-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QU0GDg8ZpWuCr777/ngy0YkJ4RAs9MhO5yhC/ZcrouRXuW/0bTtLZP+4u0cDX4NX om3tHToARCLxuIPlqrG4/w== 0000927016-01-000438.txt : 20010208 0000927016-01-000438.hdr.sgml : 20010208 ACCESSION NUMBER: 0000927016-01-000438 CONFORMED SUBMISSION TYPE: S-6 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20010207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANCOCK JOHN VARIABLE LIFE ACCOUNT S CENTRAL INDEX KEY: 0000906790 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 042664016 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-6 SEC ACT: SEC FILE NUMBER: 333-55172 FILM NUMBER: 1527763 BUSINESS ADDRESS: STREET 1: 200 CLARENDON STREET STREET 2: PO BOX 111 CITY: BOSTON STATE: MA ZIP: 02117 BUSINESS PHONE: 6175729196 S-6 1 0001.txt VEP EDGE REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on February 7, 2001 Registration No. 333-_____ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM S-6 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] PRE-EFFECTIVE AMENDMENT NO. [_] POST-EFFECTIVE AMENDMENT NO. [_] ---------------------- JOHN HANCOCK VARIABLE LIFE ACCOUNT S (Exact name of trust) JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY (Name of depositor) Insurance and Separate Accounts Dept. JOHN HANCOCK PLACE BOSTON, MASSACHUSETTS 02117 (Complete address of depositor's principal executive offices) -------------------- RONALD J. BOGAGE, ESQ. Insurance and Separate Accounts Dept. JOHN HANCOCK LIFE INSURANCE COMPANY JOHN HANCOCK PLACE, BOSTON, 02117 (Name and complete address of agent for service) -------------------- Copy to: THOMAS C. LAUERMAN, ESQ. Freedman, Levy, Kroll & Simonds 1050 Connecticut Avenue, N.W. Washington, D.C. 20036 -------------------- Approximate date of proposed public offering: as soon as practicable after the effective date of this Registration Statement. Title and amount of securities being registered: interests under flexible premium variable life survivorship contracts. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 5(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Sections 8(a), may determine. CROSS-REFERENCE TABLE
Form N-8B-2 Item Caption in Prospectus - ---------------- --------------------- 1, 2 Cover, The Account and The Series Funds or Fund, JHVLICO and John Hancock 3 Inapplicable 4 Cover, Distribution of Policies 5,6 The Account and The Series Funds or Fund, State Regulation 7, 8, 9 Inapplicable 10(a),(b),(c),(d),(e) Policy Provisions and Benefits 10(f) Voting Privileges 10(g),(h) Changes that JHVLICO Can Make 10(i) Appendix--Other Policy Provisions, The Account and The Series Funds or Fund 11, 12 Summary, The Account and The Series Funds or Fund, Distribution of Policies 13 Summary, Charges and Expenses, Appendix--Illustration of Death Benefits, Surrender Values and Accumulated Premiums 14, 15 Summary, Distribution of Policies, Premiums 16 The Account and The Series Funds or Fund 17 Summary, Policy Provisions and Benefits 18 The Account and The Series Funds or Fund, Tax Considerations 19 Reports 20 Changes that JHVLICO Can Make 21 Policy Provisions and Benefits 22 Policy Provisions and Benefits
23 Distribution of Policies 24 Not Applicable 25 JHVLICO and John Hancock 26 Not Applicable 27,28,29,30 JHVLICO and John Hancock, Board of Directors and Executive Officers of JHVLICO 31,32,33,34 Not Applicable 35 JHVLICO and John Hancock 37 Not Applicable 38,39,40,41(a) Distribution of Policies, JHVLICO and John Hancock, Charges and Expenses 42, 43 Not Applicable 44 The Account and The Series Funds or Fund, Policy Provisions, Appendix--Illustration of Death Benefits, Surrender Values and Accumulated Premiums 45 Not Applicable 46 The Account and The Series Funds or Fund, Policy Provisions, Appendix--Illustration of Death Benefits, Surrender Values and Accumulated Values 47, 48, 49, 50 Not Applicable 51 Policy Provisions and Benefits, Appendix--Other Policy Provisions 52 The Account and The Series Funds, Changes that JHVLICO Can Make 53,54,55 Not Applicable 56,57,58 Not Applicable 59 Financial Statements
PROSPECTUS DATED MAY 1, 2001 VARIABLE ESTATE PROTECTION EDGE a flexible premium variable life survivorship insurance policy issued by JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY ("JHVLICO") The policy provides an investment option with fixed rates of return declared by JHVLICO and the following variable investment options: VARIABLE INVESTMENT OPTION MANAGED BY - -------------------------- ---------- Equity Index ................................. State Street Global Advisors Growth & Income .............................. Independence Investment Associates, Inc. and Putnam Investment Management, LLC Large Cap Value .............................. T. Rowe Price Associates, Inc. Large Cap Value CORE/SM/ ..................... Goldman Sachs Asset Management Large Cap Growth ............................. Independence Investment Associates, Inc. Large Cap Aggressive Growth .................. Alliance Capital Management L.P. Large/Mid Cap Value .......................... Wellington Management Company, LLP Fundamental Growth ........................... Putnam Investment Management, LLC Mid Cap Growth ............................... Janus Capital Corporation Small/Mid Cap CORE/SM/ ....................... Goldman Sachs Asset Management Small/Mid Cap Growth ......................... Wellington Management Company, LLP Small Cap Equity ............................. Capital Guardian Trust Company Small Cap Value .............................. T. Rowe Price Associates, Inc. Small Cap Growth ............................. John Hancock Advisers, Inc. V.A. Relative Value .......................... John Hancock Advisers, Inc. AIM V.I. Value ............................... A I M Advisors, Inc. AIM V.I. Growth .............................. A I M Advisors, Inc. Fidelity VIP Growth .......................... Fidelity Management and Research Company Fidelity VIP Contrafund/(R)/ ................. Fidelity Management and Research Company MFS Investors Growth Stock ................... MFS Investment Management/(R)/ MFS Research ................................. MFS Investment Management/(R)/ MFS New Discovery ............................ MFS Investment Management/(R)/ International Equity Index ................... Independence Investment Associates, Inc. International Opportunities .................. T. Rowe Price International, Inc. International Equity ......................... Goldman Sachs Asset Management Morgan Stanley Dean Witter Investment Emerging Markets Equity ...................... Management Inc. Janus Aspen Worldwide Growth ................. Janus Capital Corporation Real Estate Equity ........................... Independence Investment Associates, Inc. and Morgan Stanley Dean Witter Investment Management Inc. Health Sciences .............................. John Hancock Advisers, Inc. V.A. Financial Industries .................... John Hancock Advisers, Inc. Janus Aspen Global Technology ................ Janus Capital Corporation Managed ...................................... Independence Investment Associates, Inc. and Capital Guardian Trust Company Global Balanced .............................. Capital Guardian Trust Company Short-Term Bond .............................. Independence Investment Associates, Inc. Bond Index ................................... Mellon Bond Associates, LLP Active Bond .................................. John Hancock Advisers, Inc. V.A. Strategic Income ........................ John Hancock Advisers, Inc. High Yield Bond .............................. Wellington Management Company, LLP Global Bond .................................. Capital Guardian Trust Company Money Market ................................. Wellington Management Company, LLP - -------------------------------------------------------------------------------- The variable investment options shown on page 1 are those available as of the date of this prospectus. We may add, modify or delete variable investment options in the future. When you select one or more of these variable investment options, we invest your money in the corresponding investment option(s) of one or more of the following: the John Hancock Variable Series Trust I, the John Hancock Declaration Trust, the AIM Variable Insurance Funds, Inc., Fidelity's Variable Insurance Products Fund and Variable Insurance Products Fund II, the MFS Variable Insurance Trust, and the Janus Aspen Series (Service Shares Class) (together, "the Series Funds"). In this prospectus, the investment options of the Series Funds are referred to as "funds". In the prospectuses for the Series Funds, the investment options may be referred to as "funds", "portfolios" or "series". Each Series Fund is a so-called "series" type mutual fund registered with the Securities and Exchange Commission ("SEC"). The investment results of each variable investment option you select will depend on those of the corresponding fund of one of the Series Funds. Each of the funds is separately managed and has its own investment objective and strategies. Attached at the end of this prospectus is a prospectus for each Series Fund. The Series Fund prospectuses contain detailed information about each available fund. Be sure to read those prospectuses before selecting any of the variable investment options shown on page 1. * * * * * * * * * * * * Please note that the 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. * * * * * * * * * * * * JHVLICO LIFE SERVICING OFFICE ----------------------------- Express Delivery U.S. Mail ---------------- --------- 529 Main Street (X-4) P.O. Box 111 Charlestown, MA 02129 Boston, MA 02117 PHONE: 1-800-732-5543 FAX: 1-617-886-3048 2 GUIDE TO THIS PROSPECTUS This prospectus contains information that you should know before you buy a policy or exercise any of your rights under the policy. However, please keep in mind that this is a prospectus - - it is not the policy. The prospectus --- simplifies many policy provisions to better communicate the policy's essential features. Your rights and obligations under the policy will be determined by the language of the policy itself. When you receive your policy, read it carefully. This prospectus is arranged in the following way: . The section which follows is called "Basic Information". It contains basic information about the policy in a question and answer format. You should read the Basic Information before reading any other section of the prospectus. . Behind the Basic Information section are illustrations of hypothetical policy benefits that help clarify how the policy works. These start on page 25. . Behind the illustrations is a section called "Additional Information." This section gives more details about the policy. It generally does not repeat information contained in the Basic --- Information section. A table of contents for the Additional Information section appears on page 32. . Behind the Additional Information section are the financial statements for us and for the Separate Account that we use for this policy. These start on page 47. . Finally, there is an Alphabetical Index of Key Words and Phrases at the back of the prospectus on page 118. After the Alphabetical Index of Key Words and Phrases, this prospectus ends and the prospectuses for the Series Funds begin. 3 BASIC INFORMATION This "Basic Information" section provides answers to commonly asked questions about the policy. Here are the page numbers where the questions and answers appear:
Question Beginning on page - -------- ----------------- .What is the policy? ....................................................... 5 .Who owns the policy? ...................................................... 5 .How can you invest money in the policy? ................................... 5 .Is there a minimum amount you must invest? ................................ 6 .How will the value of your investment in the policy change over time? ..... 8 .What charges will we deduct from your investment in the policy? ........... 9 .What charges will the Series Funds deduct from your investment in the policy? ................................................................... 11 .What other charges can we impose in the future? ........................... 14 .How can you change your policy's investment allocations? .................. 14 .How can you access your investment in the policy? ......................... 15 .How much will we pay when the last insured person dies? ................... 17 .Can you add additional benefit riders? .................................... 18 .How can you change your policy's insurance coverage? ...................... 20 .Can you cancel your policy after it's issued? ............................. 21 .Can you choose the form in which we pay out policy proceeds? .............. 21 .To what extent can we vary the terms and conditions of the policies in particular cases? ............................................. 22 .How will your policy be treated for income tax purposes? .................. 23 .How do you communicate with us? ........................................... 23
4 WHAT IS THE POLICY? This is a so-called "survivorship" policy that provides coverage on two insured persons. The policy's primary purpose is to provide lifetime protection against economic loss due to the death of the last surviving insured person. If the life insurance protection is provided under a master group policy, the term "policy" as used in this prospectus refers to the certificate you will be issued and not to the master group policy. The value of the amount you have invested under the policy may increase or decrease daily based upon the investment results of the variable investment options that you choose. The amount we pay to the policy's beneficiary upon the death of the last surviving insured person (we call this the "death benefit") may be similarly affected. While either of the insured persons is alive, you will have a number of options under the policy. Here are some major ones: . Determine when and how much you invest in the various investment options . Borrow or withdraw amounts you have in the investment options . Change the beneficiary who will receive the death benefit . Change the amount of insurance . Turn in (i.e., "surrender") the policy for the full amount of its surrender value . Choose the form in which we will pay out the death benefit or other proceeds Most of these options are subject to limits that are explained later in this prospectus. WHO OWNS THE POLICY? That's up to the person who applies for the policy. The owner of the policy is the person who can exercise most of the rights under the policy, such as the right to choose the investment options or the right to surrender the policy. In many cases, the person buying the policy is also the person who will be the owner. However, the application for a policy can name another person or entity (such as a trust) as owner. Whenever we've used the term "you" in this prospectus, we've assumed that the reader is the person who has whatever right or privilege is being discussed. There may be tax consequences if the owner and the insured person are different, so you should discuss this issue with your tax adviser. HOW CAN YOU INVEST MONEY IN THE POLICY? Premium Payments We call the investments you make in the policy "premiums" or "premium payments". The amount we require as your first premium depends upon the specifics of your policy and the insured person. Except as noted below, you can make any other premium payments you wish at any time. That's why the policy is called a "flexible premium" policy. 5 Maximum premium payments Federal tax law limits the amount of premium payments you can make relative to the amount of your policy's insurance coverage. We will not knowingly accept any amount by which a premium payment exceeds the maximum. If you exceed certain other limits, the law may impose a penalty on amounts you take out of your policy. More discussion of these tax law requirements begins on page 40. Also, we may refuse to accept any amount of an additional premium if: . that amount of premium would increase our insurance risk exposure, and . the insured persons don't provide us with adequate evidence that they continue to meet our requirements for issuing insurance. In no event, however, will we refuse to accept any premium necessary to prevent the policy from terminating or to keep the guaranteed death benefit feature in effect. 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 Variable Life Insurance Company." Premiums after the first must be sent to the JHVLICO Life Servicing Office at the appropriate address shown on page 2 of this prospectus. We will also accept premiums: . by wire or by exchange from another insurance company, . via an electronic funds transfer program (any owner interested in making monthly premium payments must use this method), or . if we agree to it, through a salary deduction plan with your employer. You can obtain information on these other methods of premium payment by contacting your JHVLICO representative or by contacting the JHVLICO Life Servicing Office. IS THERE A MINIMUM AMOUNT YOU MUST INVEST? Planned Premiums The Policy Specifications page of your policy will show the "Planned Premium" for the policy. You choose this amount in the policy application. 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 invest enough to keep the policy in force (see "Guaranteed death benefit feature" on page 7 and "Lapse and reinstatement" on page 8). 6 Guaranteed death benefit feature This feature guarantees that your Basic Sum Insured will not terminate (i.e., "lapse"), regardless of adverse investment performance, if on each "grace period testing date" the amount of cumulative premiums you have paid (less all withdrawals from the policy and all outstanding loans) equals or exceeds the sum of all Guaranteed Death Benefit Premium ("GDB Premium") due to date. For the first 5 policy years, the same applies to any amount of Additional Sum Insured. If the Guaranteed Death Benefit test is not satisfied on any grace period testing date, the guaranteed death benefit feature will not be "in effect" on that date. We currently test on a quarterly basis, but reserve the right to test on each monthly deduction date. (The term "monthly deduction date" is defined on page 35 under "Procedures for issuance of a policy".) Your policy will show two types of GDB Premium (or such other types as permitted by your state): . 5 Year GDB Premium - This is used on each grace period testing date until the 5th policy anniversary. The total GDB Premium that is "due to date" on any grace period testing date during this period is equal to the 5 Year GDB Premium times the number of elapsed policy months from the policy's date of issue through the grace period testing date. . Age 100 GDB Premium - This is used on each grace period testing date that occurs on and after the 5th policy anniversary until the policy anniversary nearest the younger insured person's 100th birthday (regardless of whether such younger insured person remains alive until that policy anniversary). The total GDB Premium that is "due to date" on any grace period testing date during this period is equal to the Age 100 GDB Premium times the number of elapsed policy months from the policy's date of issue through the grace period testing date. The Age 100 GDB Premium is higher than the 5 Year GDB Premium, but neither of them will ever be greater than the so-called "guideline premium" for the policy as defined in Section 7702 of the Internal Revenue Code. For the first 5 policy years, the guaranteed death benefit feature applies to both the Basic Sum Insured and Additional Sum Insured then in effect and any riders then in effect. On the 5th policy anniversary and thereafter, the guaranteed death benefit feature applies only to the Basic Sum Insured in effect when we issue the policy and does not apply to any amount of Additional Sum Insured or any rider benefits. If you increase the Total Sum Insured (see "How much will we pay when the last insured person dies?" on page 17), the guaranteed death benefit feature will cease to be in effect on the date such increase takes effect or the 5th policy anniversary, whichever is later. If there is a decrease in the Total Sum Insured or a change in death benefit option, the 5 Year GDB Premium and the Age 100 GDB Premium may be changed. In making any "due date" calculation described above after the effective date of the change, the old GDB Premium will apply up to the effective date of the change and the new GDB Premium will be multiplied by the number of elapsed policy months from the effective date of the change through the grace period testing date. 7 If there are monthly charges that remain unpaid because of this guaranteed death benefit feature, we will deduct such charges when there is sufficient account value to pay them. If an insufficient amount of GDB Premium has been paid on a grace period testing date, and your policy would lapse for failure to pay charges then due, we will provide you with a notification as described in the next section, "Lapse and reinstatement". Lapse and reinstatement Either your entire policy or the Additional Sum Insured portion of your Total Sum Insured can lapse for failure to pay charges due under the policy. During the first 5 policy years, there can be no lapse of any kind if the guaranteed death benefit feature is in effect. If the guaranteed death benefit feature is in effect after the 5th policy year, the Additional Sum Insured and any additional benefit riders (unless otherwise stated therein) will be in default and may lapse if the policy's surrender value is not sufficient to pay the charges on a grace period testing date. If the guaranteed death benefit feature is not in effect, the entire policy will be in default and may lapse if the policy's surrender value is not sufficient to pay the charges on a grace period testing date. In either case, we will notify you of how much you will need to pay to keep the Additional Sum Insured or the policy in force. You will have a 61 day "grace period" to make these payments. If you pay these amounts during the grace period, you may also continue the guaranteed death benefit feature by paying the necessary amount of GDB Premiums. If you don't pay at least the required amount by the end of the grace period, the Additional Sum Insured and any additional benefit riders (unless otherwise stated therein) or your policy, as the case may be, will lapse. If your policy lapses, all coverage under the policy will cease. Even if the policy or the Additional Sum Insured terminates in this way, you can still reactivate (i.e., "reinstate") it within 3 years from the beginning of the grace period. You will have to provide evidence that the surviving insured persons still meet our requirements for issuing coverage. You will also have to pay a minimum amount of premium and be subject to the other terms and conditions applicable to reinstatements, as specified in the policy. If the guaranteed death benefit is not in effect and the last surviving insured person dies during the grace period, we will deduct any unpaid monthly charges from the death benefit. During a grace period, you cannot make a partial withdrawal or policy loan. HOW WILL THE VALUE OF YOUR INVESTMENT IN THE POLICY CHANGE OVER TIME? From each premium payment you make, we deduct the charges described under "Deductions from premium payments" below. We invest the rest in the investment options you've elected. Special investment rules apply to premiums processed prior to the 20th day after your policy becomes effective. (See "Commencement of investment performance" beginning on page 35.) Over time, the amount you've invested in any variable investment option will increase or decrease the same as if you had invested the same amount directly in the corresponding fund of the Series Fund and had reinvested all fund dividends and distributions in additional fund shares; except that we will deduct certain additional charges which will reduce your account value. We 8 describe these charges under "What charges will we deduct from your investment in the policy?" below. The amount you've invested in the fixed investment option will earn interest at a rate we declare from time to time. We guarantee that this rate will be at least 4%. If you want to know what the current declared rate is, just call or write to us. The current declared rate will also appear in the annual statement we will send you. Amounts you invest in the fixed investment option will not be subject to the asset-based risk charge described on page 10. Otherwise, the charges applicable to the fixed investment option are the same as those applicable to the variable investment options. At any time, the "account value" of your policy is equal to: . the amount you invested, . plus or minus the investment experience of the investment options you've chosen, . minus all charges we deduct, and . minus all withdrawals you have made. If you take a loan on the policy, however, your account value will be computed somewhat differently. This is discussed beginning on page 37. WHAT CHARGES WILL WE DEDUCT FROM YOUR INVESTMENT IN THE POLICY? Deductions from premium payments . Tax charge - A charge to cover state premium taxes we currently expect to ---------- pay, on average, and the increased Federal income tax burden that we currently expect will result from receipt of premiums. This charge is currently 3.60% of each premium. . Premium sales charge - A charge to help defray our sales costs. The charge is -------------------- 5% of the premium you pay in all policy years. We currently intend to stop making this charge on premiums received after the 10th policy year, but this is not guaranteed. Because policies of this type were first offered for sale in the year 2001, no termination of this charge has yet occurred. . Optional enhanced cash value rider charge - A charge to cover the cost of ----------------------------------------- this rider, if elected, equal to 2% of premium paid in each of the first two policy years up to the Target Premium. Deductions from account value . Issue charge - A monthly charge made for the first four policy years to help ------------ defray our sales and administrative costs. Part of the charge is a percentage of the "Target Premium" and will be the same regardless of the amount of premium actually paid. The percentage will vary depending upon the proportion of Additional Sum Insured at issue and will never be greater than 1.833%. The Target Premium is determined at the time 9 the policy is issued and appears in the "Policy Specifications" section of the policy. In general, the greater the proportion of Additional Sum Insured at issue, the lower the Target Premium. The other part of the charge is an amount per thousand of Basic Sum Insured at issue. This amount will vary depending upon the proportion of Additional Sum Insured at issue and will never be greater than 5c. In general, the greater the proportion of Additional Sum Insured at issue, the lower the amount per thousand. . Maintenance charge - A monthly charge to help defray our administrative ------------------ costs. This is a flat dollar charge of up to $12 (currently $9) during all policy years. . Insurance charge - A monthly charge for the cost of insurance. To determine ---------------- the charge, we multiply the amount of insurance for which we are at risk by a cost of insurance rate. The rate is derived from an actuarial table and the ratio of Basic Sum Insured to Additional Sum Insured on the date we issue your policy. The table in your policy will show the maximum cost of insurance rates. The cost of insurance rates that we currently apply are generally less than the maximum rates. We will review the cost of insurance rates at least every 5 years and may change them from time to time. However, those rates will never be more than the maximum rates shown in the policy. The table of rates we use will depend on the insurance risk characteristics and (usually) gender of each of the insured persons, the Total Sum Insured 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 each insured person's attained age increases. (An insured person's "attained age" on any date is his or her age on the birthday nearest that date.) The insurance charge is not affected by the death of the first insured person to die. The insurance charge for death benefit Option B will tend to be higher than the insurance charge for death benefit Option A (see "How much will we pay when the last insured person dies?" on page 17). . Extra mortality charge - A monthly charge specified in your policy for ---------------------- additional mortality risk if either of the insured persons is subject to certain types of special insurance risk. . Asset-based risk charge - A monthly charge for mortality and expense risks we ----------------------- assume. The charge is a percentage of that portion of your account value allocated to variable investment options. The current percentage on the first $25,000 of account value allocated to variable investment options is .0501%. We guarantee that this percentage will never exceed .0501%. The current percentages on the account value allocated to the variable investment options in excess of $25,000 are .0501% for policy years 1 through 10, .0167% for policy years 11 through 20, and .0083% for policy years 21 and thereafter. We guarantee that these percentages will never exceed .0501 % for all policy years. This charge does not apply to the fixed investment option. . Optional benefits charge - Monthly charges for certain optional insurance ------------------------ benefits added to the policy by means of a rider. Some of the riders we currently offer are described under "Can you add additional benefit riders?" on page 18. . Contingent deferred sales charge ("CDSC") - A charge we deduct if the policy ----------------------------------------- lapses or is surrendered within the first 14 policy years. We deduct this charge to compensate us for sales expenses that we would otherwise not recover in the event of early lapse or surrender. The charge is a percentage of the premiums we received in the first two 10 policy years that do not exceed the first year Target Premium, as shown in the following table: POLICY YEAR(S) PERCENTAGE OF PREMIUMS RECEIVED -------------- ------------------------------- 1 100% 2 93% 3 86% 4 79% 5 71% 6 64% 7 57% 8 50% 9 43% 10 36% 11 29% 12 21% 13 14% 14 7% 15 and later 0% The percentages may be lower for older issue ages due to certain state law restrictions. A pro-rata portion of the CDSC may also be charged in the case of certain types of withdrawals (see "Partial withdrawals" on page __) . Partial withdrawal charge - A $20 charge for each partial withdrawal of ------------------------- account value to compensate us for the administrative expenses of processing the withdrawal. WHAT CHARGES WILL THE SERIES FUNDS DEDUCT FROM YOUR INVESTMENT IN THE POLICY? The Series Funds must pay investment management fees and other operating expenses. These fees and expenses are different for each fund and reduce the investment return of each fund. Therefore, they also indirectly reduce the return you will earn on any variable investment options you select. We may receive payments from a fund or its affiliates at an annual rate of up to approximately 0.25% of the average net assets that holders of our variable life insurance policies and variable annuity contracts have invested in that fund. Any such payments do not, however, result in any charge to you in addition to what is disclosed below. The following figures for the funds are based on historical fund expenses, as a percentage (rounded to two decimal places) of each fund's average daily net assets for 2000 except as indicated in the Notes appearing at the end of this table. Expenses of the funds are not fixed or specified under the terms of the policy, and those expenses may vary from year to year. 11
Total Fund Total Fund Investment Distribution and Other Operating Operating Operating Management Service Expenses With Expenses With Expenses Absent Fund Name Fee (12b-1) Fees Reimbursement Reimbursement Reimbursement - --------- ---------- ---------------- --------------- ------------- ------------------ JOHN HANCOCK VARIABLE SERIES TRUST I (NOTE 1): Equity Index ......................... Growth & Income ...................... Large Cap Value ...................... Large Cap Value CORE/SM/ ............. Large Cap Growth ..................... Large Cap Aggressive Growth .......... Large/Mid Cap Value .................. Fundamental Growth ................... Mid Cap Growth ....................... Small/Mid Cap CORE/SM/ ............... Small/Mid Cap Growth ................. Small Cap Equity ..................... Small Cap Value* ..................... Small Cap Growth ..................... International Equity Index ........... International Opportunities .......... International Equity ................. Emerging Markets Equity .............. Real Estate Equity ................... Health Sciences ...................... Managed .............................. Global Balanced ...................... Short-Term Bond ...................... Bond Index ........................... Active Bond .......................... High Yield Bond ...................... Global Bond .......................... Money Market ......................... JOHN HANCOCK DECLARATION TRUST (NOTE 2): V.A. Relative Value .................. V.A. Financial Industries ............ V.A. Strategic Income ................ AIM VARIABLE INSURANCE FUNDS, INC.: AIM V.I. Value ....................... AIM V.I. Growth ...................... VARIABLE INSURANCE PRODUCTS FUND - SERVICE CLASS (NOTE 3): Fidelity VIP Growth .................. VARIABLE INSURANCE PRODUCTS FUND II - SERVICE CLASS (NOTE 3): Fidelity VIP Contrafund/(R)/ ......... MFS VARIABLE INSURANCE TRUST (NOTE 4): MFS Investors Growth Stock ...........
12
Total Fund Total Fund Investment Distribution and Other Operating Operating Operating Management Service Expenses With Expenses With Expenses Absent Fund Name Fee (12b-1) Fees Reimbursement Reimbursement Reimbursement - --------- ---------- ---------------- --------------- ------------- ------------------ MFS Research ......................... MFS New Discovery .................... JANUS ASPEN SERIES - SERVICE SHARES CLASS: Janus Aspen Worldwide Growth ......... Janus Aspen Global Technology ........
NOTES TO FUND EXPENSE TABLE (1) Under the expense reimbursement policy adopted April 23, 1999, John Hancock Life Insurance Company voluntarily reimburses a fund when the fund's "other fund expenses" exceed 0.10% of the fund's average daily net assets (0.00% for Equity Index). Shareholders of the Managed, Growth & Income, Fundamental Growth, Real Estate Equity, Small Cap Equity, Global Balanced, Active Bond, and Global Bond funds approved new management fee schedules which applied to those funds effective November 1, 2000. The investment management fee percentages for each of those funds are calculated as if those new fee schedules had been in effect for all of 2000. The investment management fee percentages for all other funds reflect the investment management fees that were actually payable for 2000 . * Small Cap Value was formerly "Small/Mid Cap Value". "CORE/SM"/ IS A SERVICE MARK OF GOLDMAN, SACHS & CO. (2) John Hancock Declaration Trust funds' percentages reflect the investment management fees currently payable and other fund expenses allocated in 2000. John Hancock Advisers, Inc. has agreed to limit temporarily other expenses of each fund to 0.25% of the fund's average daily assets. (3) A portion of the brokerage commissions that certain of the Fidelity VIP funds pay was used to reduce fund expenses. In addition, through arrangements with certain funds' custodian, credits realized as a result of uninvested cash balances were used to reduce a portion of each applicable fund's expenses. Without these reductions, the operating expenses of the funds would have been higher, as shown in the last column of this table. (4) MFS Variable Insurance Trust Funds have an expense offset arrangement which reduces each fund's custodian fee based upon the amount of cash maintained by the fund with its custodian and dividend disbursing agent. Each fund may enter into other such arrangements and directed brokerage arrangements, which would also have the effect of reducing the fund's expenses. Expenses do not take into account these expense reductions, and are therefore higher than the actual expenses of the fund. MFS Investment Management(R) (also doing business as Massachusetts Financial Services Company) has contractually agreed to bear expense for the Investors Growth Stock and New Discovery Funds, subject to reimbursement by the fund, such that such fund's "other fund expenses" shall not exceed 0.15% of the average daily net assets of the fund during the current fiscal year. WHAT OTHER CHARGES COULD WE IMPOSE IN THE FUTURE? Except for the tax charge deducted from premium payments, we currently make no charge for our Federal income taxes. However, if we incur, or expect to incur, income taxes attributable 13 to any subaccount of the Account or this class of policies in future years, we reserve the right to make a charge for such taxes. Any such charge would reduce what you earn on any affected investment options. However, we expect that no such charge will be necessary. We also reserve the right to increase the tax 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. Under current laws, we may incur state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not significant. If there is a material change in applicable state or local tax laws, we may make charges for such taxes. HOW CAN YOU CHANGE YOUR POLICY'S INVESTMENT ALLOCATIONS? Future premium payments At any time, you may change the investment options in which future premium payments will be invested. You make the original allocation in the application for the policy. The percentages you select must be in whole numbers and must total 100%. Transfers of existing account value You may also transfer your existing account value from one investment option to another. To do so, you must tell us how much to transfer, either as a whole number percentage or as a specific dollar amount. Without our approval, the maximum amount you may transfer to or from any investment option in any policy year is $1,000,000. Under our current rules, you can make transfers out of any variable investment option anytime you wish. However, we reserve the right to impose limits on the number and frequency of transfers into or out of variable investment options and to impose a charge of up to $25 for any transfer beyond an annual limit (which will not be less than 12). Transfers out of the fixed investment option are currently subject to the following restrictions: . You can only make such a transfer once in each policy year. . The most you can transfer at any one time is the greater of $500 or 20% of the assets in your fixed investment option. We reserve the right to impose limits on: . the minimum amount of each transfer out of the fixed investment option; and . the maximum amount of any transfer into the fixed investment option after the second policy year. 14 Dollar cost averaging This is a program of automatic monthly transfers out of the Money Market investment option into one or more of the other variable investment options. You choose the investment options and the dollar amount and timing of the transfers. The program is designed to reduce the risks that result from market fluctuations. It does this by spreading out the allocation of your money to investment options over a longer period of time. This allows you to reduce the risk of investing most of your money at a time when market prices are high. Obviously, the success of this strategy depends on market trends and is not guaranteed. HOW CAN YOU ACCESS YOUR INVESTMENT IN THE POLICY? Full surrender You may surrender your policy in full at any time. If you do, we will pay you the account value, less any policy loans and less any CDSC that then applies. This is called your "surrender value." You must return your policy when you request a full surrender. Partial withdrawals You may make a partial withdrawal of your surrender value at any time after the first policy year. Each partial withdrawal must be at least $1,000. There is a charge (usually $20) for each partial withdrawal. We will automatically reduce the account value of your policy by the amount of the withdrawal and the related charge. Unless we agree otherwise, each investment option will be reduced in the same proportion as the account value is then allocated among them. We will not permit a partial withdrawal if it would cause your surrender value to fall below 3 months' worth of monthly charges (see "Deductions from account value" on page 9). We also reserve the right to refuse any partial withdrawal that would cause the policy's Total Sum Insured to fall below $250,000, or the policy's Basic Sum Insured to fall below $250,000. Under the Option A death benefit, the reduction of your account value occasioned by a partial withdrawal could cause the minimum insurance amount to become less than your Total Sum Insured (see "How much will we pay when the last insured person dies?" on page 17). If that happens, we will automatically reduce your Total Sum Insured. The calculation of that reduction is explained in the policy, and will be implemented by first reducing any Additional Sum Insured in effect. If the reduction in Total Sum Insured would cause your policy to fail the Internal Revenue Code's definition of life insurance, we will not permit the partial withdrawal. If the withdrawal results in a reduction in Basic Sum Insured, a pro-rata portion of the applicable CDSC will be deducted from the account value. Policy loans You may borrow from your policy at any time by completing a form satisfactory to us or, if the telephone transaction authorization form has been completed, by telephone. The maximum amount you can borrow is determined as follows: . We first determine the surrender value of your policy. 15 . We then subtract an amount equal to 12 times the monthly charges then being deducted from account value. . We then multiply the resulting amount by.75% in policy years 1 through 10, .50% in policy years 11 through 20, and 0% thereafter (although we reserve the right to increase the percentage after policy year 20 to as much as .25%). . We then subtract the third item above from the result of the second item above. The minimum amount of each loan is $1,000. The interest charged on any loan is an effective annual rate of 4.75% in the first 10 policy years, 4.50% in policy years 11 through 20, and 4.0% thereafter. However, we reserve the right to increase the percentage after policy year 20 to as much as 4.25%. Accrued interest will be added to the loan daily and will bear interest at the same rate as the original loan amount. The amount of the loan is deducted from the investment options in the same proportion as the account value is then allocated among them and is placed in a special loan account. This special loan account will earn interest at an effective annual rate of 4.0%. However, if we determine that a loan will be treated as a taxable distribution because of the differential between the loan interest rate and the rate being credited on the special loan account, we reserve the right to decrease the rate credited on the special loan account to a rate that would, in our reasonable judgement, result in the transaction being treated as a loan under Federal tax law. You can repay all or part of a loan at any time. Unless we agree otherwise, each repayment will be allocated among the investment options as follows: . The same proportionate part of the loan as was borrowed from the fixed investment option will be repaid to the fixed investment option. . The remainder of the repayment will be allocated among the investment options in the same way a new premium payment would be allocated. If you want a payment to be used as a loan repayment, you must include instructions to that effect. Otherwise, all payments will be assumed to be premium payments. HOW MUCH WILL WE PAY WHEN THE LAST INSURED PERSON DIES? In your application for the policy, you will tell us how much life insurance coverage you want on the lives of the insured persons. This is called the "Total Sum Insured" of insurance. Total Sum Insured is composed of the Basic Sum Insured and any Additional Sum Insured you elect. The maximum amount of Additional Sum Insured you can have when we issue the policy is generally limited to 400% of the Basic Sum Insured. The application may also give you the option of electing among various patterns of scheduled increases in Additional Sum Insured. There are a number of factors you should consider in determining whether to elect coverage in the form of Basic Sum Insured or in the form of Additional Sum Insured. These factors are discussed under "Basic Sum Insured vs. Additional Sum Insured" on page 35. 16 When the last of the insured persons dies, we will pay the death benefit minus any outstanding loans. There are two ways of calculating the death benefit. You choose which one you want in the application. The two death benefit options are: . Option A - The death benefit will equal the greater of (1) the Total Sum Insured plus any optional extra death benefit, if elected (as described below), or (2) the minimum insurance amount (as described below). . Option B - The death benefit will equal the greater of (1) the Total Sum Insured amount plus your policy's account value on the date of death of the last surviving insured person, or (2) the minimum insurance amount. For the same premium payments, the death benefit under Option B will tend to be higher than the death benefit under Option A. On the other hand, the monthly insurance charge will be higher under Option B to compensate us for the additional insurance risk. Because of that, the account value will tend to be higher under Option A than under Option B for the same premium payments. Optional extra death benefit feature If you elect the Option A death benefit, you may also elect this optional extra death benefit feature. (This feature is sometimes referred to as "Option M".) The optional extra death benefit is determined on each monthly processing date and on the date of death of the last surviving insured personas follows: . First, we multiply your account value by a factor specified in the policy. . We will then subtract your Total Sum Insured. Any excess is the optional extra death benefit. This feature may result in the Option A death benefit being higher than the minimum insurance amount. Although there is no special charge for this feature, your monthly insurance charge will be based on that higher death benefit amount. Election of this feature must be made in the application for the policy. If you elect this feature, you must elect the "cash value accumulation test" for purposes of determining the minimum insurance amount (see below). You may revoke your election of this feature at any time, but there may be adverse tax consequences if you do. A "monthly processing date" is the first business day of a policy month. The minimum insurance amount In order for a policy to qualify as life insurance under Federal tax law, there has to be a minimum amount of insurance in relation to account value. There are two tests that can be applied under Federal tax law - - the "guideline premium and cash value corridor test" and the "cash value accumulation test." When you elect the death benefit option, you must also elect which test you wish to have applied. As indicated above, the guideline premium and cash value corridor test is not available if the optional extra death benefit feature is elected. Under the guideline premium and cash value corridor test, we compute the minimum insurance amount 17 each business day by multiplying the account value on that date by the so-called "corridor factor" applicable on that date. The corridor factors are derived by applying the guideline premium and cash value corridor test. The corridor factor starts out at 2.50 for ages at or below 40 and decreases as attained age increases, reaching a low of 1.0 at age 95. A table showing the factor for each policy year will appear in the policy. Under the cash value accumulation test, we compute the minimum insurance amount each business day by multiplying the account value on that date by the so-called "death benefit factor" applicable on that date. The death benefit factors are derived by applying the cash value accumulation test. The death benefit factor decreases as attained age increases. A table showing the factor for each policy year will appear in the policy. Regardless of which test is applied, the appropriate factor will be referred to in the policy as the "Required Additional Death Benefit Factor." As noted above, you have to elect which test will be applied when you elect the death benefit option. The cash value accumulation test may be preferable if you want an increasing death benefit in later policy years and/or want to fund the policy at the "7 pay" limit for the full 7 years (see "Tax Considerations" beginning on page 41). The guideline premium and cash value corridor test may be preferable if you want the account value under the policy to increase without increasing the death benefit as quickly as might otherwise be required. When the insured person reaches 100 If the policy is still in effect on the policy anniversary nearest the 100th birthday of the younger of the two insured persons (the "age 100 adjustment date"), the following things will happen whether or not the younger insured person is actually alive on that policy anniversary: . We will stop deducting any monthly charges (other than the asset-based risk charge) and will stop accepting any premium payments. . The death benefit will become equal to the Basic Sum Insured plus a percentage of the account value on the date of death of the last surviving insured person. The percentage will be equal to the ratio of Additional Sum Insured to Total Sum Insured on the day immediately preceding the age 100 adjustment date. Death benefit Options A and B (as described above) and the guaranteed minimum death benefit feature will all cease to apply. CAN YOU ADD ADDITIONAL BENEFIT RIDERS? When you apply for a policy, you can request any of the additional benefit riders that we then make available. Availability and rider benefits may vary by state. Charges for the selected rider will generally increase the monthly deductions from your policy's account value. We may change the rates of these charges, but not above the maximum amounts that will be stated in the Policy Specifications page of your policy. Optional enhanced cash value rider If you surrender the policy at any time during the first 5 policy years and this rider is then in effect, we will pay an Enhanced Cash Value Benefit. The Benefit is paid in addition to the policy surrender value. The Benefit is equal to any remaining CDSC plus a percentage of first and 18 second year premiums paid up to the Target Premium. The percentage will be specified in the policy. Also, if you die during the first 4 policy years and the rider is in effect, we will increase the policy's account value by the amount of the Benefit in determining the death benefit payable. Since the rider increases the amount of insurance for which we are at risk, it increases the amount of the insurance charge described on page 10. The maximum amount you may borrow from the policy or withdraw from the policy through partial withdrawals is not effected by this rider. This rider can only be elected at the time of application for the policy. Policy split option rider At the time of policy issue, you may elect a rider that will permit the Total Sum Insured to be evenly split into two separate policies, one for each insured person, but only if the insured persons get divorced or certain Federal tax law changes occur. The rider may be cancelled at any time, but it will automatically terminate on the date of death of the first insured person to die or on the policy anniversary nearest the older insured person's 80th birthday, whichever is earlier. A policy split could have adverse tax consequences, so check with your tax adviser before electing this rider. Other riders We currently offer a number of other optional riders, such as the four year level term rider. HOW CAN YOU CHANGE YOUR POLICY'S INSURANCE COVERAGE? Increase in coverage You may request an increase in the Additional Sum Insured. As to when such an increase would take effect, see "Effective date of other policy transactions" on page 37. Generally, each such increase must be at least $50,000. However, you will have to provide us with evidence that the insured persons still meet our requirements for issuing insurance coverage. Unless we consent otherwise, you may not increase the Additional Sum Insured if the increase would cause the entire Additional Sum Insured to equal or exceed 800% of the Basic Sum Insured. Decrease in coverage After the first policy year, you may request a reduction in the Total Sum Insured at any time, but only if: . the remaining Basic Sum Insured will be at least $250,000, and . the remaining Additional Sum Insured will not exceed 800% of the Basic Sum Insured, and . the remaining Total Sum Insured will at least equal the minimum required by the tax laws to maintain the policy's life insurance status. We may refuse any reduction in Additional Sum Insured if it would cause the death benefit to increase pursuant to the optional extra death benefit feature. As to when any reduction in 19 Total Sum Insured would take effect, see "Effective date of other policy transactions" on page __. Change of death benefit option You may change your coverage from death benefit Option B to Option A on any policy anniversary, but only if there is no change in the Federal tax law test used to determine the minimum insurance amount. A change from death benefit Option A to Option B is not permitted under our administrative rules. Please read "The minimum insurance amount" starting on page 17 for more information about the "guideline premium and cash value corridor test" and the "cash value accumulation test." Tax consequences Please read "Tax considerations" starting on page 40 to learn about possible tax consequences of changing your insurance coverage under the policy. CAN YOU CANCEL YOUR POLICY AFTER IT'S ISSUED? You have the right to cancel your policy within 10 days (or longer in some states) after you receive it. This is often referred to as the "free look" period. To cancel your policy, simply deliver or mail the policy to: . JHVLICO at one of the addresses shown on page 2, or . the JHVLICO representative who delivered the policy to you. In most states, you will receive a refund of any premiums you've paid. In some states, the refund will be your account value on the date of cancellation plus all charges deducted by JHVLICO or the Series Fund prior to that date. The date of cancellation will be the date of such mailing or delivery. CAN YOU CHOOSE THE FORM IN WHICH WE PAY OUT POLICY PROCEEDS? Choosing a payment option You may choose to receive proceeds from the policy as a single sum. This includes proceeds that become payable because of death or full surrender. Alternatively, you can elect to have proceeds of $1,000 or more applied to any of a number of other payment options, including the following: . Option 1 - Proceeds left with us to accumulate with interest . Option 2A - Equal monthly payments of a specified amount until all proceeds are paid out 20 . Option 2B - Equal monthly payments for a specified period of time . Option 3 - Equal monthly payments for life, but with payments guaranteed for a specific number of years . Option 4 - Equal monthly payments for life with no refund . Option 5 - Equal monthly payments for life with a refund if all of the proceeds haven't been paid out You cannot choose an option if the monthly payments under the option would be less than $50. We will issue a supplementary agreement when the proceeds are applied to any alternative payment option. That agreement will spell out the terms of the option in full. We will credit interest on each of the above options. For options 1 and 2A, the interest will be at least an effective annual rate of 3 1/2%. Changing a payment option You can change the payment option at any time before the proceeds are payable. If you haven't made a choice, the payee of the proceeds has a prescribed period in which he or she can make that choice. Tax impact There may be tax consequences to you or your beneficiary depending upon which payment option is chosen. You should consult with a qualified tax adviser before making that choice. TO WHAT EXTENT CAN WE VARY THE TERMS AND CONDITIONS OF OUR POLICIES IN PARTICULAR CASES? Listed below are some variations we can make in the terms of our policies. Any variation will be made only in accordance with uniform rules that we apply fairly to all of our customers. State law insurance requirements Insurance laws and regulations apply to us in every state in which our policies are sold. As a result, various terms and conditions of your insurance coverage may vary from the terms and conditions described in this prospectus, depending upon where you reside. These variations will be reflected in your policy or in endorsements attached to your policy. Variations in expenses or risks We may vary the charges and other terms of our policies where special circumstances result in sales or administrative expenses, mortality risks or other risks that are different from those normally associated with the policies. These include the type of variations discussed under "Reduced charges for eligible classes" on page 38. No variation in any charge will exceed any maximum stated in this prospectus with respect to that charge. 21 HOW WILL YOUR POLICY BE TREATED FOR INCOME TAX PURPOSES? Generally, death benefits paid under policies such as yours are not subject to income tax. Earnings on your account value are not subject to income tax as long as we don't pay them out to you. If we do pay out any amount of your account value upon surrender or partial withdrawal, all or part of that distribution should generally be treated as a return of the premiums you've paid and should not be subject to income tax. Amounts you borrow are generally not taxable to you. However, some of the tax rules change if your policy is found to be a "modified endowment contract." This can happen if you've paid more than a certain amount of premiums that is prescribed by the tax laws. Additional taxes and penalties may be payable for policy distributions of any kind. For further information about the tax consequences of owning a policy, please read "Tax considerations" beginning on page 40. HOW DO YOU COMMUNICATE WITH US? General Rules You should mail or express all checks and money orders for premium payments and loan repayments to the JHVLICO Life Servicing Office at the appropriate address shown on page 2. Certain requests must be made in writing and be signed and dated by you. They include the following: . loans, surrenders or partial withdrawals . transfers of account value among investment options . change of allocation among investment options for new premium payments . change of death benefit option . increase or decrease in Total Sum Insured . change of beneficiary . election of payment option for policy proceeds . tax withholding elections . election of telephone transaction privilege. You should mail or express these requests to our Life Servicing Office at the appropriate address shown on page 2. You should also send notice of an insured person's death and related documentation to our Life Servicing Office. We don't consider that we've "received" any 22 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 Life Servicing Office or your JHVLICO representative. Each communication to us must include your name, your policy number and the name of the insured persons. 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 Standard Time, but special circumstances (such as suspension of trading on a major exchange) may dictate an earlier closing time. Telephone Transactions If you complete a special authorization form, you can request loans, transfers among investment options and changes of allocation among investment options simply by telephoning us at 1-800-732-5543 or by faxing us at 1-617-886-3048. Any fax request should include your name, daytime telephone number, policy number and, in the case of transfers and changes of allocation, the names of the investment options involved. We will honor telephone instructions from anyone who provides the correct identifying information, so there is a risk of loss to you if this service is used by an unauthorized person. However, you will receive written confirmation of all telephone transactions. There is also a risk that you will be unable to place your request due to equipment malfunction or heavy phone line usage. If this occurs, you should submit your request in writing. The policies are not designed for professional market timing organizations or other persons or entities that use programmed or frequent transfers among investment options. For reasons such as that, we reserve the right to change our telephone transaction policies or procedures at any time. We also reserve the right to suspend or terminate the privilege altogether with respect to all policies like yours or with respect to any class of such policies. 23 ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND ACCUMULATED PREMIUMS The following tables illustrate the changes in death benefit, account value and surrender value of the policy under certain hypothetical circumstances that we assume solely for this purpose. Each table separately illustrates the operation of a policy for specified issue ages, premium payment schedule and Total Sum Insured. The amounts shown are for the end of each policy year and assume that all of the account value is invested in funds that achieve investment returns at constant annual rates of 0%, 6% and 12% (i.e., before any fees or expenses deducted from Series Fund assets). After the deduction of average fees and expenses at the Series Fund level (as described below) the corresponding net annual rates of return would be -0.__%, 5.__% and 11.__%. Investment return reflects investment income and all realized and unrealized capital gains and losses. The tables assume annual Planned Premiums that are paid at the beginning of each policy year for a male insured person who is 55 years old and a preferred underwriting risk when the policy is issued and for a female insured person who is 50 years old and a preferred underwriting risk when the policy is issued. Tables are provided for each of the two death benefit options. The tables headed "Current Charges" assume that the current rates for all charges deducted by JHVLICO will apply in each year illustrated, including the intended waiver of the premium sales charge after the tenth policy year. The tables headed "Maximum Charges" are the same, except that the maximum permitted rates for all years are used for all charges. The tables do not reflect any charge that we reserve the right to make but are not currently making. The tables assume that no optional rider benefits and no Additional Sum Insured have been elected and that no loans or withdrawals are made. With respect to fees and expenses deducted from assets of the Series Funds, the amounts shown in all tables reflect (1) investment management fees equivalent to an effective annual rate of 0.__%, and (2) an assumed average asset charge for all other operating expenses of the Series Funds equivalent to an effective annual rate of 0.__%. These rates are the arithmetic average for all funds that are available as investment options. In other words, they are based on the hypothetical assumption that policy account values are allocated equally among the variable investment options. The actual rates associated with any policy will vary depending upon the actual allocation of policy values among the investment options. The charge shown above for all other operating expenses of the Series Funds reflects reimbursements to certain funds as described in the footnotes to the table beginning on page 12. We currently expect those reimbursement arrangements to continue indefinitely, but that is not guaranteed. The second column of each table shows the amount you would have at the end of each policy year if an amount equal to the assumed Planned Premiums were invested to earn interest, after taxes, at 5% compounded annually. This is not a policy value. It is included for comparison purposes only. Because your circumstances will no doubt differ from those in the illustrations that follow, values under your policy will differ, in most cases substantially. Upon request, we will furnish you with a comparable illustration reflecting the issue age, sex and underwriting risk classification of each of your proposed insured persons, and the Basic Sum Insured, Additional Sum Insured and annual Planned Premium amount requested. 24 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING CURRENT CHARGES
Death Benefit Surrender Value --------------------------- ----------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at --------------------------- ----------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% - ------- ------------------ ------- ------- --------- ------- ------- ----------- 1 8,564 500,000 500,000 500,000 4,284 4,567 4,851 2 17,556 500,000 500,000 500,000 10,098 11,001 11,939 3 26,998 500,000 500,000 500,000 15,010 16,879 18,894 4 36,912 500,000 500,000 500,000 20,362 23,557 27,134 5 47,322 500,000 500,000 500,000 25,628 30,521 36,213 6 58,252 500,000 500,000 500,000 31,868 38,890 47,369 7 69,728 500,000 500,000 500,000 38,005 47,615 59,659 8 81,779 500,000 500,000 500,000 44,036 56,708 73,199 9 94,432 500,000 500,000 500,000 49,962 66,184 88,111 10 107,717 500,000 500,000 500,000 55,778 76,054 104,534 11 121,667 500,000 500,000 500,000 62,130 87,014 123,336 12 136,314 500,000 500,000 500,000 68,355 98,422 144,036 13 151,694 500,000 500,000 500,000 74,447 110,291 166,825 14 167,843 500,000 500,000 500,000 80,397 122,631 191,911 15 184,799 500,000 500,000 500,000 86,195 135,454 219,525 16 202,603 500,000 500,000 500,000 92,292 149,519 251,186 17 221,297 500,000 500,000 500,000 98,230 164,192 286,223 18 240,926 500,000 500,000 500,000 103,988 179,487 325,009 19 261,536 500,000 500,000 500,000 109,540 195,419 367,966 20 283,177 500,000 500,000 500,000 114,856 212,005 415,574 25 408,735 500,000 500,000 781,214 137,954 307,127 744,013 30 568,983 500,000 500,000 1,354,197 148,447 425,366 1,289,712 35 773,504 500,000 607,346 2,298,834 133,943 578,425 2,189,366
* The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each Policy Year. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit after the tenth Policy Year, or optional rider benefits are elected. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 25 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION B DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING CURRENT CHARGES
Death Benefit Surrender Value --------------------------- ----------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at --------------------------- ----------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% - ------- ------------------ ------- ------- --------- ------- ------- ----------- 1 8,564 504,284 504,567 504,851 4,284 4,567 4,851 2 17,556 509,689 510,593 511,531 10,097 11,001 11,938 3 26,998 515,008 516,877 518,892 15,008 16,877 18,892 4 36,912 520,359 523,554 527,129 20,359 23,554 27,129 5 47,322 525,623 530,515 536,205 25,623 30,515 36,205 6 58,252 531,861 538,880 547,357 31,861 38,880 47,357 7 69,728 537,994 547,601 559,641 37,994 47,601 59,641 8 81,779 544,021 556,687 573,170 44,021 56,687 73,170 9 94,432 549,940 566,153 588,069 49,940 66,153 88,069 10 107,717 555,747 576,010 604,470 55,747 76,010 104,470 11 121,667 562,091 586,955 623,246 62,091 86,955 123,246 12 136,314 568,301 598,339 643,906 68,301 98,339 143,906 13 151,694 574,372 610,171 666,632 74,372 110,171 166,632 14 167,843 580,290 622,456 691,619 80,290 122,456 191,619 15 184,799 586,041 635,195 719,080 86,041 135,195 219,080 16 202,603 592,070 649,136 750,504 92,070 149,136 250,504 17 221,297 597,913 663,627 785,185 97,913 163,627 285,185 18 240,926 603,539 678,660 823,436 103,539 178,660 323,436 19 261,536 608,911 694,222 865,601 108,911 194,222 365,601 20 283,177 613,983 710,288 912,050 113,983 210,288 412,050 25 408,735 634,273 798,438 1,225,998 134,273 298,438 725,998 30 568,983 636,756 890,986 1,727,745 136,756 390,986 1,227,745 35 773,504 604,677 968,775 2,519,344 104,677 468,775 2,019,344
* The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each Policy Year. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit after the tenth Policy Year, or optional rider benefits are elected. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 26 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION A DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING MAXIMUM CHARGES
Death Benefit Surrender Value --------------------------- ---------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at --------------------------- ---------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% - ------- ------------------ ------- ------- --------- ------ ------- ----------- 1 8,564 500,000 500,000 500,000 4,131 4,409 4,688 2 17,556 500,000 500,000 500,000 9,765 10,647 11,564 3 26,998 500,000 500,000 500,000 14,450 16,269 18,231 4 36,912 500,000 500,000 500,000 19,521 22,619 26,090 5 47,322 500,000 500,000 500,000 24,439 29,168 34,674 6 58,252 500,000 500,000 500,000 30,257 37,020 45,197 7 69,728 500,000 500,000 500,000 35,882 45,108 56,691 8 81,779 500,000 500,000 500,000 41,302 53,428 69,240 9 94,432 500,000 500,000 500,000 46,502 61,972 82,939 10 107,717 500,000 500,000 500,000 51,463 70,731 97,891 11 121,667 500,000 500,000 500,000 56,644 80,202 114,746 12 136,314 500,000 500,000 500,000 61,528 89,879 133,145 13 151,694 500,000 500,000 500,000 66,081 99,739 153,230 14 167,843 500,000 500,000 500,000 70,255 109,750 175,155 15 184,799 500,000 500,000 500,000 73,998 119,873 199,100 16 202,603 500,000 500,000 500,000 77,251 130,069 225,274 17 221,297 500,000 500,000 500,000 79,921 140,270 253,908 18 240,926 500,000 500,000 500,000 81,983 150,470 285,327 19 261,536 500,000 500,000 500,000 83,333 160,601 319,878 20 283,177 500,000 500,000 500,000 83,875 170,608 357,991 25 408,735 500,000 500,000 650,482 69,426 216,322 619,506 30 568,983 ** 500,000 1,091,304 ** 241,458 1,039,337 35 773,504 ** 500,000 1,777,950 ** 211,499 1,693,285
* The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each Policy Year. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit after the tenth Policy Year, or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 27 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION B DEATH BENEFIT GUIDELINE PREMIUM AND CASH VALUE CORRIDOR TEST NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING MAXIMUM CHARGES
Death Benefit Surrender Value --------------------------- ---------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at --------------------------- ---------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% - ------- ------------------ ------- ------- --------- ------ ------- ----------- 1 8,564 504,130 504,409 504,687 4,130 4,409 4,687 2 17,556 509,356 510,238 511,155 9,763 10,646 11,563 3 26,998 514,446 516,265 518,226 14,446 16,265 18,226 4 36,912 519,510 522,607 526,075 19,510 22,607 26,075 5 47,322 524,417 529,141 534,641 24,417 29,141 34,641 6 58,252 530,215 536,968 545,131 30,215 36,968 45,131 7 69,728 535,811 545,015 556,570 35,811 45,015 56,570 8 81,779 541,185 553,271 569,029 41,185 53,271 69,029 9 94,432 546,321 561,720 582,590 46,321 61,720 82,590 10 107,717 551,193 570,343 597,332 51,193 70,343 97,332 11 121,667 556,252 579,620 613,878 56,252 79,620 113,878 12 136,314 560,975 589,028 631,827 60,975 89,028 131,827 13 151,694 565,315 598,519 651,268 65,315 98,519 151,268 14 167,843 569,213 608,028 672,280 69,213 108,028 172,280 15 184,799 572,601 617,479 694,941 72,601 117,479 194,941 16 202,603 575,404 626,782 719,331 75,404 126,782 219,331 17 221,297 577,506 635,802 745,488 77,506 135,802 245,488 18 240,926 578,874 644,481 773,545 78,874 144,481 273,545 19 261,536 579,382 652,661 803,546 79,382 152,661 303,546 20 283,177 578,918 660,190 835,552 78,918 160,190 335,552 25 408,735 556,648 680,649 1,026,556 56,648 180,649 526,556 30 568,983 ** 639,253 1,259,526 ** 139,253 759,526 35 773,504 ** ** 1,504,388 ** ** 1,004,388
* The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each Policy Year. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit after the tenth Policy Year, or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 28 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION A DEATH BENEFIT CASH VALUE ACCUMULATION TEST NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING CURRENT CHARGES
Death Benefit Surrender Value --------------------------- --------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at --------------------------- --------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% - ------- ------------------ ------- ------- --------- ------- ------- ----------- 1 8,564 500,000 500,000 500,000 4,284 4,567 4,851 2 17,556 500,000 500,000 500,000 10,098 11,001 11,939 3 26,998 500,000 500,000 500,000 15,010 16,879 18,894 4 36,912 500,000 500,000 500,000 20,362 23,557 27,134 5 47,322 500,000 500,000 500,000 25,628 30,521 36,213 6 58,252 500,000 500,000 500,000 31,868 38,890 47,369 7 69,728 500,000 500,000 500,000 38,005 47,615 59,659 8 81,779 500,000 500,000 500,000 44,036 56,708 73,199 9 94,432 500,000 500,000 500,000 49,962 66,184 88,111 10 107,717 500,000 500,000 500,000 55,778 76,054 104,534 11 121,667 500,000 500,000 500,000 62,130 87,014 123,336 12 136,314 500,000 500,000 500,000 68,355 98,422 144,036 13 151,694 500,000 500,000 500,000 74,447 110,291 166,825 14 167,843 500,000 500,000 500,000 80,397 122,631 191,911 15 184,799 500,000 500,000 500,000 86,195 135,454 219,525 16 202,603 500,000 500,000 500,000 92,292 149,519 251,186 17 221,297 500,000 500,000 532,293 98,230 164,192 286,200 18 240,926 500,000 500,000 585,231 103,988 179,487 324,882 19 261,536 500,000 500,000 641,863 109,540 195,419 367,595 20 283,177 500,000 500,000 702,547 114,856 212,005 414,730 25 408,735 500,000 500,000 1,085,330 137,954 307,127 734,963 30 568,983 500,000 560,913 1,655,287 148,447 423,605 1,250,081 35 773,504 500,000 685,082 2,519,656 133,943 561,419 2,064,837
* The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each Policy Year. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit after the tenth Policy Year, or optional rider benefits are elected. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 29 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION B DEATH BENEFIT CASH VALUE ACCUMULATION TEST NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING CURRENT CHARGES
Death Benefit Surrender Value --------------------------- ----------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at --------------------------- ----------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% - ------- ------------------ ------- ------- --------- ------- ------- ----------- 1 8,564 504,284 504,567 504,851 4,284 4,567 4,851 2 17,556 509,689 510,593 511,531 10,097 11,001 11,938 3 26,998 515,008 516,877 518,892 15,008 16,877 18,892 4 36,912 520,359 523,554 527,129 20,359 23,554 27,129 5 47,322 525,623 530,515 536,205 25,623 30,515 36,205 6 58,252 531,861 538,880 547,357 31,861 38,880 47,357 7 69,728 537,994 547,601 559,641 37,994 47,601 59,641 8 81,779 544,021 556,687 573,170 44,021 56,687 73,170 9 94,432 549,940 566,153 588,069 49,940 66,153 88,069 10 107,717 555,747 576,010 604,470 55,747 76,010 104,470 11 121,667 562,091 586,955 623,246 62,091 86,955 123,246 12 136,314 568,301 598,339 643,906 68,301 98,339 143,906 13 151,694 574,372 610,171 666,632 74,372 110,171 166,632 14 167,843 580,290 622,456 691,619 80,290 122,456 191,619 15 184,799 586,041 635,195 719,080 86,041 135,195 219,080 16 202,603 592,070 649,136 750,504 92,070 149,136 250,504 17 221,297 597,913 663,627 785,185 97,913 163,627 285,185 18 240,926 603,539 678,660 823,436 103,539 178,660 323,436 19 261,536 608,911 694,222 865,601 108,911 194,222 365,601 20 283,177 613,983 710,288 912,050 113,983 210,288 412,050 25 408,735 634,273 798,438 1,225,998 134,273 298,438 725,998 30 568,983 636,756 890,986 1,727,745 136,756 390,986 1,227,745 35 773,504 604,677 968,775 2,519,344 104,677 468,775 2,019,344
* The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each Policy Year. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit after the tenth Policy Year, or optional rider benefits are elected. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 30 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION A DEATH BENEFIT CASH VALUE ACCUMULATION TEST NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING MAXIMUM CHARGES
Death Benefit Surrender Value --------------------------- ---------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at --------------------------- ---------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% - ------- ------------------ ------- ------- --------- ------ ------- ----------- 1 8,564 500,000 500,000 500,000 4,131 4,409 4,688 2 17,556 500,000 500,000 500,000 9,765 10,647 11,564 3 26,998 500,000 500,000 500,000 14,450 16,269 18,231 4 36,912 500,000 500,000 500,000 19,521 22,619 26,090 5 47,322 500,000 500,000 500,000 24,439 29,168 34,674 6 58,252 500,000 500,000 500,000 30,257 37,020 45,197 7 69,728 500,000 500,000 500,000 35,882 45,108 56,691 8 81,779 500,000 500,000 500,000 41,302 53,428 69,240 9 94,432 500,000 500,000 500,000 46,502 61,972 82,939 10 107,717 500,000 500,000 500,000 51,463 70,731 97,891 11 121,667 500,000 500,000 500,000 56,644 80,202 114,746 12 136,314 500,000 500,000 500,000 61,528 89,879 133,145 13 151,694 500,000 500,000 500,000 66,081 99,739 153,230 14 167,843 500,000 500,000 500,000 70,255 109,750 175,155 15 184,799 500,000 500,000 500,000 73,998 119,873 199,100 16 202,603 500,000 500,000 500,000 77,251 130,069 225,274 17 221,297 500,000 500,000 500,000 79,921 140,270 253,908 18 240,926 500,000 500,000 513,820 81,983 150,470 285,239 19 261,536 500,000 500,000 557,411 83,333 160,601 319,229 20 283,177 500,000 500,000 603,104 83,875 170,608 356,027 25 408,735 500,000 500,000 869,056 69,426 216,322 588,506 30 568,983 ** 500,000 1,212,163 ** 241,458 915,431 35 773,504 ** 500,000 1,659,249 ** 211,499 1,359,740
* The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each Policy Year. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit after the tenth Policy Year, or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 31 PLAN: FLEXIBLE PREMIUM VARIABLE LIFE SURVIVORSHIP $500,000 TOTAL SUM INSURED MALE, ISSUE AGE 55, PREFERRED UNDERWRITING CLASS FEMALE, ISSUE AGE 50, PREFERRED UNDERWRITING CLASS OPTION B DEATH BENEFIT CASH VALUE ACCUMULATION TEST NO GUARANTEED MINIMUM DEATH BENEFIT AFTER TENTH POLICY YEAR PLANNED PREMIUM: $8,156* USING MAXIMUM CHARGES
Death Benefit Surrender Value --------------------------- ---------------------------- Assuming hypothetical Assuming hypothetical End of Planned Premiums gross annual return of gross annual return of Policy accumulated at --------------------------- ---------------------------- Year 5% annual interest 0% 6% 12% 0% 6% 12% - ------- ------------------ ------- ------- --------- ------ ------- ----------- 1 8,564 504,130 504,409 504,687 4,130 4,409 4,687 2 17,556 509,356 510,238 511,155 9,763 10,646 11,563 3 26,998 514,446 516,265 518,226 14,446 16,265 18,226 4 36,912 519,510 522,607 526,075 19,510 22,607 26,075 5 47,322 524,417 529,141 534,641 24,417 29,141 34,641 6 58,252 530,215 536,968 545,131 30,215 36,968 45,131 7 69,728 535,811 545,015 556,570 35,811 45,015 56,570 8 81,779 541,185 553,271 569,029 41,185 53,271 69,029 9 94,432 546,321 561,720 582,590 46,321 61,720 82,590 10 107,717 551,193 570,343 597,332 51,193 70,343 97,332 11 121,667 556,252 579,620 613,878 56,252 79,620 113,878 12 136,314 560,975 589,028 631,827 60,975 89,028 131,827 13 151,694 565,315 598,519 651,268 65,315 98,519 151,268 14 167,843 569,213 608,028 672,280 69,213 108,028 172,280 15 184,799 572,601 617,479 694,941 72,601 117,479 194,941 16 202,603 575,404 626,782 719,331 75,404 126,782 219,331 17 221,297 577,506 635,802 745,488 77,506 135,802 245,488 18 240,926 578,874 644,481 773,545 78,874 144,481 273,545 19 261,536 579,382 652,661 803,546 79,382 152,661 303,546 20 283,177 578,918 660,190 835,552 78,918 160,190 335,552 25 408,735 556,648 680,649 1,026,556 56,648 180,649 526,556 30 568,983 ** 639,253 1,259,526 ** 139,253 759,526 35 773,504 ** ** 1,504,388 ** ** 1,004,388
* The illustrations assume that Planned Premiums equal to the Target Premium are paid at the start of each Policy Year. The Death Benefit and Surrender Value will differ if premiums are paid in different amounts or frequencies, if policy loans are taken, or if Additional Sum Insured, Guaranteed Minimum Death Benefit after the tenth Policy Year, or optional rider benefits are elected. ** Policy lapses unless additional premium payments are made. IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT AND SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGE 0%, 6%, OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATE ABOVE OR BELOW THE AVERAGE FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL INVESTMENT RESULTS CAN BE ACHIEVED FOR ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 32 ADDITIONAL INFORMATION This section of the prospectus provides additional detailed information that is not contained in the Basic Information section on pages 4 through 24. CONTENTS OF THIS SECTION BEGINNING ON PAGE - ------------------------ ----------------- Description of us.......................................... 33 How we support the policy and investment options........... 33 Procedures for issuance of a policy........................ 34 Basic Sum Insured vs. Additional Sum Insured............... 35 Commencement of investment performance..................... 35 How we process certain policy transactions................. 36 Effects of policy loans.................................... 37 Additional information about how certain policy charges work....................................................... 38 How we market the policies................................. 39 Tax considerations......................................... 40 Reports that you will receive.............................. 42 Voting privileges that you will have....................... 42 Changes that we can make as to your policy................. 42 Adjustments we make to death benefits...................... 43 When we pay policy proceeds................................ 43 Other details about exercising rights and paying benefits.. 44 Legal matters.............................................. 44 Registration statement filed with the SEC.................. 44 Accounting and actuarial experts........................... 44 Financial statements of JHVLICO and the Account............ 45 List of our Directors and Executive Officers of JHVLICO.... 46 33 DESCRIPTION OF US We are JHVLICO, a stock life insurance company chartered in 1979 under Massachusetts law. We are authorized to transact a life insurance and annuity business in all states other than New York and in the District of Columbia. We began selling variable life insurance policies in 1980. We are regulated and supervised by the Massachusetts Commissioner of Insurance, who periodically examines our affairs. We also are subject to the applicable insurance laws and regulations of all jurisdictions in which we are authorized to do business. We are required to submit annual statements of our operations, including financial statements, to the insurance departments of the various jurisdictions in which we do business for purposes of determining solvency and compliance with local insurance laws and regulations. The regulation to which we are subject, however, does not provide a guarantee as to such matters. We are a wholly-owned subsidiary of John Hancock Life Insurance Company ("John Hancock"), a Massachusetts stock life insurance company. On February 1, 2000, John Hancock Mutual Life Insurance Company (which was chartered in Massachusetts in 1862) converted to a stock company by "demutualizing" and changed its name to John Hancock Life Insurance Company. As part of the demutualization process, John Hancock became a subsidiary of John Hancock Financial Services, Inc., a newly formed publicly-traded corporation. John Hancock's home office is at John Hancock Place, Boston, Massachusetts 02117. As of December 31, 2000, John Hancock's assets were approximately $__ billion and it had invested approximately $___ million in JHVLICO in connection with JHVLICO's organization and operation. It is anticipated that John Hancock will from time to time make additional capital contributions to JHVLICO to enable us to meet our reserve requirements and expenses in connection with our business. John Hancock is committed to make additional capital contributions if necessary to ensure that we maintain a positive net worth. HOW WE SUPPORT THE POLICY AND INVESTMENT OPTIONS Separate Account S The variable investment options shown on page 1 are in fact subaccounts of Separate Account S (the "Account"), a separate account established by us under Massachusetts law. The Account meets the definition of "separate account" under the Federal securities laws and is registered as a unit investment trust under the Investment Company Act of 1940 ("1940 Act"). Such registration does not involve supervision by the SEC of the management of the Account or 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. The assets in each subaccount are invested in the corresponding fund of one of theSeries Funds. New subaccounts may be added as new funds are added to the Series Funds and made available to policy owners. Existing subaccounts may be deleted if existing funds are deleted from the Series Funds. We will purchase and redeem Series Fund shares for the Account at their net asset value without any sales or redemption charges. Shares of a Series Fund represent an interest in one of the funds of the Series Fund which corresponds to a subaccount of the Account. Any dividend or capital gains distributions received by the Account will be reinvested in shares of that same fund at their net asset value as of the dates paid. On each business day, shares of each fund are purchased or redeemed by us for each subaccount based on, among other things, the amount of net premiums allocated to the subaccount, distributions reinvested, and transfers to, from and among subaccounts, all to be effected as of that date. Such purchases and redemptions are effected at each fund's net asset value per share determined for that same date. A "business day" is any date on which the 34 New York Stock Exchange is open for trading. We compute policy values for each business day as of the close of that day (usually 4:00 p.m. Eastern Standard Time). Our general account Our obligations under the policy's fixed investment option are backed by our general account assets. Our general account consists of assets owned by us other than those in the Account and in other separate accounts that we may establish. Subject to applicable law, we have sole discretion over the investment of assets of the general account and policy owners do not share in the investment experience of, or have any preferential claim on, those assets. Instead, we guarantee that the account value allocated to the fixed investment option will accrue interest daily at an effective annual rate of at least 4% without regard to the actual investment experience of the general account. Because of exemptive and exclusionary provisions, interests in our fixed investment option have not been registered under the Securities Act of 1933 and our general account has not been registered as an investment company under the 1940 Act. Accordingly, neither the general account nor any interests therein are subject to the provisions of these acts, and we have been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to the fixed investment option. Disclosure regarding the fixed investment option may, however, be subject to certain generally-applicable provisions of the Federal securities laws relating to accuracy and completeness of statements made in prospectuses. PROCEDURES FOR ISSUANCE OF A POLICY Generally, the policy is available with a minimum Basic Sum Insured at issue of $250,000. At the time of issue, each insured person must have an attained age of at least 20 and no more than 85. All insured persons must meet certain health and other insurance risk criteria called "underwriting standards". Policies issued in Montana or in connection with certain employee plans will not directly reflect the sex of the insured persons in either the premium rates or the charges or values under the policy. The illustrations set forth in this prospectus are sex-distinct and, therefore, may not reflect the rates, charges, or values that would apply to such policies. Minimum Initial Premium The Minimum Initial Premium must be received by us at our Life Servicing Office in order for the policy to be in full force and effect. There is no grace period for the payment of the Minimum Initial Premium. The Minimum Initial Premium is determined by us based on the characteristics of each of the insured persons, the Basic Sum Insured and the Additional Sum Insured at issue, and the policy options you have selected. 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 persons' rate classes should be. After we approve an application for a policy and assign an appropriate insurance rate class, we will prepare the policy for delivery. We will not pay a death benefit under a policy unless the policy is in effect when the last surviving insured person dies (except for the circumstances described under "Temporary insurance coverage prior to policy delivery" on page 35). The policy will take effect only if all of the following conditions are satisfied: . The policy is delivered to and received by the applicant. . The Minimum Initial Premium is received by us. . Each insured person is living and still meets our health criteria for issuing insurance. 35 If all of the above conditions are satisfied, the policy will take effect on the date shown in the policy as the "date of issue." That is the date on which we begin to deduct monthly charges. Policy months, policy years and policy anniversaries are all measured from the date of issue. Backdating In order to preserve a younger age at issue for one or both of the insured persons, we can designate a date of issue that is up to 60 days earlier than the date that would otherwise apply. This is referred to as "backdating" and is allowed under state insurance laws. Backdating can also be used in certain corporate-owned life insurance cases involving multiple policies to retain a common monthly deduction date. The conditions for coverage described above under "Commencement of insurance coverage" must still be satisfied, but in a backdating situation the policy always takes effect retroactively. Backdating results in a lower insurance charge (if it is used to preserve an insured person's younger age at issue), but monthly charges begin earlier than would otherwise be the case. Those monthly charges will be deducted as soon as we receive premiums sufficient to pay them. Temporary coverage prior to policy delivery If a specified amount of premium is paid with the application for a policy and other conditions are met, we will provide temporary survivorship term life insurance coverage on the insured persons for a period prior to the time coverage under the policy takes effect. Such temporary term coverage will be subject to the terms and conditions described in the application for the policy, including limits on amount and duration of coverage. Monthly deduction dates Each charge that we deduct monthly is assessed against your account value or the subaccounts at the close of business on the date of issue and at the close of the first business day in each subsequent policy month. BASIC SUM INSURED VS. ADDITIONAL SUM INSURED As noted earlier in this prospectus, you should consider a number of factors in determining whether to elect coverage in the form of Basic Sum Insured or in the form of Additional Sum Insured. For the same amount of premiums paid, the amount of the issue charge deducted from account value and the amount of compensation paid to the selling insurance agent will generally be less if coverage is included as Additional Sum Insured rather than as Basic Sum Insured. On the other hand, the amount of any Additional Sum Insured is not included in the guaranteed death benefit feature after the 5th policy year and is not extended beyond the age 100 adjustment date. (The "age 100 adjustment date" is defined under "When the younger insured person reaches 100" on page __.). Therefore, if the policy's surrender value is insufficient to pay the monthly charges as they fall due (including the charges for the Additional Sum Insured) after the 5th policy year, the Additional Sum Insured coverage will lapse, even if the Basic Sum Insured stays in effect pursuant to the guaranteed death benefit feature. Generally, you will incur lower issue charges and have more flexible coverage with respect to the Additional Sum Insured than with respect to the Basic Sum Insured. If this is your priority, you may wish to maximize the proportion of the Additional Sum Insured. However, if your priority is to take advantage of the guaranteed death benefit feature after the 5th policy year, the proportion of the Policy's Total Sum Insured that is guaranteed can be increased by taking out more coverage as Basic Sum Insured at the time of policy issuance. In addition, the death benefit after the age 100 adjustment date will generally be larger if the proportion of Basic Sum Insured immediately prior to that date is larger. Any decision you make to modify the amount of Additional Sum Insured coverage after issue can 36 have significant tax consequences (see "Tax Considerations" beginning on page 40). COMMENCEMENT OF INVESTMENT PERFORMANCE Any premium payment processed prior to the twentieth day after the policy's date of issue will automatically be allocated to the Money Market investment option. On the later of the date such payment is received or the twentieth day following the date of issue, the portion of the Money Market investment option attributable to such payment will be reallocated automatically among the investment options you have chosen. All other premium payments will be allocated among the investment options you have chosen as soon as they are processed. HOW WE PROCESS CERTAIN POLICY TRANSACTIONS Premium payments We will process any premium payment as of the day we receive it, unless one of the following exceptions applies: (1) We will process a payment received prior to a policy's date of issue as if received on the day immediately preceding date of issue. (2) If the Minimum Initial Premium is not received prior to the date of issue, we will process each premium payment received thereafter as if received on the day immediately preceding the date of issue until all of the Minimum Initial Premium is received. (3) We will process the portion of any premium payment for which we require evidence of an insured person's continued insurability only after we have received such evidence and found it satisfactory to us. (4) If we receive any premium payment that we think will cause a policy to become a modified endowment or will cause a policy to lose its status as life insurance under the tax laws, we will not accept the excess portion of that premium payment and will immediately notify the owner. We will refund the excess premium when the premium payment check has had time to clear the banking system (but in no case more than two weeks after receipt), except in the following circumstances: . The tax problem resolves itself prior to the date the refund is to be made; or . The tax problem relates to modified endowment status and we receive a signed acknowledgment from the owner prior to the refund date instructing us to process the premium notwithstanding the tax issues involved. In the above cases, we will treat the excess premium as having been received on the date the tax problem resolves itself or the date we receive the signed acknowledgment. We will then process it accordingly. (5) If a premium payment is received or is otherwise scheduled to be processed (as specified above) on a date that is not a business day, the premium payment will be processed on the business day next following that date. Transfers among investment options Any reallocation among investment options must be such that the total in all investment options after reallocation equals 100% of account value. Transfers out of any investment option will be effective at the end of the business day in which we receive at our Life Servicing Office notice satisfactory to us. We have the right to defer transfers of amounts out of the fixed investment option for up to six months. Dollar cost averaging Scheduled transfers under this option may be made from the Money Market investment option to not more than nine other variable investment options. However, the amount transferred to any one investment option must be at least $100. 37 Once we receive the election in form satisfactory to us at our Life Servicing Office, transfers will begin on the second monthly deduction date following its receipt. If you have any questions with respect to this provision, call 1-800-732-5543. Once elected, the scheduled monthly transfer option will remain in effect for so long as you have at least $2,500 of your account value in the Money Market investment option, or until we receive written notice from you of cancellation of the option or notice of the death of the last surviving insured person. We reserve the right to modify, terminate or suspend the dollar cost averaging program at any time. Telephone transfers and policy loans Once you have completed a written authorization, you may request a transfer or policy loan by telephone or by fax. If the fax request option becomes unavailable, another means of telecommunication will be substituted. If you authorize telephone transactions, you will be liable for any loss, expense or cost arising out of any unauthorized or fraudulent telephone instructions which we reasonably believe to be genuine, unless such loss, expense or cost is the result of our mistake or negligence. We employ procedures which provide safeguards against the execution of unauthorized transactions, and which are reasonably designed to confirm that instructions received by telephone are genuine. These procedures include requiring personal identification, tape recording calls, and providing written confirmation to the owner. If we do not employ reasonable procedures to confirm that instructions communicated by telephone are genuine, we may be liable for any loss due to unauthorized or fraudulent instructions. Effective date of other policy transactions The following transactions take effect on the policy anniversary on or next following the date we approve your request: . Total Sum Insured decreases . Additional Sum Insured increases. A change of death benefit Option from B to A is effective on the policy anniversary on or next following the date we receive the request. Reinstatements of lapsed policies take effect on the monthly deduction date on or next following the date we approve your request: We process loans, surrenders, partial withdrawals and loan repayments as of the day we receive such request or repayment. EFFECTS OF POLICY LOANS The account value, the surrender value, and any death benefit above the Total Sum Insured are permanently affected by any loan, whether or not it is repaid in whole or in part. This is because the amount of the loan is deducted from the investment options and placed in a special loan account. The investment options and the special loan account will generally have different rates of investment return. The amount of the outstanding loan (which includes accrued and unpaid interest) is subtracted from the amount otherwise payable when the policy proceeds become payable. Whenever the outstanding loan equals or exceeds the surrender value, the policy will terminate 31 days after we have mailed notice of termination to you (and to any assignee of record at such assignee's last known address) specifying the minimum amount that must be paid to avoid termination, unless a repayment of at least the amount specified is made within that period. ADDITIONAL INFORMATION ABOUT HOW CERTAIN POLICY CHARGES WORK Sales expenses and related charges The sales charges (i.e., the premium sales charge and the CDSC) help to compensate us for the cost of selling our policies. (See "What charges will we deduct from your investment in the policy?" in the Basic Information section of this prospectus.) The amount of the charges in any policy year does not 38 specifically correspond to sales expenses for that year. We expect to recover our total sales expenses over the life of the policies. To the extent that the sales charges do not cover total sales expenses, the sales expenses may be recovered from other sources, including gains from the asset-based risk charge and other gains with respect to the policies, or from our general assets. (See "How we market the policies" on page 39.) Similarly, administrative expenses not fully covered by the issue charge and the maintenance charge may also be recovered from such other sources. Effect of premium payment pattern You may structure the timing of premium payments to minimize the sales charges, although doing so involves certain risks. Paying less premium in the first 10 policy years and more in later years could reduce your total sales charges. For example, if the Target premium was $10,000 and you paid $5,000 in each of the first 10 policy years, you would pay total sales charges of $2,500 and be subject to a maximum CDSC of $10,000. If you paid $2,500 in each of the first 10 policy years and $25,000 in policy year 11, you would pay total sales charges of only $1,250 and be subject to a maximum CDSC of only $5,000. However, delaying the payment of premiums to later policy years could increase the risk that the guaranteed death benefit feature will not be in effect and the surrender value will be insufficient to pay policy charges. As a result, the policy or any Additional Sum Insured may lapse and eventually terminate. Monthly charges Unless we agree otherwise, we will deduct the monthly charges described in the Basic Information section from your policy's investment options in proportion to the amount of account value you have in each. For each month that we cannot deduct any charge because of insufficient account value, the uncollected charges will accumulate and be deducted when and if sufficient account value becomes available. The insurance under the policy continues in full force during any grace period but, if the last surviving insured person dies during the policy grace period, the amount of unpaid monthly charges is deducted from the death benefit otherwise payable. Reduced charges for eligible classes The charges otherwise applicable may be reduced with respect to policies issued to a class of associated individuals or to a trustee, employer or similar entity where we anticipate that the sales to the members of the class will result in lower than normal sales or administrative expenses, lower taxes or lower risks to us. We will make these reductions in accordance with our rules in effect at the time of the application for a policy. The factors we consider in determining the eligibility of a particular group for reduced charges, and the level of the reduction, are as follows: the nature of any 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 any 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. HOW WE MARKET THE POLICIES Signator Investors, Inc. ("Signator"), an indirect wholly-owned subsidiary of John Hancock located at 197 Clarendon Street, Boston, MA 02117, is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. and the Securities Investor Protection Corporation. Signator acts as principal underwriter and principal distributor of the policies pursuant to a sales 39 agreement among John Hancock, Signator, JHVLICO, and the Account. Signator also serves as principal underwriter for John Hancock Variable Annuity Accounts U, I and V, John Hancock Mutual Variable Life Insurance Account UV and John Hancock Variable Life Accounts V and S, all of which are registered under the 1940 Act. Signator is also the principal underwriter for John Hancock Variable Series Trust I. Applications for policies are solicited by agents who are licensed by state insurance authorities to sell JHVLICO's policies and who are also registered representatives ("representatives") of Signator or other broker-dealer firms, as discussed below. John Hancock (on behalf of JHVLICO) performs insurance underwriting and determines whether to accept or reject the application for a policy and each insured person's risk classification. JHVLICO will make the appropriate refund if a policy ultimately is not issued or is returned under the "free look" provision. Officers and employees of John Hancock and JHVLICO are covered by a blanket bond by a commercial carrier in the amount of $25 million. Signator's representatives are compensated for sales of the policies on a commission and service fee basis by Signator, and JHVLICO reimburses Signator for such compensation and for other direct and indirect expenses (including agency expense allowances, general agent, district manager and supervisor's compensation, agent's training allowances, deferred compensation and insurance benefits of agents, general agents, district managers and supervisors, agency office clerical expenses and advertising) actually incurred in connection with the marketing and sale of the policies. The maximum commission payable to a Signator representative for selling a policy varies by policy year and, in the first policy year, is different for the portion of premiums paid up to the Target Premium and the portion, if any, of premiums paid in excess of the Target Premium. For the first policy year, the maximum commission is 50% of the Target Premium and 4% of any excess premium. For policy years 2 through 5, the maximum commission is 4% of all premiums paid. For policy years 6 and thereafter, the maximum commission is 3% of all premiums paid. In addition, a "trail" commission is payable at the end of each policy year equal to a percentage of that portion of account value allocated to the variable investment options for the applicable policy year. The maximum percentages are 0.40% for policy years 1 through 10 and 0.20% for policy years 11 and thereafter. Representatives with less than four years of service with Signator and those compensated on salary plus bonus or level commission programs may be paid on a different basis. Representatives who meet certain productivity and persistency standards with respect to the sale of policies issued by JHVLICO and John Hancock will be eligible for additional compensation. The policies are also sold through other registered broker-dealers that have entered into selling agreements with Signator and whose representatives are authorized by applicable law to sell variable life insurance policies. The commissions which will be paid by such broker-dealers to their representatives will be in accordance with their established rules. The commission rates may be more or less than those set forth above for Signator's representatives. In addition, their qualified registered representatives may be reimbursed by the broker-dealers under expense reimbursement allowance programs in any year for approved voucherable expenses incurred. Signator will compensate the broker-dealers as provided in the selling agreements, and JHVLICO will reimburse Signator for such amounts and for certain other direct expenses in connection with marketing the policies through other broker-dealers. Representatives of Signator and the other broker-dealers mentioned above may also earn "credits" toward qualification for attendance at certain business meetings sponsored by John Hancock. The offering of the policies is intended to be continuous, but neither JHVLICO nor Signator is obligated to sell any particular amount of policies. 40 TAX CONSIDERATIONS This description of federal income tax consequences is only a brief summary and is not intended as tax advice. Tax consequences will vary based on your own particular circumstances, and for further information you should consult a qualified tax advisor. Federal, state and local tax laws, regulations and interpretations can change from time to time. As a result, the tax consequences to you and the beneficiary may be altered, in some cases retroactively. Policy proceeds We believe the policy will receive the same federal income and estate tax treatment as fixed benefit life insurance policies. Section 7702 of the Internal Revenue Code (the "Code") defines life insurance for federal tax purposes. If certain standards are met at issue and over the life of the policy, the policy will satisfy that definition. We will monitor compliance with these standards. If the policy complies with the definition of life insurance, we believe the death benefit proceeds under the policy will be excludable from the beneficiary's gross income under the Code. Other policy distributions Increases in account value as a result of interest or investment experience will not be subject to federal income tax unless and until values are actually received through distributions. In general, the owner will be taxed on the amount of distributions that exceed the premiums paid under the policy. But under certain circumstances within the first 15 policy years, the owner may be taxed on a distribution even if total withdrawals do not exceed total premiums paid. Any taxable distribution will be ordinary income to the owner (rather than capital gains). Distributions for tax purposes can include amounts received upon surrender or partial withdrawals. You may also be deemed to have received a distribution for tax purposes if you assign all or part of your policy rights or change your policy's ownership. We also believe that, except as noted below, loans received under the policy will be treated as indebtedness of an owner and that no part of any loan will constitute income to the owner. However, if the policy terminates for any reason, 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 requirements to keep your policy from lapsing and a significant tax burden if you allow the lapse to occur. It is possible that, despite our monitoring, a policy might fail to qualify as life insurance under Section 7702 of the Code. This could happen, for example, if we inadvertently failed to return to you any premium payments that were in excess of permitted amounts, or if 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 and gains under the policy for the period of the disqualification and for subsequent periods. In the past, the United States Treasury Department has stated that it anticipated issuing guidelines prescribing circumstances in which the ability of a policy owner to direct his or her investment to particular funds may cause the policy owner, rather than the insurance company, to be treated as the owner of the shares of those funds. In that case, any income and gains attributable to those shares would be included in your current gross income for federal income tax purposes. Under current law, however, we believe that we, and not the owner of a policy, would be considered the owner of the fund's shares for tax purposes. Tax consequences of ownership or receipt of policy proceeds under federal, state and local estate, 41 inheritance, gift and other tax laws depend on the circumstances of each owner or beneficiary. Because there may be unfavorable tax consequences (including recognition of taxable income and the loss of income tax-free treatment for any death benefit payable to the beneficiary), you should consult a qualified tax adviser prior to changing the policy's ownership or making any assignment of ownership interests. 7-pay premium limit At the time of policy issuance, we will determine whether the Planned Premium schedule will exceed the 7-pay limit discussed below. If so, our standard procedures prohibit issuance of the policy unless you sign a form acknowledging that fact. The 7-pay limit is the total of net level premiums that would have been payable at any time for a comparable fixed policy to be fully "paid-up" after the payment of 7 equal annual premiums. "Paid-up" means that no further premiums would be required to continue the coverage in force until maturity, based on certain prescribed assumptions. If the total premiums paid at any time during the first 7 policy years exceed the 7-pay limit, the policy will be treated as a "modified endowment", which can have adverse tax consequences. The owner will be taxed on distributions and loans from a "modified endowment" to the extent of any income (gain) to the owner (on an income-first basis). The distributions and loans affected will be those made on or after, and within the two year period prior to, the time the policy becomes a modified endowment. Additionally, a 10% penalty tax may be imposed on taxable portions of such distributions or loans that are made before the owner attains age 59 1/2. Furthermore, any time there is a "material change" in a policy (such as an increase in the Additional Sum Insured, the addition of certain other policy benefits after issue, a change in death benefit option, or reinstatement of a lapsed policy), the policy will have a new 7-pay limit as if it were a newly-issued policy. If a prescribed portion of the policy's then account value, plus all other premiums paid within 7 years after the material change, at any time exceed the new 7-pay limit, the policy will become a modified endowment. Moreover, if benefits under a policy are reduced (such as a reduction in the Total Sum Insured or death benefit or the reduction or cancellation of certain rider benefits), the 7-pay limit will be recalculated based on the reduced benefits. If the premiums paid to date are greater than the recalculated 7-pay limit, the policy will become a modified endowment. All modified endowments issued by the same insurer (or its affiliates) to the owner during any calendar year generally will be treated as one contract for the purpose of applying the modified endowment rules. A policy received in exchange for a modified endowment will itself also be a modified endowment. You should consult your tax advisor if you have questions regarding the possible impact of the 7-pay limit on your policy. Corporate and H.R. 10 plans The policy may be acquired in connection with the funding of retirement plans satisfying the qualification requirements of Section 401 of the Code. If so, the Code provisions relating to such plans and life insurance benefits thereunder should be carefully scrutinized. We are not responsible for compliance with the terms of any such plan or with the requirements of applicable provisions of the Code. REPORTS THAT YOU WILL RECEIVE At least annually, we will send you a statement setting forth the following information as of the end of the most recent reporting period: the amount of the death benefit, the Basic Sum Insured and the Additional Sum Insured, the account value, the portion of the account value in each investment option, the surrender value, premiums received and charges deducted from premiums since the last report, and any outstanding policy loan (and interest 42 charged for the preceding policy year). Moreover, you also will receive confirmations of premium payments, transfers among investment options, policy loans, partial withdrawals and certain other policy transactions. Semiannually we will send you a report containing the financial statements of the Series Funds, including a list of securities held in each fund. VOTING PRIVILEGES THAT YOU WILL HAVE All of the assets in the subaccounts of the Account are invested in shares of the corresponding funds of the Series Funds. We will vote the shares of each of the funds of a Series Fund which are deemed attributable to variable life insurance policies at regular and special meetings of the Series Fund's shareholders in accordance with instructions received from owners of such policies. Shares of the Series Fund held in the Account which are not attributable to such policies, as well as shares for which instructions from owners are not received, will be represented by us at the meeting. We will vote such shares for and against each matter in the same proportions as the votes based upon the instructions received from the owners of such policies. We determine the number of a fund's shares held in a subaccount attributable to each owner by dividing the amount of a policy's account value held in the subaccount by the net asset value of one share in the fund. Fractional votes will be counted. We determine the number of shares as to which the owner may give instructions as of the record date for 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. CHANGES THAT WE CAN MAKE AS TO YOUR POLICY Changes relating to a Series Fund or the Account The voting privileges described in this prospectus reflect our understanding of applicable Federal securities law requirements. To the extent that applicable law, regulations or interpretations change to eliminate or restrict the need for such voting privileges, we reserve the right to proceed in accordance with any such revised requirements. We also reserve the right, subject to compliance with applicable law, including approval of owners if so required, (1) to transfer assets determined by JHVLICO to be associated with the class of policies to which your policy belongs from the Account to another separate account or subaccount, (2) to operate the Account as a "management-type investment company" under the 1940 Act, or in any other form permitted by law, the investment adviser of which would be JHVLICO, John Hancock, or an affiliate of either, (3) to deregister the Account under the 1940 Act, (4) to substitute for the fund shares held by a subaccount any other investment permitted by law, and (5) to take any action necessary to comply with or obtain any exemptions from the 1940 Act. We would notify owners of any of the foregoing changes and, to the extent legally required, obtain approval of owners and any regulatory body prior thereto. Such notice and approval, however, may not be legally required in all cases. Other permissible changes We reserve the right to make any changes in the policy necessary to ensure the policy is within the definition of life insurance under the Federal tax laws and is in compliance with any changes in Federal or state tax laws. In our policies, we reserve the right to make certain changes if they would serve the best interests of policy owners or would be appropriate in carrying 43 out the purposes of the policies. Such changes include the following: . Changes necessary to comply with or obtain or continue exemptions under the federal securities laws . Combining or removing investment options . Changes in the form of organization of any separate account Any such changes will be made only to the extent permitted by applicable laws and only in the manner permitted by such laws. When required by law, we will obtain your approval of the changes and the approval of any appropriate regulatory authority. ADJUSTMENTS WE MAKE TO DEATH BENEFITS If either insured person commits suicide within certain time periods, the amount of death benefit we pay will be limited as described in the policy. Also, if an application misstated the age or gender of either insured person, we will adjust the amount of any death benefit as described in the policy. WHEN WE PAY POLICY PROCEEDS General We will pay any death benefit, withdrawal, surrender value or loan within 7 days after we receive the last required form or request (and, with respect to the death benefit, any other documentation that may be required). If we don't have information about the desired manner of payment within 7 days after the date we receive notification of the death of the last surviving insured person, we will pay the proceeds as a single sum, normally within 7 days thereafter. Delay to challenge coverage We may challenge the validity of your insurance policy based on any material misstatements made to us in the application for the policy. We cannot make such a challenge, however, beyond certain time limits that are specified in the policy. Delay for check clearance We reserve the right to defer payment of that portion of your account value that is attributable to a premium payment made by check for a reasonable period of time (not to exceed 15 days) to allow the check to clear the banking system. Delay of separate account proceeds We reserve the right to defer payment of any death benefit, loan or other distribution that is derived from a variable investment option if (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 a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to fairly determine the account value; or (3) the SEC by order permits the delay for the protection of owners. Transfers and allocations of account value among the investment options may also be postponed under these circumstances. If we need to defer calculation of separate account values for any of the foregoing reasons, all delayed transactions will be processed at the next values that we do compute. OTHER DETAILS ABOUT EXERCISING RIGHTS AND PAYING BENEFITS Joint ownership If more than one person owns a policy, all owners must join in most requests to exercise rights under the policy. Assigning your policy You may assign your rights in the policy to someone else as collateral for a loan or for some other reason. Assignments do not require the consent of any revocable beneficiary. A copy of the assignment must be forwarded to us. We are not responsible for any payment we make or any action we take before we receive notice of the assignment in good order. Nor are we responsible for the validity of the 44 assignment. An absolute assignment is a change of ownership. All collateral assignees of record must consent to any full surrender, partial withdrawal or loan from the policy. Your beneficiary You name your beneficiary when you apply for the policy. The beneficiary is entitled to the proceeds we pay following the death of the last surviving insured person. You may change the beneficiary during that insured person's lifetime. Such a change requires the consent of any irrevocable named beneficiary. A new beneficiary designation is effective as of the date you sign it, but will not affect any payments we make before we receive it. If no beneficiary is living when the last surviving insured person dies, we will pay the insurance proceeds to the owner or the owner's estate. LEGAL MATTERS The legal validity of the policies described in this prospectus has been passed on by Ronald J. Bocage, Vice President and Counsel for JHVLICO. Messrs. Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised us on certain Federal securities law matters in connection with the policies. REGISTRATION STATEMENT FILED WITH THE SEC This prospectus omits certain information contained in the Registration Statement which has been filed with the SEC. More details may be obtained from the SEC upon payment of the prescribed fee. ACCOUNTING AND ACTUARIAL EXPERTS The financial statements of JHVLICO and the Account included in this prospectus have been audited by Ernst & Young LLP, independent auditors, for the periods indicated in their reports thereon which appear elsewhere herein and have been included in reliance on their reports given on their authority as experts in accounting and auditing. Actuarial matters included in this prospectus have been examined by Todd G. Engelsen, F.S.A., Vice President and Actuary of JHVLICO and Second Vice President of John Hancock. FINANCIAL STATEMENTS OF JHVLICO AND THE ACCOUNT The financial statements of JHVLICO included herein should be distinguished from the financial statements of the Account and should be considered only as bearing upon the ability of JHVLICO to meet its obligations under the policies. 45 LIST OF DIRECTORS AND EXECUTIVE OFFICERS OF JHVLICO The Directors and Executive Officers of JHVLICO and their principal occupations during the past five years are as follows: Directors and Executive Principal Occupations Officers - ----------------------- ------------------------------ David F. D'Alessandro....... Chairman of the Board and Chief Executive Officer of JHVLICO; President and Chief Executive Officer, John Hancock Life Insurance Company. Michele G. Van Leer......... Vice Chairman of the Board and President of JHVLICO; Senior Vice President, John Hancock Life Insurance Company. Ronald J. Bocage............ Director, Vice President and Counsel of JHVLICO; Vice President and Counsel, John Hancock Life Insurance Company. Bruce M. Jones.............. Director and Vice President of JHVLICO; Vice President, John Hancock Life Insurance Company. Thomas J. Lee............... Director and Vice President of JHVLICO; Vice President, John Hancock Life Insurance Company. Barbara L. Luddy............ Director, Vice President and Actuary of JHVLICO; Senior Vice President, John Hancock Life Insurance Company. Robert S. Paster............ Director and Vice President of JHVLICO; Vice President, John Hancock Life Insurance Company. Robert R. Reitano........... Director and Vice President of JHVLICO; Vice President, John Hancock Life Insurance Company. Paul Strong................. Director and Vice President of JHVLICO; Vice President, John Hancock Life Insurance Company. Daniel L. Ouellette......... Vice President, Marketing, of JHVLICO; Senior Vice President, John Hancock Life Insurance Company. Edward P. Dowd.............. Vice President, Investments, of JHVLICO; Senior Vice President, John Hancock Life Insurance Company Roger G. Nastou............. Vice President, Investments, of JHVLICO; Vice President, John Hancock Life Insurance Company Todd G. Engelsen............ Vice President and Illustration Actuary of JHVLICO; Second Vice President, John Hancock Life Insurance Company Julie H. Indge.............. Treasurer of JHVLICO; Financial Officer, John Hancock Life Insurance Company Patrick J. Gill............. Controller of JHVLICO; Senior Associate Controller, John Hancock Life Insurance Company. Peter Scavongelli........... Secretary of JHVLICO; State Compliance Officer, John Hancock Life Insurance Company The business address of all Directors and officers of JHVLICO is John Hancock Place, Boston, Massachusetts 02117. 46 YEAR-END 2000 AUDITED FINANCIALS OF JHVLICO AND ACCOUNT S WILL BE ADDED BY PRE-EFFECTIVE AMENDMENT 47 ALPHABETICAL INDEX OF KEY WORDS AND PHRASES This index should help you locate more information about many of the important concepts in this prospectus. KEY WORD OR PHRASE PAGE Account ................................................................. 33 account value ........................................................... 9 Additional Sum Insured .................................................. 17 asset-based risk charge ................................................. 10 asset rebalancing ....................................................... 15 attained age ............................................................ 10 Basic Sum Insured ....................................................... 17 beneficiary ............................................................. 44 business day ............................................................ 34 changing Option A or B .................................................. 20 changing the Total Sum Insured .......................................... 20 charges ................................................................. 9 Code .................................................................... 40 cost of insurance rates ................................................. 10 date of issue ........................................................... 35 death benefit ........................................................... 5 deductions .............................................................. 9 dollar cost averaging ................................................... 15 expenses of the Series Funds ............................................ 11 fixed investment option ................................................. 34 full surrender .......................................................... 15 funds ................................................................... 2 grace period ............................................................ 8 guaranteed death benefit feature ........................................ 7 Guaranteed Death Benefit Premium ........................................ 7 insurance charge ........................................................ 10 insured person .......................................................... 5 investment options ...................................................... 1 JHVLICO ................................................................. 33 lapse ................................................................... 7 loan .................................................................... 16 loan interest ........................................................... 16 Maximum Monthly Benefit ................................................. 19 maximum premiums ........................................................ 6 Minimum Initial Premium ................................................. 34 minimum insurance amount ................................................ 17 minimum premiums ........................................................ 6 modified endowment ...................................................... 41 monthly deduction date .................................................. 35 Option A; Option B ...................................................... 17 optional benefits charge ................................................ 10 owner ................................................................... 5 partial withdrawal ...................................................... 15 partial withdrawal charge ............................................... 11 payment options ......................................................... 21 Planned Premium ......................................................... 6 policy anniversary ...................................................... 35 policy year ............................................................. 35 premium; premium payment ................................................ 5 prospectus .............................................................. 2 receive; receipt ........................................................ 24 reinstate; reinstatement ................................................ 8 sales charges ........................................................... 9 SEC ..................................................................... 2 Separate Account U ...................................................... 33 Servicing Office ........................................................ 2 special loan account .................................................... 16 subaccount .............................................................. 33 surrender ............................................................... 5 surrender value ......................................................... 15 Target Premium .......................................................... 9 tax considerations ...................................................... 40 telephone transactions .................................................. 24 Total Sum Insured ....................................................... 17 transfers of account value .............................................. 14 Series Funds ............................................................ 2 variable investment options ............................................. 1 we; us .................................................................. 33 withdrawal .............................................................. 15 withdrawal charge ....................................................... 11 you; your ............................................................... 5 48 PART II UNDERTAKING TO FILE REPORTS Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred in that Section. REPRESENTATION OF REASONABLENESS John Hancock Variable Life Insurance Company represents that the fees and charges deducted under the Policies, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company. UNDERTAKING REGARDING INDEMNIFICATION Pursuant to Section X of JHVLICO's Bylaws and Section 67 of the Massachusetts Business Corporation Law, JHVLICO indemnifies each director, former director, officer, and former officer, and his heirs and legal representatives from liability incurred or imposed in connection with any legal action in which he may be involved by reason of any alleged act or omission as an officer or a director of JHVLICO. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. CONTENTS OF REGISTRATION STATEMENT This Registration Statement comprises the following Papers and Documents: The facing sheet. Cross-Reference Table. The prospectus containing 48 pages. The undertaking regarding indemnification. The undertaking to file reports. The signatures. The following exhibits: I.A. (1) JHVLICO Board Resolution establishing the separate account included in Post-Effective Amendment No. 2 to Form S-6 Registration Statement filed January 11, 1996 (File No. 33-64366) is incorporated by reference. (2) Not Applicable (3) (a) Form of Distribution and Servicing Agreement by and among Signator Investors, Inc. (previously known as "John Hancock Distributors, Inc."), John Hancock Mutual Life Insurance Company, and John Hancock Variable Life Insurance Company, incorporated by reference from Pre-Effective Amendment No. 2 to Form S-6 Registration Statement of John Hancock Variable Life Account S (File No. 33- 15075) filed April 18, 1997. (b) Specimen Variable Contracts Selling Agreement between Signator Investors, Inc. and selling broker-dealers, incorporated by reference from Pre-Effective Amendment No. 2 to Form S-6 Registration Statement of John Hancock Variable Life Account S (File No. 33-15075) filed April 18, 1997. (c) Schedule of sales commissions included in Exhibit I.A.(3) (a) above. (4) Not Applicable (5) Form of flexible premium variable life insurance policy, included in the initial filing of this Form S-6 Registration Statement (File No. 33-79108), filed May 18, 1994. (6) (a) JHVLICO Certificate of Incorporation included in Post-Effective Amendment No. 2 to Form S-6 Registration Statement filed January 11, 1996 (File No. 33-64366) is incorporated by reference. (b) JHVLICO By-laws included in Post-Effective Amendment No. 2 to Form S-6 Registration Statement filed January 11, 1996 (File No. 33-64366) is incorporated by reference. (7) Not Applicable. (8) (a) Participation Agreement Among Templeton Variable Products Series Fund, Franklin Templeton Distributors, Inc. and John Hancock Life Insurance Company, John Hancock Variable Life Insurance Company, and Investors Partner Life Insurance Company, filed in Post- Effective Amendment No. 1 to file No. 333-81127, Filed May 4, 2000. (b) Participation Agreement Among Variable Insurance Products Fund II, Fidelity Distributors Corporation and John Hancock Mutual Life Insurance Company, filed in Post-Effective Amendment No. 1 to file No. 333-81127, Filed May 4, 2000. (c) Participation Agreement Among Variable Insurance Products Fund, Fidelity Distributors Corporation and John Hancock Mutual Life Insurance Company, filed in Post-Effective Amendment No. 1 to file No. 333-81127, Filed May 4, 2000. (d) Participation Agreement Among MFS Variable Insurance Trust, John Hancock Mutual Life Insurance Company and Massachusetts Financial Services Company, filed in Post-Effective Amendment No. 1 to file No. 333-81127, Filed May 4, 2000. (e) Participation Agreement By And Among AIM Variable Insurance Funds, Inc., AIM Distributors, Inc., John Hancock Mutual Life Insurance Company and Certain Of Its Affiliated Insurance Companies, Each On Behalf Of Itself And Its Separate Accounts, And John Hancock Funds, Inc., filed in Post-Effective Amendment No. 1 to file No. 333-81127, Filed May 4, 2000. (f) Participation Agreement between Janus Aspen Series, Janus Capital Corporation, and John Hancock Variable Life Insurance Company, filed in Post Effective Amendment No. 9 to File No. 333-425, filed on November 1, 2000. (9) Not Applicable. (10) Forms of applications for Policy, included in the initial filing of this Form S-6 Registration Statement (File No. 33-79108), filed May 18, 1994. (11) Not Applicable. The Registrant invests only in shares of open-end Funds. 2. Included as Exhibit 1.A(5) above. 3. Opinion and consent of counsel as to securities being registered, (to be Filed by amendment). 4. Not Applicable 5. Not Applicable 6. Opinion and consent of actuaries (Filed herewith). 7. Consent of independent auditors (to be Filed by amendment). 8. Memorandum describing JHVLICO's issuance, transfer and redemption procedures for the flexible policy pursuant to Rule 6e-3(T)(b)(12)(iii), included in the initial filing of Form S-6 Registration Statement, filed May 18, 1994. 9. Powers of attorney for Cleary, Tomlinson, D'Alessandro, Shaw, Luddy, Lee, Reitano, Van Leer and Paster, included in Post-Effective Amendment No. 1 to this Form S-6 Registration Statement, filed April 1995. Power of Attorney for Ronald J. Bocage, incorporated by reference from Form 10-K annual report of John Hancock Variable Life Insurance Company (File No. 33-62895) filed March 28, 1997. Powers of Attorney for Bruce M. Jones and Paul Strong, incorporated by reference from the Post-Effective Amendment No. 2 to File No. 333-81127, Filed May 4, 2000. 10. Representations, Description and Undertaking pursuant to Rule 6e-3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940, included in Pre-Effective Amendment No. 1 to Form S-6 Registration Statement, filed October 10, 1994 File No. 33-64366 is incorporated by reference. 11. Exemptive Relief Relied Upon, included in Pre-Effective Amendment No. 1 to Form S-6 Registration Statement, filed October 10, 1994 File No. 33-64366 is incorporated by reference. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities with John Hancock Variable Life Insurance Company and on the dates indicated. Signatures Title Date - ---------- ----- ---- /s/ PATRICK J. GILL - -------------------- PATRICK J. GILL Controller (Principal Accounting February 7, 2001 Officer and Acting Principal Financial Officer) /s/ MICHELE G. VAN LEER - ----------------------- Michele G. Van Leer Vice Chairman of the Board February 7, 2001 for herself and as and President(Acting Principal Attorney-in-Fact Executive Officer) For: David F. D'Alessandro Chairman of the Board Robert S. Paster Director Thomas J. Lee Director Bruce M. Jones Director Paul Strong Director Barbara L. Luddy Director Ronald J. Bocage Director Robert R. Reitano Director SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the John Hancock Variable Life Insurance Company has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunder duly authorized, and its seal to be hereunto fixed and attested, all in the City of Boston and Commonwealth of Massachusetts on the 7th day of February, 2001. JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY (SEAL) By /s/ MICHELE G. VAN LEER ----------------------- Michele G. Van Leer Vice Chairman and President Attest: /s/ PETER SCAVONGELLI ---------------------- Peter Scavongelli Secretary EX-99.6 2 0002.txt LETTER TO BOARD OF DIRECTORS EXHIBIT 6 [John Hancock Life Variable Insurance Company Letterhead] February 7, 2001 Board of Directors of the John Hancock Variable Life Insurance Company Re: Actuarial Opinion: Members of the Board: This opinion is furnished in connection with the filing of the Registration Statement on Form S-6 in which this opinion is being filed as an exhibit, pursuant to the Securities Act of 1933, as amended, with respect to variable life insurance policies under which amounts will be allocated to one or more of the subaccounts of one or more variable life insurance separate accounts. The policies described in the prospectus(es) in said Registration Statement. The policy form was reviewed under my direction, and I am familiar with the Registration Statement and exhibits. In my opinion, the illustrations of policy benefits, values, and accumulated premiums shown in the prospectus(es) (or appendix thereto) included in the Registration Statement, based on the assumptions stated with the illustrations, are consistent with the provisions of the policies. Such assumptions, including, to the extent applicable, the current cost of insurance rates, current scheduled rates of other charges, current dividend scales, and any other currently scheduled credits, are reasonable. The policies have not been designed so as to make the relationship between premiums and benefits, as shown in the illustrations, appear disproportionately more favorable to a prospective purchaser of a policy for an insured person(s) with the characteristics illustrated than to a prospective purchaser of a policy for an insured person(s) with other characteristics; nor have the particular examples set forth in the illustrations been selected for the purpose of making this relationship appear more favorable. I hereby consent to the filing of this opinion as an exhibit to the amended Registration Statement and to the use of my name under the heading "Experts" or "Accounting and Actuarial Experts" in the propectus(es). /s/ Todd G. Englesen Todd G. Englesen, FSA Second Vice President -----END PRIVACY-ENHANCED MESSAGE-----