and appropriate.
(b) To allocate to the Account amounts to provide for life insurance
(including benefits incidental thereto) payable in fixed or variable amounts or
both and the income, gains and losses, realized or unrealized, attributable to
the Account shall be credited to or charged against the Account without regard
to the other income, gains or losses of the Company.
(c) To authorize the registration of the Account as an investment
company under the Investment Company Act of 1940 and the registration of the
variable life insurance policies issued in connection with the Account as
securities under the Securities Act of 1933, and to authorize and empower the
Chairman of the Board, the Vice Chairman, the President, or the Secretary of the
Company ("Officers of the Company") to take all action necessary to comply with
the Acts, including but not limited to the execution and filing of registration
statements and amendments thereto, applications for exemptions from the
provisions of the Act as may be necessary or desirable and amendments thereto,
and agreements for the administration of the Account and for the distribution of
variable life insurance policies carrying an interest in the Account assets and
any other actions necessary under all other applicable federal and state laws
and regulations.
(d) To authorize the Officers of the Company to take all actions
necessary to register the Account as a unit investment trust under the
Investment Company Act of 1940, and to take such related actions as they deem
necessary and appropriate to carry out the foregoing, including, without
limitation, the following: determining that the fundamental investment policy
of the Account shall be to invest or reinvest the assets in securities issued by
such investment companies registered under
<PAGE>
-2-
the Investment Company Act of 1940 as the Officers may designate pursuant to the
provisions of the variable life insurance policies issued by the Company;
establishing one or more subaccounts within the Account to which net premiums
under the variable life insurance policies will be allocated in accordance with
instructions received from contractowners, reserving to the officers the
authority to increase or decrease the number of subaccounts in the Account as
they deem necessary or appropriate; and investing each subaccount only in the
shares of a single mutual fund or a single portfolio of an investment company
organized as a series fund pursuant to the Investment Company Act of 1940.
(e) To authorize the Officers of the Company to deposit such amount
in the Account or in each subaccount thereof as may be necessary or appropriate
to facilitate the Account's operations; to transfer funds from time to time
between the Company's general account and the Account as deemed appropriate and
consistent with the terms of the variable life insurance policies and applicable
laws; and to establish criteria by which the Company shall institute procedures
to provide for a pass-through of voting rights to the owners of variable life
insurance policies issued by the Company, as required by applicable laws, with
respect to the shares of any investment companies which are held in the Account.
(f) To appoint Francis C. Cleary, Jr., Counsel, as agent for service
of process or the like for the Company to receive notices and communications
from the Securities and Exchange Commission with respect to such Registration
Statements or exemptive applications and amendments thereto as may be filed on
behalf of the Company concerning the Account or the variable life insurance
policies, and to exercise the powers given to such agent in the rules and
regulations of the Securities and Exchange Commission under the Securities Act
of 1933, the Investment Company Act of 1940, or the Securities Exchange Act of
1934.
(g) To authorize the Officers of the Company to do or cause to be
done all things necessary or desirable, as may be advised by counsel, to comply
with, or obtain exemptions from, federal, state or local statutes or regulations
that may be applicable to the issuance and sale of variable life insurance
products by the Company.
(h) To authorize the Company to act as the depositor for the Account
and provide all administrative services in connection with the establishment and
maintenance of the Account and in connection with the issuance and sale of
variable life insurance policies, all on such terms and subject to such
modifications as the Officers deem necessary or appropriate to effectuate the
foregoing.
<PAGE>
-3-
(i) To authorize the Officers of the Company to contract with a
suitable investment company under the Investment Company Act of 1940, the shares
of which shall be purchased by the Company in order to serve as an investment
vehicle for the Account and, further, that the Officers are authorized to do all
things as they deem necessary and appropriate to carry out the foregoing.
(j) To empower the Executive Committee to authorize the execution and
delivery of such instruments and such other action as it may deem necessary or
desirable in order to carry out the purpose and intent of this vote and to
comply with applicable federal or state laws and regulations.
<PAGE>
Exhibit 1.A..(3) (a)
DISTRIBUTION AGREEMENT
AGREEMENT, made as of the 26th day of August, 1993, by and between
John Hancock Mutual Life Insurance Company ("John Hancock") and, on its own
behalf and on behalf of its several existing and future separate accounts
registered under the Investment Company Act of 1940 (the "Investment Company
Act"), including without limitation John Hancock Variable Life Accounts U, V and
S, John Hancock Variable Life Insurance Company ("JHVLICO").
WHEREAS, John Hancock is the principal underwriter of John Hancock
Variable Series Trust I ("the Fund"), a series mutual fund whose shareholders
are separate accounts of insurance companies, including JHVLICO, pursuant to an
Underwriting and Administrative Services Agreement dated as of January 15, 1986
("Underwriting Agreement");
WHEREAS, insurance companies issue variable life insurance and annuity
products under which net premiums or considerations are allocated to such
separate accounts for investment in the Fund;
WHEREAS, the Fund is registered as an open-end investment company
under the Investment Company Act;
WHEREAS, John Hancock is registered as a broker-dealer under the
Securities Exchange Act of 1934 ("1934 Act") and is a member of the National
Association of Securities Dealers, Inc.;
WHEREAS, JHVLICO will issue variable life insurance policies
("Policies") whose net premiums are or will be allocated to JHVLICO's registered
separate accounts; and
WHEREAS, John Hancock and JHVLICO wish to enter into this Agreement
defining the conditions under which John Hancock will distribute the Contracts;
NOW THEREFORE, John Hancock and JHVLICO hereby agree as follows:
1. John Hancock shall offer for sale and sell Policies on behalf of
JHVLICO in each state and other jurisdictions in which such policies may be
lawfully sold. Such offering or sale shall be on such terms and conditions and
shall provide for such lawful compensation to John Hancock as John Hancock and
JHVLICO shall determine, provided that such terms, conditions and compensation
shall be as set forth in or not inconsistent with a prospectus meeting the
requirements of Section 10(a) of the Securities Act of 1933, as amended, and
containing the required information for or forming a part of a registration
statement effective under said Act.
Applications for Policies shall be solicited by insurance agents of
JHVLICO who are duly and appropriately licensed for the sale of such Policies in
each such state or other jurisdiction. John Hancock shall have responsibility
for arranging for such licensing. John Hancock shall review completed
applications for Policies in terms of suitability (except to the extent that
responsibility for suitability determinations is assumed by other broker-dealers
pursuant to the selling agreements referred to in paragraph 10 below) and
insurance underwriting and shall determine whether to accept or reject any
application in accordance with underwriting rules established by JHVLICO. John
Hancock will determine an insured's risk classification pursuant to its own
underwriting rules. Initial and subsequent premium payments under Policies shall
be made by check payable to JHVLICO. JHVLICO will refund any premiums paid if a
Policy is not issued or is surrendered under the short-term cancellation
provision.
<PAGE>
2. John Hancock shall pay its registered representatives acting as
JHVLICO's agents commissions and service fees in accordance with its then
applicable compensation rules and procedures. The maximum commission payable to
an agent for selling a policy shall be as set forth in Exhibit A appended
hereto. JHVLICO will reimburse John Hancock for commissions, any service fees
and for other direct and indirect expenses (including agency expense allowances,
general agent, district manager and supervisor compensation, agent 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
Policies.
3. The books, accounts and records of John Hancock and JHVLICO as to
all transactions hereunder shall be maintained so as to disclose clearly and
accurately the nature and details of the transactions, including particularly
such accounting information as is necessary to support the reasonableness of the
amounts to be paid by JHVLICO hereunder and to ensure compliance with applicable
regulatory and reporting requirements. To the extent that either of John Hancock
or JHVLICO maintains on behalf of the other any records required to be
maintained by the other pursuant to 1940 Act Rules 30a- or 30a-2 under the
Investment Company Act or pursuant to 1934 Act Rules 17a-3 and 17a-4, such
records are the property of the party so required to maintain them and will be
surrendered promptly to that party upon its request.
4. This Agreement shall terminate automatically if it shall be
assigned or if the Underwriting Agreement is terminated. This Agreement may be
terminated at any time on 60 days' written notice to the other party hereto,
without the payment of any penalty, by John Hancock or JHVLICO.
5. John Hancock will pay the expenses of preparing and printing
registration statements, prospectuses and sales literature, all fees and
expenses in connection with John Hancock's qualification as a broker-dealer and
all other expenses relating to the offering, sale or delivery of Policies.
JHVLICO will reimburse John Hancock for registration fees under the Securities
Act of 1933, the costs associated with the preparation and printing of
registration statements, prospectuses and sales literature and for like expenses
actually incurred in connection with the offering, sale and delivery of
Policies.
6. In offering, selling and delivering Policies, John Hancock will
duly conform in all respects with the laws of the United States and of each
state in which Policies may be offered for sale by it pursuant to this
Agreement. Applications will be solicited by registered representatives of John
Hancock or any other broker-dealer who have been duly licensed. In connection
with the offering, sale or delivery of Policies, John Hancock will not give any
information or make any representation other than information and
representations contained in or not inconsistent with a prospectus meeting the
requirement of Section 10(a) of the Securities Act of 1933 and containing the
required information for or forming a part of a registration statement which is
effective under said Act.
7. John Hancock agrees that, in the absence of a fixed account or if
no suitable fixed-dollar policy is available from JHVLICO, it will issue a
policy of fixed benefit insurance without evidence of insurability in exchange
for any Policy whenever the Owner of a Policy elects to exchange the Policy in
accordance with its provisions.
8. JHVLICO undertakes to guarantee the performance of all of John
Hancock's obligations, imposed by Section 27(f) of the Investment Company Act of
1940, as amended, and Rules 6e-2(b)(l4)(vi), 6e-3(T)(b)(l3)(vi) and 27d-2(b)
adopted by the Securities and Exchange Commission, to make refunds of charges
required of the principal underwriter of Policies issued in connection with the
registered separate account.
<PAGE>
9. No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
10. John Hancock and JHVLICO may agree with one or more broker-dealers
registered under the Securities Exchange Act of 1934 for the sale of the
Policies funded by the registered separate account. Any broker-dealer offering,
selling or delivering Policies will agree with John Hancock and JHVLICO to
conform duly in all respects with the laws of the United States and of each
state in which Contracts may be offered for sale by it. No agent or
representative of any such broker-dealer shall solicit applications for Policies
until duly licensed and appointed by JHVLICO as a life insurance agent of
JHVLICO in the appropriate jurisdiction. John Hancock will compensate other
broker-dealers as provided in the selling agreements with such other broker-
dealers, and JHVLICO will reimburse John Hancock for such amounts.
11. This Agreement shall be subject to the applicable provisions of
the Federal securities laws and the rules, regulations, and rulings thereunder,
including such exemptions as the Securities and Exchange Commission may grant,
and the terms hereof shall be interpreted and construed in accordance therewith.
12. John Hancock shall, in connection with its obligations hereunder,
comply with all laws and regulations, whether Federal or state, and whether
relating to insurance or securities, including but not limited to the
recordkeeping and sales supervision requirements of such laws and regulations
and rules of the National Association of Securities Dealers, Inc.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year above written.
Date: August 26, l993
John Hancock Mutual Life Insurance Company
By:/s/WILLIAM L. BOYAN
-------------------
William L. Boyan
President
Date: August 26, 1993
John Hancock Variable Life Insurance Company
By:/s/ HENRY D. SHAW/
-----------------
Henry D., Shaw
President
<PAGE>
AMENDMENT TO DISTRIBUTION AGREEMENT
BY AND BETWEEN
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
AND
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
AGREEMENT made this 1st day of August, 1994, by and between John Hancock
Mutual Life Insurance Company ("John Hancock") and John Hancock Variable Life
Insurance Company ("JHVLICO"), on its own behalf and on behalf of its several
existing and future separate accounts registered under the Investment Company
Act of 1940 (the "Investment Company Act"), including without limitation John
Hancock Variable Life Accounts U, V and S and John Hancock Variable Annuity
Account I.
WHEREAS, John Hancock and JHVLICO are parties to a distribution agreement
dated August 26, 1993 (the "Distribution Agreement") governing the terms and
conditions under which John Hancock has undertaken to offer for sale and sell on
behalf of JHVLICO, in each state and other jurisdiction where lawfully
permitted, certain variable life insurance policies, issued by JHVLICO, whose
net premiums are or will be allocated to JHVLICO's registered separate accounts;
WHEREAS, JHVLICO will continue to issue such variable life insurance
policies and will begin to issue variable annuity contracts whose net premiums
are or will be allocated to certain JHVLICO registered separate accounts;
WHEREAS, John Hancock and JHVLICO wish to enter into this Amendment
redefining the conditions and terms of the Distribution Agreement and Exhibit A
thereto;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, John Hancock and JHVLICO hereby amend the Distribution Agreement and
Exhibit A thereto and agree to the following terms:
1. Any reference to "variable life insurance policies" in the Distribution
Agreement shall be read "variable life insurance policies and variable annuity
contracts"; and
2. Except as otherwise specified in this Amendment,any reference to "Policies"
or "policies" in the Distribution Agreement shall include variable life
insurance policies, issued by JHVLICO, whose net premiums are or will be
allocated to certain JHVLICO registered separate accounts and variable annuity
contracts, issued by JHVLICO, whose net premiums are or will be allocated to
certain JHVLICO registered separate accounts; and
3. The phrase "With respect to life insurance policies only" should be added
to the beginning of provision seven in the Distribution Agreement; and
4. The commission schedule for John Hancock Variable Annuity Account I should
be included in Exhibit A, as shown in the attachment to this Amendment.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and on its behalf by its duly authorized representative as
of the day and year indicated.
<PAGE>
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
BY: /s/STEPHEN L. BROWN AUGUST 2, 1994
-------------------- --------------
Stephen L. Brown (date)
Chairman and Chief Executive Officer
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
on its own behalf and on behalf of its
several existing and future registered
separate accounts
BY:/s/HENRY D. SHAW AUGUST 5, 1994
---------------- --------------
Henry D. Shaw (date)
President
EXHIBIT A
Scheduled Premium Policy (Flex V)
Maximum commission of 50% of premium paid under Modified Schedule of
premiums in Policy year 1, 10% of such premiums in Policy years 2-4, and 3% of
any other premiums.
Annual Premium Policy (VLI)
Maximum commission of 55% of premium paid in Policy year 1, 15% of
premium paid in Policy year 2, 10% of premium paid in Policy years 3-5, 5% of
premium paid in Policy years 6-10, and 3% of any other premiums.
Single Premium Policy
Maximum commission of 3%.
Flexible Premium Variable Survivorship Policy (VEP)
Maximum commission of 45% of Target Premium paid in Policy year 1, 5%
of Target Premium paid in Policy years 2-5, 3% of Target Premium paid in any
subsequent years, and 3% of any excess premium in any year.
Individual Deferred Combination Fixed/Variable Annuity Contract (Independence
Preferred)
Maximum commission of 3% of premium on contracts issued to Annuitants
issue age 0-70, maximum commission of 2% of premium on contracts issued to
Annuitants issue ages 71 and above.
Revised Flexible Premium Policy (New Flex V)
Maximum Commission of 50% of premium paid up to Required Premium in
Policy year 1, 8% of such premiums in Policy years 2-4, and 3% of any other
premiums.
<PAGE>
Universal Variable Policy (MVL)
Maximum commission of 50% of premium paid up to Required Premium paid
in Policy year 1, 6% of the Target Premium for Policy years 2-4; 3% of the
Target Premium in each year thereafter, and 3% of excess premium in any year.
Variable COLI Policy (VCOLI)
Maximum commission of 14% of Target Premium in Policy years 1-10; 3%
of Target Premium in Policy years 11 and thereafter; and 2% of any excess
premium paid.
Universal Variable Policy (MVL II)
Maximum commission of 20% of Target Premium in Policy year 1, plus 6%
of the Target Premium for the first Policy year which will be payable in each of
Policy years 2-4; 6% of the Target Premium for Policy years 2-4; 3% of the
Target Premium paid in each year thereafter; and 3% of excess premium in any
year.
(Exhibit A, as amended, December 6, 1995)
<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 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
<PAGE>
-2-
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 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
<PAGE>
-3-
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.
(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 any 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
<PAGE>
-4-
(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.
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.
/s/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.
/s/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 to 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 at his address as it appears on the records of the corporation, with
postage thereon prepaid.
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<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
sharehiolders, 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
ameeting 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 ameeting 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 tranfer 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
tranfer 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
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 appropriated 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.
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<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 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.
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<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 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.
<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 all his
transaction 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 require 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 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 director may determine, conditioned upon he
faithful performance of his duties to the corporation. Any secretary, treasurer,
assistant secretary and assistant treasurer or 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 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. CHECK, 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>
December, 1995 EXHIBIT 8
Description of JHMLICO's and JHVLICO's Issuance,
Transfer and Redemption Procedures for Policies
Pursuant to Rule 6e-3(T)(b)(12)(iii)
and
Method of Computing Adjustments upon Conversion to Fixed
Benefit Policies
Pursuant to Rule 6e-3(T)(b)(13)(v)(B).
------------------------------------------
Set forth below is the information called for under Rule 6e-3(T)(b)(12)(iii) and
Rule 6e-3(T) (b) (13) (v) (B) under the Investment Company Act 1940 ("1940 Act")
regarding certain procedures under John Hancock Mutual Life Insurance Company's
("JHMLICO") and John Hancock Variable Life Insurance Company's ("JHVLICO")
Flexible Premium Variable Life Insurance Policies (hereinafter referred to
individually as the "Policy" and collectively as the "Policies") newly issued in
1996.
Rule 6e-3(T) (b) (12) (iii) provides an exemption for a variable life insurance
separate account, its sponsoring insurance company, its investment adviser and
its principal underwriter from Sections 22(d), 22(e) and 27(c) (1) of the 1940
Act and Rule 22c-1 thereunder for issuance, transfer and redemption procedures
under a variable life insurance Policy to the extent necessary to assure
compliance with Rule 6e-3(T), state insurance law or established administrative
procedures of the life insurance company. The Rule requires, as a condition for
exemption, that such procedures be reasonable, fair and nondiscriminatory, and
be disclosed in the registration statement filed with respect to such variable
life insurance policies.
JHMLICO and JHVLICO represent that their procedures meet the foregoing standards
of Rule 6e-3(T) (b) (12) (iii), based on the following facts and circumstances:
1. Because of the insurance nature of the Policies and, in certain instances,
as a result of the requirements of the state insurance laws, the procedures
necessarily differ in significant respects from the procedures for mutual funds
and contractual plans for which the 1940 Act was designed.
2. Many of the procedures have been adapted from those established and utilized
in connection with the administration of JHMLICO's fixed benefit life insurance
policies and earlier versions of variable life insurance policies issued by its
subsidary, JHVLICO.
3. Certain procedures, including the 24-month conversion right to fixed benefit
policies, are required by Rule 6e-3(T).
4. JHMLICO and JHVLICO, in structuring their procedures to comply with Rule
6e-3(T), state insurance laws, and their established administrative procedures,
have attempted to meet the intent of the 1940 Act to the extent deemed feasible.
5. Generally speaking, the state insurance laws to which both JHMLICO and
JHVLICO are subject reflect the fundamental principle that the procedures shall
not be unfair, unreasonable or unjustly discriminatory to any policyholder.
<PAGE>
-2-
6. Because of the intricate insurance methodology underlying the procedures, it
is often difficult to determine, with certainty, whether and to what extent a
particular procedure, or a given step to that procedure, deviates from a
specific requirement of Section 22(d), 22(e) or 27(c) (1) of the 1940 Act or
Rule 22c-1 thereunder.
Accordingly, the summary below includes the principal Policy provisions and
procedures that might be deemed to constitute, either directly or indirectly,
accommodation of the 1940 Act requirements and insurance practices. Given the
complexities of the Policies' operations, the summary, although comprehensive,
does not attempt to treat each and every mechanical variation or permutation
that might occur and does not repeat every provision or procedure that is
already set forth in the registration statement or exhibits thereto. At the same
time, the summary, in order to provide a comprehensive view of the procedures,
includes certain procedural steps that do not constitute a deviation from the
Sections and Rule cited above.
Rule 6e-3(T)(b) (13) (v)(B) grants an exemption for a flexible premium
variable life insurance separate account, its sponsoring insurance company, its
investment adviser and its principal underwriter from Section 27(d) of the 1940
Act for flexible premium variable life insurance policies which allow the
policyholder to convert a flexible premium variable life insurance policy into a
fixed benefit life insurance policy at any time during the first 24 months after
issuance. The Rule requires, as a condition for exemption, that the method of
computing any adjustments made in payment (or charges) or cash values to reflect
variances between the payments and cash values under the original policy and new
policy be set out in an exhibit to the registration statement filed with respect
to the variable life insurance Policy. JHMLICO's and JHVLICO's Policies provide
for such a conversion privilege. No adjustments in payments (or charges) and
cash values are made upon exercise of that privilege, as described below.
This memorandum divides the information called for by Rules 6e-3(T)(b) (12)
(iii) and 6e-3(T)(b) (13) (v)(B) into three parts. The first part summarizes
procedures under the policies which might be deemed to involve, either directly
or indirectly, a "redemption" within the meaning of the 1940 Act. The second
part summarizes procedures which might be deemed to involve, either directly, a
"purchase" transaction. The third part summarizes the procedures for converting
a Policy to a fixed benefit Policy.*/
-
This exhibit refers to procedures as they affect the respective variable
accounts of JHMLICO and JHVLICO ("the Account") used in funding the Policies.
Except as otherwise stated herein, these procedures do not necessarily reflect
the Fixed Account under the Policies which is held in the General Account of
each insurer. Whenever reference is made herein to JHMLICO it should also be
read as JHVLICO, insofar as JHVLICO and its Account are concerned, each insurer
having adopted identical procedures.
Except as otherwise defined herein, capitalized terms used in this memorandum
have the same meaning as are defined in the prospectus contained in the
applicable registration statement.
_____________________
*/ If an Owner requests a "purchase" or "redemption" transaction which is
impossible (for example, allocation of a loan or partial surrender to
subaccounts which have insufficient assets to support said allocation) or
impermissible (such as a reduction in the Basic Death Benefit below the minimum
required amount), JHMLICO will notify the Policy Owner to determine what action,
if any, the Policy Owner wishes to take instead.
<PAGE>
-3-
I. "Redemption" Procedures:
Surrender and Related Transactions
----------------------------------
JHMLICO's Policies provide for the payment of monies to a policyholder ("Owner")
or beneficiary upon presentation to JHMLICO of a Policy. Such presentation might
be deemed to constitute, either directly or indirectly, a "redemption" of the
Owner's interest within the meaning of the 1940 Act. Set forth below is a
summary of the principal policy provisions and procedures which might be viewed
as involving such a "redemption". The principal difference between such
"redemptions" and redemptions in the mutual fund or contractual plan context is
that under the Policies, the payee may be deemed not to receive a pro rata or
proportionate share of the assets in JHMLICO's account within the meaning of the
1940 Act. The amount received by the payee will depend upon the particular
benefit for which the Policy is presented, including, for example the surrender
Value or Death Benefit.
There are also certain Policy provisions -- such a Policy loans -- under which
the Policy will not be presented to JHMLICO but which will affect the Owner's
benefits and involve a transfer of the assets supporting the Policy reserve out
of the Account. Finally, state insurance law may require that certain
requirements be met before JHMLICO is permitted to make payments to the payee.
A. Surrender Values
----------------
If the insured party under a Policy ("Insured") is alive, JHMLICO will pay,
within seven days, the Surrender Value next computed after receipt, at its Home
Office, of the Policy and a signed request for surrender. Computations with
respect to the investment experience of the subaccounts will be made as of 4:00
p.m., New York City time, on each day during which the New York Stock Exchange
is open for trading and on which the fund values its shares. This will enable
JHMLICO to pay the Surrender Value based on the next computed value after a
request is received.
While no premium is in default, the Surrender Value is equal to the Account
Value less any indebtedness. In general, the Account Value for any day equals
the Policy Account Value for the previous day, increased by any net premium and
decreased by any charges against the Account Value, accumulated at the
subaccount's rate of return after charges against the Account.
The total charge for sales load, over the lesser of 20 years or the life
expectancy of the insured, will not exceed 9% of the Target Premium at issue
over that period. No minimum amount of Policy Account Value is guaranteed.
JHMLICO will make the payment of the Surrender Value out of its General Account
and transfer assets from the Account to the General Account for the amounts held
for the Policy in the Account.
In lieu of payment of the Surrender Value upon surrender of a Policy in a single
sum, an election may be made to apply all or a portion of the proceeds under one
of the benefit settlement options described in the Policy or, with the approval
of JHMLICO, under other optional methods of settlement available from JHMLICO.
The election may be made by the Owner during the Insured's lifetime, or, if no
election is in effect at death, by the beneficiary. The benefit settlement
options are subject to the restrictions and limitations set forth in the Policy.
<PAGE>
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B. Death Claims
------------
JHMLICO will pay a death benefit to the beneficiary within seven days after
receipt at its Home Office of due proof of death of the Insured, and all other
requirements necessary 1/ to make payment. Provided the Policy is in full force,
-
2/ the Death Benefit will be the greater of (1) the Sum Insured (and Account
- -
Value, if any, under Option B) plus all premiums received after the last
processing date prior to the Insured's date of death less any indebtedness on
the date of death, and (2) the Account Value at the end of the Valuation Period
in which death occurs multiplied by the applicable Death Benefit Factor or
Corridor Factor, as applicable, less any indebtedness on the date of death. The
Death Benefit is also less any premium in default if death occurs during the 61
day Policy grace period.
The proceeds payable on death also reflect interest from the date of death to
the date of payment.
JHMLICO will make payment of the Death Benefit out of its General Account, and
will transfer assets from the Account to the General Account in an amount equal
to the amount held in the Account for the Policy terminated by death.
In lieu of payment of the Death Benefit in a single sum, a settlement option may
be selected as described in Section I.A, above.
C. Default
-------
Premium Grace Period, Default and Lapse. Unless the Guranteed 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 Policy 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 Policy grace period, the Policy will
lapse, and any remaining amount owed to the Owner as of the date of lapse will
be paid to the Owner.
Lapse can have significant tax consequences. If the Guaranteed Death Benefit has
been in effect and lapses at the end of a Guaranteed Death Benefit grace period,
the usual default, Policy grace period and lapse procedures described in the
preceding paragraph will be applied commencing with the first day of the Policy
month in which the lapse of the Guaranteed Death Benefit occurs.
The insurance continues in full force during the grace period but, if the
insured dies during the Policy grace period, the amount in default will be
deducted from the amount of Death Benefit otherwise payable.
Written notice will be furnished to the Owner at his or her last known address,
at least 31 days prior to the end of any grace period. If in the Policy grace
period, the notice will specify the minimum amount which must be paid to
continue the Policy in force on a premium paying basis after the end of the
Policy grace period. If in the Guaranteed Death Benefit grace period, the notice
will specify the new amount which must be paid to continue the Guaranteed Death
Benefit feature in force.
_______________
1/State insurance laws impose various requirements, such as receipt of a tax
- -
waiver before payment of the Death Benefit may be made. In addition, payment of
the Death Benefit is subject to the provisions of the Policy regarding suicide
and incontestability.
2/"In full force", means that the insurance under the Policy is being continuedd
- -
for the greater of the Guaranteed Death Benefit and the Current Death Benefit,
and that no unpaid premium is more than 61 days overdue.
<PAGE>
-5-
D. Policy Loan
-----------
Loans may be made at any time a Loan Value is available. The Owner may borrow
money on completion of a form satisfactory to JHMLICO assigning the Policy as
the only security for the loan. Payment of the loan will be made from JHMLICO's
Home Office. The Loan Value will be 90% of the Surrender Value. Interest accrues
and is compounded daily at an effective annual rate determined by John Hancock
at the start of each Policy year. This interest rate will not exceed the greater
of (1) the "Published Monthly Average" (defined below) for the calendar month
ending 2 months before the calendar month of the Policy anniversary or (2)5%.
The "Published Monthly Average" means Moody's Corporate Bond Yield Average-
Monthly Average Corporate, 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 its is at least $300. The
Owner may repay all or a portion of any indebtedness while the insured is living
and premiums are being duly paid. When a loan is made, shares are redeemed in an
aggregate equal to the amount of the loan and this aggregate value is allocated
to the Loan Account. The shares redeemed will be redeemed in each subaccount 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.
Loan interest which is not paid by a Policy anniversary will be added to the
loan principal by automatically effecting an additional Policy loan. Amounts
transferred to the Policy loan account are credited with interest at .50% less
than the loan interest rate per annum for the first 20 Policy years and .25%
less than the loan interest rate per annum in years 21 and beyond, which
interest is transferred to the subaccount when the loan is repaid, according to
the Investment Rule then in effect.
While the indebtedness is outstanding, that portion of the Account Value that is
in the Loan Account is credited with interest at a rate of .50% less than the
loan rate for the first 20 Policy years and .25% less than the loan rate in
years 21 and later, a rate which 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 outstanding indebtedness is subtracted from the
amount otherwise payable when the Policy proceeds become payable.
Whenever the indebtedness equals or exceeds the Surrender Value, the Policy
terminates 31 days after notice has been mailed by JHMLICO 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.
E. Transfers Among Variable Subaccounts
------------------------------------
The Owner may reallocate the amounts held for the Policy in the variable
subaccounts in each Policy year without charge. The Owner may use either
percentages (in whole numbers) or designate the dollar amount of funds to be
transferred between subaccounts. The reallocation must be such that the total in
the subaccounts after reallocation equals 100%. The change will be effective at
the end of the Valuation Period in which JHMLICO receives at its Home Office
notice satisfactory to JHMLICO.
<PAGE>
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F. Conversion Privilege
--------------------
The conversion privilege provided in accordance with Rule 6e-3(T) (b) (13) (v)
(B) under the 1940 Act is discussed under III. below.
G. Partial Withdrawal of Account Value
-----------------------------------
An Owner may withdraw a portion of Account Value from the Policy on or after the
first Policy anniversary. This privilege, which reduces the Account Value by the
amount of the withdrawal and the associated charge, may be exercised only once
in a Policy year and will be effective as of the end of the Valuation Period in
which JHMLICO receives written notice satisfactory to it at its Home Office. The
minimum amount that may be withdrawn in $1000. The Sum Insured of the Policy
will not be reduced until the Account Value multiplied by the applicable
Corridor or Death Benefit Factor is less than or equal to the Sum Insured. At
that time, the Sum Insured is reduced by the amount of any withdrawals. An
amount equal to $20 is charged against Account Value for each partial
withdrawal. When a withdrawal is made the cumulative premiums calculated for
purposes of determining the availability of the Guaranteed Death Benefit feature
will be adjusted. If the cumulative premiums paid are less than the Guaranteed
Death Benefit Premiums required at this point, the Guaranteed Death Benefit will
no longer be in effect.
II. Purchase and Related Transactions
-------------------------------------
Set out below is a summary of the principal provisions of the Policies and
administrative procedures thereunder that might be deemed to constitute, either
directly or indirectly, a "purchase" transaction within the meaning of the 1940
Act. The summary shows that, because of the insurance nature of the Policies,
the procedures involved necessarily differ in certain significant respects from
the purchase procedures for mutual funds and contractual plans. The chief
differences revolve around the premium rate structure and the insurance
underwriting (i.e., evaluation of risk) process. There are also certain Policy
provisions -- such as reinstatement -- which do not result in the issuance of a
Policy but which required certain payments by the Owner and involve a transfer
of assets supporting the Policy reserve into the Account.
A. Premium Schedules and Underwriting Standards
--------------------------------------------
Premiums for JHMLICO's Policies will not be the same for all Owners. The chief
reason is that the principle of pooling and distribution of mortality risks is
based upon the assumption that each Owner pays a premium commensurate with the
Insured's mortality risk which is actuarially determined based upon factors such
as age, sex, health and occupation. In the context of life offering price") for
all Insured's would discriminate unfairly in favor of those Insured's
representing greater mortality risks to the disadvantage of those representing
lesser risks. Accordingly, although there will be no uniform "Public offering
price" for all Insured's, there will be a single "price" for all Insured's in a
given actuarial category.
The Policies will be offered and sold pursuant to established premium targets 3/
-
and underwriting standards and in accordance with state insurance laws. Such
laws prohibit unfair discrimination among Policyholders, but recognize that
premiums may be based upon factors such as age, sex, health, and occupation. In
a few states, the premiums and values under the Policies will not directly
reflect the sex of the insured.
___________
3/ in accordance with industry practice, JHMLICO will establish procedures to
- -
handle errors in initial and subsequent premium payments to collect
underpayments, except for de minimis amounts.
<PAGE>
-7-
B. Application and Initial Premium Processing
------------------------------------------
Upon receipt of a completed application from a proposed Owner, JHMLICO will
follow certain insurance underwriting (i.e., evaluation of risk) procedures
designed to determine whether the proposed Insured in insurable. This process
may involve such verification procedures as medical examinations and may require
that further information be provided by the proposed Insured before a
determination can be made. A Policy cannot be issued, i.e., physically issued
through JHMLICO's computerized issue system until this underwriting procedure
has been completed. Policies issued on a guaranteed issue basis do not require
evidence of insurability.
The date on which a Policy is issued is referred to as the "Date of Issue". The
date of issue coincides with the beginning of a Valuation Period. It represents
the commencement of the suicide and contestable periods for purposes of the
Policies. It is also the date as of which the insurance age of the proposed
Insured is determined. It represents the first day of the Policy year and
therefore determines the Policy anniversary. It also marks the commencement of
the variability of benefits.
These processing procedures are designed to provide immediate benefits to the
proposed Owner in connection with payment of the initial premium and will not
dilute any benefit payable to an existing Owner. Although a Policy cannot be
issued until after the underwriting process has been completed, the proposed
Insured will receive immediate insurance coverage, if he has paid his minimum
first premium, subject to the other terms and conditions of JHMLICO's Receipt
and Conditional Temporary Insurance Agreement. If the minimum first premium is
paid with the application and the Policy is issued as applied for, the date of
issue in general will be the last of the Part A date or the Part B date of the
application or the date of most recent evidence of insurability, so that
variability of benefits will commence as of that date. If the minimum first
premium is not paid with the application, the date of issue will be the actual
date the application is processed for issue or the next valid issue date
provided the Owner pays the necessary premium. Except as referred to above, no
coverage will take effect with respect to a Policy until the minimum first
premium has been paid and the Policy is delivered to the Owner while the insured
is living and has not consulted, been examined, or treated by a doctor since the
latest Part B of the application was completed. If coverage under a Policy never
goes into effect, any premium paid will be returned without interest.
JHMLICO will require that the Policy be delivered and the minimum initial
premium paid within a specific period to protect itself against anti-selection
by the proposed Owner resulting from deterioration in the Insured's health.
Generally, the period will not exceed 60 days from the date of completion of the
latest of Parts A and B of the application and any required medical examination.
JHMLICO will transfer the appropriate amount from its general account to the
Account on the date the Policy is approved. The appropriate amount will be
calculated as though the net premium had in fact been transferred from the
General Account to the Account commencing on the date the Policy is issued.
D. REINSTATEMENT PROVISION
-----------------------
The Policy may be reinstated within 1 year after the beginning of the Policy
grace period unless the Surrender Value has been paid or otherwise exhausted. A
Policy will be reinstated upon receipt by JHMLICO of a written application for
reinstatement and production of evidence of insurability satisfactory to JHMLICO
and payment of an amount equal to the sum of (a) and (b).
<PAGE>
-8-
(a) All paid monthly charges grossed up for State Premium Tax, Federal DAC Tax
and Sales Load if applicable plus interest from the due date to and including
the date of the reinstatement at an effective rate of 6%.
(b) Total of all monthly deductions grossed up for State Premium Tax, Federal
DAC Tax and Sales Load if applicable for the next three monthly processing dates
following the date of reinstatement, where the charges for each of the next
three processing dates are assumed to be equal to such charges as on the date of
default.
On the date of reinstatement the Policy will have (i) a Sum Insured as if no
lapse had occurred and (ii) indebtedness equal to any indebtedness at the end of
the day immediately preceding the date of reinstatement.
The Account Value on the date of reinstatement will be (a) less (b) and (c)
where:
(a) is the amount in Payment above;
(b) is the aggregate premium expense charges, i.e. sales charge, premium tax
charge and Federal DAC tax charge; and
(c) is the sum of all Mortality Charges, Maintenance Charges and charges for
Riders and ratings, if any, that would have been made from the date of lapse to
the date of reinstatement if the Policy had not lapsed, with interest an
effective annual rate of 6% to the date of reinstatement.
In order to assist a lapsed Owner in making a considered judgment as to whether
to reinstate, JHMLICO may calculate the amount payable upon reinstatement and
"freeze" the amount for up to ten days.
F. REPAYMENT OF LOAN
-----------------
The Owner may repay al or a portion of any indebtedness while the insured is
living and premiums are duly paid. When a loan is made, shares are redeemed in
an aggregate value equal to the amount of the loan and this aggregate value is
transferred to he general account and carried as a Loan Account. The shares
redeemed will be redeemed in each subaccount 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.
While the indebtedness is outstanding, the portion of the Account Value that is
in the Loan Account is credited with interest at a rate of at.50% less than the
loan rate in the first 20 Policy years and .25% less than the loan rate in
years 21 and beyond, a rate which will usually be different that 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 outstanding indebtedness is subtracted from the
amount otherwise payable when the Policy proceeds become payable.
G. CORRECTION OF MISSTATEMENT OF AGE OR SEX
----------------------------------------
If JHMLICO discovers that the age or sex of the Insured has been misstated,
JHMLICO will reconstruct the Policy by determining what benefits the premium
paid would have purchased at the correct age or sex. Special adjustments may
have to be made if the resultant face amount is below JHMLICO'S minimum size
Policy.
<PAGE>
-9-
Once the benefits are redetermined, JHMLICO will make the necessary adjustment
in the reserve assets in the Account to reflect the redetermined benefits and
the correct age and sex of the Insured.
III. CONVERSION OF POLICY
--------------------
JHMLICO'S Policies, in accordance with Rule 6e-3(T) (b) (v) (B) under the 1940
Act, provide that the Owner within 24 months of issue, or any time after
thereafter, may transfer the entire Account Value under the Policy to the Fixed
Account thus crating a non-variable or fixed benefit life insurance Policy. This
conversion privilege is designed to permit an Owner to change his or her mind
and to obtain a fixed benefit Policy.
<PAGE>
EXHIBIT 9
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
John Hancock Variable Annuity and Variable Life Insurance Accounts
------------------------------------------------------------------
POWER OF ATTORNEY
The undersigned member of the Board of Directors of John Hancock
Variable Life Insurance Company does hereby constitute and appoint Henry D.
Shaw, Francis C. Cleary, Thomas J. Lee, Sandra M. DaDalt and Laura M. Mangan,
and each of them individually, with full power of substitution, his or her true
and lawful attorneys and agents to execute, in the name of, and on behalf of,
the undersigned as a member of said Board of Directors, the Registration
Statements under the Securities Act of 1933 and the Investment Company Act of
1940, and each amendment to the Registration Statements, to be filed for John
Hancock Variable Life Account V, John Hancock Variable Annuity Account I and any
other variable annuity or variable life insurance account of John Hancock
Variable Life Insurance Company with the Securities and Exchange Commission and
to take any and all action and to execute in the name of, and on behalf of, the
undersigned as a member of said Board of Directors or otherwise any and all
instruments, including applications for exemptions from such Acts, which said
attorneys and agents deem necessary or advisable to enable any variable annuity
or variable life insurance account of John Hancock Variable Life Insurance
Company to comply with the Securities Act of 1933, as amended, the Investment
Company Act of 1940, as amended, and the rules, regulations and requirements of
the Securities and Exchange Commission in respect thereof; and the undersigned
hereby ratifies and confirms as his or her own act and deed all that each of
said attorneys and agents shall do or cause to have done by virtue hereof. Each
of said attorneys and agents shall have, and may exercise, all of the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date shown.
<TABLE>
<CAPTION>
DATE DIRECTOR
---- --------
<S> <C>
9-15-94 /s/ HENRY D. SHAW
9-15-94 /s/ JOSEPH A. TOMLINSON
9-15-94 /s/ ROBERT R. REITANO
9-15-94 /s/ THOMAS J. LEE
9-15-94 /s/ FRANCIS C. CLEARY, JR.
10-12-94 /s/ BARBARA L. LUDDY
10-13-94 /s/ MICHELE G. VAN LEER
3-9-95 /s/ ROBERT S. PASTER
4-5-95 /s/ DAVID F. D'ALESSANDRO
</TABLE>
<PAGE>
EXHIBIT 10
REPRESENTATIONS, DESCRIPTION AND
UNDERTAKING PURSUANT TO
RULE 6e3(T)(b)(13)(iii)(F) UNDER
THE INVESTMENT COMPANY ACT OF 1940
Registrant makes the following representations:
(1) Rule 6e-3(T)(b)(13)(iii)(F) is being relied upon.
(2) The level of the mortality and expense risk charge and the guaranteed
minimum death benefit charge are within the range of industry practice
for comparable contracts and reasonable in relation to the risks
assumed by John Hancock under the Policies.
(3) The methodology used to support the representation made in paragraph
(2) above is based on an analysis of the levels of mortality and
expense risk charges and guaranteed minimum death benefit charges
being made in comparable contracts and of the nature of the mortality
risk assumed, the nature of the guaranteed minimum death benefit risk
assumed, and the nature of the expense risks assumed, including anti-
selection and other risks to John Hancock that arise from the
policyowner's ability to exercise various flexibility features under
the Policies, all based on John Hancock's and its affiliates'
experience with other insurance products in these regards. Registrant
undertakes to keep and make available to the Commission on request the
documents used to support the representations in paragraph (2) above.
(4) (i) Registrant has concluded that there is a reasonable likelihood
that the distribution financing arrangement will benefit the
Account and policyowners. Registrant undertakes to keep and make
available to the Commission on request a memorandum setting forth
the basis for this representation.
(ii) Registrant represents that the Account will invest only in
management investment companies which have undertaken to have a
board of directors, a majority of whom are not interested persons
to registrant, formulate and approve any plan under Rule 12b-1 to
finance distribution expenses.
<PAGE>
Exhibit 11
Exemptive Relief Relied Upon
With respect to the variable life insurance policies ("Policies") that are
the subject of this registration statement, the Registrant, Depositor and the
Principal Underwriter rely on exemptive relief granted to them in SEC File No.
812-8446, Rel, No. IC-19817 (Oct. 27, 1993) (Notice), Rel. No. ICI-19898
(Nov 24, 1993) (Order).
Among other things, the Commission in that proceeding granted (1) class
exemptive relief with respect to the deduction of charges associated with the
Depositor's treatment of deferred acquisition costs for federal income tax
purposes and (2) exemptive relief with respect to the so-called "stair-step"
provisions of Section 27(a)(3) of the 1940 Act and Rule 6e-3(T)(b)(13)(ii) under
the Act to the extent necessary because the policies permitted, during the first
10 policy years, premiums in excess of one year's target premium to be paid,
subject to a 3.5% sales charge (and, during policy years 11 through 20, a 3%
sales charge) prior to a subsequent year's target premium being paid, subject to
a higher sales charge.
The Registrant, Depositor, and Principal Underwriter (the "applicants")
believe it is appropriate to rely on the exemptive relief previously obtained
notwithstanding that certain minor changes have been made in the Policies, in
view of the fact that such changes are in no way material to the relief granted.
The principal substantive changes in the policies as described in the
exemptive application are discussed below:
1. The Policies are now offered on a single insured basis and on a
guaranteed issue (as well as a fully-underwritten) basis, although the cost of
insurance charges under Policies underwritten on a guaranteed issue basis (like
those subject to full medical underwriting) will not exceed those based on the
1980 Commissioners' Standard Ordinary Mortality Table.
2. Two additional subaccounts of the Registrant have been added as
investment options. The exemptive application (as amended, the "application"),
however, specifically reserved the right to add or delete such subaccounts at
any time.
3. For policy owners choosing an "Option A" death benefit, the alternative
forms of coverage have been somewhat revised. The Option A death benefit can now
be determined pursuant to the "guideline premium and cash value corridor" test
as well as the "cash value accumulation test" for Federal income tax purposes.
<PAGE>
4. The "Guaranteed Minimum Death Benefit" has been limited to five years,
and the method of computing the amount of premium payments necessary to keep
this benefit in force has been revised.
5. The 1.25% premium expense and processing charge has been eliminated.
6. The Policy issue charge has been revised.
7. The current and maximum monthly administrative charges have been
changed.
8. The current mortality and expense risk charge for the majority of
Policies has been reduced from .625% per annum to .6% per annum. For a minority
of Policies, however, this charge will represent a modest increase.
Nevertheless, the charge is still well below the .9% maximum that the exemptive
application specifically reserves the right to charge.
9. The maximum and current percentage of sales charges deducted from
premiums paid in any year up to one target premium have been reduced and the
deduction of any sales charge from premiums paid in any year in excess of one
target premium has been eliminated (on both a current and guaranteed basis).
10. A sales charge has been added that will be deducted as a dollar amount
each month. This charge is fixed and will not vary for the first five policy
years, at which time it terminates. The amount of this charge depends on the age
and gender of the insured and is computed as a number of cents per $1000 of the
basic sum insured under the policy at issue.
The applicants do not believe that any of the foregoing changes in the
facts as set forth in the exemptive application are in any way material to the
relief granted. The applicants have reviewed the application and determined that
all of the other representations, undertakings and arguments therein, and public
policy considerations in connection therewith, remain unchanged.
Nor do the applicants believe that exemptive relief from the "stair-step"
provisions is required in connection with the new form of sales charge referred
to in numbered paragraph 10 above. As there noted, such charge is a fixed number
of cents per $1000 of the basic sum insured under the Policy at issue. Neither
this proportion (i.e. the ratio of the dollar amount of the charge to the basic
sum insured at issue) nor the dollar amount of the charge will change during the
five-year period during which it is deducted. The applicants do not believe that
the structure of this
<PAGE>
-3-
charge violates the terms of Section 27(a)(3). In any event, the applicants
believe that the exemption in Rule 6e-3(T)(d)(1)(ii)(A) would be available as to
such charge. As required by that provision, the proportionate amount (discussed
above) of any monthly deduction of such charge will not exceed the proportionate
amount of any such prior monthly deduction. Moreover, the applicants believe
that the policies and purposes of Section 27(a)(3) and Rule
6e-3(T)(d)(1)(ii)(A), as discussed in the exemptive application, are not in any
way contravened by such deductions.
----------------------------------------
Based on the foregoing analysis, the applicants will continue to rely on
the exemptive relief cited above with respect to the Policies that are the
subject of this registration statement.
