As filed with the U.S. Securities and Exchange Commission on June 28, 2002

Registration No. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 UV
(Exact name of trust)

JOHN HANCOCK LIFE INSURANCE COMPANY
(Name of depositor)

JOHN HANCOCK PLACE
INSURANCE & SEPARATE ACCOUNTS DIV. - LAW SECTOR
BOSTON, MASSACHUSETTS 02117
(Complete address of depositor's principal executive offices)
--------------------

RONALD J. BOCAGE, ESQ.
JOHN HANCOCK LIFE INSURANCE COMPANY
INSURANCE & SEPARATE ACCOUNTS DIV. - LAW SECTOR
JOHN HANCOCK PLACE, BOSTON, MASSACHUSETTS 02117
(Name and complete address of agent for service)
-------------------------

Copy to:
THOMAS C. LAUERMAN
Foley & Lardner
3000 K Street, N.W.
Washington, D.C. 20007
--------------------

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 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 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

PART II

UNDERTAKING TO FILE REPORTS

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

REPRESENTATION OF REASONABLENESS

John Hancock Life Insurance Company represents that the fees and
charges deducted under the Policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by the insurance company.

UNDERTAKING REGARDING IMDEMNIFICATION

Pursuant to Article 8 of John Hancock's Bylaws and Chapter 156B,
Section 67 of the Massachusetts Business Corporation Law, John Hancock
indemnifies each director, former director, officer, and former officer, and his
heirs and legal representatives from liability incurred or imposed in connection
with any legal action in which he may be involved by reason of any alleged act
or omission as an officer or a director of John Hancock.

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

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and
documents:

The facing sheet.

The prospectus containing 151 pages.

The undertaking to file reports.

The representation of reasonableness.

The undertaking regarding indemnification.

The signatures.

The following exhibits:

I.A. (1) John Hancock Board Resolution establishing the separate
account, is incorporated by reference to Post-Effective
Amendment No. 3 to the Form S-6 Registration Statement of
File No. 33-63842, filed on March 6, 1996

(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 Life
Insurance (previously known as "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.

(4) Not Applicable

(5) Form of flexible premium variable life insurance policy,
filed herewith.

(6) (a) John Hancock's Restated Articles of Organization are
incorporated by reference from Post-Effective Amendment
No. 10 the Registration Statement of File No.
333-76662, filed on March 7, 2001.

(b) John Hancock's Amended And Restated By-Laws are
incorporated by reference to the Annual Report filed on
Form 10-K, File No. 333-45862, filed March 27, 2002.

(7) Not applicable.

(8) (a) Participation Agreement Among Variable Insurance
Products Fund II, Fidelity Distributors Corporation and
John Hancock Life Insurance Company (formerly known as
"John Hancock Mutual 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, Fidelity Distributors Corporation and
John Hancock Life Insurance Company (formerly known as
"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 MFS Variable Insurance
Trust, John Hancock Life Insurance Company (formerly
known as "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.

(d) Participation Agreement By And Among AIM Variable
Insurance Funds, Inc., AIM Distributors, Inc., John
Hancock Life Insurance Company (formerly known as "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.

(e) Participation Agreement between Janus Aspen Series,
Janus Capital Corp., and John Hancock Variable Life
Insurance Company, incorporated by reference to File
333-425, filed on Form S-6 on November 1, 2001.

(9) Not Applicable.

(10) Form of application for Policy, filed herewith.

(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 Pre-Effective Amendment.

4. Not Applicable

5. Not Applicable

6. Opinion and consent of actuary, to be filed by Pre-Effective
Amendment.

7. Consent of independent auditors, to be filed by Pre-Effective
Amendment.

8. Memorandum describing John Hancock's issuance, transfer and
redemption procedures for the flexible policy pursuant to Rule
6e-3(T)(b)(12)(iii), incorporated by reference to Pre-Effective
Amendment No. 1 to File 33-64364, filed on October 29, 1993.

9. Powers of attorney for David F. D'Alessandro, Foster L. Aborn,
Waye A. Budd, John M. Connors, Jr., John DeCiccio, Robert E.
Fast, Kathleen Foley Feldstein, Michael C. Hawley, Edward H.
Linde, Judith A. McHale, R. Robert Popeo, Richard F. Syron and
Robert J. Tarr, Jr. are incorporated by reference to the initial
registration statement of File No. 333-67744, filed on August 16,
2001. Power of attorney for Thomas P. Glynn, incorporated by
reference to the initial registration statement to File No.
333-70743, filed on October 2, 2001.

10. Representations, Description and Undertaking pursuant to Rule
6e-3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940
are incorporated by reference to Pre-Effective Amendment No. 1 to
Form S-6 Registration Statement to File No. 33-79108 filed
October 10, 1994.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the John
Hancock Life Insurance Company has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, and
attested, all in the City of Boston and Commonwealth of Massachusetts on the
28th day of June, 2002.

On behalf of the Registrant,
JOHN HANCOCK LIFE INSURANCE COMPANY
(Depositor)

By: /s/ DAVID F. D'ALESSANDRO
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David F. D'Alessandro
Chairman, President and Chief
Executive Officer

Attest: /s/ RONALD J. BOCAGE
----------------------------
Ronald J. Bocage
Vice President and Counsel

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 Life Insurance Company and on the dates indicated.

/s/ THOMAS E. MOLONEY June 28, 2002
- ------------------------------------
Thomas E. Moloney
Senior Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
Acting Principal Accounting Officer)

/s/ DAVID F. D'ALESSANDRO June 28, 2002
- ---------------------------
David F. D'Alessandro
Chairman, President and Chief Executive Officer
(Principal Executive Officer)

Signing for himself and as Attorney-In-Fact for:

Foster L. Aborn Director
Wayne A. Budd Director
John M. Connors, Jr. Director
John M. DeCiccio Director
Robert E. Fast Director
Kathleen Foley Feldstein Director
Thomas P. Glynn Director
Michael C. Hawley Director
Edward H. Linde Director
Judith A. McHale Director
R. Robert Popeo Director
Richard F. Syron Director
Robert J. Tarr, Jr. Director

PROSPECTUS DATED ___________, 2002
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MAJESTIC VARIABLE COLI
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a flexible premium variable life insurance policy issued by
JOHN HANCOCK LIFE INSURANCE COMPANY ("John Hancock")

The policy provides an investment option with fixed rates of return
declared by John Hancock and the following variable investment options:

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Variable Investment Option Managed By
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Equity Index .......................... SSgA Funds Management, Inc.
Large Cap Value ....................... T. Rowe Price Associates, Inc.
Large Cap Value CORE (SM) Goldman Sachs Asset Management
Large Cap Growth ...................... Independence Investment LLC
Large Cap Aggressive Growth ........... Alliance Capital Management L.P.
Growth & Income ....................... Independence Investment LLC and Putnam Investment Management, LLC
Fundamental Value ..................... Wellington Management Company, LLP
Multi Cap Growth ...................... Janus Capital Management, LLC
Fundamental Growth. ................... Putnam Investment Management, LLC
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, LLC
V.A. Relative Value.................... John Hancock Advisers, LLC
AIM V.I. Premier Equity ............... A I M Advisors, Inc.
AIM V.I. Capital Development .......... 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 LLC
International Opportunities ........... T. Rowe Price International, Inc.
Fidelity VIP Overseas ................. Fidelity Management and Research Company
Emerging Markets Equity ............... Morgan Stanley Investment Management Inc.
Janus Aspen Worldwide Growth .......... Janus Capital Management, LLC
Real Estate Equity .................... Independence Investment LLC and Morgan Stanley Investment Management Inc.
Health Sciences ....................... Putnam Investment Management, LLC
V.A. Financial Industries ............. John Hancock Advisers, LLC
Janus Aspen Global Technology ......... Janus Capital Management, LLC
Managed ............................... Independence Investment LLC and Capital Guardian Trust Company
Global Balanced ....................... Capital Guardian Trust Company
Short-Term Bond ....................... Independence Investment LLC
Bond Index ............................ Mellon Bond Associates, LLP
Active Bond ........................... John Hancock Advisers, LLC
V.A. Strategic Income ................. John Hancock Advisers, LLC
High Yield Bond ....................... Wellington Management Company, LLP
Global Bond ........................... Capital Guardian Trust Company
Money Market .......................... Wellington Management Company, LLP
Brandes International Equity .......... Brandes Investment Partners, L.P.
Turner Core Growth. ................... Turner Investment Partners, Inc.
Frontier Capital Appreciation ......... Frontier Capital Management Company, LLC
Clifton Enhanced U.S. Equity .......... The Clifton Group
Business Opportunity Value ............ Iridian Asset Management LLC
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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, Fidelity's Variable
Insurance Products Fund (Service Class) and Variable Insurance Products Fund II
(Service Class), the MFS Variable Insurance Trust (Initial Class Shares), the
Janus Aspen Series (Service Shares Class), and the M Fund, Inc. (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 are prospectuses for the Series Funds. 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.

* * * * * * * * * * * *

JOHN HANCOCK LIFE SERVICING OFFICE
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Express Delivery U.S. Mail
---------------- ---------
529 Main Street (X-4) P.O. Box 111
Charlestown, MA 02129 Boston, MA 02117

Phone: 1-800-521-1234

Fax: 1-617-572-6956

GUIDE TO THIS PROSPECTUS

This prospectus contains information that you should know before you buy a
policy or exercise any of your rights under the policy. However, please keep in
mind that this is a prospectus - - it is not the policy. The prospectus
simplifies many policy provisions to better communicate the policy's essential
features. Your rights and obligations under the policy will be determined by the
language of the policy itself. When you receive your policy, read it carefully.

This prospectus is arranged in the following way:

. The section which follows is called "Basic Information". It is in a
question and answer format. We suggest you read the Basic
Information section before reading any other section of the
prospectus.

. Behind the Basic Information section are illustrations of
hypothetical policy benefits that help clarify how the policy
works. These start on page 22.

. Behind the illustrations is a section called "Additional
Information" that gives more details about the policy. It generally
does not repeat information that is in the Basic Information
section. A table of contents for the Additional Information section
appears on page 31.

. Behind the Additional Information section are the financial
statements for John Hancock and Separate Account UV. These start on
page 46.

. Finally, there is an Alphabetical Index of Key Words and Phrases at
the back of the prospectus on page 126.

After the Alphabetical Index of Key Words and Phrases, this prospectus ends
and the prospectuses for the Series Funds begin.

* * * * * * * * * * * *

BASIC INFORMATION

This part of the prospectus 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?.................................................................... 10
...What other charges could we impose in the future?........................... 13
...How can you change your policy's investment allocations?.................... 13
...How can you access your investment in the policy?........................... 14
...How much will we pay when the insured person dies?.......................... 16
...How can you change your policy's insurance coverage?........................ 17
...Can you cancel your policy after it's issued?............................... 18
...Can you choose the form in which we pay out policy proceeds?................ 18
...To what extent can we vary the terms and conditions of our policies in
particular cases?.......................................................... 19
...How will your policy be treated for income tax purposes?.................... 19
...How do you communicate with us?............................................. 20

WHAT IS THE POLICY?

The policy's primary purpose is to provide lifetime protection against
economic loss due to the death of the insured person. The value of the amount
you have invested under the policy may increase or decrease daily based upon the
investment results of the variable investment options that you choose. The
amount we pay to the policy's beneficiary if the insured person dies (we call
this the "death benefit") may be similarly affected.

While the insured person is alive, you will have a number of options under
the policy. Here are some major ones:

. Determine when and how much you invest in the various investment
options

. Borrow or withdraw amounts you have in the investment options

. Change the beneficiary who will receive the death benefit

. Change the amount of insurance

. Turn in (i.e., "surrender") the policy for the full amount of its
surrender value

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

Most of these options are subject to limits that are explained later in
this prospectus.

WHO OWNS THE POLICY?

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

HOW CAN 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.

Minimum premium payment

Each premium payment must be at least $100.

Maximum premium payments

Federal tax law limits the amount of premium payments you can make relative
to the amount of your policy's insurance coverage. We will not knowingly accept
any amount by which a premium payment exceeds the maximum. If you exceed certain
other limits, the law may impose a penalty on amounts you take out of your
policy. We'll monitor your premium payments and let you know if you're about to
exceed this limit. More discussion of these tax law requirements begins on page
39. Also, we may refuse to accept any amount of an additional premium if:

. that amount of premium would increase our insurance risk exposure,
and

. the insured person doesn't provide us with adequate evidence that
he or she continues to meet our requirements for issuing insurance.

In no event, however, will we refuse to accept any premium necessary to
prevent the policy or the guaranteed minimum death benefit feature from
terminating. We reserve the right to limit premium payments above the amount of
cumulative Guaranteed Minimum Death Benefit Premiums (whether or not the
guaranteed minimum death benefit feature described on page 7 is 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 Life." We will not accept
credit card checks. We will not accept starter or third party checks if they
fail to satisfy our administrative requirements. Premiums after the first must
be sent to the John Hancock 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, or

. if we agree to it, through a salary deduction plan with your
employer.

You can obtain information on these other methods of premium payment by
contacting your John Hancock representative or by contacting the John Hancock
Life Servicing Office.

IS THERE A MINIMUM AMOUNT 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. The
premium reminder notice we send you is based on this amount. You will also
choose how often to pay premiums-- annually, semi-annually, quarterly or
monthly. The date on which such a payment is "due" is referred to in the policy
as a "modal processing date." However, payment of Planned Premiums is not
necessarily

required. You need only invest enough to keep the policy in force (see "Lapse
and reinstatement" and "Guaranteed minimum death benefit feature" below).

Lapse and reinstatement

Either your entire policy or the Additional Sum Insured portion of your
Total Sum Insured can terminate (i.e., "lapse") for failure to pay charges due
under the policy. If the guaranteed minimum death benefit feature is in effect,
only the Additional Sum Insured, if any, can lapse. If the guaranteed minimum
death benefit feature is not in effect, the entire policy can lapse. In either
case, if the policy's surrender value is not sufficient to pay the charges on a
monthly deduction date, we will notify you of how much you will need to pay to
keep any Additional Sum Insured or the policy in force. You will have a 61 day
"grace period" to make that payment. If you don't pay at least the required
amount by the end of the grace period, the Additional Sum Insured or your policy
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 1 year from the beginning of the
grace period. You will have to provide evidence that the insured person still
meets our requirements for issuing coverage. You will also have to pay a minimum
amount of premium and be subject to the other terms and conditions applicable to
reinstatements, as specified in the policy. If the guaranteed minimum death
benefit is not in effect and the insured person dies during the grace period, we
will deduct any unpaid monthly charges from the death benefit. During such a
grace period, you cannot make a partial withdrawal or policy loan.

Guaranteed minimum death benefit feature

This feature is available only if the insured person meets certain
underwriting requirements and only if you've elected death benefit Option A (see
"How much will we pay when the last insured person dies?" on page 15) . The
feature guarantees that your Basic Sum Insured will not lapse during the first
10 policy years, regardless of adverse investment performance, if both of the
following are true:

. any Additional Sum Insured under the policy is not scheduled to
exceed the Basic Sum Insured at any time (see "How much will we pay
when the insured person dies?" on page 15), and

. on each monthly deduction date during that 10 year period the
amount of cumulative premiums you have paid accumulated at 4%
(less all withdrawals from the policy accumulated at 4%) equals or
exceeds the sum of all Guaranteed Minimum Death Benefit Premiums
due to date accumulated at 4%.

The Guaranteed Minimum Death Benefit Premium (or "GMDB Premium") is defined
in the policy and is "due" on each monthly deduction date. The term "monthly
deduction date" is defined on page 30. On the application for the policy, you
may elect for this feature to extend beyond the tenth policy year. If you so
elect, we will impose a special charge for this feature after the tenth policy
year. You may revoke the election at any time.

No GMDB Premium will ever be greater than the so-called "guideline premium"
for the policy as defined in Section 7702 of the Internal Revenue Code. Also,
the GMDB Premiums may change in the event of any change in the Additional Sum
Insured of the policy or any change in the death benefit option (see "How much
will we pay when the insured person dies?" on page 15).

If the guaranteed minimum death benefit test is not satisfied on any
monthly deduction date, we will notify you immediately and tell you how much you
will need to pay to keep the feature in effect. You will have until the second
monthly deduction date after default to make that payment. If you don't pay at
least the required amount by the end of that period, the feature will lapse. The
feature may be reinstated in accordance with the terms of the policy within 5
years after the policy anniversary on which default occurred. If it is
reinstated more than 1 year after such policy anniversary, we will require
evidence that the insured person still meets our requirements for issuing
coverage. We may refuse to reinstate the feature more than once during the life
of the policy.

The guaranteed minimum death benefit feature applies only to the Basic Sum
Insured. It does not apply to any amount of Additional Sum Insured (see "How
much will we pay when the insured person dies?" on page 15).

The guaranteed minimum death benefit feature will cease to apply on the
policy anniversary nearest the insured person's 100th birthday. Also, the
feature cannot be reinstated after that policy anniversary.

If there are monthly charges that remain unpaid because of this feature, we
will deduct such charges when there is sufficient surrender value to pay them.

HOW WILL THE VALUE OF 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 a 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
describe these charges under "What charges will John Hancock deduct from my
investment in the policy?" below.

The amount you've invested in the fixed investment option will earn
interest at a rate we declare from time to time. We guarantee that this rate
will be at least 4%. If you want to know what the current declared rate is, just
call or write to us. Amounts you invest in the fixed investment option will not
be subject to the asset-based risk charge described on page 9. 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 36.

WHAT CHARGES WILL WE DEDUCT FROM YOUR INVESTMENT IN THE POLICY?

Deductions from premium payments

... Sales charge - A charge to help defray our sales costs. The current charge is
6.5% of premiums received in each of the first 10 policy years up to the
Target Premium, and 3.5% of premiums received in each policy year thereafter
up to the Target Premium. We reserve the right to increase the percentages
for policy years 1 through 10 and thereafter up to 10% and 7%, respectively.
Because policies of this type were first offered in 2001, the lower current
rates after the tenth policy year are not yet applicable to any policy. No
charge is currently deducted from premiums received in excess of the Target
Premium, but we reserve the right to impose such a charge of up to 3.5% of
such excess premiums received in any policy year. The "Target Premium" is
determined at the time the policy is issued and will appear in the "Policy
Specifications" section of the policy.

... Optional enhanced cash value rider charge - A charge imposed if you elect
this rider. The charge is 1% of premiums received in the first policy year.

Deductions from account value

... 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 percentages are .03%
for policy years 1 - 20, and .0125% thereafter. These percentages equate to
effective annual rates of .36% and .15%, respectively. The reduction after 20
years has not occurred yet under any policy, since no policy has yet been
outstanding for 20 years. We guarantee that this charge will never exceed
.05% of that portion of your account value allocated to variable investment
options. This percentage equates to an effective annual rate of .60%. This
charge does not apply to the fixed investment option.

... Issue charge - A monthly charge to help defray our administrative costs. This
is a charge per $1,000 of Basic Sum Insured at issue that varies by age and
that is deducted only during the first ten policy years. The charge will
appear in the "Policy Specifications" section of the policy. As an example,
the monthly charge for a 45 year

old is 7.65c per $1,000 of Basic Sum Insured. The maximum monthly charge
is for an 85 year old and is 48.60c per $1,000 of Basic Sum Insured.

... Administrative charge - A monthly charge to help defray our administrative
costs. This charge has two parts: (1) a flat dollar charge of up to $5
(currently $2.50), and (2) a charge of up to 6c per $1,000 of Basic Sum
Insured at issue (currently 3c per $1,000 of Basic Sum Insured at issue). The
second part of this charge will not apply to amounts of Basic Sum Insured
greater than $1,000,000.

... Insurance charge - A monthly charge for the cost of insurance. To determine
the charge, we multiply the amount of insurance for which we are at risk by a
cost of insurance rate. The rate is derived from an actuarial table. The
table in your policy will show the maximum cost of insurance rates. The cost
of insurance rates that we currently apply are generally less than the
maximum rates. We will review the cost of insurance rates at least every 5
years and may change them from time to time. However, those rates will never
be more than the maximum rates shown in the policy. The table of rates we use
will depend on the insurance risk characteristics and (usually) gender of the
insured person, the 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 the insured
person's attained age increases. (The insured person's "attained age" on any
date is his or her age on the birthday nearest that date.) Higher current
insurance rates are generally applicable to policies issued on a "guaranteed
issue" basis, where only very limited underwriting information is obtained.
This is often the case with policies issued to trustees, employers and
similar entities.

... Extra mortality charge - A monthly charge specified in your policy for
additional mortality risk if the insured person is subject to certain types
of special insurance risk.

... Guaranteed minimum death benefit charge - A monthly charge beginning in the
eleventh policy year if the guaranteed minimum death benefit feature is
elected to extend beyond the first ten policy years. This charge is currently
1c per $1,000 of Basic Sum Insured and is guaranteed not to exceed 2c per
$1,000 of Basic Sum Insured. Because policies of this type were first offered
in 2001, this charge is not yet applicable to any policy at the current rate.

... Optional benefits charge - Monthly charges for any optional insurance
benefits added to the policy by means of a rider (other than the optional
enhanced cash value rider).

... Partial withdrawal charge - A charge for each partial withdrawal of account
value to compensate us for the administrative expenses of processing the
withdrawal. The charge is equal to the lesser of $20 or 2% of the withdrawal
amount.

WHAT CHARGES WILL THE SERIES FUNDS DEDUCT FROM YOUR INVESTMENT IN THE POLICY?

The 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 also receive payments
from a fund or its affiliates at an annual rate of up to approximately 0.35% 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 2001, 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.

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 ....................... 0.13% N/A 0.07% 0.20% 0.20%
Large Cap Value..................... 0.75% N/A 0.08% 0.83% 0.83%
Large Cap Value CORE (SM) ......... 0.75% N/A 0.10% 0.85% 0.88%
Large Cap Growth ................... 0.38% N/A 0.03% 0.41% 0.41%
Large Cap Aggressive Growth......... 0.87% N/A 0.10% 0.97% 1.06%
Growth & Income..................... 0.67% N/A 0.05% 0.72% 0.72%
Fundamental Value * ................ 0.89% N/A 0.10% 0.99% 1.20%
Multi Cap Growth * ................. 0.93% N/A 0.10% 1.03% 1.03%
Fundamental Growth ................. 0.90% N/A 0.10% 1.00% 1.19%
Small/Mid Cap CORE (SM) ............ 0.80% N/A 0.10% 0.90% 1.15%
Small/Mid Cap Growth ............... 0.97% N/A 0.10% 1.07% 1.07%
Small Cap Equity ................... 0.90% N/A 0.10% 1.00% 1.02%
Small Cap Value .................... 0.95% N/A 0.10% 1.05% 1.08%
Small Cap Growth ................... 1.05% N/A 0.10% 1.15% 1.17%
International Equity Index ......... 0.17% N/A 0.10% 0.27% 0.40%
International Opportunities ........ 1.14% N/A 0.10% 1.24% 1.39%
Emerging Markets Equity ............ 1.52% N/A 0.10% 1.62% 4.24%
Real Estate Equity ................. 1.00% N/A 0.07% 1.07% 1.07%
Health Sciences .................... 1.00% N/A 0.10% 1.10% 1.19%
Managed ............................ 0.67% N/A 0.06% 0.73% 0.73%
Global Balanced .................... 1.05% N/A 0.10% 1.15% 1.36%
Short-Term Bond .................... 0.60% N/A 0.08% 0.68% 0.68%
Bond Index ......................... 0.15% N/A 0.09% 0.24% 0.24%
Active Bond ........................ 0.62% N/A 0.05% 0.67% 0.67%
High Yield Bond .................... 0.80% N/A 0.10% 0.90% 1.00%
Global Bond ........................ 0.85% N/A 0.10% 0.95% 0.95%
Money Market ....................... 0.25% N/A 0.07% 0.32% 0.32%

John Hancock Declaration Trust
(Note 2):
V.A. Relative Value ................ 0.60% N/A 0.14% 0.74% 0.74%
V.A. Financial Industries .......... 0.80% N/A 0.09% 0.89% 0.89%
V.A. Strategic Income .............. 0.60% N/A 0.10% 0.70% 0.70%

Aim Variable Insurance Funds -
Series I Shares:
AIM V.I. Premier Equity Fund ** .... 0.60% N/A 0.25% 0.85% 0.85%

Aim Variable Insurance Funds -
Series II Shares:
AIM V.I. Capital Development Fund... 0.75% 0.25% 0.41% 1.41% 1.41%

Variable Insurance Products Fund
- Service Class (Note 3):
Fidelity VIP Growth ................ 0.58% 0.10% 0.10% 0.78% 0.78%
Fidelity VIP Overseas .............. 0.73% 0.10% 0.20% 1.03% 1.03%

Variable Insurance Products Fund
II - Service Class (Note 3):
Fidelity VIP Contrafund(R) ......... 0.58% 0.10% 0.10% 0.78% 0.78%

MFS Variable Insurance Trust -
Initial Class Shares (Note 4):
MFS Investors Growth Stock ......... 0.75% N/A 0.17% 0.92% 0.92%
MFS Research ....................... 0.75% N/A 0.15% 0.90% 0.90%
MFS New Discovery .................. 0.90% N/A 0.16% 1.06% 1.09%

Janus Aspen Series - Service Shares
Class (Note 5):
Janus Aspen Worldwide Growth ....... 0.65% 0.25% 0.04% 0.94% 0.94%
Janus Aspen Global Technology ...... 0.65% 0.25% 0.05% 0.95% 0.95%

M Fund, Inc. (Note 6):
Brandes International Equity ....... 0.75% N/A 0.25% 1.00% 1.02%
Turner Core Growth ................. 0.45% N/A 0.25% 0.70% 0.90%
Frontier Capital Appreciation ...... 0.90% N/A 0.25% 1.15% 1.15%
Clifton Enhanced U.S. Equity ....... 0.38% N/A 0.25% 0.63% 0.78%
Business Opportunity Value.......... 0.65% N/A 0.25% 0.90% 0.90%

NOTES TO FUND EXPENSE TABLE

/(1)/ Under its current investment management agreements with the John
Hancock Variable Series Trust I, John Hancock Life Insurance Company
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).
Percentages shown for the Large Cap Value and Small Cap Value funds
are calculated as if the current management fee schedules, which
apply to these funds effective May 1, 2001, were in effect for all
of 2001. Percentages shown for the Multi Cap Growth, Small/Mid Cap
Growth, Small Cap Growth, International Opportunities, Emerging
Markets, Short-Term Bond and High Yield Bond funds are calculated as
if the current management fee schedules, which apply to these funds
effective October 1, 2001, were in effect for all of 2001.
Percentages shown for the Health Sciences Fund are annualized.
"CORE(SM)" is a service mark of Goldman, Sachs & Co.

* Fundamental Value was formerly "Large/Mid Cap Value" and Multi Cap
Growth was formerly "Mid Cap Growth."

/(2)/ Percentages shown for John Hancock Declaration Trust funds reflect
the investment management fees currently payable and other fund
expenses allocated in 2001. John Hancock Advisers, LLC has agreed to
limit temporarily other expenses of each fund to 0.25% of the fund's
average daily assets, at least until April 30, 2003.

** AIM V.I. Premier Equity Fund was formerly "AIM V.I. Value Fund."

/(3)/ Actual annual class operating expenses were lower for each of the
Fidelity VIP funds shown because a portion of the brokerage
commissions that the fund paid was used to reduce the fund's
expense. In addition, through rearrangements with the fund's
custodian, credits realized as a result of uninvested

cash balances are used to reduce a portion of the fund's custodian
expenses. These offsets may be discontinued at any time.

/(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 similar
arrangements and directed brokerage arrangements, which would also
have the effect of reducing the fund's expenses. "Other Operating
Expenses" do not take into account these expense reductions, and are
therefore higher than the actual expenses of the funds. Had these
fee reductions been taken into account, "Total Fund Operating
Expenses with Reimbursement" would equal 0.90% for MFS Investors
Growth Stock, 0.89% for MFS Research and 1.05% for MFS New
Discovery. MFS Investment Management(R) (also doing business as
Massachusetts Financial Services Company) has contractually agreed,
subject to reimbursement, to bear expenses for the MFS New Discovery
Fund, such that the fund's "Other Expenses" (after taking into
account the expense offset arrangement described above) does not
exceed 0.15% annually. This contractual fee arrangement will
continue until at least May 1, 2003, unless changed with the consent
of the board of trustees which oversees the fund.

/(5)/ Percentages shown for the Janus Aspen funds are based upon expenses
for the year ended December 31, 2001. Expenses are shown without the
effect of any expense offset arrangement.

/(6)/ Percentages shown for M Fund, Inc. funds reflect the investment
management fees currently payable and other fund expenses allocated
in 2001. M Financial Advisers, Inc. reimburses a fund when the
fund's other operating expenses exceed 0.25% of that fund's average
daily net assets. Percentages shown for the Business Opportunity
Value Fund are estimates because the fund was not in operation in
2001.

WHAT OTHER CHARGES COULD WE IMPOSE IN THE FUTURE?

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

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. A confirmation of each
transfer will be sent to you. 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 frequency of transfers into and out of variable
investment options,

... impose a limit of not less than 12 on the number of such transfers in any
policy year, and

... impose a charge of up to $25 on each such transfer in excess of a yearly
limit of not 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.

... Any transfer request received within 6 months of the last transfer out of the
fixed investment option will not be processed until such 6 month period has
expired.

... The most you can transfer at any one time is the greater of (i) $500, or (ii)
20% of the assets in your fixed investment option or (iii) the amount
transferred out of your fixed investment option during the previous policy
year.

We reserve the right to impose a minimum amount limit on transfers out of
the fixed investment option.

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 plus, if surrender occurs in the
first three policy years, a refund of 50% of sales charges deducted from any
Target Premiums paid within 365 days prior to the date of surrender. This is
called your "surrender value." You must return your policy when you request a
full surrender.

Partial withdrawals

You may make a partial withdrawal of your surrender value at any time. Each
partial withdrawal must be at least $1,000. There is a charge (usually $20) for
each partial withdrawal. We will automatically reduce the account value of your
policy by the amount of the withdrawal and the related charge. Each investment
option will be reduced in the same proportion as the account value is then
allocated among them. We will not permit a partial withdrawal if it would cause
your account 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 $100,000. Any partial withdrawal (other than a Terminated ASI Withdrawal
Amount, as described below) will reduce your death benefit under any of the
death benefit options (see "How much will we pay when the insured

person dies?" on page 15) and under the guaranteed death benefit feature (see
page 7). Under Option A, such a partial withdrawal will reduce the Total Sum
Insured. Under Option B, such a partial withdrawal will reduce your account
value. Under the guaranteed death benefit feature, such a partial withdrawal
will reduce the Basic Sum Insured. A "Terminated ASI Withdrawal Amount" is any
partial withdrawal made while there is an Additional Sum Insured under the
policy that later lapses as described on page 7. The total of all Terminated ASI
Withdrawal Amounts cannot exceed the Additional Sum Insured in effect
immediately before the Additional Sum Insured lapses.

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. However, you can't borrow from your policy during a
"grace period" (see "Lapse and reinstatement" on page 7). The maximum amount you
can borrow is determined as follows:

. We first determine the account value of your policy.

. 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 20 and .25% thereafter.

. We then subtract the third item above from 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 20 policy years and 4.25%
thereafter. Accrued interest will be added to the loan daily and will bear
interest at the same rate as the original loan amount. The amount of the loan is
deducted from the investment options in the same proportion as the account value
is then allocated among them and is placed in a special loan account. This
special loan account will earn interest at an effective annual rate of 4.0%.
However, if we determine that a loan will be treated as a taxable distribution
because of the differential between the loan interest rate and the rate being
credited on the special loan account, we reserve the right to decrease the rate
credited on the special loan account to a rate that would, in our reasonable
judgement, result in the transaction being treated as a loan under Federal tax
law.

You can repay all or part of a loan at any time. Each repayment will be
allocated among the investment options as follows:

. The same proportionate part of the loan as was borrowed from the
fixed investment option will be repaid to the fixed investment
option.

. The remainder of the repayment will be allocated among the
investment options in the same way a new premium payment would be
allocated.

If you want a payment to be used as a loan repayment, you must include
instructions to that effect. Otherwise, all payments will be assumed to be
premium payments. Policy loans may result in adverse tax consequences under
certain circumstances (see "Tax Considerations" on page 39).

HOW MUCH WILL WE PAY WHEN THE INSURED PERSON DIES?

In your application for the policy, you will tell us how much life
insurance coverage you want on the life of the insured person. This is called
the "Total Sum Insured." Total Sum Insured is composed of the Basic Sum Insured
and any Additional Sum Insured you elect. The only limitation on how much
Additional Sum Insured you can have is that it generally cannot exceed 400% of
the Basic 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 34.

When the insured person 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, or (2) the minimum insurance amount (as
described below).

. Option B -The death benefit will equal the greater of (1) the Total
Sum Insured plus your policy's account value on the date of death,
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.

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. Under the guideline premium and cash value corridor test, we
compute the minimum insurance amount each business day by multiplying the
account value on that date (plus any refund of sales charges that might be due
if the policy were surrendered on that date) by the "required additional death
benefit factor" applicable on that date. In this case, the death benefit factors
are derived by applying the guideline premium and cash value corridor test. The
death benefit 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. Under the cash value
accumulation test, we compute the minimum insurance amount each business day by
multiplying the account value on

that date (plus any refund of sales charges that might be due if the policy
were surrendered on that date) by the death benefit factor applicable on that
date. In this case, the death benefit factors are derived by applying the cash
value accumulation test. The death benefit factor decreases as attained age
increases. Regardless of which test you elect, a table showing the required
additional death benefit factor for each policy year will appear in the policy.

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 39). 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 insured
person's 100th birthday, the following things will happen:

. 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 account value on the
date of death. Death benefit Options A and B (as described above)
and the guaranteed minimum death benefit feature will all cease to
apply.

Enhanced cash value rider

In the application for the policy, you may elect to purchase the enhanced
cash value rider. This rider provides an enhanced cash value benefit (in
addition to the surrender value) if you surrender the policy within the first
seven policy years and such surrender is not made pursuant to an exchange under
Section 1035 of the Internal Revenue Code (or any successor provision). The
amount of the benefit will be shown in the "Policy Specifications" section of
the policy. The benefit is also included in the account value when calculating
the death benefit. Election of this rider could increase your insurance charge
since it affects our amount at risk under the policy. The amount available for
partial withdrawals and loans are based on the surrender value and will in no
way be increased due to this rider.

HOW CAN YOU CHANGE YOUR POLICY'S INSURANCE COVERAGE?

Increase in coverage

The Basic Sum Insured generally cannot be increased after policy issue.
After the first policy year, you may request an increase in the Additional Sum
Insured. However, you will have to provide us with evidence that the insured
person still meets our requirements for issuing insurance coverage. As to when
an approved increase would take effect, see "Effective date of other policy
transactions" on page 36.

Decrease in coverage

The Basic Sum Insured generally cannot be decreased after policy issue.
After the first policy year, you may request a reduction in the Additional Sum
Insured, but only if:

. the remaining Total Sum Insured will be at least $100,000, 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.

As to when an approved decrease would take effect, see "Effective date of other
policy transactions" on page 36.

Change of death benefit option

At any time, you may request to change your coverage from death benefit
Option B to Option A. Our administrative systems do not currently permit any
other change of death benefit option. Such changes may be permitted in the
future, but that is not guaranteed.

Tax consequences

Please read "Tax considerations" starting on page 39 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 the latest of the following
periods:

. 10 days after you receive it (this period may be longer in some
states);

. 10 days after mailing by John Hancock of the Notice of Withdrawal
Right; or

. 45 days after the date Part A of the application has been
completed.

This is often referred to as the "free look" period. To cancel your policy,
simply deliver or mail the policy to John Hancock at one of the addresses shown
on page 2, or to the John Hancock representative who delivered the policy to
you.

In most states, you will receive a refund of any premiums you've paid. In
some states, the refund will be your account value on the date of cancellation
plus all charges deducted by John Hancock or the Series Funds 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

. 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%. If no alternative payment option has been chosen, proceeds will
be paid as a single sum.

Changing a payment option

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

Tax impact

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 John Hancock in every state in
which its policies are sold. As a result, various terms and conditions of your
insurance coverage may vary from the terms and conditions described in this
prospectus, depending upon where you reside. These variations will be reflected
in your policy or in endorsements attached to your policy.

Variations in expenses or risks

We may vary the charges and other terms of our policies where special
circumstances result in sales or administrative expenses, mortality risks or
other risks that are different from those normally associated with the policies.
These include the type of variations discussed under "Reduced charges for
eligible classes" on page 37. No variation in any charge will exceed any maximum
stated in this prospectus with respect to that charge.

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 39.

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 John Hancock Life Servicing Office at the appropriate
address shown on page 2.

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

. surrenders or partial withdrawals

. 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

The following requests may be made either in writing (signed and dated by
you) or by telephone or fax if a special form is completed (see "Telephone
Transactions" below):

. loans

. transfers of account value among investment options

. change of allocation among investment options for new premium
payments

You should mail or express all written requests to the John Hancock Life
Servicing Office at the appropriate address shown on page 2. You should also
send notice of the insured person's death and related documentation to the John
Hancock Life Servicing Office. We don't consider that we've "received" any
communication until such time as it has arrived at the proper place and in the
proper and complete form.

We have special forms that should be used for a number of the requests
mentioned above. You can obtain these forms from the John Hancock Life Servicing
Office or your John Hancock representative. Each communication to us must
include your name, your policy number and the name of the insured person. We
cannot process any request that doesn't include this required 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 1-800-521-1234 or by faxing us at
1-617-572-6956. 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.

ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND
ACCUMULATED PREMIUMS

The following tables illustrate the changes in death benefit, account value
and surrender value of the policy under certain hypothetical circumstances that
we assume solely for this purpose. Each table separately illustrates the
operation of a policy for a specified issue age, premium payment schedule and
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 gross 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 -0.87%, 5.08% and
11.03%. (Investment return reflects investment income and all realized and
unrealized capital gains and losses.) The tables assume annual Planned Premiums
that are paid at the beginning of each policy year for an insured person who is
a 45 year old male standard non-smoker underwriting risk when the policy is
issued.

Tables are provided for each of the two death benefit options. The tables
headed "Current Charges" assume that the current rates for all charges deducted
by John Hancock will apply in each year illustrated. 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 (i) the
guaranteed minimum death benefit has not been elected beyond the tenth policy
year, (ii) no optional rider benefits and no Additional Sum Insured have been
elected, (iii) no loans or withdrawals are made, (iv) no increases or decreases
in coverage are requested and (v) no change in the death benefit option is
requested.

With respect to fees and expenses deducted from Series Fund assets, the
amounts shown in all tables reflect (1) investment management fees equivalent to
an effective annual rate of .75%, and (2) an assumed average asset charge for
all other Series Fund operating expenses equivalent to an effective annual rate
of .12%. These rates are the arithmetic average for all funds of the Series
Funds. 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 Series Fund operating expenses reflects reimbursements to certain
funds as described in the footnotes to the table beginning on page 11. We
currently expect those reimbursement arrangements to continue indefinitely, but
that is not guaranteed. Without those arrangements, the assumed average asset
charge for all other operating expenses shown above would be higher. This would
result in lower values than those shown in the following tables.

The second column of each table shows the amount you would have at the end
of each policy year if an amount equal to the assumed Planned Premiums were
invested to earn interest, after taxes, at 5% compounded annually. This is not a
policy value. It is included for comparison purposes only.

Because your circumstances will no doubt differ from those in the
illustrations that follow, values under your policy will differ, in most cases
substantially. Upon request, we will furnish you with a comparable illustration
reflecting your proposed insured person's issue age, sex and underwriting risk
classification, and the Total Sum Insured and annual Planned Premium amount
requested.

Plan: Flexible Premium Variable Life
$100,000 Total Sum Insured
Male, Issue age 45, Fully Underwritten Nonsmoker Underwriting Class
Option A Death Benefit
Guideline Premium and Cash Value Corridor Test
No Guaranteed Minimum Death Benefit after tenth Policy Year
Planned Premium: $5,649 for Seven Years*
Using Current Charges

Death Benefit Surrender Value
--------------------------------------------- ---------------------------------------------
Planned Premiums Assuming hypothetical gross annual return of Assuming hypothetical gross annual return of
End of accumulated at --------------------------------------------- ---------------------------------------------
Policy Year 5% annual interest 0% 6% 12% 0% 6% 12%
- ----------- ------------------ -------------- -------------- -------------- ------------- -------------- --------------

1 5,931 100,000 100,000 100,000 5,174 5,480 5,786
2 12,159 100,000 100,000 100,000 10,087 11,008 11,967
3 18,699 100,000 100,000 100,000 14,886 16,744 18,752
4 25,565 100,000 100,000 100,000 19,411 22,534 26,045
5 32,775 100,000 100,000 100,000 24,030 28,762 34,295
6 40,345 100,000 100,000 100,000 28,585 35,280 43,427
7 48,294 100,000 100,000 100,000 33,081 42,109 53,544
8 50,709 100,000 100,000 100,714 32,287 43,720 58,897
9 53,244 100,000 100,000 106,302 31,480 45,394 64,818
10 55,906 100,000 100,000 112,033 30,654 47,132 71,359
11 58,702 100,000 100,000 118,077 29,937 49,069 78,718
12 61,637 100,000 100,000 126,789 29,200 51,086 86,842
13 64,718 100,000 100,000 136,053 28,441 53,187 95,812
14 67,954 100,000 100,000 145,897 27,663 55,382 105,723
15 71,352 100,000 100,000 156,348 26,870 57,679 116,678
16 74,920 100,000 100,000 167,415 26,039 60,072 128,781
17 78,666 100,000 100,000 181,935 25,165 62,566 142,137
18 82,599 100,000 100,000 197,663 24,240 65,168 156,876
19 86,729 100,000 100,000 214,698 23,262 67,886 173,144
20 91,065 100,000 100,000 233,144 22,222 70,728 191,102
25 116,225 100,000 102,637 367,670 17,142 88,481 316,957
30 148,336 100,000 119,079 563,228 9,962 111,289 526,381
35 189,318 ** 147,326 919,743 ** 140,311 875,946

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

* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each of the first seven Policy Years. The Death
Benefit and Surrender Value will differ if premiums are paid in different
amounts or frequencies.
** 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. In
fact, for any given period of time, the investment results could be negative.

1 5,931 100,000 100,000 100,000 4,610 4,889 5,169
2 12,159 100,000 100,000 100,000 8,860 9,688 10,551
3 18,699 100,000 100,000 100,000 13,034 14,691 16,485
4 25,565 100,000 100,000 100,000 16,851 19,627 22,752
5 32,775 100,000 100,000 100,000 20,878 25,073 29,986
6 40,345 100,000 100,000 100,000 24,833 30,760 37,986
7 48,294 100,000 100,000 100,000 28,715 36,703 46,841
8 50,709 100,000 100,000 100,000 27,475 37,563 50,997
9 53,244 100,000 100,000 100,000 26,188 38,421 55,583
10 55,906 100,000 100,000 100,000 24,845 39,271 60,651
11 58,702 100,000 100,000 100,000 23,562 40,236 66,392
12 61,637 100,000 100,000 106,201 22,208 41,194 72,740
13 64,718 100,000 100,000 113,201 20,776 42,145 79,719
14 67,954 100,000 100,000 120,595 19,259 43,084 87,388
15 71,352 100,000 100,000 128,400 17,647 44,009 95,821
16 74,920 100,000 100,000 136,632 15,924 44,914 105,101
17 78,666 100,000 100,000 147,563 14,073 45,791 115,284
18 82,599 100,000 100,000 159,335 12,070 46,631 126,456
19 86,729 100,000 100,000 172,006 9,888 47,420 138,715
20 91,065 100,000 100,000 185,646 7,498 48,148 152,169
25 116,225 ** 100,000 280,170 ** 50,440 241,526
30 148,336 ** 100,000 411,334 ** 48,261 384,424
35 189,318 ** 100,000 646,929 ** 33,499 616,123

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

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. In
fact, for any given period of time, the investment results could be negative.

Plan: Flexible Premium Variable Life
$100,000 Total Sum Insured
Male, Issue age 45, Fully Underwritten Nonsmoker Underwriting Class
Option B Death Benefit
Guideline Premium and Cash Value Corridor Test
No Guaranteed Minimum Death Benefit after tenth Policy Year
Planned Premium: $5,649 for Seven Years*
Using Current Charges

1 5,931 104,988 105,294 105,600 5,172 5,478 5,784
2 12,159 109,895 110,816 111,773 10,078 10,999 11,957
3 18,699 114,675 116,529 118,533 14,859 16,713 18,716
4 25,565 119,349 122,461 125,959 19,349 22,461 25,959
5 32,775 123,913 128,619 134,121 23,913 28,619 34,121
6 40,345 128,396 135,040 143,122 28,396 35,040 43,122
7 48,294 132,802 141,740 153,057 32,802 41,740 53,057
8 50,709 131,913 143,200 158,180 31,913 43,200 58,180
9 53,244 131,005 144,698 163,816 31,005 44,698 63,816
10 55,906 130,070 146,228 170,010 30,070 46,228 70,010
11 58,702 129,240 147,925 176,962 29,240 47,925 76,962
12 61,637 128,384 149,666 184,615 28,384 49,666 84,615
13 64,718 127,498 151,446 193,038 27,498 51,446 93,038
14 67,954 126,589 153,275 202,321 26,589 53,275 102,321
15 71,352 125,663 155,161 212,560 25,663 55,161 112,560
16 74,920 124,690 157,075 223,826 24,690 57,075 123,826
17 78,666 123,663 159,012 236,220 23,663 59,012 136,220
18 82,599 122,576 160,964 249,853 22,576 60,964 149,853
19 86,729 121,425 162,929 264,855 21,425 62,929 164,855
20 91,065 120,205 164,899 281,361 20,205 64,899 181,361
25 116,225 114,333 176,918 397,278 14,333 76,918 297,278
30 148,336 106,357 189,458 588,269 6,357 89,458 488,269
35 189,318 ** 200,236 902,208 ** 100,236 802,208

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

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. In
Fact, For Any Given Period Of Time, The Investment Results Could Be Negative.

1 5,931 104,306 104,584 104,863 4,589 4,867 5,145
2 12,159 108,512 109,334 110,190 8,795 9,617 10,473
3 18,699 112,618 114,255 116,028 12,900 14,538 16,310
4 25,565 116,621 119,352 122,426 16,621 19,352 22,426
5 32,775 120,519 124,627 129,438 20,519 24,627 29,438
6 40,345 124,310 130,086 137,123 24,310 30,086 37,123
7 48,294 127,987 135,727 145,543 27,987 35,727 45,543
8 50,709 126,534 136,241 149,154 26,534 36,241 49,154
9 53,244 125,028 136,700 153,061 25,028 36,700 53,061
10 55,906 123,460 137,093 157,282 23,460 37,093 57,282
11 58,702 121,945 137,534 161,973 21,945 37,534 61,973
12 61,637 120,353 137,893 167,045 20,353 37,893 67,045
13 64,718 118,681 138,162 172,533 18,681 38,162 72,533
14 67,954 116,924 138,329 178,473 16,924 38,329 78,473
15 71,352 115,074 138,382 184,903 15,074 38,382 84,903
16 74,920 113,120 138,301 191,860 13,120 38,301 91,860
17 78,666 111,047 138,065 199,381 11,047 38,065 99,381
18 82,599 108,839 137,647 207,506 8,839 37,647 107,506
19 86,729 106,475 137,016 216,272 6,475 37,016 116,272
20 91,065 103,935 136,140 225,723 3,935 36,140 125,723
25 116,225 ** 126,994 285,259 ** 26,994 185,259
30 148,336 ** 105,499 371,156 ** 5,499 271,156
35 189,318 ** ** 492,101 ** ** 392,101

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

Plan: Flexible Premium Variable Life
$100,000 Total Sum Insured
Male, Issue age 45, Fully Underwritten Nonsmoker Underwriting Class
Option A Death Benefit
Cash Value Accumulation Test
No Guaranteed Minimum Death Benefit after tenth Policy Year
Planned Premium: $5,649 for Seven Years*
Using Current Charges

1 5,931 100,000 100,000 100,000 5,174 5,480 5,786
2 12,159 100,000 100,000 100,000 10,087 11,008 11,967
3 18,699 100,000 100,000 100,000 14,886 16,744 18,752
4 25,565 100,000 100,000 100,000 19,411 22,534 26,045
5 32,775 100,000 100,000 100,000 24,030 28,762 34,295
6 40,345 100,000 100,000 107,368 28,585 35,280 43,420
7 48,294 100,000 101,095 128,372 33,081 42,109 53,471
8 50,709 100,000 101,937 136,914 32,287 43,718 58,719
9 53,244 100,000 102,823 146,095 31,480 45,388 64,490
10 55,906 100,000 103,750 155,960 30,654 47,119 70,830
11 58,702 100,000 105,009 166,871 29,937 49,042 77,933
12 61,637 100,000 106,320 178,611 29,200 51,039 85,743
13 64,718 100,000 107,681 191,244 28,441 53,110 94,325
14 67,954 100,000 109,102 204,852 27,663 55,264 103,765
15 71,352 100,000 110,588 219,523 26,870 57,508 114,157
16 74,920 100,000 112,123 235,307 26,039 59,831 125,564
17 78,666 100,000 113,694 252,261 25,165 62,233 138,081
18 82,599 100,000 115,313 270,499 24,240 64,717 151,812
19 86,729 100,000 116,990 290,141 23,262 67,286 166,873
20 91,065 100,000 118,732 311,318 22,222 69,941 183,387
25 116,225 100,000 130,923 453,403 17,142 86,184 298,468
30 148,336 100,000 145,999 667,643 9,962 105,942 484,466
35 189,318 ** 165,003 996,043 ** 129,546 782,007

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

1 5,931 100,000 100,000 100,000 4,610 4,889 5,169
2 12,159 100,000 100,000 100,000 8,860 9,688 10,551
3 18,699 100,000 100,000 100,000 13,034 14,691 16,485
4 25,565 100,000 100,000 100,000 16,851 19,627 22,752
5 32,775 100,000 100,000 100,000 20,878 25,073 29,986
6 40,345 100,000 100,000 100,000 24,833 30,760 37,986
7 48,294 100,000 100,000 112,316 28,715 36,703 46,783
8 50,709 100,000 100,000 118,495 27,475 37,563 50,819
9 53,244 100,000 100,000 125,056 26,188 38,421 55,203
10 55,906 100,000 100,000 132,024 24,845 39,271 59,959
11 58,702 100,000 100,000 139,706 23,562 40,236 65,247
12 61,637 100,000 100,000 147,856 22,208 41,194 70,979
13 64,718 100,000 100,000 156,511 20,776 42,145 77,194
14 67,954 100,000 100,000 165,695 19,259 43,084 83,930
15 71,352 100,000 100,000 175,435 17,647 44,009 91,230
16 74,920 100,000 100,000 185,776 15,924 44,914 99,134
17 78,666 100,000 100,000 196,728 14,073 45,791 107,684
18 82,599 100,000 100,000 208,334 12,070 46,631 116,924
19 86,729 100,000 100,000 220,633 9,888 47,420 126,895
20 91,065 100,000 100,000 233,667 7,498 48,148 137,646
25 116,225 ** 100,000 311,633 ** 50,440 205,143
30 148,336 ** 100,000 415,615 ** 48,261 301,585
35 189,318 ** 100,000 554,596 ** 33,499 435,421

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

Plan: Flexible Premium Variable Life
$100,000 Total Sum Insured
Male, Issue age 45, Fully Underwritten Nonsmoker Underwriting Class
Option B Death Benefit
Cash Value Accumulation Test
No Guaranteed Minimum Death Benefit after tenth Policy Year
Planned Premium: $5,649 for Seven Years*
Using Current Charges

1 5,931 104,988 105,294 105,600 5,172 5,478 5,784
2 12,159 109,895 110,816 111,773 10,078 10,999 11,957
3 18,699 114,675 116,529 118,533 14,859 16,713 18,716
4 25,565 119,349 122,461 125,959 19,349 22,461 25,959
5 32,775 123,913 128,619 134,121 23,913 28,619 34,121
6 40,345 128,396 135,040 143,122 28,396 35,040 43,122
7 48,294 132,802 141,740 153,057 32,802 41,740 53,057
8 50,709 131,913 143,200 158,180 31,913 43,200 58,180
9 53,244 131,005 144,698 163,816 31,005 44,698 63,816
10 55,906 130,070 146,228 170,010 30,070 46,228 70,010
11 58,702 129,240 147,925 176,962 29,240 47,925 76,962
12 61,637 128,384 149,666 184,615 28,384 49,666 84,615
13 64,718 127,498 151,446 193,038 27,498 51,446 93,038
14 67,954 126,589 153,275 202,321 26,589 53,275 102,321
15 71,352 125,663 155,161 216,446 25,663 55,161 112,557
16 74,920 124,690 157,075 232,005 24,690 57,075 123,802
17 78,666 123,663 159,012 248,719 23,663 59,012 136,143
18 82,599 122,576 160,964 266,699 22,576 60,964 149,680
19 86,729 121,425 162,929 286,064 21,425 62,929 164,528
20 91,065 120,205 164,899 306,942 20,205 64,899 180,809
25 116,225 114,333 176,918 447,020 14,333 76,918 294,266
30 148,336 106,357 189,458 658,236 6,357 89,458 477,640
35 189,318 ** 200,236 982,001 ** 100,236 770,983

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

1 5,931 104,306 104,584 104,863 4,589 4,867 5,145
2 12,159 108,512 109,334 110,190 8,795 9,617 10,473
3 18,699 112,618 114,255 116,028 12,900 14,538 16,310
4 25,565 116,621 119,352 122,426 16,621 19,352 22,426
5 32,775 120,519 124,627 129,438 20,519 24,627 29,438
6 40,345 124,310 130,086 137,123 24,310 30,086 37,123
7 48,294 127,987 135,727 145,543 27,987 35,727 45,543
8 50,709 126,534 136,241 149,154 26,534 36,241 49,154
9 53,244 125,028 136,700 153,061 25,028 36,700 53,061
10 55,906 123,460 137,093 157,282 23,460 37,093 57,282
11 58,702 121,945 137,534 161,973 21,945 37,534 61,973
12 61,637 120,353 137,893 167,045 20,353 37,893 67,045
13 64,718 118,681 138,162 172,533 18,681 38,162 72,533
14 67,954 116,924 138,329 178,473 16,924 38,329 78,473
15 71,352 115,074 138,382 184,903 15,074 38,382 84,903
16 74,920 113,120 138,301 191,860 13,120 38,301 91,860
17 78,666 111,047 138,065 199,381 11,047 38,065 99,381
18 82,599 108,839 137,647 207,506 8,839 37,647 107,506
19 86,729 106,475 137,016 216,272 6,475 37,016 116,272
20 91,065 103,935 136,140 225,723 3,935 36,140 125,723
25 116,225 ** 126,994 285,259 ** 26,994 185,259
30 148,336 ** 105,499 373,644 ** 5,499 271,130
35 189,318 ** ** 498,202 ** ** 391,146

- -------------------------
* The illustrations assume that Planned Premiums equal to the Target Premium
are paid at the start of each of the first seven Policy Years. The Death
Benefit and Surrender Value will differ if premiums are paid in different
amounts or frequencies.
** Policy lapses unless additional premium payments are made.

ADDITIONAL INFORMATION

This section of the prospectus provides additional detailed information
that is not contained in the Basic Information section on pages 4 through 21.

Contents of this section Pages to see
- ------------------------ ------------
Description of John Hancock.................................... 32
How we support the policy and investment options............... 32
Procedures for issuance of a policy............................ 33
Basic Sum Insured vs. Additional Sum Insured................... 34
Commencement of investment performance......................... 35
How we process certain policy transactions..................... 35
Effects of policy loans........................................ 36
Additional information about how certain policy charges work... 37
How we market the policies..................................... 38
Tax considerations............................................. 39
Reports that you will receive.................................. 41
Voting privileges that you will have........................... 41
Changes that John Hancock can make as to your policy........... 42
Adjustments we make to death benefits.......................... 42
When we pay policy proceeds.................................... 43
Other details about exercising rights and paying benefits...... 43
Legal matters.................................................. 44
Registration statement filed with the SEC...................... 44
Accounting and actuarial experts............................... 44
Financial statements of John Hancock and the Account........... 44
List of Directors and Executive Officers of John Hancock....... 45

DESCRIPTION OF JOHN HANCOCK

We are John Hancock Life Insurance Company, a Massachusetts stock life
insuarnce company. On February 1, 2000, John Hancock Mutual Life Insurance
Company (which was chartered in Massachusetts in 1862) converted to a stock
company by "demutualizing" and changed its name to John Hancock Life Insurance
Company. As part of the demutualization process, John Hancock Life Insurance
Company became a subsidiary of John Hancock Financial Services, Inc., a newly
formed publicly-traded corporation. Our Home Office is at John Hancock Place,
Boston, Massachusetts 02117. We are authorized to transact a life insurance and
annuity business in all states and in the District of Columbia. As of December
31, 2001, our assets were approximately $81 billion.

We are regulated and supervised by the Massachusetts Commissioner of
Insurance, who periodically examines our affairs. We also are subject to the
applicable insurance laws and regulations of all jurisdictions in which we are
authorized to do business. We are required to submit annual statements of our
operations, including financial statements, to the insurance departments of the
various jurisdictions in which we do business for purposes of determining
solvency and compliance with local insurance laws and regulations. The
regulation to which we are subject, however, does not provide a guarantee as to
such matters.

HOW WE SUPPORT THE POLICY AND INVESTMENT OPTIONS

Separate Account UV

The variable investment options shown on page 1 are in fact subaccounts of
Separate Account UV (the "Account"), a separate account established by us under
Massachusetts law. The Account meets the definition of "separate account" under
the Federal securities laws and is registered as a unit investment trust under
the Investment Company Act of 1940 ("1940 Act"). Such registration does not
involve supervision by the SEC of the management of the Account or John Hancock.

The Account's assets are the property of John Hancock. Each policy provides
that amounts we hold in the Account pursuant to the policies cannot be reached
by any other persons who may have claims against us.

The assets in each subaccount are invested in the corresponding fund of one
of the Series 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 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 Total Sum Insured at
issue of $100,000 and a minimum Basic Sum Insured at issue of $50,000. At the
time of issue, the 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 person in either the premium
rates or the charges or values under the policy. The illustrations set forth in
this prospectus are sex-distinct and, therefore, may not reflect the rates,
charges, or values that would apply to such policies.

Minimum Initial Premium

The Minimum Initial Premium must be received by us at our Life Servicing
Office in order for the policy to be in full force and effect. There is no grace
period for the payment of the Minimum Initial Premium. The Minimum Initial
Premium is determined by us based on the characteristics of the insured person,
the Total 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 person's rate class should be.
After we approve an application for a policy and assign an appropriate insurance
rate class, we will prepare the policy for delivery. We will not pay a death
benefit under a policy unless the policy is in effect when the insured person
dies (except for the circumstances described under "Temporary insurance coverage
prior to policy delivery" on page 34).

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

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

... The Minimum Initial Premium is received by us.

... Each insured person is living and still meets our health criteria for issuing
insurance.

If all of the above conditions are satisfied, the policy will take effect on the
date shown in the policy as the "date of issue." That is the date on which we
begin to deduct monthly charges. Policy months, policy years and policy
anniversaries are all measured from the date of issue.

Backdating

In order to preserve a younger age at issue for the insured person, we can
designate a date of issue that is up to 60 days earlier than the date that would
otherwise apply. This is referred to as "backdating" and is allowed under state
insurance laws. Backdating can also be used in certain corporate-owned life
insurance cases involving multiple policies to retain a common monthly deduction
date.

The conditions for coverage described above under "Commencement of
insurance coverage" must still be satisfied, but in a backdating situation the
policy always takes effect retroactively. Backdating results in a lower
insurance charge (if it is used to preserve the insured person's younger age at
issue), but monthly charges begin earlier than would otherwise be the case.
Those monthly charges will be deducted as soon as we receive premiums sufficient
to pay them.

Temporary coverage prior to policy delivery

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

Monthly deduction dates

Each charge that we deduct monthly is assessed against your account value
or the subaccounts at the close of business on the date of issue and at the
close of the first business day in each subsequent policy month.

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 sales charge deducted
from premiums 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 minimum death benefit feature.
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),
the Additional Sum Insured coverage will lapse, even if the Basic Sum Insured
stays in effect pursuant to the guaranteed minimum death benefit feature.

Generally, you will incur lower sales charges and have more flexible
coverage with respect to the Additional Sum Insured than with respect to the
Basic Sum Insured. 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 minimum death benefit feature, 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. As stated
earlier in this prospectus, the guaranteed minimum death benefit feature does
not apply if the Additional Sum Insured is scheduled to exceed the Basic Sum
Insured at any time. If such was the case, you would presumably wish to maximize
the proportion of the Additional Sum Insured.

If you want to purchase Additional Sum Insured, you may select from among
several forms of it: a level amount of coverage; an amount of coverage that
increases on each policy anniversary up to a prescribed limit; an amount of
coverage that increases on each policy anniversary to the amount of premiums
paid during prior policy years plus the Planned Premium for the current policy
year, subject

to certain limits; or a combination of those forms of coverage.

Any decision you make to modify the amount of Additional Sum Insured
coverage after issue can have significant tax consequences (see "Tax
Considerations" beginning on page 39).

COMMENCEMENT OF INVESTMENT PERFORMANCE

Any premium payment processed prior to the twentieth day after the 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 business day immediately preceding the date of issue.

(2) If the Minimum Initial Premium is not received prior to the date of
issue, we will process each premium payment received thereafter as if received
on the business day immediately preceding the date of issue until all of the
Minimum Initial Premium is received.

(3) We will process the portion of any premium payment for which we require
evidence of the insured person's continued insurability only after we have
received such evidence and found it satisfactory to us.

(4) If we receive any premium payment that we think will cause a policy to
become a modified endowment or will cause a policy to lose its status as life
insurance under the tax laws, we will not accept the excess portion of that
premium payment and will immediately notify the owner. We will refund the excess
premium when the premium payment check has had time to clear the banking system
(but in no case more than two weeks after receipt), except in the following
circumstances:

... The tax problem resolves itself prior to the date the refund is to be made;
or

... The tax problem relates to modified endowment status and we receive a signed
acknowledgment from the owner prior to the refund date instructing us to
process the premium notwithstanding the tax issues involved.

In the above cases, we will treat the excess premium as having been received on
the date the tax problem resolves itself or the date we receive the signed
acknowledgment. We will then process it accordingly.

(5) If a premium payment is received or is otherwise scheduled to be
processed (as specified above) on a date that is not a business day, the premium
payment will be processed on the business day next following that date.

Transfers among investment options

Any reallocation among investment options must be such that the total in
all investment options after reallocation equals 100% of account value.
Transfers out of a variable investment option will be effective at the end of
the business day in which we receive at our Life Servicing Office notice
satisfactory to us.

If received on or before the policy anniversary, requests for transfer out
of the fixed investment option will be processed on the policy anniversary (or
the next business day if the policy anniversary does not occur on a business
day). If received after the policy anniversary, such a request will be processed

at the end of the business day in which we receive the request at our Life
Servicing Office. If you request a transfer out of the fixed investment option
61 days or more prior to the policy anniversary, we will not process that
portion of the reallocation, and your confirmation statement will not reflect a
transfer out of the fixed investment option as to such request. Currently, there
is no minimum amount limit on transfers into the fixed investment option, but we
reserve the right to impose such a limit in the future. We have the right to
defer transfers of amounts out of the fixed investment option for up to six
months.

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 the request:

... Total Sum Insured decreases

... Additional Sum Insured increases

... Change of death benefit option from Option B to Option A

... Any other change of death benefit option, when and if permitted by our
administrative rules (see "Change of death benefit option" on page 17)

Reinstatements of lapsed policies take effect on the monthly deduction date
on or next following the date we approve the request for reinstatement.

We process loans, surrenders, partial withdrawals and loan repayments as of
the day we receive such request or repayment.

EFFECTS OF POLICY LOANS

The account value, the surrender value, and any death benefit above the
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 account 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. Also, taking out a
loan on the policy increases the risk that the policy may lapse because of the
difference between the interest rate charged on the loan and the interest rate
credited to the special loan account. Policy loans may also result in adverse
tax consequences under certain circumstances (see "Tax considerations" beginning
on page 39).

ADDITIONAL INFORMATION ABOUT HOW CERTAIN POLICY CHARGES WORK

Sales expenses and related charges

The sales charges help to compensate us for the cost of selling our
policies. (See "What charges will John Hancock deduct from my investment in the
policy?" in the Basic Information section of this prospectus.) The amount of the
charges in any policy year does not specifically correspond to sales expenses
for that year. We expect to recover our total sales expenses over the life of
the policies. To the extent that the sales charges do not cover total sales
expenses, the sales expenses may be recovered from other sources, including
gains from the 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
38.) Similarly, administrative expenses not fully covered by the issue charge
and the administrative charge may also be recovered from such other sources.

Effect of premium payment pattern

You may structure the timing and amount of premium payments to minimize the
sales charges, although doing so involves certain risks. Paying less than one
Target Premium in the first policy year or paying more than one Target Premium
in any policy year could reduce your total sales charges over time. For example,
if the Target Premium was $10,000 and you paid a premium of $10,000 in each of
the first ten policy years, you would pay total sales charges of $6,500. If you
paid $20,000 (i.e., two times the Target Premium amount) in every other policy
year up to the ninth policy year, you would pay total sales charges of only
$3,250. However, delaying the payment of Target Premiums to later policy years
could increase the risk that the guaranteed minimum death benefit feature will
lapse and the account value will be insufficient to pay monthly policy charges
as they come due. As a result, the policy or any Additional Sum Insured may
lapse and eventually terminate. Conversely, accelerating the payment of Target
Premiums to earlier policy years could cause aggregate premiums paid to exceed
the policy's 7-pay premium limit and, as a result, cause the policy to become a
modified endowment, with adverse tax consequences to you upon receipt of policy
distributions. (See "Tax considerations" beginning on page 39.)

Monthly charges

We deduct the monthly charges described in the Basic Information section
from your policy's investment options in proportion to the amount of account
value you have in each. For each month that we cannot deduct any charge because
of insufficient account value, the uncollected charges will accumulate and be
deducted when and if sufficient account value becomes available.

The insurance under the policy continues in full force during any grace
period but, if the insured person dies during the policy grace period, the
amount of unpaid monthly charges is deducted from the death benefit otherwise
payable.

Reduced charges for eligible classes

The charges otherwise applicable may be reduced with respect to policies
issued to a class of associated individuals or to a trustee, employer or similar
entity where we anticipate that the sales to the members of the class will
result in lower than normal sales or administrative expenses, lower taxes or
lower risks to us. We will make these reductions in accordance with our rules in
effect at the time of the application for a policy. The factors we consider in
determining the eligibility of a particular group for reduced charges, and the
level of the reduction, are as follows: the nature of the association and its
organizational framework; the method by which sales will be made to the members
of the class; the facility with which premiums will be collected from the
associated individuals and the association's capabilities with respect to
administrative tasks; the anticipated lapse and surrender rates of the policies;
the size of the class of associated individuals and the number of years it has
been in existence; 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 agreement among John Hancock,
Signator, John Hancock Variable Life Insurance Company and the Account. Signator
also serves as principal underwriter for John Hancock Variable Annuity Accounts
U, I and V, John Hancock Mutual Variable Life Insurance Account UV and John
Hancock Variable Life Accounts U and V, all of which are registered under the
1940 Act. Signator is also the principal underwriter for John Hancock Variable
Series Trust I.

Applications for policies are solicited by agents who are licensed by state
insurance authorities to sell John Hancock's policies and who are also
registered representatives ("representatives") of Signator or other
broker-dealer firms, as discussed below. John Hancock performs insurance
underwriting and determines whether to accept or reject the application for a
policy and each insured person's risk classification. John Hancock will make the
appropriate refund if a policy ultimately is not issued or is returned under the
"free look" provision. Officers and employees of John Hancock are covered by a
blanket bond by a commercial carrier in the amount of $25 million.

Signator's representatives are compensated for sales of the policies on a
commission and service fee basis by Signator, and John Hancock reimburses
Signator for such compensation and for other direct and indirect expenses
(including agency expense allowances, general agent, district manager and
supervisor's compensation, agent's training allowances, deferred compensation
and insurance benefits of agents, general agents, district managers and
supervisors, agency office clerical expenses and advertising) actually incurred
in connection with the marketing and sale of the policies.

The maximum commission payable to a Signator representative for selling a
policy is 21% of the Target Premium paid in the first policy year, 12 % of the
Target Premium paid in each of the second through fifth policy years, and 3% of
the Target Premium paid in each policy year thereafter. The maximum commission
on any premium paid in any policy year in excess of the Target Premium is 2%.

Representatives with less than four years of service with Signator and
those compensated on salary plus bonus or level commission programs may be paid
on a different basis. Representatives who meet certain productivity and
persistency standards with respect to the sale of policies issued by John
Hancock will be eligible for additional compensation.

The policies are also sold through other registered broker-dealers that
have entered into selling agreements with Signator and whose representatives are
authorized by applicable law to sell variable life insurance policies. The
commissions which will be paid by such broker-dealers to their representatives
will be in accordance with their established rules. The commission rates may be
more or less than those set forth above for Signator's representatives. In
addition, their qualified registered representatives may be reimbursed by the
broker-dealers under expense reimbursement allowance programs in any year for
approved voucherable expenses incurred. Signator will compensate the
broker-dealers as provided in the selling agreements,

and John Hancock will reimburse Signator for such amounts and for certain other
direct expenses in connection with marketing the policies through other
broker-dealers.

Representatives of Signator and the other broker-dealers mentioned above
may also earn "credits" toward qualification for attendance at certain business
meetings sponsored by John Hancock.

The offering of the policies is intended to be continuous, but neither John
Hancock nor Signator is obligated to sell any particular amount of policies.

TAX CONSIDERATIONS

This description of federal income tax consequences is only a brief summary
and is not intended as tax advice. Tax consequences will vary based on your own
particular circumstances, and for further information you should consult a
qualified tax advisor. Federal, state and local tax laws, regulations and
interpretations can change from time to time. As a result, the tax consequences
to you and the beneficiary may be altered, in some cases retroactively.

Policy proceeds

We believe the policy will receive the same federal income and estate tax
treatment as fixed benefit life insurance policies. Section 7702 of the Internal
Revenue Code (the "Code") defines life insurance for federal tax purposes. If
certain standards are met at issue and over the life of the policy, the policy
will satisfy that definition. We will monitor compliance with these standards.

If the policy complies with the definition of life insurance, we believe
the death benefit under the policy will be excludable from the beneficiary's
gross income under Section 101 of 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 credited to the
policy for the period of the disqualification and for subsequent periods.

Tax consequences of ownership or receipt of policy proceeds under federal,
state and local estate,

inheritance, gift and other tax laws 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.

Diversification rules and ownership of the Account

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

The Treasury Department explained in its temporary regulations regarding
diversification that such regulations " do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor, rather than the insurance company, to be treated
as the owner of the assets in the account". As the variable policy owner, you
will be treated as the owner of Account assets if you have the ability to
exercise investment control over them. If you are found to have such ability,
you will be taxed on any income or gains the assets generate. Although the
Treasury Department announced several years ago that it would provide further
guidance on this issue, it had not yet done so as of the date of this
prospectus.

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

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

7-pay premium limit

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

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

The owner will be taxed on distributions and loans from a "modified
endowment" to the extent of any income (gain) to the owner (on an income-first
basis). The distributions and loans affected will be those made on or after, and
within the two year period prior to, the time the policy becomes a modified
endowment. Additionally, a 10% penalty tax may be imposed on taxable portions of
such distributions or loans that are made before the owner attains age 591/2.

Furthermore, any time there is a "material change" in a policy (generally
the result of such things as an increase in 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) during the 7 years in which a 7-pay test is being
applied, the 7-pay limit will generally 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 are required to 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 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 each Series Fund, 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 the Series Funds which are deemed attributable to variable life
insurance policies at regular and special meetings of the Series Funds'
shareholders in accordance with instructions received from owners of such
policies. Shares of the Series Funds held in the Account which are not
attributable to such policies, as well as shares for which instructions from
owners are not received, will be represented by us at the meeting. We will vote
such shares for and against each matter in the same proportions as the votes
based upon the instructions received from the owners of such policies.

We determine the number of a fund's shares held in a subaccount
attributable to each owner by dividing the amount of a policy's account value
held in the subaccount by the net asset value of one share in the fund.
Fractional votes will be counted. We determine the number of shares as to which
the owner may give instructions as of the record date for the

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 JOHN HANCOCK 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 John Hancock to be associated
with the class of policies to which your policy belongs from the Account to
another separate account or subaccount, (2) to operate the Account as a
"management-type investment company" under the 1940 Act, or in any other form
permitted by law, the investment adviser of which would be John Hancock or an
affiliate, (3) to deregister the Account under the 1940 Act, (4) to substitute
for the fund shares held by a subaccount any other investment permitted by law,
and (5) to take any action necessary to comply with or obtain any exemptions
from the 1940 Act. We would notify owners of any of the foregoing changes and,
to the extent legally required, obtain approval of owners and any regulatory
body prior thereto. Such notice and approval, however, may not be legally
required in all cases.

Other permissible changes

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

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

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

... Combining or removing investment options

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

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

ADJUSTMENTS WE MAKE TO DEATH BENEFITS

If the insured person commits suicide within certain time periods, the
amount of death benefit we pay will be limited as described in the policy. Also,
if an application misstated the age or gender of the insured person, we will
adjust the amount of any death benefit as described in the policy.

WHEN WE PAY POLICY PROCEEDS

General

We will pay any death benefit, withdrawal, surrender value or loan within 7
days after we receive the last required form or request (and, with respect to
the death benefit, any other documentation that may

be required). If we don't have information about the desired manner of payment
within 7 days after the date we receive documentation of the insured person's
death, we will pay the proceeds as a single sum.

Delay to challenge coverage

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

Delay for check clearance

We reserve the right to defer payment of that portion of your account value
that is attributable to a premium payment made by check for a reasonable period
of time (not to exceed 15 days) to allow the check to clear the banking system.

Delay of separate account proceeds

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

OTHER DETAILS ABOUT EXERCISING RIGHTS AND PAYING BENEFITS

Joint ownership

If more than one person owns a policy, all owners must join in most
requests to exercise rights under the policy.

Assigning your policy

You may assign your rights in the policy to someone else as collateral for
a loan or for some other reason. Assignments do not require the consent of any
revocable beneficiary. A copy of the assignment must be forwarded to us. We are
not responsible for any payment we make or any action we take before we receive
notice of the assignment in good order. Nor are we responsible for the validity
of the assignment. An absolute assignment is a change of ownership. All
collateral assignees of record must consent to any full surrender, partial
withdrawal or loan from the policy.

Your beneficiary

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

LEGAL MATTERS

The legal validity of the policies described in this prospectus has been
passed on by Ronald J. Bocage, Vice President and Counsel for John Hancock. The
law firm of Foley & Lardner, Washington, D.C., has 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

Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and schedules of John Hancock at December 31, 2001 and
2000, and for each of the three years in the period ended December 31, 2001, and
the financial statements of the Account at December 31, 2001 and for each of the
periods indicated therein, as set forth in their reports. We've included these
financial statements in this prospectus and elsewhere in the registration
statement in reliance on Ernst & Young LLP's reports, given on their authority
as experts in accounting and auditing.

Actuarial matters included in this prospectus have been examined by Deborah A.
Poppel, F.S.A., an Actuary and Second Vice President of John Hancock.

FINANCIAL STATEMENTS OF JOHN HANCOCK AND THE ACCOUNT

The financial statements of John Hancock included herein should be
distinguished from the financial statements of the Account and should be
considered only as bearing upon the ability of John Hancock to meet its
obligations under the policies.

In addition to those financial statements of John Hancock and the Account
included herein that have been audited by Ernst & Young LLP, this prospectus
also contains unaudited financial statements of both John Hancock and the
Account for a period subsequent to the audited financial statements.

LIST OF DIRECTORS AND EXECUTIVE OFFICERS OF JOHN HANCOCK

The Directors and Executive Officers of John Hancock and their principal
occupations during the past five years are as follows:

Directors Principal Occupations
- --------- ---------------------

David F. D'Alessandro.......Chairman of the Board, President and Chief Executive
Officer, John Hancock
Foster L. Aborn.............Director, formerly Vice Chairman of the Board and Chief
Investment Officer, John Hancock
Wayne A. Budd...............Executive Vice President and General Counsel, John
Hancock; formerly Group President, Bell Atlantic - New
England (telecommunications)
John M. Connors, Jr.........Chairman and Chief Executive Officer and Director,
Hill, Holliday, Connors, Cosmopoulos, Inc.
(advertising).
John M. DeCiccio............Executive Vice President and Chief Investment Officer,
John Hancock
Robert E. Fast..............Senior Partner, Hale and Dorr (law firm)
Kathleen F. Feldstein.......President, Economic Studies, Inc. (economic
consulting).
Thomas P. Glynn.............Chief Operating Officer, Partners HealthCare System,
Inc. (health care)
Michael C. Hawley...........Retired Chairman and Chief Executive Officer, The
Gillette Company (razors, etc.)
Edward H. Linde.............President and Chief Executive Officer, Boston
Properties, Inc. (real estate)
Judith A. McHale............President and Chief Operating Officer, Discovery
Communications, Inc. (multimedia communications)
R. Robert Popeo.............Chairman, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo
(law firm)
Richard F. Syron............Chairman, President and Chief Executive Officer, Thermo
Electron Corp. (scientific and industrial instruments)
Robert J. Tarr, Jr..........Formerly Chairman, President and Chief Executive
Officer, HomeRuns.com (online grocer)

Other Executive Officers
- ------------------------

Thomas E. Moloney...........Senior Executive Vice President and Chief Financial
Officer
Michael Bell................Senior Executive Vice President - Retail; Founder and
Director of Monitor Company (management consulting)
Derek Chilvers..............Executive Vice President; Chairman and Chief Executive
Officer of John Hancock International Holdings, Inc.
Maureen R. Ford.............Executive Vice President; Chairman and Chief Executive
Officer of John Hancock Funds, Inc.
Barry J. Rubenstein.........Vice President, Counsel and Secretary
Robert F. Walters...........Executive Vice President and Chief Information Officer

The business address of all Directors and officers of John Hancock is John
Hancock Place, Boston, Massachusetts 02117.

SECOND QUARTER 2002 JOHN HANCOCK FINANCIALS

(TO BE ADDED BY AMENDMENT)

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
John Hancock Life Insurance Company

We have audited the accompanying consolidated balance sheets of John
Hancock Life Insurance Company as of December 31, 2001 and 2000, and the related
consolidated statements of income, changes in shareholder's equity and
comprehensive income, and cash flows for each of the three years in the period
ended December 31, 2001. Our audits also included the financial statement
schedules. These financial statements and schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of John Hancock
Life Insurance Company at December 31, 2001 and 2000, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the related
financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, in 2001
the Company changed its method of accounting for its employee pension plan and
postretirement health and welfare plans, derivatives and certain long-duration
participating contracts.

/s/ ERNST & YOUNG LLP

Boston, Massachusetts
March 1, 2002

JOHN HANCOCK LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEETS

December 31
2001 2000
--------- ----------
(in millions)
Assets
Investments - Notes 3 and 4
Fixed maturities:
Held-to-maturity-at amortized cost
(fair value: 2001-$1,908.2; 2000-$13,965.8).......... $ 1,923.5 $14,145.1
Available-for-sale-at fair value
(cost: 2001-$35,778.0; 2000-$15,822.4)............... 36,072.1 15,925.4
Equity securities:
Available-for-sale-at fair value
(cost: 2001-$433.1; 2000-$587.6)..................... 562.3 846.1
Trading securities-at fair value
(cost: 2001-$2.7; 2000-$1.1)......................... 1.4 1.6
Mortgage loans on real estate.......................... 9,667.0 9,659.4
Real estate............................................ 380.4 447.9
Policy loans........................................... 1,927.0 1,894.9
Short-term investments................................. 78.6 174.9
Other invested assets.................................. 1,676.9 1,335.2
--------- ----------
Total Investments.................................. 52,289.2 44,430.5

Cash and cash equivalents.............................. 1,025.3 2,966.3
Accrued investment income.............................. 745.9 699.4
Premiums and accounts receivable....................... 117.2 129.0
Deferred policy acquisition costs...................... 3,186.3 3,027.1
Reinsurance recoverable - Note 9....................... 2,464.3 1,905.9
Other assets........................................... 2,298.4 1,946.8
Separate accounts assets............................... 18,998.1 23,307.0
--------- ----------
Total Assets....................................... $81,124.7 $78,412.0
========= ==========

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

JOHN HANCOCK LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEETS (continued)

December 31
--------------------
2001 2000
--------- -----------
(in millions)

Liabilities and Shareholder's Equity
Liabilities
Future policy benefits................................ $29,715.0 $26,726.8
Policyholders' funds.................................. 20,530.3 18,543.1
Unearned revenue...................................... 346.0 323.1
Unpaid claims and claim expense reserves.............. 203.8 256.4
Dividends payable to policyholders.................... 472.8 453.7
Short-term debt - Note 7.............................. 124.6 245.3
Long-term debt - Note 7............................... 618.7 534.0
Income taxes - Note 5................................. 803.9 526.3
Other liabilities..................................... 3,675.5 2,370.7
Separate accounts liabilities......................... 18,998.1 23,307.0
--------- ---------
Total Liabilities..................................... 75,488.7 73,286.4
Minority interest - Note 8............................ 28.8 --
Commitments and contingencies - Note 11
Shareholder's Equity - Note 12
Common stock, $10,000 par value; 1,000 shares
authorized
and outstanding...................................... 10.0 10.0
Additional paid in capital............................ 4,763.4 4,764.6
Retained earnings..................................... 608.2 284.3
Accumulated other comprehensive income (loss)......... 225.6 66.7
--------- ---------
Total Shareholder's Equity......................... 5,607.2 5,125.6
--------- ---------
Total Liabilities and Shareholder's Equity......... $81,124.7 $78,412.0
========= =========

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

JOHN HANCOCK LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF INCOME

Years Ended December 31
2001 2000 1999
--------- --------- ---------
(in millions)
Revenues
Premiums........................................ $2,351.9 $2,390.7 $2,021.4
Universal life and investment-type product
charges........................................ 600.8 591.4 560.9
Net investment income - Note 3.................. 3,646.2 3,563.9 3,338.9
Net realized investment and other gains
(losses), net of related
amortization of deferred policy acquisition
costs, amounts
credited to participating pension
contractholders and
the policyholder dividend obligation
($(4.1), $11.6 and $85.0,
respectively) - Notes 1, 3 and 13.............. (245.8) 78.3 169.6
Investment management revenues, commissions and
Other fees..................................... 585.1 746.5 672.5
Other revenue (expense)......................... 185.8 3.4 (1.3)
-------- -------- --------
Total revenues................................. 7,124.0 7,374.2 6,762.0
Benefits and expenses
Benefits to policyholders, excluding amounts
related to net realized
investment and other gains (losses) credited
to participating pension
contractholders and the policyholder
dividend obligation ($25.3, $21.0,
and $35.3, respectively) - Notes 1, 3 and 13... 4,328.1 4,247.4 4,585.4
Other operating costs and expenses.............. 1,227.8 1,288.8 1,251.0
Amortization of deferred policy acquisition
costs, excluding
amounts related to net realized investment
and other gains (losses)
($(29.4) $(9.4) and $49.7, respectively) -
Notes 1, 3 and 13.............................. 249.0 187.1 125.0
Dividends to policyholders...................... 551.7 539.2 487.3
Demutualization expenses........................ -- 10.6 96.2
-------- -------- --------
Total benefits and expenses................... 6,356.6 6,273.1 6,544.9
-------- -------- --------
Income before income taxes and cumulative
effect of accounting changes.................. 767.4 1,101.1 217.1
Income taxes - Note 5........................... 200.7 308.9 81.5
-------- -------- --------
Income before cumulative effect of accounting
changes........................................ 566.7 792.2 135.6
Cumulative effect of accounting changes, net
of income tax - Note 1......................... 7.2 -- (9.7)
-------- -------- --------
Net income...................................... $ 573.9 $ 792.2 $ 125.9
======== ======== ========

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

JOHN HANCOCK LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

AND COMPREHENSIVE INCOME

Accumulated
Additional Other Total
Common Paid In Retained Comprehensive Shareholder's Outstanding
Stock Capital Earnings Income (Loss) Equity Shares
---------- ---------- ---------- ------------- ------------- -------------
(in millions, except for share amounts)

Balance at January 1, 1999....... -- -- $ 4,226.6 $ 281.5 $4,508.1 --
Comprehensive income:
Net income...................... 125.9 125.9
Other comprehensive
income,
net of tax:
Net unrealized
investment gains
(losses)...................... (251.4) (251.4)
Foreign currency translation
Adjustment.................... (1.8) (1.8)
Minimum pension liability...... (22.9) (22.9)
--------
Comprehensive income............ (150.2)
------- -------- --------- ------- -------- -----
Balance at December 31, 1999.... -- -- 4,352.5 5.4 4,357.9 --

Demutualization transaction..... $10.0 $4,722.1 (4,394.4) 337.7 1,000
Comprehensive income:
Net income before
demutualization............... 41.9 41.9
Net income after
demutualization............... 750.3 750.3
--------- --------
Net income.................... 792.2 792.2
Other comprehensive
income,
Net of tax:
Net unrealized investment gains
(losses)...................... 54.6 54.6
Foreign currency translation
Adjustment.................... (1.5) (1.5)
Minimum pension liability...... 8.2 8.2
--------
Comprehensive income............ 853.5
Capital contributions from
parent company................ 42.5 42.5
Dividend paid to parent company. (466.0) (466.0)
------- -------- --------- ------- -------- -----
Balance at December 31, 2000.... 10.0 4,764.6 284.3 66.7 5,125.6 1,000
==== ======= ===== ==== ======= =====

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

JOHN HANCOCK LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

AND COMPREHENSIVE INCOME (continued)

Accumulated
Additional Other Total
Common Paid In Retained Comprehensive Shareholder's Outstanding
Stock Capital Earnings Income (Loss) Equity Shares
------ --------- -------- ------------- ------------- -----------
(in millions, except for share amounts)

Balance at December
31, 2000.............. 10.0 4,764.6 284.3 66.7 5,125.6 1,000
Demutualization
transactions.......... (1.2) (1.2)
Comprehensive income:
Net income............ 573.9 573.9
Other comprehensive
income, Net of tax:
Net unrealized
investment gains
(losses)............. (81.1) (81.1)
Foreign currency
translation
Adjustment........... 1.0 1.0
Minimum pension
liability............ 15.2 15.2
Cash flow hedges...... (3.8) (3.8)
--------
Comprehensive income... 505.2
Dividends paid to
parent company........ (250.0) (250.0)
Change in accounting
principles............ 227.6 227.6
----- -------- ------- ------ -------- -----
Balance at December
31, 2001.............. $10.0 $4,763.4 $ 608.2 $225.6 $5,607.2 1,000
===== ======== ======= ====== ======== =====

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

JOHN HANCOCK LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31
2001 2000 1999
----------- ---------- -------------
(in millions)
Cash flows from operating activities:
Net income........................... $ 573.9 $ 792.2 $ 125.9
Adjustments to reconcile net income
to net cash
provided by operating activities:
Amortization of discount-fixed
maturities........................ (134.0) (102.9) (67.9)
Net realized investment and other
gains (losses), net............... 245.8 (78.3) (169.6)
Change in deferred policy
acquisition costs................. (204.0) (235.4) (251.3)
Depreciation and amortization...... 72.1 78.8 70.0
Net cash flows from trading
securities........................ 0.2 (0.1) --
Increase in accrued investment
income............................ (46.5) (89.8) (92.6)
Decrease in premiums and accounts
receivable........................ 11.8 8.4 32.0
Increase in other assets and other
liabilities, net.................. (263.5) (464.5) (304.4)
Increase in policy liabilities and
accruals, net..................... 2,323.7 1,798.1 2,235.1
Loss on sale of subsidiaries....... -- -- 21.3
Increase (decrease) in income taxes 195.4 336.7 (31.5)
---------- --------- ----------
Net cash provided by operating
activities........................ 2,774.9 2,043.2 1,567.0
Cash flows from investing activities:
Sales of:
Fixed maturities held-to-maturity... -- -- 24.3
Fixed maturities available-for-sale. 16,058.9 4,360.5 9,567.7
Equity securities available-for-sale 614.6 669.9 149.7
Real estate......................... 53.8 59.8 1,277.1
Short-term investments and other
invested assets.................... 113.4 81.5 695.9
Maturities, prepayments and scheduled
redemptions of:
Fixed maturities held-to-maturity... 241.8 1,807.2 1,769.3
Fixed maturities available-for-sale. 3,051.1 1,476.6 1,800.5
Equity securities available-for-sale 35.9 13.4 --
Short-term investments and other
invested assets.................... 168.4 418.8 270.9
Mortgage loans on real estate....... 1,342.0 1,447.4 1,304.3
Purchases of:
Fixed maturities held-to-maturity... (66.7) (2,092.4) (2,688.5)
Fixed maturities available-for-sale. (26,321.9) (6,961.4) (12,272.9)
Equity securities available-for-sale (285.8) (425.3) (283.6)
Real estate......................... (52.8) (58.7) (190.9)
Short-term investments and other
invested assets.................... (448.5) (784.8) (649.1)
Mortgage loans on real estate issued (1,204.5) (1,499.9) (2,348.0)
Net cash (paid) received related to
acquisition/sale of businesses..... (28.2) 141.3 (206.5)
Other, net.......................... 177.4 (25.7) (57.9)
---------- --------- ----------
Net cash used in investing
activities...................... $ (6,551.1) $(1,371.8) $ (1,837.7)
========== ========= ==========

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

JOHN HANCOCK LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Years Ended December 31
2001 2000 1999
--------- ---------- ----------
(in millions)

Cash flows from financing activities:
Issuance of common stock................ -- $ 10.0 --
Contribution from Parent................ -- 1,552.0 --
Payments to eligible policyholders under
Plan of Reorganization................. -- (1,076.7) --
Dividend paid to parent company......... $ (250.0) (466.0) --
Universal life and investment-type
contract deposits...................... 10,520.3 7,918.2 $ 8,134.9
Universal life and investment-type
contract maturities and withdrawals.... (8,271.8) (7,034.2) (7,977.7)
Issuance of long-term debt.............. 81.9 20.0 6.0
Repayment of long-term debt............. (22.9) (73.2) (15.5)
Net decrease in commercial paper........ (222.3) (158.2) (30.5)
--------- --------- ---------
Net cash provided by financing
activities........................... 1,835.2 691.9 117.2
--------- --------- ---------
Net (decrease) increase in cash and
cash equivalents..................... (1,941.0) 1,363.3 (153.5)
Cash and cash equivalents at beginning
of year.............................. 2,966.3 1,603.0 1,756.5
--------- --------- ---------
Cash and cash equivalents at end of
year ................................ $ 1,025.3 $ 2,966.3 $ 1,603.0
========= ========= =========

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

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

John Hancock Life Insurance Company, (the Company), formerly known as John
Hancock Mutual Life Insurance Company (the Mutual Company) and Subsidiaries, is
a diversified financial services organization that provides a broad range of
insurance and investment products and investment management and advisory
services.

Basis of Presentation

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates.

The accompanying consolidated financial statements include the accounts of
the Company and its majority-owned and controlled subsidiaries. All significant
intercompany transactions and balances have been eliminated.

Partnerships, joint venture interests and other equity investments in which
the Company does not have a controlling interest, but has significant influence,
are recorded using the equity method of accounting and are included in other
invested assets.

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

In December 2001, the Company transferred both its remaining portion of
John Hancock Canadian Holdings Limited and certain international subsidiaries
held by the Company, with a carrying value at December 31, 2001 of $300.1
million, to its parent, JHFS, in the form of a dividend. The transfer has been
accounted for as a de-pooling of interests. As a result of the de-pooling of
interests, all current and prior period consolidated financial data has been
restated to exclude the results of operations, financial position, and cash
flows of these transferred foreign subsidiaries from the Company's financial
statements. No gain or loss was recognized on the transaction.

The following acquisitions were recorded under the purchase method of
accounting and, accordingly, the operating results have been included in the
Company's consolidated results of operations from the applicable date of
acquisition. Each purchase price was allocated to the assets acquired and the
liabilities assumed based on estimated fair values, with the excess of the
applicable purchase price over the estimated fair values, if any, recorded as
goodwill. These entities or books of business were generally acquired by the
Company in execution of its plan to acquire businesses that have strategic
value, meet its earnings requirements and advance the growth of its current
businesses. The unaudited pro forma revenues, assuming the transactions had
taken place at the beginning of the year of acquisition and the preceding year,
for 2001, 2000 and 1999, were approximately $7,177.3 million, $7,714.1 million
and $6,894.9 million, an increase of $53.3 million, $248.7 million and $132.9
million, respectively, from reported balances. The unaudited pro forma net
income for the years ended December 31, 2001, 2000 and 1999, was approximately
$572.7 million, $783.9 million and $118.6 million, a change of $(1.2) million,
$(8.3) million and $(7.3) million, respectively, from reported balances.

On April 2, 2001, a subsidiary of the Company, Signature Fruit Company, LLC
(Signature Fruit), purchased certain assets and assumed certain liabilities out
of the bankruptcy proceedings of Tri Valley Growers, Inc., a cooperative
association, for approximately $53.0 million. The net losses related to the
acquired operations included in the Company's results from the date of
acquisition through December 31, 2001 were $3.4 million. The unaudited pro forma
results for the years ended December 31, 2001 and 2000, assuming the transaction
had taken place at the beginning of 2001 and 2000, would not be materially
different from the reported results.

On March 1, 2000, the Company acquired the individual long-term care
insurance business of Fortis, Inc. (Fortis) through a coinsurance agreement for
approximately $165.0 million. The unaudited pro forma results for the years
ended December 31, 2000 and 1999, assuming the acquisition of Fortis had taken
place at the beginning of 2000 and 1999, would not be materially different from
the reported results.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Reorganization

In connection with the Mutual Company's Plan of Reorganization (the Plan),
effective February 1, 2000, the Mutual Company converted from a mutual life
insurance company to a stock life insurance company (i.e., demutualized) and
became a wholly-owned subsidiary of John Hancock Financial Services, Inc. (JHFS
or the parent company), which is a holding company. All policyholder membership
interests in the Mutual Company were extinguished on that date and eligible
policyholders of the Mutual Company received, in the aggregate, 212.8 million
shares of common stock of JHFS, $1,438.7 million of cash and $43.7 million of
policy credits as compensation. In addition, the Company established a closed
block to fund the guaranteed benefits and dividends of certain participating
insurance policies. In connection with the Plan, the Mutual Company changed its
name to John Hancock Life Insurance Company.

In addition, on February 1, 2000, JHFS completed its initial public
offering (IPO) in which 102.0 million shares of common stock were issued at a
price of $17.00 per share. Net proceeds from the IPO were $1,657.7 million, of
which $105.7 million was retained by JHFS and $1,552.0 million was contributed
to the Company.

Investments

The Company classifies its debt and equity investment securities into one
of three categories: held-to-maturity, available-for-sale or trading. The
Company determines the appropriate classification of debt securities at the time
of purchase and re-evaluates such designation as of each balance sheet date.
Fixed maturity investments include bonds, mortgage-backed securities, and
redeemable preferred stock and are classified as held-to-maturity or
available-for-sale. Those bonds and mortgage-backed securities that the Company
has the positive intent and ability to hold to maturity are classified as
held-to-maturity and are carried at amortized cost. Fixed maturity investments
not classified as held-to-maturity are classified as available-for-sale and are
carried at fair value. Unrealized gains and losses related to available-for-sale
securities are reflected in shareholder's equity, net of related amortization of
deferred policy acquisition costs, amounts credited to participating pension
contractholders, amounts credited to the policyholder dividend obligation, and
applicable taxes. The amortized cost of debt securities is adjusted for
amortization of premiums and accretion of discounts to maturity. Such
amortization is included in investment income. The amortized cost of fixed
maturity investments is adjusted for impairments in value deemed to be other
than temporary and such adjustments are reported as a component of net realized
investment and other gains (losses).

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

Equity securities include common stock and non-redeemable preferred stock.
Equity securities that have readily determinable fair values are carried at fair
value. For equity securities that the Company has classified as
available-for-sale, unrealized gains and losses are reflected in shareholder's
equity, as described above for available-for-sale fixed maturity securities.
Impairments in value deemed to be other than temporary are reported as a
component of net realized investment and other gains (losses). Gains and losses,
both realized and unrealized, on equity securities classified as trading are
included in net realized investment and other gains (losses).

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Mortgage loans on real estate are carried at unpaid principal balances
adjusted for amortization of premium or discount, less allowance for probable
losses. When it is probable that the Company will be unable to collect all
amounts of principal and interest due according to the contractual terms of the
mortgage loan agreement, the loan is deemed to be impaired and a valuation
allowance for probable losses is established. The valuation allowance is based
on the present value of the expected future cash flows, discounted at the loan's
original effective interest rate or on the collateral value of the loan if the
loan is collateral dependent. Any change to the valuation allowance for mortgage
loans on real estate is reported as a component of net realized investment and
other gains (losses). Interest received on impaired mortgage loans on real
estate is included in interest income in the period received. If foreclosure
becomes probable, the measurement method used is collateral value. Foreclosed
real estate is then recorded at the collateral's fair value at the date of
foreclosure, which establishes a new cost basis.

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

Real estate to be disposed of is carried at the lower of cost or fair value
less costs to sell. Any change to the valuation allowance for real estate to be
disposed of is reported as a component of net realized investment and other
gains (losses). The Company does not depreciate real estate to be disposed of.

Policy loans are carried at unpaid principal balances, which approximate
fair value.

Short-term investments are carried at amortized cost, which approximates
fair value.

Net realized investment and other gains (losses), other than those related
to separate accounts for which the Company does not bear the investment risk,
are determined on the basis of specific identification of cost and are reported
net of related amortization of deferred policy acquisition costs, amounts
credited to participating pension contractholder accounts, and amounts credited
to the policyholder dividend obligation.

Derivative Financial Instruments

The Company uses various derivative instruments to hedge and manage its
exposure to changes in interest rate levels, foreign exchange rates, and equity
market prices, and to manage the duration of assets and liabilities. All
derivatives are carried on the consolidated balance sheets at fair value.

In certain cases, the Company uses hedge accounting as allowed by Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," by designating derivative instruments as
either fair value hedges or cash flow hedges. For derivative instruments that
are designated and qualify as fair value hedges, the change in fair value of the
derivative instrument as well as the offsetting change in fair value of the
hedged item are recorded in net realized investment and other gains (losses).
Basis adjustments are amortized into income through net realized investment and
other gains and losses. For derivative instruments that are designated and
qualify as cash flow hedges, the effective portion of the change in fair value
of the derivative instrument is recorded in other comprehensive income, and then
reclassified into income when the hedged item affects income. Hedge
effectiveness is assessed quarterly by a variety of techniques including
regression analysis and cumulative dollar offset. In certain cases, there is no
hedge ineffectiveness because the derivative instrument was constructed such
that all the terms of the derivative exactly match the hedged risk in the hedged
item. If a hedge becomes ineffective, the hedge accounting described above
ceases.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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

Cash and Cash Equivalents

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

Deferred Policy Acquisition Costs

Costs that vary with, and are related primarily to, the production of new
business have been deferred to the extent that they are deemed recoverable. Such
costs include commissions, certain costs of policy issue and underwriting, and
certain agency expenses. For participating traditional life insurance policies,
such costs are amortized over the life of the contracts at a constant rate based
on the present value of the estimated gross margin amounts expected to be
realized over the lives of the contracts. Estimated gross margin amounts include
anticipated premiums and investment results less claims and administrative
expenses, changes in the net level premium reserve and expected annual
policyholder dividends. For universal life insurance contracts and
investment-type products, such costs are being amortized generally in proportion
to the present value of expected gross profits arising principally from
surrender charges and investment results, and mortality and expense margins. The
effects on the amortization of deferred policy acquisition costs of revisions to
estimated gross margins and profits are reflected in earnings in the period such
estimated gross margins and profits are revised. For non-participating term life
and long-term care insurance products, such costs are being amortized over the
premium-paying period of the related policies using assumptions consistent with
those used in computing policy benefit reserves. Amortization of deferred policy
acquisition costs was $219.6 million, $177.7 million and $174.7 million in 2001,
2000 and 1999, respectively.

Amortization of deferred policy acquisition costs is allocated to: (1) net
realized investment and other gains (losses) for those products in which such
gains (losses) have a direct impact on the amortization of deferred policy
acquisition costs; (2) unrealized investment gains and losses, net of tax, to
provide for the effect on the deferred policy acquisition cost asset that would
result from the realization of unrealized gains and losses on assets backing
participating traditional life insurance and universal life and investment-type
contracts; and (3) a separate component of benefits and expenses to reflect
amortization related to the gross margins or profits, excluding net realized
investment and other gains (losses), relating to policies and contracts in
force.

Net realized investment and other gains (losses) related to certain
products have a direct impact on the amortization of deferred policy acquisition
costs as such gains and losses affect the amount and timing of profit emergence.

Accordingly, to the extent that such amortization results from net realized
investment and other gains (losses), management believes that presenting
realized investment and other gains and losses net of related amortization of
deferred policy acquisition costs provides information useful in evaluating the
operating performance of the Company. This presentation may not be comparable to
presentations made by other insurers.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Reinsurance

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

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

Goodwill and Value of Business Acquired

The excess of cost over the fair value of the net assets of businesses
acquired (goodwill) was $116.0 million and $131.2 million at December 31, 2001
and 2000, respectively, and is included in other assets in the consolidated
balance sheets. Goodwill relating to acquisitions completed before July 1, 2001
is amortized on systematic bases over periods not exceeding 40 years, which
correspond with the benefits estimated to be derived from the acquisitions.
Accumulated amortization was $58.1 million and $48.0 million at December 31,
2001 and 2000, respectively. Amortization expense included in other operating
costs and expenses was $11.3 million, $11.2 million, and $8.5 million, in 2001,
2000 and 1999, respectively. The Company reevaluates the recoverability of
recorded goodwill based on the undiscounted cash flows of the related business
whenever significant events or changes indicate an impairment might exist. If
the undiscounted cash flows do not support the amount recorded, an impairment is
recognized by a charge to current operations to reduce the carrying value of the
goodwill based on the expected discounted cash flows of the related business.

The Company records an asset representing the present value of estimated
future profits of insurance policies inforce related to the businesses acquired.
This asset is recorded as the value of business acquired (VOBA) and amounted to
$76.2 million and $81.4 million at December 31, 2001 and 2000, respectively, and
is included in other assets in the consolidated balance sheets. VOBA is
amortized in proportion to the present value of expected gross profits.
Amortization expense included in other operating costs and expenses was $2.3
million, $4.2 million and $1.3 million in 2001, 2000 and 1999 respectively.

Separate Accounts

Separate accounts assets and liabilities reported in the accompanying
consolidated balance sheets represent funds that are administered and invested
by the Company to meet specific investment objectives of the contractholders.
Net investment income and net realized investment and other gains (losses)
generally accrue directly to such contractholders who bear the investment risk,
subject in some cases to minimum guaranteed rates. The assets of each separate
account are legally segregated and are not subject to claims that arise out of
any other business of the Company. Separate account assets are reported at fair
value. Deposits, net investment income and net realized investment and other
gains (losses) of separate accounts are not included in the revenues of the
Company. Fees charged to contractholders, principally mortality, policy
administration and surrender charges, are included in universal life and
investment-type product charges.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

future Policy Benefits and Policyholders' Funds

Future policy benefits for participating traditional life insurance
policies are based on the net level premium method. This net level premium
reserve is calculated using the guaranteed mortality and dividend fund interest
rates, which range from 2.5% to 8.0%. The liability for annual dividends
represents the accrual of annual dividends earned. Settlement dividends are
accrued in proportion to gross margins over the life of the contract.

For non-participating traditional life insurance policies, future policy
benefits are estimated using a net level premium method on the basis of
actuarial assumptions as to mortality, persistency, interest and expenses
established at policy issue. Assumptions established at policy issue as to
mortality and persistency are based on the Company's experience, which, together
with interest and expense assumptions, include a margin for adverse deviation.
Benefit liabilities for annuities during the accumulation period are equal to
accumulated contractholders' fund balances and after annuitization are equal to
the present value of expected future payments. Interest rates used in
establishing such liabilities range from 2.5% to 8.0% for life insurance
liabilities, from 2.0% to 14.2% for individual annuity liabilities and from 2.0%
to 11.3% for group annuity liabilities.

Future policy benefits for long-term care insurance policies are based on
the net level premium method. Assumptions established at policy issue as to
mortality, morbidity, persistency, interest and expenses, which include a margin
for adverse deviation, are based on estimates developed by management. Interest
rates used in establishing such liabilities range from 6.0% to 8.5%.

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

Estimates of future policy benefit reserves, claim reserves and expenses
are reviewed continually and adjusted as necessary; such adjustments are
reflected in current earnings. Although considerable variability is inherent in
such estimates, management believes that future policy benefit reserves and
unpaid claims and claims expense reserves are adequate.

Policyholders' funds for universal life and investment-type products,
including guaranteed investment contracts and funding agreements, are equal to
the policyholder account values before surrender charges. Policy benefits that
are charged to expense include benefit claims incurred in the period in excess
of related policy account balances and interest credited to policyholders'
account balances. Interest crediting rates range from 3.0% to 9.0% for universal
life products and from 2.0% to 14.7% for investment-type products.

Major components of policyholder funds presented in the consolidated
balance sheets are summarized as follows:

December 31
2001 2000
--------- -----------
(in millions)

Liabilities for policyholder funds
Guaranteed investment contracts....................... $ 6,583.5 $ 7,985.5
U.S. funding agreements............................... 67.1 80.9
Global funding agreements backing medium-term notes... 9,490.4 6,266.3
Other investment-type contracts....................... 2,247.7 2,341.8
--------- ---------
Total liabilities for investment type contracts...... 18,388.7 16,674.5
Liabilities for individual annuities.................. 56.6 62.2
Universal life and other reserves..................... 2,085.0 1,806.4
--------- ---------
Total liabilities for policyholder funds............. $20,530.3 $18,543.1
========= =========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company is authorized to issue up to $15.0 billion in global funding
agreements under two distribution programs, and through December 31, 2001, we
have $9.5 billion outstanding. Global funding agreements are investment products
which require the Company to pay a stated rate of interest on the principal
amount and to repay the principal at maturity. These agreements may not be
terminated prior to maturity by the Company or the contractholder. Claims for
principal and interest under these global funding agreements are afforded equal
priority to claims of life insurance and annuity policyholders under the
insolvency provisions of Massachusetts Insurance Laws. Under the Company's
programs, the global funding agreements are issued to special purpose entities.
The special purpose entities fund the purchase of the global funding agreement
through the issuance of medium-term notes to investors. These notes are
non-recourse to the Company. If the medium-term notes issued by the special
purpose entity are denominated in a foreign currency, the Company also enters
into a currency swap with the special purpose entity. Similarly, the Company may
enter into an interest rate swap with the special purpose entity to match the
interest rate characteristics of the global funding agreement to those of the
medium term note. As a result, the payment terms of any particular series of
notes issued by the special purpose entity correspond to the payment terms of
the global funding agreement and swap agreement(s), if any, that secure that
series.

Under the first program, established in May 1998 for $2.5 billion, expanded
to $7.5 billion in 1999, an affiliated offshore special purpose entity issued
medium-term notes in Europe, Asia and Australia. Through December 31, 2001,
there is $3.9 billion outstanding under this program. This special purpose
entity is consolidated in the Company's financial statements. The medium-term
notes issued by this special purpose entity are reported with global funding
agreements in the Company's consolidated balance sheet.

Under the second program, established in June 2000, for $5.0 billion,
expanded to $7.5 billion in 2001, the unaffiliated special purpose entity issued
medium-term notes in Europe, Asia, and to institutional investors in the United
States. Through December 31, 2001, there is $5.6 billion outstanding under this
program. Although this special purpose entity is not consolidated in the
Company's financial statements, the funding agreements backing the related
medium-term notes are included in policyholders' funds in the Company's
consolidated balance sheets.

At December 31, 2001, the annual contractual maturities of global funding
agreements on notes issued under both programs were as follows: 2002 - $236.6
million; 2003 - $1,227.8 million; 2004 - $1,227.6 million; 2005 - $1,246.3
million; 2006 - $2,047.9 million; 2007 and thereafter - $3,504.2 million.

Participating Insurance

Participating business represents approximately 76.6%, 86.3%, and 88.1% of
the Company's life insurance in force, 98.1%, 97.9%, and 98.3% of the number of
life insurance policies in force, and 92.1%, 99.6% and 97.4%, of life insurance
premiums in 2001, 2000 and 1999, respectively.

The portion of earnings allocated to participating pension contractholders
and closed block policyholders that cannot be expected to inure to the Company
is excluded from net income and shareholder's equity.

The amount of policyholders' dividends to be paid is approved annually by
the Company's Board of Directors. The determination of the amount of
policyholder dividends is complex and varies by policy type. In general, the
aggregate amount of policyholders' dividends is related to actual interest,
mortality, morbidity, persistency and expense experience for the year and is
also based on management's judgment as to the appropriate level of statutory
surplus to be retained by the Company. For policies included in the closed
block, expense experience is not included in determining policyholders'
dividends.

Revenue Recognition

Premiums from participating and non-participating traditional life
insurance and annuity policies with life contingencies are recognized as income
when due.

Premiums from universal life and investment-type contracts are reported as
deposits to policyholders' account balances. Revenues from these contracts
consist of amounts assessed during the period against policyholders' account
balances for mortality charges, policy administration charges and surrender
charges.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Premiums for contracts with a single premium or a limited number of premium
payments, due over a significantly shorter period than the total period over
which benefits are provided, are recorded in income when due. The portion of
such premium that is not required to provide for all benefits and expenses is
deferred and recognized in income in a constant relationship to insurance in
force or, for annuities, the amount of expected future benefit payments.

Premiums from long-term care insurance contracts are recognized as income
when due. Premiums from group life and health insurance contracts are recognized
as income over the period to which the premiums relate in proportion to the
amount of insurance protection provided.

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

Federal Income Taxes

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

Foreign Currency Translation

The assets and liabilities of operations in foreign currencies are
translated into United States dollars at current exchange rates. Revenues and
expenses are translated at average rates during the year. The resulting net
translation adjustments for each year are accumulated and included in
shareholder's equity. Gains or losses on foreign currency transactions are
reflected in earnings.

Severance

As part of JHFS's ongoing Competitive Position Project, it has initiated a
restructuring plan to reduce costs and increase future operating efficiency by
consolidating portions of its operations. The plan consists primarily of
reducing staff in the home office and terminating certain operations outside the
home office.

In connection with the restructuring plan, approximately 872 employees have
been or will be terminated. These employees are or have been associated with
operations in the Boston office and outside the home office. As of December 31,
2001 and 2000, the liability for employee termination costs, included in other
liabilities was $18.0 million and $20.6 million, respectively. Employee
termination costs, included in other operating costs and expenses, were $40.0
million, $18.8 million and $26.3 million for the years ended December 31, 2001,
2000 and 1999, respectively. Of the total number of employees affected,
approximately 855 employees were terminated as of December 31, 2001, having
received benefit payments of approximately $67.8 million.

On January 7, 2002, as part of its ongoing expense reduction program, the
Company eliminated an additional 160 jobs. During the first quarter of 2002,
affected employees will receive severance benefits and outplacement services of
approximately $5.7 million.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cumulative Effect of Accounting Changes

During the first quarter of 2001, the Company changed the method of
accounting for the recognition of deferred gains and losses considered in the
calculation of the annual expense for its employee pension plan under SFAS No.
87, "Employers' Accounting for Pensions," and for its postretirement health and
welfare plans under SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." The Company changed the method of recognizing
gains and losses from deferral within a 10% corridor and amortization of gains
outside this corridor over the future working careers of the participants to
deferral within a 5% corridor and amortization of gains and losses outside this
corridor over the future working careers of the participants. The new method is
preferable because in the Company's situation, it produces results that more
closely match current economic realities of the Company's retirement and welfare
plans through the use of the current fair values of assets while still
mitigating the impact of extreme gains and losses. As a result, on January 1,
2001, the Company recorded a credit of $18.6 million (net of tax of $9.9
million), related to its employee benefit pension plans, and a credit of $4.7
million (net of tax of $2.6 million), related to its postretirement health and
welfare plans. The total credit recorded as a cumulative effect of an accounting
change was $23.3 million (net of tax of $12.5 million) for the year ended
December 31, 2001. This change in accounting increased net income for the year
ended December 31, 2001 by $4.4 million. The unaudited pro forma results for the
years ended December 31, 2000 and 1999, assuming this change in accounting had
taken place as of the beginning of 2000 and 1999, would not be materially
different from the reported results.

On January 1, 2001, the Company adopted SFAS No. 133, as amended by SFAS
No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities." The adoption of SFAS No. 133, as amended, resulted in a charge to
operations accounted for as a cumulative effect of accounting change of $16.1
million (net of tax benefit of $8.3 million) as of January 1, 2001. In addition,
as of January 1, 2001, a $227.6 million (net of tax of $122.6 million)
cumulative effect of accounting change was recorded in other comprehensive
income for (1) the transition adjustment in the adoption of SFAS No. 133, as
amended, an increase of $40.5 million (net of tax of $21.8 million), and (2) the
reclassification of $12.1 billion in securities from the held-to-maturity
category to the available-for-sale category, an increase of $187.1 million (net
of tax of $100.8 million).

In April 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) 98-5, "Reporting the Costs of
Start-Up Activities." The SOP, which was adopted by the Company on January 1,
1999, required that start-up costs capitalized prior to January 1, 1999 be
written-off immediately and any start-up costs incurred on or after January 1,
1999 be expensed as incurred. The adoption of SOP 98-5 resulted in a charge to
operations of $9.7 million (net of tax of $5.9 million) and was accounted for as
a cumulative effect of an accounting change.

Recent Accounting Pronouncements

In September 2001, the Financial Accounting Standard Board's (FASB's)
Emerging Issues Task Force reached a consensus on Issue 01-10, "Accounting for
the Impact of the Terrorist Attacks of September 11, 2001." Issue 01-10 presents
guidance relative to accounting for and financial reporting of the events of
September 11, 2001 (the Events), including both how and when to measure, record
and report losses and any resulting liabilities which are directly attributable
to the Events. Based on a comprehensive review of the Company's operations, the
Company believes that the Events had no material financial impact on the
Company's results of operations or financial position.

In June 2001, the FASB issued SFAS No. 141, "Business Combinations." SFAS
No. 141 requires that all business combinations be accounted for under a single
method, the purchase method. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also clarifies the criteria to recognize intangible
assets separately from goodwill, and prohibits the amortization of goodwill
relating to acquisitions completed after July 1, 2001. SFAS No. 141 is effective
for business combinations initiated after June 30, 2001.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 requires that goodwill and other intangible assets deemed
to have indefinite lives no longer be amortized to earnings, but instead be
reviewed at least annually for impairment. Intangible assets with definite lives
will continue to be amortized over their useful lives. SFAS No. 142 will be
effective January 1, 2002. The Company estimates that adoption of SFAS No. 142
on January 1, 2002, and the cessation of amortization of previously amortizable
goodwill, will result in an increase in net income of $7.8 million (net of tax
of $3.4 million) for the year ending December 31, 2002. During early 2002, the
Company will perform initial impairment tests of goodwill as of January 1, 2002
based on the guidance in SFAS No. 142. The Company plans on evaluating the
goodwill of each reporting unit for impairment using valuations of reporting
units based on earnings and book value multiples and by reference to similar
multiples of publicly traded peers. Any goodwill impairments resulting from
these initial impairment tests would be recorded as the cumulative effect of a
change in accounting principle. The Company has conducted preliminary impairment
tests which indicated no impairments of goodwill. The Company does not expect
the impact of the impairment tests required under SFAS No. 142 to have a
material impact on its results of operations, earnings or financial position.

In January 2001, the FASB's Emerging Issues Task Force (EITF) reached a
consensus on Issue No. 99-20, "Recognition of Interest Income and Impairment on
Purchased and Retained Beneficial Interests in Securitized Financial Assets."
Issue 99-20 requires investors in certain asset-backed securities to record
changes in their estimated yield on a prospective basis and specifies evaluation
methods with which to evaluate these securities for an other-than-temporary
decline in value. The adoption of EITF 99-20 did not have a material financial
impact on the Company's results of operations or financial position.

In December 2000, the AICPA issued SOP 00-3, "Accounting by Insurance
Enterprises for Demutualizations and Formations of Mutual Insurance Holding
Companies and Certain Long-Duration Participating Contracts." The SOP, which was
adopted with respect to accounting for demutualization expenses by the Company
on December 31, 2000, requires that demutualization related expenses be
classified as a single line item within income from continuing operations and
should not be classified as an extraordinary item. The adoption of SOP 00-3
resulted in the reclassification of demutualization expenses previously recorded
as an extraordinary item in 1999 of $93.6 million (net of tax of $2.6 million).
On October 1, 2001, the Company adopted the remaining provisions of SOP 00-3
which required the reclassification of $9,710.0 million and $12,035.9 million of
closed block assets and liabilities, respectively at December 31, 2000, and
$1,467.7 million and $1,343.6 million of closed block revenues, and benefits and
expenses, respectively, for the period from February 1, 2000 (date of
demutualization) to December 31, 2000, all of which were reclassified to other
existing asset, liability, revenue, and benefit and expense accounts. The
required implementation of SOP 00-3 also resulted in a reduction of net income
of $20.2 million (net of tax of $6.6 million), for the period from February 1,
2000 to December 31, 2000 and $3.4 million (net of tax of $1.8 million), for the
nine months ended September 30, 2001. Finally, adoption also resulted in the
recognition of a policyholder dividend obligation of $77.0 million at December
31, 2000, which represents cumulative actual closed block earnings in excess of
expected periodic amounts calculated at the date of the demutualization. See
Note 6 for a summary description of the closed block assets, liabilities,
revenues and expenses.

In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities," which
replaces SFAS No. 125, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities." SFAS No. 140 provides new accounting
and reporting standards which are based on consistent application of a financial
components approach that focuses on control. Under this approach, after a
transfer of financial assets, the Company recognizes the financial and servicing
assets it controls and the liabilities it has incurred, derecognizes financial
assets when control has been surrendered, and derecognizes liabilities when
extinguished. SFAS No. 140 provides consistent standards for distinguishing
transfers of financial assets that are sales from transfers that are secured
borrowings. SFAS No. 140 is effective for transfers and servicing of financial
assets and extinguishments of liabilities occurring after March 31, 2001. The
adoption of SFAS No. 140 did not have a material impact on the Company's results
of operations or financial position.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting Principles Board Opinion (APB) No. 25, "Accounting for Stock
Issued to Employees," provides guidance on how to account for the issuance of
stock and stock options to employees. Certain of the Company's employees are
compensated, in part, with non-vested stock and stock options, issued by the
parent company, JHFS, and the related expenses are borne by the Company. The
Company adopted APB No. 25 upon its demutualization and upon JHFS' IPO effective
February 1, 2000. Compensation cost for stock options, if any, is measured as
the excess of the quoted market price of JHFS' stock at the date of grant over
the amount an employee must pay to acquire the stock. Compensation cost is
recognized over the requisite vesting periods based on market value on the date
of grant. APB No. 25 was amended by SFAS No. 123, "Accounting for Stock-Based
Compensation," to require pro forma disclosures of net income and earnings per
share as if a "fair value" based method was used. On March 31, 2000, the FASB
issued FASB Interpretation No. 44, "Accounting for Certain Transactions
Involving Stock Compensation, an interpretation of APB No. 25." The
Interpretation clarifies guidance for certain issues that arose in the
application of APB No. 25. The Company was required to adopt the Interpretation
on July 1, 2000. Interpretation No. 44 did not have a material impact on the
Company's results of operations or financial position.

In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements."
SAB 101 clarifies the SEC staff's views on applying generally accepted
accounting principles to revenue recognition in financial statements. In March
2000, the SEC issued an amendment, SAB 101A, which deferred the effective date
of SAB 101. In June 2000, the SEC issued a second amendment, SAB 101B, which
deferred the effective date of SAB 101 to no later than the fourth fiscal
quarter of fiscal years beginning after December 15, 1999. The Company adopted
SAB 101 in the fourth quarter of fiscal 2000. The adoption of SAB 101 did not
have a material impact on the Company's results of operations or financial
position.

Codification

In March 1998, the National Association of Insurance Commissioners (NAIC)
adopted codified statutory accounting principles (Codification) effective
January 1, 2001. Codification changes prescribed statutory accounting practices
and resulted in changes to the accounting practices that the Company and its
domestic life insurance subsidiaries use to prepare their statutory-basis
financial statements. The states of domicile of the Company and its domestic
life insurance subsidiaries have adopted Codification as the prescribed basis of
accounting on which domestic insurers must report their statutory-basis results
effective January 1, 2001. The cumulative effect of changes in accounting
principles adopted to conform to the requirements of Codification is reported as
an adjustment to surplus in the statutory-basis financial statements as of
January 1, 2001. Implementation of Codification did not have a material impact
on the Company's domestic life insurance subsidiaries' statutory-basis capital
and surplus, and these companies remain in compliance with all regulatory and
contractual obligations.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 2. RELATED PARTY TRANSACTIONS

Certain directors of the Company are members or directors of other entities
that periodically perform services for or have other transactions with Company.
Such transactions are either subject to bidding procedures or are otherwise
entered into on terms comparable to those that would be available to unrelated
third parties and are not material to the Company's results of operations or
financial condition.

The Company provides certain administrative and asset management services
to its pension plans and employee welfare trust. Fees paid to the Company for
these services were $8.4 million, $6.4 million and $6.5 million during the years
ended December 31, 2001, 2000 and 1999, respectively.

The Company provides JHFS with personnel, property and facilities in
carrying out certain of its corporate functions. JHFS determines fees, annually,
for these services and facilities based on a number of criteria. The amount of
these service fees charged to JHFS were $28.5 million and $19.8 million for the
years ended December 31, 2001 and 2000, respectively. These fees are included as
a reduction of other operating costs and expenses in the consolidated statements
of income.

The Company has reinsured certain portions of its long term care and group
pension businesses with John Hancock Reassurance Company, Ltd. of Bermuda
(JHReCo), a wholly owned subsidiary of JHFS. The Company entered into these
reinsurance contracts in order to facilitate its capital management process.
These reinsurance contracts are primarily written on a funds withheld basis
where the related financial assets remain invested at the Company. As a result,
the Company recorded accounts payable to JHReCo for coinsurance amounts withheld
of $1,158.9 million and $633.2 million at December 31, 2001 and 2000,
respectively, which are included with other liabilities in the consolidated
balance sheets, and recorded reinsurance recoverable from JHReCo of $1,504.6
million and $870.4 million at December 31, 2001 and 2000, respectively, which
are included with other reinsurance recoverables on the consolidated balance
sheets. Premiums ceded to JHReCo were $740.8 million, $396.7 million and $306.2
million during 2001, 2000 and 1999 respectively.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3. INVESTMENTS

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

Years Ended December 31
2001 2000 1999
--------- --------- ---------
(in millions)
Net Investment Income
Fixed maturities.......................... $2,721.2 $2,456.2 $2,407.0
Equity securities......................... 29.7 23.3 19.2
Mortgage loans on real estate............. 774.4 796.2 750.7
Real estate............................... 67.7 82.7 147.3
Policy loans.............................. 118.4 112.7 105.3
Short-term investments.................... 73.9 147.1 83.7
Other..................................... 101.4 200.7 161.8
-------- -------- --------
Gross investment income................... 3,886.7 3,818.9 3,675.0
Less investment expenses.............. 240.5 255.0 336.1
-------- -------- --------
Net investment income...................... $3,646.2 $3,563.9 $3,338.9
======== ======== ========
Net realized investment and other gains
(losses), net of related amortization of
deferred policy acquisition costs, amounts
credited to the policyholder dividend
obligation and amounts credited to
participating pension contractholders
Fixed maturities.......................... $ (351.1) $ (135.3) $ (34.2)
Equity securities......................... 201.8 196.1 109.7
Mortgage loans on real estate and real
estate to be disposed of................. (60.4) (15.2) 141.3
Derivatives and other invested assets..... (40.2) 44.3 37.8
Amortization adjustment for deferred policy
acquisition costs........................ 29.4 9.4 (49.7)
Amounts credited to the policyholder
dividend obligation...................... 17.0 (14.1) --
Amounts credited to participating pension
contractholders.......................... (42.3) (6.9) (35.3)
-------- -------- --------
Net realized investment and other gains
(losses),
net of related amortization of deferred
policy
acquisition costs, amounts credited to the
policyholder
dividend obligation and amounts credited to
participating
pension contractholders................... $ (245.8) $ 78.3 $ 169.6
======== ======== ========

Gross gains of $ 349.9 million in 2001, $294.6 million in 2000 and $186.4
million in 1999, and gross losses of $119.0 million in 2001, $123.6 million in
2000 and $173.7 million in 1999, were realized on the sale of available-for-sale
securities.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3. INVESTMENTS (continued)

The Company's investments in held-to-maturity securities and
available-for-sale securities are summarized below:

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ----------
(in millions)
December 31, 2001
Held-to-Maturity:
Corporate securities......... $ 1,073.9 $ 28.3 $ 15.2 $ 1,087.0
Mortgage-backed securities... 844.9 14.5 43.0 816.4
Obligations of states and
political subdivisions...... 4.7 0.1 -- 4.8
--------- -------- -------- ---------
Total fixed maturities
held-to-maturity.......... $ 1,923.5 $ 42.9 $ 58.2 $ 1,908.2
========= ======== ======== =========
Available-for-Sale:
Corporate securities......... $29,680.2 $1,103.5 $ 879.1 $29,904.6
Mortgage-backed securities... 5,252.7 125.1 98.7 5,279.1
Obligations of states and
political subdivisions...... 93.3 5.5 0.2 98.6
Debt securities issued by
foreign governments......... 457.1 44.7 4.0 497.8
U.S. Treasury securities and
obligations of U.S.
government corporations and
agencies.................... 294.7 3.8 6.5 292.0
--------- -------- -------- ---------
Fixed maturities
available-for-sale.......... 35,778.0 1,282.6 988.5 36,072.1
Equity securities............ 433.1 175.5 46.3 562.3
--------- -------- -------- ---------
Total fixed maturities and
equity securities
available-for-sale........ $36,211.1 $1,458.1 $1,034.8 $36,634.4
========= ======== ======== =========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3. INVESTMENTS (continued)

Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ----------
(in millions)
December 31, 2000
Held-to-Maturity:
Corporate securities......... $12,834.7 $553.7 $698.4 $12,690.0
Mortgage-backed securities... 1,202.5 11.5 53.0 1,161.0
Obligations of states and
political subdivisions..... 102.3 3.1 0.9 104.5
Debt securities issued by
foreign governments......... 5.6 4.7 -- 10.3
--------- ------ ------ ---------
Total fixed maturities
held-to-maturity......... $14,145.1 $573.0 $752.3 $13,965.8
========= ====== ====== =========
Available-for-Sale:
Corporate securities......... $10,948.3 $457.1 $478.2 $10,927.2
Mortgage-backed securities... 4,105.0 94.7 33.0 4,166.7
Obligations of states and
political subdivisions...... 25.3 1.8 -- 27.1
Debt securities issued by
foreign governments......... 546.0 67.3 12.0 601.3
U.S. Treasury securities and
obligations of U.S.
government corporations and
agencies.................... 197.8 5.4 0.1 203.1
--------- ------ ------ ---------
Fixed maturities
available-for-sale.......... 15,822.4 626.3 523.3 15,925.4
Equity securities............ 587.6 348.5 90.0 846.1
--------- ------ ------ ---------
Total fixed maturities and
equity securities
available-for-sale
governments............... $16,410.0 $974.8 $613.3 $16,771.5
========= ====== ====== =========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3. INVESTMENTS (continued)

The amortized cost and fair value of fixed maturities at December 31, 2001,
by contractual maturity, are shown below:

Amortized Fair
Cost Value
---------- ----------
(in millions)
Held-to-Maturity:
Due in one year or less............................... $ 62.9 $ 68.0
Due after one year through five years................. 15.4 22.2
Due after five years through ten years................ 67.7 65.4
Due after ten years................................... 932.6 936.2
--------- ---------
1,078.6 1,091.8
Mortgage-backed securities............................ 844.9 816.4
--------- ---------
Total................................................. $ 1,923.5 $ 1,908.2
========= =========
Available-for-Sale:
Due in one year or less............................... $ 1,861.7 $ 1,905.8
Due after one year through five years................. 9,874.3 10,073.3
Due after five years through ten years................ 10,902.5 10,927.6
Due after ten years................................... 7,886.8 7,886.3
--------- ---------
30,525.3 30,793.0
Mortgage-backed securities............................ 5,252.7 5,279.1
--------- ---------
Total................................................. $35,778.0 $36,072.1
========= =========

Expected maturities may differ from contractual maturities because eligible
borrowers may exercise their right to call or prepay obligations with or without
call or prepayment penalties.

The sale of fixed maturities held-to-maturity relate to certain securities
with amortized cost of $24.3 million for the year ended December 31, 1999, which
were sold due to a significant decline in the issuers' credit quality or as part
of the sale of the property and casualty operations in 1999. The related net
realized investment and other gains on the sales were $0.9 million in 1999.

The change in net unrealized gains (losses) on trading securities that has
been included in earnings during 2001, 2000 and 1999 amounted to $(1.8) million,
$0.1 million and $(0.1) million, respectively.

The Company participates in a security lending program for the purpose of
enhancing income on securities held. At December 31, 2001 and 2000, $775.4
million and $88.6 million, respectively, of the Company's securities, at market
value, were on loan to various brokers/dealers, and were fully collateralized by
cash and highly liquid securities. The market value of the loaned securities is
monitored on a daily basis, and the collateral is maintained at a level of at
least 102.0% of the loaned securities' market value.

For 2001, 2000 and 1999, investment results passed through to participating
pension contractholders as interest credited to policyholders' account balances
amounted to $170.5 million, $171.7 million and $180.9 million, respectively.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3. INVESTMENTS (continued)

Mortgage loans on real estate are evaluated periodically as part of the
Company's loan review procedures and are considered impaired when, based on
current information and events, it is probable that the Company will be unable
to collect all amounts due according to the contractual terms of the loan
agreement. The allowance for losses is maintained at a level believed adequate
by management to absorb estimated probable credit losses that exist at the
balance sheet date. Management's periodic evaluation of the adequacy of the
allowance for losses is based on the Company's past loan loss experience, known
and inherent risks in the portfolio, adverse situations that may affect the
borrower's ability to repay (including the timing of future payments), the
estimated value of the underlying collateral, composition of the loan portfolio,
current economic conditions and other relevant factors. This evaluation is
inherently subjective as it requires estimating the amounts and timing of future
cash flows expected to be received on impaired mortgage loans that may be
susceptible to significant change.

Changes in the allowance for probable losses on mortgage loans on real
estate and real estate to be disposed of are summarized below.

Balance at Balance at
Beginning End
of Year Additions Deductions of Year
---------- --------- ---------- -----------
(in millions)
Year ended December 31, 2001
Mortgage loans on real estate $ 81.6 $37.8 $ 6.6 $112.8
Real estate to be disposed of 43.5 46.0 5.9 83.6
------ ----- ------ ------
Total........................ $125.1 $83.8 $ 12.5 $196.4
====== ===== ====== ======
Year ended December 31, 2000
Mortgage loans on real estate $107.9 $ 4.6 $ 30.9 $ 81.6
Real estate to be disposed of 58.1 17.1 31.7 43.5
------ ----- ------ ------
Total........................ $166.0 $21.7 $ 62.6 $125.1
====== ===== ====== ======
Year ended December 31, 1999
Mortgage loans on real estate $ 96.0 $38.4 $ 26.5 $107.9
Real estate to be disposed of 112.0 22.5 76.4 58.1
------ ----- ------ ------
Total........................ $208.0 $60.9 $102.9 $166.0
====== ===== ====== ======

At December 31, 2001 and 2000, the total recorded investment in mortgage
loans that are considered to be impaired under SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan," along with the related provision for losses
were as follows:

December 31
2001 2000
-------- --------
(in millions)
Impaired mortgage loans on real estate with provision for
losses.................................................. $ 92.5 $ 32.4
Provision for losses..................................... (42.6) (14.9)
------ ------
Net impaired mortgage loans on real estate............... $ 49.9 $ 17.5
====== ======

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3. INVESTMENTS (continued)

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

Years Ended December 31
2001 2000 1999
------ ------- -------
(in millions)
Average recorded investment in impaired loans..... $62.5 $100.3 $135.5
Interest income recognized on impaired loans...... 8.4 2.9 4.9

The payment terms of mortgage loans on real estate may be restructured or
modified from time to time. Generally, the terms of the restructured mortgage
loans call for the Company to receive some form or combination of an equity
participation in the underlying collateral, excess cash flows or an effective
yield at the maturity of the loans sufficient to meet the original terms of the
loans.

Restructured commercial mortgage loans aggregated $56.0 million and $60.4
million as of December 31, 2001 and 2000, respectively. The expected gross
interest income that would have been recorded had the loans been current in
accordance with the original loan agreements and the actual interest income
recorded were as follows:

Years Ended December 31
2001 2000 1999
------- ------- -------
(in millions)
Expected......................................... $5.0 $5.2 $11.1
Actual........................................... 3.8 4.7 7.2

At December 31, 2001, the mortgage portfolio was diversified by specific
collateral property type and geographic region as displayed below:

Collateral Carrying
Property Tytpe Amount
- ---------------------- -------------
(in millions)
Apartments........... $1,601.7
Hotels............... 451.6
Industrial........... 809.8
Office buildings..... 2,601.5
Retail............... 1,429.7
Multi family......... 1.8
Mixed Use............ 108.0
Agricultural......... 2,532.3
Other................ 243.4

Allowance for losses. (112.8)
--------
Total................ $9,667.0
========

Geographic Carrying
Concentration Amount
- ---------------------- -------------
(in millions)
East North Central.... $1,072.5
East South Central.... 490.6
Middle Atlantic....... 1,490.4
Mountain.............. 417.4
New England........... 891.1
Pacific............... 1,823.1
South Atlantic........ 2,097.5
West North Central.... 385.1
West South Central.... 907.0
Canada/Other.......... 205.1
Allowance for losses.. (112.8)
--------
Total................. $9,667.0
========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3. INVESTMENTS (continued)

Mortgage loans with outstanding principal balances of $2.0 million, bonds
with amortized cost of $388.7 million and real estate with a carrying value of
$0.5 million were non-income producing for the year ended December 31, 2001.

Depreciation expense on investment real estate was $4.6 million, $7.9
million, and $7.1 million in 2001, 2000, and 1999, respectively. Accumulated
depreciation was $65.1 million and $60.9 million at December 31, 2001 and 2000,
respectively.

The Company sold $542.9 million, $359.2 million, and $172.0 million of
commercial mortgage loans in securitization transactions in 2001, 2000, and
1999, respectively, for which it received net proceeds of $546.1 million, $362.4
million and $175.5 million, in 2001, 2000 and 1999, respectively. During 2001,
2000 and 1999, the Company recognized pre-tax gains of $3.2 million, $3.2
million and $3.5 million, respectively, related to these transactions.

As a result of these securitizations, the Company retained mortgage
servicing responsibilities which were recorded as servicing assets. These
servicing assets were valued at $1.2 million and $0.8 million at December 31,
2001 and 2000, respectively.

Investments in other assets, which include unconsolidated joint ventures,
partnerships, and limited liability corporations, accounted for by using the
equity method of accounting totaled $1,062.1 million and $826.5 million at
December 31, 2001 and 2000, respectively. Total combined assets of such
investments were $12,541.6 million and $5,040.1 million (consisting primarily of
investments), and total combined liabilities were $1,108.6 million and $823.3
million (including $580.0 million and $354.0 million of notes payable) at
December 31, 2001 and 2000, respectively. Total combined revenues and expenses
of these investments in 2001 were $942.5 million and $645.2 million,
respectively, resulting in $297.3 million of total combined income from
operations. Total combined revenues and expenses were $508.0 million and $172.7
million, respectively, resulting in $335.3 million of total combined income from
operations in 2000. Net investment income on investments accounted for using the
equity method totaled $56.4 million, $143.8 million and $65.1 million in 2001,
2000, and 1999 respectively.

NOTE 4. DERIVATIVES AND HEDGING INSTRUMENTS

The fair value of derivative instruments classified as assets at December
31, 2001 was $331.2 million, and appears on the consolidated balance sheet in
other assets. The fair value of derivative instruments classified as liabilities
at December 31, 2001 was $580.0 million, and appears on the consolidated balance
sheet in other liabilities.

Fair Value Hedges

The Company uses interest rate futures contracts and interest rate swap
agreements as part of its overall strategies of managing the duration of assets
and liabilities or the average life of certain asset portfolios to specified
targets. Interest rate swap agreements are contracts with a counterparty to
exchange interest rate payments of a differing character (e.g., fixed-rate
payments exchanged for variable-rate payments) based on an underlying principal
balance (notional principal). The net differential to be paid or received on
interest rate swap agreements is accrued and recognized as a component of net
investment income.

The Company also manages interest rate exposure by using interest rate swap
agreements to modify certain liabilities, such as fixed rate debt and Constant
Maturity Treasuries (CMT) indexed liabilities, by converting them to a
LIBOR-based floating rate.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 4. DERIVATIVES AND HEDGING INSTRUMENTS

The Company enters into interest rate cap agreements, cancelable interest
rates swap agreements, and written swaptions to manage the interest rate
exposure of options that are embedded in certain assets and liabilities. A
written swaption obligates the Company to enter into an interest rate agreement
on the expiration date, contingent on future interest rates. Interest rate cap
and floor agreements are contracts with a counterparty which require the payment
of a premium for the right to receive payments for the difference between the
cap or floor interest rate and a market interest rate on specified future dates
based on an underlying principal balance (notional principal). Amounts earned on
interest rate cap and floor agreements and swaptions are recorded as an
adjustment to net investment income.

The Company uses equity collar agreements to reduce its equity market
exposure with respect to certain common stock investments that the Company
holds. A collar consists of a written call option that limits the Company's
potential for gain from appreciation in the stock price as well as a purchased
put option that limits the Company's potential for loss from a decline in the
stock price.

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

For the year ended December 31, 2001, the Company recognized a net loss of
$16.5 million related to the ineffective portion of its fair value hedges, and a
net gain of $1.9 million, related to the portion of the hedging instruments that
were excluded from the assessment of hedge effectiveness. Both of these amounts
are recorded in net realized investment and other gains and losses. For the year
ended December 31, 2001, all of the Company's hedged firm commitments qualified
as fair value hedges.

Cash Flow Hedges

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

The Company used interest rate futures contracts to hedge the variable cash
flows associated with variable benefit payments that it will make on certain
annuity contracts. Amounts are reclassified from other comprehensive income when
benefit payments are made.

The Company used interest rate floor agreements to hedge the interest rate
risk associated with minimum interest rate guarantees in certain of its life
insurance and annuity businesses. Amounts are reclassified from other
comprehensive income if interest rates fall below certain levels.

For the year ended December 31, 2001, the Company recognized a loss of $0.2
million related to the ineffective portion of its cash flow hedges, and a net
gain of $0.4 million related to the portion of the hedging instruments that was
excluded from the assessment of hedge effectiveness. Both of these amounts are
recorded in net realized investment and other gains and losses. For the year
ended December 31, 2001, all of the Company's hedged forecast transactions
qualified as cash flow hedges.

For the year ended December 31, 2001, a net loss of $0.2 million was
reclassified from other accumulated comprehensive income to earnings. It is
anticipated that approximately $0.6 million of net gains will be reclassified
from other accumulated comprehensive income to earnings within the next twelve
months. The maximum length for which variable cash flows are hedged is 24 years.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 4. DERIVATIVES AND HEDGING INSTRUMENTS (continued)

For the year ended December 31, 2001, none of the Company's cash flow
hedges have been discontinued because it was probable that the original
forecasted transactions would not occur by the end of the originally specified
time period documented at inception of the hedging relationship.

The transition adjustment for the adoption of SFAS No. 133, as amended,
resulted in an increase in other comprehensive income of $23.0 million (net of
tax of $12.3 million) representing the accumulation in other comprehensive
income of the effective portion of the Company's cash flow hedges as of January
1, 2001. For the year ended December 31, 2001, $3.8 million of loss (net of tax
of $2.1 million) representing the effective portion of the change in fair value
of derivative instruments designated as cash flow hedges was added to
accumulated other comprehensive income, resulting in a balance of $19.1 million
(net of tax of $10.3 million).

Derivatives Not Designated as Hedging Instruments

The Company enters into interest rate swap agreements, cancelable interest
rate swap agreements, interest rate futures contracts, and interest rate cap and
floor agreements to manage exposure to interest rates as described above under
Fair Value Hedges without designating the derivatives as hedging instruments.

NOTE 5. INCOME TAXES

The Company participates in the filing of a life/non-life consolidated
federal income tax return. The life company sub-group includes three domestic
life insurance companies (the Company, John Hancock Variable Life Insurance
Company and Investors Partner Life Insurance Company) and a Bermuda life
insurance company (John Hancock Reassurance Company, Ltd.) that is treated as a
U.S. company for federal income tax purposes. The non-life subgroup consists of
John Hancock Financial Services, Inc., John Hancock Subsidiaries, LLC and John
Hancock International Holdings, Inc.

In addition to taxes on operations, mutual life insurance companies are
charged an equity base tax. As the Company was a mutual life insurance company
for the entire year 1999, it was subject to the re-computation of its 1999
equity base tax liability in its 2000 tax return. The equity base tax is
determined by application of an industry-based earnings rate to mutual
companies' average equity base, as defined by the Internal Revenue Code. The
industry earnings rate is determined by the Internal Revenue Service (IRS) and
is not finalized until the subsequent year. The Company estimated its taxes for
the current year based on estimated industry earnings rates and revised these
estimates up or down when the earnings rates were finalized and published by the
IRS in the subsequent year.

Income before income taxes and cumulative effect of accounting changes
includes the following:

Years Ended December 31
2001 2000 1999
------- -------- --------
(in millions)
Domestic......................................... $761.8 $1,093.5 $210.7
Foreign.......................................... 5.6 7.6 6.4
------ -------- ------
Income before income taxes and cumulative effect
of accounting changes........................... $767.4 $1,101.1 $217.1
====== ======== ======

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 5. INCOME TAXES (continued)

The components of income taxes were as follows:

Years Ended December 31
2001 2000 1999
------- ------- ---------
(in millions)
Current taxes:
Federal......................................... $ (9.9) $ 15.7 $(34.1)
Foreign......................................... 3.1 1.2 2.3
State........................................... 4.6 12.0 5.8
------ ------ ------
(2.2) 28.9 (26.0)
Deferred taxes:
Federal......................................... 210.5 279.4 108.6
Foreign......................................... (0.9) 1.6 --
State........................................... (6.7) (1.0) (1.1)
------ ------ ------
202.9 280.0 107.5
------ ------ ------
Total income taxes............................... $200.7 $308.9 $ 81.5
====== ====== ======

A reconciliation of income taxes computed by applying the federal income
tax rate to income before income taxes and the consolidated income tax expense
charged to operations follows:

Years Ended December 31
2001 2000 1999
------- ------- ---------
(in millions)
Tax at 35%....................................... $268.6 $385.4 $ 76.0
Add (deduct):
Equity base tax................................. (13.4) (46.0) 22.2
Prior year taxes................................ 9.9 (0.3) 1.8
Tax credits..................................... (28.1) (20.6) (12.9)
Foreign taxes................................... 1.3 0.4 1.0
Tax exempt investment income.................... (25.7) (11.5) (14.4)
Non-taxable gain on sale of subsidiary.......... -- -- (15.4)
Disallowed demutualization expenses............. -- -- 31.1
Other........................................... (11.9) 1.5 (7.9)
------ ------ ------
Total income taxes............................ $200.7 $308.9 $ 81.5
====== ====== ======

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 5. INCOME TAXES (continued)

The significant components of the Company's deferred tax assets and
liabilities were as follows:

December 31
2001 2000
-------- --------
(in millions)
Deferred tax assets:
Policy reserve adjustments............................. $ 485.5 $ 492.2
Other postretirement benefits ......................... 136.6 148.9
Book over tax basis of investments..................... 418.1 299.5
Dividends payable to policyholders..................... 125.7 117.6
Interest............................................... 34.5 38.3
Other.................................................. 163.1 51.2
-------- --------
Total deferred tax assets 1,363.5 1,147.7
-------- --------
Deferred tax liabilities:
Deferred policy acquisition costs ..................... 824.5 649.1
Depreciation........................................... 214.2 211.7
Basis in partnerships ................................. 130.7 109.8
Market discount on bonds............................... 72.9 64.2
Pension plan expense................................... 133.6 104.0
Capitalized charges related to mutual funds............ 31.5 56.9
Lease Income........................................... 523.2 339.4
Unrealized gains....................................... 135.8 56.7
-------- --------
Total deferred tax liabilities....................... 2,066.4 1,591.8
-------- --------
Net deferred tax liabilities......................... $ 702.9 $ 444.1
======== ========

The Company made an income tax payment of $3.7 million , received an income
tax refund of $21.7 million and made an income tax payment of $83.4 million in
2001, 2000 and 1999, respectively.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 6. CLOSED BLOCK

As of February 1, 2000, the Company established a closed block for the
benefit of certain classes of individual or joint traditional participating
whole life insurance policies for which the Company had a dividend scale
payable in 1999 and individual term life insurance policies that were in force
on February 1, 2000. Assets were allocated to the closed block in an amount
that, together with anticipated revenues from policies included in the closed
block, was reasonably expected to be sufficient to support such business,
including provision for payment of benefits, direct asset acquisition and
disposition costs, and taxes, and for continuation of dividend scales payable
in 1999, assuming experience underlying such dividend scales continues. Assets
allocated to the closed block inure solely to the benefit of the holders of the
policies included in the closed block and will not revert to the benefit of the
shareholders of JHFS. No reallocation, transfer, borrowing, or lending of
assets can be made between the closed block and other portions of the Company's
general account, any of its separate accounts, or any affiliate of the Company
without approval of the Massachusetts Division of Insurance.

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

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

If actual cumulative earnings are greater than expected cumulative
earnings, only expected earnings will be recognized in income. Actual
cumulative earnings in excess of expected cumulative earnings represents
undistributed accumulated earnings attributable to policyholders, which are
recorded as a policyholder dividend obligation because the excess will be paid
to closed block policyholders as an additional policyholder dividend unless
otherwise offset by future performance of the closed block that is less
favorable than originally expected. If actual cumulative performance is less
favorable than expected, only actual earnings will be recognized in income.

The principal cash flow items that affect the amount of closed block assets
and liabilities are premiums, net investment income, purchases and sales of
investments, policyholders' benefits, policyholder dividends, premium taxes,
guaranty fund assessments, and income taxes. The principal income and expense
items excluded from the closed block are management and maintenance expenses,
commissions and net investment income and realized investment gains and losses
of investment assets outside the closed block that support the closed block
business, all of which enter into the determination of total gross margins of
closed block policies for the purpose of the amortization of deferred
acquisition costs. The amounts shown in the following tables for assets,
liabilities, revenues and expenses of the closed block are those that enter into
the determination of amounts that are to be paid to policyholders.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 6. CLOSED BLOCK (continued)

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

December 31, December 31,
2001 2000
------------ -------------
(in millions)
Liabilities
Future policy benefits............................ $10,198.7 $ 9,910.5
Policyholder dividend obligation.................. 251.2 77.0
Policyholders' funds.............................. 1,460.9 1,459.5
Policyholder dividends payable.................... 433.4 409.8
Other closed block liabilities.................... 53.7 84.6
--------- ---------
Total closed block liabilities................... 12,397.9 11,941.4
--------- ---------
Assets
Investments
Fixed maturities:
Held-to-maturity--at amortized cost
(fair value: 2001--$100.7; 2000--$2,327.4)...... 103.3 2,269.9
Available-for-sale--at fair value
(cost: 2001--$5,204.0; 2000--$2,378.7).......... 5,320.7 2,353.0
Equity securities:
Available-for-sale--at fair value
(cost: 2001--$8.8; 2000--$5.3)................... 13.4 6.3
Mortgage loans on real estate..................... 1,837.0 1,944.0
Policy loans... 1,551.9 1,540.6
Short-term investments............................ -- 62.1
Other invested assets............................. 83.1 40.7
--------- ---------
Total investments................................ 8,909.4 8,216.6
Cash and cash equivalents......................... 192.1 305.6
Accrued investment income......................... 158.9 149.3
Other closed block assets......................... 297.5 317.1
--------- ---------
Total closed block assets........................ 9,557.9 8,988.6
--------- ---------
Excess of reported closed block liabilities over
assets designated to the closed block............ 2,840.0 2,952.8
--------- ---------
Portion of above representing other comprehensive
income:
Unrealized appreciation (depreciation), net of
tax of $43.3 million and $(8.8) million at 2001
and 2000, respectively.......................... 80.1 (16.1)
Allocated to the policyholder dividend
obligation, net of tax $50.8 million and $4.7
million at 2001 and 2000, respectively.......... (94.4) (8.8)
--------- ---------
Total.......................................... (14.3) (24.9)
--------- ---------
Maximum future earnings to be recognized from
closed block
assets and liabilities........................ $ 2,825.7 $ 2,927.9
========= =========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 6. CLOSED BLOCK (continued)

December 31, December 31,
2001 2000
------------ -------------
(in millions)
Change in the policyholder dividend obligation:
Balance at beginning of period................. $ 77.0 --
Impact on net income before income taxes..... 42.5 $63.5
Unrealized investment gains (losses)......... 67.1 13.5
Cumulative effect of change in accounting
principle (1)............................... 64.6 --
------ -----
Balance at end of period.................... $251.2 $77.0
====== =====

(1) The cumulative effect of change in accounting principle represents the
impact of transferring fixed maturities from held-to-maturity to
available-for-sale as part of the adoption of SFAS No. 133 effective January 1,
2001. See Note 1.

For The period
Year February 1
Ended through
December 31, December 31,
2001 2000
------------ --------------
(in millions)
Revenues
Premiums ....................................... $ 940.0 $ 865.0
Net investment income........................... 667.5 591.6
Net realized investment and other gains
(losses), net of
amounts credited to the policyholder dividend
obligation of $(17.0) million and $14.1
million, respectively.......................... (3.6) (2.9)
Other closed block revenues..................... 0.6 (0.6)
-------- --------
Total closed block revenues.................... 1,604.5 1,453.1
Benefits and Expenses
Benefits to policyholders....................... 924.4 870.0
Change in policyholder dividend obligation...... 54.9 46.6
Other closed block operating costs and expenses (6.3) (10.0)
Dividends to policyholders...................... 474.9 407.1
-------- --------
Total benefits and expenses.................... 1,447.9 1,313.7
-------- --------
Closed block revenues, net of closed block
benefits and expenses,
before income taxes and cumulative effect of
accounting change.............................. 156.6 139.4
Income taxes, net of amounts credited to the
policyholder dividend obligation of $4.6
million and $2.8 million, respectively......... 53.0 52.3
-------- --------
Closed block revenues, net of closed block
benefits and expenses and income taxes, before
cumulative effect of accounting change........ 103.6 87.1
-------- --------
Cumulative effect of accounting change, net of
tax........................................... (1.4) --
-------- --------
Closed block revenues, net of closed block
benefits and expenses, income
taxes and the cumulative effect of accounting
change........................................ $ 102.2 $ 87.1
======== ========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 6. CLOSED BLOCK (continued)

Maximum future earnings from closed block assets and liabilities:

For the period
Year February 1
Ended through
December 31, December 31,
2001 2000
------------ ---------------
(in millions)
Beginning of period........................... $2,927.9 $3,015.0
End of period................................. 2,825.7 2,927.9
-------- --------
Change during period......................... $ 102.2 $ 87.1
======== ========

NOTE 7. DEBT AND LINE OF CREDIT

Short-term and long-term debt consists of the following:

December 31
2001 2000
--------- ---------
(in millions)
Short-term debt:
Commercial paper........................................ -- $222.3
Current maturities of long-term debt.................... $ 124.6 23.0
------- ------
Total short-term debt.................................... 124.6 245.3
------- ------
Long-term debt:
Surplus notes, 7.38% maturing in 2024................... 447.3 447.2
Notes payable, interest ranging from 5.43% to 14.0%, due
in varying amounts through 2007........................ 296.0 109.8
------- ------
Total long-term debt..................................... 743.3 557.0
Less current maturities.................................. (124.6) (23.0)
------- ------
Long-term debt........................................... 618.7 534.0
------- ------
Total debt............................................. $ 743.3 $779.3
======= ======

The Company issues commercial paper primarily to meet working capital
needs. The Company had no commercial paper outstanding at December 31, 2001.
The weighted-average interest rate for outstanding commercial paper at December
31, 2000 was 6.59%. The weighted-average life for outstanding commercial paper
at December 31, 2000 was approximately 11 days. Commercial paper borrowing
arrangements are supported by a syndicated line of credit.

The issuance of surplus notes was approved by the Massachusetts
Commissioner of Insurance, and any payments of interest or principal on the
surplus notes requires the prior approval of the Massachusetts Commissioner of
Insurance.

At December 31, 2001, the Company had a syndicated line of credit with a
group of banks totaling $1.0 billion, $500.0 million pursuant to a 364-day
commitment which expires on July 26, 2002 and $500.0 million pursuant to a
multi-year facility, which expires on August 3, 2005. The banks will commit,
when requested, to loan funds at prevailing interest rates as determined in
accordance with the line of credit agreement. Under the terms of the agreement,
the Company is required to maintain certain minimum levels of net worth and
comply with certain other covenants, which were met at December 31, 2001. At
December 31, 2001, the Company had no outstanding borrowings under the
agreement.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 7. DEBT AND LINE OF CREDIT (continued)

Aggregate maturities of long-term debt are as follows: 2002-$124.6 million;
2003-$32.2 million; 2004-$31.5 million; 2005-$25.4 million; 2006-$7.5 million
and thereafter-$522.1 million.

Interest expense on debt, included in other operating costs and expenses,
was $59.0 million, $62.6 million, and $70.1 million in 2001, 2000 and 1999,
respectively. Interest paid amounted to $55.8 million in 2001, $63.4 million in
2000, and $70.1 million in 1999.

NOTE 8. MINORITY INTEREST

Minority interest relates to preferred stock issued by Signature Tomato, a
subsidiary of Signature Fruit, a subsidiary of the Company, which acquired
certain assets and assumed certain liabilities out of bankruptcy proceedings of
Tri-Valley Growers, Inc., a cooperative association, and equity interests in
consolidated partnerships. For financial reporting purposes, the assets, the
liabilities, and earnings of Signature Fruit and the partnerships are
consolidated in the Company's financial statements.

In conjunction with the transaction discussed above, Signature Tomato, a
subsidiary of Signature Fruit, issued $2.1 million of 14.24% cumulative, voting
preferred stock in exchange for debt. In addition, Signature Fruit sold 3.0% of
its Class A membership shares to outside third parties with put options
exercisable in a period from one to three years from acquisition. All amounts
arising from these transactions have been included in minority interest in the
accompanying consolidated balance sheets.

The minority interest in the equity of consolidated partnerships of
approximately $26.1 million reflects the original investment by minority
shareholders in various consolidated partnerships, along with their proportional
share of the earnings or losses of these partnerships.

NOTE 9. REINSURANCE

The effect of reinsurance on premiums written and earned was as follows:

2001 2000 1999
Premiums Premiums Premiums
Written Earned Written Earned Written Earned
--------- --------- --------- --------- --------- -----------
(in millions)

Life, Health And
Annuity:
Direct................. $ 3,076.8 $ 3,080.7 $ 3,181.1 $ 3,180.3 $ 2,940.2 $ 2,938.3
Assumed................ 427.7 427.7 465.3 465.4 311.3 311.3
Ceded.................. (1,156.5) (1,156.5) (1,255.0) (1,255.0) (1,228.5) (1,228.5)
--------- --------- --------- --------- --------- ---------
Net life, health and
annuity premiums..... 2,348.0 2,351.9 2,391.4 2,390.7 2,023.0 2,021.1
--------- --------- --------- --------- --------- ---------
Property and casualty:
Direct................. -- -- -- -- -- --
Assumed................ -- -- -- -- 0.3 0.3
Ceded.................. -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net property and
casualty premiums -- -- -- -- 0.3 0.3
--------- --------- --------- --------- --------- ---------
Net premiums........ $ 2,348.0 $ 2,351.9 $ 2,391.4 $ 2,390.7 $ 2,023.3 $ 2,021.4
========= ========= ========= ========= ========= =========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9. REINSURANCE (continued)

For the years ended December 31, 2001, 2000 and 1999, benefits to
policyholders under life, health and annuity ceded reinsurance contracts were
$552.7 million, $649.4 million, and $514.5 million, respectively.

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

Through the Company's group health insurance operations, the Company
entered into a number of reinsurance arrangements in respect of personal
accident insurance and the occupational accident component of workers
compensation insurance, a portion of which was originated through a pool
managed by Unicover Managers, Inc. Under these arrangements, the Company both
assumed risks as a reinsurer, and also passed 95% of these risks on to other
companies. This business had originally been reinsured by a number of different
companies, and has become the subject of widespread disputes. The disputes
concern the placement of the business with reinsurers and recovery of the
reinsurance. The Company is engaged in disputes, including a number of legal
proceedings, in respect of this business. The risk to the Company is that other
companies that reinsured the business from the Company may seek to avoid their
reinsurance obligations. However, the Company believes that it has a reasonable
legal position in this matter. During the fourth quarter of 1999 and early
2000, the Company received additional information about its exposure to losses
under the various reinsurance programs. As a result of this additional
information and in connection with global settlement discussions initiated in
late 1999 with other parties involved in the reinsurance programs, during the
fourth quarter of 1999 the Company recognized a charge for uncollectible
reinsurance of $133.7 million, after tax, as its best estimate of its remaining
loss exposure. The Company believes that any exposure to loss from this issue,
in addition to amounts already provided for as of December 31, 2001, would not
be material.

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

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 10. PENSION BENEFIT PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS

The Company provides pension benefits to substantially all employees and
general agency personnel. These benefits are provided through both qualified
defined benefit and defined contribution pension plans. In addition, through
nonqualified plans, the Company provides supplemental pension benefits to
employees with salaries and/ or pension benefits in excess of the qualified plan
limits imposed by federal tax law. Pension benefits under the defined benefit
plans had been based on years of service and average compensation generally
during the three years prior to retirement. In 2001, the defined benefit
pension plans were amended to a cash balance basis under which benefits are
based on career average compensation. Under grandfathering rules, employees
over a certain age and with at least a certain number of years of service will
receive pension benefits based on the greater of the benefit from the cash
balance basis or the prior final average salary basis. This amendment became
effective on January 1, 2002. Benefits related to the Company's defined benefit
pension plans paid to employees and retirees covered by annuity contracts issued
by the Company amounted to $115.9 million in 2001, $102.2 million in 2000, and
$97.6 million in 1999. Plan assets consist principally of listed equity
securities and corporate obligations and U.S. government securities.

The Company's funding policy for qualified defined benefit plans is to
contribute annually an amount in excess of the minimum annual contribution
required under the Employee Retirement Income Security Act (ERISA). This amount
is limited by the maximum amount that can be deducted for federal income tax
purposes. Because the qualified defined benefit plans are overfunded, no
amounts were contributed to these plans in 2001 or 2000. The funding policy for
nonqualified defined benefit plans is to contribute the amount of the benefit
payments made during the year. The projected benefit obligation and accumulated
benefit obligation for the non-qualified defined benefit pension plans, which
are underfunded, for which accumulated benefit obligations are in excess of plan
assets were $258.7 million, and $236.2 million, respectively, at December 31,
2001, and $256.3 million, and $244.3 million, respectively, at December 31,
2000. Non-qualified plan assets, at fair value, were $4.6 million and $0.8
million at December 31, 2000 and 1999, respectively.

Defined contribution plans include The Investment Incentive Plan and the
Savings and Investment Plan. The expense for defined contribution plans was
$10.6 million, $8.3 million, and $8.3 million, in 2001, 2000 and 1999,
respectively.

In addition to the Company's defined benefit pension plans, the Company has
employee welfare plans for medical, dental, and life insurance covering most of
its retired employees and general agency personnel.

Substantially all employees may become eligible for these benefits if they
reach certain age and service requirements while employed by the Company. The
postretirement health care and dental coverages are contributory based on
service for post January 1, 1992 non-union retirees. A small portion of
pre-January 1, 1992 non-union retirees also contribute. The applicable
contributions are based on service.

The Company's policy is to fund postretirement benefits in amounts at or
below the annual tax qualified limits. As of December 31, 2001 and 2000, plan
assets related to non-union employees were comprised of an irrevocable health
insurance contract to provide future health benefits to retirees. Plan assets
related to union employees were comprised of approximately 60% equity
securities and 40% fixed income investments.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 10. PENSION BENEFIT PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS
(continued)

The changes in benefit obligation and plan assets related to the Company's
qualified and nonqualified benefit plans are summarized as follows:

Years Ended December 31
Other Postretirement
Pension Benefits Benefits
----------------------- ----------------------
2001 2000 2001 2000
--------- ---------- --------- ----------
(in millions)
Change in benefit
obligation:
Benefit obligation at
beginning of year......... $1,803.6 $1,905.3 $ 486.8 $ 443.2
Service cost............... 30.7 34.0 5.9 7.8
Interest cost.............. 129.1 129.2 31.8 30.9
Amendments................. 50.1 (10.3) (48.3) --
Actuarial loss (gain)...... 46.7 (143.7) (1.3) 36.6
Benefits paid.............. (127.1) (110.9) (29.6) (31.7)
Curtailment................ -- -- (3.9) --
-------- -------- ------- -------
Benefit obligation at end
of year................... 1,933.1 1,803.6 441.4 486.8
-------- -------- ------- -------
Change in plan assets:
Fair value of plan assets
at beginning of year...... 2,410.9 2,384.4 261.4 232.9
Actual return on plan
assets.................... (105.8) 125.2 (6.7) 0.3
Employer contribution...... 18.9 12.2 -- 35.5
Benefits paid.............. (127.1) (110.9) (9.0) (7.3)
-------- -------- ------- -------
Fair value of plan assets
at end of year............ 2,196.9 2,410.9 245.7 261.4
-------- -------- ------- -------
Funded status............... 263.8 607.3 (195.7) (225.4)
Unrecognized actuarial loss
(gain)..................... 24.3 (400.5) (95.3) (139.7)
Unrecognized prior service
cost....................... 67.9 24.1 (47.5) (1.4)
Unrecognized net transition
asset...................... 0.1 0.2 -- --
-------- -------- ------- -------
Prepaid (accrued) benefit
cost, net.................. $ 356.1 $ 231.1 $(338.5) $(366.5)
======== ======== ======= =======
Amounts recognized in the
consolidated balance sheets
consist of:
Prepaid benefit cost....... $ 523.9 $ 380.7
Accrued benefit liability (231.6) (243.5)
Intangible asset........... 0.5 6.0
Accumulated other
comprehensive income...... 63.3 87.9
-------- --------
Prepaid benefit cost, net. $ 356.1 $ 231.1
======== ========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 10. PENSION BENEFIT PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS
(continued)

The assumptions used in accounting for the Company's qualified and
nonqualified benefit plans were as follows:

Years Ended December 31
Other Postretirement
Pension Benefits Benefits
----------------------- ----------------------
2001 2000 2001 2000
---------- ---------- --------- ----------
Discount rate............. 7.25% 7.25% 7.25% 7.25%
Expected return on plan
assets................... 9.50% 9.00% 9.50% 9.00%
Rate of compensation
increase................. 4.20% 4.77% 4.20% 4.77%

For measurement purposes, an 8.75% annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2002. The rate was
assumed to decrease gradually to 5.25% in 2006 and remain at that level
thereafter.

For the prior valuation, a 5.50% annual rate of increase in the per capita
cost of covered health care benefits was assumed for 2001. The rate was assumed
to decrease gradually to 5.25% in 2001 and remain at that level thereafter.

The net periodic benefit (credit) cost related to the Company's qualified
and nonqualified benefit plans includes the following components:

Years Ended December 31
Other Postretirement
Pension Benefits Benefits
--------------------------- -------------------------
2001 2000 1999 2001 2000 1999
------- ------- -------- ------- ------- -------
(in millions)
Service cost.......... $ 30.7 $ 34.0 $ 33.8 $ 5.9 $ 7.8 $ 7.5
Interest cost......... 129.1 129.2 119.0 31.8 30.9 28.7
Expected return on
plan assets.......... (223.8) (209.9) (182.9) (24.4) (24.1) (18.3)
Amortization of
transition asset..... 0.1 (12.0) (12.1) -- -- --
Amortization of prior
service cost......... 6.5 4.6 3.9 (2.2) (0.2) (0.2)
Recognized actuarial
gain................. (18.3) (9.3) (6.3) (6.8) (8.7) (8.5)
Other................. -- -- -- (3.9) -- --
------- ------- ------- ------ ------ ------
Net periodic benefit
(credit) cost....... $ (75.7) $ (63.4) $ (44.6) $ 0.4 $ 5.7 $ 9.2
======= ======= ======= ====== ====== ======

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

1-Percentage 1-Percentage
Point Increase Point Decrease
-------------- ---------------
(in millions)
Effect on total of service and interest costs
in 2001...................................... $ 4.0 $ (3.7)
Effect on postretirement benefit obligations
as of December 31, 2001....................... 42.2 (38.8)

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 11. COMMITMENTS AND CONTINGENCIES

The Company has extended commitments to purchase fixed maturity
investments, preferred and common stock, and other invested assets and to issue
mortgage loans on real estate totaling $518.4 million, $0.3 million, $491.2
million and $212.9 million, respectively at December 31, 2001. If funded,
loans related to real estate mortgages would be fully collateralized by related
properties. The Company monitors the creditworthiness of borrowers under
long-term bond commitments and requires collateral as deemed necessary. The
estimated fair values of the commitments described above aggregate $1.2 billion
at December 31, 2001. The majority of these commitments expire in 2002.

In the normal course of its business operations, the Company is involved
with litigation from time to time with claimants, beneficiaries and others, and
a number of litigation matters were pending as of December 31, 2001. It is the
opinion of management, after consultation with counsel, that the ultimate
liability with respect to these claims, if any, will not materially affect the
financial position or results of operations of the Company.

Class Action

During 1997, the Company entered into a court-approved settlement relating
to a class action lawsuit involving certain individual life insurance policies
sold from 1979 through 1996. In entering into the settlement, the Company
specifically denied any wrongdoing. The total reserve held in connection with
the settlement to provide for relief to class members and for legal and
administrative costs associated with the settlement amounted to $52.7 million
and $224.0 million at December 31, 2001 and 2000, respectively. Costs incurred
related to the settlement were $30.0 million and $140.2 million in 2001 and
1999, respectively. No such costs were incurred in 2000. The estimated reserve
is based on a number of factors, including the estimated cost per claim and the
estimated costs to administer the claims.

During 1996, management determined that it was probable that a settlement
would occur and that a minimum loss amount could be reasonably estimated.
Accordingly, the Company recorded its best estimate based on the information
available at the time. The terms of the settlement agreement were negotiated
throughout 1997 and approved by the court on December 31, 1997. In accordance
with the terms of the settlement agreement, the Company contacted class members
during 1998 to determine the actual type of relief to be sought by class
members. The majority of the responses from class members were received by the
fourth quarter of 1998. The type of relief sought by class members differed from
the Company's previous estimates, primarily due to additional outreach
activities by regulatory authorities during 1998 encouraging class members to
consider alternative dispute resolution (ADR) relief. In 1999, the Company
updated its estimate of the cost of claims subject to alternative dispute
resolution relief and revised its reserve estimate accordingly. The reserve
estimate was further evaluated quarterly, and was adjusted as noted above, in
the fourth quarter of 2001. The adjustment to the reserve in 2001 was the
result of the Company being able to better estimate the cost of settling the
remaining claims, which on average tend to be larger, more complicated claims.
The better estimate comes from experience with actual settlements on similar
claims.

Administration of the ADR component of the settlement continues to date.
Although some uncertainty remains as to the cost of claims in the final phase
(i.e., arbitration) of the ADR process, it is expected that the final cost of
the settlement will not differ materially from the amounts presently provided
for by the Company.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 11. COMMITMENTS AND CONTINGENCIES (continued)

Harris Trust

Since 1983, the Company has been involved in complex litigation known as
Harris Trust and Savings Bank, as Trustee of Sperry Master Retirement Trust No.
2 v. John Hancock Mutual Life Insurance Company (S.D.N.Y. Civ. 83-5491). After
successive appeals to the Second Circuit and to the U.S. Supreme Court, the case
was remanded to the District Court and tried to a Federal District Court judge
in 1997.The judge issued an opinion in November 2000.

In that opinion the Court found against the Company and awarded the Trust
approximately $13.8 million in relation to this claim together with unspecified
additional pre-judgment interest on this amount from October 1988. The Court
also found against the Company on issues of liability valuation and ERISA law.
Damages in the amount of approximately $5.7 million, together with unspecified
pre-judgment interest from December 1996, were awarded on these issues. As part
of the relief, the judge ordered the removal of Hancock as a fiduciary to the
plan. On April 11, 2001, the Court entered a judgment against the Company for
approximately $84.9 million, which includes damages to the plaintiff,
pre-judgment interest, attorney's fees and other costs.

The Company believes that the underlying case was incorrectly decided and
there are promising grounds for challenging the District Court's decision.
Therefore, the Company has filed an appeal and believes that it is probable
that the Appeals Court will reverse the lower court's decision. Notwithstanding
what the Company believes to be the merits of the Company's position in this
case, if unsuccessful, its ultimate liability, including fees, costs and
interest could have a material adverse impact on net income. However, the
Company does not believe that any such liability would be material in relation
to its financial position or liquidity.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 12. SHAREHOLDER'S EQUITY

(a) Common Stock

As result of the Reorganization, as described in Note 1, the Company was
converted to a stock life insurance company. The Company has one class of
capital stock, common stock ($10,000 par value, 1,000 shares authorized and
outstanding). All of the outstanding common stock of the Company is owned by
JHFS, the parent.

(b) Other Comprehensive Income

The components of accumulated other comprehensive income are as follows:

Net
Accumulated Foreign Accumulated
Net Gain (Loss) Currency Minimum Other
Unrealized On Cash Flow Translation Pension Comprehensive
Gains (Losses) Hedges Adjustment Liability Income
-------------- ------------- ----------- ---------- -------------
(in millions)

Balance at December
31, 1998.............. $ 320.5 -- $(0.7) $(38.3) $ 281.5
Gross unrealized gains
(losses)(net of
deferred income tax
benefit of $234.7
million).............. (453.8) -- -- -- (453.8)
Reclassification
(losses), realized in
net income (net of tax
expense of $4.5
million).............. 8.2 -- -- -- 8.2
Adjustment for
participating group
annuity contracts (net
of deferred income tax
expense of $40.1
million).............. 74.6 -- -- -- 74.6
Adjustment for
deferred policy
acquisition costs and
present value of
future profits (net
of deferred income
tax expense of $60.7
million).............. 119.6 -- -- -- 119.6
------- ------- ------- ------- -------
Net unrealized gains
(losses).............. (251.4) -- -- -- (251.4)
Foreign currency
translation
adjustment............ -- -- (1.8) -- (1.8)
Minimum pension
liability (net of
deferred income tax
benefit of $12.3
million).............. -- -- -- (22.9) (22.9)
------- ------- ------- ------- -------
Balance at December
31, 1999.............. $ 69.1 -- $(2.5) $(61.2) $ 5.4
======= ======= ======== ======= ========

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 12. SHAREHOLDER'S EQUITY (continued)

Balance at December
31, 1999.............. $ 69.1 -- $(2.5) $(61.2) $ 5.4
Gross unrealized gains
(losses) (net of
deferred income tax
benefit of $8.1
million).............. (12.7) -- -- -- (12.7)
Reclassification
adjustments for
gains (losses),
realized in net
income (net of tax
expense of $59.8
million).............. 111.2 -- -- -- 111.2
Adjustment for
participating group
annuity contracts
(net of deferred
income tax expense of
$3.6 million)......... (6.8) -- -- -- (6.8)
Adjustment for
policyholder dividend
obligation (net of
income tax benefit of
$4.7 million.......... (8.8) -- -- -- (8.8)
Adjustment for
deferred policy
acquisition costs and
present value of
future profits (net
of deferred income
tax expense of $15.4
million).............. (28.3) -- -- -- (28.3)
------ ------ ------ ------ ------
Net unrealized gains
(losses).............. 54.6 -- -- -- 54.6
Foreign currency
translation
adjustment............ -- -- (1.5) -- (1.5)
Minimum pension
liability (net of
deferred income tax
benefit of $4.4
million).............. -- -- -- 8.2 8.2
------ ------ ------ ------ ------
Balance at December
31, 2000.............. $123.7 -- $(4.0) $(53.0) $ 66.7
====== ====== ====== ====== ======

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 12. SHAREHOLDER'S EQUITY (continued)

Balance at December
31, 2000.............. $123.7 -- $(4.0) $(53.0) $ 66.7
Gross unrealized gains
(losses) (net of
deferred income tax
benefit of $49.1
million).............. (88.3) -- -- -- (88.3)
Reclassification
adjustment for
gains (losses),
realized in net
income (net of tax
expense of $80.8
million).............. 150.1 -- -- -- 150.1
Adjustment for
participating group
annuity contracts (net
of deferred income
tax benefit of $5.1
million).............. (9.5) -- -- -- (9.5)
Adjustment for
deferred policy
acquisition costs and
present value of
future profits (net of
deferred income tax
benefit of $25.8
million).............. (47.8) -- -- -- (47.8)
Adjustment for net
shadow policyholder
dividend obligation
(net of tax benefit
of $46.1 million)..... (85.6) -- -- -- (85.6)
------ ----- ----- ------ ------
Net unrealized gains
(losses).............. (81.1) -- -- -- (81.1)
Foreign currency
translation
adjustment............ -- -- 1.0 -- 1.0
Minimum pension
liability (net
of deferred income
tax expense of $8.2
million).............. -- -- -- 15.2 15.2
Net accumulated gains
(losses) on cash flow
hedges (net of tax
benefit of $2.1
million).............. -- (3.8) -- -- (3.8)
Change in accounting
principle (net of
income tax expense of
$122.6 million)....... 204.7 22.9 -- -- 227.6
------ ----- ----- ------ ------
Balance at December
31, 2001.............. $247.3 $19.1 $(3.0) $(37.8) $225.6
====== ===== ===== ====== ======

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 12. SHAREHOLDER'S EQUITY (continued)

Net unrealized investment and other gains (losses), included in the
consolidated balance sheets as a component of shareholder's equity, are
summarized as follows:

Year Ended
2001 2000 1999
-------- ------- ---------
(in millions)
Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturities............................ $ 294.1 $ 103.0 $(190.5)
Equity investments.......................... 129.2 258.5 136.6
Derivatives and other....................... 205.0 (155.8) 107.5
------- ------- -------
Total......................................... 628.3 205.7 53.6
Amounts of unrealized investment (gains)
losses attributable to:
Participating group annuity contracts....... (49.0) (34.4) (24.0)
Deferred policy acquisition cost and present
value of future profits.................... (51.0) 22.6 66.3
Policyholder dividend obligation............ (145.2) (13.5) --
Deferred federal income taxes............... (135.8) (56.7) (26.8)
------- ------- -------
Total......................................... (381.0) (82.0) 15.5
------- ------- -------
Net unrealized investment gains $ 247.3 $ 123.7 $ 69.1
======= ======= =======

The Company adopted the new codified statutory accounting principles
(Codification) effective January 1, 2001. Codification changes prescribe
statutory accounting practices and results in changes to the accounting
practices that the Company and its domestic life insurance subsidiaries use to
prepare their statutory-basis financial statements.

The Company and its domestic insurance subsidiaries prepare their
statutory-basis financial statements in accordance with accounting practices
prescribed or permitted by the state of domicile. For the Life Company the
Commonwealth of Massachusetts only recognizes statutory accounting practices
prescribed or permitted by Massachusetts insurance regulations and laws. The
National Association of Insurance Commissioners' "Accounting Practices and
Procedures" manual (NAIC SAP) has been adopted as a component of prescribed or
permitted practices by Massachusetts. The Commissioner of Insurance has the
right to permit other specific practices that deviate from prescribed practices.

Prior to 2001, the Commissioner had provided the Company approval to
recognize as an admitted asset the pension plan prepaid expense in accordance
with the requirements of SFAS No. 87, "Employers' Accounting for Pensions."
Beginning in 2001, the Commissioner has provided the Company with approval to
phase-in over a three-year period the impact of implementing the material
provisions of statutory SSAP No. 8, "Pensions." As a result of this permitted
practice, the Company's reported statutory surplus as of December 31, 2001 is
increased by $319.5 million over what it would be under NAIC SAP. Statutory net
income is not impacted by this permitted practice.

In addition, during 2000 and 1999, the Company received permission from the
Commonwealth of Massachusetts Division of Insurance to record its Asset
Valuation Reserve in excess of the prescribed maximum reserve level by $36.7
million and $48.0 million at December 31, 2000 and 1999, respectively. There are
no other material permitted practices.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 12. SHAREHOLDER'S EQUITY (continued)

Statutory net income and surplus include the accounts of the Company and
its variable life insurance subsidiary, John Hancock Variable Life Insurance
Company, including its wholly-owned subsidiary, Investors Partner Life
Insurance Company. Investors Guaranty Life Insurance Company, a former
subsidiary of the Company, was sold in 2001, and its statutory net income for
the period January 1, 2001 to May 22, 2001 and for the years 2000 and 1999, and
its statutory surplus at December 31, 2000 and 1999, are included in the table
below.

As Of Or For The Years Ended December 31
2001 2000 1999
---- ---- ----
(in millions)
Statutory surplus................ $3,513.6 $3,700.5 $3,456.7
Statutory net income............. 631.4 617.6 573.2

Massachusetts has enacted laws governing the payment of dividends by
insurers. Under Massachusetts insurance law, no insurer may pay any
shareholder dividends from any source other than statutory unassigned funds
without the prior approval of the Massachusetts Division of Insurance.
Massachusetts law also limits the dividends an insurer may pay in any twelve
month period, without the prior permission of the Massachusetts Division of
Insurance, to the greater of (i) 10% of its statutory policyholders' surplus as
of the preceding December 31 or (ii) the individual company's statutory net
gain from operations for the preceding calendar year, if such insurer is a life
company.

NOTE 13. SEGMENT INFORMATION

The Company's reportable segments are strategic business units offering
different products and services. The reportable segments are managed separately,
as they focus on different products, markets or distribution channels.

Protection Segment

Offers a variety of individual life insurance and individual and group
long-term care insurance products, including participating whole life, term
life, universal life, variable life, and retail and group long-term care
insurance. Products are distributed through multiple distribution channels,
including insurance agents and brokers and alternative distribution channels
that include banks, financial planners, direct marketing and the Internet.

Asset Gathering Segment

Offers individual annuities and mutual fund products and services.
Individual annuities consist of fixed deferred annuities, fixed immediate
annuities, single premium immediate annuities, and variable annuities. Mutual
fund products and services primarily consist of open-end mutual funds and
closed end funds. This segment distributes its products through distribution
channels including insurance agents and brokers affiliated with the Company,
securities brokerage firms, financial planners, and banks.

Guaranteed and Structured Financial Products (G&SFP) Segment

Offers a variety of retirement products to qualified defined benefit plans,
defined contribution plans and non-qualified buyers. The Company's products
include guaranteed investment contracts, funding agreements, single premium
annuities, and general account participating annuities and fund type products.
These contracts provide non-guaranteed, partially guaranteed, and fully
guaranteed investment options through general and separate account products. The
segment distributes its products through a combination of dedicated regional
representatives, pension consultants and investment professionals.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13. SEGMENT INFORMATION (continued)

Investment Management Segment

Offers a wide range of investment management products and services to
investors covering a variety of private and publicly traded asset classes
including fixed income, equity, mortgage loans, and real estate. This segment
distributes its products through a combination of dedicated sales and marketing
professionals, independent marketing specialists, and investment professionals.

Corporate and Other Segment

Primarily consists of the Company's international group insurance program,
certain corporate operations, and businesses that are either disposed or in
run-off. The international group insurance program consists of an international
network of 46 insurers that coordinate and/or reinsure group life, health,
disability and pension coverage for foreign and globally mobile employees of
multinational companies in 50 countries and territories. Corporate operations
primarily include certain financing activities, income on capital not
specifically allocated to the reporting segments and certain non-recurring
expenses not allocated to the segments. The disposed businesses primarily
consist of group health insurance and related group life insurance, property and
casualty insurance and selected broker/dealer operations.

The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. Allocations of net investment
income are based on the amount of assets allocated to each segment. Other costs
and operating expenses are allocated to each segment based on a review of the
nature of such costs, cost allocations utilizing time studies, and other
relevant allocation methodologies.

Management of the Company evaluates performance based on segment after-tax
operating income, which excludes the effect of net realized investment and other
gains (losses) and unusual or non-recurring events and transactions. Segment
after-tax operating income is determined by adjusting GAAP net income for net
realized investment and other gains (losses), including gains and losses on
disposals of businesses and certain other items which management believes are
not indicative of overall operating trends. While these items may be significant
components in understanding and assessing the Company's financial performance,
management believes that the presentation of after-tax operating income enhances
its understanding of the Company's results of operations by highlighting net
income attributable to the normal, recurring operations of the business.

Amounts reported as segment adjustments in the tables below primarily
relate to: (i) certain net realized investment and other gains (losses), net of
related amortization adjustment for deferred policy acquisition costs, amounts
credited to participating pension contractholder accounts and policyholder
dividend obligation (the adjustment for net realized investment and other gains
(losses) excludes gains and losses from mortgage securitizations and investments
backing short-term funding agreements because management views the related gains
and losses as an integral part of the core business of those operations); (ii)
benefits to policyholders and expenses incurred relating to the settlement of a
class action lawsuit against the Company involving certain individual life
insurance policies sold from 1979 through 1996; (iii) restructuring costs
related to our distribution systems, retail operations and mutual fund
operations; (iv) the surplus tax on mutual life insurance companies which as a
stock company is no longer applicable to the Company; (v) a fourth quarter 1999
charge for uncollectible reinsurance related to certain assumed reinsurance
business; (vi) a fourth quarter 1999 charge for a group pension dividend
resulting from demutualization related asset transfers and the formation of a
corporate account; (vii) a charge for certain one time costs associated with the
demutualization process; and (viii) cumulative effect of accounting changes.

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13. SEGMENT INFORMATION (continued)

The following table summarizes selected financial information by segment
for the year ended or as of December 31 and reconciles segment revenues and
segment after-tax operating income to amounts reported in the consolidated
statements of income (in millions)

Asset Investment Corporate
2001 Protection Gathering G&SFP Management and Other Consolidated
- ---- ---------- ---------- ---------- ---------- --------- --------------

Revenues:
Segment revenues....... $ 3,054.7 $ 1,155.0 $ 2,369.5 $ 143.2 $ 650.6 $ 7,373.0
Net realized
investment and other
gains (losses)........ (98.1) (54.8) (121.1) (0.2) 25.2 (249.0)
--------- --------- --------- -------- -------- ---------
Revenues............... $ 2,956.6 $ 1,100.2 $ 2,248.4 $ 143.0 $ 675.8 $ 7,124.0
========= ========= ========= ======== ======== =========
Net investment income $ 1,258.5 $ 498.5 $ 1,834.5 $ 28.7 $ 26.0 $ 3,646.2
Net Income:
Segment after-tax
operating
income................ 284.3 148.3 238.0 29.8 55.4 755.8
Realized investment
gains (losses), net... (62.2) (34.7) (77.0) (0.2) 16.6 (157.5)
Class action lawsuit. -- -- -- -- (19.5) (19.5)
Restructuring charges (4.4) (17.6) (1.2) (0.9) (1.3) (25.4)
Surplus tax............ 9.6 0.2 2.6 0.1 0.8 13.3
Cumulative effect of
accounting
changes, net of tax 11.7 (0.5) (1.2) (0.2) (2.6) 7.2
--------- --------- --------- -------- -------- ---------
Net income............. $ 239.0 $ 95.7 $ 161.2 $ 28.6 $ 49.4 $ 573.9
========= ========= ========= ======== ======== =========
Supplemental
Information:
Inter-segment revenues -- -- -- $ 28.0 $ (28.0) --
Equity in net income
of investees
accounted for by the
equity method......... $ 12.9 $ 7.0 $ 24.8 6.9 4.8 $ 56.4
Amortization of
deferred policy
acquisition costs..... 171.3 75.0 2.4 -- 0.3 249.0
Interest expense....... 0.9 1.9 -- 12.4 43.8 59.0
Income tax expense..... 108.8 35.0 71.0 16.2 (30.3) 200.7
Segment assets......... 28,912.5 14,740.5 32,253.9 2,049.8 3,168.0 81,124.7

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13. SEGMENT INFORMATION (continued)

Asset Investment Corporate
2001 Protection Gathering G&SFP Management and Other Consolidated
- ---- ---------- --------- -------- ---------- --------- --------------

Net Realized
Investment and other
Gains (Losses) Data:
Net realized
investment and other
gains (losses)a....... (122.9) (76.4) (78.8) 3.0 25.2 (249.9)
Less amortization of
deferred policy
acquisition costs
related to net
realized investment
and other gains
(losses).............. 7.8 21.6 -- -- -- 29.4
Less amounts credited
to participating
pension contractholder
accounts.............. -- -- (42.3) -- -- (42.3)
Add amounts credited
to the policyholder
dividend obligation... 17.0 -- -- -- -- 17.0
------- ------ ------- ----- ----- -------
Net realized
investment and other
gains (losses), net
of related amortization
of deferred policy
acquisition costs,
amounts credited to
participating pension
contractholders and
amounts credited to the
policyholder dividend
obligation-per the
consolidated financial
statements............ (98.1) (54.8) (121.1) 3.0 25.2 (245.8)
Less net realized
investment and other
gains (losses)
attributable to
mortgage
securitizations....... -- -- -- (3.2) -- (3.2)
------- ------ ------- ----- ----- -------
Net realized
investment and other
gains (losses),
net-pre-tax
adjustment made to
calculate segment
operating income...... (98.1) (54.8) (121.1) (0.2) 25.2 (249.0)
Less income tax effect. 35.9 20.1 44.1 -- (8.6) 91.5
------- ------ ------- ----- ----- -------
Net realized
investment and other
gains (losses),
net-after-tax
adjustment made to
calculate segment
operating income...... $ (62.2) $(34.7) $ (77.0) $(0.2) $16.6 $(157.5)
======= ====== ======= ===== ===== =======

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13. SEGMENT INFORMATION (continued)

Asset Investment Corporate
2000 Protection Gathering G&SFP Management and Other Consolidated
- ---- ---------- ---------- ---------- ---------- --------- --------------

Revenues:
Segment revenues....... $ 2,887.0 $ 1,195.9 $ 2,427.2 $ 212.0 $ 577.0 $ 7,299.1
Net realized
investment and
other gains (losses) (24.4) 15.4 (64.7) 7.1 141.7 75.1
--------- --------- --------- -------- -------- ---------
Revenues............... $ 2,862.6 $ 1,211.3 $ 2,362.5 $ 219.1 $ 718.7 $ 7,374.2
========= ========= ========= ======== ======== =========
Net investment income $ 1,196.3 $ 445.8 $ 1,741.9 $ 22.7 $ 157.2 $ 3,563.9
Net Income:
Segment after-tax
operating income...... 238.8 128.8 211.6 46.8 82.4 708.4
Realized investment
gains
(losses), net......... (18.2) 18.6 (40.5) 4.4 87.3 51.6
Restructuring charges (6.7) (1.4) (2.6) -- (1.3) (12.0)
Surplus tax............ 20.8 0.6 6.5 -- 18.1 46.0
Demutualization
expenses.............. 1.6 0.4 0.4 -- 0.1 2.5
Other demutualization
related costs......... (6.8) (1.3) (1.7) -- (0.2) (10.0)
Group pension dividend
transfer.............. -- -- 5.7 -- -- 5.7
--------- --------- --------- -------- -------- ---------
Net income............. $ 229.5 $ 145.7 $ 179.4 $ 51.2 $ 186.4 $ 792.2
========= ========= ========= ======== ======== =========
Supplemental
Information:
Inter-segment revenues -- -- -- $ 39.1 $ (39.1) --
Equity in net income
of investees
accounted for by the
equity
method................ $ 7.5 $ 3.5 $ 11.2 16.8 104.8 $ 143.8
Amortization of
deferred policy
acquisition costs..... 106.0 78.8 2.6 -- (0.3) 187.1
Interest expense....... 2.9 3.5 1.0 12.1 43.1 62.6
Income tax expense..... 82.0 57.9 78.3 35.2 55.5 308.9
Segment assets......... 27,091.5 14,067.2 31,161.1 3,124.5 2,967.7 78,412.0

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13. SEGMENT INFORMATION (continued)

Asset Investment Corporate
2000 Protection Gathering G&SFP Management and Other Consolidated
- ---- ---------- --------- ------- ---------- --------- --------------

Net Realized
Investment and other
Gains (Losses) Data:
Net realized
investment and other
gains (losses)........ (23.2) 18.9 (57.8) 10.3 141.7 89.9
Less amortization of
deferred policy
acquisition costs
related to net
realized investment
and other
gains (losses)........ 12.9 (3.5) -- -- -- 9.4
Less amounts credited
to
participating pension
contractholder
accounts.............. -- -- (6.9) -- -- (6.9)
Less amounts credited
to
policyholder dividend
obligation............ (14.1) -- -- -- -- (14.1)
------ ----- ------ ----- ------ ------
Net realized
investment and other
gains (losses), net
of related amortization
of deferred policy
acquisition costs,
amounts credited to
participating pension
contractholders and
amounts credited to
the policyholder
dividend obligation-
per consolidated
financial statements.. (24.4) 15.4 (64.7) 10.3 141.7 78.3
Less net realized
investment and
other gains (losses)
attributable to
mortgage
securitizations....... -- -- -- (3.2) -- (3.2)
------ ----- ------ ----- ------ ------
Net realized
investment and other
gains (losses),
net-pre-tax
adjustment made to
calculate segment
operating income...... (24.4) 15.4 (64.7) 7.1 141.7 75.1
Less income tax effect. 6.2 3.2 24.2 (2.7) (54.4) (23.5)
------ ----- ------ ----- ------ ------
Net realized
investment and other
gains (losses),
net-after-tax
adjustment made to
calculate segment
operating income...... $ (18.2) $ 18.6 $ (40.5) $ 4.4 $ 87.3 $ 51.6
====== ====== ======= ===== ====== ======

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13. SEGMENT INFORMATION (continued)

Asset Investment Corporate
1999 Protection Gathering G&SFP Management and Other Consolidated
- ---- ---------- ---------- ---------- ---------- --------- --------------

Revenues:
Segment revenues....... $ 2,756.9 $ 1,057.3 $ 2,028.2 $ 189.9 $ 532.4 $ 6,564.7
Net realized
investment and other
gains (losses)........ 173.6 (11.0) 93.3 3.1 (61.7) 197.3
--------- --------- --------- -------- -------- ---------
Revenues............... $ 2,930.5 $ 1,046.3 $ 2,121.5 $ 193.0 $ 470.7 $ 6,762.0
========= ========= ========= ======== ======== =========
Net investment income $ 1,101.9 $ 388.6 $ 1,681.3 $ 45.9 $ 121.2 $ 3,338.9
Net Income:
Segment after-tax
operating income...... 188.7 115.1 201.7 37.3 45.6 588.4
Realized investment
gains (losses), net... 108.6 (6.9) 58.4 2.0 (45.6) 116.5
Class action lawsuit. -- -- -- -- (91.1) (91.1)
Restructuring charges (8.6) (7.3) (0.6) -- (0.5) (17.0)
Surplus tax............ (12.5) (1.0) (6.5) -- (2.3) (22.3)
Workers compensation
reinsurance
reserves.............. -- -- -- -- (133.7) (133.7)
Group pension dividend
transfer.............. -- -- (205.8) -- -- (205.8)
Demutualization
expenses.............. (61.3) (13.0) (16.1) -- (2.2) (92.6)
Other demutualization
related costs......... (4.6) (0.9) (1.1) -- (0.2) (6.8)
Cumulative effect of
accounting
change................ -- (9.6) -- (0.1) -- (9.7)
--------- --------- --------- -------- -------- ---------
Net income............. $ 210.3 $ 76.4 $ 30.0 $ 39.2 $ (230.0) $ 125.9
========= ========= ========= ======== ======== =========
Supplemental
Information:
Inter-segment revenues -- -- -- $ 43.6 $ (43.6) --
Equity in net income
of investees accounted
for by the equity
method................ $ 46.2 $ (0.3) $ 14.3 3.5 1.4 $ 65.1
Amortization of
deferred policy
acquisition costs..... 69.2 53.5 3.1 -- (0.8) 125.0
Interest expense....... 0.7 6.2 -- 5.3 57.9 70.1
Income tax expense
(credit).............. 138.9 52.6 (7.5) 26.5 (129.0) 81.5
Segment assets......... 25,372.1 14,297.2 30,370.5 3,531.4 2,488.7 76,059.9

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13. SEGMENT INFORMATION (continued)

Net Realized Investment
and Other Gains
(Losses) Data:
Net realized investment
and other
gains (losses)........ 228.4 (16.1) 97.4 6.6 (61.7) 254.6
Less amortization of
deferred
policy acquisition
costs related
to net realized
investment and
other gains (losses).. (54.8) 5.1 -- -- -- (49.7)
Less amounts credited
to
participating pension
contractholder
accounts.............. -- -- (35.3) -- -- (35.3)
--------- --------- --------- -------- -------- ---------
Net realized investment
and other gains
(losses), net of
related amortization
of deferred policy
acquisition costs and
amounts credited to
participating
pension contractholders
- per consolidated
financial statements... 173.6 (11.0) 62.1 6.6 (61.7) 169.6
Less net realized
investment and
other gains (losses)
attributable to mortgage
securitizations
and investments
backing short-term
funding agreements..... -- -- 31.2 (3.5) -- 27.7
Less gain on sale of -- -- -- -- (33.0) (33.0)
business..............
Net realized investment
and other gains
(losses), net-pre-tax
adjustment made to
calculatesegment
operating income...... 173.6 (11.0) 93.3 3.1 (94.7) 164.3
Less income tax effect. (65.0) 4.1 (34.9) (1.1) 49.1 (47.8)
--------- --------- --------- -------- -------- ---------
Net realized investment
and other gains
(losses), net-after-tax
adjustment made to
calculate segment
operating income...... $ 108.6 $ (6.9) $ 58.4 $ 2.0 $ (45.6) $ 116.5
========= ========= ========= ======== ======== =========

100

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13. SEGMENT INFORMATION (continued)

The Company operates primarily in the United States and also in Indonesia. In
addition, the international group insurance program consists of a network of 46
insurers that coordinate and/or reinsure group life, health, disability and
pension coverage for foreign and globally mobile employees of multinational
companies in 50 countries and territories. The following table summarizes
selected financial information by geographic location for the year ended or at
December 31:

Income Before
Income Taxes
and Cumulative
Long-Lived Effect Of
Location Revenues Assets Assets Accounting Changes
- -------- -------- ------ ---------- --------------------
(in millions)
2001
United States............. $6,917.4 $533.8 $81,052.9 $ 761.4
Foreign - other........... 206.6 0.6 71.8 6.0
-------- ------ --------- --------
$7,124.0 $534.4 $81,124.7 $ 767.4
======== ====== ========= ========
2000
United States............. $7,201.4 $419.6 $78,346.9 $1,093.4
Foreign - other........... 172.8 0.3 65.1 7.7
-------- ------ --------- --------
$7,374.2 $419.9 $78,412.0 $1,101.1
======== ====== ========= ========
1999
United States............. $6,573.0 $440.0 $75,993.0 $ 211.2
Foreign - other........... 189.0 0.4 66.9 5.9
-------- ------ --------- --------
$6,762.0 $440.4 $76,059.9 $ 217.1
======== ====== ========= ========

The Company has no reportable major customers and revenues are attributed to
countries based on the location of customers.

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following discussion outlines the methodologies and assumptions used to
determine the fair value of the Company's financial instruments. The aggregate
fair value amounts presented herein do not represent the underlying value of the
Company and, accordingly, care should be exercised in drawing conclusions about
the Company's business or financial condition based on the fair value
information presented herein.

The following methods and assumptions were used by the Company to determine
the fair values of financial instruments:

Fair values for publicly traded fixed maturities (including redeemable
preferred stocks) are obtained from an independent pricing service. Fair values
for private placement securities and fixed maturities not provided by the
independent pricing service are estimated by the Company by discounting expected
future cash flows using a current market rate applicable to the yield, credit
quality and maturity of the investments. The fair value for equity securities is
based on quoted market prices.

101

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value for mortgage loans on real estate is estimated using discounted
cash flow analyses using interest rates adjusted to reflect the credit
characteristics of the loans. Mortgage loans with similar characteristics and
credit risks are aggregated into qualitative categories for purposes of the fair
value calculations. Fair values for impaired mortgage loans are measured based
either on the present value of expected future cash flows discounted at the
loan's effective interest rate or the fair value of the underlying collateral
for loans that are collateral dependent.

The carrying amount in the balance sheet for policy loans, short-term
investments and cash and cash equivalents approximates their respective fair
values.

The fair value of the Company's long-term debt is estimated using discounted
cash flows based on the Company's incremental borrowing rates for similar types
of borrowing arrangements. Carrying amounts for commercial paper and short-term
borrowings approximate fair value.

Fair values for the Company's guaranteed investment contracts and funding
agreements are estimated using discounted cash flow calculations based on
interest rates currently being offered for similar contracts with maturities
consistent with those remaining for the contracts being valued. The fair value
for fixed-rate deferred annuities is the cash surrender value, which represents
the account value less applicable surrender charges. Fair values for immediate
annuities without life contingencies and supplementary contracts without life
contingencies are estimated based on discounted cash flow calculations using
current market rates.

The Company's derivatives include futures contracts, interest rate swap, cap
and floor agreements, swaptions, currency rate swap agreements and equity collar
agreements. Fair values for these contracts are based on current settlement
values. These values are based on quoted market prices for the financial futures
contracts and brokerage quotes that utilize pricing models or formulas using
current assumptions for all swaps and other agreements.

The fair value for commitments approximates the amount of the initial
commitment.

102

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and fair values of the
Company's financial instruments:

December 31
---------------------------------------------
2001 2000
-------------------- ----------------------
Carrying Fair Carrying Fair
Value Value Value Value
--------- ---------- ---------- ----------
(in millions)
Assets
Fixed maturities:
Held-to-maturity ........... $ 1,923.5 $ 1,908.2 $14,145.1 $13,965.8
Available-for-sale.......... 36,072.1 36,072.1 15,925.4 15,925.4
Equity securities:
Available-for-sale.......... 562.3 562.3 846.1 846.1
Trading securities.......... 1.4 1.4 1.6 1.6
Mortgage loans on real estate 9,667.0 10,215.0 9,659.4 10,075.2
Policy loans................. 1,927.0 1,927.0 447.9 447.9
Short-term investments....... 78.6 78.6 174.9 174.9
Cash and cash equivalents.... 1,025.3 1,025.3 2,966.3 2,966.3
Derivatives:
Futures contracts, net....... -- -- (14.8) (14.8)
Interest rate swap agreements 24.9 24.9 (178.2) (296.8)
Interest rate swap CMT....... 7.5 7.5 -- --
Interest rate cap agreements. 3.6 3.6 0.1 0.1
Interest rate floor agreements 56.5 56.5 -- --
Interest rate swaption
agreements.................. -- -- (1.3) (1.3)
Currency rate swap agreements 401.6 401.6 11.4 11.4
Equity collar agreements..... 16.7 16.7 11.7 11.7
Liabilities:
Debt......................... 743.3 758.8 779.3 771.5
Guaranteed investment
contracts and
funding agreements.......... 16,142.7 15,947.0 14,333.9 13,953.8
Fixed rate deferred and
immediate annuities......... 6,212.2 6,123.3 5,195.2 5,101.3
Supplementary contracts
without life contingencies.. 54.4 58.4 60.0 63.1
Derivatives:
Futures contracts, net....... 0.9 0.9 1.4 1.4
Interest rate swap agreements 420.3 420.3 -- 114.3
Interest rate swap CMT....... -- -- -- (5.2)
Interest rate cap agreements. -- -- 2.1 2.1
Interest rate floor agreements -- -- 59.0 59.0
Interest rate swaption
agreements.................. 1.3 1.3 -- --
Currency rate swap agreements 318.2 318.2 -- (473.0)
Equity collar agreements..... 18.9 18.9 -- --
Commitments.................. -- (1,241.3) -- (1,694.2)

103

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 15. STOCK COMPENSATION PLANS

On January 5, 2000, the Company, as sole shareholder of John Hancock Financial
Services, Inc., approved and adopted the 1999 Long-Term Stock Incentive Plan
(the Incentive Plan), which originally had been approved by the Board of
Directors (the Board) of the Company on August 31, 1999. Under the Incentive
Plan, which became effective on February 1, 2000, the effective date of the Plan
of Reorganization of the Company, options of JHFS common stock granted may be
either non-qualified options or incentive stock options qualifying under Section
422 of the Internal Revenue Code. The Incentive Plan objectives include
attracting and retaining the best personnel, providing for additional
performance incentives, and promoting the success of the Company by providing
employees the opportunity to acquire JHFS' common stock. In 2001, JHFS' Board
adopted and the shareholders approved the amended and restated 1999 Long-Term
Stock Incentive Plan (as amended, the Long-Term Stock Incentive Plan) and the
Non-Employee Directors Long-Term Stock Incentive Plan (the Directors' Plan,
collectively, the Incentive Plans).

The maximum number of shares of JHFS common stock available under the
Long-Term Stock Incentive Plan is 40,741,403. Of these, no more than 8,148,281
shares shall be available for stock awards, and the maximum number of shares
that may be granted as incentive stock options is 32,593,122 shares. The
aggregate number of shares that may be covered by awards for any one participant
over the period that the Long-Term Stock Incentive Plan is in effect shall not
exceed 8,148,281 shares. Subject to these overall limits, there is no annual
limit on the number of stock options or stock awards that may be granted in any
one year.

The maximum number of shares available in the Non-Employee Directors'
Long-Term Stock Incentive Plan is 1,000,000 shares of common stock. Pursuant to
the Non-Employee Directors' Long-Term Stock Incentive Plan, each director
receives 50% of the annual retainer paid to eligible directors in the form of
stock awards. If a director elects to have the remaining 50% of their retainer
invested in shares of the JHFS' common stock through purchases on the open
market, JHFS grants a partial matching stock award, which is forfeitable within
three years prior to a change of control if his/her service as a director
terminates (other than for death, disability or retirement). In addition, on
shareholder approval of the Non-Employee Directors' Long-Term Stock Incentive
Plan, each director received a non-qualified stock option award of 15,000 shares
and annually thereafter will receive non-qualified stock option awards for 5,000
shares (except that each new director shall receive an option exercisable for
15,000 shares and will not be eligible for an annual grant in the same year.)

The Incentive Plans have options exercisable at the dates listed in the table
below. JHFS granted 11.0 million options to the Company's employees during the
year ended December 31, 2001. Options outstanding under the Long-Term Stock
Incentive Plan were granted at a price equal to the fair market value of the
stock on the date of grant, vest over a two-year period, and expire five years
after the grant date. Options outstanding under the Non-Employee Director's
Long Term Stock Incentive Plan were granted at a price equal to the fair market
value of the stock on the date of grant, vest immediately, and expire five years
after grant date.

104

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 15. STOCK COMPENSATION PLANS

The status of JHFS stock options held by the Company's employees under the
Long-Term Stock Incentive Plan and by Directors of the Company under the
Non-Employee Directors' Long-Term Stock Incentive Plan are summarized below as
of December 31:

Weighted-
average Shares subject weighted-
Number of exercise price to exercisable average exercise
options per option options price per option
-------------- -------------- ----------------- ----------------
(in thousands) (in thousands)

Outstanding at
February 1, 2000 -- --
Granted 4,165.0 $14.06
Exercised 0.2 13.94
Canceled 275.8 13.94
-------- ------
Outstanding at
December 31, 2000 3,889.0 $14.07
======== ======
Granted 10,992.1 35.96
Exercised 746.3 14.05
Canceled 984.8 29.61
-------- ------ ------- ------
Outstanding at
December 31, 2001 13,150.0 $31.21 2,270.5 $26.03
======== ====== ======= ======

The Company accounts for stock-based compensation using the intrinsic value
method prescribed by APB Opinion No. 25, under which no compensation cost for
stock options is recognized for stock option awards granted at or above fair
market value, with the exception of the Signator Stock Option Program. Had
compensation expense for the remaining Company's stock-based compensation plans
been determined based upon fair values at the grant dates for awards under the
plan in accordance with SFAS No. 123, the Company's net earnings would have been
reduced to the pro forma amounts indicated below. Additional stock option awards
are anticipated in future years. The effects of applying SFAS No. 123 on
proforma disclosures of net income indicated below are not likely to be
representative of the pro-forma effects on net income in future years for the
following reasons: 1) the number of future shares to be issued under these plans
is not known, 2) the effect of an additional year of vesting options granted in
prior years is not considered in the assumptions and 3) the assumptions used to
determine the fair value can vary significantly.

The Black-Scholes option valuation model was developed for use in estimating
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require input of highly
subjective assumptions including the expected stock price volatility. Because
the JHFS stock options granted to the employees of the Company have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of the employee
stock options.

The estimated weighted-average fair value per share using the Black-Scholes
option valuation model is $9.24 and $3.66, respectively, for the years ending
December 31, 2001 and 2000, using the following assumptions:

2001 2000
-------------------- --------------------
Expected term 3-5 years 2-5 years
Risk free rate/(1)/ 4.6%-6.0% 4.8%-5.6%
Dividend yield 1.0% 1.8%
Expected volatility 32.0 % 24.0 %

/(1)/ Dependent on grant date.

105

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 15. STOCK COMPENSATION PLANS

For the purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:

Year Ended For the Period
Year Ended December 31, 2000 February 1 through
December 31, 2001 Pro Forma (unaudited) December 31, 2000
----------------- --------------------- --------------------
(in millions)

Net income:
As reported $573.9 $792.2 $750.3
Pro forma (unaudited) 540.6 790.0 748.8

The following table summarizes information about JHFS' stock options held by
the Company's employees, outstanding at December 31, 2001:

Number Of Weighted-Average Number Of
Range of options remaining Weighted-average exercisable Weighted-average
exercise outstanding contractual life exercise price options at exercise price per
price at 12/31/01 (years) per option 12/31/01 exercisable option
- ------------- -------------- ---------------- ---------------- -------------- ----------------------
(in thousands) (in thousands)

$12.29-$16.39 2,849.3 3.2 $13.94 1,013.9 $13.94
$20.49-$24.58 35.2 3.6 23.59 16.6 23.59
$32.78-$36.88 9,240.0 4.1 35.55 1,045.0 35.53
$36.88-$40.98 1,025.5 4.4 39.31 195.0 38.18
-------- --- ------ ------- ------
13,150.0 3.9 $30.92 2,270.5 $26.03
======== === ====== ======= ======

In February 2001, JHFS implemented the Signator Stock Options Grant Program,
under the Long-Term Stock Incentive Plan. The program granted 339,307 stock
options to non-employee general agents (agents) at the market price of $35.53
per share. The stock options vest over a two-year period, subject to continued
participation in the JHFS sales program and attainment of established,
individual sales goals. After one year of vesting, an agent is allowed to
exercise 50% of the stock options granted. The Company amortizes compensation
expense for the grant over a 24-month period commencing on grant date at a fair
value of $9.24 per option determined by the Black-Scholes option valuation
model. Total expense recognized for the year ended December 31, 2001, is $1.3
million. The total grant date fair value of the stock options granted under the
program from January 1, 2001 through December 31, 2001, is $3.1 million. During
2001, 4,737 stock options were forfeited with a total grant date price of $0.01
million. The outstanding option balance in the Signator Grant Program is
334,570 at December 31, 2001.

On March 13, 2000, JHFS granted 281,084 shares of non-vested stock to key
Company personnel at a weighted- average grant price of $14.34 per share. These
grants of non-vested stock are forfeitable and vest at three or five years of
service within the Company. The Company recognizes compensation expense
immediately, as the grants are based on historical compensation. The total
grant-date price of the non-vested stock granted from January 1, 2000 through
December 31, 2000 is $4.0 million. During 2001 and 2000, 12,142 and 50,837
shares of this non-vested stock were forfeited with a total grant date price of
$0.2 million and $0.7 million, respectively. The outstanding share balance in
the 2000 plan is 218,105 as of December 31, 2001.

106

JOHN HANCOCK LIFE INSURANCE COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 15. STOCK COMPENSATION PLANS

On February 12, March 12 and March 15, 2001, JHFS granted an aggregate 265,391
total shares of non-vested stock to key Company personnel. The program was
funded with cash and the shares were purchased on the open market at the
weighted-average grant price of $37.22 per share. These grants of non-vested
stock are forfeitable and vest at three years of service within the Company. The
Company recognizes compensation expense immediately, as the grants are based on
historical compensation. The total grant-date price of the non-vested stock
granted from January 1, 2001 through December 31, 2001 is $9.9 million. During
2001, 16,414 shares of non-vested stock were forfeited with a total grant-date
price of $0.6 million. The outstanding share balance in the 2001 plan is
248,977.

During 2001, JHFS granted 72,749 shares of non-vested stock to Company
executive officers at a weighted-average grant price of $35.72 per share. These
grants of non-vested stock are forfeitable and vest at three or five years of
service within the Company. The Company amortizes compensation expense for the
grant over the vesting period. Total amortization for the period ending
December 31, 2001, is $0.3 million. The total grant-date price of the
non-vested stock granted from January 1, 2001 through December 31, 2001, is $2.6
million. During 2001, 14,000 shares of non-vested stock were forfeited with a
total grant-date exercise price of $0.5 million. The outstanding share balance
in the Executive Restricted Stock Compensation Plan is 58,749 at December 31,
2001.

In 2001, JHFS issued 3,129 shares to Non-Employee Directors as payment of 50%
of their quarterly retainer. These shares are not forfeitable and vest
immediately. The total grant-date price of this stock issued to the Company's
non-employee directors from January 1, 2001 through December 31, 2001 is $0.1
million. In addition, in July 2001, the Company implemented a plan that would
allow directors, at their discretion, to invest one half of their quarterly
retainer in JHFS' common stock in lieu of receiving cash. JHFS will match any
investment at a rate of 50%. The restricted stock given as matching shares, is
forfeitable and vests over three years, thus amortizes the balance to director
compensation expense over the vesting period. At December 31, 2001, 256 shares
were matched under the program at a weighted-average grant price per share of
$39.07. Total amortization expense recognized for the period ending December
31, 2001 is $0.01 million. There were no forfeitures through December 31, 2001.

On January 9, 2002, the Compensation Committee of JHFS' Board of Directors
approved stock and stock option grants to the Policy Committee and certain key
employees of the Company. The equity grants were made in compliance with the
terms of the Long-Term Stock Incentive Plan. A total of 550.0 thousand shares
of non-vested stock was granted, with a total grant date price of $22.9 million.
A total of 6.2 million options were granted, with a grant date fair value of
$12.57 per option as determined by the Black-Scholes option valuation model.

On February 5, 2002, the Compensation Committee of JHFS' Board of Directors
approved stock grants to executive officers and approved stock and stock option
grants to certain key employees and agents of the Company. A total of 87.4
thousand shares of non-vested stock was issued by the Company to executive
officers for cash totaling $3.3 million or $38.22 per share. A total of 154.6
thousand shares of non-vested stock was granted to certain key personnel, with a
total grant price of $5.9 million. This program was funded with cash and the
shares were purchased on the open market at the weighted-average grant price of
$38.22 per share. A total of 602.0 thousand options were granted, with a grant
date price of $11.34 per option as determined by the Black-Scholes option
valuation model.

Stock Ownership Loan Program

In January 2000, JHFS adopted a loan program whereby JHFS may extend credit to
key Company executives to purchase JHFS stock in order for them to meet
mandatory stock ownership requirements. These full recourse loans bear interest
at variable rates and principal and interest are payable no later than the death
of the executive, termination of employment or five years. As of December 31,
2001 and 2000, these amounts loaned by JHFS to Company executives were $2.9
million and $3.6 million, respectively.

107

JOHN HANCOCK LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS -
OTHER THAN INVESTMENTS IN RELATED PARTIES
As of December 31, 2001
(in millions)

Column A Column B Column C Column D

AMOUNT AT
WHICH SHOWN
IN THE
CONSOLIDATED
TYPE OF INVESTMENT COST /(2)/ VALUE BALANCE SHEET
- ------------------ --------- --------- ---------------
Fixed maturity securities,
available-for-sale:
Bonds:
United States government and government
agencies
and authorities....................... $ 332.7 $ 330.1 $ 330.1
States, municipalities and political
subdivisions.......................... 202.6 206.9 206.9
Foreign governments.................... 457.0 497.8 497.8
Public utilities....................... 3,178.5 3,198.0 3,198.0
Convertibles and bonds with warrants
attached.............................. 496.7 503.5 503.5
All other corporate bonds.............. 30,405.2 30,644.0 30,644.0
Certificates of deposits............... -- -- --
Redeemable preferred stock............. 705.3 691.8 691.8
--------- --------- ---------
Total fixed maturity securities,
available-for-sale.................... $35,778.0 $36,072.1 $36,072.1
========= ========= =========
Equity securities, available-for-sale:
Common stocks:
Public utilities....................... -- -- --
Banks, trust and insurance companies... -- -- --
Industrial, miscellaneous and all other $ 307.2 $ 433.7 $ 433.7
Non-redeemable preferred stock......... 125.9 128.6 128.6
--------- --------- ---------
Total equity securities,
available-for-sale.................... $ 433.1 $ 562.3 $ 562.3
========= ========= =========
Fixed maturity securities,
held-to-maturity:
Bonds
United States government and government
agencies
and authorities....................... $ 25.8 $ 27.2 $ 25.8
States, municipalities and political
subdivisions.......................... 509.8 499.6 509.8
Foreign governments.................... -- -- --
Public utilities....................... 140.2 140.1 140.2
Convertibles and bonds with warrants
attached.............................. -- -- --
All other corporate bonds.............. 1,169.1 1,164.4 1,169.1
Certificates of deposits............... 78.6 76.9 78.6
Redeemable preferred stock............. -- -- --
--------- --------- ---------
Total fixed maturity securities,
held-to-maturity...................... $ 1,923.5 $ 1,908.2 $ 1,923.5
========= ========= =========

The condensed financial information should be read in conjunction with the
audited consolidated financial statements and notes thereto.

108

JOHN HANCOCK LIFE INSURANCE COMPANY

SCHEDULE I -- SUMMARY OF INVESTMENTS -
OTHER THAN INVESTMENTS IN RELATED PARTIES (continued)
As of December 31, 2001
(in millions)

Column A Column B Column C Column D

AMOUNT AT
WHICH SHOWN
IN THE
CONSOLIDATED
TYPE OF INVESTMENT COST /(2)/ VALUE BALANCE SHEET
- ------------------ --------- --------- ---------------
Equity securities, trading:
Common stocks:
Public utilities....................... -- -- --
Banks, trust and insurance companies... -- -- --
Industrial, miscellaneous and all other $ 2.7 $ 1.4 $ 1.4
Non-redeemable preferred stock......... -- -- --
--------- --------- ---------
Total equity securities, trading....... 2.7 1.4 1.4
--------- --------- ---------
Mortgage loans on real estate, net /(1)/. 9,779.8 XXXX 9,667.0
Real estate, net:
Investment properties /(1)/............ 290.0 XXXX 253.3
Acquired in satisfaction of debt /(1)/. 174.0 XXXX 127.1
Policy loans........................... 1,927.0 XXXX 1,927.0
Other long-term investments /(2)/...... 1,676.9 XXXX 1,676.9
Short-term investments................. 78.6 XXXX 78.6
--------- --------- ---------
Total investments...................... $52,060.5 $38,544.0 $52,289.2
========= ========= =========

/(1)/ Difference between Column B and Column D is primarily due to valuation
allowances due to impairments on mortgage loans on real estate and due to
accumulated depreciation. See Note 3 to the audited consolidated financial
statements.

/(2)/ Difference between Column B and Column C is primarily due to operating
gains (losses) of investments in limited partnerships.

The condensed financial information should be read in conjunction with the
audited consolidated financial statements and notes thereto.

109

JOHN HANCOCK LIFE INSURANCE COMPANY

SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
As of December 31, 2001, 2000 and 1999 and for each of the years then ended
(in millions)

Column A Column B Column C Column D Column E Column F

FUTURE OTHER
POLICY POLICY
BENEFITS, CLAIMS
DEFERRED LOSSES, AND
POLICY CLAIMS BENEFITS
ACQUISITION AND LOSS UNEARNED PAYABLE PREMIUM
SEGMENT COSTS EXPENSES PREMIUMS /(1)/ /(1)/ REVENUE
- ------- ----------- --------- ------------ -------- ----------

2001:
Protection........... $2,557.1 $18,369.2 $280.4 $102.0 $1,363.8
Asset Gathering 616.2 6,689.4 -- 0.1 74.8
Guaranteed &
Structured Financial
Products............ 8.8 24,375.1 65.7 4.9 483.3
Investment Management -- -- -- -- --
Corporate & Other.... 4.2 1,284.4 (0.1) 96.8 430.0
-------- --------- ------ ------ --------
Total................ $3,186.3 $50,718.1 $346.0 $203.8 $2,351.9
======== ========= ====== ====== ========
2000:
Protection........... $2,455.7 $16,671.2 $262.6 $ 89.9 $1,295.5
Asset Gathering...... 558.2 5,619.9 -- (4.5) 63.4
Guaranteed &
Structured Financial
Products............ 8.5 21,944.2 60.4 0.7 620.3
Investment Management -- -- -- -- --
Corporate & Other 4.7 1,488.3 0.1 170.3 411.5
-------- --------- ------ ------ --------
Total................ $3,027.1 $45,723.6 $323.1 $256.4 $2,390.7
======== ========= ====== ====== ========
1999:
Protection........... $2,291.6 $15,035.0 $217.4 $112.1 $1,291.0
Asset Gathering...... 521.5 5,166.8 -- 0.2 17.2
Guaranteed &
Structured Financial
Products............ 8.4 20,310.4 56.1 0.5 298.2
Investment Management -- -- -- -- --
Corporate & Other.... 4.8 1,882.4 0.1 171.5 415.0
-------- --------- ------ ------ --------
Total................ $2,826.3 $42,394.6 $273.6 $284.3 $2,021.4
======== ========= ====== ====== ========

The condensed financial information should be read in conjunction with the
audited consolidated financial statements and notes thereto.

110

JOHN HANCOCK LIFE INSURANCE COMPANY

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION -- (CONTINUED)
As of December 31, 2001, 2000 and 1999 and for each of the years then ended
(in millions)

Column A Column B Column C Column D Column E

AMORTIZATION
OF DEFERRED
POLICY
ACQUISITION
BENEFITS, COSTS EXCLUDING
CLAIMS, AMOUNTS RELATED TO
NET LOSSES, AND NET REALIZED OTHER
INVESTMENT SETTLEMENT INVESTMENT AND OTHER OPERATING
SEGMENT INCOME EXPENSES GAINS (LOSSES) EXPENSES
- ------- ---------- ----------- -------------------- -----------

2001:
Protection............. $1,258.5 $1,603.3 $171.3 $ 346.0
Asset Gathering........ 498.5 441.6 75.0 452.4
Guaranteed & Structured
Financial Products.... 1,834.5 1,869.2 2.4 107.0
Investment Management.. 28.7 -- -- 97.9
Corporate & Other...... 26.0 414.0 0.3 224.5
-------- -------- ------ --------
Total ................. $3,646.2 $4,328.1 $249.0 $1,227.8
======== ======== ====== ========
2000:
Protection............. $1,196.3 $1,550.1 $106.0 $ 405.2
Asset Gathering........ 445.8 371.3 78.8 557.2
Guaranteed & Structured
Financial Products.... 1,741.9 1,963.4 2.6 108.8
Investment Management.. 22.7 -- -- 132.7
Corporate & Other...... 157.2 362.6 (0.3) 84.9
-------- -------- ------ --------
Total $3,563.9 $4,247.4 $187.1 $1,288.8
======== ======== ====== ========
1999:
Protection............. $1,101.9 $1,595.0 $ 69.2 $ 401.2
Asset Gathering........ 388.6 299.3 53.5 542.1
Guaranteed & Structured
Financial Products.... 1,681.3 1,959.9 3.1 94.5
Investment Management 45.9 -- -- 127.2
Corporate & Other...... 121.2 731.2 (0.8) 86.0
-------- -------- ------ --------
Total.................. $3,338.9 $4,585.4 $125.0 $1,251.0
======== ======== ====== ========

/(1)/ Unearned premiums and other policy claims and benefits payable are
included in Column C amounts.

/(2)/ Allocations of net investment income and certain operating expenses are
based on a number of assumptions and estimates, and reported operating results
would change by segment if different methods were applied.

The condensed financial information should be read in conjunction with the
audited consolidated financial statements and notes thereto.

111

JOHN HANCOCK LIFE INSURANCE COMPANY

SCHEDULE IV - REINSURANCE
As of December 31, 2001, 2000 and 1999 and for each of the years then ended:
(in millions)

ASSUMED PERCENTAGE
CEDED TO FROM OF AMOUNT
GROSS OTHER OTHER NET ASSUMED TO
AMOUNT COMPANIES COMPANIES AMOUNT NET
---------- ---------- --------- ---------- ------------

2001:
Life insurance in force $282,557.8 $107,601.2 $27,940.6 $202,897.2 13.8%
========== ========== ========= ==========
Premiums:
Life insurance.............. 2,551.6 787.6 233.2 1,997.2 11.7%
Accident and health
Insurance.................. 529.1 368.9 194.5 354.7 54.8%
P&C......................... -- -- -- -- 0.0%
---------- ---------- --------- ----------
Total..................... $ 3,080.7 $ 1,156.5 $ 427.7 $ 2,351.9 18.2%
========== ========== ========= ==========

2000:
Life insurance in force $245,171.2 $ 49,119.2 $27,489.1 $223,541.0 12.3%
========== ========== ========= ==========
Premiums:
Life insurance.............. 2,369.9 313.7 279.0 2,335.2 11.9%
Accident and health
Insurance.................. 810.4 941.3 186.4 55.5 335.9%
P&C......................... -- -- -- -- 0.0%
---------- ---------- --------- ----------
Total..................... $ 3,180.3 $ 1,255.0 $ 465.4 $ 2,390.7 19.5%
========== ========== ========= ==========
1999:
Life insurance in force $283,946.1 $ 43,244.4 $29,214.6 $269,916.3 10.8%
========== ========== ========= ==========
Premiums:
Life insurance.............. 2,074.5 408.1 139.4 1,806.1 7.7%
Accident and health
Insurance.................. 863.8 820.4 171.6 215.0 79.8%
P&C......................... -- -- 0.3 0.3 100.0%
---------- ---------- --------- ----------
Total..................... $ 2,938.3 $ 1,228.5 $ 311.3 $ 2,021.4 15.4%
========== ========== ========= ==========

Note: The life insurance caption represents principally premiums from
traditional life insurance and life-contingent immediate annuities and excludes
deposits on investment products and the universal life insurance products.

The condensed financial information should be read in conjunction with the
audited consolidated financial statements and notes thereto.

112

SECOND QUARTER 2002 ACCOUNT UV FINANCIALS

(TO BE ADDED BY AMENDMENT)

113

REPORT OF INDEPENDENT AUDITORS

To the Policyholders of
John Hancock Variable Life Account UV
of John Hancock Life Insurance Company

We have audited the accompanying statement of assets and liabilities of
John Hancock Variable Life Account UV (the Account) (comprising of,
respectively, the Large Cap Growth, Active Bond, International Equity Index,
Small Cap Growth, Global Balanced, Mid Cap Growth, Large Cap Value, Money
Market, Small/Mid Cap Growth, Real Estate Equity, Growth & Income, Managed,
Short-Term Bond, Small Cap Equity, International Opportunities, Equity Index,
Global Bond, Emerging Markets (formerly Emerging Markets Equity), Bond Index,
Small/Mid Cap CORE, High Yield Bond, Turner Core Growth, Brandes International
Equity, Frontier Capital Appreciation, Clifton Enhanced US Equity, Large Cap
Aggressive Growth, Fundamental Growth, AIM V.I. Value, Fidelity VIP Growth,
Fidelity VIP II Contrafund, MFS New Discovery Series, V.A. Strategic Income,
Health Sciences, International Equity, Large/Mid Cap Value, Small Cap Value
(formerly Small/Mid Cap Value), AIM V.I. Growth Series, MFS Research Series, and
Templeton International Subaccounts) as of December 31, 2001, and the related
statements of operations and changes in net assets for each of the periods
indicated therein. These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of each of the respective
subaccounts constituting John Hancock Variable Life Account UV at December 31,
2001, the results of their operations for the year then ended, and the changes
in their net assets for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

Boston, Massachusetts
February 8, 2002

114

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2001

Large Cap International
Growth Active Bond Equity Index
Subaccount Subaccount Subaccount
---------- ----------- -------------

Assets
Investment in shares of portfolios of:
John Hancock Variable Series Trust I,
at value.............................. $40,778,508 $ 97,207,604 $5,224,610
Policy loans and accrued interest
receivable............................ 2,816,552 11,610,304 429,026
Receivable from portfolio/JHLICO....... 112,189 70,028 2,647
----------- ------------ ----------
Total assets........................... 43,707,249 108,887,936 5,656,283
Liabilities
Payable to portfolio/JHLICO............ 110,064 65,739 2,377
Asset charges payable.................. 2,125 4,289 269
----------- ------------ ----------
Total liabilities...................... 112,189 70,028 2,646
----------- ------------ ----------
$43,595,060 $108,817,908 $5,653,637
----------- ------------ ----------
Net assets:
Accumulation units.................... $43,595,060 $108,817,908 $5,653,637
----------- ------------ ----------
Total net assets..................... $43,595,060 $108,817,908 $5,653,637
----------- ------------ ----------
Units outstanding.................... 627,315 1,941,434 221,470
----------- ------------ ----------
Unit value (accumulation)............ $ 69.49 $ 56.05 $ 25.53
=========== ============ ==========

Small Cap Global Mid Cap
Growth Balanced Growth
Subaccount Subaccount Subaccount
---------- ---------- ----------

Assets
Investment in shares of portfolios of:
John Hancock Variable Series Trust I,
at value............................. $4,876,292 $3,248,070 $17,593,663
Policy loans and accrued interest
receivable............................ -- -- --
Receivable from portfolio/JHLICO....... 34,125 160 64,808
---------- ---------- -----------
Total assets........................... 4,910,417 3,248,230 17,658,471
Liabilities
Payable to portfolio/JHLICO............ 33,891 -- 63,946
Asset charges payable.................. 234 160 862
---------- ---------- -----------
Total liabilities...................... 34,125 160 64,808
---------- ---------- -----------
$4,876,292 $3,248,070 $17,593,663
---------- ---------- -----------
Net assets:
Accumulation units.................... $4,876,292 $3,248,070 $17,593,663
---------- ---------- -----------
Total net assets..................... $4,876,292 $3,248,070 $17,593,663
---------- ---------- -----------
Units outstanding.................... 329,623 290,809 1,234,358
---------- ---------- -----------
Unit value (accumulation)............ $ 14.79 $ 11.17 $ 14.25
========== ========== ===========

See accompanying notes.

115

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (continued)

December 31, 2001

Large Cap Money Small/Mid Cap
Value Market Growth
Subaccount Subaccount Subaccount
----------- ----------- -------------
Assets
Investment in shares of portfolios of:
John Hancock Variable Series Trust I,
at value............................. $23,397,684 $20,091,408 $8,467,406
Policy loans and accrued interest
receivable............................ -- 2,238,941 --
Receivable from portfolio/JHLICO....... 98,670 217,372 3,185
----------- ----------- ----------
Total assets........................... 23,496,354 22,547,721 8,470,591
Liabilities
Payable to portfolio/JHLICO............ 97,521 218,321 2,768
Asset charges payable.................. 1,149 336 417
----------- ----------- ----------
Total liabilities...................... 98,670 218,657 3,185
----------- ----------- ----------
$23,397,684 $22,329,064 $8,467,406
----------- ----------- ----------
Net assets:
Accumulation units.................... $23,397,684 $22,329,064 $8,467,406
----------- ----------- ----------
Total net assets..................... $23,397,684 $22,329,064 $8,467,406
----------- ----------- ----------
Units outstanding.................... 1,282,001 683,765 388,270
----------- ----------- ----------
Unit value (accumulation)............ $ 18.25 $ 32.66 $ 21.81
=========== =========== ==========

Real Estate Growth &
Equity Income Managed
Subaccount Subaccount Subaccount
----------- ------------ ------------
Assets
Investment in shares of portfolios of:
John Hancock Variable Series Trust I,
at value............................. $5,525,379 $197,711,222 $ 94,814,008
Policy loans and accrued interest
receivable............................ 375,743 32,585,795 13,948,330
Receivable from portfolio/JHLICO....... 41,181 125,660 25,333
---------- ------------ ------------
Total assets........................... 5,942,303 230,422,677 108,787,671
Liabilities
Payable to portfolio/JHLICO............ 40,902 117,099 20,850
Asset charges payable.................. 276 8,561 5,168
---------- ------------ ------------
Total liabilities...................... 41,178 125,660 26,018
---------- ------------ ------------
$5,901,125 $230,297,017 $108,761,653
---------- ------------ ------------
Net assets:
Accumulation units.................... $5,901,125 $230,297,017 $108,761,653
---------- ------------ ------------
Total net assets..................... $5,901,125 $230,297,017 $108,761,653
---------- ------------ ------------
Units outstanding.................... 132,974 1,818,448 1,272,533
---------- ------------ ------------
Unit value (accumulation)............ $ 44.38 $ 126.64 $ 85.47
========== ============ ============

See accompanying notes.

116

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (continued)

December 31, 2001

Short-Term Small Cap International
Bond Equity Opportunities
Subaccount Subaccount Subaccount
---------- ---------- -------------
Assets
Investment in shares of portfolios of:
John Hancock Variable Series Trust I,
at value............................. $1,054,613 $4,641,466 $11,919,734
Policy loans and accrued interest
receivable............................ -- -- --
Receivable from portfolio/JHLICO....... 2,603 39,222 24,763
---------- ---------- -----------
Total assets........................... 1,057,216 4,680,688 11,944,497
Liabilities
Payable to portfolio/JHLICO............ 2,553 39,008 24,187
Asset charges payable.................. 50 215 576
---------- ---------- -----------
Total liabilities...................... 2,603 39,223 24,763
---------- ---------- -----------
$1,054,613 $4,641,465 $11,919,734
---------- ---------- -----------
Net assets:
Accumulation units.................... $1,054,613 $4,641,465 $11,919,734
---------- ---------- -----------
Total net assets..................... $1,054,613 $4,641,465 $11,919,734
---------- ---------- -----------
Units outstanding.................... 70,417 436,086 1,103,525
---------- ---------- -----------
Unit value (accumulation)............ $ 14.98 $ 10.64 $ 10.80
========== ========== ===========

Emerging
Equity Index Global Bond Markets
Subaccount Subaccount Subaccount
------------ ----------- ------------
Assets
Investment in shares of portfolios of:
John Hancock Variable Series Trust I,
at value............................. $51,694,821 $797,319 $893,036
Policy loans and accrued interest
receivable............................ -- -- --
Receivable from portfolio/JHLICO....... 53,474 230 8,020
----------- -------- --------
Total assets........................... 51,748,295 797,549 901,056
Liabilities
Payable to portfolio/JHLICO............ 50,918 194 7,978
Asset charges payable.................. 2,555 36 43
----------- -------- --------
Total liabilities...................... 53,473 230 8,021
----------- -------- --------
$51,694,822 $797,319 $893,035
----------- -------- --------
Net assets:
Accumulation units.................... $51,694,822 $797,319 $893,035
----------- -------- --------
Total net assets..................... $51,694,822 $797,319 $893,035
----------- -------- --------
Units outstanding.................... 2,838,268 60,288 122,482
----------- -------- --------
Unit value (accumulation)............ $ 18.21 $ 13.23 $ 7.29
=========== ======== ========

See accompanying notes.

117

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (continued)

December 31, 2001

Small/mid Cap High Yield
Bond Index CORE Bond
Subaccount Subaccount Subaccount
---------- ------------- ------------
Assets
Investment in shares of portfolios of:
John Hancock Variable Series Trust I,
at value............................. $5,365,289 $ 505,368 $980,405
Receivable from portfolio / JHLICO..... 2,746 7,956 3,357
---------- ----------- --------
Total assets........................... 5,368,035 513,324 983,762
Liabilities
Payable to portfolio / JHLICO.......... 2,483 7,931 3,310
Asset charges payable.................. 263 25 46
---------- ----------- --------
Total liabilities...................... 2,746 7,956 3,356
---------- ----------- --------
$5,365,289 $ 505,368 $980,406
---------- ----------- --------
Net assets:
Accumulation units.................... $5,365,289 $ 505,368 $980,406
---------- ----------- --------
Total net assets..................... $5,365,289 $ 505,368 $980,406
---------- ----------- --------
Units outstanding.................... 435,798 45,196 107,798
---------- ----------- --------
Unit value (accumulation)............ $ 12.31 $ 11.18 $ 9.09
========== =========== ========

Brandes Frontier
Turner Core International Capital
Growth Equity Appreciation
Subaccount Subaccount Subaccount
----------- ----------- ------------
Assets
Investment in shares of portfolios of:
Outside Trust, at value............... $362,393 $1,127,660 $459,976
Receivable from portfolio / JHLICO..... 10 29 15
-------- ---------- --------
Total assets........................... 362,403 1,127,689 459,991
Liabilities
Payable to portfolio / JHLICO.......... -- -- --
Asset charges payable.................. 11 29 15
-------- ---------- --------
Total liabilities...................... 11 29 15
-------- ---------- --------
$362,392 $1,127,660 $459,976
-------- ---------- --------
Net assets:
Accumulation units.................... $362,392 $1,127,660 $459,976
-------- ---------- --------
Total net assets..................... $362,392 $1,127,660 $459,976
-------- ---------- --------
Units outstanding.................... 21,047 71,396 21,343
-------- ---------- --------
Unit value (accumulation)............ $ 17.22 $ 15.79 $ 21.55
======== ========== ========

See accompanying notes.

118

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (continued)

December 31, 2001

Clifton Large Cap
Enhanced Aggressive Fundamental
Us Equity Growth Growth
Subaccount Subaccount Subaccount
---------- ---------- -------------
Assets
Investment in shares of portfolios of:
John Hancock Variable Series Trust I,
at value............................. $ -- $1,524 $10,796
Outside Trust, at value............... 28,059 -- --
Receivable from portfolio/JHLICO....... 1 -- 1
------- ------ -------
Total assets........................... 28,060 1,524 10,797
Liabilities
Payable to portfolio/JHLICO............ -- -- --
Asset charges payable.................. 1 -- 1
------- ------ -------
Total liabilities...................... 1 -- 1
------- ------ -------
$28,059 $1,524 $10,796
------- ------ -------
Net assets:
Accumulation units.................... $28,059 $1,524 $10,796
------- ------ -------
Total net assets..................... $28,059 $1,524 $10,796
------- ------ -------
Units outstanding.................... 2,738 221 1,558
------- ------ -------
Unit value (accumulation)............ $ 10.25 $ 6.90 $ 6.93
======= ====== =======

Fidelity VIP Fidelity VIP II
Aim V.I. Value Growth Contrafund
Subaccount Subaccount Subaccount
-------------- ------------ ---------------

Assets
Investment in shares of
portfolios of:
Outside Trust, at value............... $12,416 $ 671 $12,123
Receivable from portfolio/
JHLICO................................ 1 -- 1
------- ----- -------
Total assets........................... 12,417 671 12,124
Liabilities
Payable to portfolio / JHLICO -- -- --
Asset charges payable.................. -- -- --
Total liabilities...................... 1 -- 1
------- ----- -------
$12,416 $ 671 $12,123
------- ----- -------
Net assets:
Accumulation units.................... $12,416 $ 671 $12,123
------- ----- -------
Total net assets..................... $12,416 $ 671 $12,123
------- ----- -------
Units outstanding.................... 1,695 91 1,443
------- ----- -------
Unit value (accumulation)............ $ 7.33 $7.37 $ 8.40
======= ===== =======

See accompanying notes.

119

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (continued)

December 31, 2001

MFS New
Discovery V.A. Strategic
Series Income Health Sciences
Subaccount Subaccount Subaccount
---------- -------------- ---------------

Assets
Investment in shares of portfolios
of:
John Hancock Variable Series
Trust, at value.................. $ -- $ -- $3,348
Declaration Trust................. -- 144 --
Outside Trust, at value........... 106,557 -- --
Receivable from portfolio/
JHLICO............................ 5 -- --
-------- ------ ------
Total assets....................... 106,562 144 3,348
Liabilities
Payable to portfolio/JHLICO........ -- -- --
Asset charges payable.............. 5 -- --
-------- ------ ------
Total liabilities.................. 5 -- --
-------- ------ ------
$106,557 $ 144 $3,348
-------- ------ ------
Net assets:
Accumulation units................ $106,557 $ 144 $3,348
-------- ------ ------
Total net assets................. $106,557 $ 144 $3,348
-------- ------ ------
Units outstanding................ 11,273 14 343
-------- ------ ------
Unit value (accumulation)........ $ 9.45 $10.29 $ 9.76
======== ====== ======

International Large/Mid Cap Small Cap
Equity Value Value
Subaccount Subaccount Subaccount
------------- ------------- -----------
Assets
Investment in shares of portfolios
of:
John Hancock Variable Series
Trust, at value.................. $1,032 $4,393,211 $31,149
Receivable from portfolio / JHLICO -- 1,711 1
------ ---------- -------
Total assets....................... 1,032 4,394,922 31,150
Liabilities
Payable to portfolio / JHLICO...... -- 1,523 --
Asset charges payable.............. -- 188 2
------ ---------- -------
Total liabilities.................. -- 1,711 2
------ ---------- -------
$1,032 $4,393,211 $31,148
------ ---------- -------
Net assets:
Accumulation units................ $1,032 $4,393,211 $31,148
------ ---------- -------
Total net assets................. $1,032 $4,393,211 $31,148
------ ---------- -------
Units outstanding................ 123 322,043 2,980
------ ---------- -------
Unit value (accumulation)........ $ 8.39 $ 13.64 $ 10.45
====== ========== =======

See accompanying notes.

120

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF ASSETS AND LIABILITIES (continued)

December 31, 2001

AIM V.I. MFS Research Templeton
Growth Series Series International
Subaccount Subaccount Subaccount
------------- ------------ --------------
Assets
Investment in shares of
portfolios of:
Outside Trust, at value......... $1,712 $1,754 $2,133
Receivable from portfolio /
JHLICO.......................... -- -- --
------ ------ ------
Total assets..................... 1,712 $1,754 2,133
Liabilities
Payable to portfolio / JHLICO.... -- -- --
Total liabilities................ -- -- --
------ ------ ------
$1,712 $1,754 $2,133
------ ------ ------
Net assets:
Accumulation units.............. $1,712 $1,754 $2,133
------ ------ ------
Total net assets............... $1,712 $1,754 $2,133
------ ------ ------
Units outstanding.............. 203 204 261
------ ------ ------
Unit value (accumulation)...... $ 8.43 $ 8.60 $ 8.17
====== ====== ======

See accompanying notes.

121

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF OPERATIONS

For the year ended December 31, 2001

Large Cap International
Growth Active Bond Equity Index
Subaccount Subaccount Subaccount
---------- ----------- -------------
Investment income:
Income:
Dividends........................ $ 75,058 $5,575,227 $ 92,540
Interest on policy loans......... 224,030 840,444 32,013
----------- ---------- -----------
Total investment income............ 299,088 6,415,671 124,553
Expenses:
Mortality and expense risks....... 237,021 492,587 35,964
----------- ---------- -----------
Net investment income.............. 62,067 5,923,084 88,589
Realized gains (losses) on
investments:
Realized loss on sale of portfolio
shares........................... (303,166) (578,863) (244,081)
Realized gain distributions....... -- -- 690
----------- ---------- -----------
Realized losses.................... (303,166) (578,863) (243,391)
Change in unrealized appreciation
(depreciation) during the period.. (6,989,603) 1,577,966 (1,167,176)
----------- ---------- -----------
Net increase (decrease) in net
assets resulting from operations.. $(7,230,702) $6,922,187 $(1,321,978)
=========== ========== ===========

Small Cap Global Mid Cap
Growth Balanced Growth
Subaccount Subaccount Subaccount
---------- ---------- -------------
Investment income:
Income:
Dividends........................... $ -- $ 4,344 $ --
--------- -------- -----------
Total investment income............... -- 4,344 --
Expenses:
Mortality and expense risks.......... 27,911 1,319 85,083
--------- -------- -----------
Net investment income (loss).......... (27,911) 3,025 (85,083)
Realized gains (losses) on investments:
Realized loss on sale of portfolio
shares.............................. (193,161) (18,478) (2,329,455)
Realized gain distributions.......... -- -- --
--------- -------- -----------
Realized losses....................... (193,161) (18,478) (2,329,455)
Change in unrealized appreciation
(depreciation) during the period..... (449,625) 12,916 (4,249,250)
--------- -------- -----------
Net decrease in net assets resulting
from operations..................... $(670,697) $ (2,537) $(6,663,788)
========= ======== ===========

See accompanying notes.

122

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF OPERATIONS (continued)

For the year ended December 31, 2001

Large Cap Money Small/Mid Cap
Value Market Growth
Subaccount Subaccount Subaccount
---------- ---------- ---------------
Investment income:
Income:
Dividends.......................... $ 278,945 $797,762 $ --
Interest on policy loans........... -- 169,029 --
--------- -------- ---------
Total investment income.............. 278,945 966,791 --
Expenses:
Mortality and expense risks......... 108,117 132,202 34,942
--------- -------- ---------
Net investment income (loss)......... 170,828 834,589 (34,942)
Realized gains (losses) on
investments:
Realized gain (loss) on sale of
portfolio shares................... 69,861 -- (212,465)
Realized gain distributions......... 274,383 -- --
--------- -------- ---------
Realized gains (losses).............. 344,244 -- (212,465)
Change in unrealized appreciation
(depreciation) during the period.... (277,488) -- 391,420
--------- -------- ---------
Net increase in net assets resulting
from operations..................... $ 237,584 $834,589 $ 144,013
========= ======== =========

Real Estate Growth &
Equity Income MANAGED
Subaccount Subaccount Subaccount
----------- -------------- -------------
Investment income:
Income:
Dividends........................ $ 233,523 $ 1,000,312 $ 2,011,926
Interest on policy loans......... 29,769 2,433,647 1,055,240
--------- ------------- -----------
Total investment income............ 263,292 3,433,959 3,067,166
Expenses:
Mortality and expense risks....... 33,541 1,065,963 624,031
--------- ------------- -----------
Net investment income.............. 229,751 2,367,996 2,443,135
Realized gains (losses) on
investments:
Realized gain (loss) on sale of
portfolio shares................. (234,535) 205,711 33,494
Realized gain distributions....... 167,156 -- 495,279
--------- ------------- -----------
Realized gains (losses)............ (67,379) 205,711 528,773
Change in unrealized appreciation
(depreciation) during the period.. 128,322 (37,067,063) (5,276,809)
--------- ------------- -----------
Net increase (decrease) in net
assets resulting from operations.. $ 290,694 $ (34,493,356) $(2,304,901)
========= ============= ===========

See accompanying notes.

123

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF OPERATIONS (continued)

For the year ended December 31, 2001

Short-Term Small Cap International
Bond Equity Opportunities
Subaccount Subaccount Subaccount
---------- ---------- -------------
Investment income:
Income:
Dividends.......................... $27,491 $ 2,669 $ 104,368
------- --------- -----------
Total investment income.............. 27,491 2,669 104,368
Expenses:
Mortality and expense risks......... 3,039 21,562 78,353
------- --------- -----------
Net investment income (loss)......... 24,452 (18,893) 26,015
Realized gains (losses) on
investments:
Realized gain (loss) on sale of
portfolio shares................... 8,797 (553,686) (2,366,905)
Realized gain distributions......... -- -- --
------- --------- -----------
Realized gains (losses).............. 8,797 (553,686) (2,366,905)
Change in unrealized appreciation
(depreciation) during the period.... (2,372) 580,661 (510,586)
------- --------- -----------
Net increase (decrease) in net assets
resulting from operations........... $30,877 $ 8,082 $(2,851,476)
======= ========= ===========

Emerging
Equity Index Global Bond Markets
Subaccount Subaccount Subaccount
------------- ----------- ------------
Investment income:
Income:
Dividends......................... $ 580,736 $ 39,052 $ 1,896
------------ --------- ---------
Total investment income............. 580,736 39,052 1,896
Expenses:
Mortality and expense risks........ 288,749 6,664 4,801
------------ --------- ---------
Net investment income (loss)........ 291,987 32,388 (2,905)
Realized gains (losses) on
investments:
Realized loss on sale of portfolio
shares........................... (350,536) (4,928) (512,242)
Realized gain distributions....... 1,572,305 -- --
------------ --------- ---------
Realized gains (losses)............ 1,221,769 (4,928) (512,242)
Change in unrealized appreciation
(depreciation) during the period.. (8,084,684) (45,004) 454,961
------------ --------- ---------
Net decrease in net assets resulting
from operations................... $ (6,570,928) $ (17,544) $ (60,186)
============ ========= =========

See accompanying notes.

124

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF OPERATIONS (continued)

For the year ended December 31, 2001

Small/Mid Cap High Yield
Bond Index CORE Bond
Subaccount Subaccount Subaccount
---------- ------------- ------------
Investment income:
Income:
Dividends.......................... $146,628 $ 2,616 $ 62,648
-------- ------- ---------
Total investment income.............. 146,628 2,616 62,648
Expenses:
Mortality and expense risks......... 14,407 3,013 4,178
-------- ------- ---------
Net investment income (loss)......... 132,221 (397) 58,470
Realized gains (losses) on
investments:
Realized gain (loss) on sale of
portfolio shares................... 9,436 (3,169) (133,868)
Realized gain distributions......... 8,792 -- --
-------- ------- ---------
Realized gains (losses).............. 18,228 (3,169) (133,868)
Change in unrealized appreciation
(depreciation) during the period.... (26,418) 25,735 132,879
-------- ------- ---------
Net increase in net assets resulting
from operations..................... $124,031 $22,169 $ 57,481
======== ======= =========

Brandes Frontier
Turner Core International Capital
Growth Equity Appreciation
Subaccount Subaccount Subaccount
----------- ------------- --------------
Investment income:
Income:
Dividends........................ $ 420 $ 14,525 $ --
--------- ---------- --------
Total investment income............ 420 14,525 --
Expenses:
Mortality and expense risks....... 1,981 5,876 2,728
--------- ---------- --------
Net investment income (loss)....... (1,561) 8,649 (2,728)
Realized gains (losses) on
investments:
Realized gain (loss) on sale of
portfolio shares................. (91,201) 28,195 (54,796)
Realized gain distributions....... -- 43,702 4,602
--------- ---------- --------
Realized gains (losses)............ (91,201) 71,897 (50,194)
Change in unrealized appreciation
(depreciation) during the period.. (12,342) (246,498) 52,457
--------- ---------- --------
Net decrease in net assets
resulting from operations......... $(105,104) $ (165,952) $ (465)
========= ========== ========

See accompanying notes.

125

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF OPERATIONS (continued)

For the year ended December 31, 2001

Clifton Large Cap
Enhanced Aggressive Fundamental
US Equity Growth Growth
Subaccount Subaccount Subaccount
---------- ---------- -----------
Investment income:
Income:
Dividends............................ $ 1,266 $ -- $ --
------- ----- -------
Total investment income................ 1,266 -- --
Expenses:
Mortality and expense risks........... 149 11 62
------- ----- -------
Net investment income (loss)........... 1,117 (11) (62)
Realized gains (losses) on investments:
Realized loss on sale of portfolio
shares............................... (826) (68) (340)
Realized gain distributions........... -- -- --
------- ----- -------
Realized losses........................ (826) (68) (340)
Change in unrealized depreciation during
the period............................ (3,148) (216) (3,866)
------- ----- -------
Net decrease in net assets resulting
from operations........................ $(2,857) $(295) $(4,268)
======= ===== =======

AIM V.I. Fidelity VIP Fidelity VIP II
Value Growth Contrafund
Subaccount Subaccount Subaccount
---------- ------------ ----------------
Investment income:
Income:
Dividends...................... $ 17 $ -- $ 41
------- ------- -------
Total investment income.......... 17 -- 41
Expenses:
Mortality and expense risks..... 61 18 65
------- ------- -------
Net investment loss.............. (44) (18) (24)
Realized gains (losses) on
investments:
Realized loss on sale of
portfolio shares............... (754) (1,717) (1,122)
Realized gain distributions..... 251 272 164
------- ------- -------
Realized losses.................. (503) (1,445) (958)
Change in unrealized appreciation
(depreciation) during the period (1,395) 469 (616)
------- ------- -------
Net decrease in net assets
resulting from operations....... $(1,942) $ (994) $(1,598)
======= ======= =======
See accompanying notes.

126

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF OPERATIONS (continued)

For the year ended December 31, 2001

MFS New
Discovery V.A. Strategic Health
Series Income Sciences
Subaccount Subaccount* Subaccount*
---------- -------------- -------------
Investment income:
Income:
Dividends........................ $ 3,157 $ 3 $ --
------- ----- -----
Total investment income............ 3,157 3 --
Expenses:
Mortality and expense risks....... 422 -- 3
------- ----- ----
Net investment income (loss)....... 2,735 3 (3)
Realized gains (losses) on
investments:
Realized gain (loss) on sale of
portfolio shares................. (2,026) 1 (1)
Realized gain distributions....... 125 -- --
------- ----- ----
Realized gains (losses)............ (1,901) 1 (1)
Change in unrealized appreciation
(depreciation) during the period.. (743) 1 (22)
------- ----- -----
Net increase (decrease) in net
assets resulting from operations.. $ 91 $ 5 $ (26)
======= ===== =====

International Large/Mid Cap Small Cap
Equity Value Value
Subaccount* Subaccount* Subaccount*
------------- ------------- ------------
Investment income:
Income:
Dividends......................... $ -- $ 3,406 $ 91
------- ------- ------
Total investment income............. -- 3,406 91
Expenses:
Mortality and expense risks........ 1 1,049 33
------- ------- ------
Net investment income (loss)........ (1) 2,357 58
Realized gains (losses) on
investments:
Realized loss on sale of
portfolio shares.................. -- (5,237) (308)
Realized gain distributions........ -- -- 164
------- ------- ------
Realized losses..................... -- (5,237) (144)
Change in unrealized appreciation
(depreciation) during the period... 7 (4,848) 2,861
------- ------- ------
Net increase (decrease) in net
assets resulting from operations... $ 6 $(7,728) $2,775
======= ======= ======
-------------------------
* From commencement of operations (refer to footnote d in notes to financial
statements #6)

See accompanying notes.

127

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENT OF OPERATIONS (continued)

For the year ended December 31, 2001

AIM V.I. MFS Research Templeton
Growth Series Series International
Subaccount* Subaccount* Subaccount*
------------- ------------ --------------
Investment income:
Income:
Dividends..................... $ 4 $ -- $--
--- ---- ---
Total investment income......... 4 -- --
Expenses:
Mortality and expense risks.... 2 2 3
--- ---- ---
Net investment income (loss).... 2 (2) (3)
Realized gains (losses) on
investments:
Realized gain on sale of
portfolio shares.............. -- 1 1
--- ---- ---
Realized gains................. -- 1 1
Change in unrealized appreciation
during the period.............. 68 114 83
--- ---- ---
Net increase in net assets
resulting from operations...... $70 $113 $81
=== ==== ===
-------------------------
* From commencement of operations (refer to footnote d in notes to financial
statements #6)

See accompanying notes.

128

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31,

Large Cap Growth Subaccount
-----------------------------------------
2001 2000 1999
----------- ------------ ------------
Increase (decrease) in net assets
from operations:
Net investment income (loss)..... $ 62,067 $ 6,287,826 $ 6,329,395
Realized gains (losses).......... (303,166) 1,809,410 1,146,308
Change in unrealized appreciation
(depreciation) during the period (6,989,603) (17,039,660) 320,087
----------- ------------ -----------
Net increase (decrease) in net
assets resulting from operations (7,230,702) (8,942,424) 7,795,790
Policy transactions:
Net premiums from policyholders.. 14,342,571 16,225,070 10,950,682
Net transfers to policyholders
for benefits and terminations... (6,740,426) (8,421,666) (5,776,293)
Net transfers between subaccounts (239,029) -- --
Net change in policy loans....... 165,268 407,961 --
----------- ------------ -----------
Net increase (decrease) in net
assets resulting from policy
transactions..................... 7,528,384 8,211,365 5,174,389
----------- ------------ -----------
Total increase (decrease) in net
assets........................... 297,682 (731,059) 12,970,179
Net assets at beginning of period 43,297,378 44,028,437 31,058,258
----------- ------------ ------------
Net assets at end of period....... $43,595,060 $ 43,297,378 $44,028,437
=========== ============ ===========

Active Bond Subaccount
------------------------------------------
2001 2000 1999
------------ ------------ -------------
Increase (decrease) in net assets
from operations:
Net investment income (loss).... $ 5,923,084 $ 5,332,953 $ 5,481,982
Realized gains (losses)......... (578,863) (1,058,175) (388,883)
Change in unrealized
appreciation (depreciation)
during the period.............. 1,577,966 3,862,398 (5,439,148)
------------ ------------ -----------
Net increase (decrease) in net
assets resulting from operations 6,922,187 8,137,176 (346,049)
Policy transactions:
Net premiums from policyholders 15,445,246 26,218,788 11,668,600
Net transfers to policyholders
for benefits and terminations.. (10,820,630) (17,903,281) (7,543,864)
Net change in policy loans...... (691,455) 620,295 --
------------ ------------ -----------
Net increase in net assets
resulting from policy
transactions.................... 3,933,161 8,935,802 4,124,736
------------ ------------ -----------
Total increase in net assets..... 10,855,348 17,072,978 3,778,687
Net assets at beginning of period 97,962,560 80,889,582 77,110,895
------------ ------------ -----------
Net assets at end of period...... $108,817,908 $ 97,962,560 $80,889,582
============ ============ ============

See accompanying notes.

129

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

International Equity Index Subaccount
----------------------------------------
2001 2000 1999
----------- ----------- -----------

Increase (decrease) in net assets
from operations:
Net investment income..................... $ 88,589 $ 322,155 $ 200,569
Realized gains (losses)................... (243,391) 76,586 62,140
Change in unrealized appreciation
(depreciation) during the period......... (1,167,176) (1,706,468) 1,295,768
----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations.......... (1,321,978) (1,307,727) 1,558,477
Policy transactions:
Net premiums from policyholders........... 1,612,633 2,208,528 1,634,643
Net transfers to policyholders for
benefits and terminations................ (1,532,111) (1,307,479) (1,119,500)
Net change in policy loans................ 10,754 110,023 --
----------- ----------- -----------
Net increase in net assets
resulting from policy transactions........ 91,276 1,011,072 515,143
----------- ----------- -----------
Total increase (decrease) in net
assets.................................... (1,230,702) (296,655) 2,073,620
Net assets at beginning of period.......... 6,884,339 7,180,994 5,107,374
----------- ----------- -----------
Net assets at end of period................ $ 5,653,637 $ 6,884,339 $ 7,180,994
=========== =========== ===========

Small Cap Growth Subaccount
----------------------------------------
2001 2000 1999
----------- ----------- ----------

Increase (decrease) in net assets
from operations:
Net investment income (loss).............. $ (27,911) $ 581,967 $ 527,624
Realized gains (losses)................... (193,161) 159,388 48,210
Change in unrealized appreciation
(depreciation) during the period......... (449,625) (2,654,137) 1,125,829
----------- ----------- ----------
Net increase (decrease) in net
assets resulting from operations.......... (670,697) (1,912,782) 1,701,663
Policy transactions:
Net premiums from policyholders........... 2,267,910 4,738,730 1,398,160
Net transfers to policyholders for
benefits and terminations................ (3,102,740) (956,063) (390,180)
----------- ----------- ----------
Net increase (decrease) in net
assets resulting from policy
transactions.............................. (834,830) 3,782,667 1,007,980
----------- ----------- ----------
Total increase (decrease) in net
assets.................................... (1,505,527) 1,869,885 2,709,643
Net assets at beginning of period.......... 6,381,819 4,511,934 1,802,291
----------- ----------- ----------
Net assets at end of period................ $ 4,876,292 $ 6,381,819 $4,511,934
=========== =========== ==========

See accompanying notes.

130

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

Global Balanced Subaccount
-----------------------------------------
2001 2000 1999
---------- -------- ---------

Increase (decrease) in net assets from
operations:
Net investment income..................... $ 3,025 $ 7,198 $ 15,944
Realized gains (losses)................... (18,478) (3,641) 1,061
Change in unrealized appreciation
(depreciation) during the period......... 12,916 (21,945) (8,559)
---------- -------- ---------
Net increase (decrease) in net assets
resulting from operations................. (2,537) (18,388) 8,446
Policy transactions:
Net premiums from policyholders........... 3,159,097 75,380 115,573
Net transfers to policyholders for
benefits and terminations................ (82,211) (83,639) (133,983)
---------- -------- ---------
Net increase (decrease) in net assets
resulting from policy transactions........ 3,076,886 (8,259) (18,410)
---------- -------- ---------
Total increase (decrease) in net assets.... 3,074,349 (26,647) (9,964)
Net assets at beginning of period.......... 173,721 200,368 210,332
---------- -------- ---------
Net assets at end of period................ $3,248,070 $173,721 $ 200,368
========== ======== =========

Mid Cap Growth Subaccount
-----------------------------------------
2001 2000 1999
----------- ------------ ------------

Increase (decrease) in net assets
from operations:
Net investment income (loss).............. $ (85,083) $ 2,182,817 $ 1,338,175
Realized gains (losses)................... (2,329,455) 1,892,763 420,826
Change in unrealized appreciation
(depreciation) during the period......... (4,249,250) (11,690,290) 4,283,452
----------- ------------ -----------
Net increase (decrease) in net
assets resulting from operations.......... (6,663,788) (7,614,710) 6,042,453
Policy transactions:
Net premiums from policyholders........... 12,612,039 13,112,643 7,041,199
Net transfers to policyholders
for benefits and terminations............ (3,031,534) (4,430,561) (947,660)
----------- ------------ -----------
Net increase in net assets
resulting from policy
transactions.............................. 9,580,505 8,682,082 6,093,539
----------- ------------ -----------
Total increase in net assets............... 2,916,717 1,067,372 12,135,992
Net assets at beginning of period.......... 14,676,946 13,609,574 1,473,582
----------- ------------ -----------
Net assets at end of period................ $17,593,633 $ 14,676,946 $13,609,574
=========== ============ ===========

See accompanying notes.

131

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

Large Cap Value Subaccount
------------------------------------------
2001 2000 1999
----------- ----------- -----------

Increase (decrease) in net assets
from operations:
Net investment income..................... $ 170,828 $ 693,327 $ 474,149
Realized gains (losses)................... 344,244 (47,306) 123,242
Change in unrealized appreciation
(depreciation) during the period......... (277,488) 854,807 (499,454)
----------- ----------- -----------
Net increase in net assets
resulting from operations................. 237,584 1,500,828 97,937
Policy transactions:
Net premiums from policyholders........... 10,170,978 7,024,748 5,449,922
Net transfers to policyholders for
benefits and terminations................ (2,001,066) (1,798,175) (1,059,147)
----------- ----------- -----------
Net increase in net assets
resulting from policy transactions........ 8,169,912 5,226,573 4,390,775
----------- ----------- -----------
Total increase in net assets............... 8,407,496 6,727,401 4,488,712
Net assets at beginning of period.......... 14,990,188 8,268,787 3,774,075
----------- ----------- -----------
Net assets at end of period................ $23,397,684 $14,990,188 $ 8,262,787
=========== =========== ===========

Money Market Subaccount
------------------------------------------
2001 2000 1999
------------ ------------ ------------

Increase (decrease) in net
assets from operations:
Net investment income..................... $ 834,589 $ 1,290,563 $ 1,143,104
Realized gains (losses)................... -- -- --
Change in unrealized
appreciation (depreciation)
during the period........................ -- -- --
------------ ------------ ------------
Net increase in net assets
resulting from operations................. 834,589 1,290,563 1,143,104
Policy transactions:
Net premiums from policyholders........... 22,170,735 26,609,851 16,733,655
Net transfers to policyholders
for benefits and terminations............ (26,886,651) (22,265,301) (46,642,184)
Net change in policy loans................ (5,337) 77,509 --
------------ ------------ ------------
Net increase (decrease) in net
assets resulting from policy
transactions.............................. (4,721,253) 4,422,059 (29,908,529)
------------ ------------ ------------
Total increase (decrease) in net
assets.................................... (3,886,664) 5,712,622 (28,765,425)
Net assets at beginning of
period.................................... 26,215,728 20,503,106 49,268,531
------------ ------------ ------------
Net assets at end of period................ $ 22,329,064 $ 26,215,728 $ 20,503,106
============ ============ ============

See accompanying notes.

132

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

Small/Mid Cap Growth Subaccount
----------------------------------------
2001 2000 1999
----------- ----------- -----------

Increase (decrease) in net assets
from operations:
Net investment income (loss).............. $ (34,942) $ 570,559 $ 810,295
Realized gains (losses)................... (212,465) (136,669) 16,952
Change in unrealized appreciation
(depreciation) during the period......... 391,420 (2,663) (590,295)
----------- ----------- -----------
Net increase in net assets
resulting from operations................. 144,013 431,227 236,952
Policy transactions:
Net premiums from policyholders........... 3,794,737 1,474,342 1,533,102
Net transfers to policyholders for
benefits and terminations................ (1,326,766) (1,536,191) (1,200,248)
----------- ----------- -----------
Net increase (decrease) in net
assets resulting from policy
transactions.............................. 2,467,971 (61,849) 332,854
----------- ----------- -----------
Total increase in net assets............... 2,611,984 369,378 569,806
Net assets at beginning of period.......... 5,855,422 5,486,044 4,916,238
----------- ----------- -----------
Net assets at end of period................ $ 8,467,406 $ 5,855,422 $ 5,486,044
=========== =========== ===========

Real Estate Equity Subaccount
----------------------------------------
2001 2000 1999
----------- ----------- ------------

Increase (decrease) in net assets
from operations:
Net investment income..................... $ 229,751 $ 465,264 $ 255,391
Realized losses........................... (67,379) (159,205) (168,994)
Change in unrealized appreciation
(depreciation) during the period......... 128,322 919,904 (220,380)
----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations.......... 290,694 1,225,963 (133,983)
Policy transactions:
Net premiums from policyholders........... 1,712,308 1,762,038 968,627
Net transfers to policyholders for
benefits and terminations................ (2,078,180) (1,130,179) (2,335,552)
Net change in policy loans................ (26,470) 114,851 --
----------- ----------- -----------
Net increase (decrease) in net
assets resulting from policy
transactions.............................. (392,342) 746,710 (1,366,925)
----------- ----------- -----------
Total increase (decrease) in net
assets.................................... (101,648) 1,972,673 (1,500,908)
Net assets at beginning of period.......... 6,002,773 4,030,100 5,531,008
----------- ----------- -----------
Net assets at end of period................ $ 5,901,125 $ 6,002,773 $ 4,030,100
=========== =========== ===========

See accompanying notes.

133

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

Growth & Income Subaccount
-------------------------------------------
2001 2000 1999
------------ ------------ ------------

Increase (decrease) in net
assets from operations:
Net investment income..................... $ 2,367,996 $ 44,427,885 $ 35,556,691
Realized gains............................ 205,711 18,300,286 5,502,422
Change in unrealized
appreciation (depreciation)
during the period........................ (37,067,063) (96,829,044) 2,405,417
------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations................................ (34,493,356) (34,100,873) 43,464,530
Policy transactions:
Net premiums from policyholders........... 25,738,713 31,462,247 34,593,082
Net transfers to policyholders
for benefits and terminations............ (29,810,655) (71,685,409) (34,650,911)
Net change in policy loans................ 1,375,781 1,310,472 --
------------ ------------ ------------
Net decrease in net assets
resulting from policy
transactions.............................. (2,696,161) (38,912,690) (57,829)
------------ ------------ ------------
Total increase (decrease) in net
assets.................................... (37,189,517) (73,013,563) 43,406,701
Net assets at beginning of
period.................................... 267,486,534 340,500,097 297,093,396
------------ ------------ ------------
Net assets at end of period................ $230,297,017 $267,486,534 $340,500,097
============ ============ ============

Managed Subaccount
-------------------------------------------
2001 2000 1999
------------ ------------ ------------

Increase (decrease) in net
assets from operations:
Net investment income..................... $ 2,443,135 $ 11,092,640 $ 10,302,317
Realized gains............................ 528,773 1,551,519 996,546
Change in unrealized
depreciation during the period........... (5,276,809) (12,278,637) (2,108,530)
------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations................................ (2,304,901) 365,522 9,190,333
Policy transactions:
Net premiums from policyholders........... 12,491,524 12,192,565 13,430,282
Net transfers to policyholders
for benefits and terminations............ (13,566,962) (19,842,234) (14,305,859)
Net change in policy loans................ (334,235) 630,955 --
------------ ------------ ------------
Net decrease in net assets
resulting from policy
transactions.............................. (1,409,673) (7,018,714) (875,577)
------------ ------------ ------------
Total increase (decrease) in net
assets.................................... (3,714,574) (6,653,192) 8,314,756
Net assets at beginning of
period.................................... 112,476,227 119,129,419 110,814,663
------------ ------------ ------------
Net assets at end of period................ $108,761,653 $112,476,227 $119,129,419
============ ============ ============

See accompanying notes.

134

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

Short-Term Bond Subaccount
--------------------------------------
2001 2000 1999
---------- -------- ---------

Increase (decrease) in net assets from
operations:
Net investment income..................... $ 24,452 $ 15,494 $ 14,042
Realized gains (losses)................... 8,797 (2,287) (8,638)
Change in unrealized appreciation
(depreciation) during the period......... (2,372) 6,756 (2,442)
---------- -------- ---------
Net increase in net assets resulting from
operations................................ 30,877 19,963 2,962
Policy transactions:
Net premiums from policyholders........... 814,841 167,135 109,732
Net transfers to policyholders for
benefits and terminations................ (148,073) (69,043) (370,270)
---------- -------- ---------
Net increase (decrease) in net assets
resulting from policy transactions........ 666,768 98,092 (260,538)
---------- -------- ---------
Total increase (decrease) in net assets 697,645 118,055 (257,576)
Net assets at beginning of period.......... 356,968 238,913 496,489
---------- -------- ----------
Net assets at end of period................ $1,054,613 $356,968 $ 238,913
========== ======== =========

Small Cap Equity Subaccount
--------------------------------------
2001 2000 1999
----------- ---------- -----------

Increase (decrease) in net assets
from operations:
Net investment income (loss).............. $ (18,893) $ 297,508 $ 61,905
Realized losses........................... (553,686) (110,857) (33,134)
Change in unrealized appreciation
(depreciation) during the period......... 580,661 (668,463) (148,401)
----------- ---------- -----------
Net increase (decrease) in net
assets resulting from operations.......... 8,082 (481,812) (119,630)
Policy transactions:
Net premiums from policyholders........... 2,680,094 1,608,648 1,483,922
Net transfers to policyholders for
benefits and terminations................ (2,188,533) (452,406) (447,402)
----------- ---------- -----------
Net increase (decrease) in net
assets resulting from policy
transactions.............................. (491,561) 1,156,242 1,036,520
----------- ---------- -----------
Total increase in net assets............... 499,643 674,430 916,890
Net assets at beginning of period.......... 4,141,822 3,467,392 2,550,502
----------- ---------- ------------
Net assets at end of period................ $ 4,641,465 $4,141,822 $ 3,467,392
=========== ========== ===========

See accompanying notes.

135

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

International Opportunities Subaccount
----------------------------------------
2001 2000 1999
----------- ----------- -----------

Increase (decrease) in net assets
from operations:
Net investment income................ $ 26,015 $ 564,716 $ 223,214
Realized gains (losses).............. (2,366,905) 348,813 155,412
Change in unrealized appreciation
(depreciation) during the period.... (510,586) (2,497,504) 387,412
----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations..... (2,851,476) (1,583,975) 766,038
Policy transactions:
Net premiums from policyholders...... 9,239,568 9,284,275 2,354,681
Net transfers to policyholders for
benefits and terminations........... (5,328,329) (469,272) (3,673,500)
----------- ----------- -----------
Net increase (decrease) in net
assets resulting from policy
transactions......................... 3,911,239 8,815,003 (1,318,819)
----------- ----------- -----------
Total increase (decrease) in net
assets............................... 1,059,763 7,231,028 (552,781)
Net assets at beginning of period..... 10,859,971 3,628,943 4,181,724
----------- ----------- -----------
Net assets at end of period........... $11,919,734 $10,859,971 $ 3,628,943
=========== =========== ===========

Equity Index Subaccount
----------------------------------------
2001 2000 1999
----------- ----------- -----------

Increase (decrease) in net assets
from operations:
Net investment income..................... $ 291,987 $ 2,141,880 $ 529,375
Realized gains............................ 1,221,769 485,643 271,978
Change in unrealized appreciation
(depreciation) during the period......... (8,084,684) (8,035,375) 1,282,937
----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations.......... (6,570,928) (5,407,852) 2,084,290
Policy transactions:
Net premiums from policyholders........... 13,985,392 43,728,519 6,697,385
Net transfers to policyholders for
benefits and terminations................ (5,816,358) (2,630,030) (1,623,429)
----------- ----------- -----------
Net increase in net assets
resulting from policy transactions........ 8,169,034 41,098,489 5,073,956
----------- ----------- -----------
Total increase in net assets............... 1,598,106 35,690,637 7,158,246
Net assets at beginning of period.......... 50,096,716 14,406,079 7,247,833
----------- ----------- -----------
Net assets at end of period................ $51,694,822 $50,096,716 $14,406,079
=========== =========== ===========

See accompanying notes.

136

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

Global Bond Subaccount
--------------------------------------
2001 2000 1999
---------- ---------- ---------

Increase (decrease) in net assets from
operations:
Net investment income..................... $ 32,388 $ 57,408 $ 33,778
Realized losses........................... (4,928) (14,302) (151)
Change in unrealized appreciation
(depreciation) during the period......... (45,004) 63,359 (52,953)
---------- ---------- ---------
Net increase (decrease) in net assets
resulting from operations................. (17,544) 106,465 (19,326)
Policy transactions:
Net premiums from policyholders........... 352,334 396,099 696,619
Net transfers to policyholders for
benefits and terminations................ (677,332) (192,421) (317,999)
---------- ---------- ---------
Net increase (decrease) in net assets
resulting from policy transactions........ (324,998) 203,678 378,620
---------- ---------- ---------
Total increase (decrease) in net assets.... (342,542) 310,143 359,294
Net assets at beginning of period.......... 1,139,861 829,718 470,424
---------- ---------- ---------
Net assets at end of period................ $ 797,319 $1,139,861 $ 829,718
========== ========== =========

Emerging Markets Subaccount
--------------------------------------
2001 2000 1999
---------- ----------- --------

Increase (decrease) in net assets from
operations:
Net investment income (loss).............. $ (2,905) $ 58,591 $ 15,170
Realized gains (losses)................... (512,242) 19,902 1,838
Change in unrealized appreciation
(depreciation) during the period......... 454,961 (571,486) 92,713
--------- ---------- --------
Net increase (decrease) in net assets
resulting from operations................. (60,186) (492,993) 109,721
Policy transactions:
Net premiums from policyholders........... 801,949 1,133,676 336,277
Net transfers to policyholders for
benefits and terminations................ (590,080) (337,143) (8,915)
--------- ---------- --------
Net increase in net assets resulting from
policy transactions....................... 211,869 796,533 327,362
--------- ---------- --------
Total increase in net assets............... 151,683 303,540 437,083
Net assets at beginning of period.......... 741,352 437,812 729
--------- ---------- --------
Net assets at end of period................ $ 893,035 $ 741,352 $437,812
========= ========== ========

See accompanying notes.

137

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

Bond Index Subaccount
-------------------------------------
2001 2000 1999
---------- -------- --------

Increase (decrease) in net assets from
operations:
Net investment income..................... $ 132,221 $ 6,712 $ 2,701
Realized gains (losses)................... 18,228 (607) (1,613)
Change in unrealized appreciation
(depreciation) during the period......... (26,418) 6,100 (1,753)
---------- -------- --------
Net increase (decrease) in net assets
resulting from operations................. 124,031 12,205 (665)
Policy transactions:
Net premiums from policyholders........... 5,105,113 196,240 80,921
Net transfers to policyholders for
benefits and terminations................ (129,767) (16,742) (20,596)
---------- -------- --------
Net increase in net assets resulting from
policy transactions....................... 4,975,346 179,498 60,325
---------- -------- --------
Total increase (decrease) in net assets.... 5,099,377 191,703 59,660
Net assets at beginning of period.......... 265,912 74,209 14,549
---------- -------- --------
Net assets at end of period................ $5,365,289 $265,912 $ 74,209
========== ======== ========

Small/Mid Cap Core Subaccount
-------------------------------------
2001 2000 1999
--------- -------- --------

Increase (decrease) in net assets from
operations:
Net investment income (loss).............. $ (397) $ 21,792 $ 6,364
Realized gains (losses)................... (3,169) 1,505 1,093
Change in unrealized appreciation
(depreciation) during the period......... 25,735 (13,928) 4,719
--------- -------- ---------
Net increase in net assets resulting from
operations................................ 22,169 9,369 12,176
Policy transactions:
Net premiums from policyholders........... 288,067 479,768 44,493
Net transfers to policyholders for
benefits and terminations................ (364,419) (6,951) (12,003)
--------- -------- --------
Net increase (decrease) in net assets
resulting from policy transactions........ (76,352) 472,817 32,490
--------- -------- --------
Total increase (decrease) in net assets.... (54,183) 482,186 44,666
Net assets at beginning of period.......... 559,551 77,365 32,699
--------- -------- ---------
Net assets at end of period................ $ 505,368 $559,551 $ 77,365
========= ======== =========

See accompanying notes.

138

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

High Yield Bond Subaccount
-----------------------------------
2001 2000 1999
------------ ----------- --------

Increase (decrease) in net assets from
operations:
Net investment income........................ $ 58,470 $ 78,692 $ 2,791
Realized losses.............................. (133,868) (12,114) (396)
Change in unrealized appreciation
(depreciation) during the period............ 132,879 (188,735) (1,172)
----------- ---------- -------
Net increase (decrease) in net assets
resulting from operations.................... 57,481 (122,157) 1,223
Policy transactions:
Net premiums from policyholders.............. 906,532 1,514,684 69,375
Net transfers to policyholders for
benefits and terminations................... (1,363,474) (88,711) --
----------- ---------- -------
Net increase (decrease) in net assets
resulting from policy transactions........... (456,942) 1,425,973 69,375
----------- ---------- -------
Total increase (decrease) in net assets (399,461) 1,303,816 70,598
Net assets at beginning of period............. 1,379,867 76,051 5,453
----------- ---------- -------
Net assets at end of period................... $ 980,406 $1,379,867 $76,051
=========== ========== =======

Tuner Core Growth Subaccount
-----------------------------------
2001 2000 1999
---------- ---------- -----------

Increase (decrease) in net assets from
operations:
Net investment income (loss)................. $ (1,561) $ 50,617 $ 18,189
Realized gains (losses)...................... (91,201) 20,969 26,736
Change in unrealized appreciation
(depreciation) during the period............ (12,342) (120,040) 23,628
--------- --------- --------
Net increase (decrease) in net assets
resulting from operations.................... (105,104) (48,454) 68,553
Policy transactions:
Net premiums from policyholders.............. 316,791 192,556 109,802
Net transfers to policyholders for
benefits and terminations................... (219,789) (31,415) (45,555)
--------- --------- --------
Net increase in net assets resulting from
policy transactions.......................... 97,002 161,141 64,247
--------- --------- --------
Total increase (decrease) in net assets....... (8,102) 112,687 132,800
Net assets at beginning of period............. 370,494 257,807 125,007
--------- --------- --------
Net assets at end of period................... $ 362,392 $ 370,494 $257,807
========= ========= ========

See accompanying notes.

139

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years ended December 31,

Brandes International Equity Subaccount
----------------------------------------
2001 2000 1999
---------- ---------- ----------

Increase (decrease) in net assets
from operations:
Net investment income................... $ 8,649 $ 87,962 $ 14,188
Realized gains.......................... 71,897 13,902 11,526
Change in unrealized appreciation
(depreciation) during the period....... (246,498) (35,201) 122,734
---------- ---------- --------
Net increase (decrease) in net
assets resulting from operations........ (165,952) 66,663 148,448
Policy transactions:
Net premiums from policyholders......... 1,103,449 616,308 152,629
Net transfers to policyholders
for benefits and terminations.......... (979,043) (39,267) (31,332)
---------- ---------- --------
Net increase in net assets
resulting from policy
transactions............................ 124,406 577,041 121,297
---------- ---------- --------
Total increase (decrease) in net
assets.................................. (41,546) 643,704 269,745
Net assets at beginning of period........ 1,169,206 525,502 255,757
---------- ---------- --------
Net assets at end of period.............. $1,127,660 $1,169,206 $525,502
========== ========== ========

Frontier Capital Appreciation Subaccount
-----------------------------------------
2001 2000 1999
------------ ------------ ------------

Increase (decrease) in net assets
from operations:
Net investment income (loss)............ $ (2,728) $ 130,136 $ 8,771
Realized gains (losses)................. (50,194) 68,311 (59,550)
Change in unrealized
appreciation (depreciation)
during the period...................... 52,457 (175,994) 89,369
--------- --------- ----------
Net increase (decrease) in net
assets resulting from operations........ (465) 22,453 38,590
Policy transactions:
Net premiums from policyholders......... 445,490 219,803 103,675
Net transfers to policyholders
for benefits and terminations.......... (501,765) (179,523) (2,221,410)
--------- --------- ----------
Net increase (decrease) in net
assets resulting from policy
transactions............................ (56,275) 40,280 (2,117,735)
--------- --------- ----------
Total increase (decrease) in net
assets.................................. (56,740) 62,733 (2,079,145)
Net assets at beginning of period........ 516,716 453,983 2,533,128
--------- ---------- ----------
Net assets at end of period.............. $ 459,976 $ 516,716 $ 453,983
========== ========== ==========

See accompanying notes.

140

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years and periods ended December 31,

Clifton Enhanced US Equity Subaccount
--------------------------------------
2001 2000 1999*
------------ ------------ ----------

Increase (decrease) in net assets
from operations:
Net investment income................... $ 1,117 $ 3,190 $ 1,374
Realized gains (losses)................. (826) 302 11
Change in unrealized appreciation
(depreciation) during the period....... (3,148) (5,562) 1,285
------- ------- -------
Net increase (decrease) in net
assets resulting from operations........ (2,857) (2,070) 2,670
Policy transactions:
Net premiums from policyholders......... 10,070 16,541 15,505
Net transfers to policyholders for
benefits and terminations.............. (2,449) (9,351) --
------- ------- -------
Net increase in net assets resulting
from policy transactions................ 7,621 7,190 15,505
------- ------- -------
Total increase in net assets............. 4,764 5,120 18,175
Net assets at beginning of period........ 23,295 18,175 --
------- ------- -------
Net assets at end of period.............. $28,059 $23,295 $18,175
======= ======= =======

Large Cap Fundamental
Aggressive Growth Subaccount Growth Subaccount
----------------------------- ---------------------
2001 2000** 2001 2000**
------------- -------------- -------- -----------

Increase (decrease) in
net assets from
operations:
Net investment income
(loss)................. $ (11) $ 30 $ (62) $ 1,351
Realized losses......... (68) (8) (340) (10)
Change in unrealized
depreciation during
the period............. (216) (616) (3,866) (1,226)
------ ------ ------- -----------
Net increase
(decrease) in net
assets resulting from
operations.............. (295) (594) (4,268) 115
Policy transactions:
Net premiums from
policyholders.......... 5 2,528 9,554 9,264,914
Net transfers to
policyholders for
benefits and
terminations........... (120) -- (7,743) (9,251,776)
------ ------ ------- -----------
Net increase
(decrease) in net
assets resulting from
policy transactions..... (115) 2,528 1,811 13,138
------ ------ ------- -----------
Total increase
(decrease) in net
assets.................. (410) 1,934 (2,457) 13,253
Net assets at
beginning of period..... 1,934 -- 13,253 --
------ ------ ------- -----------
Net assets at end of
period.................. $1,524 $1,934 $10,796 $ 13,253
====== ====== ======= ===========

-------------------------
* From May 1, 1999 (commencement of operations).
** From April 24, 2000 (commencement of operations).

See accompanying notes.

141

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years and periods ended December 31,

AIM V.I. Value Fidelity VIP Growth
Subaccount Subaccount
------------------ --------------------
2001 2000* 2001 2000*
-------- -------- ---------- --------

Increase (decrease) in net assets
from operations:
Net investment income (loss)......... $ (44) $ 230 $ (18) $ (6)
Realized losses...................... (503) (11) (1,445) (7)
Change in unrealized appreciation
(depreciation) during the period.... (1,395) (1,068) 469 (525)
------- ------- ------- ------
Net decrease in net assets
resulting from operations............ (1,942) (849) (994) (538)
Policy transactions:
Net premiums from policyholders...... 12,072 12,213 1,474 5,160
Net transfers to policyholders
for benefits and terminations....... (3,006) (6,072) (4,037) (394)
------- ------- ------- ------
Net increase (decrease) in net
assets resulting from policy
transactions......................... 9,066 6,141 (2,563) 4,766
------- ------- ------- ------
Total increase (decrease) in net
assets............................... 7,124 5,292 (3,557) 4,228
Net assets at beginning of period..... 5,292 -- 4,228 --
------- ------- ------- ------
Net assets at end of period........... $12,416 $ 5,292 $ 671 $4,228
======= ======= ======= ======

Fidelity VIP II Contrafund
Subaccount
---------------------------
2001 2000*
------------- ------------

Increase (decrease) in net assets from
operations:
Net investment loss............................. $ (24) $ (12)
Realized losses................................. (958) (4)
Change in unrealized depreciation during the
period......................................... (616) (366)
------- -------
Net decrease in net assets resulting from
operations...................................... (1,598) (382)
Policy transactions:
Net premiums from policyholders................. 10,866 13,880
Net transfers to policyholders for benefits
and terminations............................... (3,652) (6,991)
------- -------
Net increase in net assets resulting from
policy transactions............................. 7,214 6,889
------- -------
Total increase in net assets..................... 5,616 6,507
Net assets at beginning of period................ 6,507 --
------- -------
Net assets at end of period...................... $12,123 $ 6,507
======= =======

-------------------------
* From April 24, 2000 (commencement of operations).

See accompanying notes.

142

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years and periods ended December 31,

MFS New V.A. Strategic
Discovery Series Income
Subaccount Subaccount
-------------------- ----------------
2001 2000* 2001**
--------- ---------- ----------------

Increase (decrease) in net assets from
operations:
Net investment income (loss)................. $ 2,735 $ (19) $ 3
Realized gains (losses)...................... (1,901) (7) 1
Change in unrealized appreciation
(depreciation) during the period............ (743) 197 1
-------- -------- -------
Net increase in net assets resulting
from operations.............................. 91 171 5
Policy transactions:
Net premiums from policyholders.............. 102,334 37,394 2,513
Net transfers to policyholders for
benefits and terminations................... (14,675) (18,758) (2,374)
-------- -------- -------
Net increase in net assets resulting
from policy transactions..................... 87,659 18,636 139
-------- -------- -------
Total increase in net assets.................. 87,750 18,807 144
Net assets at beginning of period............. 18,807 -- --
-------- -------- -------
Net assets at end of period................... $106,557 $ 18,807 $ 144
======== ======== =======

Health International Large/Midcap
Sciences Equity Value
Subaccount Subaccount Subaccount
---------- ------------- --------------
2001** 2001** 2001**
---------- ------------- --------------

Increase (decrease) in net assets
from operations:
Net investment income (loss)................ $ (3) $ (1) $ 2,357
Realized losses............................. (1) -- (5,237)
Change in unrealized appreciation
(depreciation) during the period........... (22) 7 (4,848)
------ ------ ----------
Net increase (decrease) in net
assets resulting from operations............ (26) 6 (7,728)
Policy transactions:
Net premiums from policyholders............. 3,403 1,026 4,400,939
Net transfers to policyholders for
benefits and terminations.................. (29) -- --
------ ------ ----------
Net increase in net assets resulting
from policy transactions.................... 3,374 1,026 4,400,939
------ ------ ----------
Total increase in net assets................. 3,348 1,032 4,393,211
Net assets at beginning of period............ -- -- --
------ ------ ----------
Net assets at end of period.................. $3,348 $1,032 $4,393,211
====== ====== ==========

-------------------------
* From April 24, 2000 (commencement of operations).
** From commencement of operations (refer to footnote d in notes to financial
statements #6)

See accompanying notes.

143

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

STATEMENTS OF CHANGES IN NET ASSETS (continued)

For the years and periods ended December 31,

MFS
Small CAP AIM V.I. Research Templeton
Value Growth Series Series International
Subaccount Subaccount Subaccount Subaccount
---------- ------------- ---------- ---------------
2001* 2001* 2001* 2001*
---------- ------------- ---------- ---------------

Increase (decrease) in
net assets from
operations:
Net investment income
(loss)............................ $ 58 $ 2 $ (2) $ (3)
Realized gains
(losses).......................... (144) -- 1 1
Change in unrealized
appreciation during
the period........................ 2,861 68 114 83
------- ------ ------ ------
Net increase in net
assets resulting from
operations......................... 2,775 70 113 81
Policy transactions:
Net premiums from
policyholders..................... 34,295 1,655 1,655 2,069
Net transfers to
policyholders for
benefits and
terminations...................... (5,922) (13) (14) (17)
------- ------ ------ ------
Net increase in net
assets resulting from
policy transactions................ 28,373 1,642 1,641 2,052
------- ------ ------ ------
Total increase in net
assets............................. 31,148 1,712 1,754 2,133
Net assets at beginning
of period.......................... -- -- -- --
------- ------ ------ ------
Net assets at end of
period............................. $31,148 $1,712 $1,754 $2,133
======= ====== ====== ======

-------------------------
*From commencement of operations (refer to footnote d in notes to financial
statements #6)

See accompanying notes.

144

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS

December 31, 2001

1. ORGANIZATION

John Hancock Variable Life Account UV (the Account) is a separate investment
account of John Hancock Insurance Company (JHLICO), a wholly-owned subsidiary of
John Hancock Insurance Company (John Hancock). The Account was formed to fund
variable life insurance policies (Policies) issued by JHLICO. Currently, the
Account funds the UV VLI Class #1, UV VLI Class #2, UV MVL Class #3, UV Flex
Class #4, UV Flex II Class #5, UV VEP Class #7, UV VEP Class #8, UV VEP Class
#9, NY MEVL3 Class #13, NY MVUL98 Class #14, NY VCOLI1 Class #15, NY VCOLI2
Class #16, and NY VCOLI3 Class #17 Policies. The Account is operated as a unit
investment trust registered under the Investment Company Act of 1940, as
amended, and currently consists of thirty-nine subaccounts. The assets of each
subaccount are invested exclusively in shares of a corresponding Portfolio of
John Hancock Variable Series Trust I (the Trust), John Hancock Declaration Trust
(Declaration Trust) or of other Outside Investment Trusts (Outside Trust). New
subaccounts may be added as new Portfolios are added to the Trust, Declaration
Trust, or to the Outside Trust, or as other investment options are developed and
made available to policyholders. The thirty-nine Portfolios of the Trust,
Declaration Trust, and the Outside Trust which are currently available are the
Large Cap Growth, Active Bond, International Equity Index, Small Cap Growth,
Global Balanced, Mid Cap Growth, Large Cap Value, Money Market, Small/Mid Cap
Growth, Real Estate Equity, Growth & Income, Managed, Short-Term Bond, Small Cap
Equity, International Opportunities, Equity Index, Global Bond, Emerging Markets
(formerly Emerging Markets Equity), Bond Index, Small/Mid Cap CORE, High Yield
Bond, Turner Core Growth, Brandes International Equity, Frontier Capital
Appreciation, Clifton Enhanced US Equity, Large Cap Aggressive Growth,
Fundamental Growth, AIM V.I. Value, Fidelity VIP Growth, Fidelity VIP
Contrafund, MFS New Discovery Series, V.A. Strategic Income, Health Sciences,
International Equity, Large/ Mid Cap Value, Small Cap Value (formerly Small/Mid
Cap Value), AIM V.I. Growth Series, MFS Research Series, and Templeton
International II Portfolios. Each portfolio has a different investment
objective.

The net assets of the Account may not be less than the amount required under
state insurance law to provide for death benefits (without regard to the minimum
death benefit guarantee) and other policy benefits. Additional assets are held
in JHLICO's general account to cover the contingency that the guaranteed minimum
death benefit might exceed the death benefit which would have been payable in
the absence of such guarantee.

The assets of the Account are the property of JHLICO. The portion of the
Account's assets applicable to the policies may not be charged with liabilities
arising out of any other business JHLICO may conduct.

2. SIGNIFICANT ACCOUNTING POLICIES

Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Valuation of Investments

Investment in shares of the Trust, Declaration Trust and of the Outside Trust
are valued at the reported net asset values of the respective Funds. Investment
transactions are recorded on the trade date. Dividend income is recognized on
the ex-dividend date. Realized gains and losses on sales of respective Fund
shares are determined on the basis of identified cost.

145

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Income Taxes

The operations of the Account are included in the federal income tax return of
JHLICO, which is taxed as a life insurance company under the Internal Revenue
Code. JHLICO has the right to charge the Account any federal income taxes, or
provision for federal income taxes, attributable to the operations of the
Account or to the Contracts funded in the Account. Currently, JHLICO does not
make a charge for income or other taxes. Charges for state and local taxes, if
any, attributable to the Account may also be made.

Expenses

JHLICO assumes mortality and expense risks of the variable life insurance
policies for which asset charges are deducted at various rates ranging from .50%
to .625%, depending on the type of policy, of net assets (excluding policy
loans) of the Account. Additionally, a monthly charge at varying levels for the
cost of extra insurance is deducted from the net assets of the Account.

JHLICO makes certain deductions for administrative expenses and state premium
taxes from premium payments before amounts are transferred to the Account.

Amounts Receivable/Payable

Receivables/Payables to/from portfolios/JHLICO are due to unsettled policy
transactions (net of asset-based charges) and/or subsequent/preceding
purchases/sales of the respective Portfolios' shares. The amounts are due to/
from either the respective portfolio and/or John Hancock Life Insurance Company
for the benefit of policyholders.

3. TRANSACTION WITH AFFILIATES

John Hancock acts as the distributor, principal underwriter and investment
advisor for the Trust. Certain officers of the Account are officers and
directors of JHLICO or the Trust.

4. NEW AUDIT GUIDE

Effective January 1, 2001, the Account adopted the provisions of the AICPA Audit
and Accounting Guide for Investment Companies (the Guide), as revised, effective
for fiscal years beginning after December 15, 2001. The adoption of the Guide
did not impact the total net assets of the subaccounts for fiscal year 2001.
Certain disclosures in the financial statements of the Account have changed as
a result of the adoption of the Guide. The financial statement presentation of
the account for the years prior to 2001 have not been restated.

146

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS (continued)

5. DETAILS OF INVESTMENTS

The details of the shares owned, cost and value of investments in the
Subaccounts of the Trust, Declaration Trust and of the Outside Trust at December
31, 2001 were as follows:

Shares
Subaccount Owned Cost Value
- ------------------------------------------ ----------- ------------ --------------

Large Cap Growth.......................... 2,623,627 $ 57,185,452 $ 40,778,508
Active Bond............................... 10,175,029 97,694,098 97,207,604
International Equity Index................ 432,725 6,967,156 5,224,610
Small Cap Growth.......................... 414,200 6,562,618 4,876,292
Global Balanced........................... 379,126 3,256,776 3,248,070
Mid Cap Growth............................ 1,788,114 28,987,247 17,593,663
Large Cap Value........................... 1,653,036 23,170,864 23,397,684
Money Market.............................. 20,091,408 20,091,408 20,091,408
Small/Mid Cap Growth...................... 600,897 8,631,789 8,467,406
Real Estate Equity........................ 407,874 5,396,915 5,525,379
Growth & Income........................... 16,569,601 265,476,417 197,711,222
Managed .................................. 7,248,546 102,582,559 94,814,008
Short Term Bond........................... 104,302 1,057,065 1,054,613
Small Cap Equity Portfolio................ 527,967 4,993,102 4,641,466
International Opportunities............... 1,281,466 14,273,081 11,919,734
Equity Index.............................. 3,480,909 65,793,278 51,694,821
Global Bond............................... 81,878 826,341 797,319
Emerging Markets.......................... 138,705 916,897 893,036
Bond Index................................ 542,637 5,387,511 5,365,289
Small/Mid Cap CORE........................ 51,482 486,954 505,368
High Yield Bond........................... 143,544 1,037,452 980,405
Turner Core Growth........................ 27,044 441,220 362,393
Brandes International Equity.............. 91,161 1,280,573 1,127,660
Frontier Capital Appreciation............. 27,169 461,198 459,976
Clifton Enhanced US Equity................ 2,069 35,484 28,059
Large Cap Aggressive Growth............... 188 2,356 1,524
Fundamental Growth........................ 1,273 15,888 10,796
AIM V.I. Value............................ 5,532 14,880 12,416
Fidelity VIP Growth....................... 20 727 671
Fidelity VIP II Contrafund................ 604 13,106 12,123
MFS New Discovery Series.................. 6,978 107,103 106,557
V.A. Strategic Income..................... 16 143 144
Health Sciences Fund...................... 341 3,370 3,348
International Equity...................... 137 1,025 1,032
Large/Mid Cap Value....................... 411,986 4,398,059 4,393,211
Small Cap Value........................... 2,264 28,288 31,149
AIM V.I. Growth Series.................... 105 1,644 1,712
MFS Research Series....................... 122 1,640 1,754
Templeton International................... 182 2,050 2,133

147

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS (continued)

5. DETAILS OF INVESTMENTS (continued)

Purchases, including reinvestment of dividend distributions, and proceeds from
sales of shares in the Subaccounts of the Trust, Declaration Trust and of the
Outside Trust during 2001 were as follows:

Subaccount Purchases Sales
---------- ---------- -----
Large Cap Growth.................................. $10,804,464 $ 3,042,541
Active Bond....................................... 16,609,722 7,469,708
International Equity Index........................ 1,185,789 993,377
Small Cap Growth.................................. 1,648,903 2,511,644
Global Balanced................................... 3,149,776 69,865
Mid Cap Growth.................................... 12,345,246 2,849,824
Large Cap Value................................... 9,841,981 1,226,858
Money Market...................................... 15,460,482 19,348,199
Small/Mid Cap Growth.............................. 3,467,498 1,034,469
Real Estate Equity................................ 1,668,166 1,690,773
Growth & Income................................... 13,637,246 12,552,806
Managed........................................... 8,042,371 6,853,899
Short Term Bond................................... 1,003,940 312,720
Small Cap Equity.................................. 2,687,802 2,215,133
International Opportunities....................... 8,249,954 4,312,700
Equity Index...................................... 14,738,704 4,705,379
Global Bond....................................... 350,575 643,185
Emerging Markets.................................. 752,255 543,290
Bond Index........................................ 5,382,722 266,363
Small/Mid Cap CORE................................ 540,923 617,672
High Yield Bond................................... 1,143,455 1,541,928
Turner Core Growth................................ 316,156 220,714
Brandes International Equity...................... 1,072,801 896,044
Frontier Capital Appreciation..................... 482,709 537,110
Clifton Enhanced US Equity........................ 11,334 2,596
Large Cap Aggressive Growth....................... 126
Fundamental Growth................................ 2,150 401
AIM V.I. Value.................................... 10,887 1,614
Fidelity VIP Growth............................... 1,088 3,397
Fidelity VIP II Contrafund........................ 11,048 3,694
MFS New Discovery Serie........................... 97,625 7,106
V.A. Strategic Income............................. 242 100
Health Sciences Fund.............................. 3,402 31
International Equity.............................. 1,034 9
Large/Mid Cap Value............................... 4,503,258 99,962
Small Cap Value................................... 34,680 6,084
AIM V.I. Growth Series............................ 1,659 15
MFS Research Series............................... 1,655 16
Templeton International........................... 2,068 19

148

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS (continued)

6. UNIT VALUES

A summary of unit values and units outstanding for variable life contracts and
the expense and the investment income ratios, excluding expenses of the
underlying Portfolios were as follows:

At December 31, 2001 For the year or periods ended December 31, 2001
----------------------------------- ---------------------------------------------------------
Units Unit Fair Assets Expense Ratio* Investment Total
Subaccount (000s) Value Lowest (000s) lowest to highest Income Ratio** Return***
---------- ------ to highest ------ ----------------- -------------- lowest to
------------ highest
---------

Large Cap Growth 627 $14.90 to $58.93 $ 43,595 0.05% to 0.625% 0.98% (18.04)% to 49.00%e
Active Bond 1,941 13.84 to 66.70 108,818 0.05 to 0.625 7.87 6.80 to 38.40e
International Equity Index 221 10.19 to 19.15 5,654 0.05 to 0.625 2.70 (20.79) to 1.90e
Small Cap Growth 330 14.70 to 16.83 4,876 0.05 to 0.625 --c (13.12) to 68.30
Global Balanced 291 10.88 to 11.56 3,248 0.60 to 0.625 0.57 (7.08) to (6.99)
Mid Cap Growth 1,234 14.20 to 16.04 17,594 0.05 to 0.625 --c (37.33) to 60.40e
Large Cap Value 1,282 15.89 to 18.90 23,398 0.05 to 0.625 1.83 0.66 to 58.90e
Money Market 684 12.56 to 34.50 22,329 0.05 to 0.625 5.38 3.29 to 25.60e
Small/Mid Cap Growth 388 14.38 to 23.01 8,467 0.05 to 0.625 --c 2.00 to 121.80e
Real Estate Equity 133 13.29 to 32.43 5,901 0.05 to 0.625 5.72 5.07 to 32.90e
Growth & Income 1,818 13.99 to 137.76 230,297 0.05 to 0.625 1.94 (16.00) to 39.90e
Managed 1,273 14.88 to 45.24 108,762 0.60 to 0.625 3.72 (3.47) to (3.41)
Short Term Bond 70 13.29 to 15.68 1,055 0.05 to 0.625 5.62 (11.57) to 32.90e
Small Cap Equity 436 10.30 to 11.04 4,641 0.05 to 0.625 0.09 (4.40) to 3.00e
International Opportunities 1,104 10.52 to 11.18 11,920 0.05 to 0.625 1.07 (21.41) to 5.20e
Equity Index 2,838 15.82 to 18.87 51,695 0.05 to 0.625 1.52 (12.54) to 58.20e
Global Bond 60 12.73 to 13.63 797 0.05 to 0.625 4.57 (2.07) to 27.30e
Emerging Markets 122 7.29 to 7.46 893 0.05 to 0.625 0.31 (26.20) to (4.07)e
Bond Index 436 12.30 to 12.58 5,365 0.60 to 0.625 6.46 6.86 to 7.22
Small/Mid Cap CORE 45 11.19 to 11.44 505 0.60 to 0.625 0.71 (0.36) to 0.09
High Yield Bond 108 9.08 to 9.29 980 0.50 to 0.625 10.50 (8.00) to 1.68e
Turner Core Growth 21 16.67 to 19.69 362 0.50 to 0.625 0.14 (24.04) to 66.70e
Brandes International Equity 71 15.28 to 16.10 1,128 0.50 to 0.625 1.55 (13.33) to 61.00e
Frontier Capital Appreciation 21 19.76 to 24.69 460 0.50 to 0.625 0.60 to 0.625 (2.09) to 97.60e
Clifton Enhanced US Equity 3 10.25 to 13.83 28 0.60 0.60 to 0.625 (13.50)
Large Cap Aggressive Growth --a 6.71 to 8.33 2 0.625 --c (15.34)
Fundamental Growth 2 6.12 to 10.16 11 0.625 --c (32.72)
AIM V.I. Value 2 7.13 to 29.72 12 0.525 to 0.625 0.19 (13.17) to (12.95)
Fidelity VIP Growth --a 7.12 to 71.07 1 0.625 --c (18.22)
Fidelity VIP II Contrafund 1 8.26 to 27.72 12 0.575 to 0.625 0.43 (13.06) to (12.86)
MFS New Discovery Series 11 9.12 to 16.49 107 0.575 to 0.625 5.14 (5.69) to (5.59)
V.A. Strategic Income --a 10.33 to 13.79 --b 0.625 3.11d 3.30f
Health Sciences Fund --a 9.77 to 9.81 3 0.625 --c (2.30)f
International Equity --a 8.03 to 8.43 1 0.625 --c (16.00)f
Large/Mid Cap Value 322 9.40 to 16.44 4,393 0.50 to 0.625 0.30d (6.00) to 64.40f
Small Cap Value 3 10.44 to 16.79 31 0.50 to 0.625 0.97d 4.40 to 4.80f
AIM V.I. Growth Series --a 8.44 to 20.77 2 0.625 0.34d (15.60)f
MFS Research Series --a 8.61 to 18.67 2 0.625 c (14.10)f
Templeton International --a 8.17 to 8.19 2 0.60 --c (18.30)f

149

JOHN HANCOCK VARIABLE LIFE ACCOUNT UV

NOTES TO FINANCIAL STATEMENTS (continued)

6. UNIT VALUES (continued)
* These ratios represent the annualized contract expenses of the variable
account, consisting primarily of mortality and expense charges, for each
period indicated. The ratios include only those expenses that result in a
direct reduction to unit values. Charges made directly to contract owner
accounts through the redemption of units and expenses of the underlying
portfolios are excluded.

** These amounts represent the dividends and other income received by the
subaccount from the underlying portfolio, net of management fees assessed by
the portfolio manager, divided by the average net assets. These ratios
exclude those expenses, such as mortality and expense charges, that result
in direct reductions in the unit values. The recognition of investment
income by the subaccount is affected by the timing of the declaration of
dividends by the underlying portfolio in which the subaccounts invest.

*** These amounts represent the total return for the periods indicated,
including changes in the value of the underlying portfolio, and reflect
deductions for all items included in the expense ratio. The total return
does not include any expenses assessed through the redemption of units;
inclusion of these expenses in the calculation would result in a reduction
in the total return presented. Investment options with a date notation
indicate the effective date of that investment option in the variable
account. The total return is calculated for the period indicated or from
the commencement date through the end of the reporting period.

a. Total accumulation units not greater than 500 units.

b. Total assets not greater than $500.

c. Portfolio distributed no dividends during the year.

d. From May 1, 2001 (commencement of operations). Investment Income Ratio is
annualized.

e. From July 20, 2001 (inception of investment option). $10.00 initial
offering price.

f. From May 1, 2001 (inception of investment option). $10.00 initial offering
price.

150

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..................... 32
account value............... 8
Additional Sum Insured...... 16
asset-based risk charge..... 9
attained age................ 10
Basic Sum Insured........... 16
beneficiary................. 43
business day................ 33
changing Option A or B...... 17
changing the Total Sum Insured 17
charges..................... 9
Code........................ 39
cost of insurance rates..... 10
date of issue............... 34
death benefit............... 5
deductions.................. 9
enhanced cash value rider... 17
expenses of the Series Funds 10
fixed investment option..... 33
full surrender.............. 14
fund........................ 2
grace period................ 7
guaranteed minimum death
benefit.................... 7
Guaranteed Minimum Death
Benefit Premium............ 7
insurance charge............ 10
insured person.............. 5
investment options.......... 1
John Hancock................ 32
lapse....................... 7
loan........................ 15
loan interest............... 15
maximum premiums............ 6
Minimum Initial Premium..... 33
minimum insurance amount.... 16
minimum premiums................. 5
modified endowment contract...... 19
monthly deduction date........... 34
Option A; Option B............... 16
owner............................ 5
partial withdrawal............... 14
partial withdrawal charge........ 10
payment options.................. 18
Planned Premium.................. 6
policy anniversary............... 34
policy year...................... 34
premium; premium payment......... 5
prospectus....................... 3
receive; receipt................. 20
reinstate; reinstatement......... 7
sales charge..................... 9
SEC.............................. 2
Separate Account UV.............. 28
Series Funds..................... 2
Servicing Office................. 2
special loan account............. 15
subaccount....................... 32
surrender........................ 5
surrender value.................. 14
Target Premium................... 9
tax considerations............... 39
telephone transfers.............. 21
Total Sum Insured................ 16
transfers of account value....... 13
variable investment options...... 1
we; us........................... 32
withdrawal....................... 14
withdrawal charges............... 10
you; your........................ 5

151