As filed with the U.S. Securities and Exchange Commission on April 27, 2010

Registration No. 333-126668

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-6

SEC File No 811-5130

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

POST EFFECTIVE AMENDMENT NO. 6 [X]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 16 [X]

John Hancock Life Insurance Company (U.S.A.) Separate Account N

(Exact Name of Registrant)

John Hancock Life Insurance Company (U.S.A.)

(Name of Depositor)

197 Clarendon Street

Boston, MA 02116

(Complete address of depositor’s principal executive offices)

Depositor’s Telephone Number: 617-572-6000

JAMES C. HOODLET, ESQ.

John Hancock Life Insurance Company (U.S.A.)

U.S. INSURANCE LAW

JOHN HANCOCK PLACE

BOSTON, MA 02117

(Name and complete address of agent for service)

It is proposed that this filing will become effective (check appropriate box)

[    ] immediately upon filing pursuant to paragraph (b) of Rule 485

[X] on May 3, 2010 pursuant to paragraph (b) of Rule 485

[    ] 60 days after filing pursuant to paragraph (a) (1) of Rule 485

[    ] on (date) pursuant to paragraph (a) (1) of Rule 485

If appropriate check the following box

[    ] this post-effective amendment designates a new effective date for a previously filed amendment

Pursuant to the provisions of Rule 24f-2, Registrant has registered an indefinite amount of the securities under the Securities Act of 1933.

Prospectus dated May 3, 2010

for interests in

Separate Account N

Interests are made available under

CORPORATE VUL

a flexible premium variable universal life insurance policy

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

(“John Hancock USA”)

The policy provides a fixed account option with fixed rates of return declared by John Hancock USA

and the following investment accounts:

500 Index B	Equity-Income	Mid Value
Active Bond	Financial Services	Money Market B
All Cap Core	Franklin Templeton Founding Allocation	Natural Resources
All Cap Value	Fundamental Value	Optimized All Cap
Alpha Opportunities	Global	Optimized Value
American Asset Allocation	Global Bond	PIMCO VIT All Asset
American Blue Chip Income and Growth	Health Sciences	Real Estate Securities
American Bond	High Yield	Real Return Bond
American Fundamental Holdings	International Core	Science & Technology
American Global Diversification	International Equity Index A	Short Term Government Income
American Growth	International Equity Index B	Small Cap Growth
American Growth-Income	International Opportunities	Small Cap Index
American International	International Small Company	Small Cap Opportunities
American New World	International Value	Small Cap Value
Balanced	Investment Quality Bond	Small Company Value
Blue Chip Growth	Large Cap	Smaller Company Growth
Capital Appreciation	Large Cap Value	Strategic Bond
Capital Appreciation Value	Lifestyle Aggressive	Strategic Income Opportunities
Core Allocation Plus	Lifestyle Balanced	Total Bond Market B
Core Bond	Lifestyle Conservative	Total Return
Core Diversified Growth & Income	Lifestyle Growth	Total Stock Market Index
Core Strategy	Lifestyle Moderate	U.S. High Yield Bond
Disciplined Diversification	Mid Cap Index	Utilities
Emerging Markets Value	Mid Cap Stock	Value
	*  *  *  *  *  *  *  *  *  *  *  *

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

GUIDE TO THIS PROSPECTUS

This prospectus is arranged in the following way:

• Starting on the next page is a Table of Contents for this prospectus.

• The section after the Table of Contents is called “Summary of Benefits and Risks.” It contains a summary of the benefits available under the policy and of the principal risks of purchasing the policy. You should read this section before reading any other section of this prospectus.

• Behind the Summary of Benefits and Risks section is a section called “Fee Tables” that describes the fees and expenses you will pay when buying, owning and surrendering the policy.

• Behind the Fee Tables section is a section called “Detailed Information.” This section gives more details about the policy. It may repeat certain information contained in the Summary of Benefits and Risks section in order to put the more detailed information in proper context.

• Finally, on the back cover of this prospectus is information concerning the Statement of Additional Information (the “SAI”) and how the SAI, personalized illustrations and other information can be obtained.

Prior to making any investment decisions, you should carefully review this product prospectus and all applicable supplements. In addition, you will receive the prospectuses for the underlying funds that we make available as investment options under the policies. The funds’ prospectuses describe the investment objectives, policies and restrictions of, and the risks relating to, investment in the funds. In the case of any of the portfolios that are operated as feeder funds, the prospectus for the corresponding master fund is also provided. If you need to obtain additional copies of any of these documents, please contact your John Hancock USA representative or contact our Service Office at the address and telephone number on the back page of this product prospectus.

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TABLE OF CONTENTS

	Page No.
SUMMARY OF BENEFITS AND RISKS	4
The nature of the policy	4
Summary of policy benefits	4
Death benefit	4
Surrender of the policy	4
Withdrawals	4
Policy loans	4
Optional supplementary benefit riders	5
Investment options	5
Summary of policy risks	5
Lapse risk	5
Investment risk	5
Transfer risk	5
Early surrender risk	5
Market timing risk	5
Tax risks	6
FEE TABLES	7
DETAILED INFORMATION	10
Table of Investment Options and Investment Subadvisers	10
Description of John Hancock USA	20
Description of Separate Account N	20
The fixed account	20
The death benefit	21
Limitations on payment of death benefit	21
Base Face Amount vs. Supplemental Face Amount	21
The minimum death benefit	21
When the insured person reaches 100	22
Requesting an increase in coverage	22
Requesting a decrease in coverage	22
Change of death benefit option	23
Tax consequences of coverage changes	23
Your beneficiary	23
Ways in which we pay out policy proceeds	23
Changing a payment option	23
Tax impact of payment option chosen	23
Premiums	23
Planned premiums	23
Minimum initial premium	24
Maximum premium payments	24
Processing premium payments	24
Ways to pay premiums	24
Lapse and reinstatement	25
Lapse	25
Death during grace period	25
Reinstatement	25
The policy value	25
Allocation of future premium payments	26
Transfers of existing policy value	26
Surrender and withdrawals	27
Surrender	27
Withdrawals	27
Policy loans	28

	Page No.
Repayment of policy loans	28
Effects of policy loans	28
Description of charges at the policy level	29
Deduction from premium payments	29
Deductions from policy value	29
Additional information about how certain policy charges work	30
Sales expenses and related charges	30
Method of deduction	30
Reduced charges for eligible classes	30
Other charges we could impose in the future	30
Description of charges at the portfolio level	30
Other policy benefits, rights and limitations	30
Optional supplementary benefit riders you can add	30
Variations in policy terms	31
Procedures for issuance of a policy	32
Commencement of insurance coverage	32
Backdating	32
Temporary coverage prior to policy delivery	32
Monthly deduction dates	32
Changes that we can make as to your policy	32
The owner of the policy	33
Policy cancellation right	33
Reports that you will receive	33
Assigning your policy	33
When we pay policy proceeds	34
General	34
Delay to challenge coverage	34
Delay for check clearance	34
Delay of separate account proceeds	34
Delay of general account surrender proceeds	34
How you communicate with us	34
General rules	34
Telephone, facsimile and internet transactions	35
Distribution of policies	35
Compensation	36
Tax considerations	37
General	37
Death benefit proceeds and other policy distributions	37
Policy loans	38
Diversification rules and ownership of the Account	38
7-pay premium limit and modified endowment contract status	39
Corporate and H.R. 10 retirement plans	40
Withholding	40
Life insurance purchases by residents of Puerto Rico	40
Life insurance purchases by non-resident aliens	40
Financial statements reference	40
Registration statement filed with the SEC	40
Independent registered public accounting firm	40

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SUMMARY OF BENEFITS AND RISKS

The nature of the policy

The policy’s primary purpose is to provide lifetime protection against economic loss due to the death of the insured person. The policy is unsuitable as a short-term savings vehicle because of the substantial policy-level charges. We are obligated to pay all amounts promised under the policy. The value of the amount you have invested under the policy may increase or decrease daily based on the investment results of the investment accounts that you choose. The amount we pay to the policy’s beneficiary upon the death of the insured person (we call this the “death benefit”) may be similarly affected. That’s why the policy is referred to as a “variable” life insurance policy. We call the investments you make in the policy “premiums” or “premium payments.” The amount we require as your first premium depends upon the specifics of your policy and the insured person. Except as noted in the “Detailed Information” section of this prospectus, you can make any other premium payments you wish at any time. That’s why the policy is called a “flexible premium” policy.

Summary of policy benefits

Death benefit

When the insured person dies, we will pay the death benefit minus any policy debt and unpaid fees and charges. There are two ways of calculating the death benefit (Option 1 and Option 2). You choose which one you want in the application. The two death benefit options are:

• Option 1 - The death benefit will equal the greater of (1) the Total Face Amount, or (2) the minimum death benefit (as described under “The minimum death benefit” provision in the “Detailed Information” section of this prospectus).

• Option 2 - The death benefit will equal the greater of (1) the Total Face Amount plus the policy value on the date of death, or (2) the minimum death benefit.

Surrender of the policy

You may surrender the policy in full at any time. If you do, we will pay you the policy value less any outstanding policy debt. This is called your “net cash surrender value.” You must return your policy when you request a surrender.

If you have not taken a loan on your policy, the “policy value” of your policy will, on any given date, be equal to:

• the amount you invested,

• plus any gain or minus any loss of the investment experience of the investment options you’ve chosen,

• minus all charges we deduct, and

• minus all withdrawals you have made.

If you take a loan on your policy, your policy value will be computed somewhat differently (see “Effects of policy loans”).

Withdrawals

After the first policy year, you may make a withdrawal of part of your surrender value. Generally, each withdrawal must be at least $500. We reserve the right to charge a fee of up to the lesser of 2% of the withdrawal amount or $25 for each withdrawal. Your policy value is automatically reduced by the amount of the withdrawal and the fee. A withdrawal may also reduce the Total Face Amount (see “Surrender and withdrawals — Withdrawals”). We reserve the right to refuse a withdrawal if it would reduce the net cash surrender value or the Total Face Amount below certain minimum amounts.

Policy loans

If your policy is in full force and has sufficient policy value, you may borrow from it at any time by completing the appropriate form. Generally, the minimum amount of each loan is $500. The maximum amount you can borrow is determined by a formula as described in your policy. Interest is charged on each loan. You can pay the interest or allow it to become part of the outstanding loan balance. You can repay all or part of a loan at any time. If there is an outstanding loan when the insured person dies, it will be deducted from the death benefit. Policy loans permanently affect the calculation of your policy value, and may also result in adverse tax consequences.

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Optional supplementary benefit riders

When you apply for the policy, you can request any of the optional supplementary benefit riders that we make available. Availability of riders varies from state to state. Charges for most riders will be deducted monthly from the policy value. Some riders may not be available in combination with other riders or benefits (see “Other policy benefits, rights and limitations — Optional supplementary benefit riders you can add”).

Investment options

The policy offers a number of investment options, as listed on page 1 of this prospectus. These investment options are subaccounts of Separate Account N (the “Account” or “Separate Account”), a separate account operated by us under Michigan law. There is also a “fixed account” option that provides a fixed rate of return. The variable investment options have returns that vary depending upon the investment results of underlying portfolios. These options are referred to in this prospectus as “investment accounts.” The fixed account and the investment accounts are sometimes collectively referred to in this prospectus as the “accounts.” The investment accounts cover a broad spectrum of investment styles and strategies. Although the portfolios of the series funds that underlie those investment accounts operate like publicly traded mutual funds, there are important differences between the investment accounts and publicly traded mutual funds. You can transfer money from one investment account to another without tax liability. Moreover, any dividends and capital gains distributed by each underlying portfolio are automatically reinvested and reflected in the portfolio’s value and create no taxable event for you. If and when policy earnings are distributed (generally as a result of a surrender or withdrawal), they will be treated as ordinary income instead of as capital gains. Also, you must keep in mind that you are purchasing an insurance policy and you will be assessed charges at the policy level as well as at the fund level. Such policy level charges, in aggregate, are significant and will reduce the investment performance of your policy.

Summary of policy risks

Lapse risk

If the net cash surrender value is insufficient to pay the charges when due, your policy can terminate (i.e. “lapse”). This can happen because you haven’t paid enough premiums or because the investment performance of the investment accounts you’ve chosen has been poor or because of a combination of both factors. You will be given a “grace period” within which to make additional premium payments to keep the policy in effect. If lapse occurs, you may be given the opportunity to reinstate the policy by making the required premium payments and satisfying certain other conditions.

Since withdrawals reduce your policy value, withdrawals increase the risk of lapse. Policy loans also increase the risk of lapse.

Investment risk

As mentioned above, the investment performance of any investment account may be good or bad. Your policy value will rise or fall based on the investment performance of the investment accounts you’ve chosen. Some investment accounts are riskier than others. These risks (and potential rewards) are discussed in detail in the prospectuses of the underlying portfolios.

Transfer risk

There is a risk that you will not be able to transfer your policy value from one investment account to another because of limitations on the dollar amount or frequency of transfers you can make. The limitations on transfers out of the fixed account option are more restrictive than those that apply to transfers out of investment accounts.

Early surrender risk

Depending on the policy value at the time you are considering surrender, there may be little or no surrender value payable to you.

Market timing risk

Investment accounts in variable life insurance products can be a prime target for abusive transfer activity because these products value their investment accounts on a daily basis and allow transfers among investment accounts without immediate tax consequences. As a result, some investors may seek to frequently transfer into and out of investment accounts in reaction

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to market news or to exploit a perceived pricing inefficiency. Whatever the reason, long-term investors in an investment account can be harmed by frequent transfer activity since such activity may expose the investment account’s underlying portfolio to increased portfolio transaction costs and/or disrupt the portfolio manager’s ability to effectively manage the portfolio’s investments in accordance with the portfolio’s investment objectives and policies, both of which may result in dilution with respect to interests held for long-term investment.

To discourage disruptive frequent trading activity, we impose restrictions on transfers (see “Transfers of existing policy value”) and reserve the right to change, suspend or terminate telephone, facsimile and internet transaction privileges (see “How you communicate with us”). In addition, we reserve the right to take other actions at any time to restrict trading, including, but not limited to: (i) restricting the number of transfers made during a defined period, (ii) restricting the dollar amount of transfers, and (iii) restricting transfers into and out of certain investment accounts. We also reserve the right to defer a transfer at any time we are unable to purchase or redeem shares of the underlying portfolio.

While we seek to identify and prevent disruptive frequent trading activity, it may not always be possible to do so.

Therefore, no assurance can be given that the restrictions we impose will be successful in preventing all disruptive frequent trading and avoiding harm to long-term investors.

Tax risks

Life insurance death benefits are ordinarily not subject to income tax. Other Federal and state taxes may apply as further discussed below. In general, you will be taxed on the amount of lifetime distributions that exceed the premiums paid under the policy. Any taxable distribution will be treated as ordinary income (rather than as capital gains) for tax purposes.

In order for you to receive the tax benefits extended to life insurance under the Internal Revenue Code, your policy must comply with certain requirements of the Code. We will monitor your policy for compliance with these requirements, but a policy might fail to qualify as life insurance in spite of our monitoring. If this were to occur, you would be subject to income tax on the income credited to your policy for the period of disqualification and all subsequent periods. The tax laws also contain a so-called “7 pay limit” that limits the amount of premium that can be paid in relation to the policy’s death benefit. If the limit is violated, the policy will be treated as a “modified endowment contract,” which can have adverse tax consequences. There are also certain Treasury Department rules referred to as the “investor control rules” that determine whether you would be treated as the “owner” of the assets underlying your policy. If that were determined to be the case, you would be taxed on any income or gains those assets generate. In other words, you would lose the value of the so-called “inside build-up” that is a major benefit of life insurance.

There is a tax risk associated with policy loans. Although no part of a loan is treated as income to you when the loan is made (unless your policy is a “modified endowment contract”), surrender or lapse of the policy would result in the loan being treated as a distribution at the time of lapse or surrender. This could result in a considerable tax bill. Under certain circumstances involving large amounts of outstanding loans and an insured person of advanced age, you might find yourself having to choose between high premium requirements to keep your policy from lapsing and a significant tax burden if you allow the lapse to occur.

Tax consequences of ownership or receipt of policy proceeds under Federal, state and local estate, inheritance, gift and other tax laws can vary greatly depending upon the circumstances of each owner or beneficiary. There can also be unfavorable tax consequences on such things as the change of policy ownership or assignment of ownership interests. For these and all the other reasons mentioned above, we recommend you consult with a qualified tax adviser before buying the policy and before exercising certain rights under the policy.

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FEE TABLES

This section contains the tables that describe all of the fees and expenses that you will pay when buying and owning the policy. In the first three tables, certain entries show the minimum charge, the maximum charge and the charge for a representative insured person. The charges shown in these tables may not be particularly relevant to your current situation. For more information, contact your John Hancock USA representative. Other entries show only the maximum charge we can assess and are labeled as such. Except where necessary to show a rate greater than zero, all rates shown in the tables have been rounded to two decimal places as required by prospectus disclosure rules. Consequently, the actual rates charged may be slightly higher or lower than those shown in the tables.

The first table below describes the fees and expenses that you will pay at the time that you pay a premium, withdraw policy value, surrender the policy, lapse the policy or transfer policy value between investment accounts. A portion of the premium charge is used to cover premium taxes. Premium taxes vary by jurisdiction and are subject to change. Currently, premium tax levels range from 0% to 3.5%.

	Transaction Fees
Charge	When Charge is Deducted	Amount Deducted
Maximum premium charge	Upon payment of premium	7% of each premium paid (currently, 1.5%)
Maximum withdrawal fee	Upon making a withdrawal	The lesser of 2% of the withdrawal amount or $25(1)
Maximum transfer fee	Upon each transfer into or out of an investment account beyond an annual limit of not less than 12	$25 (currently $0)(1)

(1) This charge is not currently imposed, but we reserve the right to do so in the policy.

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The next two tables describe the charges and expenses that you will pay periodically during the time you own the policy. These tables do not include fees and expenses paid at the portfolio level. Except for the policy loan interest rate and the charge for the Enhanced Cash Value Rider, all of the charges shown in the tables are deducted from your policy value. The second table is devoted only to optional supplementary rider benefits. The charges shown in these tables may not be particularly relevant to your current situation. For more information about the cost of insurance rates and other charges talk to your John Hancock representative.

Periodic Charges Other Than Fund Operating Expenses
Charge	When Charge is  Deducted	Amount Deducted
		Guaranteed Rate	Current Rate
Cost of insurance charge(1)	Monthly
Minimum charge		$0.07 per $1,000 of NAR	$0.05 per $1,000 of NAR
Maximum charge		$83.33 per $1,000 of NAR	$83.33 per $1,000 of NAR
Charge for representative insured person		$0.38 per $1,000 of NAR	$0.13 per $1,000 of NAR
Face Amount charge(2)	Monthly for 10 policy years from the Policy Date
Minimum charge		$0.09 per $1,000 of Base Face Amount in policy years 1-10	$0.09 per $1,000 of Base Face Amount in policy years 1-3
			$0.06 per $1,000 of Base Face Amount in policy years 4-6
			$0.03 per $1,000 of Base Face
			Amount in policy years 7-10
Maximum charge		$1.08 per $1,000 of Base Face	$1.08 per $1,000 of Base Face
		Amount in policy years 1-10	Amount in policy years 1-3
			$0.72 per $1,000 of Base Face
			Amount in policy years 4-6
			$0.36 per $1,000 of Base Face
			Amount in policy years 7-10
Charge for representative insured person		$0.28 per $1,000 of Base Face Amount	$0.28 per $1,000 of Base Face Amount in policy years 1-3
			$0.19 per $1,000 of Base Face
			Amount in policy years 4-6
			$0.09 per $1,000 of Base Face
			Amount in policy years 7-10
Administrative charge	Monthly	$12	$9
Asset-based risk charge(3)	Monthly	0.08% of policy value in policy years 1-10	0.03% of policy value in policy years 1-10
		0.03% of policy value in policy year 11 and thereafter	0.004% of policy value in policy year 11 and thereafter
Maximum policy loan interest rate(4)	Accrues daily Payable annually	3.75%	3.75%

(1) The cost of insurance charge is determined by multiplying the amount of insurance for which we are at risk (the net amount at risk or “NAR”) by the applicable cost of insurance rate. The rates vary widely depending upon the length of time the policy has been in effect, the insurance risk characteristics of the insured person and (generally) the gender of the insured person. The minimum rate shown in the table is the rate in the first policy year for a policy issued to cover a 15 year old female preferred underwriting risk. The maximum rate shown in the table at both guaranteed and current rates is the rate in the first policy year for a policy issued to cover a 90 year old male substandard smoker underwriting risk. This includes the so-called extra mortality charge. The representative insured person referred to in the table is a 45 year old male standard non-smoker underwriting risk with a policy in the first policy year.

(2) This charge is determined by multiplying the Base Face Amount at issue by the applicable rate. The rates vary by the sex and issue age of the insured person and duration (Policy Year). The minimum rate shown in the table is for a 15 year old female. The maximum rate shown in the table is for a 90 year old male. The representative insured person referred to in the table is a 45 year old male.

(3) This charge only applies to that portion of policy value held in the investment accounts. The charge determined does not apply to any fixed account.

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(4) 3.75% is the maximum effective annual interest rate we can charge and applies only during policy years 1-10. The effective annual interest rate is 3.00% thereafter (although we reserve the right to increase the rate after the tenth policy year to as much as 3.25%). The amount of any loan is transferred from the accounts to a special loan account which earns interest at an effective annual rate of 3.00%. Therefore, the cost of a loan is the difference between the loan interest we charge and the interest we credit to the special loan account.

	Rider Charges
Charge	When Charge is Deducted	Amount Deducted
Enhanced Cash Value Rider	Upon payment of premium	0.5% of premium paid in the first 7 policy years, up to the Limiting Premium (1) for each policy year stated in the Policy Specifications page of the policy.
Change of Life Insured Rider	At exercise of benefit	$250
Overloan Protection Rider (2)	At exercise of benefit
Minimum charge		0.04%
Maximum charge		8.00%

(1) The “Limiting Premium” is an amount determined by multiplying the Base Face Amount at issue by an applicable rate which varies by the sex and issue age of the insured person. The minimum rate is for a 15-year old female and is $17.90 per $1000 of Base Face Amount. The maximum rate is for a 90-year old male and is $216.26 per $1,000 of Base Face Amount. The rate for a representative insured person is for a 45 year old male and is $56.49 per $1000 of Base Face Amount. Thus, for the representative 45 year old male with $100,000 of Base Face Amount, the Limiting Premium for the policy year would be $5,649.00.

(2) The charge for this rider is determined as a percentage of unloaned account value. The rates vary by the attained age of the insured person at the time of exercise. The rates also differ according to the tax qualification test elected at issue. The guaranteed minimum rate for the guideline premium test is .04% (currently .04%) and the guaranteed maximum rate is 2.50% (currently 2.50%). The guaranteed minimum rate for the cash value accumulation test is .054% (currently .054%) and the guaranteed maximum rate is 8.00% (currently 8.00%). The minimum rate shown in the table is for an insured person who has reached attained age 99 and the guideline premium test has been elected. The maximum rate shown is for an insured person who has reached attained age 75 and the cash value accumulation test has been elected.

The next table describes the minimum and maximum portfolio level fees and expenses charged by any of the portfolios underlying a variable investment option offered through this prospectus, expressed as a percentage of average net assets (rounded to two decimal places). These expenses are deducted from portfolio assets.

Total Annual Portfolio Operating Expenses	Minimum	Maximum
Range of expenses, including management fees, distribution and/ or service (12b-1) fees, and other expenses1	0.49%	6.09%

¹ Certain of the portfolios’ advisers or subadvisers have contractually agreed to reimburse or waive certain portfolio level expenses. The minimum and maximum expenses shown do not reflect these contractual expense reimbursements or waivers. If such reimbursements or waivers were reflected, the minimum and maximum expenses would be 0.25% and 1.57%, respectively.

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DETAILED INFORMATION

This section of the prospectus provides additional detailed information that is not contained in the Summary of Benefits and Risks section.

Table of Investment Options and Investment Subadvisers

When you select a Separate Account investment option, we invest your money in shares of a corresponding portfolio of the John Hancock Trust (the “Trust” or “JHT”) (or the PIMCO Variable Insurance Trust (the “PIMCO Trust”) with respect to the PIMCO VIT All Asset portfolio) and hold the shares in a subaccount of the Separate Account. Fees and expenses of the portfolios are not fixed or specified under the terms of the policies and may vary from year to year. These fees and expenses differ for each portfolio and reduce the investment return of each portfolio. Therefore, they also indirectly reduce the return you will earn on any Separate Account investment options you select. For more information, please refer to the prospectus for the underlying portfolio.

The John Hancock Trust and the PIMCO Trust are so-called “series” type mutual funds and each is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end management investment company. John Hancock Investment Management Services, LLC (“JHIMS”) provides investment advisory services to the Trust and receives investment management fees for doing so. JHIMS pays a portion of its investment management fees to other firms that manage the Trust’s portfolios. We are affiliated with JHIMS and may indirectly benefit from any investment management fees JHIMS retains. The PIMCO VIT All Asset portfolio of the PIMCO Trust receives investment advisory services from Pacific Investment Management Company LLC (“PIMCO”) and pays investment management fees to PIMCO.

Each of the American Asset Allocation, American Blue Chip Income and Growth, American Bond, American Growth- Income, American Growth, American New World, American Fundamental Holdings, American Global Diversification, American International, and Core Diversified Growth & Income portfolios invests in Series 1 shares of the corresponding investment portfolio of the Trust. The American Asset Allocation, American Growth, American International, American Growth-Income, American Blue Chip Income and Growth, American New World, and American Bond portfolios operate as “feeder funds,” which means that the portfolios do not buy investment securities directly. Instead, they invest in a “master fund” which in turn purchases investment securities. Each of the American feeder fund portfolios has the same investment objective and limitations as its master fund. The prospectus for the American Fund master fund is included with the prospectuses for the underlying funds. We pay American Funds Distributors, Inc., the principal underwriter for the American Funds Insurance Series, a percentage of some or all of the amounts allocated to the “American” portfolios of the Trust for the marketing support services it provides.

The portfolios pay us or certain of our affiliates compensation for some of the distribution, administrative, shareholder support, marketing and other services we or our affiliates provide to the portfolios. The amount of this compensation is based on a percentage of the assets of the portfolios attributable to the variable insurance products that we and our affiliates issue. These percentages may differ from portfolio to portfolio and among classes of shares within a portfolio. In some cases, the compensation is derived from the Rule 12b-1 fees that are deducted from a portfolio’s assets for the services we or our affiliates provide to that portfolio. These compensation payments do not, however, result in any charge to you in addition to what is shown in the prospectus for the underlying portfolio.

The following table provides a general description of the portfolios that underlie the variable investment options we make available under the policy. You bear the investment risk of any portfolio you choose as an investment option for your policy. You can find a full description of each portfolio, including the investment objectives, policies, restrictions, and risks, in the prospectus for that portfolio. You should read the portfolio’s prospectus carefully before investing in the corresponding variable investment option.

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The investment options in the Separate Account are not publicly traded mutual funds. The investment options are only available to you as investment options in the policies, or in some cases through other variable annuity contracts or variable life insurance policies issued by us or by other life insurance companies. In some cases, the investment options also may be available through participation in certain qualified pension or retirement plans. The portfolios’ investment advisers and managers (i.e. subadvisers) may manage publicly traded mutual funds with similar names and investment objectives. However, the portfolios are not directly related to any publicly traded mutual fund. You should not compare the performance of any investment option described in this prospectus with the performance of a publicly traded mutual fund. The performance of any publicly traded mutual fund could differ substantially from that of any of the investment options of our Separate Account.

The portfolios available under the policies are as described in the following table:

Portfolio	Portfolio Manager	Investment Objective
500 Index B	MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a broad-based U.S. domestic equity market index. Under normal market conditions, the portfolio seeks to approximate the aggregate total return of a broad-based U.S. domestic equity market index.
Active Bond	Declaration Management & Research LLC; and MFC Global Investment Management (U.S.), LLC	To seek income and capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified mix of debt securities and instruments with maturity durations of approximately 4 to 6 years.
All Cap Core	Deutsche Investment Management Americas Inc.	To seek long-term growth of capital. Under normal market conditions, the portfolio invests in common stocks and other equity securities within all asset classes (small, medium and large-capitalization) of those within the Russell 3000 Index.*
All Cap Value	Lord, Abbett & Co. LLC	To seek capital appreciation. Under normal market conditions, the portfolio primarily purchases equity securities of U.S. and multinational companies in all capitalization ranges that the subadviser believes are undervalued.
Alpha Opportunities	Wellington Management Company, LLP	To seek long-term total return. The portfolio employs a “multiple sleeve structure,” which means the portfolio has several components that are managed separately in different styles. The portfolio seeks to obtain its objective by combining these different component styles in a single portfolio.
American Asset Allocation	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to provide high total return (including income and capital gains) consistent with preservation of capital over the long term. The portfolio invests all of its assets in Class 1 shares of its master fund, the Asset Allocation Fund, a series of the American Funds Insurance Series. The master fund invests in a diversified portfolio of common stocks and other equity securities, bonds and other intermediate and long-term debt securities, and money market instruments.
American Blue Chip Income and Growth	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to produce income exceeding the average yield on U.S. stocks generally (as represented by the average yield on the S&P 500 Index*) and to provide an opportunity for growth of principal consistent with sound common stock investing. The portfolio invests all of its assets in Class 1 shares of its master fund, the Blue Chip Income and Growth Fund, a series of the American Funds Insurance Series. The master fund invests primarily in common stocks of larger, more established companies domiciled in the U.S. with market capitalizations of $4 billion and above.
American Bond	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to maximize current income and preserve capital. The portfolio invests all of its assets in Class 1 shares of its master fund, the Bond Fund, a series of the American Funds Insurance Series. The master fund will invest at least 65% of its assets in investment-grade debt securities (including cash and cash equivalents) and may invest up to 35% of its assets in debt securities that are rated Ba1 or below by Moody’s and BB+ or below by S&P or that are unrated but determined to be of equivalent quality (so called “junk bonds”). The master fund may invest in debt securities of issuers domiciled outside the U.S., and may also invest up to 20% of its assets in preferred stocks, including convertible and non-convertible preferred stocks.

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Portfolio	Portfolio Manager	Investment Objective
American Fundamental Holdings	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. The portfolio invests in other funds and other investment companies, as well as other types of investments. The portfolio operates as a fund of funds and currently invests primarily in four underlying funds of the American Funds Insurance Series: Bond Fund, Growth Fund, Growth-Income Fund, and International Fund.
American Global Diversification	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. The portfolio invests in other funds and other investment companies, as well as other types of investments. Under normal market conditions, the portfolio invests a significant portion of its assets in securities, which include securities held by the underlying funds, that are located outside of the U.S. The portfolio operates as a fund of funds and currently invests primarily in five underlying funds of the American Funds Insurance Series: Bond Fund, Global Growth Fund, Global Small Capitalization Fund, High-Income Bond Fund, and New World Fund.
American Growth	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to make the shareholders’ investment grow. The portfolio invests all of its assets in Class 1 shares of its master fund, the Growth Fund, a series of the American Funds Insurance Series. The Growth Fund invests primarily in common stocks and seeks to invest in companies that appear to offer superior opportunities for growth of capital. The Growth Fund may also invest a portion of its assets in common stocks and other securities of issuers domiciled outside the U.S.
American Growth–Income	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to make the shareholders’ investments grow and to provide the shareholder with income over time. The portfolio invests all of its assets in Class 1 shares of its master fund, the Growth-Income Fund, a series of the American Funds Insurance Series. The Growth-Income Fund invests primarily in common stocks or other securities that demonstrate the potential for appreciation and/or dividends. Although the fund focuses on investments in medium to larger capitalization companies, the fund’s investments are not limited to a particular capitalization size.
American International	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to make the shareholders’ investment grow. The portfolio invests all of its assets in Class 1 shares of its master fund, the International Fund, a series of the American Funds Insurance Series. The International Fund invests primarily in common stocks of companies located outside the U.S. that the adviser believes have the potential for growth. The fund may invest a portion of its assets in common stocks and other securities of companies in countries with developing economies and/or markets.
American New World	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to make the shareholders’ investment grow over time. The portfolio invests all of its assets in Class 1 shares of its master fund, the New World Fund, a series of the American Funds Insurance Series. The New World Fund invests primarily in stocks of companies with significant exposure to countries with developing economies and/or markets that the adviser believes have potential of providing capital appreciation. The New World portfolio may also invest in debt securities of issuers, including issuers of lower rated bonds, with exposure to these countries.
Balanced	T. Rowe Price Associates, Inc.	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests in both equity and fixed-income securities. The portfolio employs growth, value and core approaches to allocate its assets among stocks of small, medium and large-capitalization companies in both the U.S. and foreign countries. The portfolio may purchase a variety of fixed-income securities, including investment-grade and below investment-grade debt securities (commonly known as “junk bonds”) with maturities that range from short to longer term, as well as cash.
Blue Chip Growth	T. Rowe Price Associates, Inc.	To seek to provide long-term growth of capital. Current income is a secondary objective. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks of large and medium-sized blue chip growth companies.
Capital Appreciation	Jennison Associates LLC	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 65% of its total assets in equity and equity-related securities of companies, at the time of investment, that exceed $1 billion in market capitalization and that the subadviser believes have above-average growth prospects. These companies are generally medium to large-capitalization companies.

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Portfolio	Portfolio Manager	Investment Objective
Capital Appreciation Value	T. Rowe Price Associates, Inc.	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests primarily in common stocks of established U.S. companies that have above-average potential for capital growth. Common stocks typically constitute at least 50% of the portfolio’s total assets. The remaining assets are generally invested in other securities, including convertible securities, corporate and government debt, foreign securities, futures and options. The portfolio may invest up to 20% of its total assets in foreign securities.
Core Allocation Plus	Wellington Management Company, LLP	To seek total return, consisting of long-term capital appreciation and current income. Under normal market conditions, the portfolio invests in equity and fixed-income securities of issuers located within and outside the U.S. The portfolio will allocate its assets between fixed-income securities, which may include investment-grade and below investment-grade debt securities with maturities that range from short to longer term, and equity securities based upon the subadviser’s targeted asset mix, which may change over time. Under normal circumstances, the targeted asset mix may range between 75%-50% equity instruments and 50%-25% fixed-income instruments and will generally reflect the subadviser’s long-term, strategic asset allocation analysis.
Core Bond	Wells Capital Management, Incorporated	To seek total return consisting of income and capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in a broad range of investment-grade debt securities, including U.S. Government obligations, corporate bonds, mortgage-backed and other asset-backed securities and money market instruments.
Core Diversified Growth & Income	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital and income. The portfolio invests in other funds and other investment companies, as well as other types of investments. Under normal market conditions, the portfolio generally invests between 65% and 75% of its assets in equity securities, which include securities held by the underlying funds, and between 25% and 35% of its assets in fixed-income securities, which include securities held by the underlying funds.
Core Strategy	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. Current income is also a consideration. Under normal market conditions, the portfolio invests in other funds of JHT and other investment companies (including exchange traded funds). The portfolio invests approximately 70% of its total assets in equity securities and underlying funds that invest primarily in equity securities and approximately 30% of its total assets in fixed-income securities and underlying funds that invest primarily in fixed-income securities.
Disciplined Diversification	Dimensional Fund Advisors LP	To seek total return consisting of capital appreciation and current income. Under normal market conditions, the portfolio invests primarily in equity securities and fixed-income securities of domestic and international issuers, including equities of issuers in emerging markets, in accordance with the following range of allocations:
		Target Allocation                          Range of Allocations Equity Securities: 70%                    65% – 75% Fixed-Income Securities: 30%        25% – 35%
Emerging Markets Value	Dimensional Fund Advisors LP	To seek long-term capital appreciation. Under normal circumstances, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in companies associated with emerging markets designated from time to time by the investment committee of the subadviser.
Equity-Income	T. Rowe Price Associates, Inc.	To seek to provide substantial dividend income and also long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities, with at least 65% in common stocks of well-established companies paying above-average dividends.
Financial Services	Davis Selected Advisers, L.P.	To seek growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in companies that, at the time of investment, are principally engaged in financial services, and the portfolio invests primarily in common stocks of financial services companies.

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Portfolio	Portfolio Manager	Investment Objective
Franklin Templeton Founding  Allocation	John Hancock Investment Management Services, LLC	To seek long-term growth of capital. The portfolio invests in other funds and in other investment companies, as well as other types of investments. The portfolio currently invests primarily in three underlying funds: Global Fund, Income Fund and Mutual Shares Fund.
Fundamental Value	Davis Selected Advisers, L.P.	To seek growth of capital. Under normal market conditions, the portfolio invests primarily in common stocks of U.S. companies with market capitalizations of at least $10 billion. The portfolio may also invest in companies with smaller capitalizations.
Global	Templeton Global Advisors Limited	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests primarily in the equity securities of companies located throughout the world, including emerging markets.
Global Bond	Pacific Investment Management Company LLC	To seek maximum total return, consistent with preservation of capital and prudent investment management. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in fixed-income instruments that are economically tied to at least three countries (one of which may be the U.S.), which may be represented by futures contracts (including related options) with respect to such securities, and options on such securities. These fixed-income instruments may be denominated in foreign currencies or in U.S. dollars, which may be represented by forwards or derivatives, such as options, futures contracts, or swap agreements.
Health Sciences	T. Rowe Price Associates, Inc.	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks of companies engaged, at the time of investment, in the research, development, production, or distribution of products or services related to health care, medicine, or the life sciences. While the portfolio may invest in companies of any size, the majority of its assets are expected to be invested in large and medium-capitalization companies.
High Yield	Western Asset Management Company	To realize an above-average total return over a market cycle of three to five years, consistent with reasonable risk. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) at the time of investment in high yield securities, including corporate bonds, preferred stocks, U.S. Government and foreign securities, mortgage-backed securities, loan assignments or participations and convertible securities that have the following ratings from one of the ratings agencies listed below (or, if unrated, are considered by the subadviser to be of equivalent quality):
		Rating Agency
		Moody’s:	Ba through C
		S&P’s:	BB through D
International Core	Grantham, Mayo, Van Otterloo & Co. LLC	To seek high total return. Under normal market conditions, the portfolio invests at least 80% of its total assets in equity investments. The portfolio typically invests in equity investments in companies from developed markets outside the U.S.
International Equity Index A	SSgA Funds Management, Inc.	To seek to track the performance of a broad-based equity index of foreign companies primarily in developed countries and, to a lesser extent, in emerging markets. Under normal market conditions, the portfolio invests at least 80% of its assets in securities listed in the Morgan Stanley Capital International All Country World Excluding U.S. Index* or American Depository Receipts or Global Depository Receipts representing such securities.
International Equity Index B	SSgA Funds Management, Inc.	To seek to track the performance of a broad-based equity index of foreign companies primarily in developed countries and, to a lesser extent, in emerging markets. Under normal market conditions, the portfolio invests at least 80% of its assets in securities listed in the Morgan Stanley Capital International All Country World Excluding U.S. Index* or American Depository Receipts or Global Depository Receipts representing such securities.

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Portfolio	Portfolio Manager	Investment Objective
International Opportunities	Marsico Capital Management, LLC	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 65% of its total assets in common stocks of foreign companies that are selected for their long-term growth potential. The portfolio may invest in an unlimited number of companies of any size throughout the world. The portfolio invests in issuers from at least three different countries not including the U.S. The portfolio may invest in common stocks of companies economically tied to emerging markets. Some issuers or securities in the portfolio may be based in or economically tied to the U.S.
International Small Company	Dimensional Fund Advisors LP	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in securities of small-capitalization companies in the particular markets in which the portfolio invests. The portfolio will primarily invest in equity securities of non-U.S. small companies of developed markets, but may hold equity securities of companies located in emerging markets.
International Value	Templeton Investment Counsel, LLC	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets in equity securities of companies located outside the U.S., including in emerging markets.
Investment Quality Bond	Wellington Management Company, LLP	To provide a high level of current income consistent with the maintenance of principal and liquidity. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in bonds rated investment-grade at the time of investment. The portfolio will tend to focus on corporate bonds and U.S. Government bonds with intermediate to longer-term maturities.
Large Cap	UBS Global Asset Management (Americas) Inc.	To seek to maximize total return, consisting of capital appreciation and current income. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of U.S. large-capitalization companies. The portfolio defines large-capitalization companies as those with a market capitalization range, at the time of investment, equal to that of the portfolio’s benchmark, the Russell 1000 Index.*
Large Cap Value	BlackRock Investment Management, LLC	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of large-capitalization companies selected from those that are, at the time of purchase, included in the Russell 1000 Value Index.* The portfolio seeks to achieve its investment objective by investing primarily in a diversified portfolio of equity securities of large-capitalization companies located in the U.S. The portfolio will seek to outperform the Russell 1000 Value Index by investing in equity securities that the subadviser believes are selling at below normal valuations.
Lifestyle Aggressive	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. Current income is not a consideration. The portfolio normally invests approximately 100% of its assets in underlying funds that invest primarily in equity securities.
Lifestyle Balanced	MFC Global Investment Management (U.S.A.) Limited	To seek a balance between a high level of current income and growth of capital, with a greater emphasis on growth of capital. The portfolio normally invests approximately 50% of its assets in underlying funds that invest primarily in fixed-income securities and approximately 50% in underlying funds that invest primarily in equity securities.
Lifestyle Conservative	MFC Global Investment Management (U.S.A.) Limited	To seek a high level of current income with some consideration given to growth of capital. The portfolio normally invests approximately 80% of its assets in underlying funds that invest primarily in fixed-income securities and approximately 20% in underlying funds that invest primarily in equity securities.
Lifestyle Growth	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. Current income is also a consideration. The portfolio invests approximately 30% of its assets in underlying funds that invest primarily in fixed-income securities and approximately 70% in underlying funds that invest primarily in equity securities.
Lifestyle Moderate	MFC Global Investment Management (U.S.A.) Limited	To seek a balance between a high level of current income and growth of capital, with a greater emphasis on income. The portfolio normally invests approximately 60% of its assets in underlying funds that invest primarily in fixed-income securities and approximately 40% in underlying funds that invest primarily in equity securities.

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Portfolio	Portfolio Manager	Investment Objective
Mid Cap Index	.MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a medium-capitalization U.S. domestic equity market index. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) at the time of investment in (a) the common stocks that are included in the S&P MidCap 400 Index* and (b) securities (which may or may not be included in the S&P MidCap 400 Index) that the subadviser believes as a group will behave in a manner similar to the index.
Mid Cap Stock	Wellington Management Company, LLP	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of medium-sized companies with significant capital appreciation potential. For the portfolio, “medium-sized companies” are those with market capitalizations within the collective market capitalization range of companies represented in either the Russell MidCap Index* or the S&P MidCap 400 Index.*
Mid Value	T. Rowe Price Associates, Inc.	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets in companies with market capitalizations that are within the S&P MidCap 400 Index* or the Russell MidCap Value Index.* The portfolio invests in a diversified mix of common stocks of mid-size U.S. companies that are believed to be undervalued by various measures and offer good prospects for capital appreciation.
Money Market B	MFC Global Investment Management (U.S.A.) Limited	To seek to obtain maximum current income consistent with preservation of principal and liquidity. Under normal market conditions, the portfolio invests in high quality, U.S. dollar denominated money market instruments. Certain market conditions may cause the return of the portfolio to become low or possibly negative.
Natural Resources	Wellington Management Company, LLP	To seek long-term total return. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity and equity-related securities of natural resource-related companies worldwide, including emerging markets. Natural resource-related companies include companies that own or develop energy, metals, forest products and other natural resources, or supply goods and services to such companies.
Optimized All Cap	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 65% of its total assets in equity securities of U.S. companies. The portfolio will focus on equity securities of U.S. companies across the three market capitalization ranges of large, medium and small.
Optimized Value	MFC Global Investment Management (U.S.A.) Limited	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 65% of its total assets in equity securities of U.S. companies with the potential for long-term growth of capital, with a market capitalization range, at the time of investment, equal to that of the portfolio’s benchmark, the Russell 1000 Value Index.*
PIMCO VIT All Asset (a series of PIMCOVariable InsuranceTrust) (only Class M is available)	Pacific Investment Management Company LLC	To seek maximum real return consistent with preservation of real capital and prudent investment management. The portfolio is a fund of funds and normally invests substantially all of its assets in Institutional Class shares of underlying PIMCO funds.
Real Estate Securities	Deutsche Investment Americas Inc.	To seek to achieve a combination of long-term capital appreciation and current income. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of real estate investment trusts and real estate companies. Equity securities include common stock, preferred stock and securities convertible into common stock.
Real Return Bond	Pacific Investment Management Company LLC	To seek maximum real return, consistent with preservation of real capital and prudent investment management. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities and corporations, which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements.

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Portfolio	Portfolio Manager	Investment Objective
Science & Technology	RCM Capital Management LLC; and T. Rowe Price Associates, Inc.	To seek long-term growth of capital. Current income is incidental to the portfolio’s objective. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks of companies expected to benefit from the development, advancement, and/or use of science and technology. For purposes of satisfying this requirement, common stock may include equity-linked notes and derivatives relating to common stocks, such as options on equity-linked notes.
Short Term Government Income	MFC Global Investment Management (U.S.), LLC	To seek a high level of current income consistent with preservation of capital. Maintaining a stable share price is a secondary goal. The portfolio seeks to achieve its objective by investing under normal circumstances at least 80% of its assets in obligations issued or guaranteed by the U.S. Government and its agencies, authorities or instrumentalities. Under normal circumstances, the portfolio’s effective duration is no more than 3 years.
Small Cap Growth	Wellington Management Company, LLP	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in small-capitalization companies. For the purposes of the portfolio, “small-capitalization companies” are those with market capitalizations, at the time of investment, not exceeding the maximum market capitalization of any company represented in either the Russell 2000 Index* or the S&P SmallCap 600 Index.*
Small Cap Index	MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a small-capitalization U.S. domestic equity market index. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) at the time of investment in (a) the common stocks that are included in the Russell 2000 Index* and (b) securities (which may or may not be included in the Russell 2000 Index) that the subadviser believes as a group will behave in a manner similar to the index.
Small Cap Opportunities	Dimensional Fund Advisors LP; and Invesco Advisers, Inc.	To seek long-term capital appreciation. Under normal market conditions, Invesco Advisers, Inc. invests at least 80% of its subadvised net assets (plus any borrowings for investment purposes) in equity securities of small-capitalization companies. Dimensional Fund Advisers LP generally will invest its subadvised net assets in a broad and diverse group of readily marketable common stocks of small and medium-capitalization companies traded on a principal U.S. exchange or on the over-the-counter market that Dimensional Fund Advisers LP determines to be value stocks at the time of purchase.
Small Cap Value	Wellington Management Company, LLP	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in small-capitalization companies that are believed to be undervalued by various measures and offer good prospects for capital appreciation. For the purposes of the portfolio, “small-capitalization companies” are those with market capitalizations, at the time of investment, not exceeding the maximum market capitalization of any company represented in either the Russell 2000 Index* or the S&P SmallCap 600 Index.*
Small Company Value	T. Rowe Price Associates, Inc.	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in companies with market capitalizations, at the time of investment, that do not exceed the maximum market capitalization of any security in the Russell 2000 Index.* The portfolio invests in small companies whose common stocks are believed to be undervalued.
Smaller Company Growth	Frontier Capital Management Company, LLC; Perimeter Capital Management; and MFC Global Investment Management (U.S.A.) Limited	To seek long-term capital appreciation. Under normal circumstances, the fund invests at least 80% of its assets in small-capitalzation equity securities.
Strategic Bond	Western Asset Management Company	To seek a high level of total return consistent with preservation of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in fixed income securities.

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Portfolio	Portfolio Manager	Investment Objective
Strategic Income Opportunities	MFC Global Investment Management (U.S.), LLC	To seek to maximize total return consistent with current income and capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its assets in the following types of securities, which may be denominated in U.S. dollars or foreign currencies: foreign government and corporate debt securities from developed and emerging markets, U.S. Government and agency securities, domestic high-yield bonds and investment-grade corporate bonds, and currency instruments.
Total Bond Market B	Declaration Management & Research LLC	To seek to track the performance of the Barclays Capital U.S. Aggregate Bond Index** (which represents the U.S. investment-grade bond market). Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowing for investment purposes) in securities listed in the Barclays Capital U.S. Aggregate Bond Index.
Total Return	Pacific Investment Management Company LLC	To seek maximum total return, consistent with preservation of capital and prudent investment management. Under normal market conditions, the portfolio invests at least 65% of its total assets in a diversified portfolio of fixed-income instruments of varying maturities, which may be represented by forwards or derivatives, such as options, futures contracts, or swap agreements.
Total Stock Market Index	MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a broad U.S. domestic equity market index. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) at the time of investment in (a) the common stocks that are included in the Wilshire 5000 Total Market Index* and (b) securities (which may or may not be included in the Wilshire 5000 Total Market Index) that the subadviser believes as a group will behave in a manner similar to the index.
U.S. High Yield Bond	Wells Capital Management, Incorporated	To seek total return with a high level of current income. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S. corporate debt securities that are, at the time of investment, below investment-grade, including preferred and other convertible securities in below investment-grade debt securities (sometimes referred to as “junk bonds” or high yield securities). The portfolio also invests in corporate debt securities that are investment-grade, and may buy preferred and other convertible securities and bank loans that are investment-grade.
Utilities	Massachusetts Financial Services Company	To seek capital growth and current income (income above that available from the portfolio invested entirely in equity securities). Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in securities of companies in the utilities industry. The subadviser considers a company to be in the utilities industry if, at the time of investment, the subadviser determines that a substantial portion (i.e. at least 50%) of the company’s assets or revenues are derived from one or more utilities.
Value	Van Kampen Investments	To seek to realize an above-average total return over a market cycle of three to five years, consistent with reasonable risk. Under normal market conditions, the portfolio invests in equity securities of companies with capitalizations, at the time of investment, similar to the market capitalization of companies in the Russell MidCap Value Index.*

*“Wilshire 5000 Total Market Index ^®” is a trademark of Wilshire Associates. “MSCI All Country World Ex US Index” is a trademark of Morgan Stanley & Co. Incorporated. ”Russell 1000, ^®” “Russell 2000, ^®” “Russell 1000 Value, ^®” “Russell 3000, ^®” “Russell MidCap, ^®” and “Russell MidCap Value ^®” are trademarks of Frank Russell Company. ”S&P 500, ^®” “S&P MidCap 400, ^®” and “S&P SmallCap 600 ^®” are trademarks of The McGraw-Hill Companies, Inc. None of the portfolios are sponsored, endorsed, managed, advised, sold or promoted by any of these companies, and none of these companies make any representation regarding the advisability of investing in the portfolios.

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The indices referred to in the portfolio objectives track companies having the ranges of approximate market capitalization, as of February 26, 2010 (except as otherwise indicated), set out below:

Wilshire 5000 Total Market Index — less than $1 million to $344 billion (as of October 31, 2009)

MSCI All Country World Ex US Index — $544 million to $197.9 billion

Russell 1000 Index — $239 million to $307.3 billion

Russell 1000 Value Index — $239 million to $307.3 billion

Russell 2000 Index — $13 million to $4.6 billion

Russell 3000 Index — $13 million to $307.3 billion

Russell MidCap Index — $239 million to $17.5 billion

Russell MidCap Value Index — $239 million to $14.5 billion

S&P 500 Index — $1.3 billion to $324.6 billion (as of April 9, 2010)

S&P MidCap 400 Index — $374 million to $8.1 billion

S&P SmallCap 600 Index — $60 million to $2.8 billion (as of April 9, 2010)

**The Barclays Capital U.S. Aggregate Bond Index (which represents the U.S. investment grade bond market) is a bond index that relies on indicators such as quality, liquidity, term and duration as relevant measures of performance.

If the shares of a portfolio are no longer available for investment or in our judgment investment in a portfolio becomes inappropriate, we may eliminate the shares of a portfolio and substitute shares of another portfolio of the Trust or another open-end registered investment company. Substitution may be made with respect to both existing investments and the investment of future purchase payments. However, we will make no such substitution without first notifying you and obtaining approval of the appropriate insurance regulatory authorities and the SEC (to the extent required by the 1940 Act).

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

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

We will vote shares of the portfolios held in the Account at the shareholder meetings according to voting instructions received from persons having the voting interest under the policies. We will determine the number of portfolio shares for which voting instructions may be given not more than 90 days prior to the meeting. Proxy material will be distributed to each person having the voting interest under the contract together with appropriate forms for giving voting instructions. We will vote all portfolio shares that we hold (including our own shares and those we hold in the Account for policy owners) in proportion to the instructions so received. The effect of this proportional voting is that a small number of policy owners can determine the outcome of a vote.

We determine the number of a series fund’s shares held in a subaccount attributable to each owner by dividing the amount of a policy’s account value held in the subaccount by the net asset value of one share in the series fund. Fractional votes will be counted. We determine the number of shares as to which the owner may give instructions as of the record date for a series fund’s meeting. Owners of policies may give instructions regarding the election of the Board of Trustees or Board of Directors of a series fund, ratification of the selection of independent auditors, approval of series fund investment advisory agreements and other matters requiring a shareholder vote. We will furnish owners with information and forms to enable owners to give voting instructions. However, we may, in certain limited circumstances permitted by the SEC’s rules, disregard voting instructions. If we do disregard voting instructions, you will receive a summary of that action and the reasons for it in the next semi-annual report to owners.

The voting privileges described above reflect our understanding of applicable Federal securities law requirements. To the extent that applicable law, regulations or interpretations change to eliminate or restrict the need for such voting privileges, we reserve the right to proceed in accordance with any such revised requirements. We also reserve the right, subject to compliance with applicable law, including approval of owners if so required, (1) to transfer assets determined by John Hancock USA to be associated with the class of policies to which your policy belongs from the Account to another separate account or subaccount, (2) to deregister the Account under the 1940 Act, (3) to substitute for the fund shares held by a subaccount any other investment permitted by law, and (4) to take any action necessary to comply with or obtain any

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exemptions from the 1940 Act. Any such change will be made only if, in our judgment, the change would best serve the interests of owners of policies in your policy class or would be appropriate in carrying out the purposes of such policies. We would notify owners of any of the foregoing changes and to the extent legally required, obtain approval of affected owners and any regulatory body prior thereto. Such notice and approval, however, may not be legally required in all cases.

Description of John Hancock USA

We are a stock life insurance company incorporated in Maine on August 20, 1955 by a special act of the Maine legislature and redomesticated under the laws of Michigan. We are a licensed life insurance company in the District of Columbia and all states of the United States except New York. Our ultimate parent is Manulife Financial Corporation (“MFC”), a publicly traded company based in Toronto, Canada. MFC is the holding company of John Hancock USA and its subsidiaries. However, neither John Hancock USA nor any of its affiliated companies guarantees the investment performance of the Account.

We are ranked and rated by independent financial rating services, which may include Moody’s, Standard & Poor’s, Fitch and A.M. Best. The purpose of these ratings is to reflect the financial strength or claims-paying ability of the company, but they do not specifically relate to its products, the performance (return) of these products, the value of any investment in these products upon withdrawal or to individual securities held in any portfolio. These ratings do not apply to the safety and performance of the Separate Account.

Description of Separate Account N

The investment accounts shown on page 1 are in fact subaccounts of Separate Account N, a separate account operated by us under Michigan law. The Account meets the definition of “separate account” under the Federal securities laws and is registered as a unit investment trust under the 1940 Act. Such registration does not involve supervision by the SEC of the management of the Account or of us.

The Account’s assets are our property. Each policy provides that amounts we hold in the Account pursuant to the policies cannot be reached by any other persons who may have claims against us and can’t be used to pay any indebtedness of John Hancock USA other than those arising out of policies that use the Account. Income, gains and losses credited to, or charged against, the Account reflect the Account’s own investment experience and not the investment experience of John Hancock USA’s other assets.

New subaccounts may be added and made available to policy owners from time to time. Existing subaccounts may be modified or deleted at any time.

The fixed account

Our obligations under any fixed account are backed by our general account assets. Our general account consists of assets owned by us other than those in the Account and in other separate accounts that we may establish. Subject to applicable law, we have sole discretion over the investment of assets of the general account and policy owners do not share in the investment experience of, or have any preferential claim on, those assets. Instead, we guarantee that the policy value allocated to any fixed account will accrue interest daily at an effective annual rate that we determine without regard to the actual investment experience of the general account. We currently offer only one fixed account — the standard fixed account. The effective annual rate we declare for the fixed account will never be less than 3%. We reserve the right to offer one or more additional fixed accounts with characteristics that differ from those of the current fixed account, but we are under no obligation to do so.

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

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The death benefit

In your application for the policy, you will tell us how much life insurance coverage you want on the life of the insured person. This is called the “Total Face Amount.” Total Face Amount is composed of the Base Face Amount and any Supplemental Face Amount you elect. The Supplemental Face Amount you can have generally cannot exceed 900% of the Base Face Amount at the Issue Date. Thereafter, increases to the Supplemental Face Amount cannot exceed 400% of the Total Face Amount at the Issue Date. There are a number of factors you should consider in determining whether to elect coverage in the form of Base Face Amount or in the form of Supplemental Face Amount. These factors are discussed under “Base Face Amount vs. Supplemental Face Amount” below.

When the insured person dies, we will pay the death benefit minus any outstanding policy debt and unpaid fees and charges. There are two ways of calculating the death benefit. You must choose which one you want in the application. The two death benefit options are described below.

• Option 1 - The death benefit will equal the greater of (1) the Total Face Amount, or (2) the minimum death benefit (as described below).

• Option 2 - The death benefit will equal the greater of (1) the Total Face Amount plus the policy value on the date of death, or (2) the minimum death benefit.

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

Limitations on payment of death benefit

If the insured person commits suicide within certain time periods (generally within two years from the Issue Date of the policy), the amount payable will be equal to the premiums paid, less the amount of any policy debt on the date of death, and less any withdrawals, unless otherwise provided by your policy.

Also if an application misstated the age or sex of the insured person, we will adjust, if necessary, the Base Face Amount, any Supplemental Face Amount, and every other benefit to that which would have been purchased at the correct age or sex by the most recent cost of insurance charge.

Base Face Amount vs. Supplemental Face Amount

As noted above, you should consider a number of factors in determining whether to elect coverage in the form of Base Face Amount or in the form of Supplemental Face Amount.

For the same amount of premiums paid, the amount of the Face Amount charge deducted from policy value and the amount of compensation paid to the selling insurance agent will generally be less if coverage is included as Supplemental Face Amount, rather than as Base Face Amount. On the other hand, the amount of any Supplemental Face Amount included in the calculation of the death benefit at and after the policy anniversary nearest the insured person’s 100^th birthday will be limited to the lesser of the current Supplemental Face Amount or the policy value.

If your priority is to reduce your Face Amount charges, you may wish to maximize the proportion of the Supplemental Face Amount. However, if your priority is to maximize the death benefit when the insured person reaches age 100, then you may wish to maximize the proportion of the Base Face Amount.

The minimum death benefit

In order for a policy to qualify as life insurance under Federal tax law, there has to be a minimum amount of insurance in relation to policy value. There are two tests that can be applied under Federal tax law — the “guideline premium test” and the “cash value accumulation test.” You must elect which test you wish to have applied at issue. Once elected, the test cannot be changed without our approval.

Under the guideline premium test, we compute the minimum death benefit each business day by multiplying the policy value (and any benefit under the Enhanced Cash Value Rider) on that date by the death benefit factor applicable on that date. Factors for some ages are shown in the table below:

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Attained Age	Applicable Factor
40 and under	250%
45	215%
50	185%
55	150%
60	130%
65	120%
70	115%
75	105%
90	105%
95 and above	100%

A table showing the factor for each age will appear in the policy.

Under the cash value accumulation test, we compute the minimum death benefit each business day by multiplying the policy value (and any benefit under the Enhanced Cash Value Rider) on that date by the death benefit factor applicable on that date. The factor decreases as attained age increases. A table showing the factor for each age will appear in the policy.

The cash value accumulation test may be preferable if you want to fund the policy so that the minimum death benefit will increase earlier than would be required under the guideline premium test, or if you want to fund the policy at the “7 pay” limit for the full seven years (see “Tax considerations”).

To the extent that the calculation of the minimum death benefit under the selected life insurance qualification test causes the death benefit to exceed our limits, we reserve the right to return premiums or distribute a portion of the policy value so that the resulting amount of insurance is maintained within our limits. Alternatively, if we should decide to accept the additional amount of insurance, we may require additional evidence of insurability.

When the insured person reaches 100

At and after the policy anniversary nearest the insured person’s 100^th birthday, the following will occur:

• Any Supplemental Face Amount will be limited (see “Base Face Amount vs. Supplemental Face Amount”).

• We will stop deducting any monthly deductions.

• We will stop accepting any premium payments.

Requesting an increase in coverage

After the first policy year, you may make a written request for an unscheduled increase in the Supplemental Face Amount. We must receive your written request within two months of your next policy anniversary. Generally, each such increase must be at least $50,000. However, you will have to provide us with evidence that the insured person qualifies for the same risk classification that applied to them at issue. Generally, any increase will be effective on the next policy anniversary following the date we approve the request.

Requesting a decrease in coverage

After the first policy year, we may approve a reduction in the Base Face Amount or the Supplemental Face Amount, but only if:

• the remaining Total Face Amount will be at least $100,000,

• the remaining Base Face Amount will be at least $50,000, and

• the remaining Total Face Amount will at least equal the minimum required by the tax laws to maintain the policy’s life insurance status.

An approved decrease will take effect on the monthly deduction date on or next following the date we approve the request. We reserve the right to require that the Supplemental Face Amount be fully depleted before the Base Face Amount can be reduced.

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Change of death benefit option

The death benefit option may be changed from Option 2 to Option 1 after the first policy year. We reserve the right to limit a request for a change if the change would cause the policy to fail to qualify as life insurance for tax purposes. We will not allow a change in death benefit option if it would cause the Total Face Amount to decrease below $100,000.

A change in the death benefit option from Option 2 to Option 1 will result in a change in the policy’s Total Face Amount, in order to avoid any change in the amount of the death benefit. The new Total Face Amount will be equal to the Total Face Amount prior to the change plus the policy value as of the date of the change. The change will take effect on the monthly deduction date on or next following the date the written request for the change is received at our Service Office.

If you change the death benefit option, the Federal tax law test (“guideline premium test” or “cash value accumulation test”) that you elected at issue will continue to apply. Please read “The minimum death benefit” for more information about these Federal tax laws tests.

Tax consequences of coverage changes

A change in the death benefit option or Total Face Amount will often change the policy’s limits under the Federal tax law test that you elected. To avoid having the policy cease to qualify as life insurance for tax purposes, we reserve the right to (i) refuse or limit a change in the death benefit option or Total Face Amount and (ii) change the Guideline Single Premium or Guideline Level Premium, as applicable. Please read “Tax considerations” to learn about possible tax consequences of changing your insurance coverage under the policy.

Your beneficiary

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

Ways in which we pay out policy proceeds

You may choose to receive proceeds from the policy as a single sum. This includes proceeds that become payable because of death or surrender. Alternatively, you can select to have proceeds of $1,000 or more applied to any of the other payment options we may offer at the time. You cannot choose an option if the monthly payments under the option would be less than $50. We will issue a supplementary agreement when the proceeds are applied to any alternative payment option. That agreement will spell out the terms of the option in full. If no alternative payment option is chosen, proceeds may be paid as a single sum.

Changing a payment option

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

Tax impact of payment option chosen

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

Premiums

Planned premiums

The Policy Specifications page of your policy will show the “Planned Premium” for the policy. You choose this amount in the policy application. You will also choose how often to pay premiums — annually, semi-annually, quarterly or monthly. The premium reminder notice we send you is based on the amount and period you choose. However, payment of Planned Premiums is not necessarily required. You need only pay enough premium to keep the policy in force (see “Lapse and reinstatement”).

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Minimum initial premium

The Minimum Initial Premium is set forth in the Policy Specifications page of your policy. After the payment of the initial premium, premiums may be paid at any time and in any amount until the insured person’s attained age 100 , subject to the limitations on premium amount described below.

Maximum premium payments

Federal tax law limits the amount of premium payments you can make relative to the amount of your policy’s insurance coverage. We will not knowingly accept any amount by which a premium payment exceeds this limit. If you exceed certain other limits, the law may impose a penalty on amounts you take out of your policy. More discussion of these tax law requirements is provided under “Tax considerations.”

Large premium payments may expose us to unanticipated investment risk, and we will generally refuse to accept premiums in excess of the Maximum Annual Premium limit set forth in the Policy Specifications. In addition, in order to limit our investment risk exposure under certain market conditions, we may refuse to accept additional premium payments that are not in excess of the Maximum Annual Premium limit.nbsp; This may be the case, for example, in an environment of decreasing interest rates, where we may not be able to acquire investments for our general account that will sufficiently match the liabilities we are incurring under our fixed account guarantees. Excessive allocations may also interfere with the effective management of our variable investment account portfolios, if we are unable to make an orderly investment of the additional premium into the portfolios. Also, we may refuse to accept an amount of additional premium if the amount of the additional premium would increase our insurance risk exposure, and the insured person doesn’t provide us with adequate evidence that he or she continues to meet our requirements for issuing insurance.

We will notify you in writing of our refusal to accept additional premium under these provisions within three days following the date that it is received by us, and will promptly thereafter take the necessary steps to return the premium to you. Notwithstanding the foregoing limits on the additional premium that we will accept, we will not refuse to accept any premium necessary to prevent the policy from terminating.

Processing premium payments

No premiums will be accepted prior to our receipt of a completed application at our Service Office. All premiums received prior to the Issue Date of the policy will be held in the general account and credited with interest from the date of receipt at the rate then being earned on amounts allocated to the Money Market B investment account. All premiums received on or after the Issue Date, but prior to the Allocation Date, will be held in the Money Market B investment account. The “Allocation Date” of the policy is the 10th day after the Issue Date. The Issue Date is shown on the Policy Specifications page of the policy. On the Allocation Date, the Net Premiums paid plus interest credited, if any, will be allocated among the investment accounts or the fixed account in accordance with the policy owner’s instructions. The “Net Premium” is the premium paid less the premium charge we deduct from it.

Any Net Premium received on or after the Allocation Date will be allocated among investment accounts or the fixed account as of the business day on or next following the date the premium is received at the Service Office. Monthly deductions are normally due on the Policy Date and at the beginning of each policy month thereafter. However, if the monthly deductions are due prior to the Contract Completion Date, they will be deducted from policy value on the Contract Completion Date instead of the dates they were due (see “Procedures for issuance of a policy” for the definition of “Contract Completion Date”).

Payment of premiums will not guarantee that the policy will stay in force. Conversely, failure to pay premiums will not necessarily cause the policy to lapse.

Ways to pay premiums

If you pay premiums by check or money order, they must be drawn on a U.S. bank in U.S. dollars and made payable to “John Hancock.” We will not accept credit card checks. We will not accept starter or third party checks if they fail to satisfy our administrative requirements. Premiums after the first must be sent to the John Hancock USA Service Office at the appropriate address shown on the back cover of this prospectus. We will also accept premiums by wire or by exchange from another insurance company.

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Lapse and reinstatement

Lapse

A policy will go into default if at the beginning of any policy month the policy’s net cash surrender value would be zero or below after deducting the monthly deductions then due. Therefore, a policy could lapse eventually if increases in policy value (prior to deduction of policy charges) are not sufficient to cover policy charges. A lapse could have adverse tax consequences as described under “Tax considerations.” We will notify you of the default and will allow a 61 day grace period in which you may make a premium payment sufficient to bring the policy out of default. The required payment will be equal to the amount necessary to bring the net cash surrender value to zero, if it was less than zero on the date of default, plus the monthly deductions due at the date of default and payable at the beginning of each of the two policy months thereafter, plus any applicable premium charge. If the required payment is not received by the end of the grace period, the policy will terminate (i.e., “lapse”) with no value.

Death during grace period

If the insured person should die during the grace period, the policy value used in the calculation of the death benefit will be the policy value as of the date of default and the insurance benefit will be reduced by any outstanding monthly deductions due at the time of death.

Reinstatement

You can reinstate a policy that has gone into default and terminated at any time within 21 days following the date of termination without furnishing evidence of insurability, subject to the following conditions:

(a) The insured person’s risk classification is standard or preferred, and

(b) The insured person’s attained age is less than 46.

By making a written request, you can reinstate a policy that has gone into default and terminated at any time within the three-year period following the date of termination subject to the following conditions:

(a) You must provide to us evidence of the insured person’s insurability that is satisfactory to us; and

(b) You must pay a premium equal to the amount that was required to bring the policy out of default immediately prior to termination, plus the amount needed to keep the policy in force to the next scheduled date for payment of the Planned Premium.

If the reinstatement is approved, the date of reinstatement will be the later of the date we approve your request or the date the required payment is received at our Service Office. The policy value on the date of reinstatement, prior to the crediting of any Net Premium paid in connection with the reinstatement, will be equal to the policy value on the date the policy terminated. Any policy debt not paid upon termination of a policy will be reinstated if the policy is reinstated.

Generally, the suicide exclusion and incontestability provisions will apply from the effective date of reinstatement. A surrendered policy cannot be reinstated.

The policy value

From each premium payment you make, we deduct the applicable premium charges described under “Deduction from premium payments.” We invest the rest (known as the “Net Premium”) in the accounts (fixed or investment) you’ve elected. Special investment rules apply to premiums processed prior to the Allocation Date (see “Processing premium payments”).

Over time, the amount you’ve invested in any investment account will increase or decrease the same as if you had invested the same amount directly in the corresponding underlying portfolio and had reinvested all portfolios’ dividends and distributions in additional portfolio shares, except that we will deduct certain additional charges which will reduce your policy value. We describe these charges under “Description of charges at the policy level.”

We calculate the unit values for each investment account once every business day as of the close of trading on the New York Stock Exchange, usually 4:00 p.m. Eastern time. Sales and redemptions within any investment account will be transacted using the unit value next calculated after we receive your request either in writing or other form that we specify. If we receive your request before the close of our business day, we’ll use the unit value calculated as of the end of that business

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day. If we receive your request at or after the close of our business day, we’ll use the unit value calculated as of the end of the next business day. If a scheduled transaction falls on a day that is not a business day, we’ll process it as of the end of the next business day.

The amount you’ve invested in the fixed account will earn interest at the rates we declare from time to time. For the fixed account, we guarantee that this rate will be at least 3%. If you want to know what the current declared rate is for the fixed account, just call or write to us. The asset-based risk charge only applies to that portion of the policy value held in the investment accounts. The charge determined does not apply to the fixed account. Otherwise, the policy level charges applicable to the fixed account are the same as those applicable to the investment accounts. We reserve the right to offer one or more additional fixed accounts with characteristics that differ from those of the current fixed account, but we are under no obligation to do so.

Allocation of future premium payments

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

Transfers of existing policy value

You may also transfer your existing policy value from one account (fixed or investment) to another. To do so, you must tell us how much to transfer, either as a whole number percentage or as a specific dollar amount. A confirmation of each transfer will be sent to you. Without our approval, the maximum amount you may transfer to or from any account in any policy year is $1,000,000.

The policies are not designed for professional market timing organizations or other persons or entities that use programmed or frequent transfers among investment accounts. As a consequence, we have reserved the right to impose limits on the number and frequency of transfers into and out of investment accounts and to impose a fee of up to $25 for any transfer beyond an annual limit (which will not be less than twelve). No transfer fee will be imposed on any transfer from an investment account into a fixed account if the transfer occurs during the following periods:

• within 18 months after the policy’s Issue Date, or

• within 60 days after the later of the effective date of a material change in the investment objectives of any investment account or the date you are notified of the change.

Subject to the restrictions set forth below, you may transfer existing policy value into or out of investment accounts. Transfers out of a fixed account are subject to additional limitations noted below.

Our current practice is to restrict transfers into or out of investment accounts to two per calendar month (except with respect to those policies described in the following paragraphs). For purposes of this restriction, and in applying the limitation on the number of free transfers, any transfers made during the period from the opening of a business day (usually 9:00 a.m. Eastern time) to the close of that business day (usually 4:00 p.m. Eastern time) are considered one transfer. You may, however, transfer to the Money Market B investment account even if the two transfer per month limit has been reached, but only if 100% of the account value in all investment accounts is transferred to the Money Market B investment account. If such a transfer to the Money Market B investment account is made, then for the 30 calendar day period after such transfer no transfers from the Money Market B investment account to any other accounts (fixed or investment) may be made. If your policy offers a dollar cost averaging or automatic asset allocation rebalancing program, any transfers pursuant to such program are not considered transfers subject to these restrictions on frequent trading. The restrictions described in this paragraph will be applied uniformly to all policy owners subject to the restrictions.

Policies such as yours may be purchased by a corporation or other entity as a means to informally finance the liabilities created by an employee benefit plan, and to this end the entity may aggregately manage the policies purchased to match its liabilities under the plan. Policies sold under these circumstances are subject to special transfer restrictions. In lieu of the two transfers per month restriction, we will allow the policy owner under these circumstances to rebalance the investment options in its policies within the following limits: (i) during the 10 calendar day period after any policy values are transferred from one investment account into a second investment account, the values can only be transferred out of the second investment account if they are transferred into the Money Market B investment account; and (ii) any policy values that would otherwise not be transferable by application of the 10 day limit described above and that are transferred into the Money Market B investment account may not be transferred out of the Money Market B investment account into any other accounts (fixed or

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investment) for 30 calendar days. The restrictions described in this paragraph will be applied uniformly to all policy owners subject to the restrictions.

Subject to our approval, we may offer policies purchased by a corporation or other entity that has purchased policies to match its liabilities under an employee benefit plan, as described above, the ability to electronically rebalance the investment options in its policies. Under these circumstances, in lieu of imposing any specific limit upon the number and timing of transfers, we will monitor aggregate trades among the subaccounts for frequency, pattern and size for potentially harmful investment practices. If we detect trading activity that we believe may be harmful to the overall operation of any investment account or underlying portfolio, we may impose conditions on policies employing electronic rebalancing to submit trades, including setting limits upon the number and timing of transfers, and revoking privileges to make trades by any means other than written communication submitted via U.S. mail.

While we seek to identify and prevent disruptive frequent trading activity, it may not always be possible to do so. Therefore no assurance can be given that the restrictions we impose will be successful in preventing all disruptive frequent trading and avoiding harm to long-term investors. The restrictions described in these paragraphs will be applied uniformly to all policy holders subject to the restrictions.

Rule 22c-2 under the 1940 Act requires us to provide tax identification numbers and other policy owner transaction information to the Trust or to other investment companies in which the Separate Account invests, at their request. An investment company will use this information to identify any pattern or frequency of investment account transfers that may violate their frequent trading policy. An investment company may require us to impose trading restrictions in addition to those described above if violations of their frequent trading policy are discovered.

Transfers out of the fixed account in any one policy year are limited to the greater of (i) the fixed account maximum transfer amount of $2,000, (ii) the fixed account maximum transfer percentage of 25% multiplied by the amount of the fixed account on the immediately preceding policy anniversary, or (iii) the amount transferred out of the fixed account during the previous policy year. Any transfer, which involves a transfer out of the fixed account may not involve a transfer to the Money Market B investment account.

We reserve the right to impose a minimum amount limit on transfers out of any fixed account. We also reserve the right to impose different restrictions on any additional fixed account that we may offer in the future.

Dollar cost averaging. We may offer policy owners a dollar cost averaging (“DCA”) program. Under the DCA program, you will designate an amount that will be transferred monthly from one investment account into any other investment account(s) or the fixed account. If insufficient funds exist to effect a DCA transfer, the transfer will not be effected and you will be so notified. No fee is charged for this program.

We reserve the right to cease to offer this program as of 90 days after written notice is sent to you.

Asset allocation balancer transfers. Under the asset allocation balancer program you will designate an allocation of policy value among investment accounts. We will move amounts among the investment accounts at specified intervals you select - annually, semi-annually, quarterly or monthly. A change to your premium allocation instructions will automatically result in a change in asset allocation balancer instructions so that the two are identical unless you either instruct us otherwise or have elected the dollar cost averaging program. No fee is charged for this program.

We reserve the right to cease to offer this program as of 90 days after written notice is sent to you.

Surrender and withdrawals

Surrender

You may surrender your policy in full at any time. If you do, we will pay you the policy value less any policy debt. This is called your “net cash surrender value.” You must return your policy when you request a surrender. We will process surrenders on the day we receive the surrender request (unless such day is not a business day, in which case we will process surrenders as of the business day next following the date of the receipt).

Withdrawals

After the first policy year, you may make a withdrawal of part of your net cash surrender value once in each policy month. Generally, each withdrawal must be at least $500. There is a withdrawal fee for each withdrawal of the lesser of 2% of

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the withdrawal amount or $25. We will automatically reduce the policy value of your policy by the amount of the withdrawal fee. Unless otherwise specified by you, each account (fixed and investment) will be reduced in the same proportion as the policy value is then allocated among them. We will not permit a withdrawal if it would cause your net cash surrender value to fall below 3 months’ worth of monthly deductions (see “Deductions from policy value”). We also reserve the right to refuse any withdrawal that would cause the policy’s Total Face Amount to fall below $100,000 or the Base Face Amount to fall below $50,000.

Because it reduces the policy value, any withdrawal will reduce your death benefit under either Option 1 or Option 2 (see “The death benefit”). Under Option 1, such a withdrawal may also reduce the Total Face Amount. Generally, any such reduction in the Total Face Amount will be implemented by first reducing any Supplemental Face Amount then in effect. We may approve reductions in the Base Face Amount prior to eliminating the Supplemental Face Amount. You should consider a number of factors in determining whether to continue coverage in the form of Base Face Amount or Supplemental Face Amount (see “Base Face Amount vs. Supplemental Face Amount”). If such a reduction in Total Face Amount would cause the policy to fail the Internal Revenue Code’s definition of life insurance, we will not permit the withdrawal.

Policy loans

You may borrow from your policy at any time by completing a form satisfactory to us. The amount available for loan will not be less than 75% of the net cash surrender value. The maximum amount you can borrow is the amount determined as set out below.

• We first determine the net cash surrender value of your policy.

• We then subtract an amount equal to 12 times the monthly deductions then being deducted from policy value.

• We then multiply the resulting amount by 0.75% in policy years 1 through 10 and 0% thereafter (although we reserve the right to increase the percentage after the tenth policy year to as much as .25%).

• We then subtract the third item above from the second item above.

The minimum amount of each loan is $500. The interest charged on any loan is an effective annual rate of 3.75% in the first 10 policy years and 3.00% thereafter. However, we reserve the right to increase the percentage after the tenth policy year to as much as 3.25%. Accrued interest will be added to the loan daily and will bear interest at the same rate as the original loan amount. Unless otherwise specified by you, the amount of the loan is deducted from the accounts (fixed and investment) in the same proportion as the policy value is then allocated among them. The amount of the loan is then placed in a special loan account. This special loan account will earn interest at an effective annual rate of 3.00%. The tax consequences of a loan interest credited differential of 0% are unclear. You should consult a tax adviser before effecting a loan to evaluate possible tax consequences. If we determine that a loan will be treated as a taxable distribution because of the differential between the loan interest rate and the rate being credited on the special loan account, we reserve the right to increase the rate charged on the loan to a rate that would, in our reasonable judgment, result in the transaction being treated as a loan under Federal tax law. The right to increase the rate charged on the loan is restricted in some states. Please see your John Hancock USA representative for details. We process policy loans as of the business day on or next following the day we receive the loan request.

Repayment of policy loans

You can repay all or part of a loan at any time. Each repayment will be allocated among the accounts as set out below.

• The same proportionate part of the loan as was borrowed from the fixed account will be repaid to that fixed account.

• The remainder of the repayment will be allocated among the accounts in the same way a new premium payment would be allocated (unless otherwise specified by you).

If you want a payment to be used as a loan repayment, you must include instructions to that effect. Otherwise, all payments will be assumed to be premium payments. We process loan repayments as of the day we receive the repayment.

Effects of policy loans

The policy value, the net cash surrender value, and any death benefit are permanently affected by any loan, whether or not it is repaid in whole or in part. This is because the amount of the loan is deducted from the accounts and placed in a special loan account. The accounts and the special loan account will generally have different rates of investment return.

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

Taking out a loan on the policy increases the risk that the policy may lapse because of the difference between the interest rate charged on the loan and the interest rate credited to the special loan account. Also, whenever the outstanding loan equals or exceeds your policy value after the insured person reaches age 100, the policy will terminate 31 days after we have mailed notice of termination to you (and to any assignee of record at such assignee’s last known address) specifying the amount that must be paid to avoid termination, unless a repayment of at least the amount specified is made within that period. Policy loans may also result in adverse tax consequences under certain circumstances (see “Tax considerations”).

Description of charges at the policy level

Deduction from premium payments

• Premium charge - A charge to help defray our sales costs and related taxes. The current charge is 1.5% of each premium paid, although we reserve the right to increase the percentage to as high as 7%.

Deductions from policy value

• Administrative charge - A monthly charge to help cover our administrative costs. This is a flat dollar charge of up to $12.

• Face Amount charge - A monthly charge for the first ten policy years to primarily help cover sales costs. To determine the charge we multiply the amount of Base Face Amount at issue by a rate which varies by duration (Policy Year) and by the insured person’s sex and issue age.

• Cost of insurance charge - A monthly charge for the cost of insurance. To determine the charge, we multiply the net amount of insurance for which we are then at risk by a cost of insurance rate. The rate is derived from an actuarial table. The table in your policy will show the maximum cost of insurance rates. The cost of insurance rates that we currently apply are generally less than the maximum rates. The current rates will never be more than the maximum rates shown in the policy. The cost of insurance we use will depend on age of the insured person at issue, the insurance risk characteristics and (usually) gender of the insured person, the and the length of time the policy has been in effect. Regardless of the table used, cost of insurance rates generally increase each year that you own your policy, as the insured person’s age increases. (The insured person’s “age” on any date is his or her age on the birthday nearest that date.) For death benefit Option 1, the net amount at risk is equal to the greater of zero, or the result of (a) minus (b) where:

(a) is the death benefit as of the first day of the Policy Month, divided by 1.0024663; and

(b) is the policy value as of the first day of the Policy Month after the deduction of all other monthly deductions.

Since the net amount at risk for death benefit Option 1 is based on a formula that includes as factors the death benefit and the policy value, the net amount at risk is affected by the investment performance of the investment accounts chosen, payment of premiums and charges assessed.

If the minimum death benefit is greater than the Total Face Amount, the cost of insurance charge will reflect the amount of that additional benefit.

For death benefit Option 2, the net amount at risk is equal to the Total Face Amount of insurance divided by 1.0024663.

• Asset-based risk charge - A monthly charge to help cover sales, administrative and other costs. The charge is a percentage of that portion of your policy value allocated to investment accounts. This charge does not apply to the current fixed account.

• Supplementary benefits charges - Monthly charges for any supplementary insurance benefits added to the policy by means of a rider.

• Withdrawal fee - A fee for each withdrawal of policy value to compensate us for the administrative expenses of processing the withdrawal. The fee is the lesser of 2% of the withdrawal amount or $25. This fee is not currently imposed, but we reserve the right to do so.

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Additional information about how certain policy charges work

Sales expenses and related charges

The premium charges help to compensate us for the cost of selling our policies (see “Description of charges at the policy level”). The amount of the charges in any policy year does not specifically correspond to sales expenses for that year. We expect to recover our total sales expenses over the life of the policies. To the extent that the premium charges do not cover total sales expenses, the sales expenses may be recovered from other sources, including gains from the asset-based risk charge and other gains with respect to the policies, or from our general assets. Similarly, administrative expenses not fully recovered by the administrative charge may also be recovered from such other sources.

Method of deduction

We deduct the monthly deductions described in the Fee Tables section from your policy’s accounts (fixed and investment) in proportion to the amount of policy value you have in each, unless otherwise specified by you.

Reduced charges for eligible classes

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

Other charges we could impose in the future

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

We also reserve the right to increase the premium charge in order to correspond with changes in the state premium tax levels or in the Federal income tax treatment of the deferred acquisition costs for this type of policy. Premium taxes vary by jurisdiction and are subject to change. Currently, premium tax levels range from 0% to 3.5%.

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

Description of charges at the portfolio level

The portfolios must pay investment management fees and other operating expenses. These fees and expenses (shown in the tables of portfolio annual expenses under “Fee Tables”) are different for each portfolio and reduce the investment return of each portfolio. Therefore, they also indirectly reduce the return you will earn on any investment accounts you select. Expenses of the portfolios are not fixed or specified under the terms of the policy, and those expenses may vary from year to year.

Other policy benefits, rights and limitations

Optional supplementary benefit riders you can add

When you apply for a policy, you can request any of the optional supplementary benefit riders that we then make available. Availability of any rider, the benefits it provides and the charges for it may vary by state. Our rules and procedures

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will govern eligibility for any rider and, in some cases, the configuration of the actual rider benefits. Each rider contains specific details that you should review before you decide to choose the rider. Charges for most riders will be deducted from the policy value. We may change these charges (or the rates that determine them), but not above any applicable maximum amount stated in the Policy Specifications page of your policy. We may add to, delete from or modify the list of optional supplementary benefit riders.

• Enhanced Cash Value Rider - This rider provides for payment of an additional benefit to the policy owner upon surrender of the policy in the first seven policy years. The Enhanced Cash Value Rider benefit is calculated as a percentage of the lesser of (i) cumulative premiums paid to date or (ii) the “Limiting Premium” shown in the Policy Specifications page of your policy, minus any withdrawals and policy debt. The percentage starts at 11% and reduces to 0% in the eighth policy year. The cumulative premiums for any policy year are equal to the lesser of the actual premium paid in that policy year and the Limiting Premium. The Enhanced Cash Value Rider is only available if: (i) notice of surrender is received at our Service Office prior to the death of the insured person, (ii) such surrender is not the result of an exchange under section 1035 of the Internal Revenue Code, and (iii) the rider has not terminated pursuant to its terms. This rider does not increase the available loan value of the policy.

• Change of Life Insured Rider - This rider is only available to certain owners purchasing the policy in connection with the financing of employee benefit plan obligations. If you elect this rider, you may change the life insured on or after the second policy anniversary. You must have an insurable interest in the new life insured, and the new life insured must consent in writing to the change. We will require evidence which satisfies us of the new life insured’s insurability, and the premiums and charges after the change date will reflect the new life insured’s age, sex, risk classification and any additional rating which applies. Supplementary benefit riders on the old life insured will be canceled as of the change date. Supplementary benefits riders may be added on the new life insured as of the change date, subject to our normal requirements and restrictions for such benefits. The incontestability and suicide provisions of the policy will apply to the entire Face Amount beginning anew as of the change date.

• Overloan Protection Rider - This rider will prevent your policy from lapsing on any date if policy debt exceeds the death benefit. The benefit is subject to a number of eligibility requirements relating to, among other things, the number of years the policy has been in force, the attained age of the life insured, the death benefit option elected and the tax status of the policy.

When the Overloan Protection benefit in this rider is invoked, all values in the investment accounts are immediately transferred to the fixed account and will continue to grow at the current fixed account interest rate. Transfer fees do not apply to these transfers. Thereafter, policy changes and transactions are limited as set forth in the rider; for example, death benefit increases or decreases, additional premium payments, policy loans, withdrawals, surrender and transfers are no longer allowed. Any outstanding policy debt will remain. Interest will continue to be charged at the policy’s specified loan interest rate, and the policy’s loan account will continue to be credited with the policy’s loan interest credited rate. Any supplementary benefit rider requiring a monthly deduction will automatically be terminated.

When the Overloan Protection Rider causes the policy to be converted into a fixed policy, there is risk that the Internal Revenue Service could assert that the policy has been effectively terminated and that the outstanding loan balance should be treated as a distribution. Depending on the circumstances, all or part of such deemed distribution may be taxable as income. You should consult a tax adviser as to the risks associated with the Overloan Protection Rider.

Variations in policy terms

Insurance laws and regulations apply to us in every state in which our policies are sold. As a result, terms and conditions of your insurance coverage may vary depending on where you purchase a policy. We disclose all material variations in this prospectus.

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

Any variation discussed above will be made only in accordance with uniform rules that we adopt and that we apply fairly to our customers.

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Procedures for issuance of a policy

Generally, the policy is available with a minimum Total Face Amount at issue of $100,000 and a minimum Base Face Amount at issue of $50,000. At the time of issue, the insured person must have an attained age of no more than 90. The insured person must meet certain health and other insurance risk criteria called “underwriting standards.”

Policies issued in Montana or in connection with certain employee plans will not directly reflect the sex of the insured person in either the premium rates or the charges or values under the policy.

Commencement of insurance coverage

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

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

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

• The Minimum Initial Premium is received by us.

• The insured person is living and there has been no deterioration in the insurability of the insured person since the date of the application.

The date all of the above conditions are satisfied is referred to in this prospectus as the “Contract Completion Date.” If all of the above conditions are satisfied, the policy will take effect on the date shown in the policy as the “Policy Date.” That is the date on which we begin to deduct monthly charges. Policy months, policy years and policy anniversaries are all measured from the Policy Date.

Backdating

Under limited circumstances, we may backdate a policy, upon request, by assigning a Policy Date earlier than the date the application is signed. However, in no event will a policy be backdated earlier than the earliest date allowed by state law, which is generally three months to one year prior to the date of application for the policy. The most common reasons for backdating are to preserve a younger age at issue for the insured person or to retain a common monthly deduction date in certain corporate-owned life insurance cases involving multiple policies issued over time. If used to preserve age, backdating will result in lower insurance charges. However, monthly deductions will begin earlier than would otherwise be the case. Monthly deductions for the period the Policy Date is backdated will actually be deducted from policy value on the Contract Completion Date.

Temporary coverage prior to policy delivery

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

Monthly deduction dates

Each charge that we deduct monthly is assessed against your policy value at the close of business on the Policy Date and at the close of the first day in each subsequent policy month.

Changes that we can make as to your policy

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

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

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

• Combining or removing fixed accounts or investment accounts.

• Changes in the form of organization of any separate account.

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

The owner of the policy

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

While the insured person is alive, you will have a number of options under the policy. These options include those listed below:

• Determine when and how much you invest in the various accounts.

• Borrow or withdraw amounts you have in the accounts.

• Change the beneficiary who will receive the death benefit.

• Change the amount of insurance.

• Turn in (i.e., “surrender”) the policy for the full amount of its net cash surrender value.

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

It is possible to name so-called “joint owners” of the policy. If more than one person owns a policy, all owners must join in most requests to exercise rights under the policy.

Policy cancellation right

You have the right to cancel your policy within ten days after you receive it (the period may be longer in some states). This is often referred to as the “free look” period. During this period, your premiums will be allocated as described under “Processing premium payments” in this prospectus. To cancel your policy, simply deliver or mail the policy to:

• John Hancock USA at either of the addresses shown on the back cover of this prospectus, or

• the John Hancock USA representative who delivered the policy to you.

The date of cancellation will be the date of such mailing or delivery. In most states, you will receive a refund of any premiums you’ve paid. In some states, the refund will be your policy value on the date of cancellation.

Reports that you will receive

At least annually, we will send you a statement setting forth at least the following information as of the end of the most recent reporting period: the amount of the death benefit, the portion of the policy value in the fixed account and in each investment account, premiums received and charges deducted from premiums since the last report, any outstanding policy loan (and interest charged for the preceding policy year), and any further information required by law. Moreover, you also will receive confirmations of premium payments, transfers among accounts, policy loans, partial withdrawals and certain other policy transactions.

Semi-annually we will send you a report containing the financial statements of the portfolios, including a list of securities held in each portfolio.

Assigning your policy

You may assign your rights in the policy to someone else as collateral for a loan or for some other reason. Assignments do not require the consent of any revocable beneficiary. A copy of the assignment must be forwarded to us. We are not

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responsible for any payment we make or any action we take before we receive a copy of the assignment at our Service Office. Nor are we responsible for the validity of the assignment or its efficacy in meeting your objectives. An absolute assignment is a change of ownership. All collateral assignees of record must usually consent to any surrender, withdrawal or loan from the policy.

When we pay policy proceeds

General

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

Delay to challenge coverage

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

Delay for check clearance

We reserve the right to defer payment of that portion of your policy value that is attributable to a premium payment made by check for a reasonable period of time (not to exceed fifteen days) to allow the check to clear the banking system. We will not delay payment longer than necessary for us to verify a check has cleared the banking system.

Delay of separate account proceeds

We reserve the right to defer payment of any death benefit, loan or other distribution that is derived from an investment account if (1) the New York Stock Exchange is closed (other than customary weekend and holiday closings) or trading on the New York Stock Exchange is restricted; (2) an emergency exists, as determined by the SEC, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to fairly determine the policy value; or (3) the SEC by order permits the delay for the protection of owners. Transfers and allocations of policy value among the investment accounts may also be postponed under these circumstances. If we need to defer calculation of separate account values for any of the foregoing reasons, all delayed transactions will be processed at the next values that we do compute.

Delay of general account surrender proceeds

State laws allow us to defer payment of any portion of the net cash surrender value derived from the fixed account for up to six months. These laws were enacted many years ago to help insurance companies in the event of a liquidity crisis.

How you communicate with us

General rules

You should mail or express all checks and money orders for premium payments and loan repayments to the John Hancock USA Service Office at the appropriate address shown on the back cover.

Under our current rules, certain requests must be made in writing and be signed and dated by you. Those requests include the following.

• loans

• surrenders or withdrawals

• change of death benefit option

• increase or decrease in Face Amount

• change of beneficiary

• election of payment option for policy proceeds

• tax withholding elections

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• election of telephone/internet transaction privilege

The following requests may be made either in writing (signed and dated by you) or by telephone or fax or through the Company’s secured website, if a special form is completed (see “Telephone, facsimile and internet transactions” below).

• transfers of policy value among accounts

• change of allocation among accounts for new premium payments

You should mail or express all written requests to our Service Office at the appropriate address shown on the back cover. You should also send notice of the insured person’s death and related documentation to our Service Office. We do not consider that we’ve “received” any communication until such time as it has arrived at the proper place and in the proper and complete form.

We have special forms that should be used for a number of the requests mentioned above. You can obtain these forms from our Service Office or your John Hancock USA representative. Each communication to us must include your name, your policy number and the name of the insured person. We cannot process any request that doesn’t include this required information. Any communication that arrives after the close of our business day, or on a day that is not a business day, will be considered “received” by us on the next following business day. Our business day currently closes at 4:00 p.m. Eastern time, but special circumstances (such as suspension of trading on a major exchange) may dictate an earlier closing time.

Telephone, facsimile and internet transactions

If you complete a special authorization form, you can request transfers among accounts and changes of allocation among accounts simply by telephoning us at 1-800-521-1234 or by faxing us at 617-572-7008 or through the Company’s secured website. Any fax or internet request should include your name, daytime telephone number, policy number and, in the case of transfers and changes of allocation, the names of the accounts involved. We will honor telephone and internet instructions from anyone who provides the correct identifying information, so there is a risk of loss to you if this service is used by an unauthorized person. However, you will receive written confirmation of all telephone/internet transactions. There is also a risk that you will be unable to place your request due to equipment malfunction or heavy phone line or internet usage. If this occurs, you should submit your request in writing.

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

As stated earlier in this prospectus, the policies are not designed for professional market timing organizations or other persons or entities that use programmed or frequent transfers among investment options. To discourage disruptive frequent trading, we have imposed certain transfer restrictions (see “Transfers of existing policy value”). In addition, we also reserve the right to change our telephone, facsimile and internet transaction privileges outlined in this section at any time, and to suspend or terminate any or all of those privileges with respect to any owners who we feel are abusing the privileges to the detriment of other owners.

Distribution of policies

John Hancock Distributors LLC (“JH Distributors”), a Delaware limited liability company affiliated with us, is the principal distributor and underwriter of the securities offered through this prospectus and of other annuity and life insurance products we and our affiliates offer. JH Distributors also acts as the principal underwriter of the Trust, whose securities are used to fund certain investment accounts under the policies and under other annuity and life insurance products we offer.

JH Distributors’ principal address is 200 Bloor Street East, Toronto, Canada M4W 1E5 and it also maintains offices with us at 197 Clarendon Street, Boston, Massachusetts 02116. JH Distributors is a broker-dealer registered under the Securities Exchange Act of 1934 (the “1934 Act”) and a member of the Financial Industry Regulatory Authority (“FINRA”).

We offer the policies for sale through individuals who are licensed as insurance agents and who are registered representatives of broker-dealers that have entered into selling agreements with JH Distributors. These broker-dealers may

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include our affiliate Signator Investors, Inc. In addition, we, either directly or through JH Distributors, have entered into agreements with other financial intermediaries that provide marketing, sales support and certain administrative services to help promote the policies (“financial intermediaries”). In a limited number of cases, we have entered into loans, leases or other financial agreements with these broker-dealers or financial intermediaries or their affiliates.

Compensation

The broker-dealers and other financial intermediaries that distribute or support the marketing of our policies may be compensated by means of various compensation and revenue sharing arrangements. A general description of these arrangements is set out below under “Standard compensation” and “Additional compensation and revenue sharing.” These arrangements may differ between firms, and not all broker-dealers or financial intermediaries will receive the same compensation and revenue sharing benefits for distributing our policies. Also, a broker-dealer may receive more or less compensation or other benefits for the promotion and sale of our policy than it would expect to receive from another issuer.

Under their own arrangements, broker-dealers determine how much of any amounts received from us is to be paid to their registered representatives. Our affiliated broker-dealer may pay its registered representatives additional compensation and benefits, such as bonus payments, expense payments, health and retirement benefits or the waiver of overhead costs or expenses in connection with the sale of the policies that they would not receive in connection with the sale of policies issued by unaffiliated companies.

Policy owners do not pay any compensation or revenue sharing benefits directly. These payments are made from JH Distributors and our own revenues, profits or retained earnings, which may be derived from a number of sources, such as fees received from an underlying fund’s distribution plan (“12b-1 fees”), the fees and charges imposed under the policy and other sources.

You should contact your registered representative for more information on compensation arrangements in connection with your purchase of a policy. We provide additional information on special compensation or reimbursement arrangements involving broker-dealers and other financial intermediaries in the Statement of Additional Information, which is available upon request.

Standard compensation. JH Distributors pays compensation to broker-dealers for the promotion and sale of the policies, and for providing ongoing service in relation to policies that have already been purchased. We may also pay a limited number of broker-dealers commissions or overrides to “wholesale” the policies; that is, to provide marketing support and training services to the broker-dealer firms that do the actual selling.

The compensation JH Distributors pays to broker-dealers may vary depending on the selling agreement. The compensation paid is not expected to exceed 35% of target premium, and 6% of premium in excess of target, paid in the first policy year, 6% of target and excess premium paid in years 2-5, and 4.75% of target and excess premium paid in years 6-10. This compensation schedule is exclusive of additional compensation and revenue sharing and inclusive of overrides and expense allowances paid to broker-dealers for sale of the policies (not including riders).

Additional compensation and revenue sharing. To the extent permitted by SEC and FINRA rules and other applicable laws and regulations, we may enter into special compensation or reimbursement arrangements (“revenue sharing”), either directly or through JH Distributors, with selected broker-dealers and other financial intermediaries. In consideration of these arrangements, a firm may feature our policy in its sales system, give us preferential access to sales staff, or allow JH Distributors or its affiliates to participate in conferences, seminars or other programs attended by the firm’s sales force. We hope to benefit from these revenue sharing and other arrangements through increased sales of our policies.

Selling broker-dealers and other financial intermediaries may receive, directly or indirectly, additional payments in the form of cash, other compensation or reimbursement. These additional compensation or reimbursement arrangements may include, for example, payments in connection with the firm’s “due diligence” examination of the policies, payments for providing conferences or seminars, sales or training programs for invited registered representatives and other employees, payment for travel expenses, including lodging, incurred by registered representatives and other employees for such seminars or training programs, seminars for the public or client seminars, advertising and sales campaigns regarding the policies, payments to assist a firm in connection with its systems, operations and marketing expenses and/or other events or activities sponsored by the firms. We may contribute to, as well as sponsor, various educational programs, sales promotions, and/or other contests in which participating firms and their sales persons may receive gifts and prizes such as merchandise, cash or other rewards as may be permitted under FINRA rules and other applicable laws and regulations.

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Tax considerations

This description of Federal income tax consequences is only a brief summary and is neither exhaustive nor authoritative. It was written to support the promotion of our products. It does not constitute legal or tax advice, and it is not intended to be used and cannot be used to avoid any penalties that may be imposed on you. Tax consequences will vary based on your own particular circumstances, and for further information you should consult a qualified tax adviser. Federal, state and local tax laws, regulations and interpretations can change from time to time. As a result, the tax consequences to you and the beneficiary may be altered, in some cases retroactively. The policy may be used in various arrangements, including non-qualified deferred compensation or salary continuation plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances of each individual arrangement. Therefore, if the value of using the policy in any such arrangement depends in part on the tax consequences, a qualified tax adviser should be consulted for advice.

General

We are taxed as a life insurance company. Under current tax law rules, we include the investment income (exclusive of capital gains) of the Separate Account in our taxable income and take deductions for investment income credited to our policy holder reserves. We are also required to capitalize and amortize certain costs instead of deducting those costs when they are incurred. We do not currently charge the Separate Account for any resulting income tax costs, other than a “DAC tax” charge we may impose against the Separate Account to compensate us for the finance costs attributable to the acceleration of our income tax liabilities by reason of a “DAC tax adjustment.” We also claim certain tax credits or deductions relating to foreign taxes paid and dividends received by the series funds. These benefits can be material. We do not pass these benefits through to the Separate Account, principally because: (i) the deductions and credits are allowed to us and not the policy owners under applicable tax law; and (ii) the deductions and credits do not represent investment return on the Separate Account assets that are passed through to policy owners.

The policies permit us to deduct a charge for any taxes we incur that are attributable to the operation or existence of the policies or the Separate Account. Currently, we do not anticipate making any specific charge for such taxes other than any DAC tax charge and premium taxes where applicable. If the level of the current taxes increases, however, or is expected to increase in the future, we reserve the right to make a charge in the future.

Death benefit proceeds and other policy distributions

Generally, death benefits paid under policies such as yours are not subject to income tax unless policy ownership has been transferred in exchange for payment. Earnings on your policy value are ordinarily not subject to income tax as long as we don’t pay them out to you. If we do pay out any amount of your policy value upon surrender or partial withdrawal, all or part of that distribution would generally be treated as a return of the premiums you’ve paid and not subjected to income tax. However certain distributions associated with a reduction in death benefit or other policy benefits within the first fifteen years after issuance of the policy are ordinarily taxable in whole or in part. Amounts you borrow are generally not taxable to you.

However, some of the tax rules change if your policy is found to be a modified endowment contract. This can happen if you’ve paid premiums in excess of limits prescribed by the tax laws. Additional taxes and penalties may be payable for policy distributions of any kind, including loans. (See “7-pay premium limit and modified endowment contract status” below.)

We expect the policy to receive the same Federal income and estate tax treatment as fixed benefit life insurance policies. Section 7702 of the Internal Revenue Code defines a life insurance contract for Federal tax purposes. For a policy to be treated as a life insurance contract, it must satisfy either the cash value accumulation test or the guideline premium test. These tests limit the amount of premium that you may pay into the policy. We will monitor compliance with these standards. If we determine that a policy does not satisfy section 7702, we may take whatever steps are appropriate and reasonable to bring it into compliance with section 7702.

If the policy complies with section 7702, the death benefit proceeds under the policy ordinarily should be excludable from the beneficiary’s gross income under section 101 of the Internal Revenue Code. (As noted above, a transfer of the policy for valuable consideration may limit the exclusion of death benefits from the beneficiary’s income.)

Increases in policy value as a result of interest or investment experience will not be subject to Federal income tax unless and until values are received through actual or deemed distributions. In general, unless the policy is a modified endowment contract, the owner will be taxed only on the amount of distributions that exceed the premiums paid under the policy. An

37

exception to this general rule occurs in the case of a decrease in the policy’s death benefit or any other change that reduces benefits under the policy in the first fifteen years after the policy is issued and that results in a cash distribution to the policy owner. Changes that reduce benefits include partial withdrawals, death benefit option changes, and distributions required to keep the policy in compliance with section 7702. For purposes of this rule any distribution within the two years immediately before a reduction in benefits will also be treated as if it caused the reduction. A cash distribution that reduces policy benefits will be taxed in whole or in part (to the extent of any gain in the policy) under rules prescribed in section 7702. The taxable amount is subject to limits prescribed in section 7702(f)(7). Any taxable distribution will be ordinary income to the owner (rather than capital gain).

Distributions for tax purposes include amounts received upon surrender or partial withdrawals. You may also be deemed to have received a distribution for tax purposes if you assign all or part of your policy rights or change your policy’s ownership.

It is possible that, despite our monitoring, a policy might fail to qualify as a life insurance contract under section 7702 of the Internal Revenue Code. This could happen, for example, if we inadvertently failed to return to you any premium payments that were in excess of permitted amounts, or if any of the funds failed to meet certain investment diversification or other requirements of the Internal Revenue Code. If this were to occur, you would be subject to income tax on the income credited to the policy from the date of issue to the date of the disqualification and for subsequent periods.

Tax consequences of ownership or receipt of policy proceeds under Federal, state and local estate, inheritance, gift and other tax laws will depend on the circumstances of each owner or beneficiary. If the person insured by the policy is also its owner, either directly or indirectly through an entity such as a revocable trust, the death benefit will be includible in his or her estate for purposes of the Federal estate tax. If the owner is not the person insured, the value of the policy will be includible in the owner’s estate upon his or her death. Even if ownership has been transferred, the death proceeds or the policy value may be includible in the former owner’s estate if the transfer occurred less than three years before the former owner’s death or if the former owner retained certain kinds of control over the policy. You should consult your tax adviser regarding these possible tax consequences.

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

Policy loans

We expect that, except as noted below (see “7-pay premium limit and modified endowment contract status”), 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, if the policy terminates for any reason other than the payment of the death benefit, the amount of any outstanding loan that was not previously considered income will be treated as if it had been distributed to the owner upon such termination. This could result in a considerable tax bill. Under certain circumstances involving large amounts of outstanding loans, you might find yourself having to choose between high premiums required to keep your policy from lapsing and a significant tax burden if you allow the lapse to occur.

Diversification rules and ownership of the Account

Your policy will not qualify for the tax benefits of a life insurance contract unless the Account follows certain rules requiring diversification of investments underlying the policy. In addition, the rules require that the policy owner not have “investment control” over the underlying assets.

In certain circumstances, the owner of a variable life insurance policy may be considered the owner, for Federal income tax purposes, of the assets of the separate account used to support the policy. In those circumstances, income and gains from the separate account assets would be includible in the policy owner’s gross income. The Internal Revenue Service (“IRS”) has stated in published rulings that a variable policy owner will be considered the owner of separate account assets if the policy owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. A Treasury Decision issued in 1986 stated that guidance would be issued in the form of regulations or rulings on the “extent to which Policyholders may direct their investments to particular sub-accounts of a separate account without being treated as owners of the underlying assets.” As of the date of this prospectus, no comprehensive guidance on this point has been issued. In Rev. Rul. 2003-91, however, the IRS ruled that a contract holder would not be treated as the owner of assets underlying a variable life insurance or annuity contract despite the owner’s ability to allocate funds among as many as twenty subaccounts.

38

The ownership rights under your policy are similar to, but different in certain respects from, those described in IRS rulings in which it was determined that policyholders were not owners of separate account assets. Since you have greater flexibility in allocating premiums and policy values than was the case in those rulings, it is possible that you would be treated as the owner of your policy’s proportionate share of the assets of the Account.

We do not know what future Treasury Department regulations or other guidance may require. We cannot guarantee that the funds will be able to operate as currently described in the series funds’ prospectuses, or that a series fund will not have to change any fund’s investment objectives or policies. We have reserved the right to modify your policy if we believe doing so will prevent you from being considered the owner of your policy’s proportionate share of the assets of the Account, but we are under no obligation to do so.

7-pay premium limit and modified endowment contract status

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

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

Policies classified as modified endowment contracts are subject to the following tax rules:

• First, all partial withdrawals from such a policy are treated as ordinary income subject to tax up to the amount equal to the excess (if any) of the policy value immediately before the distribution over the investment in the policy at such time. If you own any other modified endowment contracts issued to you in the same calendar year by the same insurance company or its affiliates, their values will be combined with the value of the policy from which you take the withdrawal for purposes of determining how much of the withdrawal is taxable as ordinary income.

• Second, loans taken from or secured by such a policy and assignments or pledges of any part of its value are treated as partial withdrawals from the policy and taxed accordingly. Past-due loan interest that is added to the loan amount is treated as an additional loan.

• Third, a 10% additional income tax is imposed on the portion of any distribution (including distributions on surrender) from, or loan taken from or secured by, such a policy that is included in income except where the distribution or loan:

• is made on or after the date on which the policy owner attains age 59 ¹/2;

• is attributable to the policy owner becoming disabled; or

• is part of a series of substantially equal periodic payments for the life (or life expectancy) of the policy owner or the joint lives (or joint life expectancies) of the policy owner and the policy owner’s beneficiary.

These exceptions to the 10% additional tax do not apply in situations where the policy is not owned by an individual.

Furthermore, any time there is a “material change” in a policy, the policy will begin a new 7-pay testing period as if it were a newly-issued policy. The material change rules for determining whether a policy is a modified endowment contract are complex. In general, however, the determination of whether a policy will be a modified endowment contract after a material change depends upon the relationship among the death benefit of the policy at the time of such change, the policy value at the time of the change, and the additional premiums paid into the policy during the seven years starting with the date on which the material change occurs.

Moreover, if there is a reduction in benefits under a policy (such as a reduction in the death benefit or the reduction or cancellation of certain rider benefits) during a 7-pay testing period, the 7-pay limit will generally be recalculated based on the reduced benefits and the policy will be re-tested from the beginning of the 7-pay testing period using the lower limit. If the premiums paid to date at any point during the 7-pay testing period are greater than the recalculated 7-pay limit, the policy will become a modified endowment contract.

If your policy is issued as a result of a section 1035 exchange, it may be considered to be a modified endowment contract if the death benefit under the new policy is smaller than the death benefit under the exchanged policy, or if you

39

reduce coverage in your new policy after it is issued. Therefore, if you desire to reduce the face amount as part of a 1035 exchange, a qualified tax adviser should be consulted for advice.

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

Corporate and H.R. 10 retirement plans

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

Withholding

To the extent that policy distributions to you are taxable, they are generally subject to withholding for your Federal income tax liability. However if you reside in the United States, you can generally choose not to have tax withheld from distributions.

Life insurance purchases by residents of Puerto Rico

In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the IRS ruled that income received by residents of Puerto Rico under a life insurance policy issued by a United States company is U.S.-source income that is subject to United States Federal income tax.

Life insurance purchases by non-resident aliens

If you are not a U.S. citizen or resident, you will generally be subject to U.S. Federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, you may be subject to state and/or municipal taxes and taxes imposed by your country of citizenship or residence. You should consult with a qualified tax adviser before purchasing a policy.

Financial statements reference

The financial statements of John Hancock USA and the Account can be found in the Statement of Additional Information. The financial statements of John Hancock USA should be distinguished from the financial statements of the Account and should be considered only as bearing upon the ability of John Hancock USA to meet its obligations under the policies. Our general account is comprised of securities and other investments, the value of which may decline during periods of adverse market conditions.

Registration statement filed with the SEC

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

Independent registered public accounting firm

The consolidated financial statements of John Hancock Life Insurance Company (U.S.A.) at December 31, 2009 and 2008, and for each of the three years in the period ended December 31, 2009, and the financial statements of John Hancock Life Insurance Company (U.S.A.) Separate Account N at December 31, 2009, and for each of the two years in the period ended December 31, 2009, appearing in the Statement of Additional Information of the Registration Statement have been audited by Ernst &Young LLP, independent registered public accounting firm, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

40

In addition to this prospectus, John Hancock USA has filed with the SEC a Statement of Additional Information (the “SAI”) which contains additional information about John Hancock USA and the Account, including information on our history, services provided to the Account and legal and regulatory matters. The SAI and personalized illustrations of death benefits, policy values and surrender values are available, without charge, upon request. You may obtain the personalized illustrations from your John Hancock USA representative. The SAI may be obtained by contacting the John Hancock USA Service Office. You should also contact the John Hancock USA Service Office to request any other information about your policy or to make any inquiries about its operation.

SERVICE OFFICE

Express Delivery	Mail Delivery
Specialty Products	Specialty Products & Distribution
197 Clarendon Street, C-6	P.O. Box 192
Boston, MA 02117	Boston, MA 02117
Phone:	Fax:
1-800-521-1234	617-572-7008

Information about the Account (including the SAI) can be reviewed and copied at the SEC’s Public Reference Branch, 100 F Street, NE, Room 1580, Washington, DC, 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 202-551-5850. Reports and other information about the Account are available on the SEC’s Internet website at http://www.sec.gov. Copies of such information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549-0102.

1940 Act File No. 811-5130 — 1933 Act File No. 333-126668

Statement of Additional Information

dated May 3, 2010

for interests in

John Hancock Life Insurance Company (U.S.A.) Account N (“Registrant”)

Interests are made available under

CORPORATE VUL

a flexible premium variable universal life insurance policy issued by

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

(“John Hancock USA”)

This is a Statement of Additional Information (“SAI”). It is not the prospectus. The prospectus, dated the same date as this SAI, may be obtained from a John Hancock USA representative or by contacting the John Hancock USA Servicing Office at Specialty Products, 197 Clarendon Street, C-6, Boston, MA 02117 or telephoning 1-800-521-1234.

TABLE OF CONTENTS

Contents of this SAI	Page No.
Description of the Depositor	2
Description of the Registrant	2
Services	2
Independent Registered Public Accounting Firm	2
Legal and Regulatory Matters	2
Principal Underwriter/Distributor	3
Additional Information About Charges	3
Financial Statements of Registrant and Depositor

Description of the Depositor

Under the Federal securities laws, the entity responsible for organization of the registered separate account underlying the variable life insurance policy is known as the “Depositor.” The Depositor is John Hancock USA, a stock life insurance company organized under the laws of Maine on August 20, 1955 by a special act of the Maine legislature and redomesticated under the laws of Michigan. We are a licensed life insurance company in the District of Columbia and all states of the United States except New York. Until 2004, John Hancock USA had been known as The Manufacturers Life Insurance Company (U.S.A.).

Our ultimate parent is Manulife Financial Corporation (“MFC”), a publicly traded company based in Toronto, Canada. MFC is the holding company of The Manufacturers Life Insurance Company and its subsidiaries, collectively known as Manulife Financial.

Description of the Registrant

Under the Federal securities laws, the registered separate account underlying the variable life insurance policy is known as the “Registrant.” In this case, the Registrant is John Hancock Life Insurance Company (U.S.A.) Separate Account N (the “Account”), a separate account established by John Hancock USA under Michigan law. The variable investment options shown on page 1 of the prospectus are subaccounts of the Account. The Account meets the definition of “separate account” under the Federal securities laws and is registered as a unit investment trust under the Investment Company Act of 1940 (“1940 Act”). Such registration does not involve supervision by the Securities and Exchange Commission (“SEC”) of the management of the Account or of John Hancock USA.

New subaccounts may be added and made available to policy owners from time to time. Existing subaccounts may be modified or deleted at any time.

Services

Administration of policies issued by John Hancock USA and of registered separate accounts organized by John Hancock USA may be provided by other affiliates. Neither John Hancock USA nor the separate accounts are assessed any charges for such services.

Custodianship and depository services for the Registrant are provided by State Street Bank. State Street Bank’s address is 225 Franklin Street, Boston, Massachusetts, 02110.

Independent Registered Public Accounting Firm

The consolidated financial statements of John Hancock Life Insurance Company (U.S.A.) at December 31, 2009 and 2008, and for each of the three years in the period ended December 31, 2009, and the financial statements of John Hancock Life Insurance Company (U.S.A.) Separate Account N at December 31, 2009, and for each of the two years in the period ended December 31, 2009, appearing in the Statement of Additional Information of the Registration Statement have been audited by Ernst &Young LLP, independent registered public accounting firm, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

Legal and Regulatory Matters

There are no legal proceedings to which the Depositor, the Account or the principal underwriter is a party or to which the assets of the Account are subject that are likely to have a material adverse effect on the Account or the ability of the principal underwriter to perform its contract with the Account or of the Depositor to meet its obligations under the policies.

On June 25, 2007, John Hancock Investment Management Services, LLC (the “Adviser”) and John Hancock Distributors LLC (the “Distributor”) and two of their affiliates (collectively, the “John Hancock Affiliates”) reached a settlement with the SEC that resolved an investigation of certain practices relating to the John Hancock Affiliates’ variable annuity and mutual fund operations involving directed brokerage and revenue sharing. Under the terms of the settlement, each John Hancock Affiliate was censured and agreed to pay a $500,000 civil penalty to the United States Treasury. In addition, the Adviser and the Distributor agreed to pay disgorgement of $14,838,943 and prejudgment interest of $2,001,999 to the John Hancock Trust funds that participated in the Adviser’s commission recapture program during the period from

2

2000 to April 2004. Collectively, all John Hancock Affiliates agreed to pay a total disgorgement of $16,926,420 and prejudgment interest of $2,361,460 to the entities advised or distributed by John Hancock Affiliates. The Adviser discontinued the use of directed brokerage in recognition of the sale of fund shares in April 2004.

Principal Underwriter/Distributor

John Hancock Distributors LLC (“JH Distributors”), a Delaware limited liability company that we control, is the principal distributor and underwriter of the securities offered through this prospectus. JH Distributors acts as the principal distributor of a number of other annuity and life insurance products we and our affiliates offer. JH Distributors also acts as the principal underwriter of John Hancock Trust (the “Trust”), whose securities are used to fund certain variable investment options under the policies and under other annuity and life insurance products we offer.

JH Distributors’ principal address is 200 Bloor Street East, Toronto, Canada M4W 1E5 and it also maintains offices with us at 197 Clarendon Street, Boston, Massachusetts 02116. JH Distributors is a broker-dealer registered under the Securities Act of 1934 (the “1934 Act”) and is a member of the Financial Industry Regulatory Authority (“FINRA”).

We offer the policies for sale through individuals who are licensed as insurance agents and who are registered representatives of broker-dealers that have entered into selling agreements with JH Distributors. These broker-dealers may include our affiliate Signator Investors, Inc.

The aggregate dollar amount of underwriting commissions paid to JH Distributors by the Depositor and its affiliates in connection with the sale of variable life products in 2009, 2008, and 2007 was $152,873,991, $224,191,519, and $236,021,417 respectively. JH Distributors did not retain any of these amounts during such periods.

The compensation JH Distributors pays to broker-dealers may vary depending on the selling agreement. Compensation is exclusive of additional compensation and revenue sharing and inclusive of overrides and expense allowances paid to broker-dealers for sale of the policies (not including riders). The compensation paid is not expected to exceed 35% of target premium, and 6% of premium in excess of target, paid in the first policy year, 6% of target and excess premium paid in years 2-5, and 4.75% of target and excess premium paid in years 6-10.

The registered representative through whom your policy is sold will be compensated pursuant to the registered representative’s own arrangement with his or her broker-dealer. Compensation to broker-dealers for the promotion and sale of the policies is not paid directly by policy owners but will be recouped through the fees and charges imposed under the policy.

Additional compensation and revenue sharing arrangements may be offered to certain broker-dealer firms and other financial intermediaries. The terms of such arrangements may differ among firms we select based on various factors. In general, the arrangements involve three types of payments or any combination thereof:

• Fixed dollar payments: The amount of these payments varies widely. JH Distributors may, for example, make one or more payments in connection with a firm’s conferences, seminars or training programs, seminars for the public, advertising and sales campaigns regarding the policies, to assist a firm in connection with its systems, operations and marketing expenses, or for other activities of a selling firm or wholesaler. JH Distributors may make these payments upon the initiation of a relationship with a firm, and at any time thereafter.

• Payments based upon sales: These payments are based upon a percentage of the total amount of money received, or anticipated to be received, for sales through a firm of some or all of the insurance products that we and/or our affiliates offer. JH Distributors makes these payments on a periodic basis.

• Payments based upon “assets under management”: These payments are based upon a percentage of the policy value of some or all of our (and/or our affiliates’) insurance products that were sold through the firm. JH Distributors makes these payments on a periodic basis.

Our affiliated broker-dealer may pay their respective registered representatives additional cash incentives, such as bonus payments, expense payments, health and retirement benefits or the waiver of overhead costs or expenses in connection with the sale of the policies that they would not receive in connection with the sale of policies issued by unaffiliated companies.

Additional Information About Charges

A policy will not be issued until the underwriting process has been completed to the Depositor’s satisfaction. The underwriting process generally includes the obtaining of information concerning your age, medical history, occupation and other personal information. This information is then used to determine the cost of insurance charge.

3

Reduction In Charges

The policy is available for purchase by corporations and other groups or sponsoring organizations. Group or sponsored arrangements may include reduction or elimination of withdrawal charges and deductions for employees, officers, directors, agents and immediate family members of the foregoing. John Hancock USA reserves the right to reduce any of the Policy’s charges on certain cases where it is expected that the amount or nature of such cases will result in savings of sales, underwriting, administrative, commissions or other costs. Eligibility for these reductions and the amount of reductions will be determined by a number of factors, including the number of lives to be insured, the total premiums expected to be paid, total assets under management for the policyowner, the nature of the relationship among the insured individuals, the purpose for which the policies are being purchased, expected persistency of the individual policies, and any other circumstances which John Hancock USA believes to be relevant to the expected reduction of its expenses. Some of these reductions may be guaranteed and others may be subject to withdrawal or modifications, on a uniform case basis. Reductions in charges will not be unfairly discriminatory to any policyowners. John Hancock USA may modify from time to time, on a uniform basis, both the amounts of reductions and the criteria for qualification.

4

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

John Hancock Life Insurance Company (U.S.A.)

Years Ended December 31, 2009, 2008, and 2007

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Audited Consolidated Financial Statements
Consolidated Balance Sheets-
As of December 31, 2009 and 2008	F-3
Consolidated Statements of Operations-
For the Years Ended December 31, 2009, 2008, and 2007	F-5
Consolidated Statements of Changes in Shareholder’s Equity and Comprehensive Income (Loss)-
For the Years Ended December 31, 2009, 2008, and 2007	F-6
Consolidated Statements of Cash Flows-
For the Years Ended December 31, 2009, 2008, and 2007	F-9
Notes to Consolidated Financial Statements	F-11

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors

John Hancock Life Insurance Company (U.S.A.)

We have audited the accompanying consolidated balance sheets of John Hancock Life Insurance Company (U.S.A.) (“the Company”) as of December 31, 2009 and 2008, and the related consolidated statements of operations, changes in shareholders’ equity and comprehensive income (loss), and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of John Hancock Life Insurance Company (U.S.A.) at December 31, 2009 and 2008, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, in 2009 the Company changed their method of accounting and reporting for other-than-temporary impairments on debt securities, in 2008 the Company changed their method of accounting and reporting for certain assets to a fair value measurement approach, and in 2007 the Company changed their method of accounting for income tax related cash flows generated by investments in leveraged leases.

/s/ Ernst & Young, LLP

Boston, Massachusetts

April 7, 2010

F-2

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED BALANCE SHEETS

	December 31,
	2009		2008
	(in millions)
Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2009—$55,386; 2008—$53,112)	$	55,581	$	49,547
Held-for-trading—at fair value (cost: 2009—$1,231; 2008—$1,228)		1,208		1,057
Equity securities:
Available-for-sale—at fair value (cost: 2009—$489; 2008—$726)		558		616
Mortgage loans on real estate		12,623		12,472
Investment real estate, agriculture, and timber		3,084		2,983
Policy loans		4,949		4,918
Short-term investments		3,973		3,670
Other invested assets		3,417		3,295
Total Investments		85,393		78,558
Cash and cash equivalents		4,915		4,850
Accrued investment income		896		913
Goodwill		3,053		3,053
Value of business acquired		2,171		2,564
Deferred policy acquisition costs and deferred sales inducements		9,565		9,846
Amounts due from and held for affiliates		3,828		3,035
Intangible assets		1,294		1,308
Reinsurance recoverable		10,171		9,418
Derivative asset		2,142		6,129
Other assets		1,680		1,560
Separate account assets		122,466		92,058
Total Assets	$	247,574	$	213,292

The accompanying notes are an integral part of these consolidated financial statements.

F-3

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED BALANCE SHEETS – (CONTINUED)

	December 31,
	2009		2008
	(in millions)
Liabilities and Shareholder’s Equity
Liabilities
Future policy benefits	$	78,478	$	76,249
Policyholders’ funds		9,125		10,785
Unearned revenue		2,615		2,458
Unpaid claims and claim expense reserves		1,303		890
Policyholder dividends payable		619		637
Amounts due to affiliates		3,714		2,554
Short-term debt		6		4
Long-term debt		484		483
Consumer notes		1,205		1,600
Current income tax payable		232		282
Deferred income tax liability		1,755		682
Coinsurance funds withheld		4,359		4,263
Derivative liability		2,629		3,112
Other liabilities		3,008		3,956
Separate account liabilities		122,466		92,058
Total Liabilities		231,998		200,013
Commitments, Guarantees, Contingencies, and Legal Proceedings (Note 11)
Shareholder’s Equity
Preferred stock ($1.00 par value; 50,000,000 shares authorized; 100,000 shares issued and outstanding at December 31, 2009 and 2008)		-		-
Common stock ($1.00 par value; 50,000,000 shares authorized; 4,728,938 shares issued and outstanding at December 31, 2009 and 2008)		5		5
Additional paid-in capital		12,427		12,412
Retained earnings		2,822		1,765
Accumulated other comprehensive income (loss)		129		(1,086)
Total John Hancock Life Insurance Company (U.S.A.) Shareholder’s Equity		15,383		13,096
Noncontrolling interests		193		183
Total Shareholder’s Equity		15,576		13,279
Total Liabilities and Shareholder’s Equity	$	247,574	$	213,292

The accompanying notes are an integral part of these consolidated financial statements.

F-4

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years ended December 31,
	2009		2008		2007
	(in millions)
Revenues
Premiums	$	3,946	$	81	$	3,707
Fee income		3,561		3,427		4,449
Net investment income		4,346		4,441		4,839
Net realized investment and other (losses) gains:
Total other-than-temporary impairment losses		(754)		(1,767)		(386)
Portion of loss recognized in other comprehensive income		91		-		-
Net impairment losses recognized in earnings		(663)		(1,767)		(386)
Other net realized investment and other (losses) gains		(1,174)		1,544		693
Total net realized investment and other (losses) gains		(1,837)		(223)		307
Other revenue		46		62		68
Total revenues		10,062		7,788		13,370
Benefits and expenses
Benefits to policyholders		4,558		4,771		6,854
Policyholder dividends		918		939		942
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		1,211		(336)		751
Other operating costs and expenses		3,071		3,064		2,649
Total benefits and expenses		9,758		8,438		11,196
Income (loss) before income taxes		304		(650)		2,174
Income tax (benefit) expense		(7)		(339)		652
Net income (loss)		311		(311)		1,522
Less: Net (loss) income attributable to noncontrolling interests		(16)		16		32
Net income (loss) attributable to John Hancock Life Insurance Company (U.S.A.)	$	327	$	(327)	$	1,490

The accompanying notes are an integral part of these consolidated financial statements.

F-5

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S

EQUITY AND COMPREHENSIVE INCOME (LOSS)

	Capital Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total John Hancock Life Insurance Company (U.S.A.) Shareholder’s Equity			Noncontrolling Interests			Total Shareholder’s Equity			Outstanding Shares
	(in millions, except for shares outstanding)																			(in thousands)
Balance at January 1, 2007, as previously reported after giving retroactive effect to the Merger (Note 1)	$	5	$	11,896	$	2,283		$	916		$	15,100		$	133		$	15,233		4,829
Comprehensive income:
Net income						1,490						1,490			32			1,522
Other comprehensive income, net of tax:
Net unrealized investment gains									100			100						100
Foreign currency translation adjustment									(4	)		(4	)					(4	)
Pension and postretirement benefits:
Change in prior service cost									24			24						24
Change in net actuarial gain									(8	)		(8	)					(8	)
Cash flow hedges									55			55						55
Comprehensive income												1,657			32			1,689
Adoption of ASC 840 (Note 1)						(133	)					(133	)					(133	)
Transfer of invested assets with affiliates				10								10						10
Share-based payments				20								20						20
Contributions from noncontrolling interests															22			22
Distributions to noncontrolling interests															(44	)		(44	)
Dividends paid to Parent						(594	)					(594	)					(594	)
Balance at December 31, 2007	$	5	$	11,926	$	3,046		$	1,083		$	16,060		$	143		$	16,203		4,829

The accompanying notes are an integral part of these consolidated financial statements.

F-6

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S

EQUITY AND COMPREHENSIVE INCOME (LOSS) – (CONTINUED)

	Capital Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total John Hancock Life Insurance Company (U.S.A.) Shareholder’s Equity			Noncontrolling Interests			Total Shareholder’s Equity			Outstanding Shares
	(in millions, except for shares outstanding)																			(in thousands)
Balance at January 1, 2008	$	5	$	11,926	$	3,046		$	1,083		$	16,060		$	143		$	16,203		4,829
Comprehensive (loss) income:
Net (loss) income						(327	)					(327	)		16			(311	)
Other comprehensive loss, net of tax:
Net unrealized investment losses									(2,534	)		(2,534	)					(2,534	)
Foreign currency translation adjustment									(23	)		(23	)					(23	)
Pension and postretirement benefits:
Change in prior service cost									(1	)		(1	)					(1	)
Change in net actuarial loss									(666	)		(666	)					(666	)
Cash flow hedges									1,055			1,055						1,055
Comprehensive (loss) income												(2,496	)		16			(2,480	)
Adoption of ASC 825 (Note 1)						7						7						7
Adoption of ASC 715 (Note 1)						(1	)					(1	)					(1	)
Share-based payments				9								9						9
Contributions from noncontrolling interests															62			62
Distributions to noncontrolling interests															(38	)		(38	)
Capital contribution from Parent				477								477						477
Dividends paid to Parent						(960	)					(960	)					(960	)
Balance at December 31, 2008	$	5	$	12,412	$	1,765		$	(1,086	)	$	13,096		$	183		$	13,279		4,829

The accompanying notes are an integral part of these consolidated financial statements.

F-7

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S

EQUITY AND COMPREHENSIVE INCOME (LOSS) – (CONTINUED)

	Capital Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total John Hancock Life Insurance Company (U.S.A.) Shareholder’s Equity			Noncontrolling Interests			Total Shareholder’s Equity			Outstanding Shares
	(in millions, except for shares outstanding)																		(in thousands)
Balance at January 1, 2009	$	5	$	12,412	$	1,765	$	(1,086	)	$	13,096		$	183		$	13,279		4,829
Comprehensive income (loss):
Net income (loss)						327					327			(16	)		311
Other comprehensive income, net of tax:
Net unrealized investment gains								2,916			2,916						2,916
Foreign currency translation adjustment								5			5						5
Pension and postretirement benefits:
Change in prior service cost								(2	)		(2	)					(2	)
Change in net actuarial loss								60			60						60
Net unrealized gain on split-dollar life insurance benefit								2			2						2
Cash flow hedges								(1,005	)		(1,005	)					(1,005	)
Comprehensive income (loss)											2,303			(16	)		2,287
Adoption of ASC 320 (Note 1)						730		(761	)		(31	)					(31	)
Share-based payments				8							8						8
Contributions from noncontrolling interests														39			39
Distributions to noncontrolling interests														(13	)		(13	)
Capital contribution from Parent				7							7						7
Balance at December 31, 2009	$	5	$	12,427	$	2,822	$	129		$	15,383		$	193		$	15,576		4,829

The accompanying notes are an integral part of these consolidated financial statements.

F-8

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended December 31
	2009		2008		2007
	(in millions)
Cash flows from operating activities:
Net income (loss)	$	311	$	(311)	$	1,522
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of premiums and accretion of discounts associated with investments, net		153		168		296
Net realized investment and other losses (gains)		1,837		223		(307)
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		1,211		(336)		751
Capitalization of deferred policy acquisition costs and deferred sales inducements		(1,642)		(2,009)		(1,974)
Depreciation and amortization		134		129		125
Net cash flows from trading securities		(151)		46		-
Decrease (increase) in accrued investment income		17		12		(68)
(Increase) decrease in other assets and other liabilities, net		(885)		2,030		1,159
(Decrease) increase in policyholder liabilities and accruals, net		(143)		4,178		3,256
Increase in deferred income taxes		29		114		443
Net cash provided by operating activities		871		4,244		5,203
Cash flows from investing activities:
Sales of:
Fixed maturities		11,418		10,428		15,561
Equity securities		1,022		422		1,453
Real estate		2		7		29
Other invested assets		71		884		646
Maturities, prepayments, and scheduled redemptions of:
Fixed maturities		2,101		2,318		2,235
Mortgage loans on real estate		2,112		2,056		3,428
Other invested assets		234		-		-
Purchases of:
Fixed maturities		(14,722)		(12,491)		(18,035)
Equity securities		(733)		(288)		(555)
Real estate		(151)		(233)		(201)
Other invested assets		(578)		(1,056)		(1,056)
Mortgage loans on real estate issued		(2,467)		(2,627)		(2,766)
(Issuance) repayments of notes receivable from affiliates		(11)		(755)		43
Net purchases of short-term investments		(303)		(944)		(1,997)
Other, net		716		692		(61)
Net cash used in investing activities		(1,289)		(1,587)		(1,276)

The accompanying notes are an integral part of these consolidated financial statements.

F-9

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

CONSOLIDATED STATEMENTS OF CASH FLOWS – (CONTINUED)

	Years ended December 31,
	2009		2008		2007
	(in millions)
Cash flows from financing activities:
Capital contribution from Parent	$	7	$	477	$	-
Dividends paid to Parent		-		(500)		(594)
Increase (decrease) in amounts due to affiliates		1,425		(964)		507
Universal life and investment-type contract deposits		7,547		7,375		4,964
Universal life and investment-type contract maturities and withdrawals		(5,287)		(7,948)		(6,580)
Net transfers to separate accounts from policyholders’ funds		(2,593)		(1,918)		(844)
Excess tax benefits related to share-based payments		8		2		17
Repayments of consumer notes, net		(395)		(557)		(297)
Issuance of long-term debt		1		2		1
Repayments of short-term debt		-		-		(477)
Repayments of long-term debt		-		(6)		(2)
Unearned revenue on financial reinsurance		(44)		1,592		(149)
Net reinsurance recoverable		(186)		(125)		(35)
Net cash provided by (used in) financing activities		483		(2,570)		(3,489)
Net increase in cash and cash equivalents		65		87		438
Cash and cash equivalents at beginning of year		4,850		4,763		4,325
Cash and cash equivalents at end of year	$	4,915	$	4,850	$	4,763
Non-cash financing activities during the year:
Dividend of note receivable to Parent	$	-	$	(460)	$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-10

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies

Business.   John Hancock Life Insurance Company (U.S.A.) (“JHUSA” or the “Company”) is a wholly-owned subsidiary of The Manufacturers Investment Corporation (“MIC”). MIC is a wholly-owned subsidiary of John Hancock Holdings (Delaware) LLC (“JHHLLC”), which is an indirect, wholly-owned subsidiary of The Manufacturers Life Insurance Company (“MLI”). MLI, in turn, is a wholly-owned subsidiary of Manulife Financial Corporation (“MFC”), a Canadian-based, publicly traded life insurance company.

The Company provides a wide range of insurance and investment products to both individual and institutional customers located primarily in the United States. These products, including individual life insurance, individual and group fixed and variable annuities, individual and group long-term care insurance, and mutual funds, are sold through an extensive network of agents, securities dealers, and other financial institutions. The Company also offers investment management services with respect to the Company’s separate account assets and to mutual funds and institutional customers. The Company is licensed in forty-nine states.

On December 31, 2009, John Hancock Life Insurance Company (“JHLICO”), which was a wholly-owned subsidiary of John Hancock Financial Services, Inc. (“JHFS”), and John Hancock Variable Life Insurance Company (“JHVLICO”), which was a wholly-owned subsidiary of JHLICO, merged with and into JHUSA. As a result of the merger, JHLICO and JHVLICO ceased to exist, and the companies’ property and obligations became the property and obligations of JHUSA.

Below is a summary of the individual and consolidated revenues and net income (loss) for JHUSA and JHLICO for the years ended December 31, 2009, 2008, and 2007. Amounts for the prior years have been restated to include financial results for JHLICO and JHVLICO.

	2009, Prior to Merger				2009
(in millions)	John Hancock Life Insurance Company (U.S.A.)		John Hancock Life Insurance Company (1)		Merger Adjustments (2)		Consolidated
Revenues	$	4,493	$	5,692	$	(123)	$	10,062
Net income (loss)	$	911	$	(573)	$	(27)	$	311

	2008, As Previously Reported				2008
(in millions)	John Hancock Life Insurance Company (U.S.A.)		John Hancock Life Insurance Company (1)		Merger Adjustments (2)		Consolidated
Revenues	$	5,512	$	2,618	$	(342)	$	7,788
Net loss	$	(38)	$	(304)	$	31	$	(311)

	2007, As Previously Reported				2007
(in millions)	John Hancock Life Insurance Company (U.S.A.)		John Hancock Life Insurance Company (1)		Merger Adjustments (2)		Consolidated
Revenues	$	5,636	$	7,843	$	(109)	$	13,370
Net income	$	719	$	771	$	32	$	1,522

(1) Includes the results of JHVLICO.

(2) Represents the elimination of significant intercompany transactions, reclassifications to conform to the current year presentation, and the impact of retroactive accounting changes.

F-11

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

On December 31, 2009, JHFS, which was a wholly-owned subsidiary of JHHLLC, merged with and into MIC. As a result of the merger, JHFS ceased to exist, and the company’s property and obligations became the property and obligations of MIC.

On December 31, 2009, Manulife Holdings (Delaware) LLC (“MHDLLC”), which was the parent company of MIC, merged with and into JHHLLC. As a result of the merger, MHDLLC ceased to exist, and the company’s property and obligations became the property and obligations of JHHLLC.

Basis of Presentation. The accompanying consolidated financial statements of the Company give effect to the merger of JHUSA with JHLICO and JHVLICO, which is reflected in JHUSA’s audited consolidated financial statements for the year ended December 31, 2009, as a merger of entities under common control.

These financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

The accompanying consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries and variable interest entities (“VIEs”) in which the Company is the primary beneficiary. Partnerships, joint venture interests, and other equity investments in which the Company does not have a controlling financial interest, but has significant influence, are recorded using the equity method of accounting and are included in other invested assets. All significant intercompany transactions and balances have been eliminated. For further discussion regarding VIEs, see Note 3 – Relationships with Variable Interest Entities.

Reclassifications. Certain prior year amounts have been reclassified to conform to the current year presentation.

Investments. The Company classifies its fixed maturity securities, other than leveraged leases, as either available-for-sale or held-for-trading and records these securities at fair value. Unrealized investment gains and losses related to available-for-sale securities are reflected in shareholder’s equity, net of policyholder related amounts and deferred income taxes. Unrealized investment gains and losses related to held-for-trading securities are reflected in net realized investment and other gains (losses). Interest income is generally recognized on the accrual basis. The amortized cost of debt securities is adjusted for other-than-temporary impairments, amortization of premiums, and accretion of discounts to maturity. Amortization of premiums and accretion of discounts are included in net investment income. The Company recognizes an impairment loss only when management does not expect to recover the amortized cost of the security.

The Company classifies its leveraged leases as fixed maturity securities and calculates their carrying value by accruing income at their expected internal rate of return.

For mortgage-backed securities, the Company recognizes income using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities. When actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date plus anticipated future payments, and any resulting adjustment is included in net investment income.

Equity securities include common stock and preferred stock. Equity securities that have readily determinable fair values are carried at fair value. For equity securities that the Company classifies as available-for-sale, unrealized investment gains and losses are reflected in shareholder’s equity, as described above for available-for-sale fixed maturity securities. Equity securities that do not have readily determinable fair values are carried at cost and are included in other invested assets. The cost of equity securities is written down to fair value when a decline in value is considered to be other-than-temporary. The Company considers its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its value. Dividends are recorded as income on the ex-dividend date.

Mortgage loans on real estate are carried at unpaid principal balances and are adjusted for amortization of premiums or accretion of discounts, less an allowance for probable losses. Premiums or discounts are amortized over the life of the mortgage loan contract in a manner that results in a constant effective yield. Interest income and amortization amounts and other costs that are recognized as an adjustment of yield are included as components of net investment income. Mortgage loans on real estate are evaluated periodically as part of the Company’s loan review procedures and are considered impaired when it is probable that the Company will be unable to collect all amounts of principal and interest due according to the contractual terms of the mortgage loan agreement. The valuation allowance established as a result of impairment is based on

F-12

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

the present value of the expected future cash flows, discounted at the loan’s original effective interest rate, or is based on the collateral value of the loan if higher and the loan is collateral dependent. The Company estimates this level to be adequate to absorb estimated probable credit losses that exist at the balance sheet date. Any change to the valuation allowance for mortgage loans on real estate is reported as a component of net realized investment and other gains (losses). Interest received on impaired mortgage loans on real estate is included in net investment income in the period received. If foreclosure becomes probable, the measurement method used is based on the collateral’s fair value. Foreclosed real estate is recorded at the collateral’s fair value at the date of foreclosure, which establishes a new cost basis.

Investment real estate, agriculture, and timber, which the Company has the intent to hold for the production of income, is carried at depreciated cost, using the straight-line method of depreciation, less adjustments for impairments in value. In those cases where it is determined that the carrying amount of investment real estate, agriculture, and timber is not recoverable, an impairment loss is recognized based on the difference between the depreciated cost and fair value of the asset. The Company reports impairment losses as part of net realized investment and other gains (losses).

Policy loans are carried at unpaid principal balances.

Short-term investments, which include investments with remaining maturities of one year or less, but greater than three months, at the time of purchase, are reported at fair value.

Net realized investment and other gains (losses), other than those related to separate accounts for which the Company does not bear the investment risk, are determined on a specific identification method and are reported net of amounts credited to participating contract holder accounts.

Derivative Financial Instruments. Derivatives are financial contracts, the value of which is derived from underlying interest rates, foreign exchange rates, other financial instruments, commodity prices, or indices. The Company uses various derivative instruments to hedge and manage its exposure to changes in interest rate levels, foreign exchange rates, and equity market prices and also to manage the duration of assets and liabilities. All derivative instruments are carried on the Company’s Consolidated Balance Sheets at fair value.

In certain cases, the Company uses hedge accounting by designating derivative instruments as either fair value hedges or cash flow hedges. For derivative instruments that are designated and qualify as fair value hedges, any changes in fair value of the derivative instruments, as well as the offsetting changes in fair value of the hedged items, are recorded in net realized investment and other gains (losses). Basis adjustments are amortized into income through net realized investment and other gains (losses).

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the change in fair value of the derivative instrument is recorded in accumulated other comprehensive income and then reclassified into income when the hedged item affects income. When a cash flow hedge is terminated, the effective portion of the accumulated derivative gain or loss continues to be reported in accumulated other comprehensive income and then is reclassified into income when the hedged item affects income. If it is determined that the forecasted transaction is no longer probable, the balance remaining in accumulated other comprehensive income is immediately recognized in earnings.

Hedge effectiveness is assessed quarterly using a variety of techniques, including regression analysis and cumulative dollar offset. When it is determined that a derivative is not effective as a hedge, the Company discontinues hedge accounting. In certain cases, there is no hedge ineffectiveness because the derivative instrument was constructed such that all the terms of the derivative exactly match the risk in the hedged item.

In cases where the Company receives or pays a premium as consideration for entering into a derivative instrument (i.e., interest rate caps and floors and swaptions), the premium is amortized into net investment income over the term of the derivative instrument. The change in fair value of such premiums (i.e., the inherent ineffectiveness of the derivative) is excluded from the assessment of hedge effectiveness and is included in net realized investment and other gains (losses). Changes in fair value of derivatives that are not non-qualifying hedges are included in net realized investment and other gains (losses).

The Company is a party to financial instruments that may contain embedded derivatives. The Company assesses each identified embedded derivative to determine whether bifurcation is required. If it is determined that the terms of the

F-13

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

embedded derivative are not clearly and closely related to the economic characteristics of the host contract and that a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract. Embedded derivatives are carried at fair value with changes in fair value reported in net realized investment and other gains (losses) for derivatives embedded in investment securities and reinsurance contracts or benefits to policyholders for the reinsurance recoverable related to guaranteed minimum income benefits and certain separate account guarantees related to guaranteed minimum withdrawal benefits.

Cash and Cash Equivalents. Cash and cash equivalents include cash and all highly liquid debt investments with a remaining maturity of three months or less when purchased.

Goodwill, Value of Business Acquired, and Other Intangible Assets. On April 28, 2004 (the “acquisition date”), MFC acquired JHFS and its subsidiaries, including JHLICO and JHVLICO, which was accounted for using the purchase method of accounting. The allocation of purchase consideration resulted in the recognition of goodwill, value of business acquired (“VOBA”), and other intangible assets as of the acquisition date.

Goodwill recorded on the Company’s Consolidated Balance Sheets represents primarily the excess of the cost over the fair value of identifiable net assets acquired by MFC.

VOBA is the present value of estimated future profits of insurance policies in-force related to businesses acquired by MFC. The Company amortizes VOBA using the same methodology and assumptions used to amortize deferred policy acquisition costs (“DAC”) and tests for recoverability at least annually.

Other intangible assets include brand name, investment management contracts (fair value of the investment management relationships between the Company and the mutual funds managed by the Company), distribution networks, and other investment management contracts (institutional investment management contracts managed by the Company’s investment management subsidiaries) recognized at the acquisition date. Brand name and investment management contracts are not subject to amortization. Distribution networks and other investment management contracts are amortized over their respective estimated lives in other operating costs and expenses.

The Company tests goodwill, brand name, and investment management contracts for impairment at least annually, or more frequently if circumstances indicate impairment may have occurred. Distribution networks and other investment contracts are reviewed for impairment only upon the occurrence of certain triggering events. An impairment is recorded whenever an intangible asset’s fair value is deemed to be less than its carrying value.

Deferred Policy Acquisition Costs and Deferred Sales Inducements. DAC are costs that vary with, and are related primarily to, the production of new business and have been deferred to the extent that they are deemed recoverable. Such costs include sales commissions, certain policy issuance and underwriting costs, and certain agency expenses. Similarly, any amounts assessed as initiation fees or front-end loads are recorded as unearned revenue. The Company tests the recoverability of DAC at least annually.

DAC related to participating traditional life insurance is amortized over the life of the policies at a constant rate based on the present value of the estimated gross margin amounts expected to be realized over the lives of the policies. Estimated gross margin amounts include anticipated premiums and investment results less claims and administrative expenses, changes in the net level premium reserve, and expected annual policyholder dividends. For annuity, universal life insurance, and investment-type products, DAC and unearned revenue are amortized generally in proportion to the change in present value of expected gross profits arising principally from surrender charges, investment results, including realized gains (losses), and mortality and expense margins. DAC amortization is adjusted retrospectively when estimates are revised. For annuity, universal life insurance, and investment-type products, the DAC asset is adjusted for the impact of unrealized gains (losses) on investments as if these gains (losses) had been realized, with corresponding credits or charges included in accumulated other comprehensive income.

DAC related to non-participating traditional life and long-term care insurance is amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves.

F-14

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

The Company offers sales inducements, including enhanced crediting rates or bonus payments, to contract holders on certain of its individual and group annuity products. The Company defers sales inducements and amortizes them over the life of the underlying contracts using the same methodology and assumptions used to amortize DAC.

Reinsurance. Assets and liabilities related to reinsurance ceded contracts are reported on a gross basis. The accompanying Consolidated Statements of Operations reflect premiums, benefits, and settlement expenses net of reinsurance ceded. Reinsurance premiums, commissions, expense reimbursements, benefits, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. The Company remains liable to its contract holders to the extent that counterparties to reinsurance ceded contracts do not meet their contractual obligations.

Separate Account Assets and Liabilities. Separate account assets and liabilities reported on the Company’s Consolidated Balance Sheets represent funds that are administered and invested by the Company to meet specific investment objectives of contract holders. Net investment income and net realized investment and other gains (losses) generally accrue directly to such contract holders who bear the investment risk, subject, in some cases, to principal guarantees and minimum guaranteed rates of income. The assets of each separate account are legally segregated and are not subject to claims that arise out of any other business of the Company. Separate account assets are reported at fair value, and separate account liabilities are set equal to the fair value of the separate account assets. Deposits, surrenders, net investment income, net realized investment and other gains (losses), and the related liability changes of separate accounts are offset within the same line item in the Consolidated Statements of Operations. Fees charged to contract holders, principally mortality, policy administration, investment management, and surrender charges, are included in the revenues of the Company.

Future Policy Benefits and Policyholders’ Funds. Future policy benefits for participating traditional life insurance policies are based on the net level premium method. The net level premium reserve is calculated using the guaranteed mortality and dividend fund interest rates. The liability for annual dividends represents the accrual of annual dividends earned. Settlement dividends are accrued in proportion to gross margins over the life of the policies. Participating business represented 38% and 41% of the Company’s traditional life net insurance in-force at December 31, 2009 and 2008, respectively, and 81%, 85%, and 91% of the Company’s traditional life net insurance premiums for the years ended December 31, 2009, 2008, and 2007, respectively.

Benefit liabilities for annuities during the accumulation period are equal to accumulated contract holders’ fund balances and after annuitization are equal to the present value of expected future payments.

For payout annuities in loss recognition, future policy benefits are computed using estimates of expected mortality, expenses, and investment yields as determined at the time these contracts first moved into loss recognition. Payout annuity reserves are adjusted for the impact of net realized investment and other gains (losses) associated with the underlying assets.

Future policy benefits for long-term care insurance policies are based on the net level premium method. Assumptions established at policy issue as to mortality, morbidity, persistency, and interest and expenses, which include a margin for adverse deviation, are based on estimates developed by management.

For non-participating traditional life insurance policies and reinsurance policies, future policy benefits are estimated using a net level premium method based upon actuarial assumptions as to mortality, persistency, interest, and expenses established at the policy issue or acquisition date. Assumptions established at policy issue as to mortality and persistency are based on the Company’s experience, which, together with interest and expense assumptions, include a margin for adverse deviation.

Policyholders’ funds for universal life insurance, individual and group annuities, and investment-type products, including guaranteed investment contracts and funding agreements, are equal to the total of the policyholder account values before surrender charges, additional reserves established to adjust for lower market interest rates as of the acquisition date, and additional reserves established on certain guarantees offered in certain investment-type products. Policyholder account values include deposits plus credited interest or change in investment value less expense and mortality fees, as applicable, and withdrawals. Policy benefits are charged to expense and include benefit claims incurred in the period in excess of related policy account balances and interest credited to policyholders’ account balances.

F-15

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Components of policyholders’ funds were as follows:

	December 31,
	2009		2008
	(in millions)
Guaranteed investment contracts	$	948	$	1,057
Funding agreements		1,753		3,644
Other investment-type products		1,976		1,975
Total liabilities for investment-type products		4,677		6,676
Individual and group annuities		2,124		1,948
Universal life and other		2,324		2,161
Total policyholders’ funds	$	9,125	$	10,785

Included in funding agreements at December 31, 2009 and 2008, are $1,753 million and $3,502 million, respectively, of funding agreements purchased from the Company by special purpose entities (“SPEs”), which in turn issued medium-term notes to global investors that are non-recourse to the Company. The SPEs are not consolidated in the Company’s consolidated financial statements.

Liabilities for unpaid claims and claim expenses include estimates of payments to be made on reported individual and group life, long-term care, and group accident and health insurance claims and estimates of incurred but not reported claims based on historical claims development patterns.

Estimates of future policy benefit reserves, claim reserves, and expenses are reviewed on a regular basis and adjusted as necessary. Any changes in estimates are reflected in current earnings.

Policyholder Dividends. Policyholder dividends for the closed blocks are approved annually by the Company’s Board of Directors. The aggregate amount of policyholder dividends is calculated based upon actual interest, mortality, morbidity, persistency, and expense experience for the year as appropriate, as well as management’s judgment as to the proper level of statutory surplus to be retained by the Company. For policies included in the JHUSA closed block, expense experience is included in determining policyholder dividends. Expense experience is not included for policies included in the JHLICO closed block. For additional information on the closed blocks, see Note 6 — Closed Blocks.

Revenue Recognition. Premiums from participating and non-participating traditional life insurance, annuity policies with life contingencies, and reinsurance contracts are recognized as revenue when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into income in a constant relationship to insurance in-force or, for annuities, the amount of expected future benefit payments.

Premiums from long-term care insurance contracts are recognized as income when due.

Deposits related to universal life and investment-type products are credited to policyholders’ account balances. Revenues from these contracts, as well as annuities, consist of amounts assessed against policyholders’ account balances for mortality, policy administration, and surrender charges and are recorded in fee income in the period in which the services are provided.

Fee income also includes advisory fees, broker-dealer commissions and fees, and administration service fees. Such fees and commissions are recognized in the period in which services are performed. Commissions related to security transactions and related expenses are recognized as income on the trade date. Contingent deferred selling charge commissions are recognized as income when received. Selling commissions paid to the selling broker-dealer for sales of mutual funds that do not have a front-end sales charge are deferred and amortized on a straight-line basis over periods ranging from one to six years. This is the approximate period of time expected to be benefited and during which fees earned pursuant to Rule 12b-1 distribution plans are received from the funds and contingent deferred sales charges are received from shareholders of the funds.

Share-Based Payments. The Company recognizes the costs resulting from share-based payment transactions with employees in its consolidated financial statements utilizing a fair value-based measurement method.

F-16

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Certain Company employees are provided compensation in the form of stock options, deferred share units, and restricted share units in MFC. The fair value of the stock options granted by MFC to the Company’s employees is recorded by the Company over the vesting periods. The fair value of the deferred share units and the intrinsic fair value of the restricted share units granted by MFC to Company employees are recognized in the accounts of the Company over the vesting periods of the units. The share-based payments are a legal obligation of MFC, but in accordance with U.S. GAAP, are recorded in the accounts of the Company in other operating costs and expenses.

The Company reports the benefits of tax deductions in excess of recognized compensation cost as a financing cash flow item.

Income Taxes. The provision for federal income taxes includes amounts currently payable or recoverable and deferred income taxes, computed under the liability method, resulting from temporary differences between the tax and financial statement bases of assets and liabilities. A valuation allowance is established for deferred tax assets when it is more likely than not that an amount will not be realized. Foreign subsidiaries and U.S. subsidiaries operating outside of the United States are taxed under applicable foreign statutory rates.

Foreign Currency. Assets and liabilities of foreign operations are translated into U.S. dollars using current exchange rates as of the balance sheet date. Revenues and expenses are translated using the average exchange rates during the year. The resulting net translation adjustments for each year are included in accumulated other comprehensive income. Gains or losses on foreign currency transactions are reflected in earnings.

Adoption of Recent Accounting Pronouncements

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification

Effective July 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 168, “The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles – a Replacement of FASB Statement No. 162,” and FASB Accounting Standards Update (“ASU”) No. 2009-01, “Topic 105- Generally Accepted Accounting Principles amendments based on Statement of Financial Accounting Standards No. 168 – The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles.”

FASB Accounting Standards Codification ™ (“ASC”) Topic 105 establishes the FASB Accounting Standards Codification™ as the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities and to supersede all previous U.S. GAAP literature. Adoption of the ASC had no effect on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations, as it did not change U.S. GAAP principles.

Fair Value Measurements

Effective December 31, 2009, the Company adopted ASU No. 2009-12, “Fair Value Measurements and Disclosures – Investment in Certain Entities That Calculate Net Asset per Share (or Its Equivalent).” This amendment to ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), allows entities to use the net asset value of certain investments when determining fair value, provided certain criteria are met. Adoption of this guidance had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Effective December 31, 2009, the Company adopted ASU No. 2009-05, “Measuring Liabilities at Fair Value.” This amendment to ASC 820 simplifies, in certain instances, the assessment of fair value of a liability. This amendment, when applicable, allows the use of the fair value of the instrument associated with the liability when it is traded as an asset as a proxy for its fair value as a liability, given inherent difficulties in measuring the fair value of such liabilities directly. The fair value of the liability is not adjusted to reflect any restrictions on its transfer. Adoption of this guidance had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Effective April 1, 2009, the Company adopted FASB Staff Position (“FSP”) No. FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” which is now incorporated into ASC 820. This accounting guidance carries forward and elaborates on previous fair value concepts. The fair value of an asset or liability continues to be the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date under then current market conditions. ASC 820 provides indicators of when a transaction is considered disorderly and elaborates on how

F-17

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

to determine the fair value of a financial instrument if such conditions exist. Adoption of this guidance had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

In October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active,” which is now incorporated into ASC 820. This pronouncement provided additional guidance on determining fair values of illiquid securities. This guidance was immediately effective, retroactive to prior reporting periods for which financial statements had not yet been issued. Adoption of this guidance had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Effective January 1, 2008, the Company adopted FSP FAS 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13,” which is now incorporated into ASC 820. This guidance provides a scope exception for applying Statement of Financial Accounting Standards No. 157, “Fair Value Measurements (“SFAS No. 157”),” fair value methodologies to the evaluation criteria on lease classification or measurement. Adoption of this guidance had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Effective January 1, 2008, the Company adopted SFAS No. 157, which is now incorporated into ASC 820. This guidance provides a single definition of fair value for accounting purposes, establishes a consistent framework for measuring fair value, and expands disclosure requirements about fair value measurements.

ASC 820 requires, among other things, an exit value approach for valuing assets and liabilities, using the best available information about what a market would bear. The exit value approach focuses on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Exit values for liabilities should include margins for risk even if they are not observable. ASC 820 provides guidance on how to measure fair value when required under existing accounting standards. ASC 820 establishes a fair value hierarchy based on the observability of the inputs to valuation techniques used to measure fair value, sorted into three levels (“Level 1, 2, and 3”) with the most observable input level being Level 1. The impact of changing valuation methods to comply with ASC 820 resulted in adjustments to actuarial liabilities, which were recorded as an increase in net income of $60 million, net of tax, on January 1, 2008.

Pension and Postretirement Benefit Plans

Effective December 31, 2009, the Company adopted FSP No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets,” which is now incorporated into ASC Topic 715, “Compensation” (“ASC 715”). This guidance requires enhanced disclosures of the assets of the Company’s pension and other postretirement benefit plans in the Company’s consolidated financial statements. ASC 715 requires a narrative description of investment policies and strategies for plan assets and discussion of long-term rate of return assumptions for plan assets. ASC 715 requires application of ASC 820 style disclosures to fair values of plan assets, including disclosure of fair values of plan assets sorted by asset category and valuation levels 1, 2, and 3, with roll forward of level 3 plan assets and discussion of valuation processes used. Adoption of this guidance resulted in expanded disclosures related to the Company’s pension and postretirement benefit plans, but had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Effective January 1, 2008, the Company adopted Emerging Issues Task Force (“EITF”) Issue No. 06-10, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance Arrangements,” which is now incorporated into ASC 715. This guidance requires employers to recognize a liability for the postretirement benefit related to collateral assignment split-dollar life insurance arrangements. ASC 715 also requires employers to recognize and measure an asset based on the nature and substance of the collateral assignment split-dollar life insurance arrangement. The impact of adoption of this guidance was recorded directly to the beginning balance of 2008 retained earnings and reported as a change in accounting principle. Adoption of this guidance did not have a material impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Effective January 1, 2008, the Company adopted EITF Issue No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements,” which is now incorporated into ASC 715. This guidance requires employers that enter into endorsement split-dollar life insurance arrangements that provide an employee with a postretirement benefit to recognize a liability for the future benefits promised based on the substantive agreement made with the employer. Whether the accrual is based on a death benefit or on the future cost of maintaining the

F-18

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

insurance depends on what the employer has effectively agreed to provide during the employee’s retirement. The purchase of an endorsement-type life insurance policy does not qualify as a settlement of the liability. The impact of adoption of this guidance was recorded directly to the beginning balance of 2008 retained earnings and reported as a change in accounting principle. Adoption of this guidance did not have a material impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Subsequent Events

Effective April 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 165, “Subsequent Events,” which is now incorporated into ASC Topic 855, “Subsequent Events” (“ASC 855”). This guidance was retroactively amended by the FASB in February 2010 by issuance of ASU No. 2010-09, “Subsequent Events,” which requires an entity which files or furnishes its financial statements with the U.S. Securities and Exchange Commission (“SEC”) to evaluate subsequent events through the date that its financial statements are issued. Adoption of this guidance resulted in expanded disclosures related to subsequent events, but had no impact on the Company’s Balance Sheets or Statements of Operations.

Other-Than-Temporary Impairments

Effective April 1, 2009, the Company adopted FSP No. FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” which is now incorporated into ASC Topic 320, “Investments – Debt and Equity Securities” (“ASC 320”). This new guidance removes the concept of “intent and ability to hold until recovery of value” associated with other-than-temporary impairment of a debt security whose fair value is less than its cost. Impairment losses should be recorded in earnings on an available-for-sale debt security only when management does not expect to recover the amortized cost of the security. For additional information regarding the Company’s impairment process, see Note 2 – Investments.

The Company’s adoption of this guidance required reassessment of previous impairment losses recorded on debt securities held at March 31, 2009, with any reversals of previous impairment losses recorded through retained earnings and offset to accumulated other comprehensive income for available-for-sale debt securities and other actuarial related amounts included in other comprehensive income, and related impact on deferred policy acquisition costs, as of April 1, 2009.

As a result of adoption of ASC 320, the Company recognized an increase in retained earnings of $730 million, net of tax, on April 1, 2009 with a corresponding (decrease) increase in accumulated other comprehensive income of ($761) million, net of tax, attributable to (1) available-for-sale debt securities of ($898) million, (2) unearned revenue liability of ($5) million, (3) deferred policy acquisition costs and deferred sales inducements of $96 million, (4) value of business acquired of $30 million, and (5) future policy benefits of $16 million. Other balance sheet items were impacted as follows: value of business acquired decreased by $36 million, deferred policy acquisition costs and deferred sales inducements decreased by $11 million, deferred income tax liability decreased by $17 million, and future policy benefits increased by $1 million.

Derivative Instruments and Hedging Activities

Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities,” which is now incorporated into ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). This guidance provides extensively expanded disclosure requirements for derivative instruments and hedging activities and applies to all derivative instruments, including bifurcated derivative instruments and related hedged items. Adoption of this guidance resulted in expanded disclosures related to derivative instruments and hedging activities, but had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Effective December 31, 2007, the Company early adopted FSP No. FIN 39-1, “Amendment of Offsetting of Amounts Related to Certain Contracts,” which is now incorporated into ASC 815. This guidance specifies that an entity that has in the past elected to offset fair value of derivative assets and liabilities may change its policy election. The Company changed its accounting policy from net to gross balance sheet presentation of offsetting derivative balances with the same counterparty. This accounting policy change was applied retrospectively. Adoption of ASC 815 resulted in an increase in derivative assets equally offset by an increase in derivative liabilities at December 31, 2007 of $673 million and had no impact on the Company’s Consolidated Statements of Operations.

F-19

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Consolidated Financial Statements

Effective January 1, 2009, the Company adopted Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51,” which is now incorporated into ASC Topic 810, “Consolidation” (“ASC 810”). ASC 810 establishes accounting guidance for noncontrolling interests in a subsidiary and for deconsolidation of a subsidiary. Noncontrolling interests in subsidiaries are included as a separate component of shareholder’s equity on the Consolidated Balance Sheets, net income attributable to both the Company’s interest and the noncontrolling interests is presented separately on the Consolidated Statement of Operations, and any changes in the Company’s ownership of a subsidiary, which do not result in deconsolidation, would be accounted for as transactions in the Company’s own stock. Deconsolidation will typically result in the recognition of a gain or loss, with any retained noncontrolling interest measured initially at fair value. This accounting guidance was applied prospectively, except for the presentation and disclosure requirements, which were applied retrospectively. Adoption of this guidance had no measurement impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Effective December 31, 2008, the Company adopted FSP FAS No. 140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities,” which is now incorporated into ASC 810. This guidance requires enhanced disclosures about transfers of financial assets and interests in VIEs. While the Company is not involved in securitizing financial assets, it does have significant relationships with VIEs. Adoption of this guidance resulted in expanded disclosures related to VIEs, but had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Investments

Effective December 31, 2008, the Company adopted FSP No. EITF 99-20-1, “Amendments to the Impairment Guidance EITF Issue No. 99-20,” which is now incorporated into ASC Topic 325, “Investments” (“ASC 325”). This guidance helps conform the impairment guidance in EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets,” which is also now incorporated into ASC 325, to the impairment guidance of ASC 320. This impairment guidance applies to debt securities backed by securitized financial assets (“ABS”), which are of less than high credit quality and can be contractually prepaid in a way that the investor could lose part of its investment. These securities are categorized as available-for-sale and most have fair values below their carrying values. ASC 325 allows the Company to consider its own expectations about probabilities that the ABS can and will be held until the fair values recover, while assessing whether the ABS is other-than-temporarily impaired. Adoption of this guidance had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Financial Instruments

Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which is now incorporated into ASC Topic 825, “Financial Instruments” (“ASC 825”). The objective of this guidance is to enable companies to mitigate the earnings volatility caused by measuring related assets and liabilities differently, without having to apply complex hedge accounting provisions. ASC 825 provides the option to use fair value accounting for most financial assets and financial liabilities, with changes in fair value reported in earnings. Selection of the fair value option is irrevocable and can be applied on an instrument-by-instrument basis.

The Company elected to adopt ASC 825 for certain bonds classified as available-for-sale that support certain actuarial liabilities to participating policyholders. The book and market value for these bonds prior to this election were $1,307 million and $1,314 million, respectively. The amount of net unrealized gains reclassified from accumulated other comprehensive income on January 1, 2008 was $7 million. The actuarial liabilities in these products are recorded through earnings primarily based on fluctuations in the fair value of the underlying bonds. The bonds were classified as held-for-trading on the Consolidated Balance Sheet at December 31, 2008. The adoption of ASC 825 resulted in an adjustment to retained earnings of $7 million as of January 1, 2008.

F-20

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Leases

Effective January 1, 2007, the Company adopted FSP No. FAS 13-2, “Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction,” which is now incorporated into ASC Topic 840, “Leases” (“ASC 840”), and requires that changes in the projected timing of cash flows relating to income taxes generated by a leveraged lease be considered triggers requiring recalculation of the rate of return and allocation of lease income from the inception of the lease, with gain or loss recognition of the impact of any resulting change. Prior to this amendment, only changes to lease assumptions which affected the total amount of estimated net income were considered to be such triggers. This guidance cannot be retrospectively applied. Adoption of ASC 840 resulted in a charge to opening retained earnings at January 1, 2007 of $133 million, net of tax.

Income Taxes

Effective January 1, 2007, the Company adopted FASB Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” which is now incorporated into ASC Topic 740, “Income Taxes” (“ASC 740”). This guidance prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that it has taken or expects to take on a tax return. ASC 740 requires evaluation of whether a tax position taken on a tax return is more likely than not to be sustained if challenged, and if so, evaluation of the largest benefit that is more than 50% likely of being realized on ultimate settlement. Differences between these benefits and actual tax positions result in either (a) an increase in a liability for income taxes payable or a reduction of an income tax refund receivable; (b) a reduction in a deferred tax asset or an increase in a deferred tax liability, or both (a) and (b). ASC 740 requires recording a cumulative effect of adoption in retained earnings as of the beginning of the year of adoption. Adoption of this guidance had no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Deferred Policy Acquisition Costs

Effective January 1, 2007, the Company adopted American Institute of Certified Public Accountants Statement of Position (“SOP”) No. 05-1, “Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of Insurance Contracts,” which is now incorporated into ASC Topic 944, “Financial Services – Insurance” (“ASC 944”). ASC 944 provides guidance on accounting for deferred policy acquisition costs of internal replacements of insurance and investment contracts. An internal replacement that is determined to result in a replacement contract that is substantially changed from the replaced contract should be accounted for as an extinguishment of the replaced contract. Unamortized deferred policy acquisition costs, unearned revenue liabilities, and deferred sales inducement assets from extinguished contracts should no longer be deferred and should be charged to expense. Adoption of this guidance had no material impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Future Adoption of Recent Accounting Pronouncements

Fair Value Measurements

In January 2010, the FASB issued ASU No. 2010-06, “Fair Value Measurements and Disclosures – Improving Disclosures about Fair Value Measurements,” which amends ASC 820. This guidance adds additional requirements for disclosures about transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and settlements relating to Level 3 measurements. It also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. These amendments to ASC 820 will be effective for the Company on January 1, 2010. Adoption of this guidance will result in expanded disclosures related to fair value measurements, but will have no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Consolidation Accounting

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 167, “Amendments to FASB Interpretation No. 46(R),” which was incorporated into ASC 810 by ASU No. 2009-17, “Consolidation – Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities.”

F-21

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 1 — Summary of Significant Accounting Policies - (continued)

Modifications to ASC 810 will revise the accounting principles for assessing consolidation of a VIE and include the following features:

• A new concept of control - now defined as an entity’s ability to make decisions that are most economically significant to the VIE coupled with economic exposure to the VIE’s variability. This definition replaces the previous concept of “exposure to the majority of the VIE’s variability” in determining when to consolidate another entity.

• New guidance for determining which party, among parties with shared decision making powers over a VIE, makes the most significant decisions for the VIE.

• A bright line test for removal rights over an entity’s decision maker by its equity owners, whereby removal rights are disregarded as an element of control unless they can be exercised successfully by a single party.

• Expanded guidance on whether fees charged to a VIE by its decision maker are variable interests, leading to consolidation by the decision maker.

• Removal of the previous scope exception for qualifying special purpose entities.

ASC 810 retains a scope exception for consolidation by investment companies of their investments. These amendments to ASC 810 will be effective for the Company on January 1, 2010. In February 2010, the FASB issued ASU No. 2010-10, “Consolidation – Amendments for Certain Investment Funds,” which deferred the effective date of these amendments for relationships with investment companies. The Company is currently evaluating the impact of adopting these amendments to ASC 810 on the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations.

Transfers of Financial Assets

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, “Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140,” which upon its effective date will amend ASC Topic 860, “Transfers and Servicing” (“ASC 860”). ASC 860 focuses on securitization activity, and these amendments affect the transferor’s derecognition principles for assets transferred. Amendments to ASC 860 eliminate the concept of qualifying special purpose entities, removing their previous exemption from consolidation accounting by transferors of financial assets to them. Further, ASC 860 will not permit derecognition accounting for transfers of portions of financial assets when the portions transferred do not meet the definition of a participating interest. ASC 860 will strengthen the requirement that transferred assets be legally isolated from the transferor and all of its consolidated affiliates in order for the transfer to be accounted for as a sale. ASC 860 will require that retained interests in transferred assets be recognized at fair value instead of amounts based on relative fair value allocations of the previous carrying value of assets transferred.

These amendments to ASC 860 will be effective on a prospective basis for transfers of financial assets occurring on or after January 1, 2010.

F-22

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments

Fixed Maturities and Equity Securities

The Company’s investments in fixed maturities and equity securities are summarized below:

	December 31, 2009
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-Than-     Temporary Impairments in AOCI (2)
	(in millions)
Fixed maturities and equity securities:
Corporate debt securities	$	41,667	$	1,803	$	965	$	42,505	$	(98)
Commercial mortgage-backed securities		4,643		69		238		4,474		(1)
Residential mortgage-backed securities		843		1		368		476		(8)
Collateralized debt obligations		291		-		156		135		(1)
Other asset-backed securities		1,238		41		37		1,242		-
U.S. Treasury securities and obligations of U.S. government corporations and agencies		1,945		40		17		1,968		-
Obligations of states and political subdivisions		1,533		11		53		1,491		-
Debt securities issued by foreign governments		1,214		98		34		1,278		-
Fixed maturities		53,374		2,063		1,868		53,569		(108)
Other fixed maturities (1)		2,012		-		-		2,012		-
Total fixed maturities available-for-sale		55,386		2,063		1,868		55,581		(108)
Equity securities available-for-sale		489		77		8		558		-
Total fixed maturities and equity securities available-for-sale	$	55,875	$	2,140	$	1,876	$	56,139	$	(108)

	December 31, 2008
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities and equity securities:
Corporate debt securities	$	41,297	$	856	$	3,940	$	38,213
Commercial mortgage-backed securities		4,852		4		620		4,236
Residential mortgage-backed securities		635		17		1		651
Collateralized debt obligations		272		-		100		172
Other asset-backed securities		1,501		23		191		1,333
U.S. Treasury securities and obligations of U.S. government corporations and agencies		1,276		207		-		1,483
Obligations of states and political subdivisions		171		6		9		168
Debt securities issued by foreign governments		1,083		209		26		1,266
Fixed maturities		51,087		1,322		4,887		47,522
Other fixed maturities (1)		2,025		-		-		2,025
Total fixed maturities available-for-sale		53,112		1,322		4,887		49,547
Equity securities available-for-sale		726		81		191		616
Total fixed maturities and equity securities available-for-sale	$	53,838	$	1,403	$	5,078	$	50,163

(1) The Company classifies its leveraged leases as fixed maturities and calculates their carrying value by accruing income at their expected internal rate of return.

(2) Represents the amount of other-than-temporary impairment losses in accumulated other comprehensive income (“AOCI”), which from the date of adoption of ASC 320 on April 1, 2009, were not included in earnings.

F-23

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

The amortized cost and fair value of available-for-sale fixed maturities at December 31, 2009, by contractual maturity, are shown below:

	Amortized Cost		Fair Value
	(in millions)
Fixed maturities:
Due in one year or less	$	2,167	$	2,182
Due after one year through five years		11,792		12,112
Due after five years through ten years		12,409		12,928
Due after ten years		19,991		20,020
		46,359		47,242
Asset-backed and mortgage-backed securities		7,015		6,327
Total	$	53,374	$	53,569

Expected maturities may differ from contractual maturities because eligible borrowers may exercise their right to call or prepay obligations with or without call or prepayment penalties. Asset-backed and mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

Fixed Maturities and Equity Securities Impairment Review

The Company has a process in place to identify securities that could potentially have an impairment that is other-than-temporary. This process involves monitoring market events that could impact issuers’ credit ratings, business climate, management changes, litigation and government actions, and other similar factors. This process also involves monitoring late payments, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts, and cash flow projections as indicators of credit issues.

At the end of each quarter, the MFC Loan Review Committee reviews all securities where market value is less than 80 percent of amortized cost for six months or more or if there is a significant unrealized loss at the balance sheet date to determine whether impairments need to be taken. The analysis focuses on each company’s or project’s ability to service its debts in a timely fashion and the length of time the security has been trading below amortized cost. The results of this analysis are reviewed by the Credit Committee at MFC. This committee includes MFC’s Chief Financial Officer, Chief Investment Officer, Chief Risk Officer, Chief Credit Officer, and other senior management. This quarterly process includes a fresh assessment of the credit quality of each investment in the entire fixed maturities portfolio.

The Company considers relevant facts and circumstances in evaluating whether the impairment of a security is other-than-temporary. Relevant facts and circumstances considered include (1) the length of time the fair value has been below cost; (2) the financial position of the issuer, including the current and future impact of any specific events; and (3) the Company’s ability and intent to hold the security to maturity or until it recovers in value. If the Company intends to sell, or if it is more likely than not that it will be required to sell an impaired security prior to recovery of its cost basis, the security is considered other-than-temporarily impaired, and the Company records a charge to earnings for the full amount of impairment (the difference between the current carrying amount and fair value of the security). For those securities in an unrealized loss position where the Company does not intend to sell or is not more likely than not to be required to sell, the Company determines its ability to recover the amortized cost of the security by comparing the net present value of the projected future cash flows to the amortized cost of the security. If the net present value of the cash flow is less than the security’s amortized cost, then the difference is recorded as a credit loss. The difference between the estimates of the credit loss and the overall unrealized loss on the security is the non-credit-related component. The credit loss portion is charged to net realized investment and other gains (losses) on the Consolidated Statements of Operations, while the non-credit loss is charged to accumulated other comprehensive income on the Consolidated Balance Sheets.

The net present value used to determine the credit loss is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. The Company may use the estimated fair value of collateral as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. The projection of future cash flows are subject to the same analysis the Company applies to its overall impairment evaluation process, as noted above, which incorporates security specific information such as late payments, downgrades by rating agencies, key financial ratios, financial statements, and fundamentals of the industry and geographic area in which the issuer operates, as well as overall macroeconomic conditions.

F-24

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

The projections are estimated using assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. For mortgage-backed and asset-backed securities, cash flow estimates, including prepayment assumptions, are based on data from third-party data sources or internal estimates and are driven by assumptions regarding the underlying collateral, including default rates, recoveries, and changes in value.

There are a number of significant risks and uncertainties inherent in the process of monitoring impairments and determining if impairment is other-than-temporary. These risks and uncertainties include (1) the risk that the Company’s assessment of an issuer’s ability to meet all of its contractual obligations will change based on changes in the credit characteristics of that issuer; (2) the risk that the economic outlook will be worse than expected or have more of an impact on the issuer than anticipated; (3) the risk that fraudulent information could be provided to the Company’s investment professionals who determine the fair value estimates and other-than-temporary impairments; and (4) the risk that new information obtained by the Company or changes in other facts and circumstances lead it to change its intent to hold the security to maturity or until it recovers in value. Any of these situations could result in a charge to earnings in a future period.

The cost amounts for both fixed maturity securities and equity securities are net of other-than-temporary impairment charges.

The following table rolls forward the amount of credit losses recognized in earnings on available-for-sale fixed maturities for which a portion of the other-than-temporary impairment was also recognized in accumulated other comprehensive income, starting with the date of adoption of ASC 320 on April 1, 2009:

Credit losses on available-for-sale fixed maturities:

(in millions)

Balance at December 31, 2008	$	-
Additions:
Credit losses remaining in retained earnings related to adoption of new authoritative guidance on April 1, 2009		726
Credit losses for which an other-than-temporary impairment was not previously recognized		159
Credit losses for which an other-than-temporary impairment was previously recognized		15
Deletions:
Amounts related to sold, matured, or paid down available-for-sale fixed maturities		(539	)
Balance at December 31, 2009	$	361

F-25

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

The following table shows the carrying value and gross unrealized losses aggregated by investment category and length of time that individual available-for-sale fixed maturity securities and equity securities have been in a continuous unrealized loss position:

Unrealized Losses on Available-For-Sale Fixed Maturity Securities and Equity Securities — By Investment Age

	Year ended December 31, 2009
	Less than 12 months				12 months or more				Total
	Carrying Value		Unrealized Losses		Carrying Value		Unrealized Losses		Carrying Value		Unrealized Losses
					(in millions)
Corporate debt securities	$	6,358	$	235	$	6,167	$	730	$	12,525	$	965
Commercial mortgage-backed securities		772		38		946		200		1,718		238
Residential mortgage-backed securities		194		147		275		221		469		368
Collateralized debt obligations		5		1		103		155		108		156
Other asset-backed securities		199		7		325		30		524		37
U.S. Treasury securities and obligations of U.S. government corporations and agencies		1,155		17		-		-		1,155		17
Obligations of states and political subdivisions		1,148		50		23		3		1,171		53
Debt securities issued by foreign governments		335		12		67		22		402		34
Total fixed maturities available-for-sale		10,166		507		7,906		1,361		18,072		1,868
Equity securities available-for-sale		40		3		58		5		98		8
Total	$	10,206	$	510	$	7,964	$	1,366	$	18,170	$	1,876

	Year ended December 31, 2008
	Less than 12 months				12 months or more				Total
	Carrying Value		Unrealized Losses		Carrying Value		Unrealized Losses		Carrying Value		Unrealized Losses
					(in millions)
Corporate debt securities	$	17,248	$	1,982	$	9,479	$	1,958	$	26,727	$	3,940
Commercial mortgage-backed securities		2,565		357		1,216		263		3,781		620
Residential mortgage-backed securities		102		1		32		-		134		1
Collateralized debt obligations		33		5		110		95		143		100
Other asset-backed securities		629		117		155		74		784		191
Obligations of states and political subdivisions		100		8		11		1		111		9
Debt securities issued by foreign governments		28		1		61		25		89		26
Total fixed maturities available-for-sale		20,705		2,471		11,064		2,416		31,769		4,887
Equity securities available-for-sale		347		161		40		30		387		191
Total	$	21,052	$	2,632	$	11,104	$	2,446	$	32,156	$	5,078

Unrealized losses can be created by rising interest rates or by rising credit concerns and hence widening credit spreads. Credit concerns are apt to play a larger role in the unrealized loss on below investment grade securities. Unrealized losses on

F-26

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

investment grade securities principally relate to changes in interest rates or changes in credit spreads since the securities were acquired. Credit rating agencies’ statistics indicate that investment grade securities have been found to be less likely to develop credit concerns. The gross unrealized loss on below investment grade available-for-sale fixed maturity securities decreased to $606 million at December 31, 2009 from $768 million at December 31, 2008.

At December 31, 2009 and 2008, there were 1,545 and 2,182 available-for-sale fixed maturity securities with an aggregate gross unrealized loss of $1,868 million and $4,887 million, respectively, of which the single largest unrealized loss was $24 million and $48 million, respectively. The Company anticipates that these fixed maturity securities will perform in accordance with their contractual terms and currently has the ability and intent to hold these securities until they recover or mature.

At December 31, 2009 and 2008, there were 141 and 633 equity securities with an aggregate gross unrealized loss of $8 million and $191 million, respectively, of which the single largest unrealized loss was $2 million and $14 million, respectively. The Company anticipates that these equity securities will recover in value in the near term.

Available-for-sale securities with amortized cost of $203 million were non-income producing for the year ended December 31, 2009. Non-income producing assets represent investments that have not produced income for the twelve months preceding December 31, 2009.

Securities Lending

The Company participated in a securities lending program for the purpose of enhancing income on securities held in 2009 and 2008, but there were no securities on loan and no collateral held as of December 31, 2009 and 2008. The Company maintains collateral at a level of at least 102% of the loaned securities’ market value and monitors the market value of the loaned securities on a daily basis.

Assets on Deposit

As of December 31, 2009 and 2008, fixed maturity securities with a fair value of $50 million and $59 million, respectively, were on deposit with government authorities as required by law.

Mortgage Loans on Real Estate

At December 31, 2009, the mortgage portfolio was diversified by specific collateral property type and geographic region as displayed below:

Collateral Property Type	Carrying Amount			Geographic Concentration	Carrying Amount
	(in millions)				(in millions)
Apartments	$	1,659		East North Central	$	1,172
Hotels		13		East South Central		381
Industrial		1,803		Middle Atlantic		2,215
Office buildings		3,106		Mountain		876
Retail		3,392		New England		1,060
Mixed use		245		Pacific		3,345
Agricultural		793		South Atlantic		2,168
Agri business		1,105		West North Central		355
Other		549		West South Central		855
				Canada/Other		238
Provision for losses		(42	)	Provision for losses		(42	)
Total	$	12,623		Total	$	12,623

F-27

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

Changes in the allowance for probable losses on mortgage loans on real estate are summarized below:

	Balance at Beginning of Period	Additions	Deductions	Balance at End of Period
	(in millions)
Year ended December 31, 2009	$  29	$  36	$  23	$  42
Year ended December 31, 2008	17	15	3	29
Year ended December 31, 2007	41	13	37	17

Mortgage loans with a carrying value of $108 million were non-income producing for the year ended December 31, 2009. At December 31, 2009, mortgage loans with a carrying value of $14 million were delinquent by less than 90 days and $5 million were delinquent by 90 days or more.

The total recorded investment in mortgage loans that are considered to be impaired along with the related provision for losses were as follows:

	December 31,
	2009			2008
	(in millions)
Impaired mortgage loans on real estate with provision for losses	$	150		$	75
Provision for losses		(42	)		(29	)
Net impaired mortgage loans on real estate	$	108		$	46

The average recorded investment in impaired loans and the interest income recognized on impaired loans were as follows:

	Years ended December 31,
	2009		2008		2007
	(in millions)
Average recorded investment in impaired loans	$	113	$	60	$	94
Interest income recognized on impaired loans		-		-		-

Investment Real Estate, Agriculture, and Timber

Investment real estate, agriculture, and timber of $145 million was non-income producing for the year ended December 31, 2009. Depreciation expense on investment real estate, agriculture, and timber was $53 million, $51 million, and $53 million in 2009, 2008, and 2007, respectively. Accumulated depreciation was $413 million and $367 million at December 31, 2009 and 2008, respectively.

Equity Method Investments

Investments in other assets, which include unconsolidated joint ventures, partnerships, and limited liability corporations, accounted for using the equity method of accounting totaled $3,059 million and $2,847 million at December 31, 2009 and 2008, respectively. Net investment income (loss) on investments accounted for under the equity method totaled $78 million, $(4) million, and $210 million in 2009, 2008, and 2007, respectively. Total combined assets of such investments were $34,412 million and $33,770 million (consisting primarily of investments) and total combined liabilities were $9,960 million and $10,428 million (including $6,539 million and $7,229 million of debt) at December 31, 2009 and 2008, respectively. Total combined revenues and expenses of these investments in 2009 were $4,199 million and $4,075 million, respectively, resulting in $124 million of total combined income from operations. Total combined revenues and expenses of these investments in 2008 were $3,071 million and $3,482 million, respectively, resulting in $411 million of total combined loss from operations. Total combined revenues and expenses in 2007 were $1,349 million and $1,113 million, respectively, resulting in $236 million of total combined income from operations. Depending on the timing of receipt of the audited financial statements of these other assets, the above investee level financial data may be up to one year in arrears.

F-28

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 2 — Investments - (continued)

Net Investment Income and Net Realized Investment and Other (Losses) Gains

The following information summarizes the components of net investment income and net realized investment and other (losses) gains:

	Years ended December 31,
	2009			2008			2007
	(in millions)
Net investment income
Fixed maturities	$	3,333		$	3,286		$	3,422
Equity securities		31			56			45
Mortgage loans on real estate		739			714			683
Investment real estate, agriculture, and timber		146			155			181
Policy loans		332			322			304
Short-term investments		27			182			251
Equity method investments and other		15			(8	)		217
Gross investment income		4,623			4,707			5,103
Less investment expenses		277			266			264
Net investment income (1)	$	4,346		$	4,441		$	4,839
Net realized investment and other (losses) gains
Fixed maturities	$	(180	)	$	(1,577	)	$	(41	)
Equity securities		(59	)		(129	)		124
Mortgage loans on real estate		(83	)		(23	)		76
Derivatives and other invested assets		(1,366	)		1,317			157
Amounts credited to participating contract holders		(149	)		189			(9	)
Net realized investment and other (losses) gains (1)	$	(1,837	)	$	(223	)	$	307

(1) Includes net investment income and net realized investment and other (losses) gains on assets held in trust on behalf of MRBL, which are included in amounts due from and held for affiliates on the Consolidated Balance Sheets. See Note 8 – Related Party Transactions for information on the associated MRBL reinsurance agreement.

The change in net unrealized loss on fixed maturities classified as held-for-trading of $(107) million and $216 million is included in net realized investment and other (losses) gains for the years ended December 31, 2009 and December 31, 2008, respectively. There were no fixed maturities classified as held-for-trading for the year ended December 31, 2007.

For 2009, 2008, and 2007, net investment income passed through to participating contract holders as interest credited to policyholders’ account balances amounted to $111 million, $138 million, and $133 million, respectively.

Gross gains were realized on the sale of available-for-sale securities of $363 million, $352 million, and $418 million for the years ended December 31, 2009, 2008, and 2007, respectively, and gross losses were realized on the sale of available-for-sale securities of $131 million, $30 million, and $100 million for the years ended December 31, 2009, 2008, and 2007, respectively. In addition, other-than-temporary impairments on available-for-sale securities of $663 million, $1,767 million, and $386 million for the years ended December 31, 2009, 2008, and 2007, respectively, were recognized in the Consolidated Statements of Operations.

Note 3 — Relationships with Variable Interest Entities

In its capacities as an investor and as an investment manager, the Company has relationships with various types of entities, some of which are considered variable interest entities (“VIEs”) in accordance with ASC 810.

F-29

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3 — Relationships with Variable Interest Entities - (continued)

Under ASC 810, the variable interest holder, if any, that will absorb a majority of the VIE’s expected losses, receive a majority of the VIE’s expected residual returns, or both, is deemed to be the primary beneficiary and must consolidate the VIE. An entity that holds a significant variable interest in a VIE, but is not the primary beneficiary, must disclose certain information regarding its involvement with the VIE.

The Company determines whether it is the primary beneficiary of a VIE by evaluating the contractual rights and obligations associated with each party involved in the entity, calculating estimates of the entity’s expected losses and expected residual returns, and allocating the estimated amounts to each party. In addition, the Company considers qualitative factors, such as the extent of the Company’s involvement in creating or managing the VIE.

If it is not considered to be the primary beneficiary, the Company assesses the materiality of its relationship with the VIE to determine if it holds a significant variable interest, which requires disclosure. This assessment considers the materiality of the VIE relationship to the Company as, among other factors, a percentage of total investments, percentage of total net investment income, and percentage of total funds under management. For purposes of assessing materiality and disclosing significant variable interests, the Company aggregates similar entities.

Consolidated Variable Interest Entities

The Company’s separate accounts are considered the primary beneficiary of certain timberland VIEs, as discussed further below. The consolidation of these VIEs in the separate accounts of the Company resulted in an increase in separate account assets of $1,574 million, with an equal increase in separate account liabilities at December 31, 2009 and an increase in separate account assets of $192 million, with an equal increase in separate account liabilities at December 31, 2008.

The liabilities recognized as a result of consolidating the timberland VIEs do not represent additional claims on the general assets of the Company; rather, they represent claims against the assets recognized as a result of consolidating the VIEs. Conversely, the assets recognized as a result of consolidating the timberland VIEs do not represent additional assets which the Company can use to satisfy claims against its general assets; rather they can only be used to settle the liabilities recognized as a result of consolidating the VIEs.

Significant Variable Interests in Unconsolidated Variable Interest Entities

The following table presents the total assets of, investment in, and maximum exposure to loss relating to VIEs for which the Company has concluded that it holds significant variable interests, but it is not the primary beneficiary, and which have not been consolidated. The Company does not record any liabilities related to the unconsolidated VIEs.

	December 31,
	2009
	Total Assets		Investment (1)		Maximum Exposure to Loss (2)
	(in millions)
Collateralized debt obligations (3)	$	1,431	$	27	$	27
Real estate limited partnerships (4)		1,166		466		522
Timber funds (5)		5,010		180		183
Total	$	7,607	$	673	$	732
	December 31,
	2008
	Total Assets		Investment (1)		Maximum Exposure to Loss (2)
	(in millions)
Collateralized debt obligations (3)	$	2,039	$	27	$	27
Real estate limited partnerships (4)		1,208		486		537
Timber funds (5)		5,413		176		182
Total	$	8,660	$	689	$	746

F-30

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 3 — Relationships with Variable Interest Entities - (continued)

(1) The Company’s investments in unconsolidated VIEs are included in other invested assets on the Consolidated Balance Sheets.

(2) The maximum exposure to loss related to collateralized debt obligations (“CDOs”) is limited to the investment reported on the Company’s Consolidated Balance Sheets. The maximum exposure to loss related to real estate limited partnerships and timber funds is limited to the Company’s investment plus unfunded capital commitments. The maximum loss is expected to occur only upon bankruptcy of the issuer or investee or as a result of a natural disaster in the case of the timber funds.

(3) The Company acts as an investment manager to certain asset-backed investment vehicles, commonly known as CDOs, for which it collects a management fee. In addition, the Company may invest in debt or equity securities issued by these CDOs or by CDOs managed by others. CDOs raise capital by issuing debt and equity securities and use the proceeds to purchase investments.

(4) Real estate limited partnerships include partnerships established for the purpose of investing in real estate that qualifies for low income housing and/or historic tax credits. Limited partnerships are owned by a general partner, who manages the business, and by limited partners, who invest capital, but have limited liability and are not involved in the partnerships’ management. The Company is typically the sole limited partner or investor member of each and is not a general partner or managing member.

(5) The Company acts as investment manager for the VIEs owning the timberland properties (the “timber funds”), which the general account and institutional separate accounts invest in. Timber funds are investment vehicles used primarily by large institutional investors, such as public and corporate pension plans, whose primary source of return is derived from the growth and harvest of timber and long-term appreciation of the property. The primary risks of timberland investing include market uncertainty (fluctuation of timber and timberland investments), relative illiquidity (compared to stocks and other investment assets), and environmental risk (natural hazards or legislation related to threatened or endangered species). These risks are mitigated through effective investment management and geographic diversification of timberland investments. The Company collects an advisory fee from each timber fund and is also eligible for performance and forestry management fees.

Note 4 — Derivatives and Hedging Instruments

Types of Derivatives and Derivative Strategies

Interest Rate Contracts. The Company uses interest rate futures contracts, interest rate swap agreements, and cancelable interest rate swap agreements as part of its overall strategies of managing the duration of assets and liabilities or the average life of certain asset portfolios to specified targets. Interest rate futures contracts are contractual obligations to buy or sell a financial instrument, foreign currency, or other underlying commodity on a pre-determined future date at a specified price. Interest rate futures contracts are agreements with standard amounts and settlement dates that are traded on regulated exchanges. Interest rate swap agreements are contracts with counterparties to exchange interest rate payments of a differing character (i.e., fixed-rate payments exchanged for variable-rate payments) based on an underlying principal balance (notional principal). The net differential to be paid or received on interest rate swap agreements is accrued and recognized as a component of net investment income.

The Company uses interest rate swap agreements to hedge the variable cash flows associated with future fixed income asset acquisitions, which will support the Company’s long-term care and life insurance businesses. These agreements will reduce the impact of future interest rate changes on the cost of acquiring adequate assets to support the investment income assumptions used in pricing these products. During future periods when the acquired assets are held by the Company, the accumulated gain or loss will be amortized into investment income as a yield adjustment on the assets.

The Company also uses interest rate swap agreements to hedge the variable cash flows associated with payments that it will receive on certain floating rate fixed income securities. The accumulated gain or loss will be amortized into investment income as a yield adjustment when the payments are made.

F-31

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Derivatives and Hedging Instruments - (continued)

The Company also enters into basis swaps to better match the cash flows from assets and related liabilities. Basis swaps are included in interest rate swaps for disclosure purposes. The Company utilizes basis swaps in non-qualifying hedging relationships.

Inflation swaps are used to reduce inflation risk generated from inflation-indexed liabilities. Inflation swaps are classified within interest rate swaps for disclosure purposes. The Company utilizes inflation swaps in qualifying and non-qualifying hedging relationships.

Forward and futures agreements are contractual obligations to buy or sell a financial instrument, foreign currency, or other underlying commodity on a predetermined future date at a specified price. Forward contracts are OTC contracts negotiated between counterparties, whereas futures agreements are contracts with standard amounts and settlement dates that are traded on regulated exchanges. The Company uses exchange-traded interest rate futures primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, and to hedge against changes in interest rates on anticipated liability issuances by replicating U.S. Treasury or swap curve performance. The Company utilizes exchange-traded interest rate futures in non-qualifying hedging relationships.

Options are contractual agreements whereby the holder has the right, but not the obligation, to buy (call option) or sell (put option) a security, exchange rate, interest rate, or other financial instrument at a predetermined price/rate within a specified time. The Company also purchases interest rate caps and floors primarily to protect against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate caps and floors in non-qualifying hedging relationships.

Foreign Currency Contracts. Foreign currency derivatives, including foreign currency swaps and foreign currency forwards, are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies.

Cross currency rate swap agreements are used to manage the Company’s exposure to foreign exchange rate fluctuations, interest rate fluctuations, or both, on foreign currency financial instruments. Cross currency rate swap agreements are contracts to exchange the currencies of two different countries at the same rate of exchange at specified future dates. The net differential to be paid or received on cross currency rate swap agreements is accrued and recognized as a component of net investment income.

Under foreign currency forwards, the Company agrees with other parties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The maturities of these forwards correspond with the future periods in which the foreign currency transactions are expected to occur. The Company utilizes currency forwards in qualifying and non-qualifying hedging relationships.

Equity Market Contracts. Total return swaps are contracts that involve the exchange of payments based on changes in the value of a reference asset, including any returns such as interest earned on these assets, in exchange for amounts based on reference rates specified in the contract. The Company utilizes total return swaps in qualifying and non-qualifying hedging relationships.

Equity index futures contracts are contractual obligations to buy or sell a specified amount of an underlying equity index at an agreed contract price on a specified date. Equity index futures are contracts with standard amounts and settlement dates that are traded on regulated exchanges. The Company utilizes currency forwards in non-qualifying hedging relationships.

F-32

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Derivatives and Hedging Instruments - (continued)

The table below provides a summary of the gross notional amount and fair value of derivatives contracts by the underlying risk exposure for all derivatives in hedging and non-hedging relationships:

		December 31, 2009						December 31, 2008
		Notional Amount		Fair Value Assets		Fair Value Liabilities		Notional Amount		Fair Value Assets		Fair Value Liabilities
		(in millions)
Qualifying Hedging Relationships
Fair value hedges	Interest rate swaps	$	14,922	$	402	$	752	$	16,308	$	923	$	1,431
	Foreign currency swaps		883		-		253		2,408		92		322
Cash flow hedges	Interest rate swaps		12,961		912		66		10,661		2,903		117
	Foreign currency swaps		629		4		122		1,482		291		301
	Foreign currency forwards		266		43		-		-		-		-
	Equity market contracts		38		8		-		48		-		27
Total Derivatives in Hedging Relationships		$	29,699	$	1,369	$	1,193	$	30,907	$	4,209	$	2,198
Non-Hedging Relationships
	Interest rate swaps	$	22,535	$	526	$	500	$	15,011	$	1,369	$	681
	Foreign currency swaps		4,461		238		319		2,879		348		223
	Foreign currency forwards		800		-		1		506		3		3
	Total return swaps		1,030		-		-		1,086		-		-
	Interest rate options		287		1		-		437		-		-
	Embedded derivatives – fixed maturities		86		-		2		178		-		7
	Embedded derivatives – reinsurance contracts		-		8		614		-		200		-
	Embedded derivatives – participating pension contracts (1)		-		-		71		-		58		-
	Embedded derivatives – benefit guarantees (1)		-		1,703		640		-		4,382		2,859
Total Derivatives in Non-Hedging Relationships			29,199		2,476		2,147		20,097		6,360		3,773
Total Derivatives (2)		$	58,898	$	3,845	$	3,340	$	51,004	$	10,569	$	5,971

(1) Embedded derivatives related to participating pension contracts are reported as part of future policy benefits and embedded derivatives related to benefit guarantees are reported as part of reinsurance recoverable or future policy benefits on the Consolidated Balance Sheets.

(2) The fair values of all derivatives in an asset position are reported within derivative asset on the Consolidated Balance Sheets, and derivatives in a liability position are reported within derivative liability on the Consolidated Balance Sheets, excluding embedded derivatives related to participating pension contracts and benefit guarantees.

Hedging Relationships

The Company uses derivatives for economic hedging purposes. In certain circumstances, these hedges also meet the requirements for hedge accounting. Hedging relationships eligible for hedge accounting are designated as either fair value hedges or cash flow hedges, as described below.

Fair Value Hedges. The Company uses interest rate swaps to manage its exposure to changes in fair value of fixed-rate financial instruments caused by changes in interest rates. The Company also uses cross currency swaps to manage its exposure to foreign exchange rate fluctuations and interest rate fluctuations.

F-33

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Derivatives and Hedging Instruments - (continued)

The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges in net realized investment and other gains (losses). For the years ended December 31, 2009 and 2008, the Company did not recognize any gains or losses related to the portion of the hedging instruments that were excluded from the assessment of hedge effectiveness. At December 31, 2009, the Company had no hedges of firm commitments.

The following table shows the investment gains (losses) recognized:

For the year ended December 31, 2009
Derivatives in Fair Value Hedging Relationships	Hedged Items in Fair Value Hedging Relationships	Gains (Losses) Recognized on Derivatives			Gains (Losses) Recognized for Hedged Items			Ineffectiveness Recognized
		(in millions)
Interest rate swaps	Fixed-rate assets	$	470		$	(348	)	$	122
	Fixed-rate liabilities		(310	)		263			(47)
Foreign currency swaps	Fixed-rate assets		90			(83	)		7
Total		$	250		$	(168	)	$	82
For the year ended December 31, 2008
Derivatives in Fair Value Hedging Relationships	Hedged Items in Fair Value Hedging Relationships	Gains (Losses) Recognized on Derivatives			Gains (Losses) Recognized for Hedged Items			Ineffectiveness Recognized
		(in millions)
Interest rate swaps	Fixed-rate assets	$	(657	)	$	684		$	27
	Fixed-rate liabilities		220			(272	)		(52)
Foreign currency swaps	Fixed-rate assets		(114	)		92			(22)
Total		$	(551	)	$	504		$	(47)

Cash Flow Hedges. The Company uses interest rate swaps to hedge the variability in cash flows from variable rate financial instruments and forecasted transactions. The Company also uses cross currency swaps and forward agreements to hedge currency exposure on foreign currency financial instruments and foreign currency denominated expenses, respectively. Total return swaps are used to hedge the variability in cash flows associated with certain stock-based compensation awards. Inflation swaps are used to reduce inflation risk generated from inflation-indexed liabilities.

For the years ended December 31, 2009 and 2008, all of the Company’s hedged forecast transactions qualified as cash flow hedges. For the years ended December 31, 2009 and 2008, no cash flow hedges were discontinued because it was probable that the original forecasted transactions would occur by the end of the originally specified time period documented at inception of the hedging relationship.

F-34

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Derivatives and Hedging Instruments - (continued)

The following table presents the effects of derivatives in cash flow hedging relationships on the Consolidated Statements of Operations and the Consolidated Statements of Changes in Shareholder’s Equity:

For the year ended December 31, 2009
Derivatives in Cash Flow Hedging Relationships	Hedged Items in Cash Flow Hedging Relationships	Gains (Losses) Deferred in AOCI on Derivatives (Net of Tax)			Gains Reclassified from AOCI into Net Realized Investment and Other Gains (Losses) (Net of Tax)			Ineffectiveness Recognized in Net Realized Investment and Other Gains (Losses)
		(in millions)
Interest rate swaps	Floating rate assets	$	(23	)	$	-		$	-
	Forecasted fixed-rate assets		(1,082	)		(5	)		(17	)
	Inflation indexed liabilities		108			-			-
Foreign currency swaps	Fixed-rate assets		(35	)		-			-
Foreign currency forwards	Forecasted expenses		28			-			-
Equity market contracts	Stock-based compensation		4			-			-
Total		$	(1,000	)	$	(5	)	$	(17	)
For the year ended December 31, 2008
Derivatives in Cash Flow Hedging Relationships	Hedged Items in Cash Flow Hedging Relationships	Gains (Losses) Deferred in AOCI on Derivatives (Net of Tax)			Gains Reclassified from AOCI into Net Realized Investment and Other Gains (Losses) (Net of Tax)			Ineffectiveness Recognized in Net Realized Investment and Other Gains (Losses)
		(in millions)
Interest rate swaps	Floating rate assets	$	37		$	-		$	-
	Forecasted fixed-rate assets		1,118			(31	)		30
	Inflation indexed liabilities		(73	)		-			-
Foreign currency swaps	Fixed-rate assets		5			-			-
Equity market contracts	Stock-based compensation		(1	)		-			-
Total		$	1,086		$	(31	)	$	30

The Company anticipates that net gains of approximately $32 million will be reclassified from accumulated other comprehensive income to earnings within the next twelve months. The maximum time frame for which variable cash flows are hedged is 37 years.

For a roll forward of the net accumulated gains (losses) on cash flow hedges see Note 12 – Shareholder’s Equity.

Derivatives Not Designated as Hedging Instruments. The Company enters into interest rate swap agreements, cancelable interest rate swap agreements, total return swap agreements, interest rate futures contracts, credit default swaps, and interest rate cap and floor agreements to manage exposure to interest rates without designating the derivatives as hedging instruments. Credit default swaps are contracts in which the buyer makes a series of payments to the seller and, in exchange, receives compensation if one of the events specified in the contract occurs. Interest rate cap agreements are contracts with counterparties which require the payment of a premium for the right to receive payments for the difference between the cap interest rate and a market interest rate on specified future dates based on an underlying principal balance (notional principal).

F-35

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 4 — Derivatives and Hedging Instruments - (continued)

In addition, the Company uses interest rate floor agreements to hedge the interest rate risk associated with minimum interest rate guarantees in certain of its life insurance and annuity businesses, without designating the derivatives as hedging instruments.

The Company offers certain variable annuity products with a guaranteed minimum withdrawal benefit (“GMWB”) rider. This rider is effectively an embedded option on the basket of mutual funds which is offered to contract holders. Beginning in November 2007, for certain contracts, the Company implemented a hedging program to reduce its exposure to the GMWB rider. This dynamic hedging program uses interest rate swap agreements, equity index futures (including but not limited to the Dow Jones Industrial, Standard & Poor’s 500, Russell 2000, and Dow Jones Euro Stoxx 50 indices), and foreign currency futures to match the sensitivities of the GMWB rider liability to the market risk factors.

For the years ended December 31, 2009 and 2008, net losses of $1,289 million and net gains of $957 million, respectively, related to derivatives in a non-hedge relationship were recognized by the Company. These amounts were recorded in net realized investment and other gains (losses).

For the years ended December 31,	2009			2008
Non-Hedging Relationships
Investment (losses) gains:
Interest rate swaps	$	(906	)	$	818
Interest rate futures		3			(28	)
Interest rate options		4			-
Foreign currency swaps		(121	)		31
Foreign currency forwards		18			(28	)
Foreign currency futures		(24	)		(2	)
Equity market contracts		30			(25	)
Equity index futures		(293	)		191
Total Investment (Losses) Gains from Derivatives in Non-Hedging Relationships	$	(1,289	)	$	957

Embedded Derivatives. The Company has certain embedded derivatives that are required to be separated from their host contracts and accounted for as derivatives. These host contracts include fixed maturities, reinsurance contracts, participating pension contracts, and certain benefit guarantees.

For more details on the Company’s embedded derivatives see Note 14 – Fair Value of Financial Instruments.

Credit Risk. The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to the derivative financial instruments. The current credit exposure of the Company’s derivative contracts is limited to the fair value in excess of the collateral held at the reporting date.

The Company manages its credit risk by entering into transactions with creditworthy counterparties, obtaining collateral where appropriate, and entering into master netting agreements that provide for a netting of payments and receipts with a single counterparty. The Company enters into credit support annexes with its over-the-counter derivative dealers in order to manage its credit exposure to those counterparties. As part of the terms and conditions of those agreements, the pledging and accepting of collateral in connection with the Company’s derivative usage is required. As of December 31, 2009 and 2008, the Company had accepted collateral consisting of various securities with a fair value of $861 million and $2,472 million, respectively, which is held in separate custodial accounts. In addition, as of December 31, 2009 and 2008, the Company pledged collateral of $598 million and $546 million, respectively, which is included in fixed maturities on the Consolidated Balance Sheets.

F-36

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 5 — Income Taxes

The Company files tax returns as part of two consolidated groups, MHDLLC and JHHLLC. MHDLLC includes JHUSA and JHHLLC includes JHLICO and JHVLICO. Beginning in 2010, these groups will be consolidated and reported as one tax group.

In accordance with the income tax sharing agreements in effect for the applicable tax years, the income tax provision (or benefit) is computed as if each entity filed separate federal income tax returns. Intercompany settlements of income taxes are made through an increase or reduction to amounts due to or from affiliates. Such settlements occur on a periodic basis in accordance with the tax sharing agreements. Tax benefits from operating losses are provided at the U.S. statutory rate plus any tax credits attributable, provided the consolidated group utilizes such benefits currently.

Income (loss) before income taxes includes the following:

	Years ended December 31,
	2009			2008			2007
	(in millions)
Domestic	$	290		$	(670	)	$	2,155
Foreign		14			20			19
Income (loss) income before income taxes	$	304		$	(650	)	$	2,174
The components of income taxes were as follows:
	Years ended December 31,
	2009			2008			2007
	(in millions)
Current taxes:
Federal	$	(45	)	$	(462	)	$	194
Foreign		6			4			10
State		3			5			5
Total		(36	)		(453	)		209
Deferred taxes:
Federal		31			111			448
Foreign		(1	)		2			(4	)
State		(1	)		1			(1	)
Total		29			114			443
Total income tax (benefit) expense	$	(7	)	$	(339	)	$	652

F-37

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 5 — Income Taxes - (continued)

A reconciliation of income taxes at the federal income tax rate to income tax expense charged to operations follows:

	Years ended December 31,
	2009			2008			2007
	(in millions)
Tax at 35%	$	106		$	(227	)	$	762
Add (deduct):
Prior year taxes		14			26			(46	)
Tax credits		(76	)		(72	)		(92	)
Tax-exempt investment income		(76	)		(92	)		(193	)
Lease income		63			3			22
Unrecognized tax benefits		(44	)		15			185
Other		6			8			14
Total income tax (benefit) expense	$	(7	)	$	(339	)	$	652

Deferred income tax assets and liabilities result from tax effecting the differences between the financial statement values and income tax values of assets and liabilities at each Consolidated Balance Sheet date. Deferred tax assets and liabilities consisted of the following:

	December 31,
	2009		2008
	(in millions)
Deferred tax assets:
Policy reserves	$	1,339	$	2,434
Net operating loss carryforwards		384		614
Net capital loss carryforwards		74		-
Tax credits		670		566
Unearned revenue		915		756
Unrealized investment losses on securities		5		595
Deferred compensation		212		212
Deferred policy acquisition costs		-		2
Federal interest deficiency		307		221
Dividends payable to policyholders		144		123
Securities and other investments		1		182
Other		245		158
Total deferred tax assets		4,296		5,863
Deferred tax liabilities:
Unrealized investment gains on securities		498		5
Deferred policy acquisition costs		2,367		2,514
Intangibles		1,213		1,296
Lease income		68		116
Premiums receivable		42		41
Deferred sales inducements		132		121
Deferred gains		628		609
Securities and other investments		1,023		1,738
Other		80		105
Total deferred tax liabilities		6,051		6,545
Net deferred tax liabilities	$	1,755	$	682

At December 31, 2009, the Company had $1,097 million of operating loss carryforwards, which will expire in various years through 2023, and $209 million of capital loss carryforwards, which will expire in 2014. The Company believes that it will realize the full benefit of its deferred tax assets.

F-38

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 5 — Income Taxes - (continued)

The Company made income tax payments of $4 million, $13 million, and $37 million in 2009, 2008, and 2007, respectively.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state, or local income tax examinations by taxing authorities for years before 1998.

For MHDLLC, the Internal Revenue Service (“IRS”) completed its examinations and the appeals process for years 1998 through 2003, and the Company received income tax refunds for these years in April 2009 totaling $44 million, including interest. The IRS completed its examination of this group’s income tax returns for the years 2004 and 2005 in July 2009. The Company filed protests with the IRS Appeals Division for various adjustments raised by the IRS in its examinations of these years. The IRS commenced an examination of this group’s income tax returns for years 2006 and 2007 in November 2009.

For JHHLLC, the IRS completed its examinations for years 1996 through 1998 in September 2003 and completed its examination for years 1999 through 2001 in October 2006. The Company filed protests with the IRS Appeals Division for various adjustments raised by the IRS in its examinations of these years. In June 2008, the Company and the IRS Appeals Division agreed to compromise settlement on several issues that arose in the 1996 through 1998 examinations, and in December 2008, the IRS issued a statutory notice of deficiency covering the remaining issues. In March 2009, the Company filed a petition in U.S. Tax Court contesting the statutory notice of deficiency. IRS Appeals Division proceedings involving the years 1999 through 2001 are ongoing. The IRS completed its examination of this group’s income tax returns for the years 2002 through 2004 in August 2009. The Company filed protests with the IRS Appeals Division for various adjustments raised by the IRS in its examinations of these years. The IRS examination for years 2005 and 2006 commenced in January 2010.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	December 31
	2009			2008
	(in millions)
Beginning balance	$	1,869		$	1,463
Additions based on tax positions related to the current year		182			182
Reductions based on tax positions related to the current year		-			(10	)
Additions for tax positions of prior years		349			301
Reductions for tax positions of prior years		(239	)		(67	)
Ending balance	$	2,161		$	1,869

Included in the balances as of December 31, 2009 and 2008, respectively, are $356 million and $410 million of unrecognized benefits that, if recognized, would affect the Company’s effective tax rate.

Included in the balances as of December 31, 2009 and 2008, respectively, are $1,805 million and $1,459 million of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest or penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate, but would accelerate the payment of taxes to an earlier period.

An estimate of the change in unrecognized tax benefits attributable to deductions for dividends received cannot be made at this time because there is no specific information available with respect to either the position that will be taken by the U.S. Treasury Department or the effective dates of the anticipated regulations.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense (part of other operating costs and expenses) and penalties in income tax expense. During the years ended December 31, 2009, 2008, and 2007, the Company recognized approximately $224 million, $195 million, and $95 million in interest expense, respectively. The Company had approximately $878 million and $634 million accrued for interest as of December 31, 2009 and December 31, 2008, respectively. The Company did not recognize any material amounts of penalties during the years ended December 31, 2009, 2008, and 2007.

F-39

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Closed Blocks

The Company operates two separate closed blocks for the benefit of certain classes of individual or joint traditional participating whole life insurance policies. The JHUSA closed block was established upon the demutualization of MLI for those designated participating policies that were in-force on September 23, 1999. The JHLICO closed block was established upon the demutualization of JHLICO for those designated participating policies that were in-force on February 1, 2000. Assets were allocated to the closed blocks in an amount that, together with anticipated revenues from policies included in the closed blocks, was reasonably expected to be sufficient to support such business, including provision for payment of benefits, direct asset acquisition and disposition costs, and taxes, and for continuation of dividend scales, assuming experience underlying such dividend scales continues. Assets allocated to the closed blocks inure solely to the benefit of the holders of the policies included in the closed blocks and will not revert to the benefit of the shareholder of the Company. No reallocation, transfer, borrowing, or lending of assets can be made between the closed blocks and other portions of the Company’s general account, any of its separate accounts, or any affiliate of the Company without prior approval from the State of Michigan Office of Financial and Insurance Regulation.

If, over time, the aggregate performance of the assets and policies of a closed block is better than was assumed in funding that closed block, dividends to policyholders will be increased. If, over time, the aggregate performance of the assets and policies of a closed block is less favorable than was assumed in funding that closed block, dividends to policyholders for that closed block will be reduced.

The assets and liabilities allocated to the closed blocks are recorded in the Company’s Consolidated Balance Sheets and Statements of Operations on the same basis as other similar assets and liabilities. The carrying amount of the closed blocks’ liabilities in excess of the carrying amount of the closed blocks’ assets at the date the closed blocks were established (adjusted to eliminate the impact of related amounts in accumulated other comprehensive income) represents the maximum future earnings from the assets and liabilities designated to the closed blocks that can be recognized in income over the period the policies in the closed blocks remain in force. The Company has developed an actuarial calculation of the timing of such maximum future shareholder earnings, and this is the basis of the policyholder dividend obligation.

If actual cumulative earnings of a closed block are greater than expected cumulative earnings of that block, only expected earnings will be recognized in that closed block’s income. Actual cumulative earnings in excess of expected cumulative earnings of a closed block represent undistributed accumulated earnings attributable to policyholders, which are recorded as a policyholder dividend obligation because the excess will be paid to the policyholders of that closed block as an additional policyholder dividend unless otherwise offset by future closed block performance that is less favorable than originally expected. If actual cumulative performance of a closed block is less favorable than expected, expected earnings for that closed block will be recognized in net income, unless the policyholder dividend obligation has been reduced to zero, in which case actual earnings will be recognized in income. Actual experience within the JHLICO closed block, in particular realized and unrealized losses, resulted in a reduction of the remaining policyholder dividend obligation to zero during the year ended December 31, 2008.

For all closed block policies, the principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, purchases and sales of investments, policyholders’ benefits, policyholder dividends, premium taxes, guaranty fund assessments, and income taxes. For the JHLICO closed block policies, the principal income and expense items excluded from the closed block are management and maintenance expenses, commissions, and net investment income and realized investment gains and losses of investment assets outside the closed block that support the closed block business, all of which enter into the determination of total gross margins of closed block policies for the purpose of the amortization of deferred acquisition costs. There are no exclusions applicable to the JHUSA closed block. The amounts shown in the following tables for assets, liabilities, revenues, and expenses of the closed blocks are those that enter into the determination of amounts that are to be paid to policyholders.

F-40

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Closed Blocks - (continued)

The following tables set forth certain summarized financial information relating to the closed blocks as of the dates indicated:

JHUSA Closed Block

	December 31,
	2009			2008
	(in millions)
Liabilities
Future policy benefits	$	8,632		$	8,680
Policyholders’ funds		79			79
Policyholder dividends payable		202			211
Other closed block liabilities		214			191
Total closed block liabilities	$	9,127		$	9,161
Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2009—$3,084; 2008—$3,235)	$	3,179		$	3,128
Mortgage loans on real estate		652			583
Policy loans		1,619			1,700
Other invested assets		659			644
Total investments		6,109			6,055
Cash borrowings and cash equivalents		(244	)		(345	)
Accrued investment income		117			115
Amounts due from and held for affiliates		1,779			1,752
Other closed block assets		355			488
Total assets designated to the closed block	$	8,116		$	8,065
Excess of closed block liabilities over assets designated to the closed block	$	1,011		$	1,096
Portion of above representing accumulated other comprehensive income:
Unrealized appreciation, net of deferred income tax expense of $142 million and $42 million, respectively		264			78
Adjustment for deferred policy acquisition costs, net of deferred income tax benefit of $46 million and $14 million, respectively		(85	)		(26	)
Foreign currency translation adjustment		(67	)		(21	)
Total amounts included in accumulated other comprehensive income		112			31
Maximum future earnings to be recognized from closed block assets and liabilities	$	1,123		$	1,127

F-41

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Closed Blocks - (continued)

JHUSA Closed Block

	Years ended December 31,
	2009			2008			2007
	(in millions)
Revenues
Premiums	$	624		$	647		$	661
Net investment income		455			473			438
Net realized investment and other (losses) gains		(35	)		(9	)		17
Total revenues		1,044			1,111			1,116
Benefits and Expenses
Benefits to policyholders		734			782			799
Policyholder dividends		392			411			409
Amortization of deferred policy acquisition costs		(76	)		(218	)		(50	)
Other closed block operating costs and expenses		24			25			25
Total benefits and expenses		1,074			1,000			1,183
Revenues, net of benefits and expenses before income taxes		(30	)		111			(67	)
Income tax (benefit) expense		(11	)		39			(24	)
Revenues, net of benefits and expenses and income taxes	$	(19	)	$	72		$	(43	)

Maximum future earnings from closed block assets and liabilities:

	Years Ended December 31,
	2009			2008
	(in millions)
Beginning of period	$	1,127		$	1,199
Revenues, net of benefits and expenses and income taxes		19			(72	)
Adoption of ASC 320 (Note 1)		(23	)		-
End of period	$	1,123		$	1,127

F-42

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Closed Blocks - (continued)

JHLICO Closed Block

	December 31,
	2009		2008
	(in millions)
Liabilities
Future policy benefits	$	10,916	$	10,979
Policyholders’ funds		1,511		1,510
Policyholder dividends payable		407		418
Other closed block liabilities		118		119
Total closed block liabilities	$	12,952	$	13,026
Assets
Investments
Fixed maturities:
Available-for-sale—at fair value (amortized cost: 2009—$6,378; 2008—$6,773)	$	6,456	$	6,159
Equity securities:
Available-for-sale—at fair value (cost: 2009—$7; 2008—$5)		8		4
Mortgage loans on real estate		1,928		1,684
Policy loans		1,533		1,533
Other invested assets		153		165
Total investments		10,078		9,545
Cash and cash equivalents		299		162
Accrued investment income		134		143
Other closed block assets		165		426
Total assets designated to the closed block	$	10,676	$	10,276
Excess of closed block liabilities over assets designated to the closed block	$	2,276	$	2,750
Portion of above representing accumulated other comprehensive income:
Unrealized appreciation (depreciation), net of deferred income tax expense of $28 million and deferred income tax benefit of $204 million, respectively		53		(378	)
Maximum future earnings to be recognized from closed block assets and liabilities	$	2,329	$	2,372
	Years ended December 31,
	2009		2008
	(in millions)
Change in the policyholder dividend obligation:
Balance at beginning of period	$	-	$	142
Impact on net income before income taxes		-		(83	)
Unrealized investment gains		-		(31	)
Change in deferred income tax liability		-		(28	)
Balance at end of period	$	-	$	-

F-43

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 6 — Closed Blocks - (continued)

JHLICO Closed Block

	Years ended December 31,
	2009			2008			2007
	(in millions)
Revenues
Premiums	$	648		$	699		$	734
Net investment income		588			581			590
Net realized investment and other (losses) gains		(12	)		(118	)		20
Total revenues		1,224			1,162			1,344
Benefits and Expenses
Benefits to policyholders		761			794			841
Policyholder dividends		461			478			482
Change in the policyholder dividend obligation		-			(62	)		(88	)
Other closed block operating costs and expenses		3			2			(2	)
Total benefits and expenses		1,225			1,212			1,233
Revenues, net of benefits and expenses before income taxes		(1	)		(50	)		111
Income tax (benefit) expense, net of amounts credited to the policyholder dividend obligation of $0 million, $0 million, and $1 million, respectively		(2	)		(17	)		39
Revenues, net of benefits and expenses and income taxes	$	1		$	(33	)	$	72

Maximum future earnings from closed block assets and liabilities:

	Years Ended December 31,
	2009			2008
	(in millions)
Beginning of period	$	2,372		$	2,339
Revenues, net of benefits and expenses and income taxes		(1	)		33
Adoption of ASC 320 (Note 1)		(42	)		-
Change during period	$	2,329		$	2,372

Note 7 — Debt and Line of Credit

External short-term and long-term debt consisted of the following:

	December 31,
	2009			2008
	(in millions)
Short-term debt:
Current maturities of long-term debt	$	6		$	4
Long-term debt:
Surplus notes, 7.38% maturing in 2024 (1)		491			492
Notes payable, interest ranging from 5.09% to 12.1% due in varying amounts to 2015		15			12
Fair value adjustments related to interest rate swaps (1)		(16	)		(17	)
		490			487
Less current maturities of long-term debt		(6	)		(4	)
Total long-term debt	$	484		$	483
Consumer notes:
Notes payable, interest ranging from 0.72% to 6.25% due in varying amounts to 2036	$	1,205		$	1,600

F-44

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 7 — Debt and Line of Credit - (continued)

(1) As part of its interest rate management, the Company uses interest rate swaps to convert the interest expense on the surplus notes from fixed to variable. Under ASC 815, these swaps are designated as fair value hedges, which results in the carrying value of the notes being adjusted for changes in fair value.

Long-Term Debt

Aggregate maturities of long-term debt are as follows: 2010—$6 million; 2011—$0 million; 2012—$0 million; 2013—$0 million; 2014—$0 million; and thereafter—$484 million.

Interest expense on debt, included in other operating costs and expenses, was $34 million, $34 million, and $39 million in 2009, 2008, and 2007, respectively. Interest paid on debt was $34 million, $34 million, and $41 million in 2009, 2008, and 2007, respectively.

Any payment of interest or principal on the surplus notes requires the prior approval of the Michigan Commissioner of Financial and Insurance Regulation (the “Commissioner”).

Consumer Notes

The Company issues consumer notes through its SignatureNotes program. SignatureNotes is an investment product sold through a broker-dealer network to retail customers in the form of publicly traded fixed and/or floating rate securities. SignatureNotes have a variety of maturities, interest rates, and call provisions.

Aggregate maturities of consumer notes, net of unamortized dealer fees, are as follows: 2010—$251 million; 2011—$162 million; 2012—$113 million; 2013—$60 million; 2014—$226 million; and thereafter—$393 million.

Interest expense on consumer notes, included in benefits to policyholders, was $47 million, $104 million, and $115 million in 2009, 2008, and 2007, respectively. Interest paid amounted to $50 million, $104 million, and $112 million in 2009, 2008, and 2007, respectively.

Line of Credit

At December 31, 2009, the Company had a committed line of credit established by MFC totaling $1 billion pursuant to a 364-day revolving credit facility. MFC will commit, when requested, to loan funds at prevailing interest rates as determined in accordance with the line of credit agreement. Under the terms of the agreement, the Company is required to maintain a certain minimum level of net worth and comply with certain other covenants, which were met at December 31, 2009. At December 31, 2009, the Company had no outstanding borrowings under the agreement.

At December 31, 2009, the Company, MFC, and other MFC subsidiaries had a committed line of credit through a group of banks totaling $250 million pursuant to a multi-year facility, which will expire in 2010. The banks will commit, when requested, to loan funds at prevailing interest rates as determined in accordance with the line of credit agreement. Under the terms of the agreement, MFC is required to maintain certain minimum level of net worth, and MFC and the Company are required to comply with certain other covenants, which were met at December 31, 2009. At December 31, 2009, MFC and its subsidiaries, including the Company, had no outstanding borrowings under the agreement.

Note 8 — Related Party Transactions

Reinsurance Transactions

Effective December 31, 2008, the Company entered into an amended and restated reinsurance agreement with an affiliate, John Hancock Reassurance Company Limited (“JHRECO”), to reinsure 20% of the risk related to payout annuity policies issued January 1, 2008 through September 30, 2008 and 65% of the risk related to payout annuity policies issued prior to January 1, 2008. The reinsurance agreement is written on a modified coinsurance basis where the assets supporting the reinsured policies remain invested with the Company. Under the terms of the agreement, the Company recorded a reduction of $3,640 million in premiums in the Consolidated Statements of Operations and recorded a modified coinsurance reserve adjustment of $3,640 million, which reduced benefits to policyholders in the Consolidated Statements of Operations for the year ended December 31, 2008. As of December 31, 2008, the Company also recorded $55 million related to the cost of

F-45

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Related Party Transactions - (continued)

reinsurance, which was reported with reinsurance recoverables on the Consolidated Balance Sheets. The cost of reinsurance is being amortized into income through benefits to policyholders over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies. The balance of unearned revenue related to the cost of reinsurance was $133 million as of December 31, 2009.

The Company reinsured certain portions of its long-term care insurance and group annuity contracts with JHRECO. The Company entered into these reinsurance contracts in order to facilitate its capital management process. These reinsurance contracts are written both on a funds withheld basis where the related financial assets remain invested at the Company and a modified coinsurance agreement. As of July 1, 2008, amendments were made to the contracts to update the calculation of investment income and the expense allowance to reflect current experience and practices. The Company recorded a liability for coinsurance amounts withheld from JHRECO of $4,158 million and $3,860 million at December 31, 2009 and 2008, respectively, on the Company’s Consolidated Balance Sheets and recorded a reinsurance recoverable from JHRECO of $4,749 million and $4,130 million at December 31, 2009 and 2008, respectively, which was included with reinsurance recoverables on the Company’s Consolidated Balance Sheets. Premiums ceded to JHRECO were $644 million, $656 million, and $651 million during the years ended December 31, 2009, 2008, and 2007, respectively. Claim reserves ceded to JHRECO were $603 million, $538 million, and $528 million during the years ended December 31, 2009, 2008, and 2007, respectively.

Effective October 1, 2008, the Company entered into a reinsurance agreement with an affiliate, Manulife Reinsurance (Bermuda) Limited (“MRBL”), to reinsure 75% of certain group annuity contracts in-force. The reinsurance agreement covers all contracts, excluding the guaranteed benefit rider, issued and in-force as of September 30, 2008. As the underlying contracts being reinsured are considered investment contracts, the agreement does not meet the criteria for reinsurance accounting and was classified as a financial instrument. Under the terms of the agreement, the Company received initial consideration of $1,495 million, which was classified as unearned revenue. Effective October 1, 2009, the original agreement was amended to increase the quota share percentage from 75% to 87%. Under the terms of the amended agreement, additional consideration of $250 million was due to the Company on December 31, 2009 and payable by MRBL no later than March 31, 2010. The Company recorded this amount as a receivable as of December 31, 2009. As a result of the amendment, the unearned revenue of $250 million as of September 30, 2009 was included with the balance of unearned revenue related to the initial consideration. These amounts are being amortized into income through other operating costs and expenses on a basis consistent with the manner in which the deferred policy acquisition costs on the underlying reinsured contracts are recognized. The balance of the unearned revenue liability was $1,705 million and $1,484 million as of December 31, 2009 and 2008, respectively.

Effective December 31, 2004, the Company entered into a reinsurance agreement with MRBL to reinsure 75% of the non-reinsured risk of the JHLICO closed block. The Company amended this treaty during 2008 to increase the portion of non-reinsured risk reinsured under this treaty to 90% and amended it during 2009 to provide additional surplus relief. The reinsurance agreement is written on a modified coinsurance basis where the related financial assets remain invested within the Company. As the reinsurance agreement does not subject the reinsurer to the reasonable possibility of significant loss, it was classified as financial reinsurance and given deposit-type accounting treatment with only the reinsurance risk fee being reported in other operating costs and expenses in the Consolidated Statements of Operations.

Effective December 31, 2003, the Company entered into a reinsurance agreement with MRBL to reinsure 90% of the non-reinsured risk of the JHUSA closed block. As approximately 90% of the mortality risk is covered under previously existing contracts with third-party reinsurers and the resulting limited mortality risk is inherent in the new contract with MRBL, it was classified as financial reinsurance and given deposit-type accounting treatment. The Company retained title to the invested assets supporting this block of business. These invested assets are held in trust on behalf of MRBL and are included in amounts due from and held for affiliates on the Consolidated Balance Sheets. The amounts held at December 31, 2009 and 2008 were $2,290 million and $2,190 million, respectively, and are accounted for as invested assets available-for-sale.

Effective January 1, 2002, the Company entered into a 90% quota share reinsurance agreement with MRBL to reinsure a block of variable annuity business (the “Original Agreement”). The Original Agreement covered base contracts, but excluded the guaranteed benefit riders. The primary risk reinsured was investment and lapse risk with only limited coverage, of mortality risk. Accordingly, the contract was classified as financial reinsurance and given deposit-type accounting

F-46

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Related Party Transactions - (continued)

treatment. Under the terms of the Original Agreement, the Company received a net ceding commission of $113 million for the year ended December 31, 2008. This amount was classified as unearned revenue and was being amortized into income as payments were made to MRBL. The Original Agreement was amended effective October 1, 2008, as discussed further below. As a result of the amendment, the unearned revenue balance of $580 million as of September 30, 2008 was included in the calculation of the cost of reinsurance, which was reported with reinsurance recoverables on the Consolidated Balance Sheets.

Effective October 1, 2008, the Company entered into an amended and restated variable annuity reinsurance agreement with MRBL. The base contracts continue to be reinsured on a modified coinsurance basis; however, MRBL now reinsures all substantial risks, including all guaranteed benefits, related to certain specified policies not already reinsured to third parties. Guaranteed benefit reinsurance coverage was apportioned in accordance with the reinsurance agreement provisions between modified coinsurance and coinsurance funds withheld as of December 31, 2009 and 2008. The assets supporting the reinsured policies remained invested with the Company. As of December 31, 2009 and 2008, respectively, the Company reported net ceded reserves and cost of reinsurance of $1,681 million and $792 million, which was included with reinsurance recoverables, a reinsurance payable to MRBL of $261 million and $781 million, which was included with amounts due to affiliates, and a liability for coinsurance funds withheld of $194 million and $285 million on the Consolidated Balance Sheets. The net MRBL reinsurance recoverable includes the impact of ongoing reinsurance cash flows and is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies with changes to ceded reserves and cost of reinsurance recognized as a component of benefits to policyholders on the Consolidated Statements of Operations.

Service Agreements

The Company has formal service agreements with MFC and MLI, which can be terminated by either party upon two months notice. Under the various agreements, the Company will pay direct operating expenses incurred by MFC and MLI on behalf of the Company. Services provided under the agreements include legal, actuarial, investment, data processing, accounting, and certain other administrative services. Costs incurred under the agreements were $394 million, $374 million, and $336 million for the years ended December 31, 2009, 2008, and 2007, respectively. As of December 31, 2009 and December 31, 2008, the Company had amounts payable to MFC and MLI of $10 million and amounts receivable from MFC and MLI of $8 million, respectively.

Management believes the allocation methods used are reasonable and appropriate in the circumstances; however, the Company’s Consolidated Balance Sheets may not necessarily be indicative of the financial condition that would have existed if the Company operated as an unaffiliated entity.

Debt Transactions

Pursuant to a subordinated surplus note dated September 30, 2008, the Company borrowed $110 million from an affiliate, John Hancock Financial Holdings (Delaware), Inc. (“JHFH”). The interest rate is fixed at 7%, and interest is payable semi-annually. The note matures on March 31, 2033. Interest expense was $8 million and $2 million for the years ended December 31, 2009 and 2008, respectively.

Pursuant to a subordinated surplus note dated September 30, 2008, the Company borrowed $295 million from JHFH. The interest rate is fixed at 7%, and interest is payable semi-annually. The note matures on March 31, 2033. Interest expense was $21 million and $5 million for the years ended December 31, 2009 and 2008, respectively.

On December 22, 2006, the Company issued a subordinated note to MHDLLC in the amount of $136 million due December 15, 2016 (the “Original Note”). Interest on the Original Note accrued at a variable rate equal to LIBOR plus 0.3% per annum calculated and reset quarterly on March 15, June 15, September 15, and December 15 and payable semi-annually on June 15 and December 15 of each year until December 15, 2011, and thereafter at a variable rate equal to LIBOR plus 1.3% per annum reset quarterly as aforesaid until payment in full. On September 30, 2008, the Original Note was converted to a subordinated surplus note on the same economic terms. Interest on the subordinated surplus note from October 1, 2008 until December 15, 2011 accrues at a variable rate equal to LIBOR plus 0.3% per annum calculated and reset quarterly on March 31, June 30, September 30, and December 31 and payable semi-annually on March 31 and September 30 of each year. Thereafter, interest accrues at a variable rate equal to LIBOR plus 1.3% per annum reset quarterly as aforementioned and

F-47

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Related Party Transactions - (continued)

payable semi-annually on June 15 and September 15 of each year until payment in full. Interest expense was $2 million, $5 million, and $10 million for the years ended December 31, 2009, 2008, and 2007, respectively.

The issuance of surplus notes by the Company was approved by the Commissioner, and any payments of interest or principal on the surplus notes require the prior approval of the Commissioner. The surplus notes were included with amounts due to affiliates on the Consolidated Balance Sheets.

Pursuant to a demand note dated September 30, 2008, the Company loaned $295 million to JHFS. The interest rate is calculated at a fluctuating rate equal to 3-month LIBOR plus 50 basis points. Interest income was $4 million and $3 million for the years ended December 31, 2009 and 2008, respectively.

Pursuant to a senior promissory note dated March 1, 2007, the Company borrowed $477 million from MHDLLC. The note was repaid on September 30, 2008. Interest was calculated at a fluctuating rate equal to 3-month LIBOR plus 33.5 basis points. Interest expense was $13 million and $23 million for the years ended December 31, 2008 and 2007, respectively.

Pursuant to a short-term senior promissory note dated December 14, 2006, the Company borrowed $477 million from MHDLLC. The note was repaid on March 1, 2007. Interest expense was $5 million for the year ended December 31, 2007.

Capital Stock Transactions

On September 30, 2008, the Company issued two shares of common stock to MIC for $477 million in cash.

Other

On December 10, 2008, the Company issued a dividend in-kind of $460 million to JHFS as repayment on an outstanding loan.

The Company, in the ordinary course of business, invests funds deposited by customers and manages the resulting invested assets for growth and income for customers. From time to time, successful investment strategies of the Company may attract deposits from affiliates of the Company. At December 31, 2009 and 2008, the Company managed approximately $6,098 million and $3,187 million of deposits from affiliates, respectively.

The Company operates a liquidity pool in which affiliates can invest excess cash. Terms of operation and participation in the liquidity pool are set out in the Liquidity Pool and Loan Facility Agreement effective November 13, 2007. The maximum aggregate amounts that the Company can accept into the Liquidity Pool are $5 billion in U.S. dollar deposits and $200 million in Canadian dollar deposits. Under the terms of the agreement, certain participants may receive advances from the Liquidity Pool up to certain predetermined limits. Interest payable on the funds will be reset daily to the one-month London Interbank Bid Rate.

The following table details the affiliates and their participation in the Company’s Liquidity Pool:

	December 31,
	2009		2008
	(in millions)
The Manufacturers Investment Corporation	$	87	$	122
John Hancock Holdings (Delaware) LLC		42		14
Manulife Reinsurance Limited		207		144
Manulife Reinsurance (Bermuda) Limited		993		54
Manulife Hungary Holdings KFT		65		44
John Hancock Life Insurance Company of Vermont		54		31
John Hancock Reassurance Company Limited		505		37
John Hancock Financial Holdings (Delaware), Inc.		6		3
Total	$	1,959	$	449

F-48

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 8 — Related Party Transactions - (continued)

The balances above are reported on the Consolidated Balance Sheets as amounts due to affiliates.

Effective March 31, 1996, MLI provides a claims paying guarantee to certain U.S. policyholders. The Claims Guarantee Agreement was revoked effective August 13, 2008, but still remains in effect with respect to policies issued by the Company prior to that date.

On July 8, 2005, MFC fully and unconditionally guaranteed the Company’s SignatureNotes, both those outstanding at that time and those to be issued subsequently. MFC’s guarantee of the SignatureNotes is an unsecured obligation of MFC and is subordinated in right of payment to the prior payment in full of all other obligations of MFC, except for other guarantees or obligations of MFC which by their terms are designated as ranking equally in right of payment with or subordinate to MFC’s guarantee of the SignatureNotes. As a result of the guarantee by MFC, the Company is exempt from filing quarterly and annual reports with the SEC pursuant to SEC Rule 12h-5, and in lieu thereof, MFC reports condensed consolidating financial information regarding the Company in its quarterly and annual reports.

Note 9 — Reinsurance

The effect of reinsurance on life, health, and annuity premiums written and earned was as follows:

	Years ended December 31,
	2009						2008						2007
	Premiums						Premiums						Premiums
	Written			Earned			Written			Earned			Written			Earned
	(in millions)
Direct	$	5,169		$	5,171		$	5,157		$	5,157		$	4,777		$	4,785
Assumed		1,384			1,384			1,221			1,221			1,127			1,127
Ceded		(2,609	)		(2,609	)		(6,297	)		(6,297	)		(2,205	)		(2,205	)
Net life, health, and annuity premiums	$	3,944		$	3,946		$	81		$	81		$	3,699		$	3,707

For the years ended December 31, 2009, 2008, and 2007, benefits to policyholders under life, health, and annuity ceded reinsurance contracts were $2,668 million, $2,049 million, and $1,619 million, respectively.

The Company utilizes reinsurance agreements to provide for greater diversification of business, allowing management to control exposure to potential losses arising from large risks, and provide additional capacity for growth.

On February 28, 1997, the Company sold a major portion of its group insurance business to UniCare Life & Health Insurance Company (“UniCare”), a wholly-owned subsidiary of WellPoint, Inc. The business sold included the Company’s group accident and health business and related group life business, and Cost Care, Inc., Hancock Association Services Group, and Tri-State, Inc., all of which were indirect, wholly-owned subsidiaries of the Company. The Company retained its group long-term care operations. The insurance business sold was transferred to UniCare through a 100% coinsurance agreement. The Company remains liable to its policyholders to the extent that UniCare does not meet its contractual obligations under the coinsurance agreement.

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

F-49

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans

The Company provides a funded qualified defined benefit plan (the ‘Plan”) that covers substantially all of its employees. Effective January 1, 2008, the John Hancock Financial Services, Inc. Pension Plan was renamed the John Hancock Pension Plan. Pursuant to the merger of JHFS into MIC, as discussed in Note 1, JHFS ceased to exist, and sponsorship of the Plan transferred to the Company effective January 1, 2010.

Historically, pension benefits were calculated utilizing a traditional formula. Under the traditional formula, benefits were provided based upon length of service and final average compensation. As of January 1, 2002, all defined benefit pension plans were amended to a cash balance basis. Under the cash balance formula, participants are credited with benefits equal to a percentage of eligible pay, as well as interest. Certain grandfathered employees are eligible to receive benefits based upon the greater of the traditional formula or cash balance formula. In addition, early retirement benefits are subsidized for certain grandfathered employees.

The Company’s funding policy for its qualified defined benefit plan is to contribute annually an amount at least equal to the minimum annual contribution required under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and other applicable laws and generally not greater than the maximum amount that can be deducted for federal income tax purposes. In 2009, 2008, and 2007, no contributions were made to the qualified plan. The Company expects that no contributions will be made in 2010.

The Company also participates in an unfunded non-qualified defined benefit plan. Sponsorship of this plan transferred from JHFS to the Company effective January 1, 2010. This plan provides supplemental benefits in excess of the compensation limit outlined in the Internal Revenue Code for certain employees.

The Company’s funding policy for its non-qualified defined benefit plan is to contribute an amount equal to the plan’s benefit payments made during the year. The contribution to the non-qualified plan was $34 million, $33 million, and $34 million in 2009, 2008, and 2007, respectively. The Company expects to contribute approximately $41 million to its non-qualified pension plan in 2010.

The Company participates in a non-qualified defined contribution pension plan maintained by MFC, which was established as of January 1, 2008 with participant directed investment options. The expense for the new plan was $7 million in both 2009 and 2008. The prior non-qualified defined benefit plan was frozen except for grandfathered participants as of January 1, 2008, and the benefits accrued under the prior plan continue to be subject to the prior plan provisions.

The Company provides postretirement medical and life insurance benefits for its retired employees and their spouses through its participation in the John Hancock Financial Services, Inc. Employee Welfare Plan. Effective January 1, 2010, the plan was renamed the John Hancock Employee Welfare Plan and plan sponsorship was transferred from JHFS to the Company. Certain employees hired prior to January 1, 2005 who meet age and service criteria may be eligible for these postretirement benefits in accordance with the plan’s provisions. The majority of retirees contribute a portion of the total cost of postretirement medical benefits. Life insurance benefits are based on final compensation subject to the plan maximum.

The welfare plan was amended effective January 1, 2007 whereby participants who had not reached a certain age and years of service with the Company were no longer eligible for such Company contributory benefits. Also, the number of years of service required to be eligible for the benefit was increased to 15 years for all participants. The future retiree life insurance coverage amount was frozen as of December 31, 2006.

The Company’s policy is to fund its other postretirement benefits in amounts at or below the annual tax qualified limits. The contribution for the other postretirement benefits was $54 million, $59 million, and $58 million in 2009, 2008, and 2007, respectively.

The Company participates in qualified defined contribution plans for its employees who meet certain eligibility requirements. Sponsorship of these plans transferred from JHFS to the Company effective January 1, 2010. These plans include the Investment-Incentive Plan for John Hancock Employees and the John Hancock Savings and Investment Plan. The expense for the defined contribution plans was $19 million, $19 million, and $16 million in 2009, 2008, and 2007, respectively.

The Company uses a December 31 measurement date to account for its pension and other postretirement benefit plans.

F-50

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

Obligations and Funded Status of Defined Benefit Plans

The amounts disclosed below represent the Company’s share of the pension and other postretirement benefit plans described above:

	Years Ended December 31,
	Pension Benefits						Other Postretirement Benefits
	2009			2008			2009			2008
				(in millions)
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,237		$	2,214		$	573		$	576
Service cost		30			30			1			1
Interest cost		128			129			33			34
Participant contributions		-			-			5			3
Actuarial loss (gain)		132			42			(8	)		17
Plan amendments		-			(2	)		-			-
Retiree drug subsidy		-			-			3			4
Benefits paid		(173	)		(176	)		(59	)		(62	)
Benefit obligation at end of year	$	2,354		$	2,237		$	548		$	573
Change in plan assets:
Fair value of plan assets at beginning of year	$	1,628		$	2,465		$	245		$	326
Actual return on plan assets		354			(694	)		61			(81	)
Employer contributions		34			33			54			59
Participant contributions		-			-			5			3
Benefits paid		(173	)		(176	)		(59	)		(62	)
Fair value of plan assets at end of year	$	1,843		$	1,628		$	306		$	245
Funded status at end of year	$	(511	)	$	(609	)	$	(242	)	$	(328	)
Amounts recognized on Consolidated Balance Sheets:
Assets	$	-		$	-		$	-		$	-
Liabilities		(511	)		(609	)		(242	)		(328	)
Net amount recognized	$	(511	)	$	(609	)	$	(242	)	$	(328	)
Amounts recognized in accumulated other comprehensive income:
Prior service cost	$	(29	)	$	(32	)	$	-		$	-
Net actuarial loss		739			789			29			71
Total	$	710		$	757		$	29		$	71

The accumulated benefit obligation for all defined benefit plans was $2,329 million and $2,208 million at December 31, 2009 and 2008, respectively.

F-51

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

The following table provides information for pension plans with accumulated benefit obligations in excess of plan assets:

	December 31,
	2009		2008
	(in millions)
Accumulated benefit obligation	$	2,329	$	2,208
Projected benefit obligation		2,354		2,237
Fair value of plan assets		1,843		1,628

Components of Net Periodic Benefit Cost

	Years Ended December 31,
	Pension Benefits									Other Postretirement Benefits
	2009			2008			2007			2009			2008			2007
	(in millions)
Service cost	$	30		$	30		$	33		$	1		$	1		$	2
Interest cost		128			129			126			33			34			34
Expected return on plan assets		(175	)		(181	)		(183	)		(26	)		(26	)		(25	)
Special termination benefits		-			-			1			-			-			-
Curtailment gain		-			-			(1	)		-			-			-
Amortization of prior service cost		(3	)		(3	)		(2	)		-			-			-
Recognized actuarial loss		4			5			1			-			-			-
Net periodic benefit cost	$	(16	)	$	(20	)	$	(25	)	$	8		$	9		$	11

The amounts included in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost in 2010 were as follows:

	Pension Benefits			Other Postretirement Benefits
	(in millions)
Amortization of prior service cost	$	(4	)	$	-
Amortization of actuarial loss, net		15			-
Total	$	11		$	-

Assumptions

Weighted–average assumptions used to determine benefit obligations were as follows:

	Years Ended December 31,
	Pension Benefits				Other Postretirement Benefits
	2009		2008		2009		2008
Discount rate	5.50	%	6.00	%	5.50	%	6.00	%
Rate of compensation increase	4.35	%	4.10	%	N/A		N/A
Health care cost trend rate for following year					8.50	%	8.50	%
Ultimate trend rate					5.00	%	5.00	%
Year ultimate rate reached					2028		2016

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

Weighted-average assumptions used to determine net periodic benefit cost were as follows:

	Years Ended December 31,
	Pension Benefits						Other Postretirement Benefits
	2009		2008		2007		2009		2008		2007
Discount rate	6.00	%	6.00	%	5.75	%	6.00	%	6.00	%	5.75	%
Expected long-term return on plan assets	8.00	%	8.00	%	8.25	%	8.00	%	8.00	%	8.25	%
Rate of compensation increase	4.10	%	5.10	%	4.00	%	N/A		N/A		N/A
Health care cost trend rate for following year							8.50	%	9.00	%	9.50	%
Ultimate trend rate							5.00	%	5.00	%	5.00	%
Year ultimate rate reached							2016		2016		2016

The overall expected long-term rate of return on plan assets assumption reflects the Company’s best estimate. The general approach used to develop the assumption takes into consideration the allocation of assets held on the measurement date, plus the target allocation of expected contributions to the plan for the upcoming fiscal year, net of investment expenses. The rate is calculated using historical weighted-average real returns for each significant class of plan assets including the effects of continuous reinvestment of earnings. In addition, the calculation includes a long-term expectation of general inflation. Current market conditions and published commentary are also considered when assessing the reasonableness of the overall expected long-term rate of return on plan assets assumption.

Assumed health care cost trend rates have a significant effect on the amounts reported for the postretirement healthcare plans. A one-percentage point change in assumed health care cost trend rates would have the following effects:

	One-Percentage Point Increase		One-Percentage Point Decrease
	(in millions)
Effect on total service and interest costs in 2009	$	1	$	(1	)
Effect on postretirement benefit obligation as of December 31, 2009		20		(17	)

Plan Assets

The Company’s overall investment strategy is to achieve a mix of approximately 94% of investments for long-term growth and 6% for near-term benefit payments, with a wide diversification of asset types, fund strategies, and fund managers.

The target allocations for plan assets are 52% equity securities, 35% fixed income securities, and 13% to all other types of investments. Equity securities primarily include investments in large-cap, mid-cap, and small-cap companies primarily located in the United States. Fixed income securities include corporate bonds of companies from a diverse range of industries, mortgage-backed securities, and U.S. Treasuries. Other types of investments include investments in private equity funds and timber and agriculture investments that follow several different strategies.

Pension plan assets of $702 million and $617 million at December 31, 2009 and 2008, respectively, were investments managed by related parties. Welfare plan assets of $185 million and $132 million at December 31, 2009 and 2008, respectively, were investments in related parties.

The plans do not own any of the Company’s or MFC’s common stock at December 31, 2009 and 2008.

Fair Value Measurements

Valuation Hierarchy

Following ASC 820 guidance, fair value measurements of pension and other postretirement benefit plan assets are categorized according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the plans’ valuation techniques. A level is assigned to each fair value measurement based on the lowest level input significant to the fair value measurement in its entirety.

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

The three levels of the fair value hierarchy are defined as follows:

• Level 1 – Fair value measurements that reflect unadjusted, quoted prices in active markets for identical assets that the Plan has the ability to access at the measurement date. Valuations are based on quoted prices reflecting market transactions involving assets identical to those being measured.

• Level 2 – Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. These include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in inactive markets, inputs that are observable that are not prices (such as interest rates, credit risks, etc.), and inputs that are derived from or corroborated by observable market data.

• Level 3 – Fair value measurements using significant nonmarket observable inputs. These include valuations for assets that are derived using data, some or all of which is not market observable data, including assumptions about risk. Level 3 securities include less liquid securities and impaired securities, as well as lower quality securities that have little or no price transparency.

Determination of Fair Value

The valuation methodologies used to determine the fair values of plan assets under the exit value approach of ASC 820 reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. When available, the plans use quoted market prices to determine fair value and classify such items within Level 1. If quoted market prices are not available, fair value is based upon matrix pricing models which discount expected cash flows utilizing independently-sourced market interest rates based on the credit quality and duration of the instrument. Items valued using models are classified according to the lowest level input that is significant to the valuation. Thus, an item may be classified in Level 3 even though significant market observable inputs are used.

The plans classify financial instruments in Level 3 of the fair value hierarchy when there is an unobservable input to the valuation model that is significant to the fair value measurement in its entirety. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments also typically rely on a number of inputs that are readily observable either directly or indirectly. Thus, the gains and losses presented below include changes in the fair value related to both observable and unobservable inputs.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy:

Domestic equity – Includes investments in separate accounts and common/collective trusts. Separate account fair values are determined by the fair value of the underlying assets. Underlying domestic equity assets are valued based on observable quoted prices in active markets, and these separate account investments are included in Level 1. Collective trust fair values are determined monthly and bi-monthly based on observable quoted prices in an inactive market, and these investments are included in Level 2.

International equity – Includes investments in mutual funds and common/collective trusts. Mutual fund fair values are determined based upon observable net asset values (“NAV”), and these investments are included in Level 1. Collective trust fair values are determined monthly and bi-monthly based on observable quoted prices in an inactive market, and these investments are included in Level 2.

Domestic fixed income – Includes investments in mutual funds and separate accounts of the group annuity contract. Mutual fund fair values are determined based upon observable NAV, and these investments are included in Level 1. Fair values of investments in separate accounts of the group annuity contract are based upon the fair value of underlying assets. Underlying domestic fixed-income investments are valued based on observable quoted prices in active and inactive markets, as well as observable market inputs other than quoted prices. These investments are included in Level 2.

International fixed income – Includes investments in mutual funds and separate accounts of the group annuity contract. Mutual fund fair values are determined based upon observable NAV, and these investments are included in Level 1. Fair values of investments in separate accounts of the group annuity contract are based upon the fair value of underlying assets. Underlying

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

international fixed-income investments are valued based on observable quoted prices in active markets, as well as observable market inputs other than quoted prices. These investments are included in Level 2.

Private equity – Fair values are determined based upon market inputs other than quoted prices and significant unobservable assumptions. Private equity investments are included in Level 3.

Timber/Agriculture – Fair values are determined based upon market inputs other than quoted prices and significant unobservable assumptions. Timber/agriculture investments are included in Level 3.

Cash and cash equivalents – The carrying values for cash and cash equivalents approximate fair value due to the short-term maturities of these instruments. Cash and cash equivalents are included in Level 1.

401(h) account net assets – Fair values are determined based upon the fair values of the investments held in the Plan, as described above. The 401(h) account net assets are included in Level 1, Level 2, or Level 3.

The fair value of the Company’s pension plan assets at December 31, 2009 and December 31, 2008, by asset category is as follows:

	December 31, 2009
	Total Fair Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash and cash equivalents	$	26	$	26	$	-	$	-
Equity
Domestic		783		331		452		-
International		268		108		160		-
Fixed Income
Domestic (a)		437		142		215		80
International (b)		121		80		41		-
Other Types of Investments
Private Equity (c)		129		-		-		129
Timber / Agriculture (d)		79		-		-		79
Total Assets at Fair Value	$	1,843	$	687	$	868	$	288
	December 31, 2008
	Total Fair Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash and cash equivalents	$	18	$	18	$	-	$	-
Equity
Domestic		633		322		311		-
International		209		81		128		-
Fixed Income
Domestic (e)		430		131		226		73
International (f)		116		74		42		-
Other Types of Investments
Private Equity (c)		150		-		-		150
Timber / Agriculture (d)		72		-		-		72
Total Assets at Fair Value	$	1,628	$	626	$	707	$	295

(a) This category consists of approximately 40% corporate bonds from U.S. issuers in diverse industries, 18% invested in the general account of the Company, 13% mortgage-backed securities, 13% U.S. Treasuries and other government debt, 9% cash and other domestic fixed income investments, and 7% sovereign debt. Investments in the general account of the Company consist primarily of domestic fixed income securities.

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

(b) This category consists of approximately 95% sovereign debt, with the remaining 5% invested in foreign currency and other international fixed income investments.

(c) This category consists of limited partnerships with buyout, mezzanine, and fund-of-fund private equity investments.

(d) This category consists of limited partnerships with timber and agriculture investments.

(e) This category consists of approximately 32% corporate bonds from U.S. issuers in diverse industries, 29% mortgage-backed securities, 17% invested in the general account of the Company, 14% cash and other domestic fixed income investments, 7% U.S. Treasuries and other government debt, and 1% sovereign debt. Investments in the general account of the Company consist primarily of domestic fixed income securities.

(f) This category consists of approximately 94% sovereign debt, with the remaining 6% invested in foreign currency and other international fixed income investments.

The changes in Level 3 assets measured at fair value on a recurring basis for the year ended December 31, 2009 are summarized as follows:

	Domestic Fixed Income			Private Equity			Timber / Agriculture
	(in millions)
Balance at January 1, 2009	$	73		$	150		$	72
Actual return on plan assets:
Relating to assets still held at the reporting date		18			(19	)		6
Relating to assets sold during the period		-			5			2
Purchases, sales, and settlements		(11	)		(7	)		(1	)
Transfers in and/or out of Level 3		-			-			-
Balance at December 31, 2009	$	80		$	129		$	79

F-56

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

The fair value of the Company’s other postretirement benefit plan assets at December 31, 2009 and December 31, 2008, by asset category is as follows:

	December 31, 2009
	Total Fair Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash and cash equivalents	$	23	$	23	$	-	$	-
Equity
Domestic		129		14		115		-
International		22		11		11		-
Fixed Income
Domestic (a)		124		24		98		2
International (b)		3		2		1		-
Other Types of Investments
Private Equity (c)		3		-		-		3
Timber / Agriculture (d)		2		-		-		2
Total Assets at Fair Value	$	306	$	74	$	225	$	7
	December 31, 2008
	Total Fair Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Cash and cash equivalents	$	20	$	20	$	-	$	-
Equity
Domestic		99		11		88		-
International		17		9		8		-
Fixed Income
Domestic (e)		102		21		79		2
International (f)		2		1		1		-
Other Types of Investments
Private Equity (c)		3		-		-		3
Timber / Agriculture (d)		2		-		-		2
Total Assets at Fair Value	$	245	$	62	$	176	$	7

(a) This category consists of approximately 44% corporate bonds from U.S. issuers in diverse industries, 27% mortgage-backed securities, 17% U.S. Treasuries and other government debt, 6% cash and other domestic fixed income investments, 4% sovereign debt, and 2% invested in the general account of the Company. Investments in the general account of the Company consist primarily of domestic fixed income securities.

(b) This category consists of approximately 95% sovereign debt, with the remaining 5% invested in foreign currency and other international fixed income investments.

(c) This category consists of limited partnerships with buyout, mezzanine, and fund-of-fund private equity investments.

(d) This category consists of limited partnerships with timber and agriculture investments.

(e) This category consists of approximately 49 % mortgage-backed securities, 35% corporate bonds from U.S. issuers in diverse industries, 10% U.S. Treasuries and other government debt, 4% cash and domestic fixed equities, 1% sovereign debt, and 1% invested in the general account of the Company. Investments in the general account of the Company consist primarily of domestic fixed income securities.

(f) This category consists of approximately 94% sovereign debt, with the remaining 6% invested in foreign currency and other international fixed income investments.

F-57

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

The fair value of Level 3 assets measured on a recurring basis at December 31, 2009 of $7 million is unchanged from the fair value reported at December 31, 2008.

Risk Management Practices and Investment Goals

Investment allocation decisions for plan assets are made in accordance with the criteria and limitations set forth in the most recent Statement of Investment Policies and Procedures (the “Statement”), as amended and restated effective November 17, 2009. The Company relies on the Statement to set forth guidelines for adopting and maintaining certain funding policies in accordance with the provisions of ERISA and to ensure that the Plan maintains sufficient amounts to meet the obligations of the Plan as they come due.

The Company’s board of directors has delegated the fiduciary oversight responsibility of the Plan to the U.S. Benefits Committee (the “Committee”), which in turn, established and actively monitors specialized subcommittees to ensure continued prudent and effective management of the Plan. One such subcommittee, the Investment Committee, is responsible for diversification of plan assets to achieve a suitable combination of investment risk and rate of return for the exclusive benefit of plan participants and beneficiaries. In order to satisfy the Plan’s ongoing obligations and minimize the likelihood of a significant deterioration in the Plan’s funded status resulting from capital market activity, the Investment Committee retains an Investment Advisor, John Hancock Investment Management Services, LLC, a subsidiary of the Company, to assist in the overall strategic investment direction of the fund.

Investment Policies and Strategies

The overall investment policies and strategies of the Plan are based on the guiding principle of diversification. Plan investments are allocated primarily between the major asset classes of fixed income and equity, with a relatively smaller proportion of investments in alternative asset classes. These investments fall into two broad categories within the context of the current asset allocation policy.

Liability-Hedging Assets – These assets consist primarily of fixed income investments, such as bonds, that generally have characteristics similar to pension liabilities, including predictable cash flows and comparable durations. In addition to capital preservation, the payment streams provided by liability-hedging assets are used to satisfy plan obligations as they become due.

Return-Seeking Assets – All non-fixed income investments, such as equities and certain alternative asset classes, fall into this category. In pursuing these investments, the Plan seeks to experience higher returns from appreciation in asset values. Historically, the long-term rate of return on equities has been higher than most investment grade fixed income securities. The increased yield comes at the expense of increased volatility and unpredictability in cash flows.

The Plan’s current asset allocation policy is formalized in the most recent Statement, and it is based on an assessment of the Plan’s long-term goals and desired risk levels.

Asset Class	Initial Target		Dynamic Policy Category
U.S equity	39	%	Return-Seeking Assets
International equity	13	%	Return-Seeking Assets
Alternatives	13	%	Return-Seeking Assets
Total	65	%
Fixed Income	35	%	Liability-Hedging Assets
Total	100	%

The Investment Committee intends for the preceding target asset allocation to adjust periodically based on the funded status of the Plan and reviews the funded ratio and asset allocation for the Plan on a monthly basis. Theoretically, an overfunded pension plan would not require the same level of capital appreciation from invested assets as an underfunded plan. As such, the Plan’s asset allocation policy is dynamic, in that the asset allocations are revised in response to the funded status of the plan. The policy is intended to facilitate the Plan’s long-term goal of reaching and maintaining fully funded status.

Permitted and Prohibited Investments

Plan investments are permitted to be made either directly, through pooled or mutual funds, or through insurance contracts, and both active and passive strategies may be used. In order to fulfill its fiduciary responsibility and to ensure that plan assets

F-58

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

are invested prudently, the Committee has compiled a list of prohibited investments, as well as placed constraints on certain permitted investments. Moreover, the Plan is not permitted to borrow funds to acquire securities or otherwise deal in margin trading. Additional restrictions and constraints, by asset class, are outlined below.

Fixed Income

The Plan’s fixed income exposure is achieved through investments in separate accounts or mutual funds. For securities held in separate accounts, the combined market value of any individual investments, as a percentage of the aggregate market value of all fixed income investments, is not to exceed the maximum quality limits outlined below. Each mutual fund investment is governed by its own prospectus, and therefore not subject to these quality limits.

Investment Rating	Maximum Limit
AAA	100	%
AA	90	%
A	75	%
BBB & Lower	45	%
BB & Lower	8	%

Equities

The Plan’s domestic and international equity investments are required to be fully diversified across sectors and countries at all times. In addition, the Plan is prohibited from acquiring more than 7.5% of the outstanding securities of any one company. The Plan is also prohibited from holding greater than 10% of its assets in the form of MFC stock.

Derivatives, Options, and Futures

The use of derivatives is permitted for the purpose of hedging investment risks, including market, interest rate, credit, liquidity, and currency risks. Derivatives may also be used to replicate direct investments, in instances where the Plan will benefit from lower costs or transactional ease. Conversely, the use of derivatives to create leverage for speculative purposes is prohibited. The Plan is also required to hold cash and cash equivalents equal to the underlying market exposure of derivatives, net of margin funds. The Plan is permitted to invest in options and futures on any securities that are not specifically prohibited by the Statement, but it is prohibited from selling derivatives on securities it does not own.

Investments in Other Assets

Pursuant to the asset allocation policy, the Plan is permitted to make investments in alternative asset classes. The Plan is permitted to invest in private equity, power and infrastructure equity, timber and agricultural investments, but hedge funds are prohibited. The Investment Committee is required to approve any proposed investments in other assets that are not specifically permitted above.

F-59

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 10 — Pension and Other Postretirement Benefit Plans - (continued)

Cash Flows

Expected Future Benefit Payments for Defined Benefit Plans

Projections for benefit payments for the next ten years are as follows:

	Pension Benefits		Other Postretirement Benefits Gross Payments		Other Postretirement Benefits- Medicare Part D Subsidy
	(in millions)
2010	$	210	$	49	$	3
2011		202		49		3
2012		197		49		4
2013		197		49		4
2014		195		48		4
2015-2019		957		227		18

Note 11 — Commitments, Guarantees, Contingencies, and Legal Proceedings

Commitments. The Company has extended commitments to purchase U.S. private debt and to issue mortgage loans on real estate totaling $1,711 million and $11 million, respectively, at December 31, 2009. If funded, loans related to real estate mortgages would be fully collateralized by the mortgaged properties. The Company monitors the creditworthiness of borrowers under long-term bond commitments and requires collateral as deemed necessary. The majority of these commitments expire in 2010.

The Company leases office space under non-cancelable operating lease agreements of various expiration dates. Rental expenses, net of sub-lease income, were $26 million, $22 million, and $24 million for the years ended December 31, 2009, 2008, and 2007, respectively.

During 2001, the Company entered into an office ground lease agreement, which expires on September 20, 2096. The terms of the lease agreement provide for adjustments in future periods. The future minimum lease payments, by year and in the aggregate, under the remaining ground lease and other non-cancelable operating leases along with the associated sub-lease income are as follows:

	Non- cancelable Operating Leases		Sub-lease Income
	(in millions)
2010	$	52	$	17
2011		46		17
2012		43		17
2013		40		17
2014		30		14
Thereafter		207		4
Total	$	418	$	86

Guarantees. In the course of business, the Company enters into guarantees which vary in nature and purpose and which are accounted for and disclosed under U.S. GAAP specific to the insurance industry. The Company had no material guarantees outstanding outside the scope of insurance accounting at December 31, 2009.

Contingencies. The Company is an investor in leveraged leases and has established provisions for possible disallowance of the tax treatment and for interest on past due taxes. During the years ended December 31, 2009 and 2008, the Company increased this provision by $186 million and $192 million, net of tax, respectively. The Company continues to believe that deductions originally claimed in relation to these arrangements are appropriate. Although not expected to occur, should the

F-60

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 11 — Commitments, Guarantees, Contingencies, and Legal Proceedings - (continued)

tax attributes of the leveraged leases be fully denied, the maximum after tax exposure including interest would be an additional estimated $282 million at December 31, 2009. See Note 19 — Subsequent Events.

The Company owns an 80% interest in Phipps Tower Associates LLC, a limited liability company formed for the purpose of development, construction, leasing, and operation of Phipps Tower, an office building located in Atlanta, Georgia. The construction of Phipps Tower will be substantially complete in early 2010. Under an LLC agreement entered into by the Company with its partner developer, both parties have rights to a one-time put/call option when the project has achieved its stabilization stage, defined as when 85% of the gross rentable area of the building has been leased and the tenants under such leases have accepted delivery of the demised premises. At that time, the Company may exercise its call option to purchase the partner developer’s interest in the project, and the partner developer may exercise its put option and sell its interest to the Company. If on or before March 5, 2013 the stabilization stage has not been achieved, or stabilization has been achieved but options have not been exercised, the Company is obligated to purchase the partner developer’s entire interest (20%) in the project for the greater of the project cost or 95% of market value at the time of the buyout. The current estimated minimum amount that the Company would be required to pay is $8 million. This estimate is 20% of the $135 million cost of construction, net of $95 million of related loans payable.

Legal Proceedings. The Company is regularly involved in litigation, both as a defendant and as a plaintiff. The litigation naming the Company as a defendant ordinarily involves its activities as a provider of insurance protection and wealth management products, an employer, and a taxpayer. In addition, state regulatory bodies, state attorneys general, the SEC, the Financial Industry Regulatory Authority, and other government and regulatory bodies regularly make inquiries and, from time to time, require the production of information or conduct examinations concerning the Company’s compliance with, among other things, insurance laws, securities laws, and laws governing the activities of broker-dealers. The Company does not believe that the conclusion of any current legal or regulatory matters, either individually or in the aggregate, will have a material adverse effect on its consolidated financial condition or results of operations.

Note 12 — Shareholder’s Equity

Capital Stock

The Company has two classes of capital stock, preferred stock and common stock. All of the outstanding preferred and common stock of the Company is owned by MIC, its parent.

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JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Shareholder’s Equity - (continued)

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) were as follows:

	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (Loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment			Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost			Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance at January 1, 2007	$	477		$	295		$	31		$	113		$	916
Gross unrealized investment gains (net of deferred income tax expense of $230 million)		428			-			-			-			428
Reclassification adjustment for gains realized in net income (net of deferred income tax benefit of $124 million)		(229	)		-			-			-			(229	)
Adjustment for policyholder liabilities (net of deferred income tax expense of $3 million)		4			-			-			-			4
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax benefit of $28 million)		(53	)		-			-			-			(53	)
Adjustment for policyholder dividend obligation (net of deferred income tax benefit of $27 million)		(50	)		-			-			-			(50	)
Net unrealized investment gains		100			-			-			-			100
Foreign currency translation adjustment		-			-			(4	)		-			(4	)
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax expense of $13 million)		-			-			-			24			24
Change in net actuarial gain (net of deferred income tax benefit of $4 million)		-			-			-			(8	)		(8	)
Net gains on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax expense of $39 million)		-			71			-			-			71
Reclassification of net cash flow hedge gains to net income (net of deferred income tax benefit of $8 million)		-			(16	)		-			-			(16	)
Balance at December 31, 2007	$	577		$	350		$	27		$	129		$	1,083

F-62

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Shareholder’s Equity - (continued)

	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (Loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment			Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost			Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance at January 1, 2008	$	577		$	350		$	27		$	129		$	1,083
Gross unrealized investment losses (net of deferred income tax benefit of $1,574 million)		(2,932	)		-			-			-			(2,932	)
Reclassification adjustment for gains realized in net income (net of deferred income tax benefit of $101 million)		(187	)		-			-			-			(187	)
Adjustment for policyholder liabilities (net of deferred income tax expense of $87 million)		162			-			-			-			162
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax expense of $216 million)		403			-			-			-			403
Adjustment for policyholder dividend obligation (net of deferred income tax expense of $11 million)		20			-			-			-			20
Net unrealized investment losses		(2,534	)		-			-			-			(2,534	)
Foreign currency translation adjustment		-			-			(23	)		-			(23	)
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax benefit of $1 million)		-			-			-			(1	)		(1	)
Change in net actuarial loss (net of deferred income tax benefit of $359 million)		-			-			-			(666	)		(666	)
Net gains on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax expense of $586 million)		-			1,086			-			-			1,086
Reclassification of net cash flow hedge gains to net income (net of deferred income tax benefit of $17 million)		-			(31	)		-			-			(31	)
Balance at December 31, 2008	$	(1,957	)	$	1,405		$	4		$	(538	)	$	(1,086	)

F-63

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Shareholder’s Equity - (continued)

	Net Unrealized Investment Gains (Losses)			Net Accumulated Gain (Loss) on Cash Flow Hedges			Foreign Currency Translation Adjustment		Additional Pension and Postretirement Unrecognized Net Periodic Benefit Cost			Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance at January 1, 2009	$	(1,957	)	$	1,405		$	4	$	(538	)	$	(1,086	)
Gross unrealized investment gains (net of deferred income tax expense of $1,400 million)		2,600			-			-		-			2,600
Reclassification adjustment for losses realized in net income (net of deferred income tax expense of $109 million)		202			-			-		-			202
Adjustment for policyholder liabilities (net of deferred income tax benefit of $59 million)		(110	)		-			-		-			(110	)
Adjustment for deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability (net of deferred income tax benefit of $289 million)		(537	)		-			-		-			(537	)
Net unrealized investment gains		2,155			-			-		-			2,155
Foreign currency translation adjustment		-			-			5		-			5
Pension and postretirement benefits:
Change in prior service cost (net of deferred income tax benefit of $1 million)		-			-			-		(2	)		(2	)
Change in net actuarial loss (net of deferred income tax expense of $31 million)		-			-			-		60			60
Net unrealized gain on split-dollar life insurance benefit (net of deferred income tax expense of $1 million)		-			-			-		2			2
Net losses on the effective portion of the change in fair value of cash flow hedges (net of deferred income tax benefit of $538 million)		-			(1,000	)		-		-			(1,000	)
Reclassification of net cash flow hedge gains to net income (net of deferred income tax benefit of $3 million)		-			(5	)		-		-			(5	)
Balance at December 31, 2009	$	198		$	400		$	9	$	(478	)	$	129

F-64

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Shareholder’s Equity - (continued)

Net unrealized investment gains (losses) included on the Company’s Consolidated Balance Sheets as a component of shareholder’s equity are summarized below:

	December 31,
	2009			2008			2007
	(in millions)
Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturities	$	547		$	(3,345	)	$	815
Equity securities		249			(79	)		461
Other investments		(3	)		(91	)		4
Total (1)		793			(3,515	)		1,280
Amounts of unrealized investment gains (losses) attributable to:
Deferred policy acquisition costs, deferred sales inducements, value of business acquired, and unearned revenue liability		(368	)		458			(159	)
Policyholder liabilities		(121	)		49			(200	)
Policyholder dividend obligation		-			-			(31	)
Deferred income taxes		(106	)		1,051			(313	)
Total		(595	)		1,558			(703	)
Net unrealized investment gains (losses)	$	198		$	(1,957	)	$	577

(1) Includes unrealized investment gains (losses) on invested assets held in trust on behalf of MRBL, which are included in amounts due from and held for affiliates on the Consolidated Balance Sheets. See Note 8 — Related Party Transactions, for information on the associated MRBL reinsurance agreement.

Statutory Results

The Company and its wholly-owned subsidiaries, John Hancock Life Insurance Company of New York and John Hancock Life & Health Insurance Company, are required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance departments of their states of domicile, which are Michigan, New York, and Massachusetts, respectively.

At December 31, 2008, JHUSA, with the explicit permission of the Commissioner, used the implied forward rates from the rolling average of the swap rates that have been observed over the past three years instead of the implied forward rates from the swap curve observed at December 31, 2008 for purposes of its C-3 Phase II calculation. The impact of using this approach was a $53 million decrease in JHUSA’s authorized control level risk-based capital as of December 31, 2008. This permitted practice was effective for reporting periods beginning on or after December 31, 2008 and ended September 30, 2009.

At December 31, 2008, JHUSA, with the explicit permission of the Commissioner, recorded an increase in the net admitted deferred tax asset (“DTA”) instead of the deferred tax calculation required by prescribed statutory accounting practices. If the net admitted DTA was reflected on the statutory balance sheet based on prescribed practices, the DTA and statutory surplus at December 31, 2008 would both be decreased by $84 million. The permitted practice had no effect on statutory net income. This permitted practice was effective for reporting periods beginning on or after December 31, 2008 and ended September 30, 2009.

The Company’s risk-based capital ratio of total adjusted capital to company action level risk-based capital was in excess of 300% at December 31, 2009.

F-65

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 12 — Shareholder’s Equity - (continued)

Unless approved by the Commissioner prior to payment, dividends to the shareholder shall be declared or paid only from the Company’s earned surplus. Dividends to the shareholder that may be paid without prior approval of the Commissioner are limited by the laws of the State of Michigan. Such dividends are permissible if, together with other dividends or distributions made within the preceding 12 months, do not exceed the greater of 10% of the Company’s surplus as of December 31 of the preceding year, or the net gain from operations for the 12 month period ending December 31 of the immediately preceding year.

Note 13 — Segment Information

The Company operates in the following three business segments: (1) Insurance and (2) Wealth Management, which primarily serve retail customers and institutional customers and (3) Corporate and Other, which includes the institutional advisory business, the remaining international insurance operations, the reinsurance operations, and the corporate account.

The Company’s reportable segments are strategic business units offering different products and services. The reportable segments are managed separately, as they focus on different products, markets, and distribution channels.

Insurance Segment. Offers a variety of individual life insurance products, including participating whole life, term life, universal life, and variable life insurance, and individual and group long-term care insurance. Products are distributed through multiple distribution channels, including insurance agents, brokers, banks, financial planners, and direct marketing.

Wealth Management Segment. Offers individual and group annuities and mutual fund products and services. Individual annuities consist of fixed deferred annuities, fixed immediate annuities, and variable annuities. Mutual fund products and services primarily consist of open-end mutual funds, closed-end funds, institutional advisory accounts, and privately managed accounts. These products are distributed through multiple distribution channels, including insurance agents and brokers affiliated with the Company, securities brokerage firms, financial planners, pension plan sponsors, pension plan consultants, and banks.

This segment also offers a variety of retirement products to qualified defined benefit plans, defined contribution plans, and non-qualified buyers, including guaranteed investment contracts, funding agreements, single premium annuities, and general account participating annuities and fund-type products. These contracts provide non-guaranteed, partially guaranteed, and fully guaranteed investment options through general and separate account products.

These products are distributed through a combination of dedicated regional representatives, pension consultants, and investment professionals. The segment’s consumer notes program is distributed primarily through brokers affiliated with the Company and securities brokerage firms.

Corporate and Other Segment. Primarily consists of the Company’s remaining international insurance operations, certain corporate operations, the institutional advisory business, reinsurance operations, and businesses that are either disposed or in run-off. Corporate operations primarily include certain financing activities, income on capital not specifically allocated to the reporting segments, and certain non-recurring expenses not allocated to the segments. Reinsurance refers to the transfer of all or part of certain risks related to policies issued by the Company to a reinsurer or to the assumption of risk from other insurers. The disposed business primarily consists of group health insurance and related group life insurance, property and casualty insurance, and selected broker-dealer operations.

The accounting policies of the segments are the same as those described in Note 1 — Summary of Significant Accounting Policies. Allocations of net investment income are based on the amount of assets allocated to each segment. Other costs and operating expenses are allocated to each segment based on a review of the nature of such costs, cost allocations utilizing time studies, and other relevant allocation methodologies.

The following table summarizes selected financial information by segment for the periods indicated. Included in the Insurance Segment for all periods presented are the assets, liabilities, revenues, and expenses of the closed blocks. For additional information on the closed blocks, see Note 6 — Closed Blocks.

F-66

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13 — Segment Information - (continued)

	Insurance			Wealth Management			Corporate and Other			Total
	(in millions)
2009
Revenues from external customers	$	4,366		$	2,652		$	535		$	7,553
Net investment income		2,265			1,624			457			4,346
Net realized investment and other losses		(732	)		(1,103	)		(2	)		(1,837	)
Inter-segment revenues		-			1			(1	)		-
Revenues	$	5,899		$	3,174		$	989		$	10,062
Total net (loss) income	$	(258	)	$	412		$	157		$	311
Supplemental Information:
Equity in net income of investees accounted for under the equity method	$	28		$	9		$	41		$	78
Carrying value of investments accounted for under the equity method		1,622			1,123			314			3,059
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		308			898			5			1,211
Interest expense		-			-			34			34
Income tax (benefit) expense		(167	)		63			97			(7	)
Segment assets	$	75,509		$	149,336		$	22,729		$	247,574
	Insurance			Wealth Management			Corporate and Other			Total
	(in millions)
2008
Revenues from external customers	$	3,407		$	(357	)	$	520		$	3,570
Net investment income		2,300			1,578			563			4,441
Net realized investment and other gains (losses)		120			102			(445	)		(223	)
Inter-segment revenues		-			1			(1	)		-
Revenues	$	5,827		$	1,324		$	637		$	7,788
Total net income (loss)	$	272		$	(360	)	$	(223	)	$	(311	)
Supplemental Information:
Equity in net income (loss) of investees accounted for under the equity method	$	8		$	26		$	(38	)	$	(4	)
Carrying value of investments accounted for under the equity method		1,418			991			438			2,847
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		(362	)		21			5			(336	)
Interest expense		-			-			34			34
Income tax expense (benefit)		137			(413	)		(63	)		(339	)
Segment assets	$	67,127		$	120,637		$	25,528		$	213,292

F-67

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 13 — Segment Information - (continued)

	Insurance		Wealth Management			Corporate and Other			Total
	(in millions)
2007
Revenues from external customers	$	3,931	$	3,525		$	768		$	8,224
Net investment income		2,246		1,888			705			4,839
Net realized investment and other gains		146		11			150			307
Inter-segment revenues		-		1			(1	)		-
Revenues	$	6,323	$	5,425		$	1,622		$	13,370
Total net income	$	569	$	513		$	440		$	1,522
Supplemental Information:
Equity in net income (loss) of investees accounted for under the equity method	$	139	$	(3	)	$	74		$	210
Carrying value of investments accounted for under the equity method		1,155		369			883			2,407
Amortization of deferred policy acquisition costs, deferred sales inducements, and value of business acquired		368		377			6			751
Interest expense		1		-			38			39
Income tax expense		281		96			275			652

The Company operates primarily in the United States and has no reportable major customers. The following table summarizes selected financial information by geographic location for or at the end of periods presented:

Location	Revenues		Income (Loss) Before Income Taxes			Long-Lived Assets		Assets
	(in millions)
2009
United States	$	10,004	$	290		$	198	$	247,431
Foreign — other		58		14			-		143
Total	$	10,062	$	304		$	198	$	247,574
2008
United States	$	7,722	$	(670	)	$	234	$	213,146
Foreign — other		66		20			-		146
Total	$	7,788	$	(650	)	$	234	$	213,292
2007
United States	$	13,043	$	2,155
Foreign — other		327		19
Total	$	13,370	$	2,174

F-68

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments. Fair values have been determined by using available market information and the valuation methodologies described below.

	December 31,
	2009				2008
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in millions)
Assets:
Fixed maturities (1):
Available-for-sale	$	53,569	$	53,569	$	47,522	$	47,522
Held-for-trading		1,208		1,208		1,057		1,057
Equity securities:
Available-for-sale		558		558		616		616
Mortgage loans on real estate		12,623		13,252		12,472		12,067
Policy loans		4,949		4,949		4,918		4,918
Short-term investments		3,973		3,973		3,670		3,670
Cash and cash equivalents		4,915		4,915		4,850		4,850
Derivatives:
Interest rate swap agreements		1,770		1,770		5,194		5,194
Inflation swaps		70		70		1		1
Cross currency rate swap agreements		242		242		731		731
Foreign exchange forward agreements		43		43		3		3
Interest rate options		1		1		-		-
Total return swap agreements		8		8		-		-
Embedded derivatives		1,711		1,711		4,640		4,640
Assets held in trust		2,290		2,290		2,190		2,190
Separate account assets		122,466		122,466		92,058		92,058
Liabilities:
Consumer notes		1,205		1,234		1,600		1,532
Debt		490		463		487		474
Guaranteed investment contracts and funding agreements		2,701		2,760		4,701		4,603
Fixed-rate deferred and immediate annuities		9,255		8,696		8,283		8,171
Supplementary contracts without life contingencies		51		53		53		51
Derivatives:
Interest rate swap agreements		1,318		1,318		2,101		2,101
Inflation swaps		-		-		128		128
Cross currency rate swap agreements		694		694		846		846
Foreign exchange forward agreements		1		1		3		3
Total return swap agreements		-		-		12		12
Equity swaps		-		-		15		15
Embedded derivatives		1,327		1,327		2,866		2,866

(1) Fixed maturities exclude leveraged leases of $2,012 million and $2,025 million at December 31, 2009 and 2008, respectively, which are carried at the net investment calculated by accruing income at the lease’s expected internal rate of return in accordance with ASC 840.

As discussed in Note 1, the Company adopted ASC 820 and ASC 825 effective January 1, 2008. In conjunction with the adoption of ASC 825, the Company elected the fair value option for certain bonds that support certain actuarial liabilities to participating policyholders. These bonds were classified as held-for-trading on the Consolidated Balance Sheet at December 31, 2009 and 2008.

F-69

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments - (continued)

ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit value. The exit value assumes the asset or liability is exchanged in an orderly transaction; it is not a forced liquidation or distressed sale.

ASC 820 resulted in effectively creating the following two primary categories of financial instruments for the purpose of fair value disclosure:

• Financial Instruments Measured at Fair Value and Reported in the Consolidated Balance Sheets – This category includes assets and liabilities measured at fair value on a recurring and nonrecurring basis. Financial instruments measured on a recurring basis include fixed maturities, equity securities, short-term investments, derivatives, and separate account assets. Assets and liabilities measured at fair value on a nonrecurring basis include mortgage loans, joint ventures, and limited partnership interests, which are reported at fair value only in the period in which an impairment is recognized.

• Other Financial Instruments Not Reported at Fair Value – This category includes assets and liabilities, which do not require the additional ASC 820 disclosures, as follows:

Mortgage loans on real estate – The fair value of unimpaired mortgage loans is estimated using discounted cash flows and takes into account the contractual maturities and discount rates, which were based on current market rates for similar maturity ranges and adjusted for risk due to the property type.

Policy loans – These loans are carried at unpaid principal balances, which approximate their fair values.

Cash and cash equivalents – The carrying values for cash and cash equivalents approximate fair value due to the short-term maturities of these instruments.

Consumer notes, guaranteed investment contracts, and funding agreements – The fair values associated with these financial instruments are determined by projecting cash flows and discounting at current corporate rates, defined as U.S. Treasury rates plus the Company’s own corporate spread. The fair value attributable to credit risk represents the present value of the spread.

Debt – The fair value of the Company’s long-term debt is estimated using discounted cash flows based on the Company’s incremental borrowing rates for similar type of borrowing arrangements. The carrying values for commercial paper and short-term borrowings approximate fair value.

Fixed-rate deferred and immediate annuities – The fair value of fixed-rate deferred annuities is estimated by projecting multiple stochastically generated interest rate scenarios under a risk neutral environment reflecting inputs (interest rates, volatility, etc.) observable at the valuation date. The fair value of fixed immediate annuities is determined by projecting cash flows and discounting at current corporate rates, defined as U.S. Treasury rates plus the Company’s own corporate spread. The fair value attributable to credit risk represents the present value of the spread.

Financial Instruments Measured at Fair Value on the Consolidated Balance Sheets

Valuation Hierarchy

Following ASC 820 guidance, the Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

• Level 1 – Fair value measurements that reflect unadjusted, quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Valuations are based on quoted prices reflecting market transactions involving assets or liabilities identical to those being measured. Level 1 securities primarily include exchange traded equity securities and certain separate account assets.

F-70

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments - (continued)

• Level 2 – Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in inactive markets, inputs that are observable that are not prices (such as interest rates, credit risks, etc.), and inputs that are derived from or corroborated by observable market data.

Most debt securities are classified within Level 2. Also included in the Level 2 category are derivative instruments that are priced using models with observable market inputs, including most derivative financial instruments and certain separate account assets.

• Level 3 – Fair value measurements using significant nonmarket observable inputs. These include valuations for assets and liabilities that are derived using data, some or all of which is not market observable data, including assumptions about risk.

Level 3 securities include less liquid securities, such as structured asset-backed securities, commercial mortgage-backed securities, and other securities that have little or no price transparency. Embedded and complex derivative financial instruments and separate account investments in real estate are also included in Level 3.

Determination of Fair Value

The valuation methodologies used to determine the fair values of assets and liabilities under ASC 820 reflect market participant assumptions and are based on the application of the fair value hierarchy that prioritizes observable market inputs over unobservable inputs. When available, the Company uses quoted market prices to determine fair value and classifies such items within Level 1. If quoted market prices are not available, fair value is based upon valuation techniques, which discount expected cash flows utilizing independent market observable interest rates based on the credit quality and duration of the instrument. Items valued using models are classified according to the lowest level input that is significant to the valuation. Thus, an item may be classified in Level 3 even though significant market observable inputs are used.

The following is a description of the valuation techniques used to measure fair value and the general classification of these instruments pursuant to the fair value hierarchy.

Fair Value Measurements on a Recurring Basis

Fixed Maturities

For fixed maturities, including corporate debt, U.S. Treasury, commercial and residential mortgage-backed securities, asset-backed securities, collateralized debt obligations, issuances by foreign governments, and obligations of state and political subdivisions, fair values are based on quoted market prices when available. When market prices are not available, fair value is generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality (matrix pricing). The significant inputs into these models include, but are not limited to, yield curves, credit risks and spreads, measures of volatility, and prepayment speeds. These fixed maturities are classified within Level 2. Fixed maturities with significant pricing inputs which are unobservable are classified within Level 3.

Equity Securities

Equity securities with active markets are classified within Level 1, as fair values are based on quoted market prices.

Short-term Investments

Short-term investments are comprised of securities due to mature within one year of the date of purchase that are traded in active markets and are classified within Level 1, as fair values are based on quoted market prices. Securities such as commercial paper and discount notes are classified within Level 2 because these securities are typically not actively traded due to their short maturities and, as such, their cost generally approximates fair value.

Derivatives

The fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for over-the-counter (“OTC”) derivatives. The pricing models used are based on market standard valuation methodologies, and the inputs to these models are consistent with what a market participant would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), and volatility. The Company’s derivatives are generally classified within Level 2 given the significant inputs to the pricing models for most OTC derivatives

F-71

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments - (continued)

are observable or can be corroborated by observable market data. Inputs that are observable generally include interest rates, foreign currency exchange rates, and interest rate curves; however, certain OTC derivatives may rely on inputs that are significant to the fair value, but are unobservable in the market or cannot be derived principally from or corroborated by observable market data and would be classified within Level 3. Inputs that are unobservable generally include broker quotes, volatilities, and inputs that are outside of the observable portion of the interest rate curve or other relevant market measures. These unobservable inputs may involve significant management judgment or estimation.

Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and consistent with what market participants would use when pricing such instruments. The credit risk of both the counterparty and the Company are considered in determining the fair value for all OTC derivatives after taking into account the effects of netting agreements and collateral arrangements.

Embedded Derivatives

As defined in ASC 815, the Company holds assets and liabilities classified as embedded derivatives on the Consolidated Balance Sheets. These assets include guaranteed minimum income benefits that are ceded under modified coinsurance reinsurance arrangements (“Reinsurance GMIB Assets”). Liabilities include policyholder benefits offered under variable annuity contracts such as guaranteed minimum withdrawal benefits with a term certain (“GMWB”) and embedded reinsurance derivatives.

Embedded derivatives are recorded on the Consolidated Balance Sheets at fair value, separately from their host contract, and the change in their fair value is reflected in net income. Many factors including, but not limited to, market conditions, credit ratings, variations in actuarial assumptions regarding policyholder liabilities, and risk margins related to non-capital market inputs may result in significant fluctuations in the fair value of these embedded derivatives that could materially affect net income.

The fair value of embedded derivatives is estimated as the present value of future benefits less the present value of future fees. The fair value calculation includes assumptions for risk margins including nonperformance risk.

Risk margins are established to capture the risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, persistency, partial withdrawal, and surrenders. The establishment of these actuarial assumptions, risk margins, nonperformance risk, and other inputs requires the use of significant judgment.

Nonperformance risk refers to the risk that the obligation will not be fulfilled and affects the value of the liability. The fair value measurement assumes that the nonperformance risk is the same before and after the transfer; therefore, fair value reflects the reporting entity’s own credit risk.

Nonperformance risk for liabilities held by the Company is based on MFC’s own credit risk, which is determined by taking into consideration publicly available information relating to MFC’s debt, as well as its claims paying ability. Nonperformance risk is also reflected in the Reinsurance GMIB Assets held by the Company. The credit risk of the reinsurance companies is most representative of the nonperformance risk for the Reinsurance GMIB Assets and is derived from publicly available information relating to the reinsurance companies’ publicly issued debt.

The fair value of embedded derivatives related to reinsurance agreements is determined based on a total return swap methodology. These total return swaps are reflected as assets or liabilities on the Consolidated Balance Sheets representing the difference between the statutory book value and fair value of the related modified coinsurance assets with ongoing changes in fair value recorded in income. The fair value of the underlying assets is based on the valuation approach for similar assets described herein.

Separate Account Assets

Separate account assets are reported at fair value and reported as a summarized total on the Consolidated Balance Sheets in accordance with SOP No. 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts,” which is now incorporated into ASC 944. The fair value of separate account assets is based on the fair value of the underlying assets owned by the separate account. Assets owned by the Company’s separate accounts primarily include investments in mutual funds, fixed maturity securities, equity securities, real estate, short-term investments, and cash and cash equivalents.

F-72

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments - (continued)

The fair value of mutual fund investments is based upon quoted market prices or reported net asset values. Open-ended mutual fund investments that are traded in an active market and have a publicly available price are included in Level 1. The fair values of fixed maturity securities, equity securities, short-term investments, and cash equivalents held by separate accounts are determined on a basis consistent with the methodologies described herein for similar financial instruments held within the Company’s general account.

Separate account assets classified as Level 3 consist primarily of debt and equity investments in private companies, which own real estate and carry it at fair value. The values of the real estate investments are estimated using generally accepted valuation techniques. A comprehensive appraisal is performed shortly after initial purchase of properties and at two or three-year intervals thereafter, depending on the property. Appraisal updates are conducted according to client contracts, generally at one-year or six-month intervals. In the quarters in which an investment is not independently appraised or its valuation updated, the market value is reviewed by management. The valuation of a real estate investment is adjusted only if there has been a significant change in economic circumstances related to the investment since acquisition or the most recent independent valuation and upon the independent appraiser’s review and concurrence with management. Further, these valuations are prepared giving consideration to the income, cost, and sales comparison approaches of estimating property value. These real estate investments are classified as Level 3 by the companies owning them. The equity investments in these companies are considered to be Level 3 by the Company.

F-73

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments - (continued)

The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis by ASC 820 fair value hierarchy levels, as of December 31, 2009 and December 31, 2008:

	December 31, 2009
	Total Fair Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Fixed maturities available-for-sale (1):
Corporate debt securities	$	42,505	$	-	$	39,889	$	2,616
Commercial mortgage-backed securities		4,474		-		4,039		435
Residential mortgage-backed securities		476		-		16		460
Collateralized debt obligations		135		-		57		78
Other asset-backed securities		1,242		-		1,151		91
U.S. Treasury and agency securities		1,968		-		1,968		-
Obligations of states and political subdivisions		1,491		-		1,261		230
Debt securities issued by foreign governments		1,278		-		1,213		65
Total fixed maturities available-for-sale		53,569		-		49,594		3,975
Fixed maturities held-for-trading (1):
Corporate debt securities		898		-		882		16
Commercial mortgage-backed securities		216		-		206		10
Residential mortgage-backed securities		3		-		-		3
Collateralized debt obligations		2		-		1		1
Other asset-backed securities		21		-		20		1
U.S. Treasury and agency securities		29		-		29		-
Obligations of states and political subdivisions		26		-		23		3
Debt securities issued by foreign governments		13		-		-		13
Total fixed maturities held-for-trading		1,208		-		1,161		47
Equity securities available-for-sale		558		558		-		-
Short-term investments		3,973		-		3,973		-
Derivative assets (2)		2,134		-		2,074		60
Embedded derivatives (3)		1,711		-		8		1,703
Assets held in trust (4)		2,290		624		1,666		-
Separate account assets (5)		122,466		116,875		2,494		3,097
Total assets at fair value	$	187,909	$	118,057	$	60,970	$	8,882
Liabilities:
Derivative liabilities (2)	$	2,013	$	-	$	1,987	$	26
Embedded derivatives (3)		1,327		-		688		639
Total liabilities at fair value	$	3,340	$	-	$	2,675	$	665

F-74

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments - (continued)

	December 31, 2008
	Total Fair Value		Level 1		Level 2		Level 3
	(in millions)
Assets:
Fixed maturities available-for-sale (1):
Corporate debt securities	$	38,213	$	-	$	36,421	$	1,792
Commercial mortgage-backed securities		4,236		-		3,790		446
Residential mortgage-backed securities		651		-		27		624
Collateralized debt obligations		172		-		84		88
Other asset-backed securities		1,333		-		1,034		299
U.S. Treasury and agency securities		1,483		-		1,483		-
Obligations of states and political subdivisions		168		-		167		1
Debt securities issued by foreign governments		1,266		-		1,204		62
Total fixed maturities available-for-sale		47,522		-		44,210		3,312
Fixed maturities held-for-trading (1):
Corporate securities		834		-		818		16
Commercial mortgage-backed securities		185		-		178		7
Residential mortgage-backed securities		4		-		1		3
Collateralized debt obligations		2		-		1		1
Other asset-backed securities		20		-		18		2
Debt securities issued by foreign governments		12		-		-		12
Total fixed maturities held-for-trading		1,057		-		1,016		41
Equity securities available-for-sale		616		616		-		-
Short-term investments		3,670		-		3,670		-
Derivative assets (2)		5,929		-		5,718		211
Embedded derivatives (3)		4,640		-		258		4,382
Assets held in trust (4)		2,190		497		1,693		-
Separate account assets (5)		92,058		87,841		1,245		2,972
Total assets at fair value	$	157,682	$	88,954	$	57,810	$	10,918
Liabilities:
Derivative liabilities (2)	$	3,105	$	-	$	3,089	$	16
Embedded derivatives (3)		2,866		-		-		2,866
Total liabilities at fair value	$	5,971	$	-	$	3,089	$	2,882

(1) Fixed maturities exclude leveraged leases of $2,012 million and $2,025 million at December 31, 2009 and 2008, respectively, which are carried at the net investment calculated by accruing income at the lease’s expected internal rate of return in accordance with ASC 840.

(2) Derivative assets and liabilities are presented gross to reflect the presentation in the Consolidated Balance Sheets, but are presented net for purposes of the Level 3 roll forward in the following table.

(3) Embedded derivatives related to fixed maturities and reinsurance contracts are reported as part of the derivative asset or liability on the Consolidated Balance Sheets. Embedded derivatives related to benefit guarantees are reported as part of the reinsurance recoverable or future policy benefits on the Consolidated Balance Sheets. Embedded derivatives related to participating pension contracts are reported as part of future policy benefits on the Consolidated Balance Sheets.

(4) Represents the fair value of assets held in trust on behalf of MRBL, which are included in amounts due from and held for affiliates on the Consolidated Balance Sheets. See Note 8 — Related Party Transactions for information on the associated MRBL reinsurance agreement. The fair value of the trust assets are determined on a basis consistent with the methodologies described herein for similar financial instruments.

F-75

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments - (continued)

(5) Separate account assets are recorded at fair value. Investment performance related to separate account assets is fully offset by corresponding amounts credited to contract holders whose interest in the separate account assets is recorded by the Company as separate account liabilities. Separate account liabilities are set equal to the fair value of separate account assets as prescribed by ASC 944.

Level 3 Financial Instruments

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2009 and 2008 are summarized as follows:

	Fixed Maturities			Net Derivatives			Net Embedded Derivatives			Separate Account Assets (6)
	(in millions)
Balance at January 1, 2009	$	3,353		$	195		$	1,516		$	2,972
Net realized/unrealized gains (losses) included in:
Net loss		(6	)(1)		(38	)(4)		(452	)(5)		(493	)
Other comprehensive income (loss)		764	(2)		(12	)		-			(1	)
Purchases, issuances, (sales), and (settlements), net		(335	)		-			-			619
Transfers in and/or (out) of Level 3, net (3)		246			(111	)		-			-
Balance at December 31, 2009	$	4,022		$	34		$	1,064		$	3,097
Gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at December 31, 2009	$	5		$	(32	)	$	(452	)	$	(389	)

	Fixed Maturities			Equity Securities			Net Derivatives			Net Embedded Derivatives			Separate Account Assets (6)
	(in millions)
Balance at January 1, 2008	$	5,023		$	4		$	(7	)	$	14		$	2,882
Net realized/unrealized gains (losses) included in:
Net (loss) income		(454	)(1)		4			187	(4)		1,502	(5)		(15	)
Other comprehensive loss		(899	)(2)		-			-			-			-
Purchases, issuances, (sales), and (settlements), net		(290	)		(8	)		5			-			105
Transfers in and/or (out) of Level 3, net (3)		(27	)		-			10			-			-
Balance at December 31, 2008	$	3,353		$	-		$	195		$	1,516		$	2,972
Gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at December 31, 2008	$	34		$	-		$	187		$	1,502		$	(15	)

(1) This amount is included in net realized investment and other gains (losses) on the Consolidated Statements of Operations.

(2) This amount is included in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets.

F-76

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 14 — Fair Value of Financial Instruments - (continued)

(3) For financial assets that are transferred into and/or out of Level 3, the Company uses the fair value of the assets at the beginning of the reporting period.

(4) This amount is included in net realized investment and other gains (losses) on the Consolidated Statements of Operations and contains unrealized gains (losses) on Level 3 derivatives held at December 31, 2009 and 2008. All gains and losses related to Level 3 assets are classified as realized gains (losses) for the purpose of this disclosure, as it is not practicable to track realized and unrealized gains (losses) separately by security.

(5) This amount is included in benefits to policyholders on the Consolidated Statements of Operations. All gains and losses on Level 3 liabilities are classified as realized gains (losses) for the purpose of this disclosure, as it is not practicable to track realized and unrealized gains (losses) separately on a contract by contract basis.

(6) Investment performance related to separate account assets is fully offset by corresponding amounts credited to contract holders whose liability is reflected within separate account liabilities.

The Company may hedge positions with offsetting positions that are classified in a different level. For example, the gains and losses for assets and liabilities in the Level 3 category presented in the tables above may not reflect the effect of offsetting gains and losses on hedging instruments that have been classified by the Company in the Level 1 and Level 2 categories.

Financial Instruments Measured at Fair Value on a Nonrecurring Basis

Certain financial assets are reported at fair value on a nonrecurring basis, including investments such as mortgage loans, joint ventures, and limited partnership interests, which are reported at fair value only in the period in which an impairment is recognized. The fair value of these securities is calculated using either models that are widely accepted in the financial services industry or the valuation of collateral underlying impaired mortgages. During the reporting period, there were no material assets or liabilities measured at fair value on a nonrecurring basis.

Note 15 — Goodwill, Value of Business Acquired, and Other Intangible Assets

The changes in the carrying value of goodwill by segment were as follows:

	Insurance		Wealth Management		Corporate and Other			Total
	(in millions)
Balance at January 1, 2009	$	1,600	$	1,307	$	146		$	3,053
Dispositions and other, net		-		-		-			-
Balance at December 31, 2009	$	1,600	$	1,307	$	146		$	3,053
	Insurance		Wealth Management		Corporate and Other			Total
	(in millions)
Balance at January 1, 2008	$	1,600	$	1,307	$	156		$	3,063
Dispositions and other, net (1)		-		-		(10	)		(10	)
Balance at December 31, 2008	$	1,600	$	1,307	$	146		$	3,053

(1) The Company reduced goodwill by $10 million for excess severance accruals.

The Company tests goodwill for impairment annually as of December 31 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit, which is defined as an operating segment or one level below an operating segment, below its carrying amount. There were no impairments recorded in 2009 or 2008, and there were no accumulated impairment losses at December 31, 2009 or 2008.

F-77

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 15 — Goodwill, Value of Business Acquired, and Other Intangible Assets - (continued)

Value of Business Acquired

The balance of and changes in VOBA as of and for the years ended December 31, were as follows:

	December 31,
	2009			2008
	(in millions)
Balance, beginning of year	$	2,564		$	2,375
Amortization		(15	)		(59	)
Change in unrealized investment (losses) gains		(342	)		248
Adoption of ASC 320 (Note 1)		(36	)		-
Balance, end of year	$	2,171		$	2,564

The following table provides estimated future amortization for the periods indicated:

	VOBA Amortization
	(in millions)
2010	$	62
2011		65
2012		63
2013		58
2014		50

Other Intangible Assets

Other intangible asset balances were as follows:

	Gross Carrying Amount		Accumulated Net Amortization		Net Carrying Amount
	(in millions)
December 31, 2009
Not subject to amortization:
Brand name	$	600	$	-	$	600
Investment management contracts		295		-		295
Subject to amortization:
Distribution networks		397		37		360
Other investment management contracts		64		25		39
Total	$	1,356	$	62	$	1,294
December 31, 2008
Not subject to amortization:
Brand name	$	600	$	-	$	600
Investment management contracts		295		-		295
Subject to amortization:
Distribution networks		397		27		370
Other investment management contracts		64		21		43
Total	$	1,356	$	48	$	1,308

Amortization expense (net of tax) for other intangible assets was $9 million, $8 million, and $8 million for the years ended December 31, 2009, 2008, and 2007, respectively. Amortization expense (net of tax) for other intangible assets is expected to be approximately $9 million in 2010, $10 million in 2011, $11 million in 2012, $11 million in 2013, and $12 million in 2014.

F-78

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Certain Separate Accounts

The Company issues variable annuity and variable life contracts through its separate accounts for which investment income and investment gains and losses accrue to, and investment risk is borne by, the contract holder. All contracts contain certain guarantees, which are discussed more fully below.

The assets supporting the variable portion of variable annuities are carried at fair value and reported on the Consolidated Balance Sheets as total separate account assets with an equivalent total reported for separate account liabilities. Amounts assessed against the contract holders for mortality, administrative, and other services are included in revenue, and changes in liabilities for minimum guarantees are included in benefits to policyholders in the Company’s Consolidated Statements of Operations. For the years ended December 31, 2009 and 2008, there were no gains or losses on transfers of assets from the general account to the separate account.

The deposits related to the variable life insurance contracts are invested in separate accounts, and the Company guarantees a specified death benefit on certain policies if specified premiums on these policies are paid by the policyholder, regardless of separate account performance.

The following table reflects variable life insurance contracts with guarantees held by the Company:

	December 31,
	2009		2008
	(in millions, except for age)
Life insurance contracts with guaranteed benefits
In the event of death
Account value	$	6,969	$	5,739
Net amount at risk related to deposits		208		618
Average attained age of contract holders		50		47

Many of the variable annuity contracts issued by the Company offer various guaranteed minimum death, income, and/or withdrawal benefits. Guaranteed Minimum Death Benefit (“GMDB”) features guarantee the contract holder either (a) a return of no less than total deposits made to the contract less any partial withdrawals; (b) total deposits made to the contract less any partial withdrawals plus a minimum return, or (c) the highest contract value on a specified anniversary date minus any withdrawals following the contract anniversary.

Contracts with Guaranteed Minimum Income Benefit (“GMIB”) riders provide a guaranteed lifetime annuity, which may be elected by the contract holder after a stipulated waiting period (7 to 15 years), and which may be larger than what the contract account balance would purchase at then-current purchase rates.

Multiple variations of an optional Guaranteed Minimum Withdrawal Benefit (“GMWB”) rider have also been offered by the Company. The GMWB rider provides contract holders a guaranteed annual withdrawal amount over a specified time period or in some cases for as long as they live. In general, guaranteed annual withdrawal amounts are based on deposits and may be reduced if withdrawals exceed allowed amounts. Guaranteed amounts may also be increased as a result of “step-up” provisions which increase the benefit base to higher account values at specified intervals. Guaranteed amounts may also be increased if withdrawals are deferred over a specified period. In addition, certain versions of the GMWB rider extend lifetime guarantees to spouses.

Unaffiliated and affiliated reinsurance has been utilized to mitigate risk related to some of the guarantee benefit riders. Hedging has also been utilized to mitigate risk related to some of the GMWB riders.

For GMDB, the net amount at risk is defined as the current guaranteed minimum death benefit in excess of the current account balance. For GMIB, the net amount at risk is defined as the excess of the current annuitization income base over the current account value. For GMWB, the net amount at risk is defined as the current guaranteed withdrawal amount minus the current account value. For all the guarantees, the net amount at risk is floored at zero at the single contract level.

The Company had the following variable annuity contracts with guarantees. Amounts at risk are shown net of reinsurance. Note that the Company’s variable annuity contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive.

F-79

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Certain Separate Accounts - (continued)

	December 31,
	2009			2008
	(in millions, except for ages and percents)
Guaranteed Minimum Death Benefit
Return of net deposits
In the event of death
Account value	$	23,472		$	16,564
Net amount at risk- net of reinsurance		309			886
Average attained age of contract holders		64			63
Return of net deposits plus a minimum return
In the event of death
Account value	$	744		$	775
Net amount at risk- net of reinsurance		238			314
Average attained age of contract holders		70			69
Guaranteed minimum return rate		5	%		5	%
Highest specified anniversary account value minus withdrawals post anniversary
In the event of death
Account value	$	28,414		$	22,944
Net amount at risk- net of reinsurance		696			1,456
Average attained age of contract holders		64			64
Guaranteed Minimum Income Benefit
Account value	$	6,293		$	5,488
Net amount at risk- net of reinsurance		54			96
Average attained age of contract holders		63			63
Guaranteed Minimum Withdrawal Benefit
Account value	$	35,595		$	24,769
Net amount at risk		1,012			1,812
Average attained age of contract holders		63			63

Account balances of variable contracts with guarantees invest in various separate accounts with the following characteristics:

	December 31,
	2009		2008
	(in billions)
Type of Fund
Equity	$	28	$	22
Balanced		22		14
Bond		7		5
Money Market		2		3
Total	$	59	$	44

F-80

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 16 — Certain Separate Accounts - (continued)

The following table summarizes the liabilities for guarantees on variable contracts reflected in the general account:

	Guaranteed   Minimum Death Benefit (GMDB)			Guaranteed Minimum Income Benefit (GMIB)			Guaranteed Minimum Withdrawal Benefit (GMWB)			Total
	(in millions)
Balance at January 1, 2009	$	424		$	442		$	2,890		$	3,756
Incurred guarantee benefits		(192	)		(166	)		-			(358	)
Other reserve changes		(1	)		(67	)		(2,227	)		(2,295	)
Balance at December 31, 2009		231			209			663			1,103
Reinsurance recoverable		(104	)		(1,177	)		(548	)		(1,829	)
Net balance at December 31, 2009	$	127		$	(968	)	$	115		$	(726	)
Balance at January 1, 2008	$	140		$	160		$	568		$	868
Incurred guarantee benefits		(126	)		(74	)		-			(200	)
Other reserve changes		410			356			2,322			3,088
Balance at December 31, 2008		424			442			2,890			3,756
Reinsurance recoverable		(259	)		(2,056	)		(2,352	)		(4,667	)
Net balance at December 31, 2008	$	165		$	(1,614	)	$	538		$	(911	)

The GMDB gross and ceded reserves, the GMIB gross reserves, and the life contingent portion of the GMWB reserves were determined in accordance with ASC 944, and the GMIB reinsurance recoverable and non-life contingent GMWB gross reserve were determined in accordance with ASC 815.

The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefits to policyholders, if actual experience or other evidence suggests that earlier assumptions should be revised.

The following assumptions and methodology were used to determine the amounts above at December 31, 2009 and 2008:

• Data used included 1,000 stochastically generated investment performance scenarios. For ASC 815 calculations, risk neutral scenarios were used.

• For life products, reserves were established using stochastic modeling of future separate account returns and best estimate mortality, lapse, and premium persistency assumptions, which vary by product.

• Mean return and volatility assumptions were determined by asset class. Market consistent observed volatilities were used where available for ASC 815 calculations.

• Annuity mortality was based on the 1994 MGDB table multiplied by factors varied by rider types (living benefit/GMDB only) and qualified and non-qualified business.

• Annuity base lapse rates vary by contract type, commission type, and by with or without living benefit or death benefit riders. The lapse rates range from 0.8% to 41.5% for GMDB and 0.3% and 41.5% for GMIB and GMWB.

• The discount rates used in the ASC 944 calculations range from 6.4% to 7%. The discount rates used in the ASC 815 calculations were based on the term structure of swap curves with a credit spread based on the credit standing of MFC (for GMWB) and the reinsurers (for GMIB).

F-81

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 17 — Deferred Policy Acquisition Costs and Deferred Sales Inducements

The balance of and changes in deferred policy acquisition costs as of and for the years ended December 31, were as follows:

	December 31,
	2009			2008
	(in millions)
Balance, beginning of year	$	9,419		$	6,718
Capitalization		1,579			1,893
Amortization (1)		(1,119	)		398
Change in unrealized investment gains and losses		(704	)		410
Adoption of ASC 320 (Note 1)		11			-
Balance, end of year	$	9,186		$	9,419

(1) In 2008, DAC amortization includes significant unlocking due to the impact of lower estimated gross profits arising from higher benefits to policyholders related to certain separate account guarantees. This unlocking contributed to the overall negative amortization during the year.

The balance of and changes in deferred sales inducements as of and for the years ended December 31, were as follows:

	December 31,
	2009			2008
	(in millions)
Balance, beginning of year	$	427		$	313
Capitalization		63			116
Amortization		(77	)		(3	)
Change in unrealized investment gains and losses		(12	)		1
Adoption of ASC 320 (Note 1)		(22	)		-
Balance, end of year	$	379		$	427

Note 18 — Share-Based Payments

The Company participates in the stock compensation plans of MFC. The Company uses the Black-Scholes-Merton option pricing model to estimate the value of stock options granted to employees. The stock-based compensation is a legal obligation of MFC, but in accordance with U.S. GAAP, is recorded in the accounts of the Company in other operating costs and expenses.

Stock Options (ESOP)

Under MFC’s Executive Stock Option Plan (“ESOP”), stock options are granted to selected individuals. Options provide the holder with the right to purchase common shares at an exercise price equal to the higher of the prior day or prior five day average closing market price of MFC’s common shares on the Toronto Stock Exchange on the date the options were granted. The options vest over a period not exceeding four years and expire not more than 10 years from the grant date. A total of 73.6 million common shares have been reserved for issuance under the ESOP.

MFC grants Deferred Share Units (“DSUs”) under the ESOP and the Stock Plan for Non-Employee Directors. Under the ESOP, the holder is entitled to receive cash payment equal to the value of the same number of common shares plus credited dividends on retirement or termination of employment. These DSUs vest over a three-year period, and each DSU entitles the holder to receive one common share on retirement or termination of employment. When dividends are paid on MFC’s common shares, holders of DSUs are deemed to receive dividends at the same rate, payable in the form of additional DSUs. In 2009, 2008, and 2007, 56,000, 217,000, and 191,000 DSUs, respectively, were issued to certain employees who elected to defer receipt of all or part of their annual bonus. Also, in 2008 and 2007, 269,000, and 260,000 DSUs were issued to certain employees who elected to defer payment of all or part of their restricted share units. In 2009, no DSUs were granted to certain employees to defer payment of all or part of their restricted share units since the restricted share units scheduled to vest in 2009 did so without any payment value. Restricted share units are discussed below. The DSUs issued in 2009, 2008, and 2007 vested immediately upon grant.

F-82

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 18 — Share-Based Payments - (continued)

Under the Stock Plan for Non-Employee Directors, each eligible director may elect to receive his or her annual director’s retainer and fees in DSUs or common shares in lieu of cash. Upon termination of board service, an eligible director who has elected to receive DSUs will be entitled to receive cash equal to the value of the DSUs accumulated in his or her account or, at his or her direction, an equivalent number of common shares. A total of one million common shares of MFC have been reserved for issuance under the Stock Plan for Non-Employee Directors

The Company recorded compensation expense for stock options granted of $9 million, $9 million, and $6 million for the years ended December 31, 2009, 2008, and 2007, respectively.

Global Share Ownership Plan (GSOP)

Effective January 1, 2001, MFC established the Global Share Ownership Plan (“GSOP”) for its eligible employees and the Stock Plan for Non-Employee Directors. Under the GSOP, qualifying employees can choose to apply up to 5% of their annual base earnings toward the purchase of common shares of MFC. MFC matches a percentage of the employee’s eligible contributions up to a maximum amount. MFC’s contributions vest immediately. All contributions are used by the GSOP’s trustee to purchase common shares in the open market. The Company’s compensation expense related to the GSOP was $1 million for each of the three years ended December 31, 2009, 2008, and 2007.

Restricted Share Unit Plan (RSU)

In 2003, MFC established the Restricted Share Unit (“RSU”) Plan. For the years ended December 31, 2009, 2008, and 2007, 3.8 million, 1.8 million, and 1.5 million RSUs, respectively, were granted to certain eligible employees under this plan. During 2009, in addition to the RSUs, 0.6 million Special RSUs and 1.5 million Performance Share Units (“PSUs”) were granted to eligible employees under this plan. There were no Special RSUs or PSUs granted in 2008 or 2007. Each RSU/Special RSU/PSU entitles the recipient to receive payment equal to the market value of one common share, plus credited dividends, at the time of vesting, subject to any performance conditions.

For the years ended December 31, 2009, 2008, and 2007, the Company granted 2.0 million, 0.7 million, and 0.7 million RSUs, respectively, to certain eligible employees. RSUs granted in 2009 vest 25% on the first anniversary, 25% on the second anniversary, and 50% on the date that is 34 months from the grant date. RSUs granted prior to 2009 vest three years from the grant date. The related compensation expense is recognized over this period, except where the employee is eligible to retire prior to the vesting date, in which case the cost is recognized over the period between the grant date and the date on which the employee is eligible to retire. The Company’s compensation expense related to RSUs was $14 million, $24 million, and $28 million for the years ended December 31, 2009, 2008, and 2007, respectively.

For the year ended December 31, 2009, the Company granted 0.3 million Special RSUs to certain eligible employees. Special RSUs vest on the date that is 22 months from the grant date, and the related compensation expense is recognized over this period, except where the employee is eligible to retire prior to the vesting date, in which case the cost is recognized over the period between the grant date and the date on which the employee is eligible to retire. The Company’s compensation expense related to Special RSUs was $2 million for the year ended December 31, 2009.

For the year ended December 31, 2009, the Company granted 0.4 million PSUs to certain eligible employees. PSUs vest 25% on the first anniversary, 25% on the second anniversary, and 50% on the date that is 34 months from the grant date, subject to performance conditions that are equally weighted over the three performance periods, and the related compensation expense is recognized over this period, except where the employee is eligible to retire prior to the vesting date, in which case the cost is recognized over the period between the grant date and the date on which the employee is eligible to retire. The Company’s compensation expense related to PSUs was $3 million for the year ended December 31, 2009.

Note 19 — Subsequent Events

The Company evaluated the recognition and disclosure of subsequent events for its December 31, 2009 consolidated financial statements through the date on which the consolidated financial statements were issued.

During the quarter ended March 31, 2010, the Company changed its assessment of the possible disallowance of the tax treatment and for interest on past due taxes related to the leveraged lease contingency disclosed in Note 11 – Commitments, Guarantees, Contingencies, and Legal Proceedings. Had this change been reflected in the results for the year ended December 31,

F-83

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)

Note 19 — Subsequent Events - (continued)

2009, the Company would have increased its provision by an additional $93 million and the maximum exposure would have decreased by $93 million.

F-84

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Audited Financial Statements

Year ended December 31, 2009 with Report of Independent Registered Public Accounting Firm

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Audited Financial Statements

Year ended December 31, 2009

Contents

Report of Independent Registered Public Accounting Firm	5
Statements of Assets and Contract Owners’ Equity	8
Statements of Operations and Changes in Contract Owners’ Equity	12
Notes to Financial Statements	80
Organization	80
Significant Accounting Policies	81
Mortality and Expense Risks Charge	83
Contract Charges	83
Purchases and Sales of Investments	83
Transaction with Affiliates	87
Diversification Requirements	87
Subsequent Events	87
Financial Highlights	88

Report of Independent Registered Public Accounting Firm

To the Contract Owners of the sub-accounts of

John Hancock Life Insurance Company (U.S.A.) Separate Account N

“Active” sub-accounts

500 Index Trust B Series 0	Emerging Markets Value Trust Series 1
500 Index Trust Series 1	Equity-Income Trust Series 0
Active Bond Trust Series 0	Equity-Income Trust Series 1
Active Bond Trust Series 1	Financial Services Trust Series 0
All Cap Core Trust Series 0	Financial Services Trust Series 1
All Cap Core Trust Series 1	Franklin Templeton Founding Allocation Trust Series 0
All Cap Growth Trust Series 0	Fundamental Value Trust Series 0
All Cap Growth Trust Series 1	Fundamental Value Trust Series 1
All Cap Value Trust Series 0	Global Bond Trust Series 0
All Cap Value Trust Series 1	Global Bond Trust Series 1
Alpha Opportunities Trust Series 0	Global Trust Series 0
American Asset Allocation Trust Series 1	Global Trust Series 1
American Blue Chip Income and Growth Trust Series 1	Health Sciences Trust Series 0
American Bond Trust Series 1	Health Sciences Trust Series 1
American Fundamental Holdings Trust Series 1	High Yield Trust Series 0
American Global Diversification Trust Series 1	High Yield Trust Series 1
American Growth Trust Series 1	International Core Trust Series 0
American Growth-Income Trust Series 1	International Core Trust Series 1
American International Trust Series 1	International Equity Index Trust A Series 1
American New World Trust Series 1	International Equity Index Trust B Series 0
Balanced Trust Series 0	International Opportunities Trust Series 0
Blue Chip Growth Trust Series 0	International Opportunities Trust Series 1
Blue Chip Growth Trust Series 1	International Small Company Trust Series 0
Capital Appreciation Trust Series 0	International Small Company Trust Series 1
Capital Appreciation Trust Series 1	International Value Trust Series 0
Capital Appreciation Value Trust Series 0	International Value Trust Series 1
Capital Appreciation Value Trust Series 1	Investment Quality Bond Trust Series 0
Core Allocation Plus Trust Series 1	Investment Quality Bond Trust Series 1
Core Bond Trust Series 0	Large Cap Trust Series 0
Core Bond Trust Series 1	Large Cap Trust Series 1
Core Diversified Growth & Income Trust Series 1	Large Cap Value Trust Series 0
Core Strategy Trust Series 0	Large Cap Value Trust Series 1
Core Strategy Trust Series 1	Lifestyle Aggressive Trust Series 0
Disciplined Diversification Trust Series 0	Lifestyle Aggressive Trust Series 1
Disciplined Diversification Trust Series 1	Lifestyle Balanced Trust Series 0
Emerging Markets Value Trust Series 0	Lifestyle Balanced Trust Series 1

5

Report of Independent Registered Public Accounting Firm

Lifestyle Conservative Trust Series 0	Small Cap Growth Trust Series 1
Lifestyle Conservative Trust Series 1	Small Cap Index Trust Series 0
Lifestyle Growth Trust Series 0	Small Cap Index Trust Series 1
Lifestyle Growth Trust Series 1	Small Cap Opportunities Trust Series 0
Lifestyle Moderate Trust Series 0	Small Cap Opportunities Trust Series 1
Lifestyle Moderate Trust Series 1	Small Cap Value Trust Series 0
Mid Cap Index Trust Series 0	Small Cap Value Trust Series 1
Mid Cap Index Trust Series 1	Small Company Value Trust Series 0
Mid Cap Stock Trust Series 0	Small Company Value Trust Series 1
Mid Cap Stock Trust Series 1	Smaller Company Growth Trust Series 0
Mid Value Trust Series 0	Smaller Company Growth Trust Series 1
Mid Value Trust Series 1	Strategic Bond Trust Series 0
Money Market Trust B Series 0	Strategic Bond Trust Series 1
Money Market Trust Series 1	Strategic Income Trust Series 0
Natural Resources Trust Series 0	Strategic Income Trust Series 1
Natural Resources Trust Series 1	Total Bond Market Trust B Series 0
Optimized All Cap Trust Series 0	Total Return Trust Series 0
Optimized All Cap Trust Series 1	Total Return Trust Series 1
Optimized Value Trust Series 0	Total Stock Market Index Trust Series 0
Optimized Value Trust Series 1	Total Stock Market Index Trust Series 1
Overseas Equity Trust Series 0	U.S. Government Securities Trust Series 0
Pacific Rim Trust Series 0	U.S. Government Securities Trust Series 1
Pacific Rim Trust Series 1	U.S. High Yield Bond Trust Series 0
Real Estate Securities Trust Series 0	U.S. High Yield Bond Trust Series 1
Real Estate Securities Trust Series 1	Utilities Trust Series 0
Real Return Bond Trust Series 0	Utilities Trust Series 1
Real Return Bond Trust Series 1	Value Trust Series 0
Science & Technology Trust Series 0	Value Trust Series 1
Science & Technology Trust Series 1	All Asset Portfolio Series 0
Short-Term Bond Trust Series 0	All Asset Portfolio Series 1
Small Cap Growth Trust Series 0
“Closed” sub-accounts
Classic Value Trust Series 0	Income & Value Trust Series 1
Classic Value Trust Series 1	International Small Cap Trust Series 0
Core Equity Trust Series 0	International Small Cap Trust Series 1
Core Equity Trust Series 1	Mid Cap Intersection Trust Series 0
Emerging Small Company Trust Series 0	Mid Cap Intersection Trust Series 1
Emerging Small Company Trust Series 1	Mid Cap Value Trust Series 0
Global Allocation Trust Series 0	Mid Cap Value Trust Series 1
Global Allocation Trust Series 1	Small Company Trust Series 1
Global Real Estate Trust Series 0	U.S. Large Cap Trust Series 0
Global Real Estate Trust Series 1	U.S. Large Cap Trust Series 1
Income & Value Trust Series 0

6

Report of Independent Registered Public Accounting Firm

We have audited the accompanying statements of assets and contract owners’ equity of John Hancock Life Insurance Company (U.S.A.) Separate Account N (the “Account”), comprised of the active sub-accounts as of December 31, 2009, and the related statements of operations and changes in contract owners’ equity of the active and closed sub-accounts for each of the two years in the period then ended (or years since inception), and the financial highlights for each of the five years in the period then ended (or years since inception). These financial statements and financial highlights are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Account’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Account’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2009, by correspondence with the custodian or fund manager of the underlying portfolios. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the active sub-accounts constituting John Hancock Life Insurance Company (U.S.A.) Separate Account N at December 31, 2009, and the results of its operations and changes in contract owners’ equity of the active and closed sub-accounts for each of the two years in the period then ended (or years since inception), and the financial highlights for each of the five years in the period then ended (or years since inception), in conformity with U.S. generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Chartered Accountants

Licensed Public Accountants

Toronto, Canada

March 31, 2010

7

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Assets and Contract Owners’ Equity

December 31, 2009

Assets
Investments at fair value:
Sub-accounts invested in John Hancock Trust portfolios:
500 Index Trust B Series 0 - 1,604,082 shares (cost $21,182,849)	$	22,312,778
500 Index Trust Series 1 - 670,154 shares (cost $6,381,339)		6,527,296
Active Bond Trust Series 0 - 26,633 shares (cost $225,868)		245,021
Active Bond Trust Series 1 - 141,057 shares (cost $1,295,689)		1,297,722
All Cap Core Trust Series 0 - 10,380 shares (cost $113,839)		153,621
All Cap Core Trust Series 1 - 71,603 shares (cost $1,079,165)		1,059,003
All Cap Growth Trust Series 0 - 3,514 shares (cost $43,454)		48,806
All Cap Growth Trust Series 1 - 64,328 shares (cost $830,887)		892,872
All Cap Value Trust Series 0 - 74,011 shares (cost $450,761)		521,779
All Cap Value Trust Series 1 - 269,020 shares (cost $1,715,049)		1,904,662
Alpha Opportunities Trust Series 0-13,358 shares (cost $203,713)		202,244
American Asset Allocation Trust Series 1 - 1,200,020 shares (cost $10,161,211)		11,976,200
American Blue Chip Income and Growth Trust Series 1 - 146,453 shares (cost $1,512,550)		1,502,607
American Bond Trust Series 1 - 126,808 shares (cost $1,456,842)		1,483,648
American Fundamental Holdings Trust Series 1 - 94 shares (cost $807)		897
American Global Diversification Trust Series 1 - 8,264 shares (cost $68,707)		78,010
American Growth Trust Series 1 - 1,140,208 shares (cost $14,787,573)		15,119,166
American Growth-Income Trust Series 1 - 916,435 shares (cost $10,384,090)		12,417,690
American International Trust Series 1 - 1,853,909 shares (cost $30,677,511)		28,772,677
American New World Trust Series 1 - 1,621 shares (cost $18,969)		19,195
Balanced Trust Series 0 - 1,217 shares (cost $18,060)		18,049
Blue Chip Growth Trust Series 0 - 492,725 shares (cost $6,685,265)		8,578,346
Blue Chip Growth Trust Series 1 - 781,054 shares (cost $12,691,325)		13,629,384
Capital Appreciation Trust Series 0 - 30,765 shares (cost $236,421)		273,810
Capital Appreciation Trust Series 1 - 437,998 shares (cost $3,238,045)		3,898,184
Capital Appreciation Value Trust Series 0 - 13,014 shares (cost $150,629)		149,143
Capital Appreciation Value Trust Series 1 - 2,008 shares (cost $22,240)		23,009
Classic Value Trust Series 0		—
Classic Value Trust Series 1		—
Core Allocation Plus Trust Series 1 - 493,507 shares (cost $4,634,346)		4,999,225
Core Bond Trust Series 0 - 8,187 shares (cost $106,521)		108,070
Core Bond Trust Series 1 - 32,750 shares (cost $414,799)		433,606
Core Diversified Growth & Income Trust Series 1 - 1,935 shares (cost $19,111)		21,555
Core Equity Trust Series 0		—
Core Equity Trust Series 1		—
Core Strategy Trust Series 0 - 147 shares (cost $1,398)		1,693
Core Strategy Trust Series 1 - 88 shares (cost $952)		1,011
Disciplined Diversification Trust Series 0 - 13,596 shares (cost $152,341)		149,965
Disciplined Diversification Trust Series 1 - 91 shares (cost $955)		1,009
Emerging Markets Value Trust Series 0 - 41,523 shares (cost $465,746)		560,976

8

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Assets and Contract Owners’ Equity

December 31, 2009

Assets (continued)
Investments at fair value:
Sub-accounts invested in John Hancock Trust portfolios:
Emerging Markets Value Trust Series 1 - 56,436 shares (cost $576,051)	$	763,018
Emerging Small Company Trust Series 0		—
Emerging Small Company Trust Series 1		—
Equity - Income Trust Series 0 - 1,214,011 shares (cost $13,606,027)		14,847,359
Equity - Income Trust Series 1 - 1,081,524 shares (cost $13,741,911)		13,270,305
Financial Services Trust Series 0 - 17,931 shares (cost $163,673)		189,531
Financial Services Trust Series 1 - 51,437 shares (cost $438,170)		544,204
Franklin Templeton Founding Allocation Trust Series 0 - 36,580 shares (cost $292,183)		341,295
Fundamental Value Trust Series 0 - 178,976 shares (cost $1,760,555)		2,281,949
Fundamental Value Trust Series 1 - 777,748 shares (cost $8,124,708)		9,947,392
Global Allocation Trust Series 0		—
Global Allocation Trust Series 1		—
Global Bond Trust Series 0 - 636,932 shares (cost $8,172,368)		7,706,881
Global Bond Trust Series 1 - 269,784 shares (cost $3,317,294)		3,275,176
Global Real Estate Trust Series 0		—
Global Real Estate Trust Series 1		—
Global Trust Series 0 - 17,400 shares (cost $191,882)		237,159
Global Trust Series 1 - 130,882 shares (cost $1,705,339)		1,785,233
Health Sciences Trust Series 0 - 50,991 shares (cost $574,229)		686,852
Health Sciences Trust Series 1 - 145,664 shares (cost $1,627,506)		1,957,724
High Yield Trust Series 0 - 230,343 shares (cost $1,659,898)		1,870,386
High Yield Trust Series 1 - 536,800 shares (cost $4,019,481)		4,385,652
Income & Value Trust Series 0		—
Income & Value Trust Series 1		—
International Core Trust Series 0 - 47,262 shares (cost $418,375)		427,723
International Core Trust Series 1 - 503,233 shares (cost $5,105,700)		4,569,358
International Equity Index Trust A Series 1 - 224,504 shares (cost $3,468,283)		3,266,527
International Equity Index Trust B Series 0 - 482,059 shares (cost $6,218,899)		7,062,159
International Opportunities Trust Series 0 - 332,150 shares (cost $3,611,238)		3,726,727
International Opportunities Trust Series 1 - 70,111 shares (cost $594,144)		787,343
International Small Cap Trust Series 0		—
International Small Cap Trust Series 1		—
International Small Company Trust Series 0 - 42,363 shares (cost $380,710)		372,374
International Small Company Trust Series 1 - 285,546 shares (cost $2,564,921)		2,507,098
International Value Trust Series 0 - 120,500 shares (cost $1,170,725)		1,368,878
International Value Trust Series 1 - 895,465 shares (cost $10,593,744)		10,226,216
Investment Quality Bond Trust Series 0 - 24,479 shares (cost $261,506)		270,739
Investment Quality Bond Trust Series 1 - 489,351 shares (cost $5,556,234)		5,426,904
Large Cap Trust Series 0 - 24,902 shares (cost $269,595)		272,677
Large Cap Trust Series 1 - 205,920 shares (cost $2,643,186)		2,261,005
Large Cap Value Trust Series 0 - 36,179 shares (cost $501,822)		553,539
Large Cap Value Trust Series 1 - 168,705 shares (cost $2,803,480)		2,581,189

9

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Assets and Contract Owners’ Equity

December 31, 2009

Assets (continued)
Investments at fair value:
Sub-accounts invested in John Hancock Trust portfolios:
Lifestyle Aggressive Trust Series 0 - 439,305 shares (cost $2,779,254)	$	3,206,926
Lifestyle Aggressive Trust Series 1 - 923,661 shares (cost $5,022,659)		6,742,728
Lifestyle Balanced Trust Series 0 - 408,839 shares (cost $3,901,631)		4,419,554
Lifestyle Balanced Trust Series 1 - 835,336 shares (cost $8,075,189)		9,013,279
Lifestyle Conservative Trust Series 0 - 102,756 shares (cost $1,155,033)		1,216,629
Lifestyle Conservative Trust Series 1 - 152,223 shares (cost $1,709,760)		1,800,796
Lifestyle Growth Trust Series 0 - 814,254 shares (cost $8,158,227)		8,427,534
Lifestyle Growth Trust Series 1 - 1,106,168 shares (cost $10,690,213)		11,437,781
Lifestyle Moderate Trust Series 0 - 293,983 shares (cost $3,262,821)		3,277,916
Lifestyle Moderate Trust Series 1 - 200,724 shares (cost $2,182,004)		2,238,073
Mid Cap Index Trust Series 0 - 125,846 shares (cost $1,506,347)		1,788,270
Mid Cap Index Trust Series 1 - 733,805 shares (cost $10,992,011)		10,434,709
Mid Cap Intersection Trust Series 0		—
Mid Cap Intersection Trust Series 1		—
Mid Cap Stock Trust Series 0 - 319,494 shares (cost $3,222,143)		3,683,767
Mid Cap Stock Trust Series 1 - 549,341 shares (cost $6,158,053)		6,306,437
Mid Cap Value Trust Series 0		—
Mid Cap Value Trust Series 1		—
Mid Value Trust Series 0 - 540,777 shares (cost $3,987,237)		5,283,386
Mid Value Trust Series 1 - 500,951 shares (cost $3,921,207)		4,909,319
Money Market Trust B Series 0 - 44,928,442 shares (cost $44,928,442)		44,928,442
Money Market Trust Series 1 - 3,588,315 shares (cost $35,883,153)		35,883,153
Natural Resources Trust Series 0 - 190,245 shares (cost $1,824,349)		2,086,992
Natural Resources Trust Series 1 - 471,100 shares (cost $4,238,549)		5,252,760
Optimized All Cap Trust Series 0 - 16,981 shares (cost $154,845)		185,772
Optimized All Cap Trust Series 1 - 8,849 shares (cost $80,617)		96,452
Optimized Value Trust Series 0 - 11,453 shares (cost $85,903)		101,134
Optimized Value Trust Series 1 - 1 shares (cost $14)		12
Overseas Equity Trust Series 0 - 256,944 shares (cost $2,616,038)		2,440,966
Pacific Rim Trust Series 0 - 63,222 shares (cost $395,100)		498,186
Pacific Rim Trust Series 1 - 309,365 shares (cost $2,570,523)		2,425,418
Real Estate Securities Trust Series 0 - 622,601 shares (cost $4,050,454)		5,547,371
Real Estate Securities Trust Series 1 - 1,365,924 shares (cost $18,981,628)		12,238,675
Real Return Bond Trust Series 0 - 317,245 shares (cost $3,707,716)		3,759,357
Real Return Bond Trust Series 1 - 336,775 shares (cost $4,028,464)		4,034,568
Science & Technology Trust Series 0 - 57,712 shares (cost $598,115)		785,456
Science & Technology Trust Series 1 - 412,701 shares (cost $4,714,924)		5,600,349
Short - Term Bond Trust Series 0 - 42,334 shares (cost $307,342)		333,591
Small Cap Growth Trust Series 0 - 431,404 shares (cost $2,784,913)		3,584,964
Small Cap Growth Trust Series 1 - 42,243 shares (cost $264,873)		350,191
Small Cap Index Trust Series 0 - 115,784 shares (cost $1,086,392)		1,289,837

10

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Assets and Contract Owners’ Equity

December 31, 2009

Assets (continued)
Investments at fair value:
Sub-accounts invested in John Hancock Trust portfolios:
Small Cap Index Trust Series 1 - 184,251 shares (cost $1,876,424)	$	2,052,561
Small Cap Opportunities Trust Series 0 - 4,145 shares (cost $53,951)		62,221
Small Cap Opportunities Trust Series 1 - 61,127 shares (cost $912,039)		923,018
Small Cap Value Trust Series 0 - 301,344 shares (cost $3,549,894)		4,523,174
Small Cap Value Trust Series 1 - 20,526 shares (cost $247,042)		308,717
Small Company Trust Series 1		—
Small Company Value Trust Series 0 - 55,993 shares (cost $663,991)		796,777
Small Company Value Trust Series 1 - 530,185 shares (cost $7,394,788)		7,560,437
Smaller Company Growth Trust Series 0 - 13,935 shares (cost $190,221)		199,275
Smaller Company Growth Trust Series 1 - 1,259,989 shares (cost $17,127,113)		18,017,839
Strategic Bond Trust Series 0 - 52,742 shares (cost $468,921)		504,215
Strategic Bond Trust Series 1 - 166,110 shares (cost $1,526,621)		1,594,659
Strategic Income Trust Series 0 - 29,970 shares (cost $390,520)		398,301
Strategic Income Trust Series 1 - 51,067 shares (cost $678,107)		679,706
Total Bond Market Trust B Series 0 - 714,382 shares (cost $7,128,053)		7,122,388
Total Return Trust Series 0 - 902,010 shares (cost $12,414,144)		12,583,045
Total Return Trust Series 1 - 3,222,772 shares (cost $43,786,681)		45,086,578
Total Stock Market Index Trust Series 0 - 103,342 shares (cost $837,777)		1,045,820
Total Stock Market Index Trust Series 1 - 72,080 shares (cost $777,044)		729,447
U.S. Government Securities Trust Series 0 - 125,133 shares (cost $1,551,600)		1,554,148
U.S. Government Securities Trust Series 1 - 228,805 shares (cost $2,843,872)		2,853,193
U.S. High Yield Bond Trust Series 0 - 23,133 shares (cost $262,152)		284,302
U.S. High Yield Bond Trust Series 1 - 26,249 shares (cost $310,307)		322,341
U.S. Large Cap Trust Series 0		—
U.S. Large Cap Trust Series 1		—
Utilities Trust Series 0 - 50,105 shares (cost $516,492)		521,594
Utilities Trust Series 1 - 143,309 shares (cost $1,349,616)		1,494,713
Value Trust Series 0 - 48,174 shares (cost $637,520)		659,988
Value Trust Series 1 - 260,292 shares (cost $3,492,832)		3,571,204
Sub - accounts invested in Outside Trust portfolios:
All Asset Portfolio Series 0 - 92,253 shares (cost $969,416)	$	969,580
All Asset Portfolio Series 1 - 56,512 shares (cost $599,015)		593,938
Total assets	$	581,777,430
Contract Owners’ Equity
Variable universal life insurance contracts	$	581,777,430

See accompanying notes.

11

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

	Sub-Account
	500 Index Trust B Series 0						500 Index Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	416,603		$	457,185		$	134,764		$	128,911
Total Investment Income		416,603			457,185			134,764			128,911
Expenses:
Mortality and expense risk		34,722			43,823			21,872			47,263
Net investment income (loss)		381,881			413,362			112,892			81,648
Realized gains (losses) on investments:
Capital gain distributions		—			118,781			—			—
Net realized gains (losses)		(3,650,304	)		(1,162,706	)		(3,394,051	)		(2,102,701	)
Realized gains (losses)		(3,650,304	)		(1,043,925	)		(3,394,051	)		(2,102,701	)
Unrealized appreciation (depreciation) during the period		7,973,200			(8,137,464	)		5,317,102			(5,726,377	)
Net increase (decrease) in assets from operations		4,704,777			(8,768,027	)		2,035,943			(7,747,430	)
Changes from principal transactions:
Transfer of net premiums		1,756,069			1,920,254			203,477			635,202
Transfer on terminations		(1,532,553	)		(1,777,015	)		(10,163,812	)		(2,128,198	)
Transfer on policy loans		(25,209	)		31,546			(707	)		(509	)
Net interfund transfers		1,244,013			4,016,864			1,918,502			(4,499,505	)
Net increase (decrease) in assets from principal transactions		1,442,320			4,191,649			(8,042,540	)		(5,993,010	)
Total increase (decrease) in assets		6,147,097			(4,576,378	)		(6,006,597	)		(13,740,440	)
Assets, beginning of period		16,165,681			20,742,059			12,533,893			26,274,333
Assets, end of period	$	22,312,778		$	16,165,681		$	6,527,296		$	12,533,893

(g) Fund available in prior year but no activity.

See accompanying notes.

12

Sub-Account
Active Bond Trust Series 0						Active Bond Trust Series 1						All Asset Portfolio Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08 (g)
$	19,289		$	29,424		$	83,660		$	55,886		$	33,380		$	3,073
	19,289			29,424			83,660			55,886			33,380			3,073
	—			—			4,462			6,132			—			—
	19,289			29,424			79,198			49,754			33,380			3,073
	—			—			—			—			—			193
	3,768			(60,103	)		(22,838	)		(178,106	)		(509	)		(400	)
	3,768			(60,103	)		(22,838	)		(178,106	)		(509	)		(207	)
	79,291			(45,699	)		128,683			(38,964	)		14,048			(13,884	)
	102,348			(76,378	)		185,043			(167,316	)		46,919			(11,018	)
	8,948			115,887			7,192			16,247			159,152			32,760
	(153,976	)		(73,256	)		(207,564	)		(336,374	)		(25,986	)		(4,070	)
	(13	)		(2	)		113			(91	)		—			—
	(128,202	)		(15,731	)		491,950			(621,306	)		731,613			40,210
	(273,243	)		26,898			291,691			(941,524	)		864,779			68,900
	(170,895	)		(49,480	)		476,734			(1,108,840	)		911,698			57,882
	415,916			465,396			820,988			1,929,828			57,882			—
$	245,021		$	415,916		$	1,297,722		$	820,988		$	969,580		$	57,882

13

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	All Asset Portfolio Series 1						All Cap Core Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	33,583		$	46,385		$	2,222		$	379
Total Investment Income		33,583			46,385			2,222			379
Expenses:
Mortality and expense risk		2,420			4,554			—			—
Net investment income (loss)		31,163			41,831			2,222			379
Realized gains (losses) on investments:
Capital gain distributions		—			2,145			—			—
Net realized gains (losses)		(110,455	)		(35,666	)		2,588			(145,418	)
Realized gains (losses)		(110,455	)		(33,521	)		2,588			(145,418	)
Unrealized appreciation (depreciation) during the period		145,493			(149,775	)		39,379			576
Net increase (decrease) in assets from operations		66,201			(141,465	)		44,189			(144,463	)
Changes from principal transactions:
Transfer of net premiums		43,971			50,836			100,842			140,480
Transfer on terminations		(36,547	)		(93,962	)		(13,522	)		(9,188	)
Transfer on policy loans		12,870			(36,716	)		—			—
Net interfund transfers		(106,630	)		(31,918	)		6,829			(826	)
Net increase (decrease) in assets from principal transactions		(86,336	)		(111,760	)		94,149			130,466
Total increase (decrease) in assets		(20,135	)		(253,225	)		138,338			(13,997	)
Assets, beginning of period		614,073			867,298			15,283			29,280
Assets, end of period	$	593,938		$	614,073		$	153,621		$	15,283

See accompanying notes.

14

Sub-Account
All Cap Core Trust Series 1						All Cap Growth Trust Series 0						All Cap Growth Trust Series 1
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	35,237		$	123,987		$	346		$	240		$	5,947		$	10,612
	35,237			123,987			346			240			5,947			10,612
	12,795			34,112			—			—			6,202			14,580
	22,442			89,875			346			240			(255)			(3,968)
	—			—			—			—			—			—
	(2,007,196	)		(979,727	)		(9,569	)		(5,312	)		(717,762	)		(143,013	)
	(2,007,196	)		(979,727	)		(9,569	)		(5,312	)		(717,762	)		(143,013	)
	2,435,832			(2,887,267	)		20,444			(14,620	)		839,598			(1,585,110)
	451,078			(3,777,119	)		11,221			(19,692	)		121,581			(1,732,091	)
	42,828			254,938			3,691			5,919			74,394			307,784
	(319,740	)		(795,201	)		(33,619	)		(1,364	)		(307,319	)		(290,608	)
	3,666			35,384			—			—			5,598			30,026
	(4,138,316	)		(1,985,621	)		21,023			38,498			(1,349,678	)		(58,218	)
	(4,411,562	)		(2,490,500	)		(8,905	)		43,053			(1,577,005	)		(11,016	)
	(3,960,484	)		(6,267,619	)		2,316			23,361			(1,455,424	)		(1,743,107	)
	5,019,487			11,287,106			46,490			23,129			2,348,296			4,091,403
$	1,059,003		$	5,019,487		$	48,806		$	46,490		$	892,872		$	2,348,296

15

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	All Cap Value Trust Series 0						All Cap Value Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	2,354		$	1,781		$	13,649		$	50,115
Total Investment Income		2,354			1,781			13,649			50,115
Expenses:
Mortality and expense risk		—			—			12,701			26,252
Net investment income (loss)		2,354			1,781			948			23,863
Realized gains (losses) on investments:
Capital gain distributions		—			1,093			—			153,459
Net realized gains (losses)		1,444			(27,421	)		(2,771,426	)		(2,371,693	)
Realized gains (losses)		1,444			(26,328	)		(2,771,426	)		(2,218,234	)
Unrealized appreciation (depreciation) during the period		86,774			334			3,240,542			74,815
Net increase (decrease) in assets from operations		90,572			(24,213	)		470,064			(2,119,556	)
Changes from principal transactions:
Transfer of net premiums		92,316			38,320			47,139			48,246
Transfer on terminations		(30,469	)		(7,600	)		(156,073	)		(158,830	)
Transfer on policy loans		(1	)		—			5,450			(4,555	)
Net interfund transfers		155,835			163,019			(3,233,792	)		(1,550,963	)
Net increase (decrease) in assets from principal transactions		217,681			193,739			(3,337,276	)		(1,666,102	)
Total increase (decrease) in assets		308,253			169,526			(2,867,212	)		(3,785,658	)
Assets, beginning of period		213,526			44,000			4,771,874			8,557,532
Assets, end of period	$	521,779		$	213,526		$	1,904,662		$	4,771,874

(ak) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

See accompanying notes.

16

Sub-Account
Alpha Opportunities Trust Series 0			American Asset Allocation Trust Series 1						American Blue Chip Income and Growth Trust Series 1
Year Ended Dec. 31/09 (ak)			Year Ended Dec. 31/09			Year Ended Dec. 31/08  (f)			Year Ended Dec. 31/09			Year Ended Dec. 31/08
	—		$	214,307		$	6,546		$	21,052		$	147,528
	—			214,307			6,546			21,052			147,528
	—			46,031			167			5,700			12,167
	—			168,276			6,379			15,352			135,361
	—			5,551			—			93,161			39,973
	—			120,975			(897	)		(1,388,447	)		(806,387	)
	—			126,526			(897	)		(1,295,286	)		(766,414	)
	(1,469	)		1,833,985			(18,995	)		1,425,441			(869,603	)
	(1,469	)		2,128,787			(13,513	)		145,507			(1,500,656	)
	—			565,089			9,996			63,399			357,139
	—			(1,308,007	)		(14,901	)		(469,876	)		(223,639	)
	—			23,725			(144	)		20,222			(80,187	)
	203,713			10,350,784			234,384			(909,574	)		559,651
	203,713			9,631,591			229,335			(1,295,829	)		612,964
	202,244			11,760,378			215,822			(1,150,322	)		(887,692	)
	—			215,822			—			2,652,929			3,540,621
$	202,244		$	11,976,200		$	215,822		$	1,502,607		$	2,652,929

17

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	American Bond Trust Series 1						American Fundamental  Holdings Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (ak)
Income:
Dividend income distribution	$	38,009		$	153,895		$	14
Total Investment Income		38,009			153,895			14
Expenses:
Mortality and expense risk		7,188			7,476			2
Net investment income (loss)		30,821			146,419			12
Realized gains (losses) on investments:
Capital gain distributions		—			37			—
Net realized gains (losses)		(66,318	)		(129,287	)		22
Realized gains (losses)		(66,318	)		(129,250	)		22
Unrealized appreciation (depreciation) during the period		240,797			(167,503	)		90
Net increase (decrease) in assets from operations		205,300			(150,334	)		124
Changes from principal transactions:
Transfer of net premiums		192,610			210,679			93
Transfer on terminations		(189,850	)		(94,990	)		(125	)
Transfer on policy loans		(115	)		—			—
Net interfund transfers		(460,700	)		(2,074,303	)		805
Net increase (decrease) in assets from principal transactions		(458,055	)		(1,958,614	)		773
Total increase (decrease) in assets		(252,755	)		(2,108,948	)		897
Assets, beginning of period		1,736,403			3,845,351			—
Assets, end of period	$	1,483,648		$	1,736,403		$	897

(ak) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

See accompanying notes.

18

Sub-Account
American Global Diversification Trust Series 1			American Growth Trust Series 1						American Growth-Income  Trust Series 1
Year Ended Dec. 31/09 (ak)			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	1,275		$	37,506		$	496,005		$	130,962		$	46,065
	1,275			37,506			496,005			130,962			46,065
	284			48,247			86,128			41,959			14,394
	991			(10,741	)		409,877			89,003			31,671
	—			3,604,971			266,326			167,577			77,414
	2,349			(10,359,444	)		(3,123,395	)		(446,930	)		(1,624,774	)
	2,349			(6,754,473	)		(2,857,069	)		(279,353	)		(1,547,360	)
	9,303			11,742,937			(11,368,782	)		2,705,756			(583,320	)
	12,643			4,977,723			(13,815,974	)		2,515,406			(2,099,009	)
	375			928,758			2,712,535			597,149			574,751
	(405	)		(8,937,299	)		(2,845,634	)		(1,317,027	)		(1,058,090	)
	—			26,253			(89,358	)		31,606			(67,026	)
	65,397			(359,406	)		9,243,795			9,057,406			(149,487	)
	65,367			(8,341,694	)		9,021,338			8,369,134			(699,852	)
	78,010			(3,363,971	)		(4,794,636	)		10,884,540			(2,798,861	)
	—			18,483,137			23,277,773			1,533,150			4,332,011
$	78,010		$	15,119,166		$	18,483,137		$	12,417,690		$	1,533,150

19

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	American International Trust Series 1						American New World Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (ak)
Income:
Dividend income distribution	$	281,653		$	1,303,398		$	186
Total Investment Income		281,653			1,303,398			186
Expenses:
Mortality and expense risk		67,277			108,659			16
Net investment income (loss)		214,376			1,194,739			170
Realized gains (losses) on investments:
Capital gain distributions		5,891,833			732,433			—
Net realized gains (losses)		(9,877,177	)		(1,851,283	)		147
Realized gains (losses)		(3,985,344	)		(1,118,850	)		147
Unrealized appreciation (depreciation) during the period		12,616,371			(19,580,193	)		227
Net increase (decrease) in assets from operations		8,845,403			(19,504,304	)		544
Changes from principal transactions:
Transfer of net premiums		750,622			2,166,820			260
Transfer on terminations		(6,949,495	)		(2,692,364	)		(149	)
Transfer on policy loans		3,760			(79,432	)		—
Net interfund transfers		3,615,926			(3,846,066	)		18,540
Net increase (decrease) in assets from principal transactions		(2,579,187	)		(4,451,042	)		18,651
Total increase (decrease) in assets		6,266,216			(23,955,346	)		19,195
Assets, beginning of period		22,506,461			46,461,807			—
Assets, end of period	$	28,772,677		$	22,506,461		$	19,195

(ak) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

See accompanying notes.

20

Sub-Account
Balanced Trust Series 0			Blue Chip Growth Trust Series 0						Blue Chip Growth Trust Series 1
Year Ended Dec. 31/09 (ak)			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	164		$	10,858		$	9,215		$	13,619		$	50,667
	164			10,858			9,215			13,619			50,667
	—			—			—			50,501			74,489
	164			10,858			9,215			(36,882	)		(23,822	)
	270			—			33,216			—			279,607
	1			(443,818	)		(208,963	)		(1,866,157	)		(544,621	)
	271			(443,818	)		(175,747	)		(1,866,157	)		(265,014	)
	(11	)		2,621,915			(848,688	)		5,615,075			(8,644,218	)
	424			2,188,955			(1,015,220	)		3,712,036			(8,933,054	)
	—			302,428			255,329			359,099			809,262
	(57	)		(498,145	)		(64,810	)		(2,393,932	)		(6,868,763	)
	—			(9	)		(2	)		5,759			(15,990	)
	17,682			4,554,645			646,042			1,285,852			642,645
	17,625			4,358,919			836,559			(743,222	)		(5,432,846	)
	18,049			6,547,874			(178,661	)		2,968,814			(14,365,900	)
	—			2,030,472			2,209,133			10,660,570			25,026,470
$	18,049		$	8,578,346		$	2,030,472		$	13,629,384		$	10,660,570

21

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Capital Appreciation Trust Series 0						Capital Appreciation Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	576		$	1,081		$	8,887		$	29,265
Total Investment Income		576			1,081			8,887			29,265
Expenses:
Mortality and expense risk		—			—			19,061			30,942
Net investment income (loss)		576			1,081			(10,174	)		(1,677	)
Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		7,249			(215,802	)		(979,450	)		(417,557	)
Realized gains (losses)		7,249			(215,802	)		(979,450	)		(417,557	)
Unrealized appreciation (depreciation) during the period		64,325			(35,883	)		2,290,857			(2,445,165	)
Net increase (decrease) in assets from operations		72,150			(250,604	)		1,301,233			(2,864,399	)
Changes from principal transactions:
Transfer of net premiums		71,831			213,970			72,350			348,771
Transfer on terminations		(67,303	)		(29,128	)		(877,944	)		(826,744	)
Transfer on policy loans		—			—			1,101			15,356
Net interfund transfers		76,971			(32,349	)		(1,181,384	)		(57,997	)
Net increase (decrease) in assets from principal transactions		81,499			152,493			(1,985,877	)		(520,614	)
Total increase (decrease) in assets		153,649			(98,111	)		(684,644	)		(3,385,013	)
Assets, beginning of period		120,161			218,272			4,582,828			7,967,841
Assets, end of period	$	273,810		$	120,161		$	3,898,184		$	4,582,828

(g) Fund available in prior year but no activity.

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

(av) Terminated as an investment option and funds transferred to Equity-Income Trust on May 4, 2009.

See accompanying notes.

22

Sub-Account
Capital Appreciation Value Trust Series 0			Capital Appreciation Value  Trust Series 1						Classic Value Trust Series 0
Year Ended Dec. 31/09 (g)			Year Ended Dec. 31/09			Year Ended Dec. 31/08 (f)			Year Ended Dec. 31/09 (av)			Year Ended Dec. 31/08
$	2,679		$	415		$	23		$	238		$	487
	2,679			415			23			238			487
	—			33			3			—			—
	2,679			382			20			238			487
	655			103			—			—			259
	173			96			(4	)		(10,928	)		(6,120	)
	828			199			(4	)		(10,928	)		(5,861	)
	(1,486	)		667			102			11,850			(7,093	)
	2,021			1,248			118			1,160			(12,467	)
	303			846			73			6,669			11,310
	(502	)		(1,048	)		(124	)		(816	)		(2,249	)
	—			(36	)		—			—			—
	147,321			19,052			2,880			(26,262	)		166
	147,122			18,814			2,829			(20,409	)		9,227
	149,143			20,062			2,947			(19,249	)		(3,240	)
	—			2,947			—			19,249			22,489
$	149,143		$	23,009		$	2,947			—		$	19,249

23

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Classic Value Trust Series 1						Core Allocation Plus Trust Series 1
	Year Ended Dec. 31/09 (av)			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (g)
Income:
Dividend income distribution	$	927		$	2,485		$	72,639
Total Investment Income		927			2,485			72,639
Expenses:
Mortality and expense risk		163			989			9,652
Net investment income (loss)		764			1,496			62,987
Realized gains (losses) on investments:
Capital gain distributions		—			2,558			165,241
Net realized gains (losses)		(125,557	)		(196,953	)		1,799
Realized gains (losses)		(125,557	)		(194,395	)		167,040
Unrealized appreciation (depreciation) during the period		102,732			74,329			364,879
Net increase (decrease) in assets from operations		(22,061	)		(118,570	)		594,906
Changes from principal transactions:
Transfer of net premiums		—			11,266			167
Transfer on terminations		(15,895	)		(8,321	)		(62,171	)
Transfer on policy loans		—			—			—
Net interfund transfers		(51,287	)		(542,279	)		4,466,323
Net increase (decrease) in assets from principal transactions		(67,182	)		(539,334	)		4,404,319
Total increase (decrease) in assets		(89,243	)		(657,904	)		4,999,225
Assets, beginning of period		89,243			747,147			—
Assets, end of period		—		$	89,243		$	4,999,225

(av) Terminated as an investment option and funds transferred to Equity-Income Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

(ax) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

Renamed on November 16, 2009. Previously known as American Diversified Growth & Income Trust.

See accompanying notes.

24

Sub-Account
Core Bond Trust Series 0						Core Bond Trust Series 1						Core Diversified Growth & Income Trust Series 1
Year Ended Dec. 31/09			Year Ended Dec. 31/08 (g)			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (ax)
$	1,963		$	132		$	12,890		$	535		$	304
	1,963			132			12,890			535			304
	—			—			3,111			22			94
	1,963			132			9,779			513			210
	—			—			—			—			—
	853			(84	)		20,669			(1	)		1,523
	853			(84	)		20,669			(1	)		1,523
	1,583			(34	)		18,868			(62	)		2,444
	4,399			14			49,316			450			4,177
	24,906			—			24,994			389			—
	(11,542	)		(22	)		(680,639	)		(66	)		(106	)
	—			—			(1,007	)		—			—
	87,249			3,066			1,018,460			20,509			17,484
	100,613			3,044			361,808			20,832			17,378
	105,012			3,058			411,124			21,282			21,555
	3,058			—			22,482			1,200			—
$	108,070		$	3,058		$	433,606		$	22,482		$	21,555

25

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Core Equity Trust Series 0						Core Equity Trust Series 1
	Year Ended Dec. 31/09 (ao)			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (ao)			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	1,855		$	7,796		$	2,269		$	28,127
Total Investment Income		1,855			7,796			2,269			28,127
Expenses:
Mortality and expense risk		—			—			381			1,540
Net investment income (loss)		1,855			7,796			1,888			26,587
Realized gains (losses) on investments:
Capital gain distributions		—			971			—			7,379
Net realized gains (losses)		(32,378	)		(3,461	)		(212,127	)		(103,325	)
Realized gains (losses)		(32,378	)		(2,490	)		(212,127	)		(95,946	)
Unrealized appreciation (depreciation) during the period		39,418			(35,127	)		175,281			(121,893	)
Net increase (decrease) in assets from operations		8,895			(29,821	)		(34,958	)		(191,252	)
Changes from principal transactions:
Transfer of net premiums		46,936			35,775			12,116			39,056
Transfer on terminations		(1,964	)		(4,313	)		(24,742	)		(73,525	)
Transfer on policy loans		—			—			2			—
Net interfund transfers		(95,323	)		2,941			(93,779	)		(214,904	)
Net increase (decrease) in assets from principal transactions		(50,351	)		34,403			(106,403	)		(249,373	)
Total increase (decrease) in assets		(41,456	)		4,582			(141,361	)		(440,625	)
Assets, beginning of period		41,456			36,874			141,361			581,986
Assets, end of period		—		$	41,456			—		$	141,361

(ao) Terminated as an investment option and funds transferred to Fundamental Value Trust on May 4, 2009.

(ay) Fund available in prior year but no activity. Fund renamed on May 4, 2009. Previously known as Index Allocation Trust.

(g) Fund available in prior year but no activity.

See accompanying notes.

26

Sub-Account
Core Strategy Trust Series 0			Core Strategy Trust Series 1			Disciplined Diversification Trust Series 0
Year Ended Dec. 31/09 (ay)			Year Ended Dec. 31/09 (ay)			Year Ended Dec. 31/09 (g)
$	31		$	18		$	2,907
	31			18			2,907
	—			2			—
	31			16			2,907
	6			—			995
	4			1			513
	10			1			1,508
	295			59			(2,375	)
	336			76			2,040
	595			—			1,437
	(33	)		(20	)		(559	)
	—			—			—
	795			955			147,047
	1,357			935			147,925
	1,693			1,011			149,965
	—			—			—
$	1,693		$	1,011		$	149,965

27

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Disciplined Diversification  Trust Series 1					Dynamic Growth Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08 (f)		Year Ended Dec. 31/08  (ah)
Income:
Dividend income distribution	$	19		—		—
Total Investment Income		19		—		—
Expenses:
Mortality and expense risk		4		—		—
Net investment income (loss)		15		—		—
Realized gains (losses) on investments:
Capital gain distributions		7		—		—
Net realized gains (losses)		1		(570	)	(11,410	)
Realized gains (losses)		8		(570	)	(11,410	)
Unrealized appreciation (depreciation) during the period		54		—		(1,632	)
Net increase (decrease) in assets from operations		77		(570	)	(13,042	)
Changes from principal transactions:
Transfer of net premiums		—		570		5,992
Transfer on terminations		(20	)	—		(2,654	)
Transfer on policy loans		—		—		—
Net interfund transfers		952		—		(127,395	)
Net increase (decrease) in assets from principal transactions		932		570		(124,057	)
Total increase (decrease) in assets		1,009		—		(137,099	)
Assets, beginning of period		—		—		137,099
Assets, end of period	$	1,009		—		—

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

(ah) Terminated as an investment option and funds transferred to Mid Cap Stock Trust on April 28, 2008.

(ab) Terminated as an investment option and funds transferred to Small Cap Growth Trust on November 10, 2008.

See accompanying notes.

28

Sub-Account
Dynamic Growth Trust Series 1		Emerging Growth Trust Series 0			Emerging Growth Trust Series 1
Year Ended Dec. 31/08 (ah)		Year Ended Dec. 31/08  (ab)			Year Ended Dec. 31/08  (ab)
—		$	394		$	1,231
—			394			1,231
2,917			—			1,575
(2,917	)		394			(344	)
—			875			2,805
(87,607	)		(125,730	)		(499,712	)
(87,607	)		(124,855	)		(496,907	)
(200,945	)		14,553			121,401
(291,469	)		(109,908	)		(375,850	)
79,850			13,608			4,287
(285,510	)		(12,947	)		(95,107	)
22			—			—
(1,878,178	)		12,300			(355,197	)
(2,083,816	)		12,961			(446,017	)
(2,375,285	)		(96,947	)		(821,867	)
2,375,285			96,947			821,867
—			—			—

29

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Emerging Markets Value Trust Series 0						Emerging Markets Value Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08 (g)			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	397		$	3,519		$	361		$	9,502
Total Investment Income		397			3,519			361			9,502
Expenses:
Mortality and expense risk		—			—			2,300			1,138
Net investment income (loss)		397			3,519			(1,939	)		8,364
Realized gains (losses) on investments:
Capital gain distributions		190			—			435			191
Net realized gains (losses)		91,213			(609	)		(109,215	)		(7,510	)
Realized gains (losses)		91,403			(609	)		(108,780	)		(7,319	)
Unrealized appreciation (depreciation) during the period		102,661			(7,430	)		385,489			(192,411	)
Net increase (decrease) in assets from operations		194,461			(4,520	)		274,770			(191,366	)
Changes from principal transactions:
Transfer of net premiums		69,613			457			4,159			20,718
Transfer on terminations		(179,838	)		(952	)		(55,716	)		(6,879	)
Transfer on policy loans		—			—			—			2
Net interfund transfers		374,991			106,764			262,736			361,578
Net increase (decrease) in assets from principal transactions		264,766			106,269			211,179			375,419
Total increase (decrease) in assets		459,227			101,749			485,949			184,053
Assets, beginning of period		101,749			—			277,069			93,016
Assets, end of period	$	560,976		$	101,749		$	763,018		$	277,069

(g) Fund available in prior year but no activity.

(ap) Terminated as an investment option and funds transferred to Smaller Company Growth Trust on November 16, 2009.

See accompanying notes.

30

Sub-Account
Emerging Small Company Trust Series 0					Emerging Small Company Trust Series 1					Equity-Income Trust Series 0
Year Ended Dec. 31/09 (ap)		Year Ended Dec. 31/08			Year Ended Dec. 31/09 (ap)		Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
—			—		—			—		$	280,890		$	284,177
—			—		—			—			280,890			284,177
—			—		82,317			147,940			—			—
—			—		(82,317	)		(147,940	)		280,890			284,177
—			164		—			13,798			—			266,741
(76,221	)		(90,398	)	(11,486,138	)		(5,092,219	)		(2,624,572	)		(1,573,014	)
(76,221	)		(90,234	)	(11,486,138	)		(5,078,421	)		(2,624,572	)		(1,306,273	)
113,636			(83,143	)	15,192,048			(8,427,006	)		5,684,937			(3,602,306	)
37,415			(173,377	)	3,623,593			(13,653,367	)		3,341,255			(4,624,402	)
61,172			76,779		825,477			1,346,358			519,433			1,050,972
(54,628	)		(67,347	)	(2,286,038	)		(5,053,747	)		(750,832	)		(388,250	)
—			—		284,330			74,469			(14	)		(4	)
(211,199	)		(27,671	)	(18,053,384	)		(730,772	)		3,535,513			1,432,815
(204,655	)		(18,239	)	(19,229,615	)		(4,363,692	)		3,304,100			2,095,533
(167,240	)		(191,616	)	(15,606,022	)		(18,017,059	)		6,645,355			(2,528,869	)
167,240			358,856		15,606,022			33,623,081			8,202,004			10,730,873
—		$	167,240		—		$	15,606,022		$	14,847,359		$	8,202,004

31

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Equity-Income Trust Series 1						Financial Services Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	308,294		$	564,897		$	1,206		$	1,854
Total Investment Income		308,294			564,897			1,206			1,854
Expenses:
Mortality and expense risk		64,343			105,250			—			—
Net investment income (loss)		243,951			459,647			1,206			1,854
Realized gains (losses) on investments:
Capital gain distributions		—			643,428			—			3,444
Net realized gains (losses)		(6,082,934	)		(3,349,760	)		(54,630	)		(24,440	)
Realized gains (losses)		(6,082,934	)		(2,706,332	)		(54,630	)		(20,996	)
Unrealized appreciation (depreciation) during the period		9,426,717			(8,005,491	)		107,974			(71,142	)
Net increase (decrease) in assets from operations		3,587,734			(10,252,176	)		54,550			(90,284	)
Changes from principal transactions:
Transfer of net premiums		487,638			1,353,367			29,798			30,320
Transfer on terminations		(8,527,929	)		(5,797,178	)		(12,677	)		(4,155	)
Transfer on policy loans		17,671			(807	)		—			—
Net interfund transfers		1,127,054			(2,159,696	)		(21,747	)		154,761
Net increase (decrease) in assets from principal transactions		(6,895,566	)		(6,604,314	)		(4,626	)		180,926
Total increase (decrease) in assets		(3,307,832	)		(16,856,490	)		49,924			90,642
Assets, beginning of period		16,578,137			33,434,627			139,607			48,965
Assets, end of period	$	13,270,305		$	16,578,137		$	189,531		$	139,607

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

See accompanying notes.

32

Sub-Account
Financial Services Trust Series 1						Franklin Templeton Founding Allocation Trust Series 0						Fundamental Value Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08 (f)			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	3,307		$	18,616		$	12,353		$	5,645		$	19,612		$	7,792
	3,307			18,616			12,353			5,645			19,612			7,792
	2,500			4,475			—			—			—			—
	807			14,141			12,353			5,645			19,612			7,792
	—			74,498			—			—			—			1,975
	(354,763	)		(499,847	)		(13,482	)		(25	)		(24,790	)		(17,633	)
	(354,763	)		(425,349	)		(13,482	)		(25	)		(24,790	)		(15,658	)
	436,211			(238,763	)		48,872			240			628,577			(107,766	)
	82,255			(649,971	)		47,743			5,860			623,399			(115,632	)
	18,110			211,962			2,876			—			176,965			50,001
	(178,264	)		(280,015	)		(13,352	)		(13,197	)		(375,306	)		(22,496	)
	959			(636	)		—			—			—			—
	(884,125	)		1,579,574			147,375			163,990			1,183,613			647,330
	(1,043,320	)		1,510,885			136,899			150,793			985,272			674,835
	(961,065	)		860,914			184,642			156,653			1,608,671			559,203
	1,505,269			644,355			156,653			—			673,278			114,075
$	544,204		$	1,505,269		$	341,295		$	156,653		$	2,281,949		$	673,278

33

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Fundamental Value Trust Series 1						Global Allocation Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09  (am)			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	75,247		$	70,400		$	12		$	4,516
Total Investment Income		75,247			70,400			12			4,516
Expenses:
Mortality and expense risk		36,741			19,703			—			—
Net investment income (loss)		38,506			50,697			12			4,516
Realized gains (losses) on investments:
Capital gain distributions		—			40,908			—			80
Net realized gains (losses)		(1,222,753	)		(393,753	)		2,307			(9,427	)
Realized gains (losses)		(1,222,753	)		(352,845	)		2,307			(9,347	)
Unrealized appreciation (depreciation) during the period		3,250,040			(1,608,758	)		30,882			(25,928	)
Net increase (decrease) in assets from operations		2,065,793			(1,910,906	)		33,201			(30,759	)
Changes from principal transactions:
Transfer of net premiums		250,355			320,447			79,426			62,769
Transfer on terminations		(877,167	)		(386,352	)		(7,805	)		(6,566	)
Transfer on policy loans		33,762			(41,313	)		(604	)		—
Net interfund transfers		2,089,969			4,176,335			(167,542	)		(9,534	)
Net increase (decrease) in assets from principal transactions		1,496,919			4,069,117			(96,525	)		46,669
Total increase (decrease) in assets		3,562,712			2,158,211			(63,324	)		15,910
Assets, beginning of period		6,384,680			4,226,469			63,324			47,414
Assets, end of period	$	9,947,392		$	6,384,680			—		$	63,324

(am) Terminated as an investment option and funds transferred to Lifestyle Balanced Trust on November 16, 2009.

See accompanying notes.

34

Sub-Account
Global Allocation Trust Series 1						Global Bond Trust Series 0						Global Bond Trust Series 1
Year Ended Dec.  31/09 (am)			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	17		$	21,212		$	804,947		$	34,656		$	523,740		$	34,756
	17			21,212			804,947			34,656			523,740			34,756
	968			3,700			—			—			16,816			27,117
	(951	)		17,512			804,947			34,656			506,924			7,639
	—			1,212			874,405			—			620,814			—
	(158,386	)		(391,314	)		(665,037	)		58,633			(1,003,335	)		152,391
	(158,386	)		(390,102	)		209,368			58,633			(382,521	)		152,391
	138,294			99,624			(121,888	)		(485,599	)		328,553			(556,309	)
	(21,043	)		(272,966	)		892,427			(392,310	)		452,956			(396,279	)
	6,648			35,198			204,575			392,353			329,381			735,063
	(40,801	)		(161,385	)		(517,212	)		(186,420	)		(2,729,871	)		(529,424	)
	4,957			(29,892	)		(3	)		(1	)		27,819			(6,570	)
	(244,040	)		(1,681,054	)		1,128,950			974,532			840,336			(791,618	)
	(273,236	)		(1,837,133	)		816,310			1,180,464			(1,532,335	)		(592,549	)
	(294,279	)		(2,110,099	)		1,708,737			788,154			(1,079,379	)		(988,828	)
	294,279			2,404,378			5,998,144			5,209,990			4,354,555			5,343,383
	—		$	294,279		$	7,706,881		$	5,998,144		$	3,275,176		$	4,354,555

35

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Global Real Estate Trust Series 0		Global Real Estate Trust Series 1
	Year Ended Dec. 31/09  (aq)		Year Ended Dec. 31/09 (aq)			Year Ended Dec. 31/08 (f)
Income:
Dividend income distribution	—		$	2,126		$	148
Total Investment Income	—			2,126			148
Expenses:
Mortality and expense risk	—			13			6
Net investment income (loss)	—			2,113			142
Realized gains (losses) on investments:
Capital gain distributions	—			—			—
Net realized gains (losses)	(831	)		(2,930	)		(20	)
Realized gains (losses)	(831	)		(2,930	)		(20	)
Unrealized appreciation (depreciation) during the period	—			1,385			(1,385	)
Net increase (decrease) in assets from operations	(831	)		568			(1,263	)
Changes from principal transactions:
Transfer of net premiums	—			126			46
Transfer on terminations	(81	)		(157	)		(62	)
Transfer on policy loans	—			—			—
Net interfund transfers	912			(3,017	)		3,759
Net increase (decrease) in assets from principal transactions	831			(3,048	)		3,743
Total increase (decrease) in assets	—			(2,480	)		2,480
Assets, beginning of period	—			2,480			—
Assets, end of period	—			—		$	2,480

(aq) Terminated as an investment option and funds transferred to Real Estate Securities Trust on November 16, 2009;

Global Real Estate Trust Series 0 was available in prior year but no activity.

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

(ag) Terminated as an investment option and funds transferred to Optimized All Cap Trust on April 28, 2008.

See accompanying notes.

36

Sub-Account
Global Trust Series 0						Global Trust Series 1						Growth & Income Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/08 (ag)
$	3,732		$	7,529		$	24,862		$	59,845		$	7,718
	3,732			7,529			24,862			59,845			7,718
	—			—			7,696			16,347			—
	3,732			7,529			17,166			43,498			7,718
	—			—			—			—			—
	(89,628	)		(79,881	)		(841,265	)		(717,387	)		(261,903	)
	(89,628	)		(79,881	)		(841,265	)		(717,387	)		(261,903	)
	187,876			(89,812	)		1,129,370			(1,047,678	)		111,802
	101,980			(162,164	)		305,271			(1,721,567	)		(142,383	)
	134,432			160,238			95,149			300,054			9,264
	(143,348	)		(37,388	)		(290,366	)		(362,486	)		(14,638	)
	—			—			24,516			(50,596	)		—
	(129,857	)		(241,320	)		(445,949	)		(2,326,846	)		(1,527,793	)
	(138,773	)		(118,470	)		(616,650	)		(2,439,874	)		(1,533,167	)
	(36,793	)		(280,634	)		(311,379	)		(4,161,441	)		(1,675,550	)
	273,952			554,586			2,096,612			6,258,053			1,675,550
$	237,159		$	273,952		$	1,785,233		$	2,096,612			—

37

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Health Sciences Trust Series 0						Health Sciences Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution		—			—			—			—
Total Investment Income		—			—			—			—
Expenses:
Mortality and expense risk		—			—			13,359			23,986
Net investment income (loss)		—			—			(13,359	)		(23,986	)
Realized gains (losses) on investments:
Capital gain distributions		8,520			8,430			28,687			127,861
Net realized gains (losses)		(47,569	)		(80,639	)		(859,822	)		(979,520	)
Realized gains (losses)		(39,049	)		(72,209	)		(831,135	)		(851,659	)
Unrealized appreciation (depreciation) during the period		239,654			(122,805	)		1,214,462			(863,853	)
Net increase (decrease) in assets from operations		200,605			(195,014	)		369,968			(1,739,498	)
Changes from principal transactions:
Transfer of net premiums		123,281			174,322			140,520			517,247
Transfer on terminations		(219,669	)		(17,777	)		(563,152	)		(602,575	)
Transfer on policy loans		(3	)		(1	)		3,196			(5,039	)
Net interfund transfers		86,968			335,626			(1,890,093	)		650,182
Net increase (decrease) in assets from principal transactions		(9,423	)		492,170			(2,309,529	)		559,815
Total increase (decrease) in assets		191,182			297,156			(1,939,561	)		(1,179,683	)
Assets, beginning of period		495,670			198,514			3,897,285			5,076,968
Assets, end of period	$	686,852		$	495,670		$	1,957,724		$	3,897,285

(ar) Terminated as an investment option and funds transferred to American Asset Allocation Trust on May 4, 2009.

See accompanying notes.

38

Sub-Account
High Yield Trust Series 0						High Yield Trust Series 1						Income & Value Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (ar)			Year Ended Dec. 31/08
$	163,536		$	86,888		$	427,721		$	489,569		$	309		$	4,822
	163,536			86,888			427,721			489,569			309			4,822
	—			—			19,038			30,385			—			—
	163,536			86,888			408,683			459,184			309			4,822
	—			—			—			—			—			3,544
	(157,625	)		(168,125	)		(1,239,309	)		(1,401,708	)		(64,753	)		(28,305	)
	(157,625	)		(168,125	)		(1,239,309	)		(1,401,708	)		(64,753	)		(24,761	)
	524,580			(240,999	)		2,320,540			(1,272,764	)		62,061			(36,403	)
	530,491			(322,236	)		1,489,914			(2,215,288	)		(2,383	)		(56,342	)
	74,857			159,846			55,569			344,372			10,210			40,256
	(189,595	)		(85,661	)		(494,249	)		(1,066,548	)		(4,447	)		(29,103	)
	(124	)		—			3,950			37,019			—			—
	745,569			195,350			(409,586	)		(1,646,371	)		(121,533	)		(50,719	)
	630,707			269,535			(844,316	)		(2,331,528	)		(115,770	)		(39,566	)
	1,161,198			(52,701	)		645,598			(4,546,816	)		(118,153	)		(95,908	)
	709,188			761,889			3,740,054			8,286,870			118,153			214,061
$	1,870,386		$	709,188		$	4,385,652		$	3,740,054			—		$	118,153

39

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Income & Value Trust Series 1						International Core Trust Series 0
	Year Ended Dec. 31/09 (ar)			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	31,620		$	445,537		$	7,300		$	14,208
Total Investment Income		31,620			445,537			7,300			14,208
Expenses:
Mortality and expense risk		20,817			92,225			—			—
Net investment income (loss)		10,803			353,312			7,300			14,208
Realized gains (losses) on investments:
Capital gain distributions		—			333,032			6,408			2,813
Net realized gains (losses)		(4,669,811	)		(1,110,614	)		(68,086	)		(68,208	)
Realized gains (losses)		(4,669,811	)		(777,582	)		(61,678	)		(65,395	)
Unrealized appreciation (depreciation) during the period		4,493,900			(4,742,168	)		99,956			(69,313	)
Net increase (decrease) in assets from operations		(165,108	)		(5,166,438	)		45,578			(120,500	)
Changes from principal transactions:
Transfer of net premiums		318,719			1,136,690			41,853			83,123
Transfer on terminations		(882,178	)		(2,844,530	)		(79,440	)		(24,158	)
Transfer on policy loans		45,269			(48,525	)		(124	)		(138	)
Net interfund transfers		(10,124,106	)		(674,040	)		215,059			41,706
Net increase (decrease) in assets from principal transactions		(10,642,296	)		(2,430,405	)		177,348			100,533
Total increase (decrease) in assets		(10,807,404	)		(7,596,843	)		222,926			(19,967	)
Assets, beginning of period		10,807,404			18,404,247			204,797			224,764
Assets, end of period		—		$	10,807,404		$	427,723		$	204,797

(ar) Terminated as an investment option and funds transferred to American Asset Allocation Trust on May 4, 2009.

See accompanying notes.

40

Sub-Account
International Core Trust Series 1						International Equity Index Trust A Series 1						International Equity Index Trust B Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	101,271		$	371,994		$	377,848		$	116,762		$	218,455		$	120,462
	101,271			371,994			377,848			116,762			218,455			120,462
	23,881			42,859			11,921			19,387			—			—
	77,390			329,135			365,927			97,375			218,455			120,462
	122,012			116,627			—			34,426			94,984			27,377
	(1,785,094	)		(781,739	)		(1,534,652	)		(450,390	)		(1,134,219	)		(505,352	)
	(1,663,082	)		(665,112	)		(1,534,652	)		(415,964	)		(1,039,235	)		(477,975	)
	2,127,900			(3,625,015	)		2,083,978			(2,649,586	)		2,674,695			(1,769,487	)
	542,208			(3,960,992	)		915,253			(2,968,175	)		1,853,915			(2,127,000	)
	155,138			477,425			68,993			278,455			1,769,191			1,594,209
	(610,733	)		(790,943	)		(418,973	)		(530,249	)		(662,356	)		(263,749	)
	6,822			12,764			(1,619	)		17,181			(142	)		(129	)
	(482,477	)		(1,266,802	)		(882,753	)		2,725,506			997,045			2,248,905
	(931,250	)		(1,567,556	)		(1,234,352	)		2,490,893			2,103,738			3,579,236
	(389,042	)		(5,528,548	)		(319,099	)		(477,282	)		3,957,653			1,452,236
	4,958,400			10,486,948			3,585,626			4,062,908			3,104,506			1,652,270
$	4,569,358		$	4,958,400		$	3,266,527		$	3,585,626		$	7,062,159		$	3,104,506

41

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	International Opportunities Trust Series 0						International Opportunities Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	34,205		$	42,977		$	7,141		$	37,849
Total Investment Income		34,205			42,977			7,141			37,849
Expenses:
Mortality and expense risk		—			—			4,619			12,907
Net investment income (loss)		34,205			42,977			2,522			24,942
Realized gains (losses) on investments:
Capital gain distributions		—			123,042			—			132,998
Net realized gains (losses)		(1,015,016	)		(398,997	)		(1,082,674	)		(1,142,289	)
Realized gains (losses)		(1,015,016	)		(275,955	)		(1,082,674	)		(1,009,291	)
Unrealized appreciation (depreciation) during the period		1,804,078			(1,587,994	)		1,350,989			(1,194,932	)
Net increase (decrease) in assets from operations		823,267			(1,820,972	)		270,837			(2,179,281	)
Changes from principal transactions:
Transfer of net premiums		164,967			296,589			91,236			450,136
Transfer on terminations		(112,251	)		(50,097	)		(153,042	)		(253,252	)
Transfer on policy loans		(2	)		(1	)		—			17,145
Net interfund transfers		753,265			1,632,299			(1,217,136	)		464,699
Net increase (decrease) in assets from principal transactions		805,979			1,878,790			(1,278,942	)		678,728
Total increase (decrease) in assets		1,629,246			57,818			(1,008,105	)		(1,500,553	)
Assets, beginning of period		2,097,481			2,039,663			1,795,448			3,296,001
Assets, end of period	$	3,726,727		$	2,097,481		$	787,343		$	1,795,448

(as) Terminated as an investment option and funds transferred to International Small Company Trust on November 16, 2009.

(al) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

See accompanying notes.

42

Sub-Account
International Small Cap Trust Series 0						International Small Cap Trust Series 1						International Small Company Trust Series 0
Year Ended Dec.  31/09 (as)			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (as)			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (al)
$	10,174		$	13,225		$	48,703		$	169,272		$	2,886
	10,174			13,225			48,703			169,272			2,886
	—			—			10,377			27,370			—
	10,174			13,225			38,326			141,902			2,886
	83,770			5,521			775,098			92,346			—
	(129,286	)		(213,551	)		(3,096,498	)		(2,569,719	)		(5,633	)
	(45,516	)		(208,030	)		(2,321,400	)		(2,477,373	)		(5,633	)
	270,273			(125,153	)		3,391,381			(1,985,032	)		(8,336	)
	234,931			(319,958	)		1,108,307			(4,320,503	)		(11,083	)
	175,590			184,067			171,057			798,750			13,584
	(361,881	)		(21,154	)		(1,711,937	)		(737,947	)		(2,243	)
	—			(1	)		5,939			17,022			—
	(354,480	)		(219,485	)		(3,136,225	)		(1,499,185	)		372,116
	(540,771	)		(56,573	)		(4,671,166	)		(1,421,360	)		383,457
	(305,840	)		(376,531	)		(3,562,859	)		(5,741,863	)		372,374
	305,840			682,371			3,562,859			9,304,722			—
	—		$	305,840			—		$	3,562,859		$	372,374

43

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	International Small Company Trust Series 1			International Value Trust Series 0
	Year Ended Dec. 31/09 (al)			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	20,124		$	26,497		$	31,720
Total Investment Income		20,124			26,497			31,720
Expenses:
Mortality and expense risk		1,627			—			—
Net investment income (loss)		18,497			26,497			31,720
Realized gains (losses) on investments:
Capital gain distributions		—			47,592			17,558
Net realized gains (losses)		(2,451	)		(252,164	)		(112,494	)
Realized gains (losses)		(2,451	)		(204,572	)		(94,936	)
Unrealized appreciation (depreciation) during the period		(57,823	)		524,540			(315,609	)
Net increase (decrease) in assets from operations		(41,777	)		346,465			(378,825	)
Changes from principal transactions:
Transfer of net premiums		12,642			253,481			247,040
Transfer on terminations		(47,638	)		(295,470	)		(108,664	)
Transfer on policy loans		38			(11	)		(2	)
Net interfund transfers		2,583,833			445,000			721,157
Net increase (decrease) in assets from principal transactions		2,548,875			403,000			859,531
Total increase (decrease) in assets		2,507,098			749,465			480,706
Assets, beginning of period		—			619,413			138,707
Assets, end of period	$	2,507,098		$	1,368,878		$	619,413

(al) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

See accompanying notes.

44

Sub-Account
International Value Trust Series 1						Investment Quality Bond Trust Series 0						Investment Quality Bond Trust Series 1
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	200,854		$	606,848		$	12,438		$	20,476		$	261,180		$	436,179
	200,854			606,848			12,438			20,476			261,180			436,179
	43,349			87,565			—			—			32,664			39,157
	157,505			519,283			12,438			20,476			228,516			397,022
	517,178			635,098			—			—			—			—
	(4,998,187	)		(5,906,580	)		(1,309	)		(16,585	)		(226,020	)		(188,580	)
	(4,481,009	)		(5,271,482	)		(1,309	)		(16,585	)		(226,020	)		(188,580	)
	7,070,226			(6,425,766	)		28,123			(14,739	)		568,082			(346,375	)
	2,746,722			(11,177,965	)		39,252			(10,848	)		570,578			(137,933	)
	622,775			1,611,605			39,453			108,452			205,021			440,697
	(4,726,830	)		(6,407,498	)		(95,156	)		(33,975	)		(1,002,777	)		(1,024,407	)
	3,972			277			—			—			55,725			(149	)
	193,010			(4,803,200	)		33,734			(49,601	)		(653,117	)		(1,122,030	)
	(3,907,073	)		(9,598,816	)		(21,969	)		24,876			(1,395,148	)		(1,705,889	)
	(1,160,351	)		(20,776,781	)		17,283			14,028			(824,570	)		(1,843,822	)
	11,386,567			32,163,348			253,456			239,428			6,251,474			8,095,296
$	10,226,216		$	11,386,567		$	270,739		$	253,456		$	5,426,904		$	6,251,474

45

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Large Cap Trust Series 0						Large Cap Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	2,693		$	1,441		$	38,921		$	60,664
Total Investment Income		2,693			1,441			38,921			60,664
Expenses:
Mortality and expense risk		—			—			12,279			20,407
Net investment income (loss)		2,693			1,441			26,642			40,257
Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		(5,507	)		(6,219	)		(1,152,149	)		(345,781	)
Realized gains (losses)		(5,507	)		(6,219	)		(1,152,149	)		(345,781	)
Unrealized appreciation (depreciation) during the period		32,740			(26,214	)		1,657,738			(1,545,292	)
Net increase (decrease) in assets from operations		29,926			(30,992	)		532,231			(1,850,816	)
Changes from principal transactions:
Transfer of net premiums		13,539			19,734			145,432			373,096
Transfer on terminations		(59,497	)		(1,953	)		(289,839	)		(374,547	)
Transfer on policy loans		(5	)		(3	)		2,888			1,054
Net interfund transfers		218,442			37,365			(1,149,542	)		20,108
Net increase (decrease) in assets from principal transactions		172,479			55,143			(1,291,061	)		19,711
Total increase (decrease) in assets		202,405			24,151			(758,830	)		(1,831,105	)
Assets, beginning of period		70,272			46,121			3,019,835			4,850,940
Assets, end of period	$	272,677		$	70,272		$	2,261,005		$	3,019,835

See accompanying notes.

46

Sub-Account
Large Cap Value Trust Series 0						Large Cap Value Trust Series 1						Lifestyle Aggressive Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	8,524		$	8,727		$	38,292		$	106,359		$	29,940		$	42,867
	8,524			8,727			38,292			106,359			29,940			42,867
	—			—			12,513			25,167			—			—
	8,524			8,727			25,779			81,192			29,940			42,867
	—			—			—			—			—			160,655
	(68,464	)		(31,194	)		(1,840,058	)		(771,508	)		(591,140	)		(107,631	)
	(68,464	)		(31,194	)		(1,840,058	)		(771,508	)		(591,140	)		53,024
	129,696			(68,474	)		1,991,508			(1,906,843	)		1,460,251			(1,007,372	)
	69,756			(90,941	)		177,229			(2,597,159	)		899,051			(911,481	)
	178,565			93,133			118,118			569,678			1,309,290			907,511
	(87,211	)		(61,114	)		(606,379	)		(1,138,241	)		(647,350	)		(103,762	)
	(563	)		(2	)		(682	)		16,671			(185,552	)		—
	(85,077	)		363,677			(2,421,739	)		(995,058	)		77,514			1,148,891
	5,714			395,694			(2,910,682	)		(1,546,950	)		553,902			1,952,640
	75,470			304,753			(2,733,453	)		(4,144,109	)		1,452,953			1,041,159
	478,069			173,316			5,314,642			9,458,751			1,753,973			712,814
$	553,539		$	478,069		$	2,581,189		$	5,314,642		$	3,206,926		$	1,753,973

47

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Lifestyle Aggressive Trust Series 1						Lifestyle Balanced Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	61,098		$	155,172		$	212,529		$	123,077
Total Investment Income		61,098			155,172			212,529			123,077
Expenses:
Mortality and expense risk		32,796			44,751			—			—
Net investment income (loss)		28,302			110,421			212,529			123,077
Realized gains (losses) on investments:
Capital gain distributions		—			1,004,823			3,328			113,776
Net realized gains (losses)		(3,684,544	)		(1,859,170	)		(518,405	)		(414,181	)
Realized gains (losses)		(3,684,544	)		(854,347	)		(515,077	)		(300,405	)
Unrealized appreciation (depreciation) during the period		5,603,273			(3,569,085	)		1,510,684			(960,860	)
Net increase (decrease) in assets from operations		1,947,031			(4,313,011	)		1,208,136			(1,138,188	)
Changes from principal transactions:
Transfer of net premiums		116,867			345,348			2,777,408			1,293,251
Transfer on terminations		(792,162	)		(350,783	)		(624,041	)		(401,351	)
Transfer on policy loans		(1,080	)		(667	)		(30,539	)		—
Net interfund transfers		517,333			(1,257,126	)		(2,040,347	)		490,240
Net increase (decrease) in assets from principal transactions		(159,042	)		(1,263,228	)		82,481			1,382,140
Total increase (decrease) in assets		1,787,989			(5,576,239	)		1,290,617			243,952
Assets, beginning of period		4,954,739			10,530,978			3,128,937			2,884,985
Assets, end of period	$	6,742,728		$	4,954,739		$	4,419,554		$	3,128,937

See accompanying notes.

48

Sub-Account
Lifestyle Balanced Trust Series 1						Lifestyle Conservative Trust Series 0						Lifestyle Conservative Trust Series 1
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	354,113		$	373,924		$	60,395		$	16,284		$	90,429		$	166,377
	354,113			373,924			60,395			16,284			90,429			166,377
	43,333			60,419			—			—			11,061			22,696
	310,780			313,505			60,395			16,284			79,368			143,681
	5,819			505,439			1,596			546			5,783			122,025
	(3,328,730	)		(524,701	)		2,973			(4,162	)		(524,887	)		(302,006	)
	(3,322,911	)		(19,262	)		4,569			(3,616	)		(519,104	)		(179,981	)
	5,107,895			(4,415,987	)		82,778			(20,243	)		788,327			(643,601	)
	2,095,764			(4,121,744	)		147,742			(7,575	)		348,591			(679,901	)
	194,829			461,831			459,332			98,256			94,787			302,445
	(1,105,882	)		(880,448	)		(96,103	)		(11,803	)		(276,063	)		(133,579	)
	(30,906	)		(12,551	)		—			—			(141	)		(131	)
	(871,043	)		203,974			361,633			232,822			(1,933,995	)		(2,836,453	)
	(1,813,002	)		(227,194	)		724,862			319,275			(2,115,412	)		(2,667,718	)
	282,762			(4,348,938	)		872,604			311,700			(1,766,821	)		(3,347,619	)
	8,730,517			13,079,455			344,025			32,325			3,567,617			6,915,236
$	9,013,279		$	8,730,517		$	1,216,629		$	344,025		$	1,800,796		$	3,567,617

49

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Lifestyle Growth Trust Series 0						Lifestyle Growth Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	245,625		$	150,390		$	335,484		$	331,099
Total Investment Income		245,625			150,390			335,484			331,099
Expenses:
Mortality and expense risk		—			—			54,324			68,334
Net investment income (loss)		245,625			150,390			281,160			262,765
Realized gains (losses) on investments:
Capital gain distributions		—			198,473			—			636,456
Net realized gains (losses)		(693,757	)		(419,653	)		(3,909,176	)		(147,566	)
Realized gains (losses)		(693,757	)		(221,180	)		(3,909,176	)		488,890
Unrealized appreciation (depreciation) during the period		2,225,927			(1,890,829	)		6,467,161			(6,105,131	)
Net increase (decrease) in assets from operations		1,777,795			(1,961,619	)		2,839,145			(5,353,476	)
Changes from principal transactions:
Transfer of net premiums		2,191,522			2,297,734			326,373			562,539
Transfer on terminations		(767,364	)		(688,540	)		(1,081,404	)		(746,921	)
Transfer on policy loans		47,698			(56,539	)		(39,893	)		(47,981	)
Net interfund transfers		878,005			857,964			(6,814	)		762,249
Net increase (decrease) in assets from principal transactions		2,349,861			2,410,619			(801,738	)		529,886
Total increase (decrease) in assets		4,127,656			449,000			2,037,407			(4,823,590	)
Assets, beginning of period		4,299,878			3,850,878			9,400,374			14,223,964
Assets, end of period	$	8,427,534		$	4,299,878		$	11,437,781		$	9,400,374

(aa) Terminated as an investment option and funds transferred to Lifestyle Balanced Trust on November 10, 2008.

See accompanying notes.

50

Sub-Account
Lifestyle Moderate Trust Series 0						Lifestyle Moderate Trust Series 1						Managed Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/08 (aa)
$	183,282		$	58,876		$	95,971		$	83,687		$	325
	183,282			58,876			95,971			83,687			325
	—			—			9,850			10,646			—
	183,282			58,876			86,121			73,041			325
	—			7,811			—			43,424			339
	(85,836	)		(55,215	)		(314,847	)		(189,557	)		(16,447	)
	(85,836	)		(47,404	)		(314,847	)		(146,133	)		(16,108	)
	356,025			(326,532	)		636,774			(534,675	)		4,019
	453,471			(315,060	)		408,048			(607,767	)		(11,764	)
	1,240,599			249,854			69,532			746,538			44,691
	(332,820	)		(96,772	)		(189,490	)		(206,917	)		(39,139	)
	—			—			(5,620	)		4,689			(12,774	)
	711,039			919,342			246,802			(722,820	)		(52,759	)
	1,618,818			1,072,424			121,224			(178,510	)		(59,981	)
	2,072,289			757,364			529,272			(786,277	)		(71,745	)
	1,205,627			448,263			1,708,801			2,495,078			71,745
$	3,277,916		$	1,205,627		$	2,238,073		$	1,708,801			—

51

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Mid Cap Index Trust Series 0						Mid Cap Index Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	15,431		$	13,315		$	93,956		$	181,876
Total Investment Income		15,431			13,315			93,956			181,876
Expenses:
Mortality and expense risk		—			—			41,734			84,648
Net investment income (loss)		15,431			13,315			52,222			97,228
Realized gains (losses) on investments:
Capital gain distributions		17,925			29,163			147,604			578,565
Net realized gains (losses)		(403,221	)		(131,065	)		(4,882,606	)		(3,028,336	)
Realized gains (losses)		(385,296	)		(101,902	)		(4,735,002	)		(2,449,771	)
Unrealized appreciation (depreciation) during the period		842,085			(427,921	)		7,312,164			(5,596,709	)
Net increase (decrease) in assets from operations		472,220			(516,508	)		2,629,384			(7,949,252	)
Changes from principal transactions:
Transfer of net premiums		410,829			452,505			193,942			393,934
Transfer on terminations		(301,298	)		(106,769	)		(819,007	)		(1,167,360	)
Transfer on policy loans		—			—			(60	)		(325	)
Net interfund transfers		199,752			110,043			(3,606,732	)		(6,539,104	)
Net increase (decrease) in assets from principal transactions		309,283			455,779			(4,231,857	)		(7,312,855	)
Total increase (decrease) in assets		781,503			(60,729	)		(1,602,473	)		(15,262,107	)
Assets, beginning of period		1,006,767			1,067,496			12,037,182			27,299,289
Assets, end of period	$	1,788,270		$	1,006,767		$	10,434,709		$	12,037,182

(at) Terminated as an investment option and funds transferred to Mid Cap Index Trust on November 16, 2009.

Mid Cap Intersection Trust Series 1 had no current year activity.

(g) Fund available in prior year but no activity.

See accompanying notes.

52

Sub-Account
Mid Cap Intersection Trust Series 0						Mid Cap Intersection Trust Series 1			Mid Cap Stock Trust Series 0
Year Ended Dec. 31/09 (at)			Year Ended Dec. 31/08 (g)			Year Ended Dec. 31/09 (at)	Year Ended Dec. 31/08		Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	251		$	86		—	—			—			—
	251			86		—	—			—			—
	—			—		—	6			—			—
	251			86		—	(6	)		—			—
	—			—		—	—			—			48,806
	(5,795	)		(413	)	—	(250	)		(613,068	)		(452,256	)
	(5,795	)		(413	)	—	(250	)		(613,068	)		(403,450	)
	14,843			(14,843	)	—	60			1,321,470			(728,431	)
	9,299			(15,170	)	—	(196	)		708,402			(1,131,881	)
	1,093			8,430		—	652			304,352			364,593
	(22,916	)		(636	)	—	(1,493	)		(233,980	)		(161,062	)
	—			—		—	1			(1,762	)		—
	(16,149	)		36,049		—	—			1,225,553			1,159,352
	(37,972	)		43,843		—	(840	)		1,294,163			1,362,883
	(28,673	)		28,673		—	(1,036	)		2,002,565			231,002
	28,673			—		—	1,036			1,681,202			1,450,200
	—		$	28,673		—	—		$	3,683,767		$	1,681,202

53

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Mid Cap Stock Trust Series 1						Mid Cap Value Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (au)			Year Ended Dec. 31/08
Income:
Dividend income distribution		—			—		$	9,185		$	16,196
Total Investment Income		—			—			9,185			16,196
Expenses:
Mortality and expense risk		32,039			56,538			—			—
Net investment income (loss)		(32,039	)		(56,538	)		9,185			16,196
Realized gains (losses) on investments:
Capital gain distributions		—			332,867			—			25,923
Net realized gains (losses)		(3,942,345	)		(2,299,470	)		60,926			(403,037	)
Realized gains (losses)		(3,942,345	)		(1,966,603	)		60,926			(377,114	)
Unrealized appreciation (depreciation) during the period		5,466,770			(5,189,302	)		(62,052	)		139,731
Net increase (decrease) in assets from operations		1,492,386			(7,212,443	)		8,059			(221,187	)
Changes from principal transactions:
Transfer of net premiums		297,066			814,729			37,084			187,886
Transfer on terminations		(5,054,939	)		(1,670,118	)		(19,466	)		(105,284	)
Transfer on policy loans		6,857			(28,835	)		—			—
Net interfund transfers		540,302			1,984,022			(1,289,516	)		1,036,993
Net increase (decrease) in assets from principal transactions		(4,210,714	)		1,099,798			(1,271,898	)		1,119,595
Total increase (decrease) in assets		(2,718,328	)		(6,112,645	)		(1,263,839	)		898,408
Assets, beginning of period		9,024,765			15,137,410			1,263,839			365,431
Assets, end of period	$	6,306,437		$	9,024,765			—		$	1,263,839

(au) Terminated as an investment option and funds transferred to Mid Value Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

See accompanying notes.

54

Sub-Account
Mid Cap Value Trust Series 1						Mid Value Trust Series 0						Mid Value Trust Series 1
Year Ended Dec. 31/09 (au)			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (g)
$	41,195		$	138,264		$	27,989		$	30,592		$	20,429
	41,195			138,264			27,989			30,592			20,429
	5,944			36,038			—			—			13,293
	35,251			102,226			27,989			30,592			7,136
	—			350,374			—			54,816			—
	(3,291,919	)		(3,535,003	)		241,080			(1,521,744	)		103,867
	(3,291,919	)		(3,184,629	)		241,080			(1,466,928	)		103,867
	3,360,185			(781,238	)		1,243,646			502,549			988,112
	103,517			(3,863,641	)		1,512,715			(933,787	)		1,099,115
	30,731			511,710			301,613			254,364			257,809
	(518,590	)		(1,956,587	)		(311,246	)		(40,440	)		(172,851	)
	3,028			6,205			(5	)		(2	)		8,084
	(5,936,526	)		(200,094	)		2,579,019			(471,464	)		3,717,162
	(6,421,357	)		(1,638,766	)		2,569,381			(257,542	)		3,810,204
	(6,317,840	)		(5,502,407	)		4,082,096			(1,191,329	)		4,909,319
	6,317,840			11,820,247			1,201,290			2,392,619			—
	—		$	6,317,840		$	5,283,386		$	1,201,290		$	4,909,319

55

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Money Market Trust B Series 0						Money Market Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	275,980		$	595,697		$	190,782		$	1,541,266
Total Investment Income		275,980			595,697			190,782			1,541,266
Expenses:
Mortality and expense risk		—			—			421,836			461,520
Net investment income (loss)		275,980			595,697			(231,054	)		1,079,746
Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		—			—			—			—
Realized gains (losses)		—			—			—			—
Unrealized appreciation (depreciation) during the period		—			—			0			—
Net increase (decrease) in assets from operations		275,980			595,697			(231,054	)		1,079,746
Changes from principal transactions:
Transfer of net premiums		47,582,393			88,775,784			2,137,204			4,779,155
Transfer on terminations		(5,037,897	)		(2,288,470	)		(41,260,508	)		(12,971,809	)
Transfer on policy loans		(2,168,464	)		(3,470,116	)		297,294			(701,889	)
Net interfund transfers		(66,377,209	)		(35,667,136	)		(26,374,219	)		25,295,542
Net increase (decrease) in assets from principal transactions		(26,001,177	)		47,350,062			(65,200,229	)		16,400,999
Total increase (decrease) in assets		(25,725,197	)		47,945,759			(65,431,283	)		17,480,745
Assets, beginning of period		70,653,639			22,707,880			101,314,436			83,833,691
Assets, end of period	$	44,928,442		$	70,653,639		$	35,883,153		$	101,314,436

(ae) Fund renamed on April 28, 2008. Previously known as Quantitative All Cap Trust.

See accompanying notes.

56

Sub-Account
Natural Resources Trust Series 0						Natural Resources Trust Series 1						Optimized All Cap Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08 (ae)
$	14,511		$	8,151		$	54,721		$	84,231		$	2,093		$	9,092
	14,511			8,151			54,721			84,231			2,093			9,092
	—			—			25,679			61,973			—			—
	14,511			8,151			29,042			22,258			2,093			9,092
	367,457			37,955			2,133,153			443,615			—			—
	(512,151	)		(464,414	)		(5,287,439	)		(7,238,796	)		(445,985	)		(93,242	)
	(144,694	)		(426,459	)		(3,154,286	)		(6,795,181	)		(445,985	)		(93,242	)
	724,384			(295,921	)		5,579,231			(3,239,855	)		447,848			(413,306	)
	594,201			(714,229	)		2,453,987			(10,012,778	)		3,956			(497,456	)
	261,045			433,289			302,444			2,409,070			69,987			194,057
	(596,135	)		(58,491	)		(4,417,470	)		(677,255	)		(24,831	)		(31,740	)
	(264	)		(119	)		10,533			10,775			(1	)		(1	)
	1,137,723			215,540			452,805			611,842			(566,403	)		997,791
	802,369			590,219			(3,651,688	)		2,354,432			(521,248	)		1,160,107
	1,396,570			(124,010	)		(1,197,701	)		(7,658,346	)		(517,292	)		662,651
	690,422			814,432			6,450,461			14,108,807			703,064			40,413
$	2,086,992		$	690,422		$	5,252,760		$	6,450,461		$	185,772		$	703,064

57

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Optimized All Cap Trust Series 1						Optimized Value Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08 (ae)			Year Ended Dec. 31/09			Year Ended Dec. 31/08 (af)
Income:
Dividend income distribution	$	1,113		$	706		$	1,822		$	945
Total Investment Income		1,113			706			1,822			945
Expenses:
Mortality and expense risk		339			329			—			—
Net investment income (loss)		774			377			1,822			945
Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		(34,930	)		(10,406	)		(10,022	)		(12,034	)
Realized gains (losses)		(34,930	)		(10,406	)		(10,022	)		(12,034	)
Unrealized appreciation (depreciation) during the period		46,113			(30,216	)		29,171			(8,404	)
Net increase (decrease) in assets from operations		11,957			(40,245	)		20,971			(19,493	)
Changes from principal transactions:
Transfer of net premiums		25,811			28,253			31,556			23,745
Transfer on terminations		(4,697	)		(2,672	)		(10,975	)		(8,793	)
Transfer on policy loans		—			16,575			—			—
Net interfund transfers		7,374			52,896			34,037			(16,516	)
Net increase (decrease) in assets from principal transactions		28,488			95,052			54,618			(1,564	)
Total increase (decrease) in assets		40,445			54,807			75,589			(21,057	)
Assets, beginning of period		56,007			1,200			25,545			46,602
Assets, end of period	$	96,452		$	56,007		$	101,134		$	25,545

(ae) Fund renamed on April 28, 2008. Previously known as Quantitative All Cap Trust.

(af) Fund renamed on April 28, 2008. Previously known as Quantitative Value Trust.

See accompanying notes.

58

Sub-Account
Optimized Value Trust Series 1						Overseas Equity Trust Series 0						Pacific Rim Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08  (af)			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	4		$	47		$	44,386		$	53,837		$	5,812		$	11,334
	4			47			44,386			53,837			5,812			11,334
	20			505			—			—			—			—
	(16	)		(458	)		44,386			53,837			5,812			11,334
	—			—			—			160,265			—			19,103
	(3,555	)		(95,514	)		(541,849	)		(464,275	)		(90,332	)		(294,898	)
	(3,555	)		(95,514	)		(541,849	)		(304,010	)		(90,332	)		(275,795	)
	400			48,112			1,052,638			(1,082,889	)		312,129			(122,460	)
	(3,171	)		(47,860	)		555,175			(1,333,062	)		227,609			(386,921	)
	—			1,616			75,026			354,797			75,098			265,653
	(5,471	)		(143,490	)		(221,384	)		(112,294	)		(249,899	)		(37,438	)
	—			—			—			—			(130	)		(128	)
	8,116			(348,827	)		201,074			(27,319	)		(22,207	)		226,738
	2,645			(490,701	)		54,716			215,184			(197,138	)		454,825
	(526	)		(538,561	)		609,891			(1,117,878	)		30,471			67,904
	538			539,099			1,831,075			2,948,953			467,715			399,811
$	12		$	538		$	2,440,966		$	1,831,075		$	498,186		$	467,715

59

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Pacific Rim Trust Series 1						Quantitative Mid Cap Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/08 (k)
Income:
Dividend income distribution	$	23,781		$	113,465		$	39
Total Investment Income		23,781			113,465			39
Expenses:
Mortality and expense risk		13,114			32,487			—
Net investment income (loss)		10,667			80,978			39
Realized gains (losses) on investments:
Capital gain distributions		—			188,653			76
Net realized gains (losses)		(2,020,866	)		(1,668,533	)		(16,720	)
Realized gains (losses)		(2,020,866	)		(1,479,880	)		(16,644	)
Unrealized appreciation (depreciation) during the period		2,587,393			(2,028,002	)		14,838
Net increase (decrease) in assets from operations		577,194			(3,426,904	)		(1,767	)
Changes from principal transactions:
Transfer of net premiums		125,040			571,243			5,610
Transfer on terminations		(530,627	)		(630,146	)		(790	)
Transfer on policy loans		7,208			37,397			-
Net interfund transfers		(2,308,336	)		102,405			(72,850	)
Net increase (decrease) in assets from principal transactions		(2,706,715	)		80,899			(68,030	)
Total increase (decrease) in assets		(2,129,521	)		(3,346,005	)		(69,797	)
Assets, beginning of period		4,554,939			7,900,944			69,797
Assets, end of period	$	2,425,418		$	4,554,939			—

(k) Terminated as an investment option and funds transferred to Mid Cap Index Trust on April 28, 2008.

See accompanying notes.

60

Sub-Account
Quantitative Mid Cap Trust Series 1			Real Estate Securities Trust Series 0						Real Estate Securities Trust Series 1
Year Ended Dec. 31/08 (k)			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	18		$	143,485		$	179,348		$	351,967		$	670,704
	18			143,485			179,348			351,967			670,704
	66			—			—			57,889			114,257
	(48	)		143,485			179,348			294,078			556,447
	42			—			72,992			—			309,753
	(9,751	)		(626,012	)		(4,843,758	)		(5,701,541	)		(8,785,091	)
	(9,709	)		(626,012	)		(4,770,766	)		(5,701,541	)		(8,475,338	)
	8,533			1,765,397			2,593,768			7,925,504			(1,153,762	)
	(1,224	)		1,282,870			(1,997,650	)		2,518,041			(9,072,653	)
	6,408			523,248			667,396			478,732			1,225,539
	(4,349	)		(310,507	)		(476,369	)		(3,395,698	)		(3,789,885	)
	(1	)		(6	)		(3	)		148,587			(80,878	)
	(44,732	)		560,131			339,776			(280,997	)		(2,817,895	)
	(42,674	)		772,866			530,800			(3,049,376	)		(5,463,119	)
	(43,898	)		2,055,736			(1,466,850	)		(531,335	)		(14,535,772	)
	43,898			3,491,635			4,958,485			12,770,010			27,305,782
	—		$	5,547,371		$	3,491,635		$	12,238,675		$	12,770,010

61

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Real Return Bond Trust Series 0						Real Return Bond Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	258,791		$	4,110		$	372,364		$	35,006
Total Investment Income		258,791			4,110			372,364			35,006
Expenses:
Mortality and expense risk		—			—			18,637			29,430
Net investment income (loss)		258,791			4,110			353,727			5,576
Realized gains (losses) on investments:
Capital gain distributions		123,700			17,148			259,321			148,162
Net realized gains (losses)		(89,915	)		(34,641	)		(574,022	)		(385,167	)
Realized gains (losses)		33,785			(17,493	)		(314,701	)		(237,005	)
Unrealized appreciation (depreciation) during the period		161,340			(113,365	)		628,212			(785,132	)
Net increase (decrease) in assets from operations		453,916			(126,748	)		667,238			(1,016,561	)
Changes from principal transactions:
Transfer of net premiums		151,782			194,874			89,987			453,306
Transfer on terminations		(152,285	)		(34,406	)		(1,813,255	)		(245,717	)
Transfer on policy loans		(723	)		—			21,600			(14,792	)
Net interfund transfers		2,406,357			706,799			(167,780	)		484,940
Net increase (decrease) in assets from principal transactions		2,405,131			867,267			(1,869,448	)		677,737
Total increase (decrease) in assets		2,859,047			740,519			(1,202,210	)		(338,824	)
Assets, beginning of period		900,310			159,791			5,236,778			5,575,602
Assets, end of period	$	3,759,357		$	900,310		$	4,034,568		$	5,236,778

See accompanying notes.

62

Sub-Account
Science & Technology Trust Series 0						Science & Technology Trust Series 1						Short-Term Bond Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
	—			—			—			—		$	15,559		$	6,460
	—			—			—			—			15,559			6,460
	—			—		$	24,651			39,564			—			—
	—			—		$	(24,651	)		(39,564	)		15,559			6,460
	—			—			—			—			—			—
	120,281			(223,586	)	$	(1,034,097	)		(361,242	)		2,319			(13,931	)
	120,281			(223,586	)	$	(1,034,097	)		(361,242	)		2,319			(13,931	)
	271,187			(109,840	)	$	3,378,527			(4,512,146	)		33,216			(2,373	)
	391,468			(333,426	)	$	2,319,779			(4,912,952	)		51,094			(9,844	)
	124,438			239,383		$	131,439			596,828			51,727			18,830
	(287,230	)		(40,060	)	$	(584,007	)		(948,897	)		(18,217	)		(7,408	)
	(20,856	)		—		$	3,060			37,258			(4	)		(2	)
	91,674			173,435		$	(1,371,927	)		(2,197,400	)		176,285			(38,181	)
	(91,974	)		372,758		$	(1,821,435	)		(2,512,211	)		209,791			(26,761	)
	299,494			39,332		$	498,344			(7,425,163	)		260,885			(36,605	)
	485,962			446,630		$	5,102,005			12,527,168			72,706			109,311
$	785,456		$	485,962		$	5,600,349		$	5,102,005		$	333,591		$	72,706

63

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Small Cap Growth Trust Series 0						Small Cap Growth Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08 (ai)
Income:
Dividend income distribution		—			—			—			—
Total Investment Income		—			—			—			—
Expenses:
Mortality and expense risk		—			—			1,628			169
Net investment income (loss)		—			—			(1,628	)		(169	)
Realized gains (losses) on investments:
Capital gain distributions		—			41,492			—			—
Net realized gains (losses)		(749,882	)		(942,518	)		104,443			(14,959	)
Realized gains (losses)		(749,882	)		(901,026	)		104,443			(14,959	)
Unrealized appreciation (depreciation) during the period		1,605,777			(593,608	)		84,936			382
Net increase (decrease) in assets from operations		855,895			(1,494,634	)		187,751			(14,746	)
Changes from principal transactions:
Transfer of net premiums		239,996			477,181			2,238			2,345
Transfer on terminations		(367,947	)		(102,007	)		(742,104	)		(1,965	)
Transfer on policy loans		(7	)		(3	)		(294	)		—
Net interfund transfers		563,651			(13,702	)		834,068			82,898
Net increase (decrease) in assets from principal transactions		435,693			361,469			93,908			83,278
Total increase (decrease) in assets		1,291,588			(1,133,165	)		281,659			68,532
Assets, beginning of period		2,293,376			3,426,541			68,532			—
Assets, end of period	$	3,584,964		$	2,293,376		$	350,191		$	68,532

(ai) Reflects the period from commencement of operations on November 10, 2008 through December 31, 2008.

See accompanying notes.

64

Sub-Account
Small Cap Index Trust Series 0						Small Cap Index Trust Series 1						Small Cap Opportunities Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	9,456		$	7,095		$	16,217		$	53,749			—		$	851
	9,456			7,095			16,217			53,749			—			851
	—			—			10,712			20,216			—			—
	9,456			7,095			5,505			33,533			—			851
	21,645			4,213			99,631			45,538			—			1,021
	(87,627	)		(117,695	)		(1,425,949	)		(782,862	)		(1,353	)		(14,724	)
	(65,982	)		(113,482	)		(1,326,318	)		(737,324	)		(1,353	)		(13,703	)
	353,195			(94,820	)		1,718,258			(1,103,436	)		19,476			(5,647	)
	296,669			(201,207	)		397,445			(1,807,227	)		18,123			(18,499	)
	306,517			188,199			99,785			401,504			11,585			23,270
	(199,506	)		(81,757	)		(3,825,710	)		(1,071,308	)		(12,797	)		(3,482	)
	(250	)		—			(566	)		676			—			—
	460,667			129,075			2,405,705			(789,058	)		19,193			(17,368	)
	567,428			235,517			(1,320,786	)		(1,458,186	)		17,981			2,420
	864,097			34,310			(923,341	)		(3,265,413	)		36,104			(16,079	)
	425,740			391,430			2,975,902			6,241,315			26,117			42,196
$	1,289,837		$	425,740		$	2,052,561		$	2,975,902		$	62,221		$	26,117

65

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Small Cap Opportunities Trust Series 1						Small Cap Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/08 (ab)
Income:
Dividend income distribution		—		$	39,286		$	1
Total Investment Income		—			39,286			1
Expenses:
Mortality and expense risk		4,367			8,263			—
Net investment income (loss)		(4,367	)		31,023			1
Realized gains (losses) on investments:
Capital gain distributions		—			71,800			129
Net realized gains (losses)		(535,793	)		(735,076	)		(58,485	)
Realized gains (losses)		(535,793	)		(663,276	)		(58,356	)
Unrealized appreciation (depreciation) during the period		682,931			(212,545	)		3,773
Net increase (decrease) in assets from operations		142,771			(844,798	)		(54,582	)
Changes from principal transactions:
Transfer of net premiums		32,222			239,870			4,051
Transfer on terminations		(109,726	)		(377,386	)		(7,241	)
Transfer on policy loans		1,299			23,329			—
Net interfund transfers		80,639			(1,537,447	)		40,388
Net increase (decrease) in assets from principal transactions		4,434			(1,651,634	)		37,198
Total increase (decrease) in assets		147,205			(2,496,432	)		(17,384	)
Assets, beginning of period		775,813			3,272,245			17,384
Assets, end of period	$	923,018		$	775,813			—

(ab) Terminated as an investment option and funds transferred to Small Cap Growth Trust on November 10, 2008.

See accompanying notes.

66

Sub-Account
Small Cap Trust Series 1			Small Cap Value Trust Series 0						Small Cap Value Trust Series 1
Year Ended Dec. 31/08 (ab)			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	30		$	26,956		$	45,198		$	1,283		$	7,381
	30			26,956			45,198			1,283			7,381
	1,025			—			—			1,257			1,740
	(995	)		26,956			45,198			26			5,641
	5,061			—			10,773			—			1,169
	(145,312	)		(608,542	)		(1,347,859	)		(173,727	)		(113,213	)
	(140,251	)		(608,542	)		(1,337,086	)		(173,727	)		(112,044	)
	25,794			1,539,031			294,389			155,901			(93,464	)
	(115,452	)		957,445			(997,499	)		(17,800	)		(199,867	)
	5,462			268,816			48,637			1,430			2,966
	(12,607	)		(119,676	)		(97,813	)		(36,244	)		(6,165	)
	(31,985	)		(337	)		(3	)		—			—
	44,586			758,747			195,420			(221,147	)		776,343
	5,456			907,550			146,241			(255,961	)		773,144
	(109,996	)		1,864,995			(851,258	)		(273,761	)		573,277
	109,996			2,658,179			3,509,437			582,478			9,201
	—		$	4,523,174		$	2,658,179		$	308,717		$	582,478

67

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Small Company Trust Series 1						Small Company Value Trust Series 0
	Year Ended Dec. 31/09 (an)			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	18			—		$	3,222		$	9,122
Total Investment Income		18			—			3,222			9,122
Expenses:
Mortality and expense risk		404			4,303			—			—
Net investment income (loss)		(386	)		(4,303	)		3,222			9,122
Realized gains (losses) on investments:
Capital gain distributions		—			1,544			102,978			19,504
Net realized gains (losses)		(863,251	)		(62,270	)		(331,552	)		(144,308	)
Realized gains (losses)		(863,251	)		(60,726	)		(228,574	)		(124,804	)
Unrealized appreciation (depreciation) during the period		852,401			(573,000	)		442,517			(207,919	)
Net increase (decrease) in assets from operations		(11,236	)		(638,029	)		217,165			(323,601	)
Changes from principal transactions:
Transfer of net premiums		73			189,728			198,409			341,086
Transfer on terminations		(29,566	)		(31,118	)		(234,614	)		(107,864	)
Transfer on policy loans		—			—			(2	)		(1	)
Net interfund transfers		(1,184,620	)		470,712			(274,736	)		312,224
Net increase (decrease) in assets from principal transactions		(1,214,113	)		629,322			(310,943	)		545,445
Total increase (decrease) in assets		(1,225,349	)		(8,707	)		(93,778	)		221,844
Assets, beginning of period		1,225,349			1,234,056			890,555			668,711
Assets, end of period		—		$	1,225,349		$	796,777		$	890,555

(an) Terminated as an investment option and funds transferred to Small Company Value Trust on May 4, 2009.

(al) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

See accompanying notes.

68

Sub-Account
Small Company Value Trust Series 1						Smaller Company Growth Trust Series 0			Smaller Company Growth Trust Series 1
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (al)			Year Ended Dec. 31/09 (al)
$	28,271		$	92,840			—			—
	28,271			92,840			—			—
	31,969			59,205			—			14,211
	(3,698	)		33,635			—			(14,211	)
	1,035,410			236,241			—			—
	(3,674,689	)		(3,263,719	)		(163	)		4,742
	(2,639,279	)		(3,027,478	)		(163	)		4,742
	4,220,846			(1,375,361	)		9,054			890,726
	1,577,869			(4,369,204	)		8,891			881,257
	427,853			839,632			3,807			163,398
	(3,154,604	)		(3,700,509	)		(2,031	)		(391,901	)
	18,500			(80,497	)		-			21,070
	(805,722	)		(829,732	)		188,608			17,344,015
	(3,513,973	)		(3,771,106	)		190,384			17,136,582
	(1,936,104	)		(8,140,310	)		199,275			18,017,839
	9,496,541			17,636,851			—			—
$	7,560,437		$	9,496,541		$	199,275		$	18,017,839

69

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Strategic Bond Trust Series 0						Strategic Bond Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	36,405		$	7,167		$	121,604		$	169,582
Total Investment Income		36,405			7,167			121,604			169,582
Expenses:
Mortality and expense risk		—			—			9,256			16,945
Net investment income (loss)		36,405			7,167			112,348			152,637
Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		(2,166	)		(8,528	)		(346,583	)		(505,882	)
Realized gains (losses)		(2,166	)		(8,528	)		(346,583	)		(505,882	)
Unrealized appreciation (depreciation) during the period		58,844			(17,649	)		559,730			(196,210	)
Net increase (decrease) in assets from operations		93,083			(19,010	)		325,495			(549,455	)
Changes from principal transactions:
Transfer of net premiums		83,614			26,523			147,547			378,433
Transfer on terminations		(76,762	)		(6,952	)		(270,257	)		(661,147	)
Transfer on policy loans		—			—			4,358			8,159
Net interfund transfers		314,686			(53,087	)		(292,601	)		(1,893,647	)
Net increase (decrease) in assets from principal transactions		321,538			(33,516	)		(410,953	)		(2,168,202	)
Total increase (decrease) in assets		414,621			(52,526	)		(85,458	)		(2,717,657	)
Assets, beginning of period		89,594			142,120			1,680,117			4,397,774
Assets, end of period	$	504,215		$	89,594		$	1,594,659		$	1,680,117

See accompanying notes.

70

Sub-Account
Strategic Income Trust Series 0						Strategic Income Trust Series 1						Total Bond Market Trust B Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	14,711		$	1,623		$	29,698		$	130,650		$	358,260		$	257,898
	14,711			1,623			29,698			130,650			358,260			257,898
	—			—			1,614			4,128			—			—
	14,711			1,623			28,084			126,522			358,260			257,898
	—			—			—			—			—			—
	6,349			(116	)		(61,526	)		(97,785	)		12,700			(44,869	)
	6,349			(116	)		(61,526	)		(97,785	)		12,700			(44,869	)
	10,146			(2,627	)		86,567			(85,661	)		27,515			46,238
	31,206			(1,120	)		53,125			(56,924	)		398,475			259,267
	51,626			6,163			40,231			225,946			113,743			83,271
	(19,812	)		(5,501	)		(115,762	)		(50,626	)		(301,807	)		(189,110	)
	—			—			—			(14	)		—			—
	319,592			2,006			(449,605	)		787,477			1,870,463			2,229,609
	351,406			2,668			(525,136	)		962,783			1,682,399			2,123,770
	382,612			1,548			(472,011	)		905,859			2,080,874			2,383,037
	15,689			14,141			1,151,717			245,858			5,041,514			2,658,477
$	398,301		$	15,689		$	679,706		$	1,151,717		$	7,122,388		$	5,041,514

71

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Total Return Trust Series 0						Total Return Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	401,956		$	127,249		$	1,837,215		$	1,886,321
Total Investment Income		401,956			127,249			1,837,215			1,886,321
Expenses:
Mortality and expense risk		—			—			194,364			172,156
Net investment income (loss)		401,956			127,249			1,642,851			1,714,165
Realized gains (losses) on investments:
Capital gain distributions		227,837			23,478			2,347,016			350,596
Net realized gains (losses)		(21,632	)		(11,764	)		(584,852	)		21,475
Realized gains (losses)		206,205			11,714			1,762,164			372,071
Unrealized appreciation (depreciation) during the period		271,251			(105,302	)		2,423,756			(1,525,099	)
Net increase (decrease) in assets from operations		879,412			33,661			5,828,771			561,137
Changes from principal transactions:
Transfer of net premiums		968,793			566,734			373,286			1,275,944
Transfer on terminations		(538,570	)		(321,082	)		(15,390,826	)		(10,167,748	)
Transfer on policy loans		(727	)		—			102,090			(35,847	)
Net interfund transfers		8,417,130			1,683,178			10,633,363			17,250,314
Net increase (decrease) in assets from principal transactions		8,846,626			1,928,830			(4,282,087	)		8,322,663
Total increase (decrease) in assets		9,726,038			1,962,491			1,546,684			8,883,800
Assets, beginning of period		2,857,007			894,516			43,539,894			34,656,094
Assets, end of period	$	12,583,045		$	2,857,007		$	45,086,578		$	43,539,894

(ad) Terminated as an investment option and funds transferred to Fundamental Value Trust on November 10, 2008.

See accompanying notes.

72

Sub-Account
Total Stock Market Index Trust Series 0						Total Stock Market Index Trust Series 1						U.S. Core Trust Series 0
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/08 (ad)
$	14,828		$	6,201		$	10,327		$	34,304		$	9,111
	14,828			6,201			10,327			34,304			9,111
	—			—			5,218			9,616			—
	14,828			6,201			5,109			24,688			9,111
	—			1,246			—			3,325			6,668
	(75,674	)		(259,800	)		(759,303	)		(98,422	)		(333,780	)
	(75,674	)		(258,554	)		(759,303	)		(95,097	)		(327,112	)
	281,671			(58,713	)		786,415			(957,026	)		60,013
	220,825			(311,066	)		32,221			(1,027,435	)		(257,988	)
	148,117			232,821			55,932			266,178			157,044
	(136,961	)		(43,195	)		(382,838	)		(195,619	)		(15,615	)
	(5	)		(3	)		—			—			—
	613,911			(15,392	)		(625,346	)		(1,095,866	)		(637,721	)
	625,062			174,231			(952,252	)		(1,025,307	)		(496,292	)
	845,887			(136,835	)		(920,031	)		(2,052,742	)		(754,280	)
	199,933			336,768			1,649,478			3,702,220			754,280
$	1,045,820		$	199,933		$	729,447		$	1,649,478			—

73

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	U.S. Core Trust Series 1			U.S. Global Leaders  Growth Trust Series 0
	Year Ended Dec. 31/08 (ad)			Year Ended Dec. 31/08 (x)
Income:
Dividend income distribution	$	79,788		$	4
Total Investment Income		79,788			4
Expenses:
Mortality and expense risk		28,643			—
Net investment income (loss)		51,145			4
Realized gains (losses) on investments:
Capital gain distributions		60,010			162
Net realized gains (losses)		(2,893,003	)		(6	)
Realized gains (losses)		(2,832,993	)		156
Unrealized appreciation (depreciation) during the period		471,380			(42	)
Net increase (decrease) in assets from operations		(2,310,468	)		118
Changes from principal transactions:
Transfer of net premiums		421,611			48
Transfer on terminations		(683,542	)		(14	)
Transfer on policy loans		31,959			—
Net interfund transfers		(5,039,383	)		(1,409	)
Net increase (decrease) in assets from principal transactions		(5,269,355	)		(1,375	)
Total increase (decrease) in assets		(7,579,823	)		(1,257	)
Assets, beginning of period		7,579,823			1,257
Assets, end of period		—			—

(ad) Terminated as an investment option and funds transferred to Fundamental Value Trust on November 10, 2008.

(x) Terminated as an investment option and funds transferred to Blue Chip Growth Trust on April 28, 2008.

See accompanying notes.

74

Sub-Account
U.S. Global Leaders Growth Trust Series 1			U.S. Government Securities Trust Series 0						U.S. Government Securities Trust Series 1
Year Ended Dec. 31/08 (x)			Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	2,346		$	46,221		$	9,916		$	92,307		$	281,445
	2,346			46,221			9,916			92,307			281,445
	835			—			—			20,235			30,234
	1,511			46,221			9,916			72,072			251,211
	84,476			26,716			—			96,724			—
	(90,007	)		6,052			(13,654	)		(127,764	)		(484,709	)
	(5,531	)		32,768			(13,654	)		(31,040	)		(484,709	)
	(13,318	)		7,565			(2,587	)		349,444			36,461
	(17,338	)		86,554			(6,325	)		390,476			(197,037	)
	11,922			18,871			141,627			106,734			480,121
	(4,336	)		(226,572	)		(5,833	)		(2,429,816	)		(3,844,754	)
	32			(938	)		—			1,012			15,059
	(643,245	)		1,482,830			(34,952	)		(2,740,720	)		1,619,169
	(635,627	)		1,274,191			100,842			(5,062,790	)		(1,730,405	)
	(652,965	)		1,360,745			94,517			(4,672,314	)		(1,927,442	)
	652,965			193,403			98,886			7,525,507			9,452,949
	—		$	1,554,148		$	193,403		$	2,853,193		$	7,525,507

75

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	U.S. High Yield Bond Trust Series 0						U.S. High Yield Bond Trust Series 1
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	22,987		$	9,797		$	37,105		$	1,223
Total Investment Income		22,987			9,797			37,105			1,223
Expenses:
Mortality and expense risk		—			—			1,928			581
Net investment income (loss)		22,987			9,797			35,177			642
Realized gains (losses) on investments:
Capital gain distributions		—			—			—			—
Net realized gains (losses)		(2,451	)		(3,880	)		158,193			(107,194	)
Realized gains (losses)		(2,451	)		(3,880	)		158,193			(107,194	)
Unrealized appreciation (depreciation) during the period		44,044			(21,122	)		18,341			9,418
Net increase (decrease) in assets from operations		64,580			(15,205	)		211,711			(97,134	)
Changes from principal transactions:
Transfer of net premiums		87,975			35,682			5,501			619
Transfer on terminations		(25,329	)		(4,526	)		(1,230,340	)		(66,458	)
Transfer on policy loans		—			—			—			—
Net interfund transfers		(14,800	)		142,603			1,318,180			(84,986	)
Net increase (decrease) in assets from principal transactions		47,846			173,759			93,341			(150,825	)
Total increase (decrease) in assets		112,426			158,554			305,052			(247,959	)
Assets, beginning of period		171,876			13,322			17,289			265,248
Assets, end of period	$	284,302		$	171,876		$	322,341		$	17,289

(aw) Terminated as an investment option and funds transferred to American Growth-Income Trust on May 4, 2009.

See accompanying notes.

76

Sub-Account
U.S. Large Cap Trust Series 0						U.S. Large Cap Trust Series 1						Utilities Trust Series 0
Year Ended Dec. 31/09 (aw)			Year Ended Dec. 31/08			Year Ended Dec. 31/09 (aw)			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	607		$	1,737		$	50,481		$	305,445		$	39,218		$	25,537
	607			1,737			50,481			305,445			39,218			25,537
	—			—			16,035			82,164			—			—
	607			1,737			34,446			223,281			39,218			25,537
	—			—			—			—			—			19,690
	(22,749	)		(23,318	)		(4,002,347	)		(832,591	)		(171,617	)		(89,305	)
	(22,749	)		(23,318	)		(4,002,347	)		(832,591	)		(171,617	)		(69,615	)
	22,016			(15,907	)		3,780,851			(6,113,582	)		391,365			(355,400	)
	(126	)		(37,488	)		(187,050	)		(6,722,892	)		258,966			(399,478	)
	6,903			28,187			142,576			588,505			95,418			152,209
	(1,586	)		(2,366	)		(1,193,225	)		(3,265,163	)		(837,868	)		(61,964	)
	—			—			174,040			69,450			(9	)		(3	)
	(53,279	)		(58,473	)		(7,994,190	)		(2,584,051	)		346,865			620,933
	(47,962	)		(32,652	)		(8,870,799	)		(5,191,259	)		(395,594	)		711,175
	(48,088	)		(70,140	)		(9,057,849	)		(11,914,151	)		(136,628	)		311,697
	48,088			118,228			9,057,849			20,972,000			658,222			346,525
	—		$	48,088			—		$	9,057,849		$	521,594		$	658,222

77

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Statements of Operations and Changes in Contract Owners’ Equity

(continued)

	Sub-Account
	Utilities Trust Series 1						Value Trust Series 0
	Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
Income:
Dividend income distribution	$	55,385		$	147,009		$	4,346		$	6,226
Total Investment Income		55,385			147,009			4,346			6,226
Expenses:
Mortality and expense risk		8,487			20,594			—			—
Net investment income (loss)		46,898			126,415			4,346			6,226
Realized gains (losses) on investments:
Capital gain distributions		—			170,522			—			21,003
Net realized gains (losses)		(1,988,258	)		(488,003	)		(35,012	)		(370,722	)
Realized gains (losses)		(1,988,258	)		(317,481	)		(35,012	)		(349,719	)
Unrealized appreciation (depreciation) during the period		2,185,225			(1,937,882	)		179,051			(48,813	)
Net increase (decrease) in assets from operations		243,865			(2,128,948	)		148,385			(392,306	)
Changes from principal transactions:
Transfer of net premiums		213,582			588,555			120,760			294,318
Transfer on terminations		(500,242	)		(335,518	)		(124,224	)		(46,768	)
Transfer on policy loans		9,763			6,140			(1	)		—
Net interfund transfers		(2,067,226	)		162,059			202,827			(57,785	)
Net increase (decrease) in assets from principal transactions		(2,344,123	)		421,236			199,362			189,765
Total increase (decrease) in assets		(2,100,258	)		(1,707,712	)		347,747			(202,541	)
Assets, beginning of period		3,594,971			5,302,683			312,241			514,782
Assets, end of period	$	1,494,713		$	3,594,971		$	659,988		$	312,241

See accompanying notes.

78

Sub-Account
Value Trust Series 1						Total
Year Ended Dec. 31/09			Year Ended Dec. 31/08			Year Ended Dec. 31/09			Year Ended Dec. 31/08
$	58,973		$	85,716		$	12,693,581		$	16,554,325
	58,973			85,716			12,693,581			16,554,325
	22,081			36,137			1,965,323			2,886,436
	36,892			49,579			10,728,258			13,667,889
	—			222,090			20,134,106			11,440,432
	(2,363,769	)		(2,499,733	)		(150,439,710	)		(104,152,880	)
	(2,363,769	)		(2,277,643	)		(130,305,604	)		(92,712,448	)
	4,133,787			(1,771,616	)		231,728,470			(177,855,591	)
	1,806,910			(3,999,680	)		112,151,124			(256,900,150	)
	69,527			715,901			82,281,055			148,569,519
	(6,056,221	)		(1,656,436	)		(178,882,691	)		(109,282,384	)
	6,427			22,101			(965,689	)		(4,538,168	)
	2,156,806			(1,594,764	)		(61,596,999	)		(10,794,155	)
	(3,823,461	)		(2,513,198	)		(159,164,324	)		23,954,812
	(2,016,551	)		(6,512,878	)		(47,013,200	)		(232,945,338	)
	5,587,755			12,100,633			628,790,630			861,735,968
$	3,571,204		$	5,587,755		$	581,777,430		$	628,790,630

79

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements

December 31, 2009

1. Organization

John Hancock Life Insurance Company (U.S.A.) Separate Account N (the “Account”) is a separate account administered and sponsored by John Hancock Life Insurance Company (U.S.A.) (“JHUSA” or the “Company”). The Account operates as a Unit Investment Trust registered under the Investment Company Act of 1940, as amended (the “Act”) and has 131 active investment sub-accounts that invest in shares of a particular John Hancock Trust (the “Trust”) portfolio and 2 sub-accounts that invests in shares of other outside investment trusts as of December 31, 2009. The Trust is registered under the Act as an open-end management investment company, commonly known as a mutual fund, which does not transact with the general public. Instead, the Trust deals primarily with insurance companies by providing the investment medium for variable contracts. The Account is a funding vehicle for the allocation of net premiums under variable universal life insurance contracts (the “Contracts”) issued by the Company.

The Company is a stock life insurance company incorporated under the laws of Michigan in 1979. The Company is an indirect wholly owned subsidiary of Manulife Financial Corporation (“MFC”), a Canadian based publicly traded life insurance company.

The Company is required to maintain assets in the Account with a total fair value at least equal to the reserves and other liabilities relating to the variable benefits under all Contracts participating in the Account. These assets may not be charged with liabilities which arise from any other business the Company conducts. However, all obligations under the Contracts are general corporate obligations of the Company.

Additional assets are held in the Company’s general account to cover the contingency that the guaranteed minimum death benefit might exceed the death benefit which would have been payable in the absence of such guarantee.

Each sub-account that invests in Portfolios of the John Hancock Trust may offer two classes of units to fund the Contracts issued by the Company. These classes, Series 1 and Series 0 represent an interest in the same Trust portfolio but in different share classes of that portfolio. Series 1 represents interests in Series 1 shares of the portfolio and Series 0 represents interests in Series NAV shares of the Trust’s portfolio. Series 1 and Series NAV shares differ in the level of 12b-1 fees and other expenses assessed against the portfolio’s assets.

80

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

As the result of portfolio changes, the following sub-accounts of the Account were renamed as follows:

Previous Name	New Name	Effective Date
American Diversified Growth & Income Trust	Core Diversified Growth & Income Trust	November 16, 2009
Index Allocation Trust	Core Strategy Trust	May 4, 2009
Turner Core Growth Trust	Large Cap Growth Trust	November 16, 2009
The following sub-accounts of the Account were commenced as investment options:
New Fund		Effective Date
Alpha Opportunities Trust		May 4, 2009
American Diversified Growth & Income Trust		May 4, 2009
American Fundamental Holdings Trust		May 4, 2009
American Global Diversification Trust		May 4, 2009
American New World Trust		May 4, 2009
Balanced Trust		May 4, 2009
International Small Company Trust		November 16, 2009
Smaller Company Growth Trust		November 16, 2009
The following sub-accounts of the Account were terminated as investment options and the funds were transferred to existing sub-account funds as follows:
Terminated	Transferred To	Effective Date
Classic Value Trust	Equity-Income Trust	May 4, 2009
Core Equity Trust	Fundamental Value Trust	May 4, 2009
Emerging Small Company Trust	Smaller Company Growth Trust	November 16, 2009
Global Allocation Trust	Lifestyle Balanced Trust	November 16, 2009
Global Real Estate Trust	Real Estate Securities Trust	November 16, 2009
Income & Value Trust	American Asset Allocation Trust	May 4, 2009
International Small Cap Trust	International Small Company Trust	November 16, 2009
Mid Cap Intersection Trust	Mid Cap Index Trust	November 16, 2009
Mid Cap Value Trust	Mid Value Trust	May 4, 2009
Small Company Trust	Small Company Value Trust	May 4, 2009
U.S. Large Cap Trust	American Growth-Income Trust	May 4, 2009

Where a fund has two series, the changes noted above apply to both Series 0 and Series 1.

2. Significant Accounting Policies

Investments of each sub-account consist of shares in the respective portfolios of the Trust. These shares are carried at fair value which is calculated using the fair value of the investment securities underlying each Trust portfolio. Transactions are recorded on the trade date. Income from dividends is recorded on the ex-dividend date. Realized gains and losses on the sale of investments are computed on the basis of the specifically identified cost of the investment sold.

81

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

In addition to the Account, a contract holder may also allocate funds to the fixed account contained within the Company’s general account. Because of exemptive and exclusionary provisions, interests in the fixed account have not been registered under the Securities Act of 1933 and the Company’s general account has not been registered as an investment company under the Act. Net interfund transfers include interfund transfers between separate and general accounts.

The operations of the Account are included in the federal income tax return of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code (the “Code”). Under the current provisions of the Code, the Company does not expect to incur federal income taxes on the earnings of the Account to the extent the earnings are credited under the Contracts. Based on this, no charge is being made currently to the Account for federal income taxes. The Company will periodically reassess this position taking into account changes in the tax law. Such a charge may be made in future years for any federal income taxes that would be attributable to the Contracts.

FAS 157 - Fair Value Measurements, which was adopted effective January 1, 2008, is now incorporated into ASC 820—Fair Value Measurement and Disclosure (“ASC 820”). This guidance provides a single definition of fair value for accounting purposes, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; that is, an exit value. An exit value is not a forced liquidation or distressed sale. Assets not measured at fair value are excluded from ASC 820 note disclosure, including Policy Loans which are held to maturity and accounted for at cost.

Following ASC 820 guidance, the Account has categorized its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Account’s valuation techniques. A level is assigned to each fair value measurement based on the lowest level input significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are defined as follows:

• Level 1 – Fair value measurements that reflect unadjusted, quoted prices in active markets for identical assets and liabilities that the Account has the ability to access at the measurement date.

• Level 2 – Fair value measurements using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

• Level 3 – Fair value measurements using significant non-market observable inputs.

Assets owned by the Account are primarily open-ended mutual fund investments issued by the Trust. These are classified within Level 1, as fair values of the underlying funds are based upon reported net asset values (“NAV”), which represent the values at which each sub-account can redeem its investments.

82

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

The following table presents the Account’s assets that are measured at fair value on a recurring basis by ASC 820 fair value hierarchy level, as of December 31, 2009.

	Mutual Funds
Level 1	$	581,777,430
Level 2		—
Level 3		—
	$	581,777,430

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported herein. Actual results could differ from those estimates.

3. Mortality and Expense Risks Charge

The Company deducts from the assets of the Account a daily charge equivalent to annual rates between 0% and 0.70% of the average net value of the Account’s assets for the assumption of mortality and expense risks.

4. Contract Charges

The Company deducts certain charges from gross premiums before placing the remaining net premiums in the sub-account. In the event of a surrender by the contract holder, surrender charges may be levied by the Company against the contract value at the time of termination to cover sales and administrative expenses associated with underwriting and issuing the Contract. Additionally, each month a deduction consisting of an administration charge, a charge for cost of insurance and charges for supplementary benefits is deducted from the contract value. Contract charges are paid through the redemption of sub-account units and are reflected as terminations.

5. Purchases and Sales of Investments

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2009 were as follows:

	Purchases		Sales
Sub-accounts:
500 Index Trust B Series 0	$	9,935,029	$	8,110,829
500 Index Trust Series 1		9,094,102		17,023,750
Active Bond Trust Series 0		160,860		414,815
Active Bond Trust Series 1		1,618,793		1,247,903
All Cap Core Trust Series 0		119,373		23,002
All Cap Core Trust Series 1		1,033,225		5,422,345
All Cap Growth Trust Series 0		45,063		53,622
All Cap Growth Trust Series 1		1,044,301		2,621,563
All Cap Value Trust Series 0		469,609		249,575
All Cap Value Trust Series 1		468,292		3,804,621
Alpha Opportunities Trust Series 0		203,713		—
American Asset Allocation Trust Series 1		11,514,186		1,708,767

83

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

	Purchases		Sales
Sub-accounts:
American Blue Chip Income and Growth Trust Series 1	$	1,383,650	$	2,570,967
American Bond Trust Series 1		1,412,594		1,839,828
American Fundamental Holdings Trust Series 1		1,602		817
American Global Diversification Trust Series 1		89,111		22,752
American Growth Trust Series 1		16,354,345		21,101,809
American Growth-Income Trust Series 1		11,916,624		3,290,909
American International Trust Series 1		17,765,422		14,238,402
American New World Trust Series 1		24,800		5,978
Balanced Trust Series 0		18,117		57
Blue Chip Growth Trust Series 0		5,687,823		1,318,046
Blue Chip Growth Trust Series 1		5,633,479		6,413,582
Capital Appreciation Trust Series 0		252,703		170,628
Capital Appreciation Trust Series 1		2,637,479		4,633,529
Capital Appreciation Value Trust Series 0		153,112		2,656
Capital Appreciation Value Trust Series 1		20,149		849
Classic Value Trust Series 0		8,927		29,098
Classic Value Trust Series 1		92,638		159,057
Core Allocation Plus Trust Series 1		4,852,181		219,633
Core Bond Trust Series 0		120,391		17,815
Core Bond Trust Series 1		1,249,366		877,778
Core Diversified Growth & Income Trust Series 1		37,788		20,200
Core Equity Trust Series 0		75,581		124,077
Core Equity Trust Series 1		309,765		414,280
Core Strategy Trust Series 0		1,426		33
Core Strategy Trust Series 1		969		18
Disciplined Diversification Trust Series 0		154,608		2,781
Disciplined Diversification Trust Series 1		974		20
Emerging Markets Value Trust Series 0		496,051		230,697
Emerging Markets Value Trust Series 1		466,565		256,890
Emerging Small Company Trust Series 0		297,308		501,962
Emerging Small Company Trust Series 1		1,965,053		21,276,986
Equity-Income Trust Series 0		7,472,077		3,887,088
Equity-Income Trust Series 1		10,252,399		16,904,014
Financial Services Trust Series 0		187,061		190,481
Financial Services Trust Series 1		505,814		1,548,327
Franklin Templeton Founding Allocation Trust Series 0		300,373		151,121
Fundamental Value Trust Series 0		2,076,285		1,071,401
Fundamental Value Trust Series 1		5,420,127		3,884,703
Global Allocation Trust Series 0		176,680		273,193
Global Allocation Trust Series 1		414,770		688,956
Global Bond Trust Series 0		5,007,160		2,511,499
Global Bond Trust Series 1		4,686,981		5,091,578
Global Real Estate Trust Series 0		2,769		1,937
Global Real Estate Trust Series 1		3,981		4,917
Global Trust Series 0		213,493		348,534
Global Trust Series 1		995,351		1,594,835
Health Sciences Trust Series 0		432,768		433,671
Health Sciences Trust Series 1		1,754,902		4,049,103
High Yield Trust Series 0		1,791,164		996,922
High Yield Trust Series 1		2,996,017		3,431,648
Income & Value Trust Series 0		73,781		189,242

84

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

	Purchases		Sales
Sub-accounts:
Income & Value Trust Series 1	$	870,864	$	11,502,357
International Core Trust Series 0		371,300		180,244
International Core Trust Series 1		1,803,814		2,535,662
International Equity Index Trust A Series 1		1,215,438		2,083,864
International Equity Index Trust B Series 0		4,404,398		1,987,221
International Opportunities Trust Series 0		1,929,153		1,088,969
International Opportunities Trust Series 1		583,613		1,860,033
International Small Cap Trust Series 0		845,699		1,292,526
International Small Cap Trust Series 1		3,397,163		7,254,905
International Small Company Trust Series 0		652,275		265,932
International Small Company Trust Series 1		2,664,808		97,435
International Value Trust Series 0		1,234,192		757,105
International Value Trust Series 1		5,532,367		8,764,758
Investment Quality Bond Trust Series 0		201,158		210,689
Investment Quality Bond Trust Series 1		2,371,984		3,538,616
Large Cap Trust Series 0		304,142		128,971
Large Cap Trust Series 1		731,522		1,995,943
Large Cap Value Trust Series 0		319,379		305,141
Large Cap Value Trust Series 1		3,465,895		6,350,798
Lifestyle Aggressive Trust Series 0		1,895,714		1,311,873
Lifestyle Aggressive Trust Series 1		4,323,237		4,453,978
Lifestyle Balanced Trust Series 0		5,657,575		5,359,236
Lifestyle Balanced Trust Series 1		5,599,356		7,095,759
Lifestyle Conservative Trust Series 0		1,183,161		396,309
Lifestyle Conservative Trust Series 1		544,535		2,574,797
Lifestyle Growth Trust Series 0		3,971,871		1,376,386
Lifestyle Growth Trust Series 1		5,337,532		5,858,109
Lifestyle Moderate Trust Series 0		3,434,438		1,632,339
Lifestyle Moderate Trust Series 1		1,768,866		1,561,522
Mid Cap Index Trust Series 0		1,083,972		741,334
Mid Cap Index Trust Series 1		2,243,101		6,275,133
Mid Cap Intersection Trust Series 0		24,302		62,022
Mid Cap Intersection Trust Series 1		—		—
Mid Cap Stock Trust Series 0		2,501,257		1,207,093
Mid Cap Stock Trust Series 1		4,444,720		8,687,473
Mid Cap Value Trust Series 0		119,840		1,382,553
Mid Cap Value Trust Series 1		987,826		7,373,932
Mid Value Trust Series 0		3,954,538		1,357,167
Mid Value Trust Series 1		5,059,197		1,241,857
Money Market Trust B Series 0		49,932,476		75,657,673
Money Market Trust Series 1		52,955,908		118,387,191
Natural Resources Trust Series 0		2,490,214		1,305,877
Natural Resources Trust Series 1		5,922,833		7,412,326
Optimized All Cap Trust Series 0		158,537		677,692
Optimized All Cap Trust Series 1		125,751		96,489
Optimized Value Trust Series 0		76,010		19,569
Optimized Value Trust Series 1		30,812		28,182
Overseas Equity Trust Series 0		744,974		645,871
Pacific Rim Trust Series 0		442,624		633,949
Pacific Rim Trust Series 1		1,100,331		3,796,380
Real Estate Securities Trust Series 0		3,590,339		2,673,988

85

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

	Purchases		Sales
Sub-accounts:
Real Estate Securities Trust Series 1	$	3,321,109	$	6,076,407
Real Return Bond Trust Series 0		3,605,383		817,762
Real Return Bond Trust Series 1		3,759,694		5,016,094
Science & Technology Trust Series 0		673,426		765,400
Science & Technology Trust Series 1		1,675,863		3,521,948
Short-Term Bond Trust Series 0		456,902		231,552
Small Cap Growth Trust Series 0		1,929,463		1,493,770
Small Cap Growth Trust Series 1		1,104,535		1,012,254
Small Cap Index Trust Series 0		904,216		305,687
Small Cap Index Trust Series 1		4,202,599		5,418,250
Small Cap Opportunities Trust Series 0		73,295		55,314
Small Cap Opportunities Trust Series 1		751,628		751,562
Small Cap Value Trust Series 0		2,654,545		1,720,039
Small Cap Value Trust Series 1		322,608		578,544
Small Company Trust Series 1		630,298		1,844,797
Small Company Value Trust Series 0		629,100		833,842
Small Company Value Trust Series 1		4,264,241		6,746,503
Smaller Company Growth Trust Series 0		229,192		38,807
Smaller Company Growth Trust Series 1		17,515,228		392,858
Strategic Bond Trust Series 0		659,030		301,087
Strategic Bond Trust Series 1		1,456,206		1,754,811
Strategic Income Trust Series 0		446,026		79,910
Strategic Income Trust Series 1		739,920		1,236,973
Total Bond Market Trust B Series 0		5,759,604		3,718,946
Total Return Trust Series 0		10,834,813		1,358,393
Total Return Trust Series 1		28,015,294		28,307,514
Total Stock Market Index Trust Series 0		1,411,839		771,949
Total Stock Market Index Trust Series 1		1,100,678		2,047,822
U.S. Government Securities Trust Series 0		1,877,654		530,527
U.S. Government Securities Trust Series 1		2,830,834		7,724,826
U.S. High Yield Bond Trust Series 0		201,790		130,958
U.S. High Yield Bond Trust Series 1		1,437,852		1,309,333
U.S. Large Cap Trust Series 0		64,644		112,000
U.S. Large Cap Trust Series 1		1,118,298		9,954,650
Utilities Trust Series 0		830,552		1,186,927
Utilities Trust Series 1		1,186,208		3,483,433
Value Trust Series 0		786,948		583,240
Value Trust Series 1		5,091,497		8,878,066
All Asset Portfolio Series 0		945,230		47,071
All Asset Portfolio Series 1		310,851		366,022
	$	474,365,204	$	602,667,172

86

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

6. Transaction with Affiliates

John Hancock Distributors LLC, a registered broker-dealer and wholly owned subsidiary of JHUSA, acts as the principal underwriter of the Contracts pursuant to a distribution agreement with the Company. Contracts are sold by registered representatives of either John Hancock Distributors LLC or other broker-dealers having distribution agreements with John Hancock Distributors LLC who are also authorized as variable life insurance agents under applicable state insurance laws. Registered representatives are compensated on a commission basis.

JHUSA has a formal service agreement with its ultimate parent company, MFC, which can be terminated by either party upon two months’ notice. Under this agreement, JHUSA pays for legal, actuarial, investment and certain other administrative services.

The majority of the investments held by the Account are invested in the Trust (Note 1).

Mortality and expense risks charge, as described in Note 3, are paid to JHUSA.

7. Diversification Requirements

The Internal Revenue Service has issued regulations under Section 817(h) of the Internal Revenue Code. Under the provisions of Section 817(h) of the Code, a variable life contract will not be treated as a life contract for federal tax purposes for any period for which the investments of the Separate Account on which the contract is based are not adequately diversified. The Code provides that the “adequately diversified” requirement may be met if the underlying investments satisfy either a statutory safe harbour test or diversification requirements set forth in regulations issued by the Secretary of Treasury. The Company believes that the Account satisfies the current requirements of the regulations, and it intends that the Account will continue to meet such requirements.

8. Subsequent Events

In accordance with the provision set forth in ASC 855 “Subsequent Events” (“ASC 855”) formerly known as FAS 165 “Subsequent Events”, Management has evaluated the possibility of subsequent events existing in the Account’s financial statements through the date the financial statements were issued and has determined that no events have occurred that require additional disclosure.

87

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	500 Index Trust B Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05 (e)
Units, beginning of period	1,219,448		1,025,869		962,976		1,649,564		—
Units issued	698,381		805,900		588,557		497,491		2,372,470
Units redeemed	(616,808	)	(612,321	)	(525,664	)	(1,184,079	)	(722,906	)
Units, end of period	1,301,021		1,219,448		1,025,869		962,976		1,649,564
Unit value, end of period $	12.77 to 21.05		10.17 to 16.66		16.28 to 26.53		15.57 to 25.20		13.57 to 13.60
Assets, end of period $	22,312,778		16,165,681		20,742,059		17,764,778		22,413,056
Investment income ratio*	2.30	%	2.35	%	3.00	%	1.22	%	0.00	%
Expense ratio, lowest to highest**	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.70	%	0.40% to 0.70	%	0.40% to 0.70	%
Total return, lowest to highest***	25.53% to 26.36	%	(37.60%) to (37.19	%)	4.51% to 5.25	%	14.76% to 15.56	%	8.56% to 8.78	%

(e) Reflects the period from commencement of operations on May 2, 2005 through December 31, 2005.

	Sub-Account
	500 Index Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	1,495,132		1,964,200		895,420		1,012,464		689,458
Units issued	1,120,394		694,681		2,318,216		705,327		932,154
Units redeemed	(1,993,504	)	(1,163,749	)	(1,249,436	)	(822,371	)	(609,148	)
Units, end of period	622,022		1,495,132		1,964,200		895,420		1,012,464
Unit value, end of period $	10.29 to 10.67		8.22 to 8.49		13.16 to 13.53		12.47 to 12.91		10.89 to 11.16
Assets, end of period $	6,527,296		12,533,893		26,274,333		11,434,368		11,226,224
Investment income ratio*	1.52	%	0.68	%	2.26	%	0.90	%	1.22	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	25.13% to 25.64	%	(37.51%) to (37.26	%)	4.39% to 4.83	%	14.52% to 15.15	%	3.60% to 4.09	%

88

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Active Bond Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	10,376		10,394		2,511		—
Units issued	3,279		13,837		11,919		11,827
Units redeemed	(8,759	)	(13,855	)	(4,036	)	(9,316	)
Units, end of period	4,896		10,376		10,394		2,511
Unit value, end of period $	50.05		40.09		44.78		43.05
Assets, end of period $	245,021		415,916		465,396		108,061
Investment income ratio*	4.48	%	5.06	%	12.60	%	22.71	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	24.86	%	(10.48%) to (7.37	%)	4.03	%	4.54	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Active Bond Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05 (e)
Units, beginning of period	67,710		141,516		339,657		329,188		—
Units issued	108,085		174,296		133,020		111,305		647,762
Units redeemed	(89,451	)	(248,102	)	(331,161	)	(100,836	)	(318,574	)
Units, end of period	86,344		67,710		141,516		339,657		329,188
Unit value, end of period $	14.95 to 15.19		12.06 to 12.21		13.54 to 13.69		13.11 to 13.18		12.64 to 12.67
Assets, end of period $	1,297,722		820,988		1,929,828		4,464,604		4,165,458
Investment income ratio*	9.00	%	4.00	%	9.09	%	2.60	%	0.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.35% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	24.00% to 24.44	%	(11.11%) to (10.80	%)	3.30% to 3.73	%	3.70% to 4.05	%	1.14% to 1.36	%

(e) Reflects the period from commencement of operations on May 2, 2005 through December 31, 2005.

89

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Alpha Opportunities Trust Series 0
	Year Ended Dec. 31/09 (ak)
Units, beginning of period	—
Units issued	15,886
Units redeemed	—
Units, end of period	15,886
Unit value, end of period $	12.73
Assets, end of period $	202,244
Investment income ratio*	0.00	%
Expense ratio, lowest to highest**	0.00	%
Total return, lowest to highest***	27.31	%

(ak) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

	Sub-Account
	All Asset Portfolio Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08 (g)
Units, beginning of period	5,829		—
Units issued	78,842		6,143
Units redeemed	(4,174	)	(314	)
Units, end of period	80,497		5,829
Unit value, end of period $	12.05		9.93
Assets, end of period $	969,580		57,882
Investment income ratio*	13.64	%	7.52	%
Expense ratio, lowest to highest**	0.00	%	0.00	%
Total return, lowest to highest***	21.32	%	(16.17%) to (12.60	%)

(g) Fund available in prior year but no activity.

90

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	All Asset Portfolio Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	44,851		52,918		51,984		36,420		5,558
Units issued	18,418		45,309		29,880		33,107		44,219
Units redeemed	(27,284	)	(53,376	)	(28,946	)	(17,543	)	(13,357	)
Units, end of period	35,985		44,851		52,918		51,984		36,420
Unit value, end of period $	16.38 to 16.67		13.59 to 13.72		16.32 to 16.45		15.21 to 15.30		14.67 to 14.72
Assets, end of period $	593,938		614,073		867,298		793,435		534,735
Investment income ratio*	7.31	%	5.30	%	6.92	%	5.36	%	5.84	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%
Total return, lowest to highest***	20.52% to 20.89	%	(16.71%) to (16.54	%)	7.29% to 7.52	%	3.68% to 3.89	%	5.25% to 5.47	%

	Sub-Account
	All Cap Core Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	1,899		2,196		23		—
Units issued	15,567		207,065		2,544		24
Units redeemed	(2,634	)	(207,362	)	(371	)	(1	)
Units, end of period	14,832		1,899		2,196		23
Unit value, end of period $	10.36		8.05		13.34		12.98
Assets, end of period $	153,621		15,283		29,280		295
Investment income ratio*	2.08	%	1.09	%	1.93	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	28.61	%	(39.60%) to (26.69	%)	2.70	%	14.77	%

(g) Fund available in prior year but no activity.

91

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	All Cap Core Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	411,878		556,146		234,795		180,858		192,844
Units issued	79,155		155,444		480,351		126,247		60,566
Units redeemed	(422,365	)	(299,712	)	(159,000	)	(72,310	)	(72,552	)
Units, end of period	68,668		411,878		556,146		234,795		180,858
Unit value, end of period $	15.29 to 15.77		11.98 to 12.31		19.90 to 20.46		10.80 to 19.99		9.46 to 7.43
Assets, end of period $	1,059,003		5,019,487		11,287,106		4,565,986		3,066,213
Investment income ratio*	1.25	%	1.55	%	1.52	%	0.64	%	0.73	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	27.62% to 28.08	%	(40.02%) to (39.81	%)	1.95% to 2.35	%	13.95% to 14.40	%	8.32% to 8.70	%

	Sub-Account
	All Cap Growth Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	5,749		1,662		69		—
Units issued	5,181		5,687		23,363		71
Units redeemed	(5,948	)	(1,600	)	(21,770	)	(2	)
Units, end of period	4,982		5,749		1,662		69
Unit value, end of period $	9.80		8.09		13.92		12.42
Assets, end of period $	48,806		46,490		23,129		847
Investment income ratio*	0.67	%	0.81	%	0.07	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	21.13	%	(41.91%) to (26.41	%)	12.08	%	6.63	%

(g) Fund available in prior year but no activity.

92

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	All Cap Growth Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	164,443		167,960		192,315		377,588		413,068
Units issued	77,295		90,328		44,827		87,667		136,091
Units redeemed	(189,215	)	(93,845	)	(69,182	)	(272,940	)	(171,571	)
Units, end of period	52,523		164,443		167,960		192,315		377,588
Unit value, end of period $	16.90 to 17.44		14.05 to 14.44		24.27 to 24.95		11.42 to 22.34		10.77 to 20.97
Assets, end of period $	892,872		2,348,296		4,091,403		4,175,639		7,772,423
Investment income ratio*	0.51	%	0.34	%	0.05	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	20.31% to 20.73	%	(42.32%) to (42.12	%)	11.27% to 11.72	%	5.83% to 6.25	%	8.23% to 8.61	%

	Sub-Account
	All Cap Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	21,831		3,203		23		—
Units issued	44,155		22,505		4,384		24
Units redeemed	(23,845	)	(3,877	)	(1,204	)	(1	)
Units, end of period	42,141		21,831		3,203		23
Unit value, end of period $	12.38		9.78		13.74		12.64
Assets, end of period $	521,779		213,526		44,000		288
Investment income ratio*	0.74	%	2.30	%	2.41	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	26.59	%	(28.80%) to (19.83	%)	8.68	%	13.82	%

(g) Fund available in prior year but no activity.

93

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	All Cap Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	363,932		462,488		116,701		112,887		111,377
Units issued	33,538		67,408		390,109		81,884		43,049
Units redeemed	(281,947	)	(165,964	)	(44,322	)	(78,070	)	(41,539	)
Units, end of period	115,523		363,932		462,488		116,701		112,887
Unit value, end of period $	16.21 to 16.71		12.88 to 13.23		18.21 to 18.64		16.92 to 17.21		14.97 to 15.19
Assets, end of period $	1,904,662		4,771,874		8,557,532		1,998,682		1,705,935
Investment income ratio*	0.47	%	0.80	%	2.02	%	0.80	%	0.52	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	25.79% to 26.23	%	(29.25%) to (28.99	%)	7.62% to 8.01	%	12.98% to 13.32	%	5.03% to 5.35	%

	Sub-Account
	American Asset  Allocation Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08 (f)
Units, beginning of period	29,748		—
Units issued	1,527,333		30,140
Units redeemed	(209,135	)	(392	)
Units, end of period	1,347,946		29,748
Unit value, end of period $	8.87 to 8.98		7.23 to 7.26
Assets, end of period $	11,976,200		215,822
Investment income ratio*	2.77	%	8.19	%
Expense ratio, lowest to highest**	0.00% to 0.70	%	0.00% to 0.65	%
Total return, lowest to highest***	22.75% to 23.61	%	(27.71%) to (27.39	%)

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

94

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	American Blue Chip Income and Growth Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	235,456		198,959		269,745		141,580		23,565
Units issued	114,968		219,437		117,978		276,354		149,882
Units redeemed	(238,029	)	(182,940	)	(188,764	)	(148,189	)	(31,867	)
Units, end of period	112,395		235,456		198,959		269,745		141,580
Unit value, end of period $	10.64 to 15.23		8.36 to 12.04		13.21 to 19.15		12.99 to 19.17		16.32 to 16.44
Assets, end of period $	1,502,607		2,652,929		3,540,621		5,160,481		2,325,308
Investment income ratio*	1.30	%	4.38	%	2.35	%	0.55	%	0.19	%
Expense ratio, lowest to highest**	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	26.52% to 27.32	%	(37.14%) to (36.72	%)	0.99% to 1.65	%	16.24% to 16.99	%	6.07% to 6.39	%

	Sub-Account
	American Bond Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	146,557		284,176		30,383		—
Units issued	109,801		237,329		417,624		34,152
Units redeemed	(143,466	)	(374,948	)	(163,831	)	(3,769	)
Units, end of period	112,892		146,557		284,176		30,383
Unit value, end of period $	11.24 to 13.68		10.02 to 12.27		11.10 to 13.68		10.78 to 13.40
Assets, end of period $	1,483,648		1,736,403		3,845,351		406,830
Investment income ratio*	2.22	%	8.31	%	4.39	%	0.00	%
Expense ratio, lowest to highest**	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%
Total return, lowest to highest***	11.48% to 12.21	%	(10.30%) to (9.72	%)	2.31% to 2.96	%	5.89% to 6.57	%

(g) Fund available in prior year but no activity.

95

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	American Fundamental Holdings Trust  Series 1
	Year Ended Dec. 31/09 (ak)
Units, beginning of period	—
Units issued	149
Units redeemed	(74	)
Units, end of period	75
Unit value, end of period $	11.87 to 11.92
Assets, end of period $	897
Investment income ratio*	2.19	%
Expense ratio, lowest to highest**	0.00% to 0.65	%
Total return, lowest to highest***	18.70% to 19.20	%

(ak) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

	Sub-Account
	American Global Diversification Trust  Series 1
	Year Ended Dec. 31/09 (ak)
Units, beginning of period	—
Units issued	8,119
Units redeemed	(1,900	)
Units, end of period	6,219
Unit value, end of period $	12.54 to 12.59
Assets, end of period $	78,010
Investment income ratio*	1.89	%
Expense ratio, lowest to highest**	0.00% to 0.65	%
Total return, lowest to highest***	25.40% to 25.94	%

(ak) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

96

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	American Growth Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	1,656,204		1,130,158		1,885,429		1,469,444		534,464
Units issued	1,119,034		1,206,254		653,970		690,357		1,438,001
Units redeemed	(1,719,926	)	(680,208	)	(1,409,241	)	(274,372	)	(503,021	)
Units, end of period	1,055,312		1,656,204		1,130,158		1,885,429		1,469,444
Unit value, end of period $	11.40 to 16.46		8.21 to 11.93		14.71 to 21.52		13.15 to 19.59		17.74 to 17.89
Assets, end of period $	15,119,166		18,483,137		23,277,773		36,590,362		26,189,118
Investment income ratio*	0.25	%	2.08	%	1.23	%	0.29	%	0.00	%
Expense ratio, lowest to highest**	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%	0.30% to 0.65	%
Total return, lowest to highest***	37.98% to 38.87	%	(44.56%) to (44.20	%)	11.20% to 11.94	%	9.09% to 9.80	%	15.04% to 15.44	%

	Sub-Account
	American Growth-Income Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	158,070		246,940		164,133		168,096		114,971
Units issued	957,864		282,920		204,622		71,113		82,686
Units redeemed	(276,154	)	(371,790	)	(121,815	)	(75,076	)	(29,561	)
Units, end of period	839,780		158,070		246,940		164,133		168,096
Unit value, end of period $	10.69 to 15.25		8.17 to 11.77		13.20 to 19.14		12.61 to 18.60		16.14 to 16.26
Assets, end of period $	12,417,690		1,533,150		4,332,011		3,009,500		2,725,094
Investment income ratio*	1.61	%	1.08	%	2.32	%	1.09	%	0.45	%
Expense ratio, lowest to highest**	0.00% to 0.70	%	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	29.88% to 30.79	%	(38.48%) to (38.08	%)	3.96% to 4.64	%	14.06% to 14.80	%	4.75% to 5.08	%

97

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	American International Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	1,592,548		1,766,825		1,393,157		705,780		94,988
Units issued	761,348		777,351		740,354		930,416		664,947
Units redeemed	(879,832	)	(951,628	)	(366,686	)	(243,039	)	(54,155	)
Units, end of period	1,474,064		1,592,548		1,766,825		1,393,157		705,780
Unit value, end of period $	14.46 to 24.41		10.14 to 17.23		17.60 to 30.09		14.72 to 25.64		21.51 to 21.70
Assets, end of period $	28,772,677		22,506,461		46,461,807		30,618,091		15,253,954
Investment income ratio*	1.14	%	3.64	%	1.88	%	0.71	%	0.55	%
Expense ratio, lowest to highest**	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%	0.00% to 0.65	%	0.30% to 0.65	%
Total return, lowest to highest***	41.67% to 42.58	%	(42.74%) to (42.37	%)	18.80% to 19.58	%	17.77% to 18.54	%	20.29% to 20.70	%

	Sub-Account
	American New World Trust Series  1
	Year Ended Dec. 31/09 (ak)
Units, beginning of period	—
Units issued	1,900
Units redeemed	(459	)
Units, end of period	1,441
Unit value, end of period $	13.30 to 13.36
Assets, end of period $	19,195
Investment income ratio*	4.29	%
Expense ratio, lowest to highest**	0.00% to 0.65	%
Total return, lowest to highest***	33.01% to 33.58	%

(ak) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

98

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Balanced Trust Series 0
	Year Ended Dec. 31/09 (ak)
Units, beginning of period	—
Units issued	1,520
Units redeemed	(5	)
Units, end of period	1,515
Unit value, end of period $	11.91
Assets, end of period $	18,049
Investment income ratio*	4.81	%
Expense ratio, lowest to highest**	0.00	%
Total return, lowest to highest***	19.11	%

(ak) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

	Sub-Account
	Blue Chip Growth Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	51,156		31,993		11,570		—
Units issued	127,285		35,457		37,198		11,788
Units redeemed	(27,277	)	(16,294	)	(16,775	)	(218	)
Units, end of period	151,164		51,156		31,993		11,570
Unit value, end of period $	56.75		39.69		69.05		61.21
Assets, end of period $	8,578,346		2,030,472		2,209,133		708,170
Investment income ratio*	0.19	%	0.47	%	0.85	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	42.97	%	(42.52%) to (28.71	%)	12.81	%	9.59	%

(g) Fund available in prior year but no activity.

99

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Blue Chip Growth Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	759,580		996,389		1,083,341		1,450,904		1,667,853
Units issued	334,151		442,153		327,662		544,153		562,542
Units redeemed	(401,994	)	(678,962	)	(414,614	)	(911,716	)	(779,491	)
Units, end of period	691,737		759,580		996,389		1,083,341		1,450,904
Unit value, end of period $	21.48 to 22.26		15.13 to 15.62		26.40 to 27.25		12.73 to 24.23		11.68 to 22.06
Assets, end of period $	13,629,384		10,660,570		25,026,470		24,026,155		29,446,370
Investment income ratio*	0.13	%	0.30	%	0.71	%	0.21	%	0.41	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.70	%	0.25% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	41.96% to 42.54	%	(42.91%) to (42.68	%)	11.96% to 12.46	%	8.82% to 9.30	%	4.86% to 5.23	%

	Sub-Account
	Capital Appreciation Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	13,784		15,717		8,132		—
Units issued	23,788		80,292		21,870		8,767
Units redeemed	(15,508	)	(82,225	)	(14,285	)	(635	)
Units, end of period	22,064		13,784		15,717		8,132
Unit value, end of period $	12.41		8.72		13.89		12.43
Assets, end of period $	273,810		120,161		218,272		101,106
Investment income ratio*	0.31	%	0.21	%	0.48	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	42.35	%	(37.24%) to (23.78	%)	11.70	%	2.38	%

(g) Fund available in prior year but no activity.

100

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Capital Appreciation Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	533,714		579,428		643,831		177,674		91,845
Units issued	300,813		275,841		206,246		782,997		129,375
Units redeemed	(512,761	)	(321,555	)	(270,649	)	(316,840	)	(43,546	)
Units, end of period	321,766		533,714		579,428		643,831		177,674
Unit value, end of period $	11.97 to 12.34		8.47 to 8.70		13.53 to 13.90		12.21 to 12.46		12.05 to 12.20
Assets, end of period $	3,898,184		4,582,828		7,967,841		7,949,747		2,156,867
Investment income ratio*	0.24	%	0.45	%	0.29	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.35% to 0.70	%	0.40% to 0.65	%
Total return, lowest to highest***	41.37% to 41.87	%	(37.63%) to (37.42	%)	10.83% to 11.28	%	1.56% to 1.90	%	13.25% to 13.55	%

	Sub-Account
	Capital Appreciation Value Trust Series 0
	Year Ended Dec. 31/09 (g)
Units, beginning of period	—
Units issued	16,050
Units redeemed	(299	)
Units, end of period	15,751
Unit value, end of period $	9.47
Assets, end of period $	149,143
Investment income ratio*	17.30	%
Expense ratio, lowest to highest**	0.00	%
Total return, lowest to highest***	30.26	%

(g) Fund available in prior year but no activity.

101

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Capital Appreciation Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08 (f)
Units, beginning of period	407		—
Units issued	2,153		422
Units redeemed	(102	)	(15	)
Units, end of period	2,458		407
Unit value, end of period $	9.36		7.23
Assets, end of period $	23,009		2,947
Investment income ratio*	7.80	%	3.95	%
Expense ratio, lowest to highest**	0.65	%	0.65	%
Total return, lowest to highest***	29.36	%	(27.66	%)

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

	Sub-Account
	Classic Value Trust Series 0
	Year Ended Dec. 31/09  (av)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	3,089		1,965		52		—
Units issued	1,791		2,121		2,669		54
Units redeemed	(4,880	)	(997	)	(756	)	(2	)
Units, end of period	—		3,089		1,965		52
Unit value, end of period $	5.99		6.23		11.44		13.09
Assets, end of period $	—		19,249		22,489		683
Investment income ratio*	1.29	%	2.43	%	6.39	%	2.93	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	(3.90	%)	(45.55%) to (30.65	%)	(12.58	%)	16.14	%

(av) Terminated as an investment option and funds transferred to Equity-Income Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

102

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Classic Value Trust Series 1
	Year Ended Dec. 31/09  (av)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05  (g)
Units, beginning of period	10,845		49,364		63,050		28,771		—
Units issued	11,100		2,623		9,414		45,105		30,518
Units redeemed	(21,945	)	(41,142	)	(23,100	)	(10,826	)	(1,747	)
Units, end of period	—		10,845		49,364		63,050		28,771
Unit value, end of period $	7.81 to 7.93		8.16 to 8.27		15.08 to 15.25		17.36 to 17.45		15.06 to 15.11
Assets, end of period $	—		89,243		747,147		1,098,196		433,522
Investment income ratio*	0.83	%	1.30	%	1.40	%	1.45	%	3.55	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%
Total return, lowest to highest***	(4.23%) to (4.13	%)	(45.91%) to (45.74	%)	(13.15%) to (12.89	%)	15.29% to 15.51	%	8.72% to 8.92	%

(av) Terminated as an investment option and funds transferred to Equity-Income Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	Core Allocation Plus Trust Series 1
	Year Ended Dec. 31/09 (g)
Units, beginning of period	—
Units issued	609,771
Units redeemed	(28,024	)
Units, end of period	581,747
Unit value, end of period $	8.58 to 8.61
Assets, end of period $	4,999,225
Investment income ratio*	3.03	%
Expense ratio, lowest to highest**	0.30% to 0.50	%
Total return, lowest to highest***	24.57% to 24.81	%

(g) Fund available in prior year but no activity.

103

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Core Bond Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08  (g)
Units, beginning of period	265		—
Units issued	9,696		523
Units redeemed	(1,432	)	(258	)
Units, end of period	8,529		265
Unit value, end of period $	12.67		11.53
Assets, end of period $	108,070		3,058
Investment income ratio*	3.96	%	10.44	%
Expense ratio, lowest to highest**	0.00	%	0.00	%
Total return, lowest to highest***	9.93	%	1.41% to 3.36	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Core Bond Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05  (e)
Units, beginning of period	1,599		87		27		6		—
Units issued	86,727		1,518		121		22		6
Units redeemed	(60,107	)	(6	)	(61	)	(1	)	—
Units, end of period	28,219		1,599		87		27		6
Unit value, end of period $	15.35 to 15.56		14.05 to 14.15		13.69 to 13.76		12.97		12.58
Assets, end of period $	433,606		22,482		1,200		355		72
Investment income ratio*	2.61	%	15.48	%	8.28	%	2.15	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%	0.65	%	0.65	%
Total return, lowest to highest***	9.22% to 9.55	%	2.63% to 2.82	%	5.58% to 5.76	%	3.13	%	0.60	%

(e) Reflects the period from commencement of operations on May 2, 2005 through December 31, 2005.

104

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Core Diversified Growth & Income Trust Series 1
	Year Ended Dec. 31/09 (ax)
Units, beginning of period	—
Units issued	3,553
Units redeemed	(1,782	)
Units, end of period	1,771
Unit value, end of period $	12.16 to 12.21
Assets, end of period $	21,555
Investment income ratio*	1.40	%
Expense ratio, lowest to highest**	0.00% to 0.65	%
Total return, lowest to highest***	21.61% to 22.14	%

(ax) Reflects the period from commencement of operations on May 4, 2009 through December 31, 2009.

Renamed on November 16, 2009. Previously known as American Diversified Growth & Income Trust.

	Sub-Account
	Core Equity Trust Series 0
	Year Ended Dec. 31/09  (ao)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	7,853		3,181		525		—
Units issued	15,890		5,403		3,907		544
Units redeemed	(23,743	)	(731	)	(1,251	)	(19	)
Units, end of period	—		7,853		3,181		525
Unit value, end of period $	5.24		5.28		11.59		12.31
Assets, end of period $	—		41,456		36,874		6,466
Investment income ratio*	3.11	%	20.74	%	0.08	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	(0.72	%)	(54.46%) to (30.69	%)	(5.85	%)	6.73	%

(ao) Terminated as an investment option and funds transferred to Fundamental Value Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

105

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Core Equity Trust Series 1
	Year Ended Dec. 31/09  (ao)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05  (g)
Units, beginning of period	21,084		39,293		43,160		19,069		—
Units issued	48,447		12,000		173,345		30,049		25,690
Units redeemed	(69,531	)	(30,209	)	(177,212	)	(5,958	)	(6,621	)
Units, end of period	—		21,084		39,293		43,160		19,069
Unit value, end of period $	6.63 to 6.73		6.69 to 6.75		14.78 to 14.89		15.81 to 15.89		14.91 to 14.96
Assets, end of period $	—		141,361		581,986		683,107		284,444
Investment income ratio*	0.97	%	11.05	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%
Total return, lowest to highest***	(0.89%) to (0.78	%)	(54.75%) to (54.67	%)	(6.50%) to (6.31	%)	6.05% to 6.26	%	5.22% to 5.42	%

(ao) Terminated as an investment option and funds transferred to Fundamental Value Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	Core Strategy Trust Series 0
	Year Ended Dec. 31/09 (ay)
Units, beginning of period	—
Units issued	189
Units redeemed	(4	)
Units, end of period	185
Unit value, end of period $	9.17
Assets, end of period $	1,693
Investment income ratio*	2.88	%
Expense ratio, lowest to highest**	0.00	%
Total return, lowest to highest***	21.93	%

(ay) Fund available in prior year but no activity. Fund renamed on May 4, 2009. Previously known as Index Allocation Trust.

106

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Core Strategy Trust Series 1
	Year Ended Dec. 31/09 (ay)
Units, beginning of period	—
Units issued	113
Units redeemed	(2	)
Units, end of period	111
Unit value, end of period $	9.06
Assets, end of period $	1,011
Investment income ratio*	4.35	%
Expense ratio, lowest to highest**	0.65	%
Total return, lowest to highest***	21.09	%

(ay) Fund available in prior year but no activity. Fund renamed on May 4, 2009. Previously known as Index Allocation Trust.

	Sub-Account
	Disciplined Diversification Trust Series 0
	Year Ended Dec. 31/09 (g)
Units, beginning of period	—
Units issued	16,641
Units redeemed	(315	)
Units, end of period	16,326
Unit value, end of period $	9.19
Assets, end of period $	149,965
Investment income ratio*	15.46	%
Expense ratio, lowest to highest**	0.00	%
Total return, lowest to highest***	27.27	%

(g) Fund available in prior year but no activity.

107

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Disciplined Diversification Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08  (f)
Units, beginning of period	—		—
Units issued	113		5,952
Units redeemed	(2	)	(5,952	)
Units, end of period	111		—
Unit value, end of period $	9.08		7.18
Assets, end of period $	1,009		—
Investment income ratio*	4.72	%	0.00	%
Expense ratio, lowest to highest**	0.65	%	0.65	%
Total return, lowest to highest***	26.40	%	(28.19	%)

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

	Sub-Account
	Emerging Markets Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08  (g)
Units, beginning of period	17,645		—
Units issued	52,715		17,760
Units redeemed	(22,046	)	(115	)
Units, end of period	48,314		17,645
Unit value, end of period $	11.61		5.77
Assets, end of period $	560,976		101,749
Investment income ratio*	0.13	%	18.41	%
Expense ratio, lowest to highest**	0.00	%	0.00	%
Total return, lowest to highest***	1.56% to 101.36	%	(51.92	%)

(g) Fund available in prior year but no activity.

108

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Emerging Markets Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07  (w)
Units, beginning of period	38,735		6,228		—
Units issued	39,554		35,677		6,275
Units redeemed	(24,940	)	(3,170	)	(47	)
Units, end of period	53,349		38,735		6,228
Unit value, end of period $	14.25 to 14.35		7.13 to 7.16		14.93
Assets, end of period $	763,018		277,069		93,016
Investment income ratio*	0.08	%	4.00	%	2.90	%
Expense ratio, lowest to highest**	0.40% to 0.65	%	0.40% to 0.65	%	0.65	%
Total return, lowest to highest***	99.84% to 100.34	%	(52.25%) to (52.13	%)	19.46	%

(w) Reflects the period from commencement of operations on April 30, 2007 through December 31, 2007.

	Sub-Account
	Emerging Small Company Trust Series 0
	Year Ended Dec. 31/09  (ap)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	22,956		27,963		10,644		—
Units issued	38,531		12,888		28,805		11,516
Units redeemed	(61,487	)	(17,895	)	(11,486	)	(872	)
Units, end of period	—		22,956		27,963		10,644
Unit value, end of period $	9.30		7.29		12.83		11.87
Assets, end of period $	—		167,240		358,856		126,387
Investment income ratio*	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	27.66	%	(43.23%) to (31.25	%)	8.08	%	2.44	%

(ap) Terminated as an investment option and funds transferred to Smaller Company Growth Trust on November 16, 2009.

(g) Fund available in prior year but no activity.

109

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Emerging Small Company Trust Series 1
	Year Ended Dec. 31/09  (ap)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	325,592		388,892		520,176		669,785		687,402
Units issued	72,026		73,633		64,222		138,895		232,231
Units redeemed	(397,618	)	(136,933	)	(195,506	)	(288,504	)	(249,848	)
Units, end of period	—		325,592		388,892		520,176		669,785
Unit value, end of period $	69.64 to 72.47		54.90 to 56.91		97.47 to 100.59		13.50 to 93.33		13.25 to 91.13
Assets, end of period $	—		15,606,022		33,623,081		40,696,420		50,949,308
Investment income ratio*	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.25% to 0.70	%	0.25% to 0.70	%	0.25% to 0.70	%	0.25% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	26.85% to 27.34	%	(43.68%) to (43.42	%)	7.29% to 7.78	%	1.70% to 2.15	%	4.31% to. 4.73	%

(ap) Terminated as an investment option and funds transferred to Smaller Company Growth Trust on November 16, 2009.

	Sub-Account
	Equity-Income Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	422,688		354,274		238,801		—
Units issued	379,345		269,861		177,383		271,056
Units redeemed	(193,578	)	(201,447	)	(61,910	)	(32,255	)
Units, end of period	608,455		422,688		354,274		238,801
Unit value, end of period $	24.40		19.40		30.29		29.30
Assets, end of period $	14,847,359		8,202,004		10,730,873		6,996,068
Investment income ratio*	2.41	%	2.71	%	3.15	%	1.68	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	25.76	%	(35.94%) to (24.93	%)	3.39	%	19.05	%

(g) Fund available in prior year but no activity.

110

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Equity-Income Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	944,208		1,209,463		1,391,728		1,578,724		1,646,238
Units issued	610,045		365,614		555,776		690,921		759,963
Units redeemed	(937,757	)	(630,869	)	(738,041	)	(877,917	)	(827,477	)
Units, end of period	616,496		944,208		1,209,463		1,391,728		1,578,724
Unit value, end of period $	22.39 to 23.21		17.93 to 18.51		28.08 to 28.97		20.31 to 28.11		17.15 to 23.56
Assets, end of period $	13,270,305		16,578,137		33,434,627		37,693,322		36,227,178
Investment income ratio*	2.19	%	2.35	%	2.82	%	1.49	%	1.25	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.70	%	0.25% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	24.91% to 25.41	%	(36.38%) to (36.12	%)	2.62% to 3.09	%	18.19% to 18.72	%	3.20% to 3.56	%

	Sub-Account
	Financial Services Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	11,844		2,300		45		—
Units issued	12,978		14,881		6,446		47
Units redeemed	(13,461	)	(5,337	)	(4,191	)	(2	)
Units, end of period	11,361		11,844		2,300		45
Unit value, end of period $	16.68		11.79		21.29		22.83
Assets, end of period $	189,531		139,607		48,965		1,024
Investment income ratio*	0.77	%	1.34	%	1.83	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	41.53	%	(44.63%) to (29.96	%)	(6.73	%)	23.16	%

(g) Fund available in prior year but no activity.

111

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Financial Services Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	158,003		37,610		135,361		30,934		23,337
Units issued	53,886		251,270		45,254		119,009		17,012
Units redeemed	(171,005	)	(130,877	)	(143,005	)	(14,582	)	(9,415	)
Units, end of period	40,884		158,003		37,610		135,361		30,934
Unit value, end of period $	13.12 to 13.47		9.34 to 9.56		16.99 to 17.33		18.35 to 18.66		15.00 to 15.14
Assets, end of period $	544,204		1,505,269		644,355		2,512,100		466,240
Investment income ratio*	0.63	%	1.65	%	1.00	%	0.22	%	0.38	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.45% to 0.65	%
Total return, lowest to highest***	40.49% to 40.91	%	(45.01%) to (44.85	%)	(7.42%) to (7.15	%)	22.32% to 22.69	%	9.07% to 9.28	%

	Sub-Account
	Franklin Templeton Founding Allocation Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08 (f)
Units, beginning of period	23,066		—
Units issued	39,529		23,225
Units redeemed	(24,389	)	(159	)
Units, end of period	38,206		23,066
Unit value, end of period $	8.93		6.79
Assets, end of period $	341,295		156,653
Investment income ratio*	6.82	%	20.48	%
Expense ratio, lowest to highest**	0.00	%	0.00	%
Total return, lowest to highest***	31.52	%	(32.08%) to (21.32	%)

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

112

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Fundamental Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	83,985		8,642		7,976		—
Units issued	253,970		84,974		2,280		8,137
Units redeemed	(122,042	)	(9,631	)	(1,614	)	(161	)
Units, end of period	215,913		83,985		8,642		7,976
Unit value, end of period $	10.57		8.02		13.20		12.68
Assets, end of period $	2,281,949		673,278		114,075		101,153
Investment income ratio*	1.00	%	3.24	%	1.77	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	31.83	%	(39.27%) to (27.52	%)	4.08	%	14.55	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Fundamental Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	591,549		235,968		258,420		194,312		168,396
Units issued	468,005		477,588		64,277		143,105		107,178
Units redeemed	(356,704	)	(122,007	)	(86,729	)	(78,997	)	(81,262	)
Units, end of period	702,850		591,549		235,968		258,420		194,312
Unit value, end of period $	13.98 to 14.42		10.68 to 10.97		17.72 to 18.14		17.14 to 17.49		15.06 to 15.28
Assets, end of period $	9,947,392		6,384,680		4,226,469		4,461,137		2,943,943
Investment income ratio*	1.08	%	1.75	%	1.58	%	0.79	%	0.42	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	30.92% to 31.39	%	(39.71%) to (39.50	%)	3.36% to 3.73	%	13.77% to 14.18	%	8.14% to 8.46	%

113

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Global Allocation Trust Series 0
	Year Ended Dec. 31/09  (am)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	7,442		3,666		32		—
Units issued	17,900		8,903		4,011		33
Units redeemed	(25,342	)	(5,127	)	(377	)	(1	)
Units, end of period	—		7,442		3,666		32
Unit value, end of period $	10.94		8.51		12.93		12.31
Assets, end of period $	—		63,324		47,414		388
Investment income ratio*	0.01	%	6.73	%	11.80	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	28.58	%	(34.21%) to (24.39	%)	5.06	%	13.58	%

(am) Terminated as an investment option and funds transferred to Lifestyle Balanced Trust on November 16, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	Global Allocation Trust Series 1
	Year Ended Dec. 31/09  (am)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	32,221		170,839		136,763		26,935		17,767
Units issued	44,931		67,943		130,340		223,082		51,578
Units redeemed	(77,152	)	(206,561	)	(96,264	)	(113,254	)	(42,410	)
Units, end of period	—		32,221		170,839		136,763		26,935
Unit value, end of period $	11.54 to 11.91		9.03 to 9.29		13.83 to 14.12		13.24 to 13.48		11.74 to 11.92
Assets, end of period $	—		294,279		2,404,378		1,826,871		316,420
Investment income ratio*	0.01	%	2.76	%	6.32	%	0.91	%	0.65	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	27.82% to 28.19	%	(34.71%) to (34.48	%)	4.45% to 4.76	%	12.77% to 13.11	%	5.51% to 5.84	%

(am) Terminated as an investment option and funds transferred to Lifestyle Balanced Trust on November 16, 2009.

114

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Global Bond Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	280,537		232,906		156,254		—
Units issued	147,097		192,157		144,116		179,125
Units redeemed	(115,310	)	(144,526	)	(67,464	)	(22,871	)
Units, end of period	312,324		280,537		232,906		156,254
Unit value, end of period $	24.68		21.38		22.37		20.41
Assets, end of period $	7,706,881		5,998,144		5,209,990		3,189,038
Investment income ratio*	12.29	%	0.56	%	8.01	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	15.41	%	(4.42%) to (1.77	%)	9.61	%	5.27	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Global Bond Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	216,580		252,132		263,273		283,511		218,132
Units issued	174,925		279,869		131,138		174,167		195,710
Units redeemed	(249,102	)	(315,421	)	(142,279	)	(194,405	)	(130,331	)
Units, end of period	142,403		216,580		252,132		263,273		283,511
Unit value, end of period $	22.70 to 23.42		19.80 to 20.36		20.79 to 21.38		18.20 to 19.56		17.39 to 18.59
Assets, end of period $	3,275,176		4,354,555		5,343,383		5,088,466		5,234,432
Investment income ratio*	14.45	%	0.57	%	7.18	%	0.00	%	4.26	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	14.65% to 15.05	%	(5.10%) to (4.78	%)	8.86% to 9.30	%	4.53% to 4.96	%	(7.19%) to (6.87	%)

115

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Global Real Estate Trust Series 0
	Year Ended Dec. 31/09 (aq)
Units, beginning of period	—
Units issued	494
Units redeemed	(494	)
Units, end of period	—
Unit value, end of period $	6.73
Assets, end of period $	—
Investment income ratio*	0.00	%
Expense ratio, lowest to highest**	0.00	%
Total return, lowest to highest***	20.71	%

(aq) Terminated as an investment option and funds transferred to Real Estate Securities Trust on November 16, 2009.

Fund available in prior year but no activity.

	Sub-Account
	Global Real Estate Trust Series 1
	Year Ended Dec. 31/09 (aq)		Year Ended Dec. 31/08  (f)
Units, beginning of period	447		—
Units issued	296		457
Units redeemed	(743	)	(10	)
Units, end of period	—		447
Unit value, end of period $	6.65		5.54
Assets, end of period $	—		2,480
Investment income ratio*	87.27	%	10.22	%
Expense ratio, lowest to highest**	0.65	%	0.65	%
Total return, lowest to highest***	20.02	%	(44.55	%)

(aq) Terminated as an investment option and funds transferred to Real Estate Securities Trust on November 16, 2009.

(f) Reflects the period from commencement of operations on April 28, 2008 through December 31, 2008.

116

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Global Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	32,930		40,340		7,504		—
Units issued	24,262		24,420		44,553		7,736
Units redeemed	(35,507	)	(31,830	)	(11,717	)	(232	)
Units, end of period	21,685		32,930		40,340		7,504
Unit value, end of period $	10.94		8.32		13.75		13.57
Assets, end of period $	237,159		273,952		554,586		101,826
Investment income ratio*	1.16	%	2.41	%	2.43	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	31.47	%	(39.49%) to (23.39	%)	1.32	%	20.42	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Global Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	145,276		261,353		240,688		227,332		226,763
Units issued	62,853		68,244		141,074		148,216		88,843
Units redeemed	(111,488	)	(184,321	)	(120,409	)	(134,860	)	(88,274	)
Units, end of period	96,641		145,276		261,353		240,688		227,332
Unit value, end of period $	18.66 to 19.26		14.30 to 14.71		23.72 to 24.40		18.08 to 24.15		15.10 to 20.08
Assets, end of period $	1,785,233		2,096,612		6,258,053		5,725,741		4,510,252
Investment income ratio*	1.83	%	1.77	%	2.31	%	1.27	%	1.25	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	30.52% to 30.97	%	(39.94%) to (39.73	%)	0.63% to 1.03	%	19.49% to 19.96	%	9.95% to 10.33	%

117

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Health Sciences Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	40,949		11,504		141		—
Units issued	32,120		73,492		50,077		146
Units redeemed	(30,032	)	(44,047	)	(38,714	)	(5	)
Units, end of period	43,037		40,949		11,504		141
Unit value, end of period $	15.96		12.11		17.26		14.66
Assets, end of period $	686,852		495,670		198,514		2,065
Investment income ratio*	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	31.84	%	(29.86%) to (21.80	%)	17.73	%	8.44	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Health Sciences Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	260,191		235,072		296,297		268,882		228,816
Units issued	114,028		280,570		112,666		210,936		114,558
Units redeemed	(274,054	)	(255,451	)	(173,891	)	(183,521	)	(74,492	)
Units, end of period	100,165		260,191		235,072		296,297		268,882
Unit value, end of period $	19.41 to 20.01		14.82 to 15.23		21.29 to 21.79		18.21 to 18.57		16.91 to 17.15
Assets, end of period $	1,957,724		3,897,285		5,076,968		5,446,065		4,584,275
Investment income ratio*	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	30.95% to 31.41	%	(30.3%) to (30.11	%)	16.91% to 17.32	%	7.67% to 8.05	%	11.91% to 12.25	%

118

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	High Yield Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	77,172		58,466		10,318		—
Units issued	142,835		64,061		66,712		10,940
Units redeemed	(88,271	)	(45,355	)	(18,564	)	(622	)
Units, end of period	131,736		77,172		58,466		10,318
Unit value, end of period $	14.20		9.19		13.03		12.82
Assets, end of period $	1,870,386		709,188		761,889		132,294
Investment income ratio*	13.46	%	9.25	%	14.49	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	54.51	%	(29.48%) to (24.36	%)	1.64	%	10.48	%

(g) Fund available in prior year but no activity.

	Sub-Account
	High Yield Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	294,419		456,353		622,204		1,025,251		747,358
Units issued	170,151		139,507		222,523		335,772		576,968
Units redeemed	(240,100	)	(301,441	)	(388,374	)	(738,819	)	(299,075	)
Units, end of period	224,470		294,419		456,353		622,204		1,025,251
Unit value, end of period $	19.87 to 20.50		12.94 to 13.31		18.42 to 18.94		15.50 to 18.69		14.12 to 16.99
Assets, end of period $	4,385,652		3,740,054		8,286,870		11,149,819		16,898,635
Investment income ratio*	11.42	%	7.50	%	12.22	%	7.72	%	5.03	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	53.51% to 54.05	%	(29.98%) to (29.73	%)	0.91% to 1.32	%	9.61% to 10.05	%	2.98% to 3.39	%

119

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Income & Value Trust Series 0
	Year Ended Dec. 31/09  (ar)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	14,162		17,941		2,855		—
Units issued	9,033		5,398		18,643		2,909
Units redeemed	(23,195	)	(9,177	)	(3,557	)	(54	)
Units, end of period	—		14,162		17,941		2,855
Unit value, end of period $	8.27		8.34		11.93		11.80
Assets, end of period $	—		118,153		214,061		33,687
Investment income ratio*	0.29	%	2.85	%	5.22	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	(0.92	%)	(30.07%) to (17.93	%)	1.11	%	8.77	%

(ar) Terminated as an investment option and funds transferred to American Asset Allocation Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	Income & Value Trust Series 1
	Year Ended Dec. 31/09  (ar)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	776,465		917,328		1,076,434		1,373,417		1,679,725
Units issued	61,508		183,110		239,053		143,883		211,726
Units redeemed	(837,973	)	(323,973	)	(398,159	)	(440,866	)	(518,034	)
Units, end of period	—		776,465		917,328		1,076,434		1,373,417
Unit value, end of period $	13.76 to 14.23		13.92 to 14.37		20.06 to 20.63		16.89 to 20.47		15.63 to 18.89
Assets, end of period $	—		10,807,404		18,404,247		21,490,159		25,459,694
Investment income ratio*	0.32	%	2.99	%	3.89	%	2.10	%	1.59	%
Expense ratio, lowest to highest**	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	(1.14%) to (1.01	%)	(30.62%) to (30.33	%)	0.40% to 0.81	%	7.90% to 8.33	%	4.49% to 4.90	%

(ar) Terminated as an investment option and funds transferred to American Asset Allocation Trust on May 4, 2009.

120

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	International Core Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (h)
Units, beginning of period	20,154		13,585		454		—
Units issued	30,718		20,613		20,258		474
Units redeemed	(15,388	)	(14,044	)	(7,127	)	(20	)
Units, end of period	35,484		20,154		13,585		454
Unit value, end of period $	12.05		10.16		16.55		14.84
Assets, end of period $	427,723		204,797		224,764		6,728
Investment income ratio*	3.08	%	6.12	%	2.92	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	18.62	%	(38.58%) to (22.22	%)	11.46	%	24.81	%

(h) Fund renamed on May 1, 2006. Previously known as International Stock Trust. Fund available in prior year but no activity.

	Sub-Account
	International Core Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (i)		Year Ended Dec. 31/05
Units, beginning of period	391,213		504,258		513,665		934,920		1,016,696
Units issued	127,741		137,701		142,487		408,054		375,227
Units redeemed	(213,147	)	(250,746	)	(151,894	)	(829,309	)	(457,003	)
Units, end of period	305,807		391,213		504,258		513,665		934,920
Unit value, end of period $	14.85 to 15.33		12.60 to 12.96		20.60 to 21.18		15.30 to 19.01		12.33 to 15.29
Assets, end of period $	4,569,358		4,958,400		10,486,948		9,619,429		14,186,941
Investment income ratio*	2.35	%	4.50	%	2.21	%	0.60	%	0.74	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.35% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	17.87% to 18.28	%	(39.02%) to (38.80	%)	10.64% to 11.08	%	23.91% to 24.33	%	15.14% to 15.55	%

(i) Fund renamed on May 1, 2006. Previously known as International Stock Trust.

121

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	International Equity Index Trust A Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05  (n)
Units, beginning of period	263,204		164,962		438,785		343,997		51,012
Units issued	61,341		231,501		126,457		167,620		392,254
Units redeemed	(149,856	)	(133,259	)	(400,280	)	(72,832	)	(99,269	)
Units, end of period	174,689		263,204		164,962		438,785		343,997
Unit value, end of period $	18.43 to 18.79		13.45 to 13.67		24.37 to 24.73		21.27 to 21.49		17.07 to 17.18
Assets, end of period $	3,266,527		3,585,626		4,062,908		9,394,587		5,895,407
Investment income ratio*	12.43	%	2.45	%	3.63	%	0.72	%	0.79	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	36.96% to 37.44	%	(44.90%) to (44.71	%)	14.62% to 15.07	%	24.62% to 25.11	%	15.80% to 16.26	%

(n) Fund renamed on May 2, 2005. Previously known as International Equity Index Fund.

	Sub-Account
	International Equity Index Trust B Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	117,054		34,648		4,914		—
Units issued	139,800		146,008		42,350		169,895
Units redeemed	(65,017	)	(63,602	)	(12,616	)	(164,981	)
Units, end of period	191,837		117,054		34,648		4,914
Unit value, end of period $	36.81		26.52		47.69		41.18
Assets, end of period $	7,062,159		3,104,506		1,652,270		202,332
Investment income ratio*	4.04	%	3.69	%	6.71	%	6.58	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	38.80	%	(44.38%) to (27.72	%)	15.82	%	27.11	%

(g) Fund available in prior year but no activity.

122

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	International Opportunities Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	228,989		110,205		12,483		—
Units issued	181,534		202,989		109,273		12,824
Units redeemed	(114,615	)	(84,205	)	(11,551	)	(341	)
Units, end of period	295,908		228,989		110,205		12,483
Unit value, end of period $	12.59		9.16		18.51		15.41
Assets, end of period $	3,726,727		2,097,481		2,039,663		192,374
Investment income ratio*	1.29	%	1.55	%	2.56	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	37.49	%	(50.51%) to (34.21	%)	20.10	%	23.96	%

(g) Fund available in prior year but no activity.

	Sub-Account
	International Opportunities Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05  (e)
Units, beginning of period	159,575		144,407		112,824		469		—
Units issued	49,349		175,070		67,598		204,132		1,745
Units redeemed	(157,666	)	(159,902	)	(36,015	)	(91,777	)	(1,276	)
Units, end of period	51,258		159,575		144,407		112,824		469
Unit value, end of period $	15.24 to 15.45		11.15 to 11.27		22.70 to 22.88		19.03 to 19.12		15.46
Assets, end of period $	787,343		1,795,448		3,296,001		2,154,500		7,257
Investment income ratio*	0.75	%	1.25	%	1.63	%	0.25	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.65	%
Total return, lowest to highest***	36.67% to 37.08	%	(50.88%) to (50.73	%)	19.32% to 19.68	%	23.04% to 23.40	%	23.71	%

(e) Reflects the period from commencement of operations on May 2, 2005 through December 31, 2005.

123

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	International Small Cap Trust Series 0
	Year Ended Dec. 31/09  (as)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	41,368		43,381		1,115		—
Units issued	79,270		25,614		50,754		1,143
Units redeemed	(120,638	)	(27,627	)	(8,488	)	(28	)
Units, end of period	—		41,368		43,381		1,115
Unit value, end of period $	11.68		7.39		15.73		14.27
Assets, end of period $	—		305,840		682,371		15,913
Investment income ratio*	2.06	%	3.02	%	4.61	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	57.92	%	(53.00%) to (37.64	%)	10.20	%	27.73	%

(as) Terminated as an investment option and funds transferred to International Small Company Trust on November 16, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	International Small Cap Trust Series 1
	Year Ended Dec. 31/09  (as)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	262,549		323,099		262,400		242,913		254,360
Units issued	185,819		170,062		224,368		115,106		115,857
Units redeemed	(448,368	)	(230,612	)	(163,669	)	(95,619	)	(127,304	)
Units, end of period	—		262,549		323,099		262,400		242,913
Unit value, end of period $	21.04 to 21.71		13.43 to 13.82		28.66 to 29.47		16.52 to 26.77		13.00 to 21.03
Assets, end of period $	—		3,562,859		9,304,722		6,853,600		4,994,547
Investment income ratio*	1.91	%	2.67	%	2.93	%	1.03	%	0.86	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.35% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	56.61% to 57.09	%	(53.29%) to (53.12	%)	9.36% to 9.80	%	26.84% to 27.29	%	9.34% to 9.72	%

(as) Terminated as an investment option and funds transferred to International Small Company Trust on November 16, 2009.

124

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	International Small Company Trust Series 0
	Year Ended Dec. 31/09 (al)
Units, beginning of period	—
Units issued	64,995
Units redeemed	(27,156	)
Units, end of period	37,839
Unit value, end of period $	9.84
Assets, end of period $	372,374
Investment income ratio*	0.59	%
Expense ratio, lowest to highest**	0.00	%
Total return, lowest to highest***	(1.59	%)

(al) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

	Sub-Account
	International Small Company Trust Series 1
	Year Ended Dec. 31/09 (al)
Units, beginning of period	—
Units issued	265,040
Units redeemed	(9,820	)
Units, end of period	255,220
Unit value, end of period $	9.82 to 9.83
Assets, end of period $	2,507,098
Investment income ratio*	0.82	%
Expense ratio, lowest to highest**	0.30% to 0.65	%
Total return, lowest to highest***	(1.79%) to (1.74	%)

(al) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

125

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	International Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	67,718		8,699		156		—
Units issued	114,220		89,308		86,980		157
Units redeemed	(71,847	)	(30,289	)	(78,437	)	(1	)
Units, end of period	110,091		67,718		8,699		156
Unit value, end of period $	12.43		9.15		15.95		14.55
Assets, end of period $	1,368,878		619,413		138,707		2,266
Investment income ratio*	2.33	%	4.68	%	5.23	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	35.94	%	(42.64%) to (26.82	%)	9.61	%	29.61	%

(g) Fund available in prior year but no activity.

	Sub-Account
	International Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	833,727		1,343,264		1,282,480		1,151,161		534,492
Units issued	342,720		462,638		635,732		802,307		1,071,184
Units redeemed	(622,169	)	(972,175	)	(574,948	)	(670,988	)	(454,515	)
Units, end of period	554,278		833,727		1,343,264		1,282,480		1,151,161
Unit value, end of period $	18.02 to 18.68		13.35 to 13.79		23.37 to 24.12		21.49 to 22.42		16.70 to 17.40
Assets, end of period $	10,226,216		11,386,567		32,163,348		28,081,796		19,488,615
Investment income ratio*	2.20	%	3.01	%	4.36	%	1.77	%	0.66	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.70	%	0.25% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	34.90% to 35.44	%	(43.04%) to (42.81	%)	8.76% to 9.25	%	28.68% to 29.27	%	9.78% to 10.15	%

126

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Investment Quality Bond Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07  (g)
Units, beginning of period	23,104		21,474		—
Units issued	16,454		22,172		28,300
Units redeemed	(17,607	)	(20,542	)	(6,826	)
Units, end of period	21,951		23,104		21,474
Unit value, end of period $	12.33		10.97		11.15
Assets, end of period $	270,739		253,456		239,428
Investment income ratio*	3.98	%	6.27	%	13.41	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	12.43	%	(1.61%) to 0.35	%	6.23	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Investment Quality Bond Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	288,229		364,134		417,247		956,608		1,132,045
Units issued	94,522		58,613		101,824		255,155		240,139
Units redeemed	(158,179	)	(134,518	)	(154,937	)	(794,516	)	(415,576	)
Units, end of period	224,572		288,229		364,134		417,247		956,608
Unit value, end of period $	24.12 to 24.90		21.59 to 22.21		22.03 to 22.66		18.33 to 21.40		17.79 to 20.67
Assets, end of period $	5,426,904		6,251,474		8,095,296		8,726,321		19,439,556
Investment income ratio*	4.75	%	6.28	%	8.92	%	7.56	%	5.63	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	11.72% to 12.11	%	(2.31%) to (1.97	%)	5.47% to 5.88	%	2.84% to 3.26	%	1.55% to 1.91	%

127

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Large Cap Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	8,969		3,559		64		—
Units issued	30,965		7,799		27,296		66
Units redeemed	(13,375	)	(2,389	)	(23,801	)	(2	)
Units, end of period	26,559		8,969		3,559		64
Unit value, end of period $	10.27		7.84		12.96		12.77
Assets, end of period $	272,677		70,272		46,121		818
Investment income ratio*	2.72	%	2.41	%	0.20	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	31.02	%	(39.55%) to (28.84	%)	1.53	%	14.38	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Large Cap Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05  (e)
Units, beginning of period	314,175		303,754		2,302		289		—
Units issued	73,118		102,040		348,751		2,142		304
Units redeemed	(205,882	)	(91,619	)	(47,299	)	(129	)	(15	)
Units, end of period	181,411		314,175		303,754		2,302		289
Unit value, end of period $	12.43 to 12.64		9.54 to 9.69		15.89 to 16.06		15.80 to 15.85		13.90
Assets, end of period $	2,261,005		3,019,835		4,850,940		36,373		4,019
Investment income ratio*	1.86	%	1.55	%	0.81	%	0.27	%	0.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.45% to 0.65	%	0.65	%
Total return, lowest to highest***	29.99% to 30.46	%	(39.94%) to (39.70	%)	0.68% to 1.09	%	13.62% to 13.85	%	11.22	%

(e) Reflects the period from commencement of operations on May 2, 2005 through December 31, 2005.

128

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Large Cap Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	53,141		12,352		251		—
Units issued	34,931		50,484		15,544		251
Units redeemed	(32,489	)	(9,695	)	(3,443	)	—
Units, end of period	55,583		53,141		12,352		251
Unit value, end of period $	9.96		9.00		14.03		13.43
Assets, end of period $	553,539		478,069		173,316		3,364
Investment income ratio*	1.66	%	3.76	%	2.11	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	10.68	%	(35.89%) to (22.82	%)	4.45	%	16.03	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Large Cap Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	312,286		355,022		217,111		174,124		74,430
Units issued	226,016		139,873		249,955		186,497		144,010
Units redeemed	(400,004	)	(182,609	)	(112,044	)	(143,510	)	(44,316	)
Units, end of period	138,298		312,286		355,022		217,111		174,124
Unit value, end of period $	18.44 to 18.82		16.78 to 17.07		26.35 to 26.72		25.41 to 25.69		22.06 to 22.24
Assets, end of period $	2,581,189		5,314,642		9,458,751		5,565,112		3,866,266
Investment income ratio*	1.41	%	1.77	%	1.03	%	0.45	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	9.92% to 10.25	%	(36.33%) to (36.13	%)	3.70% to 4.01	%	15.18% to 15.53	%	14.74% to 15.08	%

129

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Lifestyle Aggressive Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (d)
Units, beginning of period	208,575		49,164		534		—
Units issued	204,213		193,153		77,108		579
Units redeemed	(131,740	)	(33,742	)	(28,478	)	(45	)
Units, end of period	281,048		208,575		49,164		534
Unit value, end of period $	11.41		8.41		14.50		13.34
Assets, end of period $	3,206,926		1,753,973		712,814		7,133
Investment income ratio*	1.13	%	2.74	%	9.39	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	35.70	%	(42.00%) to (28.35	%)	8.66	%	15.48	%

(d) Fund renamed on May 1, 2006. Previously known as Lifestyle Aggressive 1000 Trust. Fund available in prior year but no activity.

	Sub-Account
	Lifestyle Aggressive Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (r)		Year Ended Dec. 31/05
Units, beginning of period	378,274		462,444		348,066		316,430		305,615
Units issued	369,002		178,424		197,231		121,063		63,954
Units redeemed	(365,096	)	(262,594	)	(82,853	)	(89,427	)	(53,139	)
Units, end of period	382,180		378,274		462,444		348,066		316,430
Unit value, end of period $	17.59 to 18.15		13.05 to 13.42		22.65 to 23.20		16.82 to 21.44		14.65 to 18.58
Assets, end of period $	6,742,728		4,954,739		10,530,978		7,319,039		5,802,326
Investment income ratio*	1.09	%	1.90	%	9.52	%	7.38	%	1.79	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	34.75% to 35.22	%	(42.37%) to (42.16	%)	7.84% to 8.22	%	14.72% to 15.11	%	9.92% to 10.25	%

(r) Fund renamed on May 1, 2006. Previously known as Lifestyle Aggressive 1000 Trust.

130

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Lifestyle Balanced Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (c)
Units, beginning of period	345,505		218,765		107,849		—
Units issued	542,287		252,640		129,478		110,597
Units redeemed	(514,971	)	(125,900	)	(18,562	)	(2,748	)
Units, end of period	372,821		345,505		218,765		107,849
Unit value, end of period $	11.85		9.06		13.19		12.37
Assets, end of period $	4,419,554		3,128,937		2,884,985		1,334,204
Investment income ratio*	4.92	%	4.16	%	7.63	%	0.11	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	30.89	%	(31.33%) to (21.25	%)	6.60	%	12.80	%

(c) Fund renamed on May 1, 2006. Previously known as Lifestyle Balanced 640 Trust. Fund available in prior year but no activity.

	Sub-Account
	Lifestyle Balanced Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (s)		Year Ended Dec. 31/05
Units, beginning of period	512,877		525,031		693,715		934,585		914,120
Units issued	313,368		216,482		116,050		245,346		282,338
Units redeemed	(417,108	)	(228,636	)	(284,734	)	(486,216	)	(261,873	)
Units, end of period	409,137		512,877		525,031		693,715		934,585
Unit value, end of period $	22.00 to 22.71		16.94 to 17.42		24.81 to 25.43		18.61 to 23.96		16.60 to 21.26
Assets, end of period $	9,013,279		8,730,517		13,079,455		16,303,510		19,581,681
Investment income ratio*	4.47	%	3.23	%	7.44	%	5.76	%	3.96	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	29.90% to 30.35	%	(31.74%) to (31.50	%)	5.77% to 6.15	%	12.01% to 12.39	%	6.20% to 6.51	%

(s) Fund renamed on May 1, 2006. Previously known as Lifestyle Balanced 640 Trust.

131

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Lifestyle Conservative Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (a)
Units, beginning of period	34,442		2,736		114		—
Units issued	102,908		34,420		3,731		115
Units redeemed	(37,205	)	(2,714	)	(1,109	)	(1	)
Units, end of period	100,145		34,442		2,736		114
Unit value, end of period $	12.15		9.99		11.81		11.21
Assets, end of period $	1,216,629		344,025		32,325		1,287
Investment income ratio*	8.43	%	25.38	%	9.49	%	1.13	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	21.63	%	(15.43%) to (10.74	%)	5.35	%	8.44	%

(a) Fund renamed on May 1, 2006. Previously known as Lifestyle Conservative 280 Trust. Fund available in prior year but no activity.

	Sub-Account
	Lifestyle Conservative Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (t)		Year Ended Dec. 31/05
Units, beginning of period	178,286		289,337		55,589		284,921		268,947
Units issued	22,075		153,526		257,589		66,508		55,265
Units redeemed	(124,945	)	(264,577	)	(23,841	)	(295,840	)	(39,291	)
Units, end of period	75,416		178,286		289,337		55,589		284,921
Unit value, end of period $	23.99 to 24.76		19.84 to 20.40		23.65 to 24.23		18.47 to 23.07		17.13 to 21.23
Assets, end of period $	1,800,796		3,567,617		6,915,236		1,239,063		5,962,323
Investment income ratio*	4.29	%	3.34	%	9.12	%	6.17	%	5.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.40% to 0.65	%
Total return, lowest to highest***	20.92% to 21.35	%	(16.12%) to (15.82	%)	4.70% to 5.05	%	7.73% to 8.11	%	2.22% to 2.48	%

(t) Fund renamed on May 1, 2006. Previously known as Lifestyle Conservative 280 Trust.

132

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Lifestyle Growth Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (z)
Units, beginning of period	492,467		279,917		113,970		—
Units issued	372,790		324,378		198,908		118,278
Units redeemed	(141,274	)	(111,828	)	(32,961	)	(4,308	)
Units, end of period	723,983		492,467		279,917		113,970
Unit value, end of period $	11.64		8.73		13.76		12.79
Assets, end of period $	8,427,534		4,299,878		3,850,878		1,457,877
Investment income ratio*	4.17	%	3.60	%	7.22	%	0.08	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	33.33	%	(36.54%) to (24.41	%)	7.55	%	13.58	%

(z) Fund renamed on May 1, 2006. Previously known as Lifestyle Growth 820 Trust. Fund available in prior year but no activity.

	Sub-Account
	Lifestyle Growth Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (u)		Year Ended Dec. 31/05
Units, beginning of period	616,972		589,218		507,106		416,491		417,608
Units issued	342,277		167,165		190,193		158,281		130,964
Units redeemed	(391,568	)	(139,411	)	(108,081	)	(67,666	)	(132,081	)
Units, end of period	567,681		616,972		589,218		507,106		416,491
Unit value, end of period $	20.04 to 20.69		15.14 to 15.57		24.03 to 24.63		17.42 to 22.91		15.44 to 20.26
Assets, end of period $	11,437,781		9,400,374		14,223,964		11,424,780		8,315,803
Investment income ratio*	3.52	%	2.71	%	7.66	%	5.75	%	2.70	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	32.43% to 32.90	%	(37.01%) to (36.79	%)	6.82% to 7.20	%	12.76% to 13.11	%	7.96% to 8.28	%

(u) Fund renamed on May 1, 2006. Previously known as Lifestyle Growth 820 Trust.

133

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Lifestyle Moderate Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (y)
Units, beginning of period	128,902		36,346		1,032		—
Units issued	290,244		185,989		51,669		1,056
Units redeemed	(143,591	)	(93,433	)	(16,355	)	(24	)
Units, end of period	275,555		128,902		36,346		1,032
Unit value, end of period $	11.90		9.35		12.33		11.71
Assets, end of period $	3,277,916		1,205,627		448,263		12,083
Investment income ratio*	9.25	%	7.22	%	9.18	%	0.42	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	27.18	%	(24.16%) to (16.44	%)	5.34	%	10.49	%

(y) Fund renamed on May 1, 2006. Previously known as Lifestyle Moderate 460 Trust. Fund available in prior year but no activity.

	Sub-Account
	Lifestyle Moderate Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (v)		Year Ended Dec. 31/05
Units, beginning of period	93,927		103,478		137,665		143,857		170,770
Units issued	84,461		61,722		135,935		158,656		66,570
Units redeemed	(81,047	)	(71,273	)	(170,122	)	(164,848	)	(93,483	)
Units, end of period	97,341		93,927		103,478		137,665		143,857
Unit value, end of period $	22.84 to 23.57		18.06 to 18.57		23.99 to 24.59		18.23 to 23.42		16.60 to 21.22
Assets, end of period $	2,238,073		1,708,801		2,495,078		3,158,679		3,008,972
Investment income ratio*	4.98	%	3.94	%	6.52	%	3.83	%	4.03	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	26.44% to 26.88	%	(24.72%) to (24.46	%)	4.61% to 4.98	%	9.70% to 10.09	%	3.48% to 3.79	%

(v) Fund renamed on May 1, 2006. Previously known as Lifestyle Moderate 460 Trust.

134

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Mid Cap Index Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	105,314		71,068		25,037		—
Units issued	101,997		65,541		85,093		25,693
Units redeemed	(70,504	)	(31,295	)	(39,062	)	(656	)
Units, end of period	136,807		105,314		71,068		25,037
Unit value, end of period $	13.07		9.56		15.02		13.97
Assets, end of period $	1,788,270		1,006,767		1,067,496		349,681
Investment income ratio*	1.18	%	1.14	%	1.69	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	36.74	%	(36.36%) to (29.45	%)	7.55	%	9.74	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Mid Cap Index Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	855,105		1,227,846		315,280		329,426		411,020
Units issued	136,277		151,549		1,720,087		210,019		329,260
Units redeemed	(447,190	)	(524,290	)	(807,521	)	(224,165	)	(410,854	)
Units, end of period	544,192		855,105		1,227,846		315,280		329,426
Unit value, end of period $	18.78 to 19.38		13.82 to 14.22		21.80 to 22.42		20.42 to 20.92		18.74 to 19.08
Assets, end of period $	10,434,709		12,037,182		27,299,289		6,517,466		6,231,380
Investment income ratio*	0.95	%	0.91	%	1.22	%	0.63	%	0.76	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	35.88% to 36.36	%	(36.82%) to (36.61	%)	6.76% to 7.19	%	8.95% to 9.39	%	11.24% to 11.63	%

135

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Mid Cap Intersection Trust Series 0
	Year Ended Dec. 31/09 (at)		Year Ended Dec. 31/08 (g)
Units, beginning of period	5,308		—
Units issued	4,134		6,131
Units redeemed	(9,442	)	(823	)
Units, end of period	—		5,308
Unit value, end of period $	6.89		5.40
Assets, end of period $	—		28,673
Investment income ratio*	0.73	%	0.28	%
Expense ratio, lowest to highest**	0.00	%	0.00	%
Total return, lowest to highest***	27.59	%	(42.00%) to (30.76	%)

(at) Terminated as an investment option and funds transferred to Mid Cap Index Trust on November 16, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	Mid Cap Intersection Trust Series 1
	Year Ended Dec. 31/09 (at)		Year Ended Dec. 31/08		Year Ended Dec. 31/07 (w)
Units, beginning of period	—		89		—
Units issued	—		94		89
Units redeemed	—		(183	)	—
Units, end of period	—		—		89
Unit value, end of period $	8.46		6.67		11.59
Assets, end of period $	—		—		1,036
Investment income ratio*	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.65	%	0.65	%	0.65	%
Total return, lowest to highest***	26.77	%	(42.43	%)	(7.29	%)

(at) Terminated as an investment option and funds transferred to Mid Cap Index Trust on November 16, 2009.

(w) Reflects the period from commencement of operations on April 30, 2007 through December 31, 2007.

136

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Mid Cap Stock Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	60,664		29,434		3,497		—
Units issued	82,168		61,193		29,526		3,810
Units redeemed	(41,726	)	(29,963	)	(3,589	)	(313	)
Units, end of period	101,106		60,664		29,434		3,497
Unit value, end of period $	36.43		27.71		49.27		39.87
Assets, end of period $	3,683,767		1,681,202		1,450,200		139,406
Investment income ratio*	0.00	%	0.00	%	0.01	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	31.47	%	(43.75%) to (29.90	%)	23.59	%	13.66	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Mid Cap Stock Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	736,367		690,454		746,822		842,918		1,191,214
Units issued	362,044		379,942		268,501		429,518		832,322
Units redeemed	(702,873	)	(334,029	)	(324,869	)	(525,614	)	(1,180,618	)
Units, end of period	395,538		736,367		690,454		746,822		842,918
Unit value, end of period $	15.65 to 16.23		12.00 to 12.39		21.39 to 22.00		17.44 to 18.58		15.46 to 16.45
Assets, end of period $	6,306,437		9,024,765		15,137,410		13,282,114		13,361,473
Investment income ratio*	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	30.50% to 31.03	%	(44.13%) to (43.90	%)	22.70% to 23.20	%	12.75% to 13.21	%	13.77% to 14.23	%

137

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Mid Cap Value Trust Series 0
	Year Ended Dec. 31/09  (au)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	162,505		28,637		7,923		—
Units issued	15,077		298,591		32,428		8,649
Units redeemed	(177,582	)	(164,723	)	(11,714	)	(726	)
Units, end of period	—		162,505		28,637		7,923
Unit value, end of period $	8.24		7.78		12.76		12.67
Assets, end of period $	—		1,263,839		365,431		100,380
Investment income ratio*	1.30	%	2.65	%	1.27	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	5.96	%	(39.05%) to (25.96	%)	0.72	%	12.30	%

(au) Terminated as an investment option and funds transferred to Mid Value Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	Mid Cap Value Trust Series 1
	Year Ended Dec. 31/09  (au)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	477,981		542,856		1,452,791		1,656,848		753,501
Units issued	79,265		278,961		125,745		665,474		1,329,000
Units redeemed	(557,246	)	(343,836	)	(1,035,680	)	(869,531	)	(425,653	)
Units, end of period	—		477,981		542,856		1,452,791		1,656,848
Unit value, end of period $	13.73 to 14.17		13.00 to 13.40		21.46 to 22.04		21.46 to 21.94		19.24 to 19.55
Assets, end of period $	—		6,317,840		11,820,247		31,558,117		32,162,303
Investment income ratio*	1.12	%	1.73	%	1.00	%	0.69	%	0.38	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.65	%	0.30% to 0.65	%
Total return, lowest to highest***	5.61% to 5.75	%	(39.43%) to (39.19	%)	0.04% to 0.44	%	11.55% to 12.00	%	7.31% to 7.68	%

(au) Terminated as an investment option and funds transferred to Mid Value Trust on May 4, 2009.

138

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Mid Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	84,702		110,206		43,969		—
Units issued	251,826		161,497		149,985		46,901
Units redeemed	(81,832	)	(187,001	)	(83,748	)	(2,932	)
Units, end of period	254,696		84,702		110,206		43,969
Unit value, end of period $	20.74		14.18		21.71		21.60
Assets, end of period $	5,283,386		1,201,290		2,392,619		949,770
Investment income ratio*	0.78	%	1.31	%	2.30	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	46.27	%	(34.67%) to (27.51	%)	0.51	%	20.34	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Mid Value Trust Series 1
	Year Ended Dec. 31/09 (g)
Units, beginning of period	—
Units issued	473,014
Units redeemed	(109,386	)
Units, end of period	363,628
Unit value, end of period $	13.49 to 13.52
Assets, end of period $	4,909,319
Investment income ratio*	0.51	%
Expense ratio, lowest to highest**	0.25% to 0.65	%
Total return, lowest to highest***	34.85% to 35.21	%

(g) Fund available in prior year but no activity.

139

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Money Market Trust B Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	4,093,720		1,343,526		429,969		—
Units issued	2,868,379		4,806,729		2,530,991		705,113
Units redeemed	(4,371,260	)	(2,056,535	)	(1,617,434	)	(275,144	)
Units, end of period	2,590,839		4,093,720		1,343,526		429,969
Unit value, end of period $	17.34		17.26		16.90		16.12
Assets, end of period $	44,928,442		70,653,639		22,707,880		6,933,060
Investment income ratio*	0.51	%	2.02	%	4.54	%	4.82	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	0.47	%	0.40% to 2.12	%	4.82	%	4.70	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Money Market Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	4,818,232		4,025,524		4,383,149		2,786,033		2,174,205
Units issued	2,542,228		2,612,046		1,324,785		4,547,755		2,639,719
Units redeemed	(5,626,606	)	(1,819,338	)	(1,682,410	)	(2,950,639	)	(2,027,891	)
Units, end of period	1,733,854		4,818,232		4,025,524		4,383,149		2,786,033
Unit value, end of period $	21.00 to 21.78		21.09 to 21.78		20.80 to 21.46		14.58 to 20.58		14.04 to 19.65
Assets, end of period $	35,883,153		101,314,436		83,833,691		86,696,310		52,697,960
Investment income ratio*	0.24	%	1.73	%	4.46	%	4.40	%	2.66	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.70	%	0.25% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	(0.46%) to (0.04	%)	1.09% to 1.52	%	3.83% to 4.30	%	3.70% to 4.17	%	1.95% to 2.31	%

140

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Natural Resources Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	59,882		34,188		228		—
Units issued	136,941		80,652		44,794		236
Units redeemed	(83,142	)	(54,958	)	(10,834	)	(8	)
Units, end of period	113,681		59,882		34,188		228
Unit value, end of period $	18.36		11.53		23.82		16.92
Assets, end of period $	2,086,992		690,422		814,432		3,857
Investment income ratio*	1.11	%	0.74	%	1.39	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	59.23	%	(51.60%) to (41.22	%)	40.81	%	22.32	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Natural Resources Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	241,760		254,942		176,488		161,459		88,358
Units issued	121,039		266,782		145,660		253,308		197,987
Units redeemed	(237,882	)	(279,964	)	(67,206	)	(238,279	)	(124,886	)
Units, end of period	124,917		241,760		254,942		176,488		161,459
Unit value, end of period $	41.68 to 42.66		26.35 to 26.88		54.82 to 55.72		39.22 to 39.65		32.28 to 32.54
Assets, end of period $	5,252,760		6,450,461		14,108,807		6,971,550		5,420,454
Investment income ratio*	1.02	%	0.59	%	1.07	%	0.50	%	0.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	58.16% to 58.71	%	(51.93%) to (51.76	%)	39.76% to 40.25	%	21.50% to 21.87	%	45.82% to 46.26	%

141

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Optimized All Cap Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08  (ae)		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	90,036		2,943		154		—
Units issued	18,980		142,562		3,223		160
Units redeemed	(90,481	)	(55,469	)	(434	)	(6	)
Units, end of period	18,535		90,036		2,943		154
Unit value, end of period $	10.02		7.81		13.73		13.22
Assets, end of period $	185,772		703,064		40,413		2,045
Investment income ratio*	1.12	%	1.17	%	1.57	%	3.01	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	28.35	%	(43.12%) to (28.05	%)	3.82	%	15.24	%

(ae) Fund renamed on April 28, 2008. Previously known as Quantitative All Cap Trust.

(g) Fund available in prior year but no activity.

	Sub-Account
	Optimized All Cap Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08  (ae)		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	4,357		53		50		1,712		164
Units issued	10,781		10,535		13,530		34,598		3,081
Units redeemed	(9,262	)	(6,231	)	(13,527	)	(36,260	)	(1,533	)
Units, end of period	5,876		4,357		53		50		1,712
Unit value, end of period $	16.20 to 16.52		12.71 to 12.85		22.51 to 22.72		21.84 to 21.99		19.08 to 19.18
Assets, end of period $	96,452		56,007		1,200		1,093		32,673
Investment income ratio*	1.50	%	0.96	%	0.31	%	0.01	%	3.08	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%
Total return, lowest to highest***	27.44% to 27.82	%	(43.55%) to (43.43	%)	3.11% to 3.31	%	14.42% to 14.65	%	7.88% to 8.10	%

(ae) Fund renamed on April 28, 2008. Previously known as Quantitative All Cap Trust.

142

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Optimized Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08  (af)		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	3,363		3,611		124		—
Units issued	9,599		2,253		5,310		129
Units redeemed	(2,270	)	(2,501	)	(1,823	)	(5	)
Units, end of period	10,692		3,363		3,611		124
Unit value, end of period $	9.46		7.60		12.91		13.61
Assets, end of period $	101,134		25,545		46,602		1,687
Investment income ratio*	2.64	%	2.76	%	3.20	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	24.53	%	(41.15%) to (27.37	%)	(5.17	%)	21.36	%

(af) Fund renamed on April 28, 2008. Previously known as Quantitative Value Trust.

(g) Fund available in prior year but no activity.

	Sub-Account
	Optimized Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08  (af)		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05  (g)
Units, beginning of period	50		29,814		1,038		—		—
Units issued	2,897		8,708		56,475		14,129		1,072
Units redeemed	(2,947	)	(38,472	)	(27,699	)	(13,091	)	(1,072	)
Units, end of period	—		50		29,814		1,038		—
Unit value, end of period $	13.13 to 13.20		10.50 to 10.65		17.97 to 18.17		19.08 to 19.18		15.85
Assets, end of period $	12		538		539,099		19,810		—
Investment income ratio*	0.07	%	0.05	%	2.27	%	0.22	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.45	%	0.35% to 0.65	%	0.35% to 0.65	%	0.45% to 0.65	%	0.65	%
Total return, lowest to highest***	23.92% to 24.02	%	(41.58%) to (41.40	%)	(5.81%) to (5.53	%)	20.38% to 20.63	%	8.48	%

(af) Fund renamed on April 28, 2008. Previously known as Quantitative Value Trust.

(g) Fund available in prior year but no activity.

143

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Overseas Equity Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	147,439		137,614		65,482		—
Units issued	51,021		75,397		168,518		66,602
Units redeemed	(48,229	)	(65,572	)	(96,386	)	(1,120	)
Units, end of period	150,231		147,439		137,614		65,482
Unit value, end of period $	16.25		12.42		21.43		19.04
Assets, end of period $	2,440,966		1,831,075		2,948,953		1,246,990
Investment income ratio*	2.24	%	2.06	%	2.47	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	30.83	%	(42.05%) to (24.67	%)	12.53	%	19.76	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Pacific Rim Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	50,561		25,967		141		—
Units issued	46,361		85,741		36,865		146
Units redeemed	(56,172	)	(61,147	)	(11,039	)	(5	)
Units, end of period	40,750		50,561		25,967		141
Unit value, end of period $	12.23		9.25		15.40		14.10
Assets, end of period $	498,186		467,715		399,811		1,981
Investment income ratio*	0.90	%	1.53	%	2.47	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	32.20	%	(39.92%) to (19.85	%)	9.19	%	11.22	%

(g) Fund available in prior year but no activity.

144

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Pacific Rim Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	513,139		531,658		677,202		562,685		592,545
Units issued	126,675		299,011		233,026		604,396		242,075
Units redeemed	(431,096	)	(317,530	)	(378,570	)	(489,879	)	(271,935	)
Units, end of period	208,718		513,139		531,658		677,202		562,685
Unit value, end of period $	11.41 to 11.83		8.69 to 8.97		14.58 to 14.99		13.46 to 16.58		12.20 to 15.01
Assets, end of period $	2,425,418		4,554,939		7,900,944		9,231,358		6,929,233
Investment income ratio*	0.94	%	1.63	%	1.81	%	0.90	%	0.86	%
Expense ratio, lowest to highest**	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	31.41% to 31.93	%	(40.43%) to (40.19	%)	8.37% to 8.81	%	10.27% to 10.71	%	24.89% to 25.32	%

	Sub-Account
	Real Estate Securities Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	71,624		61,644		61,253		—
Units issued	76,003		95,202		41,795		71,898
Units redeemed	(60,271	)	(85,222	)	(41,404	)	(10,645	)
Units, end of period	87,356		71,624		61,644		61,253
Unit value, end of period $	63.50		48.75		80.44		95.27
Assets, end of period $	5,547,371		3,491,635		4,958,485		5,835,277
Investment income ratio*	3.49	%	3.49	%	2.87	%	2.02	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	30.26	%	(39.39%) to (38.33	%)	(15.56	%)	38.17	%

(g) Fund available in prior year but no activity.

145

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Real Estate Securities Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	221,440		283,937		366,108		472,983		511,509
Units issued	58,954		73,525		91,471		79,184		132,415
Units redeemed	(114,951	)	(136,022	)	(173,642	)	(186,059	)	(170,941	)
Units, end of period	165,443		221,440		283,937		366,108		472,983
Unit value, end of period $	74.65 to 77.39		57.75 to 59.63		96.01 to 98.74		45.30 to 117.35		32.99 to 85.23
Assets, end of period $	12,238,675		12,770,010		27,305,782		41,904,090		39,627,992
Investment income ratio*	3.52	%	3.23	%	2.57	%	1.78	%	1.96	%
Expense ratio, lowest to highest**	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	29.27% to 29.78	%	(39.85%) to (39.60	%)	(16.20%) to (15.86	%)	37.14% to 37.69	%	11.07% to 11.52	%

	Sub-Account
	Real Return Bond Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	91,101		14,342		9,519		—
Units issued	300,552		115,493		8,989		9,712
Units redeemed	(73,419	)	(38,734	)	(4,166	)	(193	)
Units, end of period	318,234		91,101		14,342		9,519
Unit value, end of period $	11.81		9.88		11.14		10.01
Assets, end of period $	3,759,357		900,310		159,791		95,237
Investment income ratio*	10.16	%	0.58	%	7.43	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	19.54	%	(11.50%) to (11.30	%)	11.36	%	0.43	%

(g) Fund available in prior year but no activity.

146

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Real Return Bond Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	373,272		350,490		175,568		116,509		111,729
Units issued	207,023		476,953		230,718		103,018		85,239
Units redeemed	(337,649	)	(454,171	)	(55,796	)	(43,959	)	(80,459	)
Units, end of period	242,646		373,272		350,490		175,568		116,509
Unit value, end of period $	16.45 to 16.79		13.86 to 14.10		15.72 to 15.95		14.22 to 14.38		14.25 to 14.37
Assets, end of period $	4,034,568		5,236,778		5,575,602		2,514,498		1,669,468
Investment income ratio*	9.48	%	0.55	%	7.51	%	2.37	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	18.70% to 19.06	%	(11.86%) to (11.59	%)	10.58% to 10.94	%	(0.27%) to 0.05	%	0.78% to 1.09	%

	Sub-Account
	Science & Technology Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	61,404		31,366		83		—
Units issued	67,062		105,213		44,540		86
Units redeemed	(68,160	)	(75,175	)	(13,257	)	(3	)
Units, end of period	60,306		61,404		31,366		83
Unit value, end of period $	13.02		7.91		14.24		11.90
Assets, end of period $	785,456		485,962		446,630		986
Investment income ratio*	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	64.57	%	(44.42%) to (29.01	%)	19.62	%	5.60	%

(g) Fund available in prior year but no activity.

147

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Science & Technology Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	635,775		857,168		1,326,101		1,728,120		2,513,425
Units issued	186,685		370,686		686,435		490,113		687,432
Units redeemed	(373,819	)	(592,079	)	(1,155,368	)	(892,132	)	(1,472,737	)
Units, end of period	448,641		635,775		857,168		1,326,101		1,728,120
Unit value, end of period $	15.17 to 15.66		9.28 to 9.55		16.76 to 17.24		5.41 to 14.46		5.16 to 13.74
Assets, end of period $	5,600,349		5,102,005		12,527,168		16,624,064		20,287,236
Investment income ratio*	0.00	%	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	63.41% to 64.00	%	(44.81%) to (44.61	%)	18.72% to 19.21	%	4.79% to 5.21	%	1.37% to 1.78	%

	Sub-Account
	Short-Term Bond Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	4,708		5,739		1,338		—
Units issued	27,711		13,807		5,337		42,917
Units redeemed	(14,302	)	(14,838	)	(936	)	(41,579	)
Units, end of period	18,117		4,708		5,739		1,338
Unit value, end of period $	18.41		15.45		19.05		18.45
Assets, end of period $	333,591		72,706		109,311		24,683
Investment income ratio*	5.26	%	9.13	%	13.46	%	35.06	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	19.21	%	(18.92%) to (15.98	%)	3.25	%	4.55	%

(g) Fund available in prior year but no activity.

148

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Small Cap Growth Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	193,656		174,922		107,112		—
Units issued	155,489		162,394		178,101		112,610
Units redeemed	(124,017	)	(143,660	)	(110,291	)	(5,498	)
Units, end of period	225,128		193,656		174,922		107,112
Unit value, end of period $	15.92		11.84		19.59		17.19
Assets, end of period $	3,584,964		2,293,376		3,426,541		1,840,852
Investment income ratio*	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	34.46	%	(39.54%) to (28.06	%)	13.98	%	13.47	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Small Cap Growth Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08 (ai)
Units, beginning of period	6,857		—
Units issued	114,312		46,848
Units redeemed	(95,009	)	(39,991	)
Units, end of period	26,160		6,857
Unit value, end of period $	13.36 to 13.41		9.99 to 10.00
Assets, end of period $	350,191		68,532
Investment income ratio*	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	33.71% to 34.12	%	(0.08%) to (0.04	%)

(ai) Reflects the period from commencement of operations on November 10, 2008 through December 31, 2008.

149

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Small Cap Index Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	42,355		25,817		11,525		—
Units issued	86,168		53,939		25,127		35,074
Units redeemed	(27,251	)	(37,401	)	(10,835	)	(23,549	)
Units, end of period	101,272		42,355		25,817		11,525
Unit value, end of period $	12.74		10.05		15.16		15.48
Assets, end of period $	1,289,837		425,740		391,430		178,426
Investment income ratio*	1.12	%	1.47	%	2.00	%	2.39	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	26.70	%	(33.70%) to (30.20	%)	(2.06	%)	17.64	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Small Cap Index Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	245,098		339,311		668,353		728,419		453,968
Units issued	349,934		89,307		81,643		167,253		454,316
Units redeemed	(460,653	)	(183,520	)	(410,685	)	(227,319	)	(179,865	)
Units, end of period	134,379		245,098		339,311		668,353		728,419
Unit value, end of period $	15.04 to 15.52		11.95 to 12.29		18.08 to 18.59		18.61 to 19.06		15.94 to 16.25
Assets, end of period $	2,052,561		2,975,902		6,241,315		12,623,575		11,739,024
Investment income ratio*	0.68	%	1.23	%	1.61	%	0.49	%	0.53	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	25.82% to 26.27	%	(34.14%) to (33.91	%)	(2.85%) to (2.46	%)	16.79% to 17.26	%	3.16% to 3.58	%

150

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Small Cap Opportunities Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07  (g)
Units, beginning of period	3,802		3,554		—
Units issued	9,497		4,502		5,199
Units redeemed	(6,541	)	(4,254	)	(1,645	)
Units, end of period	6,758		3,802		3,554
Unit value, end of period $	9.21		6.87		11.87
Assets, end of period $	62,221		26,117		42,196
Investment income ratio*	0.00	%	2.38	%	2.68	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	34.03	%	(42.13%) to (30.69	%)	(7.60	%)

(g) Fund available in prior year but no activity.

	Sub-Account
	Small Cap Opportunities Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	57,063		137,943		282,521		256,511		74,332
Units issued	55,858		31,333		64,717		171,059		314,871
Units redeemed	(61,918	)	(112,213	)	(209,295	)	(145,049	)	(132,692	)
Units, end of period	51,003		57,063		137,943		282,521		256,511
Unit value, end of period $	17.95 to 18.37		13.50 to 13.77		23.42 to 23.86		25.54 to 25.92		23.28 to 23.53
Assets, end of period $	923,018		775,813		3,272,245		7,281,857		6,011,042
Investment income ratio*	0.00	%	2.16	%	1.75	%	0.68	%	0.00	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	33.00% to 33.46	%	(42.51%) to (42.30	%)	(8.31%) to (7.94	%)	9.68% to 10.12	%	7.02% to 7.45	%

151

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Small Cap Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	104,513		102,009		124,341		—
Units issued	101,116		94,913		15,444		143,375
Units redeemed	(67,539	)	(92,409	)	(37,776	)	(19,034	)
Units, end of period	138,090		104,513		102,009		124,341
Unit value, end of period $	32.75		25.43		34.40		35.44
Assets, end of period $	4,523,174		2,658,179		3,509,437		4,406,358
Investment income ratio*	0.74	%	1.36	%	0.97	%	0.13	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	28.79	%	(27.51%) to (26.07	%)	(2.92	%)	19.32	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Small Cap Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07  (ac)
Units, beginning of period	64,320		747		—
Units issued	34,363		127,542		31,908
Units redeemed	(72,228	)	(63,969	)	(31,161	)
Units, end of period	26,455		64,320		747
Unit value, end of period $	11.51 to 11.68		9.10 to 9.12		12.26 to 12.39
Assets, end of period $	308,717		582,478		9,201
Investment income ratio*	0.52	%	2.10	%	0.02	%
Expense ratio, lowest to highest**	0.45% to 0.65	%	0.45% to 0.65	%	0.45% to 0.65	%
Total return, lowest to highest***	27.80% to 28.07	%	(26.56%) to (26.41	%)	(1.88%) to (0.88	%)

(ac) Reflects the period from commencement of operations on November 12, 2007 through December 31, 2007.

152

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Small Company Trust Series 1
	Year Ended Dec. 31/09  (an)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05 (g)
Units, beginning of period	137,383		78,273		77,847		2,740		—
Units issued	81,625		70,823		9,939		90,180		10,254
Units redeemed	(219,008	)	(11,713	)	(9,513	)	(15,073	)	(7,514	)
Units, end of period	—		137,383		78,273		77,847		2,740
Unit value, end of period $	9.01 to 9.15		8.79 to 8.92		15.60 to 15.77		16.80 to 16.93		16.01 tos 16.06
Assets, end of period $	—		1,225,349		1,234,056		1,317,577		43,967
Investment income ratio*	0.01	%	0.00	%	0.00	%	0.00	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.45% to 0.65	%
Total return, lowest to highest***	2.46% to 2.56	%	(43.61%) to (43.44	%)	(7.15%) to (6.86	%)	4.92% to 5.23	%	5.63% to 5.84	%

(an) Terminated as an investment option and funds transferred to Small Company Value Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	Small Company Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	92,095		50,455		5,566		—
Units issued	53,623		80,014		60,594		6,551
Units redeemed	(81,255	)	(38,374	)	(15,705	)	(985	)
Units, end of period	64,463		92,095		50,455		5,566
Unit value, end of period $	12.36		9.67		13.25		13.41
Assets, end of period $	796,777		890,555		668,711		74,625
Investment income ratio*	0.40	%	0.86	%	0.17	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	27.82	%	(29.59%) to (27.05	%)	(1.14	%)	15.50	%

(g) Fund available in prior year but no activity.

153

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Small Company Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	659,315		896,860		1,197,374		1,534,174		1,525,817
Units issued	232,804		326,502		494,264		813,580		766,171
Units redeemed	(483,048	)	(564,047	)	(794,778	)	(1,150,380	)	(757,814	)
Units, end of period	409,071		659,315		896,860		1,197,374		1,534,174
Unit value, end of period $	17.25 to 17.88		13.60 to 14.04		18.69 to 19.29		19.05 to 28.45		16.62 to 24.78
Assets, end of period $	7,560,437		9,496,541		17,636,851		23,687,841		26,095,828
Investment income ratio*	0.39	%	0.66	%	0.15	%	0.07	%	0.27	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.70	%	0.25% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	26.86% to 27.37	%	(27.52%) to (27.24	%)	(1.89%) to (1.44	%)	14.62% to 15.13	%	6.29% to 6.66	%

	Sub-Account
	Smaller Company Growth Trust  Series 0
	Year Ended Dec. 31/09 (al)
Units, beginning of period	—
Units issued	22,836
Units redeemed	(3,897	)
Units, end of period	18,939
Unit value, end of period $	10.52
Assets, end of period $	199,275
Investment income ratio*	0.00	%
Expense ratio, lowest to highest**	0.00	%
Total return, lowest to highest***	5.22	%

(al) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

154

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Smaller Company Growth Trust  Series 1
	Year Ended Dec. 31/09 (al)
Units, beginning of period	—
Units issued	1,751,431
Units redeemed	(37,678	)
Units, end of period	1,713,753
Unit value, end of period $	10.51 to 10.52
Assets, end of period $	18,017,839
Investment income ratio*	0.00	%
Expense ratio, lowest to highest**	0.25% to 0.70	%
Total return, lowest to highest***	5.12% to 5.19	%

(al) Reflects the period from commencement of operations on November 16, 2009 through December 31, 2009.

	Sub-Account
	Strategic Bond Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	9,710		12,929		—		—
Units issued	64,448		4,939		18,075		60
Units redeemed	(29,886	)	(8,158	)	(5,146	)	(60	)
Units, end of period	44,272		9,710		12,929		—
Unit value, end of period $	11.39		9.23		10.99		10.99
Assets, end of period $	504,215		89,594		142,120		—
Investment income ratio*	7.86	%	6.78	%	10.56	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	23.45	%	(16.07%) to (9.37	%)	0.02	%	7.05	%

(g) Fund available in prior year but no activity.

155

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Strategic Bond Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	93,122		201,762		249,209		253,221		238,775
Units issued	71,772		54,133		109,181		138,457		176,347
Units redeemed	(93,034	)	(162,773	)	(156,628	)	(142,469	)	(161,901	)
Units, end of period	71,860		93,122		201,762		249,209		253,221
Unit value, end of period $	22.16 to 22.87		18.07 to 18.59		21.60 to 22.22		19.92 to 22.32		18.71 to 20.86
Assets, end of period $	1,594,659		1,680,117		4,397,774		5,459,524		5,217,823
Investment income ratio*	7.28	%	5.08	%	9.23	%	6.48	%	2.48	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	22.61% to 23.05	%	(16.62%) to (16.33	%)	(0.85%) to (0.45	%)	6.31% to 6.73	%	1.98% to 2.34	%

	Sub-Account
	Strategic Income Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07  (g)
Units, beginning of period	1,515		1,248		—
Units issued	35,273		766		1,481
Units redeemed	(6,454	)	(499	)	(233	)
Units, end of period	30,334		1,515		1,248
Unit value, end of period $	13.13		10.36		11.33
Assets, end of period $	398,301		15,689		14,141
Investment income ratio*	11.32	%	11.82	%	2.57	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	26.78	%	(8.57%) to (8.05	%)	5.85	%

(g) Fund available in prior year but no activity.

156

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Strategic Income Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	83,658		16,393		35,928		78,004		2,225
Units issued	44,874		185,983		20,922		37,952		90,668
Units redeemed	(88,845	)	(118,718	)	(40,457	)	(80,028	)	(14,889	)
Units, end of period	39,687		83,658		16,393		35,928		78,004
Unit value, end of period $	17.10 to 17.40		13.59 to 13.79		14.97 to 15.14		14.24 to 14.35		13.78 to 13.82
Assets, end of period $	679,706		1,151,717		245,858		512,297		1,075,257
Investment income ratio*	10.03	%	12.21	%	1.70	%	2.03	%	12.20	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.45% to 0.65	%
Total return, lowest to highest***	25.84% to 26.23	%	(9.22%) to (8.93	%)	5.16% to 5.51	%	3.31% to 3.62	%	1.64% to 1.81	%

	Sub-Account
	Total Bond Market Trust B Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07  (j)		Year Ended Dec. 31/06 (g)
Units, beginning of period	279,913		156,154		103,058		—
Units issued	294,840		259,709		171,563		107,642
Units redeemed	(202,694	)	(135,950	)	(118,467	)	(4,584	)
Units, end of period	372,059		279,913		156,154		103,058
Unit value, end of period $	19.14		18.01		17.03		15.89
Assets, end of period $	7,122,388		5,041,514		2,658,477		1,637,785
Investment income ratio*	5.55	%	6.26	%	11.03	%	2.44	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	6.29	%	3.52% to 5.79	%	7.13	%	4.07	%

(j) Renamed on October 1, 2007. Formerly known as Bond Index Trust B.

(g) Fund available in prior year but no activity.

157

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Total Return Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	224,706		72,293		34,283		—
Units issued	744,455		237,637		55,834		36,837
Units redeemed	(98,773	)	(85,224	)	(17,824	)	(2,554	)
Units, end of period	870,388		224,706		72,293		34,283
Unit value, end of period $	14.46		12.71		12.37		11.39
Assets, end of period $	12,583,045		2,857,007		894,516		390,568
Investment income ratio*	5.68	%	5.58	%	9.04	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	13.71	%	2.76% to 2.76	%	8.61	%	3.67	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Total Return Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	2,143,657		1,745,005		1,570,478		2,385,781		2,833,935
Units issued	1,140,824		1,884,675		1,105,189		879,060		1,121,316
Units redeemed	(1,319,426	)	(1,486,023	)	(930,662	)	(1,694,363	)	(1,569,470	)
Units, end of period	1,965,055		2,143,657		1,745,005		1,570,478		2,385,781
Unit value, end of period $	22.49 to 23.33		19.93 to 20.59		19.46 to 20.09		18.06 to 18.56		17.56 to 17.92
Assets, end of period $	45,086,578		43,539,894		34,656,094		28,840,343		42,371,818
Investment income ratio*	4.05	%	4.60	%	7.86	%	3.62	%	2.49	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.70	%	0.25% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	12.86% to 13.31	%	2.10% to 2.52	%	7.73% to 8.23	%	2.89% to 3.34	%	1.76% to 2.17	%

158

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Total Stock Market Index Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	6,539		6,922		37		—
Units issued	44,607		23,133		8,318		37
Units redeemed	(24,618	)	(23,516	)	(1,433	)	—
Units, end of period	26,528		6,539		6,922		37
Unit value, end of period $	39.42		30.58		48.65		46.25
Assets, end of period $	1,045,820		199,933		336,768		1,715
Investment income ratio*	1.76	%	0.93	%	3.08	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	28.93	%	(37.15%) to (25.73	%)	5.19	%	15.33	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Total Stock Market Index Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	186,446		260,998		212,749		323,999		230,903
Units issued	125,758		90,395		144,535		144,172		313,142
Units redeemed	(247,126	)	(164,947	)	(96,286	)	(255,422	)	(220,046	)
Units, end of period	65,078		186,446		260,998		212,749		323,999
Unit value, end of period $	11.14 to 11.45		8.70 to 8.91		13.90 to 14.29		13.31 to 13.63		11.62 to 11.83
Assets, end of period $	729,447		1,649,478		3,702,220		2,867,841		3,807,527
Investment income ratio*	1.04	%	1.61	%	2.17	%	1.02	%	0.99	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	28.03% to 28.42	%	(37.61%) to (37.42	%)	4.44% to 4.86	%	14.49% to 14.95	%	4.96% to 5.32	%

159

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	U.S. Government Securities Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	15,529		7,826		30		—
Units issued	139,953		62,022		13,928		31
Units redeemed	(40,450	)	(54,319	)	(6,132	)	(1	)
Units, end of period	115,032		15,529		7,826		30
Unit value, end of period $	13.51		12.45		12.64		12.24
Assets, end of period $	1,554,148		193,403		98,886		370
Investment income ratio*	4.44	%	3.95	%	8.95	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	8.49	%	(1.44%) to 0.56	%	3.25	%	4.39	%

(g) Fund available in prior year but no activity.

	Sub-Account
	U.S. Government Securities Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	464,134		571,273		690,780		649,545		541,692
Units issued	160,837		478,767		356,594		578,659		404,113
Units redeemed	(460,166	)	(585,906	)	(476,101	)	(537,424	)	(296,260	)
Units, end of period	164,805		464,134		571,273		690,780		649,545
Unit value, end of period $	17.06 to 17.69		15.84 to 16.37		16.12 to 16.64		15.74 to 16.94		15.18 to 16.32
Assets, end of period $	2,853,193		7,525,507		9,452,949		11,102,160		9,984,112
Investment income ratio*	2.03	%	3.56	%	8.20	%	5.48	%	1.72	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.70	%	0.25% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	7.68% to 8.11	%	(2.05%) to (1.66	%)	2.43% to 2.89	%	3.66% to 4.13	%	0.87% to 1.24	%

160

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	U.S. High Yield Bond Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	18,468		1,133		400		—
Units issued	14,654		19,427		929		414
Units redeemed	(12,288	)	(2,092	)	(196	)	(14	)
Units, end of period	20,834		18,468		1,133		400
Unit value, end of period $	13.65		9.31		11.76		11.42
Assets, end of period $	284,302		171,876		13,322		4,564
Investment income ratio*	13.02	%	21.85	%	12.03	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	46.65	%	(20.85%) to (19.03	%)	3.00	%	9.60	%

(g) Fund available in prior year but no activity.

	Sub-Account
	U.S. High Yield Bond Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06 (g)
Units, beginning of period	1,523		18,379		197		—
Units issued	110,223		138,980		39,504		201
Units redeemed	(92,246	)	(155,836	)	(21,322	)	(4	)
Units, end of period	19,500		1,523		18,379		197
Unit value, end of period $	16.51 to 16.75		11.33 to 11.46		14.42 to 14.54		14.11
Assets, end of period $	322,341		17,289		265,248		2,781
Investment income ratio*	8.65	%	1.00	%	10.24	%	0.00	%
Expense ratio, lowest to highest**	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.65	%
Total return, lowest to highest***	45.64% to 46.08	%	(21.38%) to (21.14	%)	2.19% to 2.52	%	8.89	%

(g) Fund available in prior year but no activity.

161

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	U.S. Large Cap Trust Series 0
	Year Ended Dec. 31/09  (aw)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	6,355		9,555		—		—
Units issued	8,638		3,767		19,992		8,184
Units redeemed	(14,993	)	(6,967	)	(10,437	)	(8,184	)
Units, end of period	—		6,355		9,555		—
Unit value, end of period $	7.51		7.57		12.37		12.41
Assets, end of period $	—		48,088		118,228		—
Investment income ratio*	0.78	%	1.94	%	1.35	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	(0.75	%)	(38.85%) to (23.68	%)	(0.26	%)	10.68	%

(aw) Terminated as an investment option and funds transferred to American Growth-Income Trust on May 4, 2009.

(g) Fund available in prior year but no activity.

	Sub-Account
	U.S. Large Cap Trust Series 1
	Year Ended Dec. 31/09 (aw)		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	933,397		1,308,474		1,435,047		1,555,399		1,640,031
Units issued	110,314		154,180		313,621		270,247		430,513
Units redeemed	(1,043,711	)	(529,257	)	(440,194	)	(390,599	)	(515,145	)
Units, end of period	—		933,397		1,308,474		1,435,047		1,555,399
Unit value, end of period $	9.57 to 9.89		9.66 to 9.97		15.86 to 16.36		16.02 to 16.46		14.58 to 14.84
Assets, end of period $	—		9,057,849		20,972,000		23,164,531		22,779,517
Investment income ratio*	0.63	%	2.17	%	1.09	%	0.57	%	0.43	%
Expense ratio, lowest to highest**	0.25% to 0.65	%	0.25% to 0.65	%	0.25% to 0.70	%	0.25% to 0.70	%	0.35% to 0.70	%
Total return, lowest to highest***	(0.94%) to (0.81	%)	(39.29%) to (39.04	%)	(1.04%) to (0.60	%)	9.88% to 10.38	%	5.08% to 5.45	%

(aw) Terminated as an investment option and funds transferred to American Growth-Income Trust on May 4, 2009.

162

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Utilities Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06  (g)
Units, beginning of period	55,369		17,927		149		—
Units issued	56,984		78,710		23,920		155
Units redeemed	(79,509	)	(41,268	)	(6,142	)	(6	)
Units, end of period	32,844		55,369		17,927		149
Unit value, end of period $	15.88		11.89		19.33		15.17
Assets, end of period $	521,594		658,222		346,525		2,261
Investment income ratio*	4.85	%	2.83	%	2.39	%	0.00	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	33.58	%	(38.50%) to (21.20	%)	27.43	%	31.06	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Utilities Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	249,807		225,244		131,267		154,810		40,217
Units issued	75,136		156,245		139,373		77,515		154,202
Units redeemed	(245,930	)	(131,682	)	(45,396	)	(101,058	)	(39,609	)
Units, end of period	79,013		249,807		225,244		131,267		154,810
Unit value, end of period $	18.81 to 19.40		14.16 to 14.55		23.22 to 23.70		18.35 to 18.66		14.10 to 14.30
Assets, end of period $	1,494,713		3,594,971		5,302,683		2,433,871		2,200,446
Investment income ratio*	3.61	%	3.24	%	2.12	%	2.31	%	0.39	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%	0.35% to 0.65	%
Total return, lowest to highest***	32.91% to 33.37	%	(39.04%) to (38.83	%)	26.57% to 26.95	%	30.15% to 30.55	%	16.07% to 16.41	%

163

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

9. Financial Highlights

	Sub-Account
	Value Trust Series 0
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07  (g)
Units, beginning of period	35,076		34,210		—
Units issued	69,744		64,360		43,166
Units redeemed	(52,309	)	(63,494	)	(8,956	)
Units, end of period	52,511		35,076		34,210
Unit value, end of period $	12.57		8.90		15.05
Assets, end of period $	659,988		312,241		514,782
Investment income ratio*	1.09	%	0.84	%	2.92	%
Expense ratio, lowest to highest**	0.00	%	0.00	%	0.00	%
Total return, lowest to highest***	41.19	%	(40.84%) to (31.48	%)	8.26	%

(g) Fund available in prior year but no activity.

	Sub-Account
	Value Trust Series 1
	Year Ended Dec. 31/09		Year Ended Dec. 31/08		Year Ended Dec. 31/07		Year Ended Dec. 31/06		Year Ended Dec. 31/05
Units, beginning of period	310,735		395,785		297,227		422,144		1,080,759
Units issued	287,392		134,441		322,269		199,825		208,115
Units redeemed	(455,541	)	(219,491	)	(223,711	)	(324,742	)	(866,730	)
Units, end of period	142,586		310,735		395,785		297,227		422,144
Unit value, end of period $	24.88 to 25.68		17.74 to 18.24		30.09 to 30.95		25.21 to 28.68		20.94 to 23.77
Assets, end of period $	3,571,204		5,587,755		12,100,633		8,411,802		9,906,015
Investment income ratio*	1.29	%	1.10	%	1.37	%	0.42	%	0.55	%
Expense ratio, lowest to highest**	0.30% to 0.65	%	0.30% to 0.65	%	0.30% to 0.70	%	0.30% to 0.70	%	0.30% to 0.70	%
Total return, lowest to highest***	40.27% to 40.75	%	(41.25%) to (41.05	%)	7.46% to 7.89	%	20.20% to 20.68	%	11.78% to 12.22	%

164

John Hancock Life Insurance Company (U.S.A.) Separate Account N

Notes to Financial Statements (continued)

The Account is a funding vehicle for a number of variable universal life insurance products which have unique combinations of features and fees that are charged against the contract owner’s account balance. Differences in the fee structures result in a variety of unit values, expense ratios and total returns.

The preceding table was developed by determining which products offered by the Company have the lowest and highest total return. Only product designs within each sub-account that had units outstanding during the period were considered when determining the lowest and highest total return. The summary may not reflect the minimum and maximum mortality and expense risk charge offered by the Company as contract owners may not have selected all available and applicable contract options as discussed in Notes 3 and 4.

(*) These ratios, which are not annualized, represent the dividends, excluding distributions of capital gains, received by the sub-account from the underlying Trust portfolio, net of management fees assessed by the Trust portfolio adviser, divided by the average net assets of the sub-account. These ratios exclude those expenses, such as mortality and expense risk charges, that result in direct reductions in unit values. The recognition of investment income by the sub-account is affected by the timing of the declarations of dividends by the underlying Trust portfolio in which the sub-accounts invest. It is the practice of the Trusts, for income tax reasons, to declare dividends in April for investment income received in the previous calendar year for all sub-accounts of the Trusts except for the Money Market Trust which declares and reinvests dividends on a daily basis. Any dividend distribution received from a sub-account of the Trusts is reinvested immediately, at the net asset value, in shares of that sub-account and retained as assets of the corresponding sub-account so that the unit value of the sub-account is not affected by the declaration and reinvestment of dividends.

(**) These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense risk charges, for the period indicated. The ratios include only those expenses that result in a direct reduction in unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying Trust portfolio are excluded.

(***) These ratios, which are not annualized, represent the total return for the period indicated, including changes in the value of the underlying Trust portfolio, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented.

165

PART C OTHER INFORMATION

Item 26. Exhibits

The following exhibits are filed as part of this Registration Statement:

(a) Resolution of Board of Directors establishing Separate Account N is incorporated by reference to post-effective amendment number 1 file number 333-152409, filed with the Commission in April 2010.

(b) Not applicable.

(c) (1) Distribution Agreement and Servicing Agreement between John Hancock Distributors and John Hancock Life Insurance Company (U.S.A.) dated February 17, 2009, incorporated by reference to pre-effective amendment number 1, file number 333-157212, filed with the Commission on April 7, 2009.

(2) Specimen General Agent and Broker-Dealer Selling Agreement by and among John Hancock Life Insurance Company (U.S.A.) John Hancock Life Insurance Company of New York, John Hancock Distributors, incorporated by reference to pre-effective amendment number 2, file number 333-148991, filed with the Commission on October 7, 2008. List of third party broker-dealer firms included as Attachment A, incorporated by reference to pre-effective amendment number 1, file number 333-157212, filed with the Commission in April 2010.

(d) (1)Form of Specimen Flexible Premium Variable Life Insurance Policy, incorporated by reference to pre-effective amendment number 1 filed number 333-126668 filed with the Commission on October 12, 2005 and form of Policy Endorsement dated 2009 is filed herewith.

(2) Form of Specimen Enhanced Cash Value Rider, incorporated by reference to pre-effective amendment number 1 filed number 333-126668 filed with the Commission on October 12, 2005.

(e) Form of Specimen Application for a Master COLI Insurance Policy. Incorporated by reference to pre-effective amendment number 1 file number 333-126668 filed with the Commission on October 12, 2005.

(f) (1) Restated Articles of Redomestication of the John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated December 30, 1992, incorporated by reference to post-effective amendment number 9 file number 333-85284, filed with the Commission in April, 2007.

(a) Amendment to the Articles of Redomestication of the John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated July 16, 2004, incorporated by reference to pre-effective amendment no. 1 file number 333-126668, filed with the Commission on October 12, 2005.

(b) Amendment to the Articles of Redomestication effective January 1, 2005, incorporated by reference to post-effective amendment number 9 file number 333-85284, filed with the Commission in April, 2007.

(2) By-laws of the John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated December 2, 1992, incorporated by reference to pre-effective amendment no. 1 file number 333- 126668, filed with the Commission on October 12, 2005.

(a) Amendment to the By-laws of the John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated June 7, 2000, incorporated by reference to pre-effective amendment no. 1 file number 333-126668, filed with the Commission on October 12, 2005.

(b) Amendment to the By-laws of the John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated March 12, 1999, incorporated by reference to pre-effective amendment no. 1 file number 333-126668, filed with the Commission on October 12, 2005.

(c) Amendment to the By-laws of the John Hancock Life Insurance Company (U.S.A.) (formerly, The Manufacturers Life Insurance Company (U.S.A.)) dated July 16, 2004, incorporated by reference to post-effective amendment number 9 file number 333-85284, filed with the Commission in April, 2007.

(g) The Depositor maintains reinsurance arrangements in the normal course of business, none of which are material.

    (h)(1) Participation Agreement among the Manufacturers Insurance Company (U.S.A.), the Manufacturers Insurance Company of New York, PIMCO Variable Insurance Trust and PIMCO Advisors Distributors LLC dated April 30, 2004, incorporated by reference to pre-effective amendment no. 1 file number 333-126668, filed with the Commission on October 12, 2005.

(2) Participation Agreement among John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, and John Hancock Trust dated April 20, 2005, incorporated by reference to pre-effective amendment no. 1 file number 333-126668, filed with the Commission on October 12, 2005.

(3) Participation Agreement among John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, and M Financial Investment Advisers, Inc. dated November 13, 2009, incorporated by reference to the Initial Registration Statement file number 333-164150 filed with the Commission on January 4, 2010.

4) Shareholder Information Agreement between John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, John Hancock Life Insurance Company, John Hancock Variable Life Insurance, and John Hancock Trust portfolios (except American Funds Insurance Series) dated April 16, 2007, incorporated by reference to post- effective amendment number 9 file number 333-85284, filed with the Commission in April, 2007.

(5) Shareholder Information Agreement between John Hancock Life Insurance Company (U.S.A.), John Hancock Life Insurance Company of New York, John Hancock Life Insurance Company, John Hancock Variable Life Insurance, and John Hancock Trust on behalf of series of the Trust that are feeder funds of the American Funds Insurance Series dated April 16, 2007, incorporated by reference to post-effective amendment number 9 file number 333-85284, filed with the Commission in April, 2007.

(i) (1) Service Agreement between John Hancock Life Insurance Company (U.S.A.) and John Hancock Life Insurance Company dated April 28, 2004, incorporated by reference to post-effective amendment number 9, file number 333-85284, filed with the Commission in April, 2007.

(j) Not applicable.

(k) Opinion and consent of counsel for John Hancock Life Insurance Company (U.S.A.), incorporated by reference to Exhibit 2 (a) to pre-effective amendment number 1 file number 333-100597, filed with the Commission on December 16, 2002.

(l) Not Applicable.

(m) Not Applicable.

(n) Consents of Independent Registered Public Accounting Firm are filed herewith.

(n)(1) Opinion of Counsel as to the eligibility of this post-effective amendment pursuant to Rule 485(b) is filed herewith.

(o) Not Applicable.

(p) Not Applicable.

(q) Memorandum Regarding Issuance, Face Amount Increase, Redemption and Transfer Procedures for the Policies. Incorporated by reference to Exhibit A(6) to pre-effective amendment no. 1 file number 333-100597 filed with the Commission on December 16, 2002.

Powers of Attorney

(i) Powers of Attorney for James R. Boyle, John DesPrez III, and Rex Schlaybaugh, Jr., are incorporated by reference to Registrant’s post-effective amendment filed with the Commission on May 1, 2006 and Power of Attorney for Scott S. Hartz is incorporated by reference to Registrant’s post-effective amendment filed with the Commission on April 27, 2009.

(ii) Powers of Attorney for James D. Gallagher and John G. Vrysen are filed herewith.

Item 27. Directors and Officers of the Depositor

OFFICERS AND DIRECTORS OF JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

Name and Principal Business Address	Position with Depositor
Directors
Thomas Borshoff
536 Stone Road
Pittsford, NY 14534	Director
James R. Boyle
601 Congress Street
Boston, MA 02210	Director and President
John D. DesPrez III
601 Congress Street
Boston, MA 02210	Director, Chairman and Chief Executive Officer

Name and Principal Business Address	Position with Depositor
Ruth Ann Fleming
205 Highland Avenue
Short Hills, NJ 07078	Director
James D. Gallagher
601 Congress Street
Boston, MA 02210	Director and Executive Vice President
Scott S. Hartz
197 Clarendon Street	Director, Executive Vice President and Chief Investment
Boston, MA 02116	Officer - U.S. Investments
Bradford J. Race, Jr.
1301 Avenue of the Americas, 32nd Floor
New York, NY 10019	Director
Rex E. Schlaybaugh, Jr.
400 Renaissance Center
Detroit, Michigan 48243	Director
John G. Vrysen
601 Congress Street
Boston, MA 02210	Director and Senior Vice President
Executive Vice Presidents
Jonathan Chiel*	and General Counsel
Marc Costantini*
Steven A. Finch**
Marianne Harrison**
Peter Levitt****	and Treasurer
Katherine MacMillan****
Stephen R. McArthur***
Hugh McHaffie*
Senior Vice Presidents
Bob Diefenbacher**
Peter Gordon**
Allan Hackney*	and Chief Information Officer
Naveed Irshad***
Gregory Mack†
Ronald J. McHugh*
Lynne Patterson*	and Chief Financial Officer
Craig R. Raymond*
Diana L. Scott*
Alan R. Seghezzi**
Bruce R. Speca*
Tony Teta**
Brooks Tingle**
Vice Presidents
Emanuel Alves*	Counsel and Corporate Secretary
Roy V. Anderson*
John C. S. Anderson**
Arnold Bergman*
Stephen J. Blewitt**
Robert Boyda*
John E. Brabazon**
George H. Braun**
Thomas Bruns††
Tyler Carr*
Robert T. Cassato*
Joseph Catalano†††
Philip Clarkson**
Kevin J. Cloherty*
Brian Collins**
Art Creel*
George Cushnie****

Name and Principal Business Address	Position with Depositor
John J. Danello*
Willma Davis**
Anthony J. Della Piana**
Brent Dennis**
Robert Donahue*****
Lynn L. Dyer**	Counsel and Chief Compliance Officer - U.S. Investments
John Egbert*
David Eisan*****
Edward Eng****
Carol Nicholson Fulp*
Paul Gallagher**
Wayne A. Gates*****
Ann Gencarella**
Richard Harris***	and Appointed Actuary
John Hatch*
Dennis Healy**
Kevin Hill**
E. Kendall Hines**
Eugene Xavier Hodge, Jr.**
James C. Hoodlet**
Terri Judge**
Roy Kapoor****
Mitchell Karman**	and Chief Compliance Officer & Counsel
	and Chief Compliance Officer - Retail Funds/Separate
Frank Knox*	Accounts
Jonathan Kutrubes*
Cynthia Lacasse**
Denise Lang***
Robert Leach*
David Longfritz*
Nathaniel I. Margolis**
John Maynard**
Steven McCormick****
Janis K. McDonough**
Scott A. McFetridge**
William McPadden**
Peter J. Mongeau**
Steven Moore****
Curtis Morrison**
Colm D. Mullarkey**
Tom Mullen*
Scott Navin**
Nina Nicolosi*
James O’Brien**
Frank O’Neill*
Jacques Ouimet**
Gary M. Pelletier**
Steven Pinover*
David Plumb**
Krishna Ramdial****	and Treasury
S. Mark Ray**
Jill Rebman***
Mark Rizza*
Ian R. Roke*
Andrew Ross****
Thomas Samoluk*
Martin Sheerin**
Gordon Shone*
Jonnie Smith††††

Name and Principal Business Address	Position with Depositor
Yiji S. Starr*
Gaurav Upadhya***
Simonetta Vendittelli*****
Peter de Vries†††††
Karen Walsh*
Linda A. Watters*
Joseph P. Welch**
Jeffery Whitehead*	and Controller
Henry Wong**
Randy Zipse**

*Principal Business Office is 601 Congress Street, Boston, MA 02210 **Principal Business Office is 197 Clarendon Street, Boston, MA 02117

***Principal Business Office is 200 Bloor Street, Toronto, Canada M4W1E5

****Principal Business Office is 250 Bloor Street, Toronto, Canada M4W1E5

*****Principal Business Office is 380 Stuart Street, Boston, MA 02117 †Principal Business is 6400 Sheridan Drive, Williamsville, NY 14221 ††Principal Business is 2001 Butterfield Road, Downers Grove, Illinois 60515

†††Principal Business is 333 West Everett Street, Milwaukee, Wisconsin 53203

††††Principal Business is 164 Corporate Drive, Portsmouth, NH 03801

†††††Principal Business is 200 Berkeley Street, Boston, MA 02116

Item 28. Persons Controlled by or Under Common Control with the Depositor or the Registrant

Registrant is a separate account of John Hancock USA, operated as a unit investment trust. Registrant supports benefits payable under John Hancock USA’s variable life insurance policies by investing assets allocated to various investment options in shares of John Hancock Trust and other mutual funds registered under the Investment Company Act of 1940 as open-end management investment companies of the “series” type.

A list of persons directly or indirectly controlled by or under common contract with John Hancock USA appears below:

Subsidiary Name

AIMV, LLC (Delaware)

Baystate Investments, LLC (Delaware)

Declaration Management & Research LLC (Delaware)

Essex Corporation (New York)

Essex Holding Company, Inc. (New York)

Frigate, LLC (Delaware)

Fusion Clearing, Inc (New York)

Hancock Capital Investment Management, LLC (Delaware)

Hancock Capital Investment IV LLC (Delaware)

Hancock Capital Management, LLC (Delaware)

Hancock Forest Management (NZ) Limited (New England)

Hancock Forest Management, Inc. (Delaware)

Hancock Mezzanine Investments, LLC (Delaware)

Hancock Mezzanine Investments II, LLC (Delaware)

Hancock Mezzanine Investments III, LLC (Delaware)

Hancock Natural Resource Group Australia Pty Limited (Australia)

Hancock Natural Resource Group, Inc. (Delaware)

Hancock Venture Partners, Inc. (Delaware)

HVP Special Purpose Sub I, Inc. (Delaware)

HVP Special Purpose Sub II, Inc. (Delaware)

HVP-Russia, Inc. (Delaware)

International Forest Investments Ltd. (Cayman Islands)

JH Networking Insurance Agency, Inc. (Massachusetts)

JHFS One Corp. (Massachusetts)

JHLICO CIP Investments, LLC (Delaware)

John Hancock Advisers LLC(Delaware)

John Hancock Assignment Company (Delaware)

John Hancock Distributors LLC (Delaware)

John Hancock Energy Resources Management Inc. (Delaware)

John Hancock Financial Network, Inc. (Massachusetts)

John Hancock Funds LLC (Delaware)

John Hancock Investment Management Services, LLC (Delaware)

John Hancock Life & Health Insurance Company (Delaware)

John Hancock Life Insurance Company of New York

John Hancock Leasing Corporation (Delaware)

John Hancock Property and Casualty Holding Company (Delaware)

John Hancock Real Estate Finance, Inc. (Delaware)

John Hancock Realty Advisors, Inc. (Delaware)

John Hancock Realty Management Inc. (Delaware)

John Hancock Signature Services, Inc.(Delaware)

John Hancock Subsidiaries LLC (Delaware)

John Hancock Timber Resource Corporation (Delaware)

JHUSA CIP Investments, LLC (Delaware)

Long Term Care Partners, LLC (Delaware)

LR Company, LLC (Delaware)

LVI, LLC (Delaware)

Manulife Service Corporation (Colorado)

MFC Global Investment Management (U.S.A.) LLC (Delaware)

New Amsterdam Insurance Agency, Inc. (New York)

P.T. Timber Inc.(New Jersey)

Signator Insurance Agency, Inc. (Massachusetts)

Signator Investors, Inc. (Delaware)

Signature Management Co., Ltd. (Bermuda)

The Berkeley Financial Group LLC (Delaware)

Viking Timber Gerenciamento De Florestas Do Brasil (Brazil)

Item 29. Indemnification

    The Form of Selling Agreement or Service Agreement between John Hancock Distributors LLC (“JH Distributors”) and various broker-dealers may provide that the selling broker-dealer indemnify and hold harmless JH Distributors and the Company, including their affiliates, officers, directors, employees and agents against losses, claims, liabilities or expenses (including reasonable attorney’s fees), arising out of or based upon a breach of the Selling or Service Agreement, or any applicable law or regulation or any applicable rule of any self-regulatory organization or similar provision consistent with industry practice.

    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.

Item 30. Principal Underwriter

    (a) Set forth below is information concerning other investment companies for which JH Distributors, the principal underwriter of the contracts, acts as investment adviser or principal underwriter.

Name of Investment Company	Capacity in Which Acting
John Hancock Variable Life Account S	Principal Underwriter
John Hancock Variable Life Account U	Principal Underwriter
John Hancock Variable Life Account V	Principal Underwriter
John Hancock Variable Life Account UV	Principal Underwriter
John Hancock Variable Annuity Account R	Principal Underwriter
John Hancock Variable Annuity Account T	Principal Underwriter
John Hancock Variable Annuity Account W	Principal Underwriter
John Hancock Variable Annuity Account X	Principal Underwriter

Name of Investment Company	Capacity in Which Acting
John Hancock Variable Annuity Account Q	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account A	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account N	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account H	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account I	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account J	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account K	Principal Underwriter
John Hancock Life Insurance Company (U.S.A.)
Separate Account M	Principal Underwriter
John Hancock Life Insurance Company of New York
Separate Account B	Principal Underwriter
John Hancock Life Insurance Company of New York
Separate Account A	Principal Underwriter
(b) John Hancock Life Insurance Company (U.S.A.) is the sole member of JH Distributors and the following comprise the Board of Managers and Officers of JH Distributors as of April 1, 2010.

Name	Title
Edward Eng****	Board Manager
Steven A. Finch**	Board Manager
Lynne Patterson*	Board Manager
Christopher Walker***	Board Manager
Karen Walsh*	Board Manager
Emanuel Alves*	Secretary
Philip Clarkson**	Vice President, U.S. Taxation
Brian Collins***	Vice President, U.S. Taxation
David Crawford***	Assistant Secretary
	Vice President, Product Development Retirement Plan
Edward Eng****	Services
Steven A. Finch**	Chairman
Peter Levitt****	Senior Vice President, Treasurer
Heather Justason***	Chief Operating Officer
Jeff Long*	Financial Operations Principal
Declan O’Beirne**	Chief Financial Officer
Kathleen Pettit**	Assistant Vice President and Chief Compliance Officer
Krishna Ramdial****	Vice President, Treasury
Pamela Schmidt**	General Counsel
Karen Walsh*	President and Chief Executive Officer

*Principal Business Office is 601 Congress Street, Boston, MA 02210 **Principal Business Office is 197 Clarendon Street, Boston, MA 02117

***Principal Business Office is 200 Bloor Street, Toronto, Canada M4W1E5

****Principal Business Office is 250 Bloor Street, Toronto, Canada M4W1E5

(c) John Hancock Distributors LLC

    The information contained in the section titled “Principal Underwriter and Distributor” in the Statement of Additional Information, contained in this Registration Statement, is hereby incorporated by reference in response to Item 31.(c)(2-5).

Item 31. Location of Accounts and Records

    The following entities prepare, maintain, and preserve the records required by Section 31(a) of the Act for the Registrant through written agreements between the parties to the effect that such services will be provided to the Registrant for such

periods prescribed by the Rules and Regulations of the Commission under the Act and such records will be surrendered promptly on request: John Hancock Distributors LLC, John Hancock Place, Boston, Massachusetts 02117, serves as Registrant’s distributor and principal underwriter, and, in such capacities, keeps records regarding shareholders account records, cancelled stock certificates. John Hancock Life Insurance Company (U.S.A.) (at the same address), in its capacity as Registrant’s depositor keeps all other records required by Section 31 (a) of the Act.

Item 32. Management Services

All management services contracts are discussed in Part A or Part B.

Item 33. Fee Representation

Representation of Insurer Pursuant to Section 26 of the Investment Company Act of 1940

    The John Hancock Life Insurance Company (U.S.A.) hereby represents that the fees and charges deducted under the contracts issued pursuant to this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the Company.

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has caused this post-effective amendment to the Registration Statement to be signed on its behalf in the City of Boston, Massachusetts, as of the 27th day of April, 2010.

John Hancock Life Insurance Company (U.S.A.) Separate Account N

(Registrant)

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

By: /s/ James R. Boyle

James R. Boyle

Principal Executive Officer

JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

(Depositor)

By: /s/ James R. Boyle

James R. Boyle

Principal Executive Officer

SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, this post-effective amendment to the Registration Statement has been signed by the following persons in the capacities indicated as of the 27th day of April, 2010.

Signatures	Title
/s/ Jeffery J. Whitehead	Vice President and Controller
Jeffery J. Whitehead
/s/ Lynne Patterson	Senior Vice President and Chief Financial Officer
Lynne Patterson
*	Director
James R. Boyle
*	Director
John D. DesPrez III
*	Director
James D. Gallagher
*	Director
Scott S. Hartz
*	Director
Rex Schlaybaugh, Jr.
*	Director
John G. Vrysen
/s/James C. Hoodlet
James C. Hoodlet
*Pursuant to Power of Attorney

May, 2010

This disclosure is distributed to policy owners of variable life insurance policies issued by John Hancock Life Insurance Company (U.S.A.) (“John Hancock USA”) and offering interests in John Hancock Life Insurance Company (U.S.A.) Separate Account N (the “Account” or “Separate Account”). Certain of the investment options described in this disclosure may not be available to you under your policy. You may contact the John Hancock (USA) Service Office for more information at 1-800-532-1234 or write to us at 197 Clarendon Street, Boston, MA 02117.

Investment Options

Certain of the investment options listed below are offered under variable life insurance policies bearing the title Corporate VUL.

500 Index	Financial Services	Money Market
500 Index B	Franklin Templeton Founding Allocation	Money Market B
Active Bond	Fundamental Value	Natural Resources
All Cap Core	Global	Optimized All Cap
All Cap Growth	Global Allocation	Optimized Value
All Cap Value	Global Bond	Overseas Equity
Alpha Opportunities	Global Real Estate	Pacific Rim
American Asset Allocation	Health Sciences	PIMCO VIT All Asset
American Blue Chip Income and Growth	High Yield	Real Estate Securities
American Bond	International Core	Real Return Bond
American Diversified Growth and Income	International Equity Index A	Science & Technology
American Fundamental Holdings	International Equity Index B	Short-Term Bond
American Global Diversification	International Opportunities	Small Cap Growth
American Growth	International Small Cap	Small Cap Index
American Growth-Income	International Value	Small Cap Opportunities
American International	Investment Quality Bond	Small Cap Value
American New World	Large Cap	Small Company Value
Balanced	Large Cap Value	Strategic Bond
Blue Chip Growth	Lifestyle Aggressive	Strategic Income
Capital Appreciation	Lifestyle Balanced	Total Bond Market B
Capital Appreciation Value	Lifestyle Conservative	Total Return
Core Allocation Plus	Lifestyle Growth	Total Stock Market Index
Core Bond	Lifestyle Moderate	U.S. Government Securities
Core Strategy	Mid Cap Index	U.S. High Yield Bond
Disciplined Diversification	Mid Cap Intersection	Utilities
Emerging Small Company	Mid Cap Stock	Value
Equity-Income	Mid Value

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Total annual portfolio operating expenses

The next table describes the minimum and maximum portfolio level fees and expenses charged by any of the portfolios underlying a variable investment option offered through this prospectus, expressed as a percentage of average net assets (rounded to two decimal places). These expenses are deducted from portfolio assets.

Total Annual Portfolio Operating Expenses	Minimum	Maximum
Range of expenses, including management fees, distribution and/ or service (12b-1) fees, and other expenses1	0.49%	6.09%

¹Certain of the portfolios’ advisers or subadvisers have contractually agreed to reimburse or waive certain portfolio level expenses. The minimum and maximum expenses shown do not reflect these contractual expense reimbursements or waivers. If such reimbursements or waivers were reflected, the minimum and maximum expenses would be 0.25% and 1.57%, respectively.

Table of investment options and investment subadvisers

Please note that certain of the investment options described in this table may not be available to you under your policy.

When you select a Separate Account investment option, we invest your money in shares of a corresponding portfolio of the John Hancock Trust (the “Trust” or “JHT”) (or the PIMCO Variable Insurance Trust (the “PIMCO Trust”) with respect to the PIMCO VIT All Asset portfolio) and hold the shares in a subaccount of the Separate Account. Fees and expenses of the portfolios are not fixed or specified under the terms of the policies and may vary from year to year. These fees and expenses differ for each portfolio and reduce the investment return of each portfolio. Therefore, they also indirectly reduce the return you will earn on any Separate Account investment options you select. For more information, please refer to the prospectus for the underlying portfolios.

The John Hancock Trust and the PIMCO Trust are so-called “series” type mutual funds and each is registered under the Investment Company Act of 1940 (“1940 Act”) as an open-end management investment company. John Hancock Investment Management Services, LLC (“JHIMS”) provides investment advisory services to the Trust and receives investment management fees for doing so. JHIMS pays a portion of its investment management fees to other firms that manage the Trust’s portfolios. We are affiliated with JHIMS and may indirectly benefit from any investment management fees JHIMS retains. The PIMCO VIT All Asset portfolio of the PIMCO Trust receives investment advisory services from Pacific Investment Management Company LLC (“PIMCO”) and pays investment management fees to PIMCO.

Each of the American Asset Allocation, American Blue Chip Income and Growth, American Bond, American Global Diversification, American Growth-Income, American Growth, American New World, American Fundamental Holdings, American International, and Core Diversified Growth & Income portfolios invests in shares of the corresponding investment portfolio of the Trust. The American Asset Allocation, American Growth, American International, American Growth-Income, American New World, American Blue Chip Income and Growth and American Bond portfolios operate as “feeder funds,” which means that the portfolios do not buy investment securities directly. Instead, they invest in a “master fund” which in turn purchases investment securities. Each of the American feeder fund portfolios has the same investment objective and limitations as its master fund. The prospectus for the American Fund master fund is included with the prospectuses for the underlying funds. We pay American Funds Distributors, Inc., the principal underwriter for the American Funds Insurance Series, a percentage of some or all of the amounts allocated to the “American” portfolios of the Trust for the marketing support services it provides.

The portfolios pay us or certain of our affiliates compensation for some of the distribution, administrative, shareholder support, marketing and other services we or our affiliates provide to the portfolios. The amount of this compensation is based on a percentage of the assets of the portfolios attributable to the variable insurance products that we and our affiliates issue. These percentages may differ from portfolio to portfolio and among classes of shares within a portfolio. In some cases, the compensation is derived from the Rule 12b-1 fees that are deducted from a portfolio’s assets for the services we or our affiliates provide to that portfolio. These compensation payments do not, however, result in any charge to you in addition to what is shown in the prospectus for the underlying portfolios.

The following table provides a general description of the portfolios that underlie the variable investment options we make available under the policy. You bear the investment risk of any portfolio you choose as an investment option for your policy. You can find a full description of each portfolio, including the investment objectives, policies, restrictions, and risks,

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in the prospectus for that portfolio. You should read the portfolio’s prospectus carefully before investing in the corresponding variable investment option.

The investment options in the Separate Account are not publicly traded mutual funds. The investment options are only available to you as investment options in the policies, or in some cases through other variable annuity contracts or variable life insurance policies issued by us or by other life insurance companies. In some cases, the investment options also may be available through participation in certain qualified pension or retirement plans. The portfolios’ investment advisers and managers (i.e. subadvisers) may manage publicly traded mutual funds with similar names and investment objectives. However, the portfolios are not directly related to any publicly traded mutual fund. You should not compare the performance of any investment option described in this prospectus with the performance of a publicly traded mutual fund. The performance of any publicly traded mutual fund could differ substantially from that of any of the investment options of our Separate Account.

The portfolios available under the policies are as described in the following table:

Portfolio	Portfolio Manager	Investment Objective
500 Index	MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a broad-based U.S. domestic equity market index. Under normal market conditions, the portfolio seeks to approximate the aggregate total return of a broad-based U.S. domestic equity market index.
500 Index B	MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a broad-based U.S. domestic equity market index. Under normal market conditions, the portfolio seeks to approximate the aggregate total return of a broad-based U.S. domestic equity market index.
Active Bond	Declaration Management & Research LLC; and MFC Global Investment Management (U.S.), LLC	To seek income and capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified mix of debt securities and instruments with maturity durations of approximately 4 to 6 years.
All Cap Core	Deutsche Investment Management Americas Inc.	To seek long-term growth of capital. Under normal market conditions, the portfolio invests in common stocks and other equity securities within all asset classes (small, medium and large-capitalization) of those within the Russell 3000 Index.*
All Cap Value	Lord, Abbett & Co. LLC	To seek capital appreciation. Under normal market conditions, the portfolio primarily purchases equity securities of U.S. and multinational companies in all capitalization ranges that the subadviser believes are undervalued.
Alpha Opportunities	Wellington Management Company, LLP	To seek long-term total return. The portfolio employs a “multiple sleeve structure,” which means the portfolio has several components that are managed separately in different styles. The portfolio seeks to obtain its objective by combining these different component styles in a single portfolio.
American Asset Allocation	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to provide high total return (including income and capital gains) consistent with preservation of capital over the long term. The portfolio invests all of its assets in Class 1 shares of its master fund, the Asset Allocation Fund, a series of the American Funds Insurance Series. The master fund invests in a diversified portfolio of common stocks and other equity securities, bonds and other intermediate and long-term debt securities, and money market instruments.
American Blue Chip Income and Growth	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to produce income exceeding the average yield on U.S. stocks generally (as represented by the average yield on the S&P 500 Index*) and to provide an opportunity for growth of principal consistent with sound common stock investing. The portfolio invests all of its assets in Class 1 shares of its master fund, the Blue Chip Income and Growth Fund, a series of the American Funds Insurance Series. The master fund invests primarily in common stocks of larger, more established companies domiciled in the U.S. with market capitalizations of $4 billion and above.

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Portfolio	Portfolio Manager	Investment Objective
American Bond	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to maximize current income and preserve capital. The portfolio invests all of its assets in Class 1 shares of its master fund, the Bond Fund, a series of the American Funds Insurance Series. The master fund will invest at least 65% of its assets in investment-grade debt securities (including cash and cash equivalents) and may invest up to 35% of its assets in debt securities that are rated Ba1 or below by Moody’s and BB+ or below by S&P or that are unrated but determined to be of equivalent quality (so called “junk bonds”). The master fund may invest in debt securities of issuers domiciled outside the U.S., and may also invest up to 20% of its assets in preferred stocks, including convertible and non-convertible preferred stocks.
American Fundamental Holdings	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. The portfolio invests in other funds and other investment companies, as well as other types of investments. The portfolio operates as a fund of funds and currently invests primarily in four underlying funds of the American Funds Insurance Series: Bond Fund, Growth Fund, Growth-Income Fund, and International Fund.
American Global Diversification	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. The portfolio invests in other funds and other investment companies, as well as other types of investments. Under normal market conditions, the portfolio invests a significant portion of its assets in securities, which include securities held by the underlying funds, that are located outside of the U.S. The portfolio operates as a fund of funds and currently invests primarily in five underlying funds of the American Funds Insurance Series: Bond Fund, Global Growth Fund, Global Small Capitalization Fund, High-Income Bond Fund, and New World Fund.
American Growth	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to make the shareholders’ investment grow. The portfolio invests all of its assets in Class 1 shares of its master fund, the Growth Fund, a series of the American Funds Insurance Series. The Growth Fund invests primarily in common stocks and seeks to invest in companies that appear to offer superior opportunities for growth of capital. The Growth Fund may also invest a portion of its assets in common stocks and other securities of issuers domiciled outside the U.S.
American Growth–Income	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to make the shareholders’ investments grow and to provide the shareholder with income over time. The portfolio invests all of its assets in Class 1 shares of its master fund, the Growth-Income Fund, a series of the American Funds Insurance Series. The Growth Income Fund invests primarily in common stocks or other securities that demonstrate the potential for appreciation and/or dividends. Although the fund focuses on investments in medium to larger capitalization companies, the fund’s investments are not limited to a particular capitalization size.
American International	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to make the shareholders’ investment grow. The portfolio invests all of its assets in Class 1 shares of its master fund, the International Fund, a series of the American Funds Insurance Series. The International Fund invests primarily in common stocks of companies located outside the U.S. that the adviser believes have the potential for growth. The fund may invest a portion of its assets in common stocks and other securities of companies in countries with developing economies and/or markets.
American New World	Capital Research and Management Company (Adviser to the American Funds Insurance Series)	To seek to make the shareholders’ investment grow over time. The portfolio invests all of its assets in Class 1 shares of its master fund, the New World Fund, a series of the American Funds Insurance Series. The New World Fund invests primarily in stocks of companies with significant exposure to countries with developing economies and/or markets that the adviser believes have potential of providing capital appreciation. The New World portfolio may also invest in debt securities of issuers, including issuers of lower rated bonds, with exposure to these countries.
Balanced	T. Rowe Price Associates, Inc.	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests in both equity and fixed-income securities. The portfolio employs growth, value and core approaches to allocate its assets among stocks of small, medium and large-capitalization companies in both the U.S. and foreign countries. The portfolio may purchase a variety of fixed-income securities, including investment- grade and below investment-grade debt securities (commonly known as “junk bonds”) with maturities that range from short to longer term, as well as cash.

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Portfolio	Portfolio Manager	Investment Objective
Blue Chip Growth	T. Rowe Price Associates, Inc.	To seek to provide long-term growth of capital. Current income is a secondary objective. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks of large and medium-sized blue chip growth companies.
Capital Appreciation	Jennison Associates LLC	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 65% of its total assets in equity and equity- related securities of companies, at the time of investment, that exceed $1 billion in market capitalization and that the subadviser believes have above-average growth prospects. These companies are generally medium to large-capitalization companies.
Capital Appreciation Value	T. Rowe Price Associates, Inc.	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests primarily in common stocks of established U.S. companies that have above-average potential for capital growth. Common stocks typically constitute at least 50% of the portfolio’s total assets. The remaining assets are generally invested in other securities, including convertible securities, corporate and government debt, foreign securities, futures and options. The portfolio may invest up to 20% of its total assets in foreign securities.
Core Allocation Plus	Wellington Management Company, LLP	To seek total return, consisting of long-term capital appreciation and current income. Under normal market conditions, the portfolio invests in equity and fixed-income securities of issuers located within and outside the U.S. The portfolio will allocate its assets between fixed-income securities, which may include investment-grade and below investment- grade debt securities with maturities that range from short to longer term, and equity securities based upon the subadviser’s targeted asset mix, which may change over time. Under normal circumstances, the targeted asset mix may range between 75%-50% equity instruments and 50%-25% fixed-income instruments and will generally reflect the subadviser’s long-term, strategic asset allocation analysis.
Core Bond	Wells Capital Management, Incorporated	To seek total return consisting of income and capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in a broad range of investment-grade debt securities, including U.S. Government obligations, corporate bonds, mortgage-backed and other asset-backed securities and money market instruments.
Core Diversified Growth & Income	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital and income. The portfolio invests in other funds and other investment companies, as well as other types of investments. Under normal market conditions, the portfolio generally invests between 65% and 75% of its assets in equity securities, which include securities held by the underlying funds, and between 25% and 35% of its assets in fixed-income securities, which include securities held by the underlying funds.
Core Strategy	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. Current income is also a consideration. Under normal market conditions, the portfolio invests in other funds of JHT and other investment companies (including exchange traded funds). The portfolio invests approximately 70% of its total assets in equity securities and underlying funds that invest primarily in equity securities and approximately 30% of its total assets in fixed-income securities and underlying funds that invest primarily in fixed-income securities.
Disciplined Diversification	Dimensional Fund Advisors LP	To seek total return consisting of capital appreciation and current income. Under normal market conditions, the portfolio invests primarily in equity securities and fixed-income securities of domestic and international issuers, including equities of issuers in emerging markets, in accordance with the following range of allocations: Target Allocation                     Range of Allocations Equity Securities: 70%                 65% – 75% Fixed-Income Securities: 30%       25% – 35%
Emerging Markets Value	Dimensional Fund Advisors LP	To seek long-term capital appreciation. Under normal circumstances, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in companies associated with emerging markets designated from time to time by the investment committee of the subadviser.

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Portfolio	Portfolio Manager	Investment Objective
Equity-Income	T. Rowe Price Associates, Inc.	To seek to provide substantial dividend income and also long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities, with at least 65% in common stocks of well-established companies paying above-average dividends.
Financial Services	Davis Selected Advisers, L.P.	To seek growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in companies that, at the time of investment, are principally engaged in financial services, and the portfolio invests primarily in common stocks of financial services companies.
Franklin Templeton Founding Allocation	John Hancock Investment Management Services, LLC	To seek long-term growth of capital. The portfolio invests in other funds and in other investment companies, as well as other types of investments. The portfolio currently invests primarily in three underlying funds: Global Fund, Income Fund and Mutual Shares Fund.
Fundamental Value	Davis Selected Advisers, L.P.	To seek growth of capital. Under normal market conditions, the portfolio invests primarily in common stocks of U.S. companies with market capitalizations of at least $10 billion. The portfolio may also invest in companies with smaller capitalizations.
Global	Templeton Global Advisors Limited	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests primarily in the equity securities of companies located throughout the world, including emerging markets.
Global Bond	Pacific Investment Management Company LLC	To seek maximum total return, consistent with preservation of capital and prudent investment management. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in fixed-income instruments that are economically tied to at least three countries (one of which may be the U.S.), which may be represented by futures contracts (including related options) with respect to such securities, and options on such securities. These fixed-income instruments may be denominated in foreign currencies or in U.S. dollars, which may be represented by forwards or derivatives, such as options, futures contracts, or swap agreements.
Health Sciences	T. Rowe Price Associates, Inc.	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks of companies engaged, at the time of investment, in the research, development, production, or distribution of products or services related to health care, medicine, or the life sciences. While the portfolio may invest in companies of any size, the majority of its assets are expected to be invested in large and medium-capitalization companies.
High Yield	Western Asset Management Company	To realize an above-average total return over a market cycle of three to five years, consistent with reasonable risk. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) at the time of investment in high yield securities, including corporate bonds, preferred stocks, U.S. Government and foreign securities, mortgage-backed securities, loan assignments or participations and convertible securities that have the following ratings from one of the ratings agencies listed below (or, if unrated, are considered by the subadviser to be of equivalent quality): Rating Agency Moody’s:                    Ba through C S&P’s:                       BB through D
International Core	Grantham, Mayo, Van Otterloo & Co. LLC	To seek high total return. Under normal market conditions, the portfolio invests at least 80% of its total assets in equity investments. The portfolio typically invests in equity investments in companies from developed markets outside the U.S.
International Equity Index A	SSgA Funds Management, Inc.	To seek to track the performance of a broad-based equity index of foreign companies primarily in developed countries and, to a lesser extent, in emerging markets. Under normal market conditions, the portfolio invests at least 80% of its assets in securities listed in the Morgan Stanley Capital International All Country World Excluding U.S. Index* or American Depository Receipts or Global Depository Receipts representing such securities.

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Portfolio	Portfolio Manager	Investment Objective
International Equity Index B	SSgA Funds Management, Inc.	To seek to track the performance of a broad-based equity index of foreign companies primarily in developed countries and, to a lesser extent, in emerging markets. Under normal market conditions, the portfolio invests at least 80% of its assets in securities listed in the Morgan Stanley Capital International All Country World Excluding U.S. Index* or American Depository Receipts or Global Depository Receipts representing such securities.
International Opportunities	Marsico Capital Management, LLC	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 65% of its total assets in common stocks of foreign companies that are selected for their long-term growth potential. The portfolio may invest in an unlimited number of companies of any size throughout the world. The portfolio invests in issuers from at least three different countries not including the U.S. The portfolio may invest in common stocks of companies economically tied to emerging markets. Some issuers or securities in the portfolio may be based in or economically tied to the U.S.
International Small Company	Dimensional Fund Advisors LP	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in securities of small-capitalization companies in the particular markets in which the portfolio invests. The portfolio will primarily invest in equity securities of non-U.S. small companies of developed markets, but may hold equity securities of companies located in emerging markets.
International Value	Templeton Investment Counsel, LLC	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets in equity securities of companies located outside the U.S., including in emerging markets.
Investment Quality Bond	Wellington Management Company, LLP	To provide a high level of current income consistent with the maintenance of principal and liquidity. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in bonds rated investment-grade at the time of investment. The portfolio will tend to focus on corporate bonds and U.S. Government bonds with intermediate to longer-term maturities.
Large Cap	UBS Global Asset Management (Americas) Inc.	To seek to maximize total return, consisting of capital appreciation and current income. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of U.S. large-capitalization companies. The portfolio defines large-capitalization companies as those with a market capitalization range, at the time of investment, equal to that of the portfolio’s benchmark, the Russell 1000 Index.*
Large Cap Value	BlackRock Investment Management, LLC	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of large-capitalization companies selected from those that are, at the time of purchase, included in the Russell 1000 Value Index.* The portfolio seeks to achieve its investment objective by investing primarily in a diversified portfolio of equity securities of large-capitalization companies located in the U.S. The portfolio will seek to outperform the Russell 1000 Value Index by investing in equity securities that the subadviser believes are selling at below normal valuations.
Lifestyle Aggressive	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. Current income is not a consideration. The portfolio normally invests approximately 100% of its assets in underlying funds that invest primarily in equity securities.
Lifestyle Balanced	MFC Global Investment Management (U.S.A.) Limited	To seek a balance between a high level of current income and growth of capital, with a greater emphasis on growth of capital. The portfolio normally invests approximately 50% of its assets in underlying funds that invest primarily in fixed-income securities and approximately 50% in underlying funds that invest primarily in equity securities.
Lifestyle Conservative	MFC Global Investment Management (U.S.A.) Limited	To seek a high level of current income with some consideration given to growth of capital. The portfolio normally invests approximately 80% of its assets in underlying funds that invest primarily in fixed-income securities and approximately 20% in underlying funds that invest primarily in equity securities.

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Portfolio	Portfolio Manager	Investment Objective
Lifestyle Growth	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. Current income is also a consideration. The portfolio invests approximately 30% of its assets in underlying funds that invest primarily in fixed-income securities and approximately 70% in underlying funds that invest primarily in equity securities.
Lifestyle Moderate	MFC Global Investment Management (U.S.A.) Limited	To seek a balance between a high level of current income and growth of capital, with a greater emphasis on income. The portfolio normally invests approximately 60% of its assets in underlying funds that invest primarily in fixed-income securities and approximately 40% in underlying funds that invest primarily in equity securities.
Mid Cap Index	MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a medium-capitalization U.S. domestic equity market index. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) at the time of investment in (a) the common stocks that are included in the S&P MidCap 400 Index* and (b) securities (which may or may not be included in the S&P MidCap 400 Index) that the subadviser believes as a group will behave in a manner similar to the index.
Mid Cap Stock	Wellington Management Company, LLP	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of medium-sized companies with significant capital appreciation potential. For the portfolio, “medium-sized companies” are those with market capitalizations within the collective market capitalization range of companies represented in either the Russell MidCap Index* or the S&P MidCap 400 Index.*
Mid Value	T. Rowe Price Associates, Inc.	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets in companies with market capitalizations that are within the S&P MidCap 400 Index* or the Russell MidCap Value Index.* The portfolio invests in a diversified mix of common stocks of mid-size U.S. companies that are believed to be undervalued by various measures and offer good prospects for capital appreciation.
Money Market	MFC Global Investment Management (U.S.A.) Limited	To seek to obtain maximum current income consistent with preservation of principal and liquidity. Under normal market conditions, the portfolio invests in high quality, U.S. dollar denominated money market instruments. Certain market conditions may cause the return of the portfolio to become low or possibly negative.
Money Market B	MFC Global Investment Management (U.S.A.) Limited	To seek to obtain maximum current income consistent with preservation of principal and liquidity. Under normal market conditions, the portfolio invests in high quality, U.S. dollar denominated money market instruments. Certain market conditions may cause the return of the portfolio to become low or possibly negative.
Natural Resources	Wellington Management Company, LLP	To seek long-term total return. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity and equity-related securities of natural resource-related companies worldwide, including emerging markets. Natural resource-related companies include companies that own or develop energy, metals, forest products and other natural resources, or supply goods and services to such companies.
Optimized All Cap	MFC Global Investment Management (U.S.A.) Limited	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 65% of its total assets in equity securities of U.S. companies. The portfolio will focus on equity securities of U.S. companies across the three market capitalization ranges of large, medium and small.
Optimized Value	MFC Global Investment Management (U.S.A.) Limited	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 65% of its total assets in equity securities of U.S. companies with the potential for long-term growth of capital, with a market capitalization range, at the time of investment, equal to that of the portfolio’s benchmark, the Russell 1000 Value Index.*
PIMCO VIT All Asset (a series of PIMCO Variable Insurance Trust) (only Class M is available)	Pacific Investment Management Company LLC	To seek maximum real return consistent with preservation of real capital and prudent investment management. The portfolio is a fund of funds and normally invests substantially all of its assets in Institutional Class shares of underlying PIMCO funds.

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Portfolio	Portfolio Manager	Investment Objective
Real Estate Securities	Deutsche Investment Americas Inc.	To seek to achieve a combination of long-term capital appreciation and current income. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of real estate investment trusts and real estate companies. Equity securities include common stock, preferred stock and securities convertible into common stock.
Real Return Bond	Pacific Investment Management Company LLC	To seek maximum real return, consistent with preservation of real capital and prudent investment management. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or instrumentalities and corporations, which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements.
Science & Technology	RCM Capital Management LLC; and T. Rowe Price Associates, Inc.	To seek long-term growth of capital. Current income is incidental to the portfolio’s objective. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in the common stocks of companies expected to benefit from the development, advancement, and/or use of science and technology. For purposes of satisfying this requirement, common stock may include equity-linked notes and derivatives relating to common stocks, such as options on equity-linked notes.
Short Term Government Income	MFC Global Investment Management (U.S.), LLC	To seek a high level of current income consistent with preservation of capital. Maintaining a stable share price is a secondary goal. The portfolio seeks to achieve its objective by investing under normal circumstances at least 80% of its assets in obligations issued or guaranteed by the U.S. Government and its agencies, authorities or instrumentalities. Under normal circumstances, the portfolio’s effective duration is no more than 3 years.
Small Cap Growth	Wellington Management Company, LLP	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in small-capitalization companies. For the purposes of the portfolio, “small-capitalization companies” are those with market capitalizations, at the time of investment, not exceeding the maximum market capitalization of any company represented in either the Russell 2000 Index* or the S&P SmallCap 600 Index.*
Small Cap Index	MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a small-capitalization U.S. domestic equity market index. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) at the time of investment in (a) the common stocks that are included in the Russell 2000 Index* and (b) securities (which may or may not be included in the Russell 2000 Index) that the subadviser believes as a group will behave in a manner similar to the index.
Small Cap Opportunities	Dimensional Fund Advisors LP; and Invesco Advisers, Inc.	To seek long-term capital appreciation. Under normal market conditions, Invesco Advisers, Inc. invests at least 80% of its subadvised net assets (plus any borrowings for investment purposes) in equity securities of small-capitalization companies. Dimensional Fund Advisers LP generally will invest its subadvised net assets in a broad and diverse group of readily marketable common stocks of small and medium-capitalization companies traded on a principal U.S. exchange or on the over-the-counter market that Dimensional Fund Advisers LP determines to be value stocks at the time of purchase.
Small Cap Value	Wellington Management Company, LLP	To seek long-term capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in small-capitalization companies that are believed to be undervalued by various measures and offer good prospects for capital appreciation. For the purposes of the portfolio, “small-capitalization companies” are those with market capitalizations, at the time of investment, not exceeding the maximum market capitalization of any company represented in either the Russell 2000 Index* or the S&P SmallCap 600 Index.*

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Portfolio	Portfolio Manager	Investment Objective
Small Company Value	T. Rowe Price Associates, Inc.	To seek long-term growth of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in companies with market capitalizations, at the time of investment, that do not exceed the maximum market capitalization of any security in the Russell 2000 Index.* The portfolio invests in small companies whose common stocks are believed to be undervalued.
Smaller Company Growth	Frontier Capital Management Company, LLC; Perimeter Capital Management; and MFC Global Investment Management (U.S.A.) Limited	To seek long-term capital appreciation. Under normal circumstances, the fund invests at least 80% of its assets in small-capitalzation equity securities.
Strategic Bond	Western Asset Management Company	To seek a high level of total return consistent with preservation of capital. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in fixed income securities.
Strategic Income Opportunities	MFC Global Investment Management (U.S.), LLC	To seek to maximize total return consistent with current income and capital appreciation. Under normal market conditions, the portfolio invests at least 80% of its assets in the following types of securities, which may be denominated in U.S. dollars or foreign currencies: foreign government and corporate debt securities from developed and emerging markets, U.S. Government and agency securities, domestic high-yield bonds and investment-grade corporate bonds, and currency instruments.
Total Bond Market B	Declaration Management & Research LLC	To seek to track the performance of the Barclays Capital U.S. Aggregate Bond Index** (which represents the U.S. investment-grade bond market). Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowing for investment purposes) in securities listed in the Barclays Capital U.S. Aggregate Bond Index.
Total Return	Pacific Investment Management Company LLC	To seek maximum total return, consistent with preservation of capital and prudent investment management. Under normal market conditions, the portfolio invests at least 65% of its total assets in a diversified portfolio of fixed-income instruments of varying maturities, which may be represented by forwards or derivatives, such as options, futures contracts, or swap agreements.
Total Stock Market Index	MFC Global Investment Management (U.S.A.) Limited	To seek to approximate the aggregate total return of a broad U.S. domestic equity market index. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) at the time of investment in (a) the common stocks that are included in the Wilshire 5000 Total Market Index* and (b) securities (which may or may not be included in the Wilshire 5000 Total Market Index) that the subadviser believes as a group will behave in a manner similar to the index.
U.S. High Yield Bond	Wells Capital Management, Incorporated	To seek total return with a high level of current income. Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in U.S. corporate debt securities that are, at the time of investment, below investment-grade, including preferred and other convertible securities in below investment- grade debt securities (sometimes referred to as “junk bonds” or high yield securities). The portfolio also invests in corporate debt securities that are investment-grade, and may buy preferred and other convertible securities and bank loans that are investment-grade.
Utilities	Massachusetts Financial Services Company	To seek capital growth and current income (income above that available from the portfolio invested entirely in equity securities). Under normal market conditions, the portfolio invests at least 80% of its net assets (plus any borrowings for investment purposes) in securities of companies in the utilities industry. The subadviser considers a company to be in the utilities industry if, at the time of investment, the subadviser determines that a substantial portion (i.e. at least 50%) of the company’s assets or revenues are derived from one or more utilities.
Value	Van Kampen Investments	To seek to realize an above-average total return over a market cycle of three to five years, consistent with reasonable risk. Under normal market conditions, the portfolio invests in equity securities of companies with capitalizations, at the time of investment, similar to the market capitalization of companies in the Russell MidCap Value Index.*

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*”Wilshire 5000 Total Market Index ^®” is a trademark of Wilshire Associates. “MSCI All Country World Ex US Index” is a trademark of Morgan Stanley & Co. Incorporated.”Russell 1000, ^®” “Russell 2000, ^®” “Russell 1000 Value, ^®” “Russell 3000, ^®” “Russell MidCap, ^®” and “Russell MidCap Value ^®” are trademarks of Frank Russell Company.”S&P 500, ^®” “S&P MidCap 400, ^®” and “S&P SmallCap 600 ^®” are trademarks of The McGraw-Hill Companies, Inc. None of the portfolios are sponsored, endorsed, managed, advised, sold or promoted by any of these companies, and none of these companies make any representation regarding the advisability of investing in the portfolios.

The indices referred to in the portfolio objectives track companies having the ranges of approximate market capitalization, as of February 26, 2010 (except as otherwise indicated), set out below:

Wilshire 5000 Total Market Index — less than $1 million to $344 billion (as of October 31, 2009)

MSCI All Country World Ex US Index — $544 million to $197.9 billion

Russell 1000 Index — $239 million to $307.3 billion

Russell 1000 Value Index — $239 million to $307.3 billion

Russell 2000 Index — $13 million to $4.6 billion

Russell 3000 Index — $13 million to $307.3 billion

Russell MidCap Index — $239 million to $17.5 billion

Russell MidCap Value Index — $239 million to $14.5 billion

S&P 500 Index — $1.3 billion to $324.6 billion (as of April 9, 2010)

S&P MidCap 400 Index — $374 million to $8.1 billion

S&P SmallCap 600 Index — $60 million to $2.8 billion (as of April 9, 2010)

**The Barclays Capital U.S. Aggregate Bond Index (which represents the U.S. investment grade bond market) is a bond index that relies on indicators such as quality, liquidity, term and duration as relevant measures of performance.

Tax considerations

This description of Federal income tax consequences is only a brief summary and is neither exhaustive nor authoritative. It was written to support the promotion of our products. It does not constitute legal or tax advice, and it is not intended to be used and cannot be used to avoid any penalties that may be imposed on you. Tax consequences will vary based on your own particular circumstances, and for further information you should consult a qualified tax adviser. Federal, state and local tax laws, regulations and interpretations can change from time to time. As a result, the tax consequences to you and the beneficiary may be altered, in some cases retroactively. The policy may be used in various arrangements, including non- qualified deferred compensation or salary continuation plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances of each individual arrangement. Therefore, if the value of using the policy in any such arrangement depends in part on the tax consequences, a qualified tax adviser should be consulted for advice.

General

We are taxed as a life insurance company. Under current tax law rules, we include the investment income (exclusive of capital gains) of the Separate Account in our taxable income and take deductions for investment income credited to our policy holder reserves. We are also required to capitalize and amortize certain costs instead of deducting those costs when they are incurred. We do not currently charge the Separate Account for any resulting income tax costs, other than a “DAC tax” charge we may impose against the Separate Account to compensate us for the finance costs attributable to the acceleration of our income tax liabilities by reason of a “DAC tax adjustment.” We also claim certain tax credits or deductions relating to foreign taxes paid and dividends received by the series funds. These benefits can be material. We do not pass these benefits through to the Separate Account, principally because: (i) the deductions and credits are allowed to us and not the policy owners under applicable tax law; and (ii) the deductions and credits do not represent investment return on the Separate Account assets that are passed through to policy owners.

The policies permit us to deduct a charge for any taxes we incur that are attributable to the operation or existence of the policies or the Separate Account. Currently, we do not anticipate making any specific charge for such taxes other than any DAC tax charge and premium taxes, where applicable. If the level of the current taxes increases, however, or is expected to increase in the future, we reserve the right to make a charge in the future.

Death benefit proceeds and other policy distributions

Generally, death benefits paid under policies such as yours are not subject to income tax unless policy ownership has been transferred in exchange for payment. Earnings on your policy value are ordinarily not subject to income tax as long as

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we don’t pay them out to you. If we do pay out any amount of your policy value upon surrender or partial withdrawal, all or part of that distribution would generally be treated as a return of the premiums you’ve paid and not subjected to income tax. However certain distributions associated with a reduction in death benefit or other policy benefits within the first fifteen years after issuance of the policy are ordinarily taxable in whole or in part. Amounts you borrow are generally not taxable to you.

However, some of the tax rules change if your policy is found to be a modified endowment contract. This can happen if you’ve paid premiums in excess of limits prescribed by the tax laws. Additional taxes and penalties may be payable for policy distributions of any kind, including loans. (See “7-pay premium limit and modified endowment contract status” below.)

We expect the policy to receive the same Federal income and estate tax treatment as fixed benefit life insurance policies. Section 7702 of the Internal Revenue Code (the “Code”) defines a life insurance contract for Federal tax purposes. For a policy to be treated as a life insurance contract, it must satisfy either the cash value accumulation test or the guideline premium test. These tests limit the amount of premium that you may pay into the policy. We will monitor compliance with these standards. If we determine that a policy does not satisfy section 7702, we may take whatever steps are appropriate and reasonable to bring it into compliance with section 7702.

If the policy complies with section 7702, the death benefit proceeds under the policy ordinarily should be excludable from the beneficiary’s gross income under section 101 of the Code. (As noted above, a transfer of the policy for valuable consideration may limit the exclusion of death benefits from the beneciriary’s income.) If your policy offers, and you have elected the Long-Term Care Rider, the rider’s benefits generally will be excludable from gross income under the Code. The tax-free nature of these accelerated benefits is contingent on the rider meeting specific requirements under section 101 and/or section 7702B of the Code. We have designed the rider to meet these standards.

Increases in policy value as a result of interest or investment experience will not be subject to Federal income tax unless and until values are received through actual or deemed distributions. In general, unless the policy is a modified endowment contract, the owner will be taxed only on the amount of distributions that exceed the premiums paid under the policy. An exception to this general rule occurs in the case of a decrease in the policy’s death benefit or any other change that reduces benefits under the policy in the first fifteen years after the policy is issued and that results in a cash distribution to the policy owner. Changes that reduce benefits include partial withdrawals, death benefit option changes, and distributions required to keep the policy in compliance with section 7702. For purposes of this rule any distribution within the two years immediately before a reduction in benefits will also be treated as if it caused the reduction. A cash distribution that reduces policy benefits will be taxed in whole or in part (to the extent of any gain in the policy) under rules prescribed in section 7702. The taxable amount is subject to limits prescribed in section 7702(f)(7). Any taxable distribution will be ordinary income to the owner (rather than capital gain).

Distributions for tax purposes include amounts received upon surrender or partial withdrawals. You may also be deemed to have received a distribution for tax purposes if you assign all or part of your policy rights or change your policy’s ownership. If your policy offers, and you have elected the Long-Term Care Rider, deductions from policy value to pay the rider charges will reduce your investment in the contract, but will not be included in income even if you have recovered all of your investment in the contract.

It is possible that, despite our monitoring, a policy might fail to qualify as a life insurance contract under section 7702 of the Code. This could happen, for example, if we inadvertently failed to return to you any premium payments that were in excess of permitted amounts, or if any of the funds failed to meet certain investment diversification or other requirements of the Code. If this were to occur, you would be subject to income tax on the income credited to the policy from the date of issue to the date of the disqualification and for subsequent periods.

Tax consequences of ownership or receipt of policy proceeds under Federal, state and local estate, inheritance, gift and other tax laws will depend on the circumstances of each owner or beneficiary. If the person insured by the policy is also its owner, either directly or indirectly through an entity such as a revocable trust, the death benefit will be includible in his or her estate for purposes of the Federal estate tax. If the owner is not the person insured, the value of the policy will be includible in the owner’s estate upon his or her death. Even if ownership has been transferred, the death proceeds or the policy value may be includible in the former owner’s estate if the transfer occurred less than three years before the former owner’s death or if the former owner retained certain kinds of control over the policy. You should consult your tax adviser regarding these possible tax consequences.

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

Policy loans

We expect that, except as noted below (see “7-pay premium limit and modified endowment contract status”), 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, if the policy terminates for any reason other than the payment of the death benefit, the amount of any outstanding loan that was not previously considered income will be treated as if it had been distributed to the owner upon such termination. This could result in a considerable tax bill. Under certain circumstances involving large amounts of outstanding loans, you might find yourself having to choose between high premiums required to keep your policy from lapsing and a significant tax burden if you allow the lapse to occur.

Diversification rules and ownership of the Account

Your policy will not qualify for the tax benefits of a life insurance contract unless the Account follows certain rules requiring diversification of investments underlying the policy. In addition, the rules require that the policy owner not have “investment control” over the underlying assets.

In certain circumstances, the owner of a variable life insurance policy may be considered the owner, for Federal income tax purposes, of the assets of the separate account used to support the policy. In those circumstances, income and gains from the separate account assets would be includible in the policy owner’s gross income. The Internal Revenue Service (“IRS”) has stated in published rulings that a variable policy owner will be considered the owner of separate account assets if the policy owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. A Treasury Decision issued in 1986 stated that guidance would be issued in the form of regulations or rulings on the “extent to which Policyholders may direct their investments to particular sub-accounts of a separate account without being treated as owners of the underlying assets.” As of the date of this prospectus, no comprehensive guidance on this point has been issued. In Rev. Rul. 2003-91, however, the IRS ruled that a contract holder would not be treated as the owner of assets underlying a variable life insurance or annuity contract despite the owner’s ability to allocate funds among as many as twenty subaccounts.

The ownership rights under your policy are similar to, but different in certain respects from, those described in IRS rulings in which it was determined that policyholders were not owners of separate account assets. Since you have greater flexibility in allocating premiums and policy values than was the case in those rulings, it is possible that you would be treated as the owner of your policy’s proportionate share of the assets of the Account.

We do not know what future Treasury Department regulations or other guidance may require. We cannot guarantee that the funds will be able to operate as currently described in the series funds’ prospectuses, or that a series fund will not have to change any fund’s investment objectives or policies. We have reserved the right to modify your policy if we believe doing so will prevent you from being considered the owner of your policy’s proportionate share of the assets of the Account, but we are under no obligation to do so.

7-pay premium limit and modified endowment contract status

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

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

Policies classified as modified endowment contracts are subject to the following tax rules:

• First, all partial withdrawals from such a policy are treated as ordinary income subject to tax up to the amount equal to the excess (if any) of the policy value immediately before the distribution over the investment in the policy at such time. If you own any other modified endowment contracts issued to you in the same calendar year by the same

13

insurance company or its affiliates, their values will be combined with the value of the policy from which you take the withdrawal for purposes of determining how much of the withdrawal is taxable as ordinary income.

• Second, loans taken from or secured by such a policy and assignments or pledges of any part of its value are treated as partial withdrawals from the policy and taxed accordingly. Past-due loan interest that is added to the loan amount is treated as an additional loan.

• Third, a 10% additional income tax is imposed on the portion of any distribution (including distributions on surrender) from, or loan taken from or secured by, such a policy that is included in income except where the distribution or loan:

• is made on or after the date on which the policy owner attains age 59 ¹/2;

• is attributable to the policy owner becoming disabled; or

• is part of a series of substantially equal periodic payments for the life (or life expectancy) of the policy owner or the joint lives (or joint life expectancies) of the policy owner and the policy owner’s beneficiary.

These exceptions to the 10% additional tax do not apply in situations where the policy is not owned by an individual.

Furthermore, any time there is a “material change” in a policy, the policy will begin a new 7-pay testing period as if it were a newly-issued policy. The material change rules for determining whether a policy is a modified endowment contract are complex. In general, however, the determination of whether a policy will be a modified endowment contract after a material change depends upon the relationship among the death benefit of the policy at the time of such change, the policy value at the time of the change, and the additional premiums paid into the policy during the seven years starting with the date on which the material change occurs.

Moreover, if there is at any time a reduction in benefits under the policy (such as a reduction in the death benefit or the reduction or cancellation of certain rider benefits) the 7-pay limit will generally be recalculated based on the reduced benefits and the policy will be re-tested from the beginning of the 7-pay testing period using the lower limit from the date it was issued. If the premiums paid to date at any point during the 7-pay testing period are greater than the recalcuated 7-pay limit, the policy will become a modified endowment contract. If your policy is a survivorship policy, the 7-pay limit will generally be recalculated based on the reduced benefits and the policy will be re-tested, using the lower limit, from the date it was issued.

If your policy is issued as a result of a section 1035 exchange, it may be considered to be a modified endowment contract if the death benefit under the new policy is smaller than the death benefit under the exchanged policy, or if you reduce coverage in your new policy after it is issued. Therefore, if you desire to reduce the face amount as part of a 1035 exchange, a qualified tax adviser should be consulted for advice.

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

Corporate and H.R. 10 retirement plans

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

Withholding

To the extent that policy distributions to you are taxable, they are generally subject to withholding for your Federal income tax liability. However if you reside in the United States, you can generally choose not to have tax withheld from distributions.

Life insurance purchases by residents of Puerto Rico

In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the Internal Revenue Service ruled that income received by residents of Puerto Rico under a life insurance policy issued by a United States company is U.S.-source income that is subject to United States Federal income tax.

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Life insurance purchases by non-resident aliens

If you are not a U.S. citizen or resident, you will generally be subject to U.S. Federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, you may be subject to state and/or municipal taxes and taxes imposed by your country of citizenship or residence. You should consult with a qualified tax adviser before purchasing a policy.

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In addition to the disclosure contained herein, John Hancock USA has filed with the SEC a prospectus and a Statement of Additional Information (the “SAI”) which contains additional information about John Hancock USA and the Account, including information on our history, services provided to the Account and legal and regulatory matters. The SAI and personalized illustrations of death benefits, account values and surrender values are available, without charge, upon request. You may obtain the personalized illustrations from your John Hancock USA representative. The SAI may be obtained by contacting the John Hancock USA Servicing Office. You should also contact the John Hancock USA Servicing Office to request any other information about your policy or to make any inquiries about its operation.

Information about the Account (including the SAI) can be reviewed and copied at the SEC’s Public Reference Branch, 100 F Street, NE, Room 1580, Washington, DC, 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 202-551-5850. Reports and other information about the Account are available on the SEC’s Internet website at http://www.sec.gov. Copies of such information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC at 100 F Street, NE, Washington, DC 20549-0102.

SUPPLEMENT DATED MAY 3, 2010

TO

PROSPECTUSES DATED MAY 3, 2010 OR LATER

This Supplement is to be distributed with certain prospectuses dated May 3, 2010 or later for variable life insurance policies of John Hancock Life Insurance Company (U.S.A.) or John Hancock Life Insurance Company of New York.

The prospectuses involved bear the title “Protection Variable Universal Life,” “Accumulation Variable Universal Life,” “Corporate VUL,” “Medallion Variable Universal Life Plus,” “Medallion Variable Universal Life Edge,” “Medallion Variable Universal Life Edge II,” “Medallion Executive Variable Life,” “Medallion Executive Variable Life II,” “Medallion Executive Variable Life III,” “Performance Executive Variable Life,” “Variable Estate Protection,” “Variable Estate Protection Plus,” “Variable Estate Protection Edge,” “Performance Survivorship Variable Universal Life” and Survivorship Variable Universal Life.” We refer to these prospectuses as the “Product Prospectuses.”

This supplement will be used only with policies sold through the product prospectuses and through registered representatives affiliated with the M Financial Group.

This Supplement is accompanied with a current prospectus for the M Fund, Inc. that contains detailed information about the funds. Be sure to read that prospectus before selecting any of the four additional variable investment options/investment accounts.

AMENDMENT TO PRODUCT PROSPECTUSES

The table on the cover page of each product prospectus is amended to include the following four additional variable investment options/investment accounts:

M International Equity

M Large Cap Growth

M Capital Appreciation

M Business Opportunity Value

VL M SUPP (5/2010)