Prospectus Dated May 1, 2006
(JOHN HANCOCK(R) LOGO)
JOHN HANCOCK ANNUITIES
Declaration Variable Annuity
Patriot Variable Annuity
Revolution Access Variable Annuity
Revolution Extra Variable Annuity**
Revolution Value Variable Annuity
PREVIOUSLY ISSUED CONTRACTS
This Prospectus describes interests in the deferred Purchase Payment variable
annuity Contracts listed above that were previously issued by JOHN HANCOCK
VARIABLE LIFE INSURANCE COMPANY ("John Hancock"). These Contracts are no longer
offered for sale, however, you may make additional Purchase Payments as
permitted under your Contract. In this Prospectus, we refer to John Hancock
Variable Life Insurance Company as "JHVLICO," "we," "us," "our," or "the
Company." You, the Contract Owner, should refer to the first page of your
Contract, to determine which of the above Contracts you purchased.
This Prospectus describes the variable portion of the Contracts to which you may
allocate additional Purchase Payments, to the extent permitted by your Contract.
If you do, your Contract Value (other than value allocated to a Fixed Investment
Option) and Variable Annuity benefit payments will vary according to the
investment performance of the applicable Sub-Accounts of the JOHN HANCOCK
VARIABLE ANNUITY ACCOUNT JF ("Separate Account"). Each Sub-Account invests in
one of the following funds of John Hancock Trust that corresponds to a Variable
Investment Option that we make available on the date of this Prospectus. Certain
Variable Investment Options may not be available under a Contract.
JOHN HANCOCK TRUST
500 Index Trust B
Active Bond Trust
Blue Chip Growth Trust(1)
Bond Index Trust B(1)
Capital Appreciation Trust(1)
Equity-Income Trust(1)
Financial Services Trust
Global Bond Trust(1)
Growth and Income Trust
(formerly, Growth & Income II Trust)
Health Sciences Trust(2)
High Yield Trust(1)
International Equity Index Trust B(1)
Managed Trust(1)
Mid Cap Index Trust(2)
Mid Cap Stock Trust(2)
Mid Value Trust(1)
Money Market Trust B
Overseas Equity Trust
Real Estate Securities Trust(1)
Short-Term Bond Trust(1)
Small Cap Growth Trust
Small Cap Index Trust(2)
Small Cap Value Trust(2)
Total Return Trust(2)
Total Stock Market Index Trust(2)
(1) Available on Revolution Variable Annuities and Patriot Variable Annuity
Contracts only
(2) Available on Revolution Variable Annuity Contracts only
CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED, GUARANTEED OR ENDORSED
BY ANY BANK, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY. PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT
FOR FUTURE REFERENCE. IT CONTAINS INFORMATION ABOUT THE SEPARATE ACCOUNT AND THE
VARIABLE PORTION OF THE CONTRACT THAT YOU SHOULD KNOW BEFORE INVESTING. THE
CONTRACTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION ("SEC"). NEITHER THE SEC NOR ANY STATE HAS DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
** If you purchased a Revolution Extra Contract, we will add an "Extra Credit"
of at least 3.5% of each Purchase Payment that you make under that
Contract. Because of this feature, the withdrawal charge applicable to
certain withdrawals of Contract Value may be higher than those imposed
under Contracts without an "Extra Credit" or "bonus" feature. The amount of
the Extra Credit may be more than offset by the withdrawal charge if you
prematurely "surrender" or otherwise withdraw money in excess of the free
withdrawal amounts while this charge is in effect.
JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
ANNUITIES SERVICE CENTER MAILING ADDRESS
601 Congress Street Post Office Box 55229
Boston, Massachusetts 02210-2805 Boston, Massachusetts 02205-5230
(617) 663-3000 or (800) 824-0335 www.johnhancockannuities.com
Table of Contents
GLOSSARY OF SPECIAL TERMS.................................................. 1
OVERVIEW................................................................... 3
FEE TABLES................................................................. 4
EXAMPLES................................................................ 5
BASIC INFORMATION.......................................................... 8
WHAT IS THE CONTRACT?................................................... 8
WHO OWNS THE CONTRACT?.................................................. 8
IS THE OWNER ALSO THE ANNUITANT?........................................ 8
HOW CAN I INVEST MONEY IN A CONTRACT?................................... 8
Purchase Payments.................................................... 8
Initial Purchase Payment............................................. 8
Issue Date and Contract Year......................................... 9
Limits on Purchase Payments.......................................... 9
Ways to Make Additional Purchase Payments............................ 9
Additional Purchase Payments by Wire................................. 9
HOW WILL THE VALUE OF MY INVESTMENT IN THE CONTRACT CHANGE OVER TIME?... 9
Extra Credit Feature................................................. 10
WHAT ANNUITY BENEFITS DOES THE CONTRACT PROVIDE?........................ 10
TO WHAT EXTENT CAN JHVLICO VARY THE TERMS AND CONDITIONS OF THE
CONTRACTS?........................................................... 10
State Law Insurance Requirements..................................... 10
Variations in Charges or Rates....................................... 10
WHAT ARE THE TAX CONSEQUENCES OF OWNING A CONTRACT?..................... 10
HOW CAN I CHANGE MY CONTRACT'S INVESTMENT ALLOCATIONS?.................. 11
Allocation of Purchase Payments...................................... 11
Transfers Among Investment Options................................... 11
Procedure for Transferring Your Assets............................... 12
Telephone and Facsimile Transactions................................. 12
Electronic Information............................................... 13
Dollar Cost Averaging Programs....................................... 13
Strategic Rebalancing................................................ 13
WHAT FEES AND CHARGES WILL BE DEDUCTED FROM MY CONTRACT?................ 14
Asset-Based Charges.................................................. 14
Annual Contract Fee.................................................. 14
Premium Taxes........................................................ 14
Withdrawal Charge.................................................... 14
Other Charges........................................................ 16
HOW CAN I WITHDRAW MONEY FROM MY CONTRACT?.............................. 16
Surrenders and Partial Withdrawals................................... 16
Signature Guarantee Requirements for Surrenders and Partial
Withdrawals:...................................................... 17
Nursing Home Waiver of Withdrawal Charge............................. 17
Waiver of Withdrawal Charge Rider.................................... 17
Systematic Withdrawal Plan........................................... 18
Telephone Withdrawals................................................ 18
WHAT HAPPENS IF THE OWNER OR ANNUITANT DIES BEFORE MY CONTRACT'S
MATURITY DATE?....................................................... 18
If you die before annuity payments have begun:....................... 18
If you die on or after annuity payments have begun:.................. 19
Death benefits following death of annuitant.......................... 19
Standard Death Benefit............................................... 19
Enhanced Death Benefit Riders........................................ 19
WHAT OTHER OPTIONAL BENEFITS MAY HAVE BEEN AVAILABLE TO ME UNDER A
CONTRACT?............................................................ 20
Accumulated Value Enhancement Benefit................................ 20
Guaranteed Retirement Income Benefit................................. 20
CAN I RETURN MY CONTRACT?............................................... 21
GENERAL INFORMATION ABOUT US, THE SEPARATE ACCOUNT AND THE FUNDS........... 22
THE COMPANY............................................................. 22
THE SEPARATE ACCOUNT.................................................... 22
THE FUNDS............................................................... 23
HOW WE SUPPORT THE FIXED INVESTMENT OPTIONS................................ 27
HOW THE FIXED INVESTMENT OPTIONS WORK...................................... 27
GUARANTEED INTEREST RATES............................................... 27
CALCULATION OF MARKET VALUE ADJUSTMENT ("MVA").......................... 27
What additional guarantee applies to the Fixed Investment Options
under my contract?................................................ 28
THE ACCUMULATION PERIOD.................................................... 30
YOUR VALUE IN OUR VARIABLE INVESTMENT OPTIONS........................... 30
VALUATION OF ACCUMULATION UNITS......................................... 30
Your Value in the Fixed Investment Options........................... 30
THE ANNUITY PERIOD......................................................... 30
MATURITY DATE........................................................... 30
CHOOSING FIXED OR VARIABLE ANNUITY PAYMENTS............................. 30
SELECTING AN ANNUITY OPTION............................................. 31
VARIABLE MONTHLY ANNUITY PAYMENTS....................................... 31
ASSUMED INVESTMENT RATE................................................. 31
TRANSFERS DURING THE ANNUITY PERIOD..................................... 31
FIXED MONTHLY ANNUITY PAYMENTS.......................................... 32
ANNUITY OPTIONS......................................................... 32
VARIABLE INVESTMENT OPTION VALUATION PROCEDURES............................ 33
FEDERAL TAX MATTERS........................................................ 33
INTRODUCTION............................................................ 33
OUR TAX STATUS.......................................................... 33
SPECIAL CONSIDERATIONS FOR OPTIONAL BENEFITS............................ 33
NON-QUALIFIED CONTRACTS................................................. 33
Undistributed Gains.................................................. 34
Taxation of Annuity Payments......................................... 34
Surrenders, Withdrawals and Death Benefits........................... 34
Taxation of Death Benefit Proceeds................................... 34
Penalty Tax on Premature Distributions............................... 35
Puerto Rico Non-Qualified Contracts.................................. 35
Diversification Requirements......................................... 35
QUALIFIED CONTRACTS..................................................... 36
Penalty Tax on Premature Distributions............................... 37
Tax-Free Rollovers................................................... 37
Loans................................................................ 37
Puerto Rico Contracts Issued to Fund Retirement Plans................ 38
SEE YOUR OWN TAX ADVISER................................................ 38
PERFORMANCE INFORMATION.................................................... 38
REPORTS.................................................................... 39
VOTING PRIVILEGES.......................................................... 39
CERTAIN CHANGES............................................................ 39
CHANGES TO THE SEPARATE ACCOUNT......................................... 39
VARIATIONS IN CHARGES OR RATES FOR ELIGIBLE CLASSES..................... 39
DISTRIBUTION OF CONTRACTS.................................................. 39
EXPERTS................................................................. 40
APPENDIX A: DETAILS ABOUT OUR FIXED INVESTMENT OPTIONS..................... 41
INVESTMENTS THAT SUPPORT OUR FIXED INVESTMENT OPTIONS................... 41
GUARANTEED INTEREST RATES............................................... 41
COMPUTATION OF MARKET VALUE ADJUSTMENT.................................. 41
APPENDIX B: EXAMPLES OF WITHDRAWAL CHARGE CALCULATIONS..................... 43
APPENDIX C: OPTIONAL ENHANCED DEATH BENEFITS............................... 48
APPENDIX D: EXAMPLES OF EARNINGS ENHANCEMENT DEATH BENEFIT CALCULATION..... 51
EXAMPLE 1............................................................... 51
EXAMPLE 2............................................................... 51
APPENDIX E: QUALIFIED PLAN TYPES........................................... 53
APPENDIX U: ACCUMULATION UNIT VALUE TABLES................................. 56
We provide additional information about the Contracts and the Separate Account
in the Statement of Additional Information, dated the same date as this
Prospectus, which we filed with the SEC and incorporate herein by reference. You
may obtain the Statement of Additional Information without charge by contacting
us at the Annuities Service Center shown on the first page of this Prospectus.
The SEC also maintains a Web site (http://www.sec.gov) that contains the
Statement of Additional Information and other information about us, the
Contracts and the Separate Account. We list the Table of Contents of the
Statement of Additional Information below.
JOHN HANCOCK VARIABLE ANNUITY ACCOUNT JF
Statement of Additional Information
Table of Contents
page of SAI
-----------
Distribution...................................................... 3
Calculation of Performance Data................................... 3
Other Performance Information..................................... 4
Calculation of Annuity Payments................................... 4
Additional Information About Determining Unit Values.............. 6
Purchases and Redemptions of Fund Shares.......................... 7
The Account....................................................... 7
Delay of Certain Payments......................................... 7
Liability for Telephone Transfers................................. 7
Voting Privileges................................................. 8
Financial Statements.............................................. 9
Glossary of Special Terms
The following terms as used in this Prospectus have the indicated meanings. We
also define other terms in specific sections of this Prospectus.
ACCUMULATION PERIOD: The period between the issue date of the Contract and its
Maturity Date.
ANNUITANT: Any natural person or persons to whom annuity benefit payments are
made and whose life is used to determine the duration of annuity benefit
payments involving life contingencies. If the Contract Owner names more than one
person as an "Annuitant", the second person named is referred to as
"co-Annuitant". The "Annuitant" and "co-Annuitant" are referred to collectively
as "Annuitant". The "Annuitant" is as designated on the Contract specification
page or in the application, unless changed. The Annuitant becomes the Owner of
the Contract during the Annuity Period.
ANNUITIES SERVICE CENTER: The mailing address of our service office is listed on
the first page of this Prospectus. You can send overnight mail to us at 601
Congress Street Boston, MA 02210-2805.
ANNUITY OPTION: The method selected by the Contract Owner (or as specified in
the Contract if no selection is made) for annuity benefit payments made by us.
ANNUITY PERIOD: The period when we make annuity benefit payments to you
following the Maturity Date.
ANNUITY UNIT: A unit of measure that is used after the election of an Annuity
Option to calculate Variable Annuity benefit payments.
BENEFICIARY: The person, persons or entity entitled to the death benefit under
the Contract. The Beneficiary is as specified in the application, unless
changed.
BUSINESS DAY: Any day on which the New York Stock Exchange is open for business.
CODE: The Internal Revenue Code of 1986, as amended.
COMPANY: John Hancock Variable Life Insurance Company.
CONTRACT: The Variable Annuity Contracts described by this Prospectus.
CONTRACT VALUE: At any time before the Maturity Date, the total value of your
Contract equals:
- - the total amount you invested;
- - plus the amount(s) credited to your Contract under the "Extra Credit
Feature" (available only on the Revolution Extra Variable Annuity)
- - minus all charges we deduct,
- - minus all withdrawals you have made;
- - plus or minus any positive or negative MVAs that we have made at the time
of any premature withdrawals or transfers you have made from a Fixed
Investment Option;
- - plus or minus each Variable Investment Option's positive or negative
investment return that we credit daily to any of your Contract's value
while it is in that option; and
- - plus the interest we credit to any of your Contract's value while it is in
a Fixed Investment Option.
CONTRACT YEAR: The period of twelve consecutive months beginning on the date as
of which the Contract is issued, or any anniversary of that date.
FIXED ANNUITY: An Annuity Option with payments for a set dollar amount that we
guarantee.
FIXED INVESTMENT OPTION: An Investment Option in which a Company guarantees the
principal value and the rate of interest credited to the Investment Account for
the term of any guarantee period.
FUND: A series of a registered open-end investment management company which
corresponds to a Variable Investment Option.
GENERAL ACCOUNT: All of the Company's assets other than assets in its Separate
Accounts or any other separate account that it may maintain.
1
INVESTMENT ACCOUNT: An account we establish for you which represents your
interests in an Investment Option during the Accumulation Period.
INVESTMENT OPTIONS: The investment choices available to Contract Owners. We
refer to the Variable Investment Options and the Fixed Investment Option
together as Investment Options.
JHVLICO: John Hancock Variable Life Insurance Company.
MATURITY DATE: The date on which we begin to make annuity benefit payments to
the Annuitant. The Maturity Date is the date specified on the Contract
specifications page, unless changed.
NON-QUALIFIED CONTRACT: A Contract which is not issued under a Qualified Plan.
OWNER OR CONTRACT OWNER ("YOU"): The person, persons (co-Owner) or entity
entitled to all of the Ownership rights under the Contract. References in this
Prospectus to Contract Owners are typically by use of "you". The Owner has the
legal right to make all changes in Contractual designations where specifically
permitted by the Contract. The Owner is as specified in the application, unless
changed. The Annuitant becomes the Owner of the Contract on the Maturity Date.
PROSPECTUS: This Prospectus that describes interests in a Contract.
PURCHASE PAYMENT: An amount paid by a Contract Owner to us as consideration for
the benefits provided by the Contract.
QUALIFIED CONTRACT: A Contract issued under a Qualified Plan.
QUALIFIED PLAN: A Retirement plan that receives favorable tax treatment under
Section 401, 403, 408 (IRAs), 408A (Roth IRAs) or 457 of the Code.
RIDER: An optional benefit that you may elect for an additional charge.
SEPARATE ACCOUNT: John Hancock Variable Annuity Account JF. A separate account
is a segregated account of the company that is not commingled with the general
assets and obligations of the company.
SUB-ACCOUNT: A sub-account of the Separate Account. Each Sub-Account invests in
shares of a specific Fund.
SURRENDER VALUE: The total value of a Contract, after any market value
adjustment, minus the annual Contract fee, any applicable premium tax, and any
applicable Rider charges, and any withdrawal charges (if applicable). We will
determine the amount surrendered or withdrawn as of the date we receive your
request in proper form at the Annuities Service Center.
VARIABLE ANNUITY: An Annuity Option with payments which: (1) are not
predetermined or guaranteed as to dollar amount, and (2) vary in relation to the
investment experience of one or more specified Sub-Accounts.
VARIABLE INVESTMENT OPTION: An Investment Option which corresponds to a
Sub-Account of a Separate Account that invests in shares of a specific Fund.
2
Overview
This is the Prospectus - it is not any Contract. The Prospectus simplifies many
Contract provisions to better communicate a Contract's essential features. Your
rights and obligations under the Contracts will be determined by the language of
a Contract itself. On request, we will provide the form of Contract for you to
review. Please read your Contract and keep it for future reference.
The Contracts described in this Prospectus are no longer offered for sale,
however, you may make additional Purchase Payments as permitted under your
Contract. This Prospectus contains information that you should know before you
exercise any of your rights under the Contract.
Prospectuses for Contracts often undergo certain changes in their terms from
year to year to reflect changes in the Contracts. The changes include such
things as the liberalization of benefits, the exercise of rights reserved under
a Contract, the alteration of administrative procedures and changes in the
Investment Options available. Any such change may or may not apply to Contracts
issued prior to the effective date of the change. This Prospectus reflects the
status of the product as of the date of this Prospectus. This Prospectus
contains information about other products. Therefore, this Prospectus may
contain information that is inapplicable to your Contract. You should consult
your Contract to verify whether any particular provision applies to you and
whether you may elect any particular Investment Option.
The Variable Investment Options shown on the first page of this Prospectus are
those available under the Contracts described in this Prospectus as of the date
of this Prospectus. There may be Variable Investment Options that are not
available to you. 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 NAV shares of a corresponding Fund of the John Hancock Trust (the
"Trust"). The Trust is a so-called "series" type mutual Fund registered with the
SEC. The investment results of each Variable Investment Option you select will
depend on those of the corresponding Funds of the Trust. Each of the Funds is
separately managed and has its own investment objective and strategies. The
Trust prospectus contains detailed information about each available Fund. Be
sure to read that prospectus before selecting any of the Variable Investment
Options.
For amounts you don't wish to invest in a Variable Investment Option, you may be
able to invest these amounts in a currently offered Fixed Investment Option if
permitted by your local jurisdiction. We invest the assets allocated to a Fixed
Investment Option in our General Account and they earn interest at a fixed rate,
declared by us, subject to a minimum rate stated in your Contract. If you remove
money from any Fixed Investment Option prior to its expiration, however, we may
increase or decrease your Contract's value to compensate for changes in interest
rates that may have occurred subsequent to the beginning of that Fixed
Investment Option. This is known as a "market value adjustment."
We refer to the Variable Investment Options and any available Fixed Investment
Option together as Investment Options.
The annuity described in this Prospectus may be sold on a group basis. If you
purchase the annuity under a group Contract, you will be issued a group
certificate. If that is the case, the word "Contract" as used in this Prospectus
should be interpreted as meaning the certificate issued to you under the group
Contract.
The Contracts are not available in all states. Certain features of the
Contracts, including optional benefit Riders, may not have been available or may
have been modified for Contracts issued in various states. YOU SHOULD REVIEW
YOUR CONTRACT, OR CONTACT THE ANNUITIES SERVICE CENTER, FOR ADDITIONAL
INFORMATION. You should disregard all references in the Prospectus to benefits
that are NOT available in your state.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any state to any person to whom it is unlawful to
make or solicit an offer in that state.
3
Fee Tables
THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY WHEN
BUYING, OWNING AND SURRENDERING CONTRACT. THE FIRST TABLE DESCRIBES THE CHARGES
THAT YOU PAID AT THE TIME THAT YOU BOUGHT THE CONTRACT AS WELL AS THE CHARGES
YOU WILL PAY WHEN YOU SURRENDER THE CONTRACT, OR TRANSFER ACCOUNT VALUE BETWEEN
INVESTMENT OPTIONS. STATE PREMIUM TAXES MAY ALSO BE DEDUCTED.
CONTRACT OWNER DECLARATION PATRIOT REVOLUTION ACCESS REVOLUTION EXTRA REVOLUTION VALUE
TRANSACTION EXPENSES(1) VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY
- ----------------------- ---------------- ---------------- ----------------- ---------------- ----------------
Maximum Withdrawal 6% for the 1st year 6% for the 1st year None 7% for the 1st year 7% for the 1st year
Charge (as % of amount 6% for the 2nd year 6% for the 2nd year 7% for the 2nd year 6% for the 2nd year
withdrawn or 5% for the 3rd year 5% for the 3rd year 7% for the 3rd year 5% for the 3rd year
surrendered) (2) 5% for the 4th year 5% for the 4th year 7% for the 4th year 4% for the 4th year
4% for the 5th year 4% for the 5th year 6% for the 5th year 3% for the 5th year
3% for the 6th year 3% for the 6th year 5% for the 6th year 2% for the 6th year
2% for the 7th year 2% for the 7th year 4% for the 7th year 1% for the 7th year
0% thereafter 0% thereafter 0% thereafter 0% thereafter
Maximum transfer
charge(3) $25 N/A $25 $25 $25
(1) State premium taxes may also apply to your Contract, which currently range
from 0.50% to 4.00% of each Purchase Payment.
(2) This charge is taken upon withdrawal or surrender within the specified
period of years measured from the date of Purchase Payment.
(3) This charge is not currently imposed, but we reserve the right to do so in
the Contract. If we do, it will be taken upon each transfer into or out of
any Investment Option beyond an annual limit of not less than 12.
THE NEXT TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY
DURING THE TIME YOU OWN THE CONTRACT. THIS TABLE DOES NOT INCLUDE FEES AND
EXPENSES PAID AT THE FUND LEVEL.
DECLARATION PATRIOT REVOLUTION ACCESS REVOLUTION EXTRA REVOLUTION VALUE
VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY
---------------- ---------------- ----------------- ---------------- ----------------
Maximum Annual Contract Fee(4) $50 $50 $50 $50 $50
Current Annual Contract Fee (5) $30 $30 $30 $30 $30
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE) (6)
(Contracts with initial Purchase Payment less than $250,000)
Asset-Based Charge 1.25% 1.25% 1.25% 1.25% 1.25%
(Contracts with initial Purchase Payment greater than $250,000)
Asset-Based Charge 1.00% 1.00% 1.25% 1.25% 1.25%
OPTIONAL BENEFIT RIDER CHARGES(7) (AS A PERCENTAGE OF YOUR CONTRACT'S TOTAL VALUE UNLESS OTHERWISE STATED)
Accidental Death Benefit Rider 0.10% 0.10% Not Offered Not Offered Not Offered
Accumulated Value Enhancement Not Offered Not Offered Maximum: 1.00% Maximum: 1.00% Maximum: 1.00%
("CARESolutions Plus") Rider(8) Current: 0.40% Curent: 0.35% Current: 0.35%
(as a percentage of your initial
Purchase Payment)
Earnings Enhancement Not Offered Not Offered 0.25% 0.25% 0.25%
("Beneficiary Tax Relief") Death
Benefit Rider
Enhanced "Stepped Up" Death 0.15% 0.15% Not Offered Not Offered Not Offered
Benefit Rider
Enhanced Death Benefit Rider(9) Not Offered Not Offered 0.25% 0.25% 0.25%
Guaranteed Retirement Income Not Offered Not Offered 0.30% 0.30% 0.30%
Benefit Rider (10)
Nursing Home Waiver (10) 0.05% 0.05% Not Offered Not Offered Not Offered
Waiver of Withdrawal Charge Not Offered Not Offered Not Offered 0.10% 0.10%
("CARESolutions") Rider(11)
(4) This charge is not currently imposed and would only apply to Declaration
and Patriot Contracts of less than $10,000; and Revolution Access,
Revolution Extra, and Revolution Value Contracts of less than $50,000.
(5) This charge applies only to Declaration and Patriot Contracts of less than
$10,000; and Revolution Access, Revolution Extra, and Revolution Value
Variable Annuities Contracts of less than $50,000. It is taken at the end
of each Contract Year but, if you surrender a Contract before then, it will
be taken at the time of surrender.
(6) This charge only applies to that portion of account value held in the
Variable Investment Options. The charge does not apply to amounts in the
Fixed Investment Options. For Revolution Access, Revolution Extra and
Revolution Value Variable Annuities Contracts, the charge does not apply to
the guarantee rate account under our dollar-cost averaging value program.
(7) Charges for optional benefit Riders are assessed monthly. The monthly
charge is 1/12 of the annual charge shown in this table.
(8) This Rider is available only if you purchased the Waiver of Withdrawal
Charge Rider as well. We do not currently impose the maximum charge shown,
but reserve the right to do so on a uniform basis for all Accumulated Value
Enhancement Riders issued in the same state.
(9) In certain states (and for Riders issued prior to May 1, 2002), the rate
for Enhanced Death Benefit Rider may be lower than the amount shown.
(10) This Rider is not available for Contracts issued after April 30, 2004.
(11) as a percentage of that portion of your Contracts total value attributable
to Purchase Payments that are still subject to withdrawal charges
4
THE NEXT TABLE DESCRIBES THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES
CHARGED BY THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN
THE CONTRACT. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED
IN THE FUND'S PROSPECTUS.
TOTAL ANNUAL FUND OPERATING EXPENSES MINIMUM MAXIMUM
- ------------------------------------ ------- -------
Range of expenses that are deducted from Fund assets,
including management fees, and other expenses 0.50% 1.28%
EXAMPLES
The following two examples are intended to help you compare the cost of
investing in Contracts with the cost of investing in other variable annuity
contracts. These costs include Contract Owner transaction expenses, Contract
fees, Separate Account annual expenses and Fund fees and expenses.
The first example assumes that you invest $10,000 in a Contract with all the
optional benefit Riders that may have been available. The first example also
assumes that your investment has a 5% return each year and assumes the maximum
annual Contract fee and the maximum fees and expenses of any of the Funds.
Although your actual costs may be higher or lower, based on these assumptions,
your costs would be:
MAXIMUM FUND LEVEL TOTAL OPERATING EXPENSES
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
DECLARATION VARIABLE ANNUITY WITH:
Enhanced "stepped-up" Death Benefit Rider;
Accidental Death Benefit Rider;
and Nursing Home Waiver Rider
If you surrender the Contract at the end of the
applicable time period: $831 $1,338 $1,872 $3,200
If you annuitize, or do not surrender the Contract
at the end of the applicable time period: $291 $ 890 $1,516 $3,200
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
PATRIOT PREFERRED VARIABLE ANNUITY WITH:
Enhanced "stepped-up" Death Benefit Rider;
Accidental Death Benefit Rider;
and Nursing Home Waiver Rider
If you surrender the Contract at the end of the
applicable time period: $829 $1,334 $1,866 $3,187
If you annuitize, or do not surrender the Contract
at the end of the applicable time period: $289 $ 886 $1,509 $3,187
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
REVOLUTION ACCESS VARIABLE ANNUITY WITH:
Enhanced Death Benefit Rider
Earnings Enhancement Death Benefit Rider
Accumulated Value Enhancement Rider; and
Guaranteed Retirement Income Benefit Rider
If you surrender the Contract at the end of the
applicable time period: $378 $1,147 $1,934 $3,980
If you annuitize, or do not surrender the Contract
at the end of the applicable time period: $378 $1,147 $1,934 $3,980
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
REVOLUTION EXTRA VARIABLE ANNUITY WITH:
Waiver of Withdrawal Charge Rider;
Enhanced Death Benefit Rider;
Earnings Enhancement Death Benefit Rider;
Accumulated Value Enhancement Rider; and
Guaranteed Retirement Income Benefit Rider
If you surrender the Contract at the end of the
applicable time period: $1,014 $1,793 $2,499 $4,034
If you annuitize, or do not surrender the Contract
at the end of the applicable time period: $ 384 $1,165 $1,962 $4,034
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
REVOLUTION VALUE VARIABLE ANNUITY WITH:
waiver of Withdrawal Charge Rider;
Enhanced Death Benefit Rider;
Earnings Enhancement Death Benefit Rider;
Accumulated Value Enhancement Rider; and
Guaranteed Retirement Income Benefit Rider.
If you surrender the Contract at the end of the
applicable time period: $1,013 $1,610 $2,224 $4,022
If you annuitize, or do not surrender the Contract
at the end of the applicable time period: $ 383 $1,161 $1,956 $4,022
5
The next example assumes that you invest $10,000 in a Contract with no optional
benefit riders for the time periods indicated. This example also assumes that
your investment has a 5% return each year and assumes the average annual
Contract fee we expect to receive for the Contracts and the minimum fees and
expenses of any of the Funds.
Although your actual costs may be higher or lower, based on these assumptions,
your costs would be:
MINIMUM FUND LEVEL TOTAL OPERATING EXPENSES
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
DECLARATION VARIABLE ANNUITY
If you surrender the Contract at the end of the
applicable time period: $721 $1,006 $1,318 $2,091
If you annuitize, or do not surrender the Contract at
the end of the applicable time period: $181 $ 559 $ 963 $2,091
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
PATRIOT VARIABLE ANNUITY
If you surrender the Contract at the end of the
applicable time period: $720 $1,004 $1,313 $2,083
If you annuitize, or do not surrender the Contract
at the end of the applicable time period: $180 $ 557 $ 959 $2,083
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
REVOLUTION ACCESS VARIABLE ANNUITY
If you surrender the Contract at the end of the
applicable time period: $180 $557 $959 $2,083
If you annuitize, or do not surrender the Contract at
the end of the applicable time period: $180 $557 $959 $2,083
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
REVOLUTION EXTRA VARIABLE ANNUITY
If you surrender the Contract at the end of the
applicable time period: $810 $1,184 $1,493 $2,088
If you annuitize, or do not surrender the Contract at
the end of the applicable time period: $180 $ 558 $ 961 $2,088
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
REVOLUTION VALUE VARIABLE ANNUITY
If you surrender the Contract at the end of the
applicable time period: $809 $1,003 $1,223 $2,080
If you annuitize, or do not surrender the Contract at
the end of the applicable time period: $179 $ 556 $ 957 $2,080
THE FOLLOWING TABLE DESCRIBES THE OPERATING EXPENSES FOR EACH FUND, AS A
PERCENTAGE OF THE FUND'S AVERAGE NET ASSETS FOR THE FISCAL YEAR ENDING DECEMBER
31, 2005. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN
THE FUND'S PROSPECTUS AND IN THE NOTES FOLLOWING THE TABLE.
ALL OF THE FUNDS SHOWN IN THE TABLE ARE NAV CLASS SHARES THAT ARE NOT SUBJECT TO
RULE 12B-1 FEES. THESE NAV CLASS SHARES COMMENCED OPERATIONS ON APRIL 29, 2005.
THESE NAV CLASS SHARES OF A FUND ARE BASED UPON THE EXPENSE RATIOS OF THE FUND'S
SERIES I SHARES FOR THE YEAR ENDED DECEMBER 31, 2005 (ADJUSTED TO REFLECT THE
ABSENCE OF ANY RULE 12B-1 FEE APPLICABLE TO THE NAV SHARES).
MANAGEMENT OTHER TOTAL FUND ANNUAL
FEES EXPENSES EXPENSES
---------- -------- -----------------
JOHN HANCOCK TRUST (NAV): (NAV)
500 Index Trust B (See Note 6.) 0.47% 0.03% 0.50%
Active Bond Trust 0.60% 0.07% 0.67%
Blue Chip Growth Trust (See Notes 1, 2 and 4.) 0.81% 0.07% 0.88%
Bond Index Trust B (See Notes 2 and 6.) 0.47% 0.03% 0.50%
Capital Appreciation Trust (See Notes 1 and 2.) 0.81% 0.05% 0.86%
Equity-Income Trust (See Notes 1, 2 and 4.) 0.81% 0.05% 0.86%
Financial Services Trust (See Notes 1, 2 and 5.) 0.82% 0.09% 0.91%
Global Bond Trust (See Note 2.) 0.70% 0.12% 0.82%
Growth & Income Trust (See Note 1.) 0.68% 0.08% 0.76%
Health Sciences Trust (See Notes 1, 2 and 4.) 1.05% 0.12% 1.17%
High Yield Trust (See Notes 1 and 2.) 0.66% 0.07% 0.73%
International Equity Index Trust B (See Note 6.) 0.55% 0.04% 0.59%
Managed Trust (See Notes 2 and 3.) 0.69% 0.06% 0.75%
Mid Cap Index Trust (See Notes 1 and 2.) 0.49% 0.04% 0.53%
Mid Cap Stock Trust (See Notes 1 and 2.) 0.84% 0.08% 0.92%
Mid Value Trust (See Notes 1, 2 and 4.) 0.98% 0.08% 1.06%
Money Market Trust B (See Note 6.) 0.49% 0.04% 0.53%
Overseas Equity Trust (See Notes 1 and 2.) 1.05% 0.23% 1.28%
Real Estate Securities Trust (See Notes 1 and 2.) 0.70% 0.06% 0.76%
Short-Term Bond Trust (See Notes 1 and 2.) 0.59% 0.09% 0.68%
Small Cap Growth Trust (See Notes 1 and 2.) 1.07% 0.06% 1.13%
Small Cap Index Trust (See Notes 1 and 2.) 0.49% 0.04% 0.53%
6
MANAGEMENT OTHER TOTAL FUND ANNUAL
FEES EXPENSES EXPENSES
---------- -------- -----------------
JOHN HANCOCK TRUST (NAV) (NAV)
Small Cap Value Trust (See Note 1.) 1.07% 0.05% 1.12%
Total Return Trust (See Note 2.) 0.70% 0.07% 0.77%
Total Stock Market Index Trust (See Notes 1and 2.) 0.49% 0.04% 0.53%
1. The management fee shown for this Fund reflects the method of calculating
the advisory fee that became effective during October, 2005 and assumes
these changes were in effect for the year ended December 31, 2005. Under
this method, the applicable portion of the Fund's aggregate net assets are
combined with the applicable portions of one or more other funds having the
same subadviser for the purpose of determining advisory fee break points.
2. The amounts shown for this Fund reflect the advisory fee rates that became
effective April 29, 2005. Expenses shown in the table assume these changes
were in effect for the year ended December 31, 2005
3. This Fund commenced operations on April 29, 2005.
4. The subadviser has voluntarily agreed to waive a portion of its subadvisory
fee for John Hancock Trust's Blue Chip Growth Trust, Equity-Income Trust,
Health Sciences Trust, Mid Value Trust, Science & Technology Trust, Small
Company Value Trust, Spectrum Income Trust and Real Estate Equity Trust
series. This waiver is based on the combined average daily net assets of
these Funds and the following funds of John Hancock Funds II: Blue Chip
Growth Fund, Equity-Income Fund, Health Sciences Fund, Science & Technology
Fund, Small Company Value Fund, Spectrum Income Fund and Real Estate Equity
Fund (collectively, the "T. Rowe Funds"). Under the voluntary agreement,
the subadviser will reduce its fee by 5.00% for the amount of the T. Rowe
Funds' combined average daily net assets in excess of $750 million and,
effective November 1, 2006, by an additional 2.50% for the amount of the T.
Rowe Funds' combined average daily net assets in excess of $1.5 billion.
The adviser has also voluntarily agreed to reduce the advisory fee for each
Fund by the amount that the subadvisory fee for that Fund is reduced. These
voluntary fee waivers may be terminated at any time by the subadviser or
the adviser.
5. The management fee shown reflects the rates of advisory fees for the
Financial Services Trust that became effective October 14, 2005. Prior to
that date, the adviser voluntarily agreed to reduce its advisory fee the
Fund to such rates (0.85% of the first $50 million of the Fund's average
annual net assets; 0.80% of the next $450 million and 0.75% of the Fund's
average annual net assets over $500 million).
6. This Fund commenced operations on April 29, 2005. "Other Expenses" shown in
the table for this Fund are based on estimates for the current fiscal year.
The adviser for this Fund has agreed, pursuant to its agreement with the
John Hancock Trust, to waive its management fee (or, if necessary,
reimburse expenses of the Fund) to the extent necessary to limit the Fund's
"Annual Operating Expenses." A Fund's "Annual Operating Expenses" includes
all of its operating expenses including advisory fees and Rule 12b-1 fees,
but excludes taxes, brokerage commissions, interest, litigation and
indemnification expenses and extraordinary expenses of the Fund not
incurred in the ordinary course of the Fund's business. Under the
agreement, the adviser's obligation will remain in effect until May 1, 2007
and will terminate after that date only if the John Hancock Trust, without
the prior written consent of the adviser, sells shares of the Fund to (or
has shares of the Fund held by) any person other than the variable life
insurance or variable annuity insurance separate accounts of John Hancock
Life Insurance Company or any of its affiliates that are specified in the
agreement. If this fee waiver had been reflected, the management fee shown
for the 500 Index Trust B, Bond Index Trust B, International Equity Index
Trust B and Money Market Trust B would be 0.22%, 0.22%, 0.30% and 0.24%,
respectively, and the Total Fund Annual Expenses shown would be 0.25%,
0.25%, 0.34% and 0.28%, respectively.
7
BASIC INFORMATION
WHAT IS THE CONTRACT?
Each of the five (5) contacts listed on the first page of this Prospectus are
deferred Purchase Payment variable annuity Contracts. An "annuity contract"
provides a person (known as the "Annuitant" or "payee") with a series of
periodic payments. Because this Contract is also a "deferred payment" Contract,
the annuity payments will begin on a future date, called the Contract's Maturity
Date. Under a "variable annuity" contract, the amount you have invested can
increase or decrease in value daily based upon the value of the Variable
Investment Options chosen. If your annuity is provided under a master group
contract, the term "Contract" as used in this Prospectus refers to the
certificate you will be issued and not to the master group contract.
WHO OWNS THE CONTRACT?
That's up to you. Unless the Contract provides otherwise, the Owner of the
Contract is the person who can exercise the rights under the Contract, such as
the right to choose the Investment Options or the right to surrender the
Contract. In many cases, the person who bought the Contract is the Owner.
However, you are free to name another person or entity (such as a trust) as
Owner. In writing this Prospectus, we've assumed that you, the reader, are the
person or persons entitled to exercise the rights and obligations under
discussion. If a Contract has joint Owners, both must join in any written notice
or request.
IS THE OWNER ALSO THE ANNUITANT?
In many cases, the same person is both the Annuitant and the Owner of a
Contract. The Annuitant is the person whose lifetime is used to measure the
period of time when we make various forms of annuity payments. Also, the
Annuitant receives payments from us under any ANNUITY OPTION that commences
during the Annuitant's lifetime. We may permit you to name another person as
Annuitant or joint Annuitant if that person meets our underwriting standards. We
may also permit you to name as joint Annuitants two persons other than yourself
if those persons meet our underwriting standards.
HOW CAN I INVEST MONEY IN A CONTRACT?
Purchase Payments
We call the investments you make in your Contract Payments or Purchase Payments.
The Contracts described in this Prospectus are no longer available for sale,
however, the minimum initial Purchase Payment requirements for the Contracts are
outlined in the table below, along with the minimum Purchase Payment for each
subsequent Payment into the Contracts. If you purchased your Contract through
the automatic investment plan, different minimums may apply. If your Contract's
total value ever falls to zero, we may terminate it. Therefore, you may need to
pay more Purchase Payments to keep the Contract in force.
MINIMUM
MINIMUM MINIMUM DIRECT
INITIAL SUBSEQUENT DEPOSIT
PURCHASE PURCHASE SUBSEQUENT
CONTRACT PAYMENT PAYMENT PAYMENT
-------- -------- ---------- ----------
Declaration $ 1,000 $500 $100
Patriot $ 1,000 $500 $100
Revolution Access $25,000 $200 $100
Revolution Extra $10,000 $200 $100
Revolution Value $ 5,000 $200 $100
Initial Purchase Payment
When we received your initial Purchase Payment and all necessary information, we
issued your Contract and invested your initial Purchase Payment. If the
information was not in good order, we contacted you to get the necessary
information. If for some reason, we were unable to complete this process within
5 Business Days, we either sent back your money or got your permission to keep
it until we received all of the necessary information.
In certain situations, we may have issued a Contract upon receiving the order of
your broker-dealer or financial institution but delayed the effectiveness of the
Contract until we received your signed application. In those situations, if we
did not receive your signed application within our required time period, we
deemed the Contract void from the beginning and returned your Purchase Payment.
We may not have issued a Contract if any proposed Owner or Annuitant was older
than age 84. We may also have limited your ability to purchase multiple
Contracts on the same Annuitants or Owners. We may, however, have waived either
of these underwriting limits.
8
Issue Date and Contract Year
We measure the years and anniversaries of your Contract from its date of issue.
We use the term Contract Year to refer to each period of time between
anniversaries of your Contract's date of issue. We did not issue a Contract if
the proposed Annuitant was older than age 84.
Limits on Purchase Payments
You can make Purchase Payments of up to $1,000,000 in any one Contract Year. The
total of all new Purchase Payments and transfers that you may allocate to any
one Variable Investment Option or Fixed Investment Option, in any one Contract
Year may not exceed $1,000,000. While the Annuitant is alive and the Contract is
in force, you can make Purchase Payments at any time before the Maturity Date
until the age limit shown below:
YOU MAY NOT MAKE ANY PURCHASE PAYMENTS
IF YOUR CONTRACT IS USED TO FUND AFTER THE ANNUITANT REACHES AGE
- -------------------------------- --------------------------------------
A Qualified Plan 70 1/2 (1)
A Non-Qualified plan 85 (2)
(1) except for a Roth IRA, which has no age limit
(2) 84 1/2 for Declaration Variable Annuity
Ways to Make Additional Purchase Payments
Additional Purchase Payments made by check or money order should be:
- - drawn on a U.S. bank,
- - drawn in U.S. dollars, and
- - made payable to "John Hancock" and sent to the Annuities Service Center.
We credit any additional Purchase Payments to your Contract at the close of the
Business Day in which we receive them at the Annuities Service Center. Each
Business Day ends at the close of regular trading for the day on the New York
Stock Exchange. Usually this is 4:00 p.m., Eastern time. If we receive an
additional Purchase Payment after the close of a Business Day, we will credit it
to your Contract on the next Business Day.
We will not accept credit card checks. Nor will we accept starter or third party
checks that fail to meet our administrative requirements. Additional Purchase
Payments should be sent to the Annuities Service Center at the address shown on
the cover of this Prospectus. You can find information about other methods of
making Purchase Payments by contacting us.
Additional Purchase Payments by Wire
You may transmit additional Purchase Payments by wire through your bank to our
bank, as long as you provide appropriate instructions with the transmittal to
identify your Contract, and the selected Investment Options (unless you have
provided us with standing allocation instructions). Information about our bank,
our account number, and the ABA routing number may be obtained from the
Annuities Service Center. Banks may charge a fee for wire services.
If your wire order is complete, we will invest the additional Purchase Payment
in your selected Investment Options as of the day we received the wire order. If
the wire order is incomplete for an identified Contract, we will immediately
return it.
HOW WILL THE VALUE OF MY INVESTMENT IN THE CONTRACT CHANGE OVER TIME?
Prior to a Contract's Maturity Date, the amount you've invested in any Variable
Investment Option will increase or decrease based upon the investment experience
of the corresponding Fund. Except for certain charges we deduct, your investment
experience will be the same as if you had invested in the Fund directly and
reinvested all Fund dividends and distributions in additional shares.
Like a regular mutual fund, each Fund deducts investment management fees and
other operating expenses. These expenses are shown in the Fee Tables. However,
unlike a mutual fund, we will also deduct charges relating to the annuity
guarantees and other features provided by the Contract. These charges reduce
your investment performance and the amount we credit to your Contract in any
Variable Investment Option. We describe these charges below under "What Fees and
Charges will be Deducted From My Contract?".
The amount you've invested in a Fixed Investment Option will earn interest at
the rate we have set for that Fixed Investment Option. The interest rate depends
upon the length of the guarantee period of the Fixed Investment Option you
select. In states where approved, we currently make available various Fixed
Investment Options with durations of up to five years, and we may make one or
more additional Fixed Investment Options available for Contracts issued before
September 30, 2002. As long as you keep your money in a Fixed Investment Option
until its expiration date, we bear all the investment risk on that money.
However, if you prematurely transfer, "surrender" or otherwise withdraw money
from a Fixed Investment Option we will increase or reduce the remaining value in
your Contract by an amount that approximates the impact that any changes in
interest rates would have
9
had on the market value of a debt instrument with terms comparable to that Fixed
Investment Option. This "market value adjustment" (or "MVA") imposes investment
risks on you. We describe how the market value adjustments work in "Calculation
of Market Value Adjustment ("MVA")".
Extra Credit Feature
(AVAILABLE ONLY ON THE REVOLUTION EXTRA VARIABLE ANNUITY CONTRACTS)
Each time you make a Purchase Payment, we will credit an extra amount to the
total value of your Contract in addition to the amount of the Purchase Payment.
If your Purchase Payment is greater than $10,000 and less than $2.5 million, the
extra amount will be equal to 3.5% of the Purchase Payment. If your Purchase
Payment is $2.5 million or more, the extra amount will be equal to 5.0% of the
Purchase Payment. These extra amounts are referred to as extra credits. Each
extra credit will be credited to your Contract at the same time the Purchase
Payment is credited and will be allocated among the Variable Investment Options
and the Fixed Investment Options in the same way that the Purchase Payment is
allocated (see "Allocation of Purchase Payments"). However, each extra credit
will be treated as "earnings" under your Contract, not as a Purchase Payment for
determining withdrawal charges. Amounts attributable to extra credits will be
considered "earnings" under a Contract for federal tax purposes and "earnings"
with respect to our determination of certain benefits under your Contract and
any optional benefit Riders that you may have purchased.
We expect to make a profit from the Contracts and anticipate that a portion of
the withdrawal charge, and any profits derived from other Contract fees and
charges, will be used to help recover our cost of providing the Extra Credit
feature. (For a description of these fees and charges, see the response to the
question "What Fees and Charges will be Deducted from My Contract?") Under
certain circumstances (such as a withdrawal of money that is in excess of the
Free Withdrawal amounts, while a withdrawal charge is in effect) the cost
associated with the Extra Credit feature may exceed the Extra Credit amount and
any related earnings. You should consider this possibility before remitting any
additional Purchase Payments for a Revolution Extra Contract.
WHAT ANNUITY BENEFITS DOES THE CONTRACT PROVIDE?
If your Contract is still in effect on its Maturity Date, it enters what is
called the Annuity Period. During the Annuity Period, we make a series of fixed
or variable payments to you as provided under one of our several Annuity
Options. The form in which we will make the annuity payments, and the proportion
of such payments that will be on a fixed basis and on a variable basis, depend
on the elections that you have in effect on the Maturity Date. Therefore, you
should exercise care in selecting your Maturity Date and your choices that are
in effect on that date.
You should carefully review the discussion under "The Annuity Period" for
information about all of these choices you can make.
TO WHAT EXTENT CAN JHVLICO VARY THE TERMS AND CONDITIONS OF THE CONTRACTS?
State Law Insurance Requirements
Insurance laws and regulations apply to us in every state in which our Contracts
are sold. As a result, various terms and conditions of your Contract may vary
from the terms and conditions described in this Prospectus, depending upon where
you purchased the Contract. These variations will be reflected in your Contract
or in endorsements attached to your Contract.
Variations in Charges or Rates
We may vary the charges, durations of Fixed Investment Options, rates and other
terms of our Contracts where special circumstances result in sales or
administrative expenses, mortality risks or other risks that are different from
those normally associated with the Contracts. These include the types of
variations discussed under the "Certain Changes" section of this Prospectus.
WHAT ARE THE TAX CONSEQUENCES OF OWNING A CONTRACT?
In most cases, no income tax will have to be paid on amounts you earn under a
Contract until these earnings are paid out. All or part of the following
distributions from a Contract may constitute a taxable payout of earnings:
- - full or partial withdrawals (including surrenders and systematic
withdrawals),
- - payment of any death benefit proceeds, and
- - periodic payments under one of our annuity payment options.
How much you will be taxed on distribution is based upon complex tax rules and
depends on matters such as:
- - the type of the distribution,
- - when the distribution is made,
- - the nature of any Qualified Plan for which the Contract is being used, and
- - the circumstances under which the payments are made.
If your Contract is issued in connection with a Qualified Plan, all or part of
your Purchase Payments may be tax-deductible.
10
Special 10% tax penalties apply in many cases to the taxable portion of any
distributions taken from a Contract before you reach age 59 1/2. Also, most
Qualified Plans require that distributions from a Contract commence and/or be
completed by a certain period of time. This effectively limits the period of
time during which you can continue to derive tax deferral benefits from any
tax-deductible Purchase Payments you paid or on any earnings under the Contract.
IF YOU ARE PURCHASING THE CONTRACT AS AN INVESTMENT VEHICLE FOR A QUALIFIED
PLAN, YOU SHOULD CONSIDER THAT THE CONTRACT DOES NOT PROVIDE ANY ADDITIONAL
TAX-DEFERRAL BENEFITS BEYOND THE TREATMENT PROVIDED BY THE QUALIFIED PLAN
ITSELF. THE FAVORABLE TAX-DEFERRAL BENEFITS AVAILABLE FOR QUALIFIED PLANS THAT
INVEST IN ANNUITY CONTRACTS ARE ALSO GENERALLY AVAILABLE IF THE QUALIFIED PLANS
PURCHASE OTHER TYPES OF INVESTMENTS, SUCH AS MUTUAL FUNDS, EQUITIES AND DEBT
INSTRUMENTS. HOWEVER, THE CONTRACT OFFERS FEATURES AND BENEFITS THAT OTHER
INVESTMENTS MAY NOT OFFER. YOU AND YOUR FINANCIAL PROFESSIONAL SHOULD CAREFULLY
CONSIDER WHETHER THE FEATURES AND BENEFITS, INCLUDING THE INVESTMENT OPTIONS,
ANNUITY LIFETIME INCOME OPTIONS, DEATH BENEFITS AND OTHER BENEFITS PROVIDED
UNDER AN ANNUITY CONTRACT ISSUED IN CONNECTION WITH A QUALIFIED PLAN ARE
SUITABLE FOR YOUR NEEDS AND OBJECTIVES AND ARE APPROPRIATE IN LIGHT OF THE
EXPENSE.
We provide additional information on taxes in the Federal Tax Matters section of
this Prospectus. We make no attempt to provide more than general information
about use of the Contract with the various types of retirement plans. Purchasers
of Contracts for use with any retirement plan should consult their legal counsel
and tax advisor regarding the suitability of the Contract.
HOW CAN I CHANGE MY CONTRACT'S INVESTMENT ALLOCATIONS?
Allocation of Purchase Payments
When you applied for your Contract, you specified the Variable Investment
Options or Fixed Investment Options (together, your Investment Options) in which
your Purchase Payments will be allocated. You may change this investment
allocation for future Purchase Payments at any time. Any change in allocation
will be effective as of the receipt of your request at the Annuities Service
Center.
We do not impose a limit on the number of Investment Options to which you may
allocate Purchase Payments at any one time or over the life of your Contract.
Transfers Among Investment Options
During the accumulation period, you may transfer amounts held in one Investment
Option to any other Investment Option. Although your Contract may impose
restrictions on the maximum dollar amount that may be transferred among Variable
Investment Options, we currently do not enforce these restrictions.
It is also our current practice to approve transfers to a Fixed Investment
Option, if available under your Contract, after the end of the 10th Contract
Year. We reserve the right to terminate this practice at any time.
To make a transfer, 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 one Variable Investment Option or Fixed Investment
Option in any Contract Year is $1,000,000.
Currently, we do not impose a charge for transfer requests. The first twelve
transfers in a Contract Year are free of any transfer charge. For each
additional transfer in a Contract Year, we do not currently assess a charge but
reserve the right (to the extent permitted by your Contract) to impose a charge
of up to $25 for any transfer beyond the annual limit (transfers out of a Fixed
Investment Option may, however, incur a market value adjustment - either
positive or negative).
We have adopted a policy and procedures to restrict frequent transfers of
Contract Value among Variable Investment Options.
Variable investment options in variable annuity products can be a prime target
for abusive transfer activity because these products value their variable
investment options on a daily basis and allow transfers among variable
investment options without immediate tax consequences. As a result, some
investors may seek to frequently transfer into and out of variable investment
options in reaction to market news or to exploit some perceived pricing
inefficiency. Whatever the reason, long-term investors in a variable investment
option can be harmed by frequent transfer activity since such activity may
expose the variable investment option's corresponding fund to increased
portfolio transaction costs (affecting the value of the shares) and/or
disruption to the corresponding fund manager's ability to effectively manage
such corresponding fund's investment portfolio in accordance with the its
investment objective and policies, both of which may result in dilution with
respect to interests held for long-term investment.
To discourage disruptive frequent trading activity, we have adopted a policy for
the Separate Account to restrict transfers to two per calendar month per
Contract, with certain exceptions, and procedures to count the number of
transfers made under a Contract. Under the current procedures of the Separate
Account, we count all transfers made during the period from the opening of
trading each day the net asset value of the shares of a Fund are determined
(usually 9 a.m.) to the close of trading that day (the close of day-time trading
of the New York Stock Exchange (usually 4 p.m.)) as a SINGLE transfer. We do NOT
count: (a) scheduled transfers made pursuant to
11
any of our Dollar Cost Averaging programs (ONLY THE REVOLUTION VALUE VARIABLE
ANNUITY HAS MORE THAN ONE DOLLAR COST AVERAGING PROGRAM; see below under "Dollar
Cost Averaging Programs") or our Strategic Rebalancing Program, (b) transfers
from a Fixed Investment Option at the end of its fixed investment period, (c)
transfers made within a prescribed period before and after a substitution of
Funds and (d) transfers made during the Annuity Period (these transfers are
subject to a 30 day notice requirement, however, as described in the "Transfers
during the Annuity Period" section of this Prospectus). Under the Separate
Account's policy and procedures, Contract Owners may transfer to a Money Market
Investment Option even if the two transfer per month limit has been reached if
100% of the Contract value in all Variable Investment Options is transferred to
that Money Market Investment Option. If such a transfer to a Money Market
Investment Option is made, for a 30 calendar day period after such transfer, no
subsequent transfers from that Money Market Investment Option to another
Variable Investment Option may be made. We apply the Separate Account's policy
and procedures uniformly to all Contract Owners.
We reserve the right to take other actions at any time to restrict trading,
including, but not limited to:
- - restricting the number of transfers made during a defined period,
- - restricting the dollar amount of transfers,
- - restricting the method used to submit transfers (e.g., changing telephone
and facsimile procedures to require that transfer requests be submitted in
writing via U.S. mail), and
- - restricting transfers into and out of certain sub-accounts.
In addition, we reserve the right to defer a transfer at any time we are unable
to purchase or redeem shares of the Funds. We also reserve the right to modify
or terminate the transfer privilege at any time (to the extent permitted by
applicable law), and to prohibit a transfer less than 30 days prior to the
Contract's Maturity Date.
While we seek to identify and prevent disruptive frequent trading activity, it
may not always be possible to do so. Therefore, no assurance can be given that
the restrictions we impose will be successful in preventing disruptive frequent
trading activity and avoid harm to long-term investors. If we are unsuccessful
in restricting disruptive frequent trading activity, the Funds may incur higher
brokerage costs and may maintain higher cash levels, limiting their ability to
achieve their investment objective.
Procedure for Transferring Your Assets
You may request a transfer in writing or, if you have authorized telephone
transfers, by telephone or fax. All transfer requests should be directed to the
Annuities Service Center. Your request should include:
- - your name;
- - daytime telephone number;
- - Contract number;
- - the names of the Investment Options to and from which assets are being
transferred; and
- - the amount of each transfer.
Your request becomes effective at the close of the Business Day in which we
receive it, in proper form at the Annuities Service Center. Each Business Day
ends at the close of regular trading for the day on the New York Stock Exchange.
Usually this is 4:00 p.m., Eastern Time. If we receive a transfer request, in
proper form, after the close of a Business Day, it will become effective at the
end of the next Business Day.
Telephone and Facsimile Transactions
If you complete a special authorization form, you can request transfers among
Investment Options and changes of allocation among Investment Options simply by
telephoning or by faxing us at the Annuities Service Center. Any fax request
should include your name, daytime telephone number, Contract 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.
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.
As stated earlier in this Prospectus, we have imposed restrictions on transfers
including the right to change our telephone and facsimile transaction procedures
at any time. We also reserve the right to suspend or terminate the privilege
altogether with respect to any Owners who we feel are abusing the privilege to
the detriment of other Owners.
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Electronic Information
You may access information about your Contract through our website,
www.johnhancockannuities.com. In order to do so, you will be required to create
an account with a username and password, and maintain a valid e-mail address.
You are responsible for keeping your password confidential and must notify us of
any loss or theft of your password, or any unauthorized use of your password.
Dollar Cost Averaging Programs
Under our STANDARD DOLLAR-COST AVERAGING PROGRAM, you may elect, at no cost, to
automatically transfer assets from any Variable Investment Option to one or more
other Variable Investment Options on a monthly, quarterly, semiannual, or annual
basis. The following conditions apply to the standard dollar cost averaging
program:
- - the amount of each transfer must equal at least $100;
- - you may change your variable investment allocation instructions at any time
in writing or, if you have authorized telephone transfers, by telephone;
- - you may discontinue the program at any time;
- - the program automatically terminates when the Variable Investment Option
from which we are taking the transfers has been exhausted;
- - automatic transfers to or from Fixed Investment Options are not permitted
under this program.
We reserve the right to suspend or terminate the program at any time.
(Available only on the Revolution Value Variable Annuity.) Under our DOLLAR-COST
AVERAGING VALUE PROGRAM, you may elect to deposit any new Purchase Payment of
$5,000 or more in a guarantee rate account that we call the "DCA rate account."
For Contracts issued after April 30, 2004, your deposits under this program will
be depleted over a 6 month period. For Contracts issued prior to May 1, 2004,
the assets in this account attributable to a new Purchase Payment will be
transferred automatically to one or more Variable Investment Options over a
period that is equal in length (i.e., either 6 months or 12 months) to the
period you initially selected. A new period will begin on the date each new
Purchase Payment is deposited in the DCA rate account program with respect to
that Purchase Payment. At the time of each deposit into this program, you must
tell us in writing:
- - that your deposit should be allocated to this program; and
- - the Variable Investment Options to which assets will be transferred; and
- - the percentage amount to be transferred to each such Variable Investment
Option.
Transfers to Fixed Investment Options are not permitted under this program, and
transfers of your account value from a Variable Investment Option are not
currently permitted to initiate the program. (You may, however, change your
variable investment allocation instructions at any time in writing or, if you
have authorized telephone transfers, by telephone).
Your participation in the dollar-cost averaging value program will end if you
request a partial withdrawal from the DCA rate account, or if you request a
transfer from the DCA rate account that is in addition to the automatic
transfers.
You may not use the standard dollar-cost averaging program and the dollar-cost
averaging value program at the same time.
Strategic Rebalancing
This program automatically re-sets the percentage of your account value
allocated to the Variable Investment Options. Over time, the variations in the
investment results for each Variable Investment Option you've selected for this
program will shift the percentage allocations among them. The strategic
rebalancing program will periodically transfer your account value among these
Variable Investment Options to reestablish the preset percentages you have
chosen. (You may, however, change your variable investment allocation
instructions at any time in writing or, if you have authorized telephone
transfers, by telephone). Strategic rebalancing would usually result in
transferring amounts from a Variable Investment Option with relatively higher
investment performance since the last rebalancing to one with relatively lower
investment performance. However, rebalancing can also result in transferring
amounts from a Variable Investment Option with relatively lower current
investment performance to one with relatively higher current investment
performance.
This program can be elected by sending the appropriate form to the Annuities
Service Center. You must specify the frequency for rebalancing (monthly,
quarterly, semi-annually or annually), the preset percentage for each Variable
Investment Option, and a future beginning date. Once elected, strategic
rebalancing will continue until we receive notice of cancellation of the option
or notice of the death of the insured person.
The Fixed Investment Options do not participate in and are not affected by
strategic rebalancing. We reserve the right to modify, terminate or suspend the
strategic rebalancing program at any time.
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WHAT FEES AND CHARGES WILL BE DEDUCTED FROM MY CONTRACT?
We assess charges and deductions under the Contract against Purchase Payments,
Contract Values or annuity benefit payments. Currently, there are no deductions
made from Purchase Payments. In addition, there are deductions from and expenses
paid out of the assets of the Funds that are described in the Funds'
prospectuses.
Asset-Based Charges
We deduct Separate Account expenses daily, as a percentage of average account
value, to compensate us primarily for our administrative expenses and for the
mortality and expense risks that we assume under the Contracts, as follows:
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)
DECLARATION PATRIOT REVOLUTION ACCESS REVOLUTION EXTRA REVOLUTION VALUE
VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY
---------------- ---------------- ----------------- ---------------- ----------------
(Contracts with initial Purchase Payment less than $250,000)
Asset-Based Charge 1.25% 1.25% 1.25% 1.25% 1.25%
(Contracts with initial Purchase Payment greater than $250,000)
Asset-Based Charge 1.00% 1.00% 1.25% 1.25% 1.25%
This charge does not apply to assets you have in our Fixed Investment Options.
We take the deduction proportionally from each Variable Investment Option you
are then using.
In return for the mortality risk charge, we assume the risk that Annuitants as a
class will live longer than expected, requiring us to pay a greater number of
annuity payments. In return for the expense risk charge, we assume the risk that
our expenses relating to the Contracts may be higher than we expected when we
set the level of the Contracts' other fees and charges, or that our revenues
from such other sources will be less than expected.
Annual Contract Fee
We currently deduct a $30 annual Contract fee at the end of each Contract Year
for a DECLARATION OR PATRIOT CONTRACT WITH A TOTAL VALUE OF LESS THAN $10,000
and also for a REVOLUTION ACCESS, REVOLUTION EXTRA OR REVOLUTION VALUE CONTRACT
WITH A TOTAL VALUE OF LESS THAN $50,000. We also deduct the annual fee before
then if you surrender your Contract, unless your Contract's total value, at the
time of surrender, is above either $10,000 FOR DECLARATION and PATRIOT
CONTRACTS, or $50,000 FOR REVOLUTION ACCESS, REVOLUTION EXTRA, AND REVOLUTION
VALUE CONTRACTS.
We take the deduction proportionally from each Variable Investment Option and
each Fixed Investment Option you are then using. We reserve the right to
increase the annual Contract fee up to $50.
Premium Taxes
We make deductions for any applicable premium or similar taxes based on the
amount of a Purchase Payment. Currently, certain local jurisdictions assess a
tax of up to 4% of each Purchase Payment.
In most cases, we deduct a charge in the amount of the tax from the total value
of the Contract only at the time of annuitization, death, surrender, or
withdrawal. We reserve the right, however, to deduct the charge from each
Purchase Payment at the time it is made. We compute the amount of the charge by
multiplying the applicable premium tax percentage times the amount you are
withdrawing, surrendering, annuitizing or applying to a death benefit.
PREMIUM TAX RATE
STATE OR ---------------------------------------------
TERRITORY QUALIFIED CONTRACTS NON-QUALIFIED CONTRACTS
- --------- ------------------- -----------------------
CA 0.50% 2.35%
GUAM 4.00% 4.00%
ME(A) 0.00% 2.00%
NV 0.00% 3.50%
PR 3.00% 3.00%
SD(A) 0.00% 1.25%(B)
WV 1.00% 1.00%
WY 0.00% 1.00%
(A) We pay premium tax upon receipt of Purchase Payment.
(B) 0.80% on Purchase Payments in excess of $500,000.
Withdrawal Charge
(Not applicable to the Revolution Access Variable Annuity)
If you withdraw some of your Purchase Payments from your Contract prior to the
Maturity Date ("partial withdrawal") or if you surrender (turn in) your
Contract, in its entirety, for cash prior to the Maturity Date ("total
withdrawal" or "surrender"), we may
14
assess a withdrawal charge. Some people refer to this charge as a "contingent
deferred withdrawal load". The amount of this charge will depend on the type of
Contract you purchased and the number of years that have passed since we
received your Purchase Payments, as shown below:
DECLARATION VARIABLE PATRIOT REVOLUTION ACCESS REVOLUTION EXTRA REVOLUTION VALUE
ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY
-------------------- ------------------- ----------------- ------------------- -------------------
Maximum Withdrawal 6% for the 1st year 6% for the 1st year 7% for the 1st year 7% for the 1st year
Charge 6% for the 2nd year 6% for the 2nd year 7% for the 2nd year 6% for the 2nd year
(as % of amount 5% for the 3rd year 5% for the 3rd year 7% for the 3rd year 5% for the 3rd year
withdrawn or 5% for the 4th year 5% for the 4th year None 7% for the 4th year 4% for the 4th year
surrendered) (1) 4% for the 5th year 4% for the 5th year 6% for the 5th year 3% for the 5th year
3% for the 6th year 3% for the 6th year 5% for the 6th year 2% for the 6th year
2% for the 7th year 2% for the 7th year 4% for the 7th year 1% for the 7th year
0% thereafter 0% thereafter 0% thereafter 0% thereafter
(1) This charge is taken upon withdrawal or surrender within the specified
period of years measured from the date of Purchase Payment.
Withdrawal charges help to compensate us for the cost of selling the Contracts,
including expenses relating to the Extra Credit feature under Revolution Extra
Variable Annuity Contracts. The amount of the charges in any Contract Year does
not specifically correspond to sales expenses for that year. We expect to
recover our total sales expenses over the life of the Contracts. To the extent
that the withdrawal 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 Contracts or from
our general assets. Similarly, administrative expenses not fully recovered by
the administration fee may also be recovered from such other sources.
FREE WITHDRAWAL AMOUNTS (applicable to Revolution Extra and Revolution Value
Contracts): If you purchased a Revolution Extra or Revolution Value Contract and
have any profit in your Contract, you can always withdraw that profit without
any withdrawal charge. By "profit," we mean the amount by which your Contract's
total value exceeds the Purchase Payments you have paid and have not (as
discussed below) already withdrawn. For Revolution Extra Contracts, "profit"
also includes any amounts attributable to an Extra Credit. If your Contract
doesn't have any profit (or you have withdrawn it all) you can still make charge
free withdrawals, unless and until all of your withdrawals during the same
Contract Year exceed 10% of all of the Purchase Payments you have paid to date.
FREE WITHDRAWAL AMOUNTS (applicable to Patriot and Declaration Contracts): If
you purchased a Patriot or Declaration Contract, you you can make withdrawals
without any withdrawal charge, unless and until all of your withdrawals during
the same Contract Year exceed 10% of all of the Purchase Payments you have paid
to date.
HOW WE DETERMINE AND DEDUCT THE CHARGE: If the amount you withdraw or surrender
totals more than the free withdrawal amount during the Contract Year, we will
assess a withdrawal charge shown in the Fee Tables on any amount of the excess
that we attribute to Purchase Payments you made within a withdrawal charge
period. Solely for purposes of determining the amount of the withdrawal charge,
we assume that the amount of each withdrawal that exceeds the free withdrawal
amount (together with any associated withdrawal charge) is a withdrawal first
from the earliest Purchase Payment, and then from the next earliest Purchase
Payment, and so forth until all payments have been exhausted. Once a Purchase
Payment has been considered to have been "withdrawn" under these procedures that
Purchase Payment will not enter into any future withdrawal charge calculations.
We deduct the withdrawal charge proportionally from each Variable Investment
Option and each Fixed Investment Option being reduced by the surrender or
withdrawal. For example, if 60% of the withdrawal amount comes from a Growth
option and 40% from the Money Market option, then we will deduct 60% of the
withdrawal charge from the Growth option and 40% from the Money Market option.
If any such option has insufficient remaining value to cover the charge, we will
deduct any shortfall from all of your other Investment Options, pro-rata based
on the value in each. If your Contract as a whole has insufficient surrender
value to pay the entire charge, we will pay you no more than the surrender
value.
You will find examples of how we compute the withdrawal charge in Appendix B to
this Prospectus.
WHEN WITHDRAWAL CHARGES DON'T APPLY: We don't assess a withdrawal charge in the
following situations:
- - on amounts applied to an Annuity Option at the Contract's Maturity Date or
to pay a death benefit;
- - on certain withdrawals if you have elected the Rider that waives the
withdrawal charge (nursing home Rider for Declaration and Patriot Variable
Annuities); and
- - on amounts withdrawn to satisfy the minimum distribution requirements for
tax qualified plans. (Amounts above the minimum distribution requirements
are subject to any applicable withdrawal charge, however).
HOW AN MVA AFFECTS THE WITHDRAWAL CHARGE: If you make a withdrawal from a Fixed
Investment Option at a time when the related MVA results in an upward adjustment
in your remaining value, we will calculate the withdrawal charge as if you had
withdrawn that much more. Similarly, if the MVA results in a downward
adjustment, we will compute any withdrawal charge as if you had withdrawn that
much less.
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Other Charges
If you purchased an optional benefit Rider, we will deduct the applicable
charges for that benefit proportionally from each of your Investment Options,
including the Fixed Investment Options, based on your value in each. We list
these charges below:
OPTIONAL BENEFIT RIDER CHARGES(1) (AS A PERCENTAGE OF YOUR CONTRACT'S TOTAL
VALUE UNLESS OTHERWISE STATED)
DECLARATION PATRIOT REVOLUTION ACCESS REVOLUTION EXTRA REVOLUTION VALUE
VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY VARIABLE ANNUITY
---------------- ---------------- ----------------- ---------------- ----------------
Accidental Death Benefit Rider 0.10% 0.10% Not Offered Not Offered Not Offered
Accumulated Value Enhancement Not Offered Not Offered Maximum: 1.00% Maximum: 1.00% Maximum: 1.00%
("CARESolutions Plus") Rider(2) Current: 0.40% Curent: 0.35% Current:
(as a percentage of your initial 0.35%
Purchase Payment)
Earnings Enhancement ("Beneficiary Not Offered Not Offered 0.25% 0.25% 0.25%
Tax Relief")
Death Benefit Rider
Enhanced "Stepped Up" 0.15% 0.15% Not Offered Not Offered Not Offered
Death Benefit Rider
Enhanced Death Benefit Rider(3) Not Offered Not Offered 0.25% 0.25% 0.25%
Guaranteed Retirement Income Not Offered Not Offered 0.30% 0.30% 0.30%
Benefit Rider (4)
Nursing Home Waiver (4) 0.05% 0.05% Not Offered Not Offered Not Offered
Waiver of Withdrawal Charge Not Offered Not Offered Not Offered 0.10% 0.10%
("CARESolutions") Rider(5)
(1) Charges for optional benefit Riders are assessed monthly. The monthly
charge is 1/12 of the annual charge shown in this table.
(2) This Rider is available only if you purchased the Waiver of Withdrawal
Charge Rider as well. We do not currently impose the maximum charge shown,
but reserve the right to do so on a uniform basis for all Accumulated Value
Enhancement Riders issued in the same state.
(3) In certain states (and for Riders issued prior to May 1, 2002), the rate
for Enhanced Death Benefit Rider may be lower than the amount shown.
(4) This Rider was not available for Contracts issued after April 30, 2004.
(5) The charge shown is a percentage of that portion of your Contract's total
value attributable to Purchase Payments that are still subject to
withdrawal charges
HOW CAN I WITHDRAW MONEY FROM MY CONTRACT?
Surrenders and Partial Withdrawals
Prior to your Contract's Maturity Date, if the Annuitant is living, you may:
- - surrender your Contract for a cash payment of its Surrender Value," or
- - make a partial withdrawal of the surrender value.
Certain surrenders and withdrawals may result in taxable income to you or other
tax consequences as described under "Federal Tax Matters." Among other things,
if you make a full surrender or partial withdrawal from your Contract before you
reach age 59 1/2, an additional federal penalty of 10% generally applies to any
taxable portion of the withdrawal.
We will deduct any partial withdrawal proportionally from each of your
Investment Options based on the value in each, unless you direct otherwise. When
you take a partial withdrawal, we deduct any applicable withdrawal charge as a
percentage of the total amount withdrawn. We take any applicable withdrawal
charge from the amount remaining in a Contract after we process the amount you
request.
Without our prior approval, you may not make a partial withdrawal:
- - for an amount less than $100, or
- - if the remaining total value of your Contract would be less than $1,000.
We reserve the right to terminate your Contract if the value of your Contract
becomes zero. You generally may not make any surrenders or partial withdrawals
once we begin making payments under an Annuity Option. FOR DECLARATION AND
PATRIOT VARIABLE
16
ANNUITIES ONLY: if your "free withdrawal value" at any time is less than $100,
you must withdraw that amount in full, in a single sum, before you make any
other partial withdrawals.
Your request to surrender your Contract or to make a partial withdrawal becomes
effective at the close of the Business Day in which we receive it, in proper
form at the Annuities Service Center. Each Business Day ends at the close of
regular trading for the day on the New York Stock Exchange. Usually this is 4:00
p.m., Eastern time. If we receive a request, in proper form, after the close of
a Business Day, it will become effective at the end of the next Business Day.
Signature Guarantee Requirements for Surrenders and Partial Withdrawals:
We require that you obtain a signature guarantee on a surrender or partial
withdrawal in the following circumstances:
- - You are requesting that we mail the amount withdrawn to an alternate
address; or
- - You have changed your address within 30 days of the withdrawal request; or
- - You are requesting a withdrawal in the amount of $100,000 or greater.
We must receive the original signature guarantee on your withdrawal request. We
will not accept copies or facsimiles of a signature guarantee. You may obtain a
signature guarantee at most banks, financial institutions or credit unions. A
notarized signature is not the same as a signature guarantee and will not
satisfy this requirement. There may be circumstances, of which we are not
presently aware, in which we would not impose a signature guarantee on a
surrender or partial withdrawal as described above.
Nursing Home Waiver of Withdrawal Charge
(Applicable only to the Declaration and Patriot Variable Annuities)
If you own a Declaration or Patriot Contract, you have may purchased an optional
nursing home waiver of withdrawal charge Rider when you applied for your
Contract, as permitted by state law. If you purchased this Rider, we will waive
the withdrawal charges on any withdrawals, provided all the following conditions
apply:
- - you become confined to a nursing home beginning at least 90 days after we
issue your Contract.
- - you remain in the nursing home for at least 90 consecutive days and receive
skilled nursing care.
- - we receive your request for a withdrawal and adequate proof of confinement
no later than 90 days after discharge from the facility.
- - your confinement is prescribed by a doctor and medically necessary.
At the time of application, you could not purchase this Rider if (1) you were
older than 75 years at application or (2) in most states, if you were confined
to a nursing home within the past two years at application.
Waiver of Withdrawal Charge Rider
(Applicable only to Revolution Extra and Revolution Value Variable Annuities)
If you own a Revolution Extra or Revolution Value Contract, you may have
purchased an optional waiver of withdrawal charge Rider when you applied for
your Contract, as permitted by state law. The "covered persons" under the Rider
are the Owner and the Owner's spouse, unless the Owner is a trust. If the Owner
is a trust, the "covered persons" are the Annuitant and the Annuitant's spouse.
Under this Rider, we will waive withdrawal charges on any withdrawals, if all
the following conditions apply to a "covered person":
- - a covered person becomes confined to a nursing home beginning at least 30
days after we issue your Contract;
- - such covered person remains in the nursing home for at least 90 consecutive
days receiving nursing care; and
- - the covered person's confinement is prescribed by a doctor and medically
necessary because of a covered physical or mental impairment.
In addition, depending on your state, the Rider may also provide for a waiver of
withdrawal charges if a covered person has been diagnosed with a chronic,
critical or terminal illness to the extent so provided in the Rider.
At the time of application, you could not purchase this Rider: (1) if either of
the covered persons was older than 74 years at application or (2) in most
states, if either of the covered persons was confined to a nursing home within
the past two years at application.
There is a charge for this Rider, as set forth in the Fee Tables. This Rider
(and the related charges) will terminate on the Contract's Maturity Date, upon
your surrendering the Contract, or upon your written request that we terminate
it.
For a more complete description of the terms and conditions of this benefit, you
should refer directly to the Rider. We will provide you with a copy on request.
In certain marketing materials, this Rider may be referred to as
"CARESolutions".
If you purchased this Rider:
- - you and your immediate family will also have access to a national program
designed to help the elderly maintain their independent living by providing
advice about an array of eldercare services available to seniors, and
17
- - you will have access to a list of long-term care providers in your area who
provide special discounts to persons who belong to the national program.
You should carefully review the tax considerations for optional benefit Riders
under "Federal Tax Matters". For a more complete description of the terms and
conditions of this benefit, you should refer directly to the Rider. We will
provide you with a copy on request.
Systematic Withdrawal Plan
Our optional systematic withdrawal plan enables you to preauthorize periodic
withdrawals. If you elect this plan, we will withdraw a percentage or dollar
amount from your Contract on a monthly, quarterly, semiannual, or annual basis,
based upon your instructions. Unless otherwise directed, we will deduct the
requested amount from each applicable Investment Option in the ratio that the
value of each bears to the total value of your Contract. Each systematic
withdrawal is subject to any market value adjustment or withdrawal charge
(WITHDRAWAL CHARGE NOT APPLICABLE TO REVOLUTION ACCESS VARIABLE ANNUITIES) that
would apply to an otherwise comparable non-systematic withdrawal. See "How Will
the Value of My Investment in the Contract Change Over Time?" and "What Fees and
Charges Will be Deducted from My Contract?" The same tax consequences also
generally will apply.
The following conditions apply to systematic withdrawal plans:
- - The amount of each systematic withdrawal must equal at least $100,
- - If the amount of each withdrawal drops below $100 or the total value of
your Contract becomes less than $5,000, we will suspend the plan and notify
you,
- - You may cancel the plan at any time.
- - We reserve the right to modify the terms or conditions of the plan at any
time without prior notice.
Telephone Withdrawals
If you complete a separate authorization form, you may make requests to withdraw
a portion of your Contract Value by telephone. We reserve the right to impose
maximum withdrawal amount and procedural requirements regarding this privilege.
For additional information regarding telephone procedures, see "Telephone and
Facsimile Transactions" in this Prospectus.
WHAT HAPPENS IF THE OWNER OR ANNUITANT DIES BEFORE MY CONTRACT'S MATURITY DATE?
Death benefits - In General
The Contracts described in this Prospectus generally provide for distribution of
death benefits if you die before a Contract's Maturity Date. The minimum death
benefits provided under the Contracts differ, depending on when you purchased a
Contract, our maximum limits on Death Benefits at that time, the jurisdiction in
which we issued a Contract, and the age of the oldest owner (or annuitant) on
the date of issue. We may pay death benefits in some cases on the Annuitant's
death, instead of the Owner's death, if the Annuitant predeceases the Owner. In
addition, you may have purchased a Contract with an optional death benefit Rider
that will enhance the amount of death benefit. You should read your Contract
carefully to determine the minimum Death Benefit and any enhanced Death Benefit
payable during the accumulation period.
Distribution requirements following death of owner
If you did not purchase your contract under a tax qualified plan, the Code
requires that the following distribution provisions apply if you die. We
summarize these provisions (and the effect of spousal continuation) below. If
your contract has joint owners, these provisions apply upon the death of the
first to die.
If you die before annuity payments have begun:
- - if the contract's designated beneficiary is your surviving spouse, your
spouse may continue the contract in force as the owner. In that case:
1. under DECLARATION and PATRIOT Contracts, we will not pay a death
benefit but the total value of your contract will equal the death
benefit that would have been payable, excluding amounts payable under
any optional benefit Riders; and
2. under REVOLUTION ACCESS, REVOLUTION EXTRA and REVOLUTION VALUE
Contracts, we will not pay a death benefit but the total value of your
contract will equal the death benefit that would have been payable,
including amounts payable under any optional benefit Riders.; and
3. under REVOLUTION ACCESS, REVOLUTION EXTRA and REVOLUTION VALUE
Contracts, your spouse may elect to add or continue any optional death
benefit Riders under his or her name, subject to our then current
underwriting standards and the deduction of Rider charges at our then
current rates. For purposes of calculating the amount of your spouse's
Death Benefit, we will treat the total value of your contract
(including any step-up in value) as the initial premium and the date
the Rider is added or continued as the Rider's date of issue.
4. under PATRIOT, DECLARATION, REVOLUTION ACCESS, REVOLUTION EXTRA and
REVOLUTION VALUE Contracts, any additional amount that we credit to
your contract will be allocated to the investment options in the same
ratio as the investment allocations held at the time of death and will
not be subject to any future surrender or withdrawal charges. If your
spouse makes any additional Purchase Payments (and if there are any
unliquidated Purchase Payments at the time of your death), however,
they will be subject to future surrender or withdrawal charges as
provided in your contract.
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- - if the beneficiary is not your surviving spouse OR if the beneficiary is
your surviving spouse but chooses not to continue the contract, the "entire
interest" (as discussed below) in a Contract on the date of your death must
be:
1. paid out in full within five years of your death or
2. applied in full towards the purchase of a life annuity on the
beneficiary, or for a similar benefit payable over a period not
extending beyond the life expectancy of the beneficiary, with payments
commencing within one year of your death.
Your "entire interest" in a REVOLUTION ACCESS, REVOLUTION EXTRA and REVOLUTION
VALUE contract, as issued in most states, equals the standard death benefit (or
any enhanced death benefit) for the Contract on the date of your death. If an
earnings enhancement benefit Rider is then in force, the "entire interest" in
most states will also include any earnings enhancement death benefit amount that
may then be payable. Your "entire interest" in a DECLARATION or PATRIOT Contract
on the date of your death, if you are the last surviving annuitant as well as
the owner, equals the death benefit that then becomes payable. If you are the
owner of a DECLARATION or PATRIOT Contract (or an owner of a REVOLUTION ACCESS,
REVOLUTION EXTRA or REVOLUTION VALUE Contract in certain states such as IL or
MN) but not the last surviving annuitant, the "entire interest" equals:
- - the surrender value if paid out in full within five years of your death, or
- - the total value of your contract applied in full towards the purchase of a
life annuity on the beneficiary, or for a similar benefit payable over a
period not extending beyond the life expectancy of the beneficiary, with
payments commencing within one year of your death.
YOU SHOULD REVIEW YOUR CONTRACT CAREFULLY TO DETERMINE THE "ENTIRE INTEREST"
THAT WILL BE DISTRIBUTED UPON AN OWNER'S DEATH.
If you die on or after annuity payments have begun:
- - any remaining amount that we owe must be paid out at least as rapidly as
under the method of making annuity payments that is then in use.
The Code imposes very similar distribution requirements on Contracts used to
fund tax qualified plans. We provide the required provisions for tax qualified
plans in separate disclosures and endorsements.
Death benefits following death of annuitant
Under DECLARATION and PATRIOT Contracts, if the annuitant dies before your
contract's date of maturity, we will pay a standard death benefit, unless you
have elected an enhanced death benefit Rider. Under REVOLUTION ACCESS,
REVOLUTION EXTRA and REVOLUTION VALUE Contracts, our payment of the "standard"
death benefit, and any enhanced death benefits, depends on the form of ownership
and whether there is one annuitant or joint annuitants:
- - If your contract is owned by a single natural person and has a single
annuitant, the death benefit is payable on the earlier of the owner's death
and the annuitant's death.
- - If your contract is owned by a single natural person and has joint
annuitants, the death benefit is payable on the earliest of the owner's
death (whether or not the owner is also an annuitant) and the last
annuitant's death.
- - If your contract is owned by joint owners and has a single annuitant, the
death benefit is payable on the earliest of the first owner's death
(whether or not the owner is also an annuitant) and the annuitant's death.
- - If your contract is owned by joint owners and has joint annuitants, the
death benefit is payable on the earliest of the first owner's death
(whether or not the owner is also an annuitant) and the last annuitant's
death.
In certain states, such as IL and MN, the death benefit under REVOLUTION ACCESS,
REVOLUTION EXTRA and REVOLUTION VALUE Contracts is payable only upon an
annuitant's death. YOU SHOULD REVIEW YOUR CONTRACT CAREFULLY TO DETERMINE WHEN A
"STANDARD" DEATH BENEFIT IS PAYABLE.
If your PATRIOT, DECLARATION, REVOLUTION ACCESS, REVOLUTION EXTRA or REVOLUTION
VALUE contract has joint owners, each owner will automatically be deemed to be
the beneficiary of the other. This means that any death benefit payable upon the
death of one owner will be paid to the other owner. In that case, any other
beneficiary you have named would receive the death benefit only if neither joint
owner remains alive at the time the death benefit becomes payable.
Standard Death Benefit
The standard death benefit under Declaration, Patriot, Revolution Access,
Revolution Extra and Revolution Value Contracts is the greater of:
- - the total value of your contract, adjusted by any then-applicable market
value adjustment, or
- - the total amount of Purchase Payments made, minus any partial withdrawals
and related withdrawal charges.
Enhanced Death Benefit Riders
We offered several optional death benefit Riders under DECLARATION, PATRIOT,
REVOLUTION ACCESS, REVOLUTION EXTRA and REVOLUTION VALUE Contracts that,
depending on state availability and our underwriting rules, were available to
you at the time you purchased your Contract. For an extra fee, these optional
death benefit Riders may enhance the standard death benefit payable under your
Contract, subject to the terms and limitations contained in the Rider.
19
Under DECLARATION and PATRIOT Contracts, we offered a "Stepped-Up" death benefit
Rider and an "Accidental Death Benefit" Rider to applicants under age 80 at the
time of purchase. Under REVOLUTION ACCESS, REVOLUTION EXTRA and REVOLUTION VALUE
Contracts, we offered an "Enhanced" death benefit Rider if each owner and each
annuitant was under age 80 at the time of purchase. We also offered an "Earnings
enhancement" death benefit Rider to purchasers of REVOLUTION ACCESS, REVOLUTION
EXTRA and REVOLUTION VALUE Contracts if each owner and each annuitant was under
age 75 at the time of purchase. The "Earnings enhancement" death benefit Rider
was not available, however, to Contracts issued in connection with tax-qualified
plans.
We provide a general description of each of these Riders in Appendix C to this
Prospectus.
Calculation and Payment of Death Benefit Value
We calculate the death benefit value as of the day we receive, in proper order
at the Annuities Service Center:
- - proof of death before the contract's date of maturity, and
- - any required instructions as to method of settlement.
We will generally pay the death benefit in a "lump-sum" under our current
administrative procedures to the beneficiary you chose, unless:
- - the death benefit is payable because of the owner's death, the designated
beneficiary is the owner's spouse, and he or she elects to continue the
contract in force; or
- - an optional method of settlement is in effect. If you have not elected an
optional method of settlement, the beneficiary may do so. However, if the
death benefit is less than the minimum stated in your contract (in most
states, $5,000), we will pay it in a lump sum, regardless of any election.
You can find more information about optional methods of settlement under
"Annuity Options".
WHAT OTHER OPTIONAL BENEFITS MAY HAVE BEEN AVAILABLE TO ME UNDER A CONTRACT?
(APPLICABLE ONLY TO REVOLUTION ACCESS, REVOLUTION EXTRA AND REVOLUTION VALUE
VARIABLE ANNUITIES)
Accumulated Value Enhancement Benefit
If you elected this benefit when you purchased a Contract, we will make a
contribution to the total value of the Contract on a monthly basis if the
covered person (who must be an Owner and the Annuitant):
- - is unable to perform at least 2 activities of daily living without human
assistance or has a cognitive impairment, AND
- - is receiving certain qualified services described in the Rider.
The amount of the contribution (called the "Monthly Benefit") is shown in the
specifications page of the Contract. However, the benefit contains an inflation
protection feature that will increase the Monthly Benefit by 5% each year after
the 7th Contract Year. The specifications page of the Contract also contains a
limit on how much the total value of the Contract can be increased by this
benefit (the "benefit limit"). The Rider must be in effect for 7 years before
any increase will occur.
You could only elect this benefit when you applied for the Contract, if it was
then available in your state. Under our current administrative rules, the
Monthly Benefit (without regard to the inflation protection feature) is
equivalent to 1% of your initial Purchase Payment, up to a maximum Purchase
Payment of $300,000. We may reduce this $300,000 limit further, however, if you
own additional annuity Contracts issued by JHVLICO and its affiliates that
provide a similar benefit. The $300,000 limit applies only to the calculation of
the Monthly Benefit under the accumulated value enhancement Rider. (See "Limits
on Purchase Payments" for a general description of other Purchase Payment limits
under the Contract).
You could not have elected this Rider unless you also elected the waiver of
withdrawal charge Rider. There is a monthly charge for this benefit as described
in the Fee Tables.
The Rider will terminate if the Contract terminates, if the covered person dies,
if the benefit limit is reached, if the Owner is the covered person and the
ownership of the Contract changes, or if, before annuity payments start, the
total value of the Contract falls below an amount equal to 25% of your initial
Purchase Payment. You may cancel the Rider by written notice at any time. The
Rider charge will terminate when the Rider terminates.
If you choose to continue the Rider after the Contract's Maturity Date, charges
for the Rider will be deducted from annuity payments and any Monthly Benefit for
which the covered person qualifies will be added to the next annuity payment.
In certain marketing materials, this Rider may have been referred to as
"CARESolutions Plus."
You should carefully review the tax considerations for optional benefit Riders
under "Federal Tax Matters" in this Prospectus.
Guaranteed Retirement Income Benefit
CONTRACTS ISSUED BEFORE MAY 1, 2004 MAY HAVE BEEN ISSUED WITH GUARANTEED
RETIREMENT INCOME BENEFIT RIDER:
20
If you elected this benefit, we will guarantee the amount of annuity payments
you receive, if the following conditions are satisfied:
- - The Maturity Date must be within the 30 day period following a Contract
anniversary.
- - If the Annuitant was age 45 or older on the date of issue, the Contract
must have been in effect for at least 10 Contract Years on the Maturity
Date and the Maturity Date must be on or after the Annuitant's 60th
birthday and on or before the Annuitant's 90th birthday.
- - If the Annuitant was less than age 45 on the date of issue, the Contract
must have been in effect for at least 15 Contract Years on the Maturity
Date and the Maturity Date must be on or before the Annuitant's 90th
birthday.
If your Contract was issued with this Rider, you need not choose to receive the
guaranteed income benefit that it provides. Rather, unless and until such time
as you exercise your option to receive a guaranteed income benefit under this
Rider, you will continue to have the option of exercising any other right or
option that you would have under the Contract (including withdrawal and annuity
payment options) if the Rider had not been added to it.
If you decided to add this Rider to your Contract, and if you ultimately decide
to take advantage of the guaranteed income it provides, we will automatically
provide that guaranteed income in the form of fixed payments under our "Option
A: life annuity with payments for guaranteed period" described below under
"Annuity options." The guaranteed period will automatically be a number of years
that the Rider specifies, based on the Annuitant's age at the annuity date and
whether your Contract is purchased in connection with a tax-qualified plan.
(These specified periods range from 5 to 10 years.) You will have no discretion
to vary this form of payment, if you choose the guaranteed income benefit under
this Rider.
We guarantee that the amount you can apply to this annuity payment option will
be at least equal to the amount of each Purchase Payment you have paid,
accumulated at the rate(s) specified in the Contract, but adjusted for any
partial withdrawals you have taken. The accumulation rates differ between (a)
Contract Value allocated to a Fixed Investment Option or Money Market Investment
Option (currently 4%) and (b) Contract Value allocated to all other Variable
Investment Options (currently 5%). Withdrawals reduce the accumulated amount in
direct proportion to the percentage of Contract Value that was reduced by the
withdrawal (including any withdrawal charges). After a withdrawal, the
accumulation rate(s) will only be applied to the remaining accumulated amount.
If your total Contract Value is higher than the amount we guarantee, we will
apply the higher amount to the annuity payment option instead of the guaranteed
amount.
There is a monthly charge for this Rider as described in the Fee Tables. The
Rider (and the related charges) automatically terminate if your Contract is
surrendered or the Annuitant dies. After you've held your Contract for 10 years,
you can terminate the Rider by written request.
CAN I RETURN MY CONTRACT?
In most cases, you had the right to cancel your Contract within 10 days (or
longer in some states) after you received it. To have canceled your Contract,
you would have delivered or mailed it to us or to the the JHVLICO representative
who delivered the Contract to you.
In most states, you would have received a refund equal to the total value of
your Contract on the date of cancellation, minus the extra credit deduction
(APPLICABLE ONLY TO REVOLUTION EXTRA VARIABLE ANNUITY CONTRACTS, as defined
below), adjusted by any then-applicable market value adjustments and increased
by any charges for premium taxes deducted by us to that date. In some states, or
if your Contract was issued as an "IRA," you would have received a refund of any
Purchase Payments you would have paid. The date of cancellation would have been
the date we receive the Contract.
The "extra credit deduction" is equal to the lesser of (1) the portion of the
total value of your Contract that is attributable to any extra credits and (2)
the amount of all extra credits. Thus, you would have received any gain and we
would have borne any loss on extra credits if you returned your Contract within
the time period specified above.
21
General Information about Us, the Separate Account and the Funds
THE COMPANY
We are John Hancock Variable Life Insurance Company, a stock life insurance
company chartered in 1979 under Massachusetts law, with its home office at 197
Clarendon Street, Boston, Massachusetts 02117. We also have an Annuities Service
Center at 601 Congress Street, Boston, Massachusetts 02210-2805. We are
authorized to transact a life insurance and annuity business in all states other
than New York and in the District of Columbia.
We are a wholly-owned subsidiary of John Hancock Life Insurance Company ("John
Hancock"), a Massachusetts stock life insurance company. On February 1, 2000,
John Hancock Mutual Life Insurance Company (which was chartered in Massachusetts
in 1862) converted to a stock company by "demutualizing" and changed its name to
John Hancock Life Insurance Company. As part of the demutualization process,
John Hancock became a subsidiary of John Hancock Financial Services, Inc., a
newly formed publicly-traded corporation. In April 2004, John Hancock Financial
Services, Inc. was merged with a subsidiary of Manulife Financial Corporation, a
publicly-traded corporation organized under the laws of Canada. The merger was
effected pursuant to an Agreement and Plan of Merger dated as of September 28,
2003. As a consequence of the merger, John Hancock's ultimate parent is now
Manulife Financial Corporation. John Hancock"s home office is at John Hancock
Place, Boston, Massachusetts 02117.
Our financial ratings are as follows:
A++ A.M. Best
Superior companies have a very strong ability to meet their obligations;
1st category of 16
AA+ Fitch
Very strong capacity to meet policyholder and Contract obligations; 2nd
category of 24
AA+ Standard & Poor's
Very strong financial security characteristics; 2nd category of 21
Aa2 Moody's
Excellent in financial strength; 3rd category of 21
These ratings are current as of the date of this Prospectus and are subject to
change. They are assigned as a measure of our ability to honor any guarantees
provided by the Contract and any applicable optional Riders but not specifically
to our products, the performance (return) of these products, the value of any
investment in these products upon withdrawal or to individual securities held in
any Fund.
THE SEPARATE ACCOUNT
We use our Separate Account to support the Variable Investment Options you
choose.
You do not invest directly in the Funds made available under the Contract. When
you direct or transfer money to a Variable Investment Option, we will purchase
shares of a corresponding Fund through John Hancock Variable Annuity Account JF
("Separate Account"). We hold the Fund's shares in a "sub-account" (usually with
a name similar to that of the corresponding Fund).
The Company established John Hancock Variable Annuity Account JF under
Massachusetts law. The Separate Account's assets, including the Funds' shares,
belong to JHVLICO. Each Contract provides that amounts we hold in the Separate
Account pursuant to the Contracts cannot be reached by any other persons who may
have claims against us.
The income, gains and losses, whether or not realized, from assets of the
Separate Account are credited to or charged against the Separate Account without
regard to the Company's other income, gains, or losses. Nevertheless, all
obligations arising under the Company's Contracts are general corporate
obligations of the Company. Assets of our Separate Accounts may not be charged
with liabilities arising out of any Company's business.
We reserve the right, subject to compliance with applicable law, to add other
sub-accounts, eliminate existing sub-accounts, combine sub-accounts or transfer
assets in one sub-account to another sub-account that we, or an affiliated
company, may establish. We will not eliminate existing sub-accounts or combine
sub-accounts without the prior approval of the appropriate state or federal
regulatory authorities.
The Separate Accounts are registered as unit investment trusts under the
Investment Company Act of 1940 ("1940 Act"). Registration under the 1940 Act
does not involve supervision by the SEC of the management or investment policies
or practices of the Separate
22
Account. If we determine that it would be in the best interests of persons
having voting rights under the Contracts, the Separate Account may be operated
as a management company under the 1940 Act or it may be deregistered if 1940 Act
registration were no longer required.
THE FUNDS
When you select a Variable Investment Option, we invest your money in a
Sub-Account of a Separate Account and it invests in NAV shares of a
corresponding Fund of John Hancock Trust.
THE FUNDS IN THE SEPARATE ACCOUNTS ARE NOT PUBLICLY TRADED MUTUAL FUNDS. The
Funds are only available to you as Investment Options in the Contracts or, in
some cases, through other variable annuity contracts or variable life insurance
policies issued by us or by other life insurance companies. In some cases, the
Funds also may be available through participation in certain qualified pension
or retirement plans.
The Funds' investment advisers and managers (i.e., subadvisers) may manage
publicly traded mutual funds with similar names and investment objectives.
However, the Funds are NOT directly related to any publicly traded mutual fund.
You should not compare the performance of any Fund described in this Prospectus
with the performance of a publicly traded mutual fund. THE PERFORMANCE OF ANY
PUBLICLY TRADED MUTUAL FUND COULD DIFFER SUBSTANTIALLY FROM THAT OF ANY OF THE
FUNDS HELD IN OUR SEPARATE ACCOUNTS.
The table in the Fee Tables section of the Prospectus shows the investment
management fees and other operating expenses for these Fund shares as a
percentage (rounded to two decimal places) of each Fund's average daily net
assets for 2005, except as indicated in the footnotes appearing at the end of
the table. Fees and expenses of the Funds are not fixed or specified under the
terms of the contracts and may vary from year to year. These fees and expenses
differ 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.
The John Hancock Trust is a so-called "series" type mutual fund and is
registered under the 1940 Act as an open-end management investment company. John
Hancock Investment Management Services, LLC ("JHIMS LLC") provides investment
advisory services to the John Hancock Trust and receives investment management
fees for doing so. JHIMS LLC pays a portion of its investment management fees to
other firms that manage the John Hancock Trust's Funds. JHIMS LLC is our
affiliate.
If shares of a Fund are no longer available for investment or in our judgment
investment in a Fund becomes inappropriate, we may eliminate the shares of a
Fund and substitute shares of another Fund, or of another open-end registered
investment company. A substitution may be made with respect to both existing
investments and the investment of future Purchase Payments. However, we will
make no such substitution without first notifying you and obtaining approval of
the SEC (to the extent required by the 1940 Act).
The Funds pay us or certain of our affiliates compensation for some of the
distribution, administrative, shareholder support, marketing and other services
we or our affiliates provide to the Funds. The amount of this compensation is
based on a percentage of the assets of the Fund attributable to the variable
insurance products that we and our affiliates issue. These percentages may
differ from Fund to Fund and among classes of shares within a Fund. In some
cases, the compensation is derived from the Rule 12b-1 fees which are deducted
from a Fund's assets and paid for the services we or our affiliates provide to
that Fund. In addition, compensation payments of up to 0.40% of assets may be
made by a Fund's investment adviser or its affiliates. Any such payments do not,
however, result in any charge to you in addition to what is shown in the Fee
Table. Such compensation will be consistent with the services rendered or the
cost savings resulting from the arrangement.
You bear the investment risk of any Fund you choose as a Variable Investment
Option for your Contract. The following table contains a general description of
the Funds that we make available under the Contracts. Certain Variable
Investment Options may not be available under a Contract.
You can find a full description of each Fund, including the investment
objectives, policies and restrictions of, and the risks relating to, investment
in the Fund in the prospectus for that Fund. YOU CAN OBTAIN A COPY OF A FUND'S
PROSPECTUS, WITHOUT CHARGE, BY CONTACTING US AT THE ANNUITIES SERVICE CENTER
SHOWN ON THE FIRST PAGE OF THIS PROSPECTUS. YOU SHOULD READ THE FUND'S
PROSPECTUS CAREFULLY BEFORE INVESTING IN THE CORRESPONDING VARIABLE INVESTMENT
OPTION.
23
JOHN HANCOCK TRUST
(We show the Fund's manager (i.e. subadviser) in bold above the name of the
Fund)
AVAILABLE ON:
-----------------
CAPITAL GUARDIAN TRUST COMPANY
Overseas Equity Trust Seeks long-term capital appreciation by investing, under Revolution Access
normal market conditions, at least 80% of its assets in Revolution Extra
equity securities of companies outside the U.S. in a Revolution Value
diversified mix of large established and medium-sized Patriot
foreign companies located primarily in developed Declaration
countries and, to a lesser extent, in emerging markets.
DAVIS SELECTED ADVISERS, L.P.
Financial Services Trust Seeks growth of capital by investing primarily in common Revolution Access
stocks of financial companies. During normal market Revolution Extra
conditions, at least 80% of the portfolio's net assets Revolution Value
(plus any borrowings for investment purposes) are Patriot
invested in companies that are principally engaged in Declaration
financial services. A company is "principally engaged"
in financial services if it owns financial
services-related assets constituting at least 50% of the
value of its total assets, or if at least 50% of its
revenues are derived from its provision of financial
services.
DECLARATION MANAGEMENT & RESEARCH LLC
Active Bond Trust (1) Seeks income and capital appreciation by investing at Revolution Access
least 80% of its assets in a diversified mix of debt Revolution Extra
securities and instruments. Revolution Value
Patriot
Declaration
Bond Index Trust B Seeks to track the performance of the Lehman Brothers Revolution Access
Aggregate Index (which represents the U.S. investment Revolution Extra
grade bond market) by investing, under normal market Revolution Value
conditions, at least 80% of its assets in securities Patriot
listed in the Lehman Index.
Managed Trust (2) Seeks income and long-term capital appreciation by Revolution Access
investing primarily in a diversified mix of: (a) common Revolution Extra
stocks of large and mid sized U.S. companies, and (b) Revolution Value
bonds with an overall intermediate term average Patriot
maturity.
Short-Term Bond Trust Seeks income and capital appreciation by investing at Revolution Access
least 80% of its assets in a diversified mix of debt Revolution Extra
securities and instruments. Revolution Value
Patriot
DEUTSCHE ASSET MANAGEMENT, INC.
Real Estate Securities Seeks to achieve a combination of long-term capital Revolution Access
Trust appreciation and current income by investing, under Revolution Extra
normal market conditions, at least 80% of its net assets Revolution Value
(plus any borrowings for investment purposes) in equity Patriot
securities of real estate investment trusts ("REITS")
and real estate companies.
GRANTHAM, MAYO, VAN OTTERLOO & CO. LLC
Managed Trust (2) Seeks income and long-term capital appreciation by Revolution Access
investing primarily in a diversified mix of: (a) common Revolution Extra
stocks of large and mid sized U.S. companies, and (b) Revolution Value
bonds with an overall intermediate term average Patriot
maturity.
INDEPENDENCE INVESTMENT LLC
Growth and Income Trust Seeks income and long-term capital appreciation by Revolution Access
(formerly, Growth & Income investing, under normal market conditions, primarily in Revolution Extra
II Trust) a diversified mix of common stocks of large U.S. Revolution Value
companies. Patriot
24
JOHN HANCOCK TRUST
(We show the Fund's manager (i.e. subadviser) in bold above the name of the
Fund)
AVAILABLE ON:
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Declaration
JENNISON ASSOCIATES LLC
Capital Appreciation Trust Seeks long-term capital growth by investing at least 65% Revolution Access
of its total assets in equity-related securities of Revolution Extra
companies that exceed $1 billion in market Revolution Value
capitalization and that the subadviser believes have Patriot
above-average growth prospects. These companies are
generally medium-to-large capitalization companies.
MFC GLOBAL INVESTMENT MANAGEMENT (U.S.A.) LIMITED
500 Index Trust B Seeks to approximate the aggregate total return of a Revolution Access
broad U.S. domestic equity market index investing, under Revolution Extra
normal market conditions, at least 80% of its net assets Revolution Value
(plus any borrowings for investment purposes) in (a) the Patriot
common stocks that are included in the S & P 500 Declaration
Index(3) and (b) securities (which may or may not be
included in the S & P 500 Index) that MFC Global
(U.S.A.) believes as a group will behave in a manner
similar to the index.
Mid Cap Index Trust Seeks to approximate the aggregate total return of a mid Revolution Access
cap U.S. domestic equity market index by attempting to Revolution Extra
track the performance of the S&P Mid Cap 400 Index(3). Revolution Value
Money Market Trust B Seeks to obtain maximum current income consistent with Revolution Access
preservation of principal and liquidity by investing in Revolution Extra
high quality, U.S. Dollar denominated money market Revolution Value
instruments. Patriot
Declaration
Small Cap Index Trust Seeks to approximate the aggregate total return of a Revolution Access
small cap U.S. domestic equity market index by Revolution Extra
attempting to track the performance of the Russell 2000 Revolution Value
Index(3).
Total Stock Market Index Seeks to approximate the aggregate total return of a Revolution Access
Trust broad U.S. domestic equity market index by attempting to Revolution Extra
track the performance of the Wilshire 5000 Equity Revolution Value
Index(3).
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
Global Bond Trust Seeks to realize maximum total return, consistent with Revolution Access
preservation of capital and prudent investment Revolution Extra
management by investing the portfolio's assets primarily Revolution Value
in fixed income securities denominated in major foreign Patriot
currencies, baskets of foreign currencies (such as the
ECU), and the U.S. dollar.
Total Return Trust Seeks to realize maximum total return, consistent with Revolution Access
preservation of capital and prudent investment Revolution Extra
management by investing, under normal market conditions, Revolution Value
at least 65% of the portfolio's assets in a diversified
portfolio of fixed income securities of varying
maturities. The average portfolio duration will normally
vary within a three- to six-year time frame based on the
subadviser's forecast for interest rates.
SSGA FUNDS MANAGEMENT, INC.
International Equity Index Seeks to track the performance of a broad-based equity Revolution Access
Trust B index of foreign companies primarily in developed Revolution Extra
countries and, to a lesser extent, in emerging market Revolution Value
countries by investing, under normal market conditions, Patriot
at least 80% of its assets in securities listed in the
Morgan Stanley Capital International All Country World
Excluding U.S. Index
T. ROWE PRICE ASSOCIATES, INC.
25
JOHN HANCOCK TRUST
(We show the Fund's manager (i.e. subadviser) in bold above the name of the
Fund)
AVAILABLE ON:
-----------------
Blue Chip Growth Trust Seeks to achieve long-term growth of capital (current Revolution Access
income is a secondary objective) by investing, under Revolution Extra
normal market conditions, at least 80% of the Revolution Value
portfolio's total assets in the common stocks of large Patriot
and medium-sized blue chip growth companies. Many of the
stocks in the portfolio are expected to pay dividends.
Equity-Income Trust Seeks to provide substantial dividend income and also Revolution Access
long-term capital appreciation by investing primarily in Revolution Extra
dividend-paying common stocks, particularly of Revolution Value
established companies with favorable prospects for both Patriot
increasing dividends and capital appreciation.
Health Sciences Trust Seeks long-term capital appreciation by investing, under Revolution Access
normal market conditions, at least 80% of its net assets Revolution Extra
(plus any borrowings for investment purposes) in common Revolution Value
stocks of companies engaged in the research,
development, production, or distribution of products or
services related to health care, medicine, or the life
sciences (collectively termed "health sciences").
Mid Value Trust Seeks long-term capital appreciation by investing, under Revolution Access
normal market conditions, primarily in a diversified mix Revolution Extra
of common stocks of mid size U.S. companies that are Revolution Value
believed to be undervalued by various measures and offer Patriot
good prospects for capital appreciation.
WELLINGTON MANAGEMENT COMPANY, LLP
Mid Cap Stock Trust Seeks long-term growth of capital by investing primarily Revolution Access
in equity securities of mid-size companies with Revolution Extra
significant capital appreciation potential. Revolution Value
Small Cap Growth Trust Seeks long-term capital appreciation by investing, under Revolution Access
normal market conditions, primarily in small-cap Revolution Extra
companies that are believed to offer above average Revolution Value
potential for growth in revenues and earnings. Patriot
Declaration
Small Cap Value Trust Seeks long-term capital appreciation by investing, under Revolution Access
normal market conditions, at least 80% of its assets in Revolution Extra
small-cap companies that are believed to be undervalued Revolution Value
by various measures and offer good prospects for capital
appreciation.
WESTERN ASSET MANAGEMENT COMPANY
High Yield Trust Seeks to realize an above-average total return over a Revolution Access
market cycle of three to five years, consistent with Revolution Extra
reasonable risk, by investing primarily in high yield Revolution Value
debt securities, including corporate bonds and other Patriot
fixed-income securities.
(1.) The Active Bond Trust is subadvised by Declaration Management & Research
LLC (65%) and Sovereign Asset Management LLC (35%)
(2.) The Managed Trust is subadvised by Grantham, Mayo,Van Otterloo & Co. LLC
(60%) and Declaration Management & Research LLC (40)%
(3) "Standard & Poor's(R)," "S&P 500(R)," "Standard and Poor's 500(R)" and "S&P
Mid Cap 400(R)" are trademarks of The McGraw-Hill ComPANies, Inc. "Russell
2000(R)" is a trademarks of Frank Russell Company. "Wilshire 5000(R)" is a
trademark of Wilshire Associates. None OF the Index Trusts are sponsored,
endorsed, managed, advised, sold or promoted by any of these companies, and
none of these companies make any representation regarding the advisability
of investing in the Trust.
26
How We Support The Fixed Investment Options
All of JHVLICO's general assets (discussed above) support its obligations under
the Fixed Investment Options (as well as all of its other obligations and
liabilities). To hold the assets that support primarily the Fixed Investment
Options, we have established a "non-unitized" separate account. With a
non-unitized separate account, you have no interest in or preferential claim on
any of the assets held in the account. The investments we purchase with amounts
you allocated to the Fixed Investment Options belong to us; any favorable
investment performance on the assets allocated to the Fixed Investment Options
belongs to us. Instead, you earn interest at the guaranteed interest rate of the
Fixed Investment Option you selected, provided that you don't surrender,
transfer, or withdraw your assets prior to the end of your selected Fixed
Investment Option.
How The Fixed Investment Options Work
Amounts you allocate to the Fixed Investment Options earn interest at a
guaranteed rate commencing with the date of allocation. At the expiration of the
Fixed Investment Option, we will automatically transfer its total value to a
Money Market Variable Investment Option under your Contract, unless you elect
to:
- - withdraw all or a portion of any such amount from the Contract,
- - allocate all or a portion of such amount to a new Fixed Investment Option
or periods of the same or different duration as the expiring Fixed
Investment Option, or
- - allocate all or a portion of such amount to one or more of the Variable
Investment Options.
You must notify us of any such election, by mailing a request to us at the
Annuities Service Center at least 30 days prior to the end of the expiring Fixed
Investment Option. We will notify you of the end of the Fixed Investment Option
at least 30 days prior to its expiration. The first day of the new Fixed
Investment Option or other reallocation will begin the day after the end of the
expiring Fixed Investment Option.
We currently make available Fixed Investment Options with durations of five
years. For Contracts issued before September 30, 2002, however, we may permit
you to select different durations. If you select any Fixed Investment Option
with a duration that extends beyond your Contract's Maturity Date, your maturity
date will automatically be changed to the Annuitant's 95th birthday (or a later
date, if we approve). We reserve the right to add or delete Fixed Investment
Options for new allocations to or from those that are available at any time.
GUARANTEED INTEREST RATES
Each Fixed Investment Option has its own guaranteed interest rate. We may, at
our discretion, change the guaranteed rate for future Fixed Investment Options.
These changes will not affect the guaranteed rates being paid on Fixed
Investment Options that have already commenced. Each time you allocate or
transfer money to a Fixed Investment Option, a new Fixed Investment Option, with
a new interest rate, begins to run with respect to that amount. The amount
allocated or transferred earns a guaranteed rate that will continue unchanged
until the end of that period.
We make the final determination of guaranteed rates and Fixed Investment Options
to be declared. We cannot predict or assure the level of any future guaranteed
rates or the availability of any future Fixed Investment Options.
You may obtain information concerning the guaranteed rates applicable to the
various Fixed Investment Options, and the durations of the Fixed Investment
Options offered at any time by calling the Annuities Service Center.
CALCULATION OF MARKET VALUE ADJUSTMENT ("MVA")
If you withdraw, surrender, transfer, or otherwise remove money from a Fixed
Investment Option prior to its expiration date, we will apply a market value
adjustment.
A market value adjustment also generally applies to:
- - death benefits pursuant to your Contract;
- - amounts you apply to an Annuity Option; and
- - amounts paid in a single sum in lieu of an annuity.
The market value adjustment increases or decreases your remaining value in the
Fixed Investment Option. If the value in that Fixed Investment Option is
insufficient to pay any negative MVA, we will deduct any excess from the value
in your other Investment Options pro-rata based on the value in each. If there
is insufficient value in your other Investment Options, we will in no event pay
out more than the surrender value of the Contract.
27
Here is how the MVA works:
We compare:
- - the guaranteed rate of the Fixed Investment Option from which the assets
are being taken WITH
- - the guaranteed rate we are currently offering for Fixed Investment Options
of the same duration as remains on the Fixed Investment Option from which
the assets are being taken.
If the first rate exceeds the second by more than 1/2%, the market value
adjustment produces an increase in your Contract's value.
If the first rate does not exceed the second by at least 1/2%, the market value
adjustment produces a decrease in your Contract's value.
For this purpose, we consider that the amount withdrawn from the Fixed
Investment Option includes the amount of any negative MVA and is reduced by the
amount of any positive MVA.
The mathematical formula and sample calculations for the market value adjustment
appear in Appendix A.
What additional guarantee applies to the Fixed Investment Options under my
contract?
JHVLICO's ultimate corporate parent, Manulife Financial Corporation ("MFC"), has
guaranteed JHVLICO's obligations with respect to any Fixed Investment Options
you elect (the "MFC Subordinated Guarantee"). The MFC Subordinated Guarantee
will apply unless and until we notify you otherwise. (If we give you such
notice, however, the MFC Subordinated Guarantee would remain in effect for all
guarantee periods under the Fixed Investment Options that had already started,
and would be inapplicable only to guarantee periods starting after the date of
such notice.) The MFC Subordinated Guarantee does not relieve JHVLICO of any
obligations under your contract -- it is in addition to all of the rights and
benefits that the contract provides. There is no charge or cost to you for the
MFC Subordinated Guarantee, and there are no disadvantages to you of having this
additional guarantee.
John Hancock Financial Services, Inc. ("JHFS") guaranteed JHVLICO Fixed
Investment Option guarantee periods that began prior to June 29, 2005 (the "JHFS
Guarantee"). The JHFS Guarantee does not apply to Fixed Investment Option
guarantee periods that began on or after June 29, 2005.
Under the rules of the United States Securities and Exchange Commission ("SEC"),
the MFC Subordinated Guarantee relieves us of our obligation to file with the
SEC annual, quarterly and current reports on Form 10-K, Form 10-Q and Form 8-K,
respectively, and thereby saves us the expense of being an SEC reporting
company. MFC is a company organized under the laws of Canada and its common
shares are listed principally on the Toronto Stock Exchange and the New York
Stock Exchange. MFC files with the SEC annual and current reports on Forms 40-F
and 6-K, respectively. MFC's consolidated financial statements include
information about JHFS and us in a footnote containing condensed consolidating
financial information with separate columns for MFC, JHFS, JHVLICO and other
subsidiaries of MFC, together with consolidating adjustments.
Similarly, we and JHFS implemented the JHFS Guarantee in order to save us the
expenses of being a public company. JHFS was our ultimate corporate parent and a
publicly-traded company that filed annual and quarterly reports with the SEC. In
April 2004, JHFS was merged with a subsidiary of MFC.
WHAT ARE THE TERMS OF THE MFC SUBORDINATED GUARANTEE? MFC guarantees your full
interest in any Fixed Investment Option. This means that, if we fail to honor
any valid request to surrender, transfer, or withdraw any amount from a
guarantee period, or fail to allocate amounts from a Fixed Investment Option to
an annuity option when it is obligated to do so, MFC guarantees the full amount
that you would have received, or value that you would have been credited with,
had we fully met our obligations under your Contract with respect to such Fixed
Investment Option. If we fail to pay any amount that becomes payable under the
Contract upon the death of an owner or annuitant, MFC guarantees the unpaid
amount, up to the Contract Value in any Fixed Investment Option on the date of
death, increased by any accrued but uncredited interest attributable thereto and
increased by any upward market value adjustment that would have been payable
upon any surrender of the Contract at that time (but not decreased by any
negative market value adjustment). If we fail to make payment when due of any
amount that is guaranteed by MFC, you could directly request MFC to satisfy our
obligation, and MFC must do so. You would not have to make any other demands on
us as a precondition to making a claim against MFC under the MFC Subordinated
Guarantee.
The MFC Subordinated Guarantee constitutes an unsecured obligation of MFC as
guarantor, and is subordinated in right of payment to the prior payment in full
of all other obligations of MFC, except for other guarantees or obligations of
MFC which by their terms are designated as ranking equally in right of payment
with or subordinated to the MFC Subordinated Guarantee, and effectively rank
senior to MFC's preferred and common shares.
HOW CAN I FIND ADDITIONAL INFORMATION ABOUT MFC? MFC is subject to the
information requirements of the U.S. Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and, in accordance with the Exchange Act, files reports
and other information with the SEC. Under a multijurisdictional disclosure
system adopted by the United States and Canada, these reports and
28
other information (including financial information) may be prepared in
accordance with the disclosure requirements of Canada, which are different from
those of the United States.
You may read and copy any reports, statements or other information filed by MFC
at the SEC's Public Reference Room, Station Place, 100 F Street, N.E.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the Public Reference Room. You can also inspect
reports, proxy statements and other information about MFC at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
You may also obtain copies of this information by mail from the Public Reference
Section of the SEC, Station Place, 100 F Street, N.E., Washington, D.C. 20549,
at prescribed rates, or from commercial document retrieval services. The SEC
maintains a website that contains reports, proxy statements and other
information, including those filed by MFC, at http://www.sec.gov. You may also
access the SEC filings and obtain other information about MFC through the
website maintained by MFC, which is http://www.manulife.com. The information
contained in that website is not incorporated by reference into this Prospectus.
MFC and JHVLICO filed a joint registration statement on Form F-3 with the SEC in
respect of the MFC guarantee described in this Prospectus. This Prospectus is a
part of that registration statement. As permitted by SEC rules, this Prospectus
does not contain all the information you can find in the registration statement.
The SEC allows MFC to "incorporate by reference" information into this
Prospectus, which means that we can disclose important information to you by
referring you to other documents filed separately with the SEC.
The information incorporated by reference is deemed to be part of this
Prospectus, except for any information superseded by information in this
Prospectus. These documents contain important information about the companies
and their financial condition.
MFC incorporates by reference the documents listed below, which were filed with
the SEC.
(a) MFC's Reports of Foreign Issuer on Form 6-K filed on January 3, March 24
and March 28, 2006; and
(b) MFC's Annual Report on Form 40-F for the year ended December 31, 2005, as
filed on March 23, 2006.
(c) MFC's Annual Report on Form 40-F for the year ended December 31, 2004, as
filed on March 29, 2005 and as amended and filed on April 21 and June 27,
2005.
Copies of the documents incorporated in this Prospectus by reference may be
obtained on request without charge from:
Manulife Financial Corporation
ATTN: Corporate Secretary
200 Bloor Street East, NT-10
Toronto, Ontario Canada M4W 1E5
Telephone: (416) 926-3000
Any annual reports on Form 20-F, Form 40-F or Form 10-K, any reports on Form
10-Q or Form 8-K, other than current reports furnished to the SEC pursuant to
Item 2.02 or Item 7.01 of Form 8-K, and any Form 6-K specifying that it is being
incorporated by reference in this Prospectus, as well as all Prospectus
supplements disclosing additional or updated information, filed by MFC with the
SEC subsequent to the date of this Prospectus shall be deemed to be incorporated
by reference into this Prospectus.
ANY STATEMENT CONTAINED IN THIS PROSPECTUS OR IN A DOCUMENT INCORPORATED OR
DEEMED TO BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS SHALL BE DEEMED TO BE
MODIFIED OR SUPERSEDED FOR PURPOSES OF THIS PROSPECTUS TO THE EXTENT THAT A
STATEMENT CONTAINED IN THIS PROSPECTUS OR IN ANY OTHER SUBSEQUENTLY FILED
DOCUMENT WHICH ALSO IS OR IS DEEMED TO BE INCORPORATED BY REFERENCE IN THIS
PROSPECTUS MODIFIES OR SUPERSEDES SUCH PRIOR STATEMENT. ANY STATEMENT OR
DOCUMENT SO MODIFIED OR SUPERSEDED SHALL NOT, EXCEPT TO THE EXTENT SO MODIFIED
OR SUPERSEDED, BE INCORPORATED BY REFERENCE AND CONSTITUTE A PART OF THIS
PROSPECTUS.
YOU SHOULD RELY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR ANY APPLICABLE PROSPECTUS SUPPLEMENT AND ON THE OTHER
INFORMATION INCLUDED IN THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS
FORMS A PART. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT OR
ADDITIONAL INFORMATION. WE ARE NOT MAKING AN OFFER OF THE MFC GUARANTEES COVERED
BY THIS PROSPECTUS IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED BY LAW.
YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY APPLICABLE PROSPECTUS SUPPLEMENT IS ACCURATE
AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS OR ANY
APPLICABLE PROSPECTUS SUPPLEMENT, AS THE CASE MAY BE.
29
The Accumulation Period
YOUR VALUE IN OUR VARIABLE INVESTMENT OPTIONS
Each Purchase Payment or transfer that you allocate to a Variable Investment
Option purchases accumulation units of that Variable Investment Option.
Similarly, each withdrawal or transfer that you take from a Variable Investment
Option (as well as certain charges that may be allocated to that option) result
in a cancellation of such accumulation units.
VALUATION OF ACCUMULATION UNITS
To determine the number of accumulation units that a specific transaction will
purchase or cancel, we use the following formula:
dollar amount of transaction
DIVIDED BY
value of one accumulation unit for the applicable
Variable Investment Option at the time of such
transaction
The value of each accumulation unit will change daily depending upon the
investment performance of the Fund that corresponds to that Variable Investment
Option and certain charges we deduct from such Investment Option. (See below
under "Variable Investment Option Valuation Procedures.")
Therefore, at any time prior to the Maturity Date, the total value of your
Contract in a Variable Investment Option can be computed according to the
following formula:
number of accumulation units in the Variable
Investment Options
TIMES
value of one accumulation unit for the
applicable Variable Investment Option at that time
Your Value in the Fixed Investment Options
On any date, the total value of your Contract in a Fixed Investment Option
equals:
- - the amount of Purchase Payments or transferred amounts allocated to the
Fixed Investment Option, MINUS
- - the amount of any withdrawals or transfers paid out of the Fixed Investment
Option, MINUS
- - the amount of any negative market value adjustments resulting from such
withdrawals or transfers, PLUS
- - the amount of any positive market value adjustments resulting from such
withdrawals and transfers, MINUS
- - the amount of any charges and fees deducted from that Fixed Investment
Option, PLUS
- - interest compounded daily on any amounts in the Fixed Investment Option
from time to time at the effective annual rate of interest we have declared
for that Fixed Investment Option.
The Annuity Period
Annuity payments are made to the Annuitant, if still living. If more than one
Annuitant is living at the Maturity Date, the payments are made to the younger
of them.
MATURITY DATE
Your Contract specifies the Maturity Date, when payments from one of our Annuity
Options are scheduled to begin. You initially choose a Maturity Date when you
complete your application for a Contract. Unless we otherwise permit, the
Maturity Date must be:
- - at least 6 months after the date the first Purchase Payment is applied to
your Contract, and
- - no later than the maximum age specified in your Contract (normally age 95).
Subject always to these requirements, you may subsequently change the Maturity
Date. The Annuities Service Center must receive your new selection at least 31
days prior to the new Maturity Date, however. Also, if you are selecting or
changing your Maturity Date for a Contract issued under a tax qualified plan,
special limits apply. (See "Contracts Purchased for a Tax-Qualified Plan.")
CHOOSING FIXED OR VARIABLE ANNUITY PAYMENTS
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During the Annuity Period, the total value of your Contract must be allocated to
no more than four Investment Options. During the Annuity Period, we do not offer
the Fixed Investment Options. Instead, we offer annuity payments on a fixed
basis as one Investment Option, and annuity payments on a variable basis for
EACH Variable Investment Option.
We will generally apply (1) amounts allocated to the Fixed Investment Options as
of the Maturity Date to provide annuity payments on a fixed basis and (2)
amounts allocated to Variable Investment Options to provide annuity payments on
a variable basis. If you are using more than four Investment Options on the
Maturity Date, we will divide your Contract's value among the four Investment
Options with the largest values (considering all Fixed Investment Options as a
single option), pro-rata based on the amount of the total value of your Contract
that you have in each.
We will make a market value adjustment to any remaining Fixed Investment Option
amounts on the Maturity Date, before we apply such amounts to an annuity payment
option. We will also deduct any premium tax charge.
Once annuity payments commence, you may not make transfers from fixed to
variable or from variable to fixed.
SELECTING AN ANNUITY OPTION
Each Contract provides, at the time of its issuance, for annuity payments to
commence on the Maturity Date pursuant to Option A: "Life Annuity with Payments
for a Guaranteed Period" for a 10 year period on a fixed basis (discussed under
"Annuity Options".)
Prior to the Maturity Date, you may select a different Annuity Option. However,
if the total value of your Contract on the Maturity Date is not at least $5,000,
Option A: "Life Annuity with Payments for a Guaranteed Period" for the 10 year
period will apply, regardless of any other election that you have made. You may
not change the form of Annuity Option once payments commence.
If the initial monthly payment under an Annuity Option would be less than $50,
we may make a single sum payment equal to the total surrender value of your
Contract on the date the initial payment would be payable. Such single payment
would replace all other benefits.
Subject to that $50 minimum limitation, your Beneficiary may elect an Annuity
Option if:
- - you have not made an election prior to the Annuitant's death;
- - the Beneficiary is entitled to payment of a death benefit of at least
$5,000 in a single sum; and
- - the Beneficiary notifies us of the election prior to the date the proceeds
become payable.
VARIABLE MONTHLY ANNUITY PAYMENTS
We determine the amount of the first variable monthly payment under any Variable
Investment Option by using the applicable annuity purchase rate for the Annuity
Option under which the payment will be made. The Contract sets forth these
annuity purchase rates. In most cases they vary by the age and gender of the
Annuitant or other payee.
The amount of each subsequent variable annuity payment under that Variable
Investment Option depends upon the investment performance of that Variable
Investment Option.
Here's how it works:
- - we calculate the actual net investment return of the Variable Investment
Option (after deducting all charges) during the period between the dates
for determining the current and immediately previous monthly payments.
- - if that actual net investment return exceeds the "assumed investment rate"
(explained below), the current monthly payment will be larger than the
previous one.
- - if the actual net investment return is less than the assumed investment
rate, the current monthly payment will be smaller than the previous one.
ASSUMED INVESTMENT RATE
The assumed investment rate for any variable portion of your annuity payments
will be 3 1/2% per year, except as follows.
You may elect an assumed investment rate of 5% or 6%, provided such a rate is
available in your state. If you elect a higher assumed investment rate, your
initial variable annuity payment will also be higher. Eventually, however, the
monthly variable annuity payments may be smaller than if you had elected a lower
assumed investment rate.
TRANSFERS DURING THE ANNUITY PERIOD
Some transfers are permitted during the Annuity Period, but subject to different
limitations than during the accumulation period. Once annuity payments on a
variable basis have begun, you may transfer all or part of the investment upon
which those payments are based
31
from one sub-account to another. You must submit your transfer request to
Annuities Service Center at least 30 DAYS BEFORE the due date of the first
annuity payment to which your transfer will apply. Transfers after the maturity
date will be made by converting the number of ANNUITY UNITs being transferred to
the number of annuity units of the sub-account to which the transfer is made, so
that the next annuity payment if it were made at that time would be the same
amount that it would have been without the transfer. Thereafter, annuity benefit
payments will reflect changes in the value of the annuity units for the new
sub-account selected. Once annuity benefit payments begin, no transfers may be
made from payments on a fixed basis to payments on a variable basis or from
payments on a variable basis to payments on a fixed basis. In addition, we
reserve the right to defer the transfer privilege at any time that we are unable
to purchase or redeem shares of a Fund. We also reserve the right to modify or
terminate the transfer privilege at any time in accordance with applicable law.
FIXED MONTHLY ANNUITY PAYMENTS
The dollar amount of each fixed monthly annuity payment is specified during the
entire period of annuity payments, according to the provisions of the Annuity
Option selected. To determine such dollar amounts we first, in accordance with
the procedures described above, calculate the amount to be applied to the FIXED
ANNUITY Option as of the Maturity Date. We then subtract any applicable premium
tax charge, if applicable, and divide the difference by $1,000.
We then multiply the result by the greater of:
- - the applicable fixed annuity purchase rate shown in the appropriate table
in the Contract; or
- - the rate we currently offer at the time of annuitization. (This current
rate may be based on the sex of the Annuitant, unless prohibited by law).
ANNUITY OPTIONS
Here are some of the Annuity Options that are available, subject to the terms
and conditions described above. We reserve the right to make available optional
methods of payment in addition to those Annuity Options listed here and in your
Contract.
OPTION A - LIFE ANNUITY WITH PAYMENTS FOR A GUARANTEED PERIOD - We will make
monthly payments for a guaranteed period of 5, 10, or 20 years, as selected by
you or your Beneficiary, and after such period for as long as the payee lives.
If the payee dies prior to the end of such guaranteed period, we will continue
payments for the remainder of the guaranteed period to a contingent payee,
subject to the terms of any supplemental agreement issued.
Federal income tax requirements currently applicable to Contracts used with H.R.
10 plans and individual retirement annuities provide that the period of years
guaranteed under Option A cannot be any greater than the joint life expectancies
of the payee and his or her designated Beneficiary.
OPTION B - LIFE ANNUITY WITHOUT FURTHER PAYMENT ON DEATH OF PAYEE - We will make
monthly payments to the payee as long as he or she lives. We guarantee no
minimum number of payments.
OPTION C - JOINT AND LAST SURVIVOR - We will provide payments monthly,
quarterly, semiannually, or annually, for the payee's life and the life of the
payee's spouse/joint payee. Upon the death of one payee, we will continue
payments to the surviving payee. All payments stop at the death of the surviving
payee.
OPTION D - JOINT AND 1/2 SURVIVOR; OR JOINT AND 2/3 SURVIVOR - We will provide
payments monthly, quarterly, semiannually, and annually for the payee's life and
the life of the payee's spouse/joint payee. Upon the death of one payee, we will
continue payments (reduced to 1/2 or 2/3 the full payment amount) to the
surviving payee. All payments stop at the death of the surviving payee.
OPTION E - LIFE INCOME WITH CASH REFUND - We will provide payments monthly,
quarterly, semiannually, or annually for the payee's life. Upon the payee's
death, we will provide a contingent payee with a lump-sum payment, if the total
payments to the payee were less than the accumulated value at the time of
annuitization. The lump-sum payment, if any, will be for the balance.
OPTION F - INCOME FOR A FIXED PERIOD - We will provide payments monthly,
quarterly, semiannually, or annually for a pre-determined period of time to a
maximum of 30 years. If the payee dies before the end of the fixed period,
payments will continue to a contingent payee until the end of the period.
OPTION G - INCOME OF A SPECIFIC AMOUNT - We will provide payments for a specific
amount. Payments will stop only when the amount applied and earnings have been
completely paid out. If the payee dies before receiving all the payments, we
will continue payments to a contingent payee until the end of the Contract.
32
With Options A, B, C, and D, we offer both fixed and/or variable annuity
payments. With Options E, F, and G, we offer only Fixed Annuity payments.
Payments under Options F and G must continue for 10 years, unless your Contract
has been in force for 5 years or more.
If the payee is more than 85 years old on the Maturity Date, the following two
options are not available without our consent:
- - Option A: "Life Annuity with Payments for a Guaranteed Period" for the 5
year period and
- - Option B: "Life Annuity without Further Payment on Death of Payee."
Variable Investment Option Valuation Procedures
We compute the net investment return and accumulation unit values for each
Variable Investment Option as of the end of each Business Day. A Business Day is
any date on which the New York Stock Exchange is open for regular trading. Each
Business Day ends at the close of regular trading for the day on that exchange.
Usually this is 4:00 p.m., Eastern time. On any date other than a Business Day,
the accumulation unit value or annuity unit value will be the same as the value
at the close of the next following Business Day.
Federal Tax Matters
INTRODUCTION
The following discussion of the Federal income tax treatment of the Contract is
not exhaustive, does not purport to cover all situations, and is not intended as
tax advice. The Federal income tax treatment of an annuity contract is unclear
in certain circumstances, and you should consult a qualified tax advisor with
regard to the application of the law to your circumstances. This discussion is
based on the Code, IRS regulations, and interpretations existing on the date of
this Prospectus. These authorities, however, are subject to change by Congress,
the Treasury Department, and judicial decisions.
This discussion does not address state or local tax consequences associated with
the purchase of a Contract. IN ADDITION, WE MAKE NO GUARANTEE REGARDING ANY TAX
TREATMENT -- FEDERAL, STATE, OR LOCAL -- OF ANY CONTRACT OR OF ANY TRANSACTION
INVOLVING A CONTRACT.
OUR TAX STATUS
We are taxed as a life insurance company. Because the operations of the Separate
Account are a part of, and are taxed with, our operations, the Separate Account
is not separately taxed as a "regulated investment company" under the Code.
Under existing Federal income tax laws, we are not taxed on the investment
income and capital gains of the Separate Account, but the operations of the
Separate Account may reduce our Federal income taxes. For example, we may be
eligible for certain tax credits or deductions relating to foreign taxes paid
and dividends received by the Funds. Our use of these tax credits and deductions
will not adversely affect or benefit the Separate Account. We do not anticipate
that we will be taxed on the income and gains of the Separate Account in the
future, but if we are, we may impose a corresponding charge against the Separate
Account.
The Contracts permit us to deduct a charge for any taxes we incur that are
attributable to the operation or existence of the Contracts or the Separate
Account. Currently, we do not anticipate making a charge of such taxes. If the
level of the current taxes increases, however, or is expected to increase in the
future, we reserve the right to make a charge in the future.
SPECIAL CONSIDERATIONS FOR OPTIONAL BENEFITS
At present, the IRS has not provided guidance as to the tax treatment of charges
for optional benefits to an annuity contract. The IRS might take the position
that each charge associated with these optional benefits is deemed a withdrawal
from the contract subject to current income tax to the extent of any gains and,
if applicable, the 10% penalty tax for premature withdrawals.
We do not currently report charges for optional benefits as partial withdrawals,
but we may do so in the future if we believe that the IRS would require us to
report them as such. You should consult a tax adviser before electing any
optional benefit Riders.
If you purchased a Qualified Contract with an optional death benefit or other
optional benefit Rider, the presence of these benefits may increase the amount
of any required minimum distributions under the requirements of your Qualified
Plan. See "Qualified Contracts (Contracts Purchased for a Qualified Plan)"
below.]
NON-QUALIFIED CONTRACTS
(Contracts Not Purchased to Fund a Qualified Plan)
33
Undistributed Gains
Except where the Owner is not an individual, we expect our Contracts to be
considered annuity contracts under Section 72 of the Code. This means that,
ordinarily, you pay no federal income tax on any gains in your Contract until we
actually distribute assets to you.
However, a Contract held by an Owner other than a natural person (for example, a
corporation, partnership, limited liability company or other such entity) does
not generally qualify as an annuity contract for tax purposes. Any increase in
value therefore would constitute ordinary taxable income to such an Owner in the
year earned. Notwithstanding this general rule, a Contract will ordinarily be
treated as held by a natural person if the nominal Owner is a trust or other
entity which holds the Contract as an agent for a natural person.
Taxation of Annuity Payments
When we make payments under a Contract in the form of an annuity, normally a
portion of each annuity payment is taxable as ordinary income. The taxable
portion of an annuity payment is equal to the excess of the payment over the
exclusion amount.
In the case of variable annuity payments, the exclusion amount is the investment
in the Contract when payments begin to be made divided by the number of payments
expected to be made (taking into account the Annuitant's life expectancy and the
form of annuity benefit selected). In the case of Fixed Annuity payments, the
exclusion amount is based on the investment in the Contract and the total
expected value of Fixed Annuity payments for the term of the Contract
(determined under IRS regulations). In general, your investment in the Contract
equals the aggregate amount of premium payments you have made over the life of
the Contract, reduced by any amounts previously distributed from the Contract
that were not subject to tax. A simplified method of determining the taxable
portion of annuity benefit payments applies to Contracts issued in connection
with certain Qualified Plans other than IRAs.
Once you have recovered your total investment in the Contract tax-free, further
annuity payments will be fully taxable. If annuity payments cease because the
Annuitant dies before all of the investment in the Contract is recovered, the
unrecovered amount generally will be allowed as a deduction on the Annuitant's
last tax return or, if there is a beneficiary entitled to receive further
payments, will be distributed to the beneficiary as described more fully below
under "Taxation of Death Benefit Proceeds."
Surrenders, Withdrawals and Death Benefits
When we make a single sum payment from your Contract, you have ordinary taxable
income to the extent the payment exceeds your investment in the Contract
(discussed above). Such a single sum payment can occur, for example, if you
surrender your Contract before the Maturity Date or if no extended payment
option is selected for a death benefit payment.
When you take a partial withdrawal from a Contract before the Maturity Date,
including a payment under a systematic withdrawal plan or guaranteed withdrawal
benefit, all or part of the payment may constitute taxable ordinary income to
you. If, on the date of withdrawal, the total value of your Contract exceeds the
investment in the Contract, the excess will be considered gain and the
withdrawal will be taxable as ordinary income up to the amount of such gain.
Taxable withdrawals may also be subject to a penalty tax for premature
withdrawals as explained below. When only the investment in the Contract
remains, any subsequent withdrawal made before the Maturity Date will be a
tax-free return of investment. If you assign or pledge any part of your
Contract's value, the value so pledged or assigned is taxed the same way as if
it were a partial withdrawal.
For purposes of determining the amount of taxable income resulting from a single
sum payment or a partial withdrawal, all annuity contracts issued by us or our
affiliates to the Owner within the same calendar year will be treated as if they
were a single contract.
As mentioned above, amounts received in a partial withdrawal are taxable to the
extent that the Contract Value exceeds the investment in the Contract. There is
some uncertainty regarding the effect a Fixed Investment Option's market value
adjustment might have on the amount treated as "Contract Value" for this
purpose. As a result, the taxable portion of amounts received in a partial
withdrawal could be greater or less depending on how the market value adjustment
is treated.
There may be special income tax issues present in situations where the Owner and
the Annuitant are not the same person and are not married to one another. A tax
adviser should be consulted in those situations.
Taxation of Death Benefit Proceeds
All or part of any death benefit proceeds may constitute a taxable payout of
earnings. A death benefit payment generally results in taxable ordinary income
to the extent such payment exceeds your investment in the Contract.
Amounts may be distributed from a Contract because of the death of an Owner or
the Annuitant. During the Accumulation Period, death benefit proceeds are
includible in income as follows:
- - if distributed in a single sum payment under our current administrative
procedures, they are taxed in the same manner as a full withdrawal, as
described above; or
- - if distributed under an Annuity Option, they are taxed in the same manner
as annuity payments, as described above; or
- - If distributed as a series of withdrawals over the Beneficiary's life
expectancy, they are taxable to the extent the Contract
34
Value exceeds the investment in the Contract.
After a Contract matures and annuity payments begin, if the Contract guarantees
payments for a stated period and the Owner dies before the end of that period,
payments made to the Beneficiary for the remainder of that period are includible
in the Beneficiary's income as follows:
- - if received in a single sum under our current administrative procedures,
they are includible in income to the extent that they exceed the
unrecovered investment in the Contract at that time; or
- - if distributed in accordance with the existing Annuity Option selected,
they are fully excludable from income until the remaining investment in the
Contract has been recovered, and all annuity benefit payments thereafter
are fully includible in income.
Penalty Tax on Premature Distributions
There is a 10% IRS penalty tax on the taxable portion of any payment from a
Non-Qualified Contract. Exceptions to this penalty tax include distributions:
- - received on or after the date on which the Contract Owner reaches age 59
1/2;
- - attributable to the Contract Owner becoming disabled (as defined in the tax
law);
- - made to a Beneficiary on or after the death of the Contract Owner or, if
the Contract Owner is not an individual, on or after the death of the
primary Annuitant;
- - made as a series of substantially equal periodic payments for the life (or
life expectancy) of the Owner or for the joint lives (or joint life
expectancies) of the Owner and designated individual Beneficiary;
- - made under a single-premium immediate annuity contract; or
- - made with respect to certain annuities issued in connection with structured
settlement agreements.
Puerto Rico Non-Qualified Contracts
Distributions from Puerto Rico annuity contracts issued by us are subject to
federal income taxation, withholding and reporting requirements as well as
Puerto Rico tax laws. Both jurisdictions impose a tax on distributions. Under
federal requirements, distributions are deemed to be income first. Under the
Puerto Rico tax laws, however, distributions from a Contract not purchased to
fund a Qualified Plan ("Non-Qualified Contract") are treated as a non-taxable
return of principal until the principal is fully recovered. Thereafter, all
distributions under a Non-Qualified Contact are fully taxable. Puerto Rico does
not currently impose an early withdrawal penalty tax. The Internal Revenue Code,
however, does impose such a penalty and bases it on the amount that is taxable
under federal rules.
Distributions under a Non-Qualified Contract after annuitization are treated as
part taxable income and part non-taxable return of principal. The amount
excluded from gross income after annuitization under Puerto Rico tax law is
equal to the amount of the distribution in excess of 3% of the total Purchase
Payments paid, until an amount equal to the total Purchase Payments paid has
been excluded. Thereafter, the entire distribution from a Non-Qualified Contract
is included in gross income. For federal income tax purposes, however, the
portion of each annuity payment that is subject to tax is computed on the basis
of investment in the Contract and the Annuitant's life expectancy. Generally
Puerto Rico does not require income tax to be withheld from distributions of
income. Although Puerto Rico allows a credit against its income tax for taxes
paid to the federal government, you may not be able to use the credit fully. If
you are a resident of Puerto Rico, you should consult a tax adviser before
purchasing an annuity contract.
Diversification Requirements
Your Contract will not qualify for the tax benefits of an annuity contract
unless the Separate Account follows certain rules requiring diversification of
investments underlying the Contract. In addition, the rules require that the
Contract Owner not have "investment control" over the underlying assets.
In certain circumstances, the Owner of a variable annuity contract may be
considered the Owner, for federal income tax purposes, of the assets of the
Separate Account used to support the Contract. In those circumstances, income
and gains from the Separate Account assets would be includible in the Contract
Owner's gross income. The Internal Revenue Service ("IRS") has stated in
published rulings that a variable Contract Owner will be considered the Owner of
Separate Account assets if the Contract Owner possesses incidents of Ownership
in those assets, such as the ability to exercise investment control over the
assets. A Treasury Decision issued in 1986 stated that guidance would be issued
in the form of regulations or rulings on the "extent to which Policyholders may
direct their investments to particular sub-accounts of a separate account
without being treated as owners of the underlying assets." As of the date of
this Prospectus, no comprehensive guidance on this point has been issued. In
Rev. Rul. 2003-91, however, the IRS ruled that a contract holder would not be
treated as the owner of assets underlying a variable life insurance or annuity
contract despite the owner's ability to allocate funds among as many as twenty
sub-accounts.
The ownership rights under your Contract are similar to, but different in
certain respects from, those described in IRS rulings in which it was determined
that contract owners were not owners of separate account assets. Since you have
greater flexibility in allocating premiums and Contract Values than was the case
in those rulings, it is possible that you would be treated as the Owner of your
Contract's proportionate share of the assets of the Separate Account.
35
We do not know what future Treasury Department regulations or other guidance may
require. We cannot guarantee that an underlying Fund will be able to operate as
currently described in its prospectus, or that a Fund will not have to change
any of its investment objectives or policies. We have reserved the right to
modify your Contract if we believe doing so will prevent you from being
considered the owner of your Contract's proportionate share of the assets of the
Separate Account, but we are under no obligation to do so.
QUALIFIED CONTRACTS
(Contracts Purchased for a Qualified Plan)
The Contracts are also available for use in connection with certain types of
retirement plans, including IRAs, which receive favorable treatment under the
Code ("Qualified Plans"). Numerous special tax rules apply to the participants
in Qualified Plans and to the Contracts used in connection with these plans. We
provide a brief description of types of Qualified Plans in Appendix C of this
Prospectus, but make no attempt to provide more than general information about
use of the Contracts with the various types of Qualified Plans in this
Prospectus. We may limit the availability of the Contracts to certain types of
Qualified Plans and may discontinue making Contracts available to any Qualified
Plan in the future. If you intend to use a Contract in connection with a
Qualified Plan you should consult a tax adviser.
We have no responsibility for determining whether a particular retirement plan
or a particular contribution to the plan satisfies the applicable requirements
of the Code, or whether a particular employee is eligible for inclusion under a
plan. In general, the Code imposes limitations on the amount of annual
compensation that can be contributed into a Qualified Plan, and contains rules
to limit the amount you can contribute to all of your Qualified Plans. Trustees
and administrators of Qualified Plans may, however, generally invest and
reinvest existing plan assets without regard to such Code imposed limitations on
contributions. Certain distributions from Qualified Plans may be transferred
directly to another plan, unless funds are added from other sources, without
regard to such limitations.
The tax rules applicable to Qualified Plans vary according to the type of plan
and the terms and conditions of the plan itself. For example, for both
withdrawals and annuity benefit payments under certain Qualified Contracts,
there may be no "investment in the Contract" and the total amount received may
be taxable. Also, loans from Qualified Contracts, where allowed, are subject to
a variety of limitations, including restrictions as to the amount that may be
borrowed, the duration of the loan, and the manner in which the loan must be
repaid. (You should always consult your tax adviser and retirement plan
fiduciary prior to exercising your loan privileges.) Both the amount of the
contribution that may be made and the tax deduction or exclusion that you may
claim for that contribution are limited under Qualified Plans.
Under the tax rules, the Owner and the Annuitant may not be different
individuals if a Contract is used in connection with a Qualified Plan. If a
co-Annuitant is named, all distributions made while the Annuitant is alive must
be made to the Annuitant. Also, if a co-Annuitant is named who is not the
Annuitant's spouse, the Annuity Options which are available may be limited,
depending on the difference in ages between the Annuitant and co-Annuitant.
Additionally, for Contracts issued in connection with Qualified Plans subject to
the Employee Retirement Income Security Act, the spouse or ex-spouse of the
Owner will have rights in the Contract. In such a case, the Owner may need the
consent of the spouse or ex-spouse to change Annuity Options or make a
withdrawal from the Contract.
Special minimum distribution requirements govern the time at which distributions
to the Owner and beneficiaries must commence and the form in which the
distributions must be paid. These special rules may also require the length of
any guarantee period to be limited. They also affect the restrictions that the
Owner may impose on the timing and manner of payment of death benefits to
beneficiaries or the period of time over which a Beneficiary may extend payment
of the death benefits under the Contract. In addition, the presence of the death
benefit or an optional benefit Rider, such as an Accumulated Value Enhancement
or Guaranteed Retirement Income Benefit may affect the amount of the required
minimum distributions that must be made under the Contract. These special rules
may also affect your ability to use any guaranteed retirement income optional
benefit Riders in connection with certain Qualified Plans, including IRAs.
Failure to comply with minimum distribution requirements will result in the
imposition of an excise tax, generally 50% of the amount by which the amount
required to be distributed exceeds the actual distribution. In the case of IRAs
(other than Roth IRAs), distributions of minimum amounts (as specified in the
tax law) to the Owner must generally commence by April 1 of the calendar year
following the calendar year in which the Owner attains age 70 1/2. In the case
of certain other Qualified Plans, such distributions of such minimum amounts
must generally commence by the later of this date or April 1 of the calendar
year following the calendar year in which the employee retires. Distributions
made under certain Qualified Plans, including IRAs, after the Owner's death must
also comply with the minimum distribution requirements, and different rules
governing the timing and the manner of payments apply, depending on whether the
designated Beneficiary is an individual, and, if so, the Owner's spouse, or an
individual other than the Owner's spouse. If you wish to impose restrictions on
the timing and manner of payment of death benefits to your designated
beneficiaries or if your Beneficiary wishes to extend over a period of time the
payment of the death benefits under your Contract, please consult your tax
adviser.
36
Penalty Tax on Premature Distributions
There is also a 10% IRS penalty tax on the taxable amount of any payment from
certain Qualified Contracts (but not Section 457 plans). (The amount of the
penalty tax is 25% of the taxable amount of any payment received from a SIMPLE
retirement account during the 2-year period beginning on the date the individual
first participated in any qualified salary reduction arrangement maintained by
the individual's employer.) There are exceptions to this penalty tax which vary
depending on the type of Qualified Plan. In the case of an Individual Retirement
Annuity or an IRA, including a SIMPLE IRA, the penalty tax does not apply to a
payment:
- - received on or after the date on which the Contract Owner reaches age 59
1/2;
- - received on or after the Owner's death or because of the Owner's disability
(as defined in the tax law); or
- - made as a series of substantially equal periodic payments (not less
frequently than annually) for the life (or life expectancy) of the Owner or
for the joint lives (or joint life expectancies) of the Owner and
"designated beneficiary" (as defined in the tax law).
These exceptions generally apply to taxable distributions from other Qualified
Plans (although, in the case of plans qualified under Sections 401 and 403, the
exception for substantially equal periodic payments applies only if the Owner
has separated from service). In addition, the penalty tax does not apply to
certain distributions from IRAs which are used for first time home purchases or
for higher education expenses. Special conditions must be met to qualify for
these two exceptions to the penalty tax. If you wish to take a distribution from
an IRA for these purposes, you should consult your tax adviser.
When we issue a Contract in connection with a Qualified Plan, we will amend it
as necessary to conform to the requirements of the plan. However, your rights to
any benefits under the plan may be subject to the terms and conditions of the
plan itself, regardless of the terms and conditions of the Contracts. We will
not be bound by terms and conditions of Qualified Plans to the extent those
terms and conditions contradict a Contract, unless we consent.
Tax-Free Rollovers
If permitted under your plan, you may make a tax-free rollover from:
- - a traditional IRA to another traditional IRA;
- - a traditional IRA to another Qualified Plan, including a Section 403(b)
plan;
- - any Qualified Plan (other than a Section 457 deferred compensation plan
maintained by a tax-exempt organization) to a traditional IRA;
- - any Qualified Plan (other than a Section 457 deferred compensation plan
maintained by a tax exempt organization) to another Qualified Plan,
including a roll-over of amounts from your prior plan derived from your
"after-tax" contributions from "involuntary" distributions;
- - a Section 457 deferred compensation plan maintained by a tax-exempt
organization to another Section 457 deferred compensation plan maintained
by a tax-exempt organization (by means of a direct trustee-to-trustee
transfer only); and
- - a traditional IRA to a Roth IRA, subject to special withholding
restrictions discussed below.
In addition, if your spouse survives you, he or she is permitted to rollover
your tax-qualified retirement account to another tax-qualified retirement
account in which your surviving spouse participates, to the extent permitted by
your surviving spouse's plan.
WITHHOLDING ON ELIGIBLE ROLLOVER DISTRIBUTIONS. If a Contract is used in
connection with a retirement plan that is qualified under Sections 401(a),
403(a), or 403(b) of the Code, or a governmental deferred compensation plan
described in Section 457(b) of the Code, any eligible rollover distribution from
the Contract will be subject to mandatory withholding. An eligible rollover
distribution generally is any taxable distribution from such plans except (i)
minimum distributions required under Section 401(a)(9) of the Code, (ii) certain
distributions for life, life expectancy, or for 10 years or more which are part
of a "series of substantially equal periodic payments," and (iii) if applicable,
certain hardship withdrawals.
Federal income tax of 20% will be withheld from an eligible rollover
distribution. The withholding is mandatory, and you cannot elect to have it not
apply. This 20% withholding will not apply, however, if instead of receiving the
eligible rollover distribution, you choose to have it directly transferred to a
Qualified Plan. Before you receive an eligible rollover distribution, we will
provide a notice explaining generally the direct rollover and mandatory
withholding requirements and how to avoid the 20% withholding by electing a
direct rollover.
Loans
A loan privilege is available only to Owners of Contracts issued in connection
with Section 403(b) retirement arrangements that are not subject to Title 1 of
the Employee Retirement Income Security Act of 1974 (ERISA). The rules governing
the availability of loans, including the maximum Loan Amount, are prescribed in
the Code, IRS regulations, and our procedures in effect at the time a loan is
made. Because the rules governing loans under section 403(b) Contracts are
complicated, you should consult your tax adviser before exercising the loan
privilege. Failure to meet the requirements for loans may result in adverse
income tax consequences to you. The loan agreement you sign will describe the
restrictions and limitations applicable to the loan at the time you apply.
37
Federal tax law generally requires loans to be repaid within 5 years (except in
cases where the loan was used to acquire the principal residence of a plan
participant), with repayments made at least quarterly and in level payments over
the term of the loan. Interest will be charged on your Loan Amount. Failure to
make a loan repayment when due will result in adverse tax income tax
consequences to you.
The amount of any Unpaid Loans will be deducted from the death benefit otherwise
payable under the Contract. In addition, loans, whether or not repaid, will have
a permanent effect on the Contract Value because the investment results of the
Investment Accounts will apply only to the unborrowed portion of the Contract
Value. The longer a loan is unpaid, the greater the effect is likely to be. The
effect could be favorable or unfavorable.
Puerto Rico Contracts Issued to Fund Retirement Plans
The tax laws of Puerto Rico vary significantly from the provisions of the
Internal Revenue Code of the United States that are applicable to various
Qualified Plans. Although we may offer variable annuity contracts in Puerto Rico
in connection with Puerto Rican "tax qualified" retirement plans, the text of
this Prospectus addresses federal tax law only and is inapplicable to the tax
laws of Puerto Rico.
SEE YOUR OWN TAX ADVISER
The foregoing description of Federal income tax topics and issues is only a
brief summary and is not intended as tax advice. It does not include a
discussion of federal estate and gift tax or state tax consequences. The rules
under the Code governing Qualified Plans are extremely complex and often
difficult to understand. Changes to the tax laws may be enforced retroactively.
Anything less than full compliance with the applicable rules, all of which are
subject to change from time to time, can have adverse tax consequences. The
taxation of an Annuitant or other payee has become so complex and confusing that
great care must be taken to avoid pitfalls. For further information you should
always consult a qualified tax adviser.
Performance Information
We may advertise total return information about investments made in the Variable
Investment Options. We refer to this information as "Account level" performance.
In our Account level advertisements, we usually calculate total return for 1, 5,
and 10 year periods or since the beginning of the applicable Variable Investment
Option.
Total return at the Account level is the percentage change between:
- - the value of a hypothetical investment in a Variable Investment Option at
the beginning of the relevant period, and
- - the value at the end of such period.
At the Account level, total return reflects adjustments for any:
- - mortality and expense risk charges,
- - administrative charge,
- - annual Contract fee, and
- - withdrawal charge payable if the Owner surrenders his Contract at the end
of the relevant period.
Total return at the Account level does not, however, reflect any premium tax
charges or any charges for optional benefit Riders. Total return at the Account
level will be lower than that at the Trust level where comparable charges are
not deducted.
We may also advertise total return in a non-standard format in conjunction with
the standard format described above. The non-standard format is generally the
same as the standard format except that it will not reflect any Contract fee or
withdrawal charge and it may be for additional durations.
We may advertise "current yield" and "effective yield" for investments in the
Money Market Investment Option. Current yield refers to the income earned on
your investment in the Money Market Investment Option over a 7-day period and
then annualized. In other words, the income earned in the period is assumed to
be earned every 7 days over a 52-week period and stated as a percentage of the
investment.
Effective yield is calculated in a similar manner but, when annualized, the
income earned by your investment is assumed to be reinvested and thus compounded
over the 52-week period. Effective yield will be slightly higher than current
yield because of this compounding effect of reinvestment.
Current yield and effective yield reflect all the recurring charges at the
Account level, but will not reflect any premium tax, any withdrawal charge, if
applicable, or any charge for optional benefit Riders.
38
Reports
At least annually, we will send you (1) a report showing the number and value of
the accumulation units in your Contract and (2) the financial statements of the
Trust.
Voting Privileges
At meetings of the Funds' shareholders, we will generally vote all the shares of
each Fund that we hold in the Account in accordance with instructions we receive
from the Owners of Contracts that participate in the corresponding Variable
Investment Option.
Certain Changes
CHANGES TO THE SEPARATE ACCOUNT
We reserve the right, subject to applicable law, including any required
shareholder approval,
- - to transfer assets that we determine to be your assets from the Separate
Account to another separate account or Investment Option by withdrawing the
same percentage of each investment in the Account with proper adjustments
to avoid odd lots and fractions,
- - to add or delete Variable Investment Options,
- - to change the underlying investment vehicles,
- - to operate the Separate Account in any form permitted by law, and
- - to terminate the Separate Account's registration under the 1940 Act, if
such registration should no longer be legally required.
Unless otherwise required under applicable laws and regulations, notice to or
approval of Owners will not be necessary for us to make such changes.
VARIATIONS IN CHARGES OR RATES FOR ELIGIBLE CLASSES
We may allow a reduction in or the elimination of any Contract charges, or an
increase in a credited interest rate for a Fixed Investment Option. The affected
Contracts would involve sales to groups or classes of individuals under special
circumstances that we expect to result in a reduction in our expenses associated
with the sale or maintenance of the Contracts, or that we expect to result in
mortality or other risks that are different from those normally associated with
the Contracts.
The entitlement to such variation in charges or rates will be determined by us
based upon such factors as the following:
- - the size of the initial Purchase Payment,
- - the size of the group or class,
- - the total amount of Purchase Payments expected to be received from the
group or class and the manner in which the Purchase Payments are remitted,
- - the nature of the group or class for which the Contracts are being
purchased and the persistency expected from that group or class as well as
the mortality or morbidity risks associated with that group or class;
- - the purpose for which the Contracts are being purchased and whether that
purpose makes it likely that the costs and expenses will be reduced, or
- - the level of commissions paid to selling broker-dealers or certain
financial institutions with respect to Contracts within the same group or
class.
We will make any reduction in charges or increase in initial guarantee rates
according to our rules in effect at the time an application for a Contract is
approved. We reserve the right to change these rules from time to time. Any
variation in charges, rates, or fees will reflect differences in costs and
services, will apply uniformly to all prospective Contract purchasers in the
group or class, and will not be unfairly discriminatory to the interests of any
Owner.
Distribution of Contracts
John Hancock Distributors, LLC ("JH Distributors"), a Delaware limited liability
company and an affiliate of ours, is the principal underwriter and distributor
of the Contract interests offered by this Prospectus and of other annuity and
life insurance products we and
39
our affiliates offer. JH Distributors also acts as the principal underwriter of
John Hancock Trust, whose securities are used to fund certain Variable
Investment Options under the Contract and under other annuity and life insurance
products we offer.
JH Distributors' principal address is 200 Bloor Street East, Toronto, Canada M4W
1E5. It also maintains offices with us at 601 Congress Street, Boston,
Massachusetts 02210. JH Distributors is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended (the "1934 Act") and is a member of
the National Association of Securities Dealers, Inc. (the "NASD").
We offered the Contract for sale through broker-dealers that entered into
selling agreements for the sale of the Contracts. Broker-dealers sold the
Contract through their registered representatives who have been appointed by us
to act as our insurance agents. Signator Investors, Inc. ("Signator"), a
subsidiary of John Hancock Life Insurance Company, or any of its affiliates that
is registered under the 1934 Act and a member of the NASD, may also have offered
the Contract.
JH Distributors may pay on-going compensation to broker-dealers in connection
with the sale or servicing of a Contract of the Contract. In turn, the
broker-dealers pay a portion of the compensation to their registered
representatives, under their own arrangements. We do not expect the total
compensation paid to such broker-dealers (including Signator) and financial
institutions to exceed 7.0% (8.0% for REVOLUTION EXTRA, REVOLUTION ACCESS, AND
REVOLUTION VALUE VARIABLE ANNUITIES) of Purchase Payments (on a present value
basis) for sales of the Contracts described in this Prospectus. We may also
reimburse Signator for direct and indirect expenses actually incurred in
connection with the distribution of these Contracts.
Signator representatives may have received additional cash or non-cash
incentives (including expenses for conference or seminar trips and certain
gifts) in connection with the sale of Contracts issued by us. From time to time,
Signator, at its expense, may also have provided significant additional amounts
to broker dealers or other financial services firms which sold or arranged for
the sale of the Contracts. Such compensation may have included, for example,
financial assistance to financial services firms in connection with their
conferences or seminars, sales or training programs for invited registered
representatives and other employees, payment for travel expenses, including
lodging, incurred by registered representatives and other employees for such
seminars or training programs, seminars for the public, advertising and sales
campaigns regarding the Contracts, and/or other events or activities sponsored
by the financial services firms. As a consequence of such additional
compensation, representatives and financial services firms, including but not
limited to Signator and its representatives, may have been motivated to sell our
Contracts instead of Contracts issued by other insurance companies.
We or our affiliates may provide compensation to broker-dealers for providing
on-going service in relation to Contracts that have already been purchased. The
amount and timing of compensation we or our affiliates may provide may vary, but
total compensation paid to broker-dealers with respect to the Contracts is not
expected to exceed the amount of compensation for distribution of the Contracts
as described in this Prospectus.
EXPERTS
The financial statements of John Hancock Variable Life Insurance Company at
December 31, 2005 and 2004 and for each of the three years in the period ended
December 31, 2005, and the financial statements of John Hancock Variable Account
JF at December 31, 2005, and for each of the two years in the period ended
December 31, 2005, appearing in this Statement of Additional Information have
been audited by Ernst & Young LLP, independent registered public accounting
firm, as set forth in their reports thereon appearing elsewhere herein, and are
included in reliance upon such reports given on the authority of such firm as
experts in accounting and auditing.
40
APPENDIX A: Details About Our Fixed Investment Options
INVESTMENTS THAT SUPPORT OUR FIXED INVESTMENT OPTIONS
We back our obligations under the Fixed Investment Options with JHVLICO's
general assets. Subject to applicable law, we have sole discretion over the
investment of our general assets (including those held in our "non-unitized"
separate account that primarily supports the Fixed Investment Options). We
invest these amounts in compliance with applicable state insurance laws and
regulations concerning the nature and quality of our general investments.
We invest the non-unitized separate account assets, according to our detailed
investment policies and guidelines, in fixed income obligations, including:
- - corporate bonds,
- - mortgages,
- - mortgage-backed and asset-backed securities, and
- - government and agency issues.
We invest primarily in domestic investment-grade securities. In addition, we use
derivative Contracts only for hedging purposes, to reduce ordinary business
risks associated with changes in interest rates, and not for speculating on
future changes in the financial markets. Notwithstanding the foregoing, we are
not obligated to invest according to any particular strategy.
GUARANTEED INTEREST RATES
We declare the guaranteed rates from time to time as market conditions and other
factors dictate. We advise you of the guaranteed rate for a selected Fixed
Investment Option at the time we:
- - receive your Purchase Payment,
- - effectuate your transfer, or
- - renew your Fixed Investment Option.
We have no specific formula for establishing the guaranteed rates for the Fixed
Investment Options. The rates may be influenced by interest rates generally
available on the types of investments acquired with amounts allocated to the
Fixed Investment Option. In determining guarantee rates, we may also consider,
among other factors, the duration of the Fixed Investment Option, regulatory and
tax requirements, sales and administrative expenses we bear, risks we assume,
our profitability objectives, and general economic trends.
COMPUTATION OF MARKET VALUE ADJUSTMENT
We determine the amount of the market value adjustment by multiplying the amount
being taken from the Fixed Investment Option (before any applicable withdrawal
charge, if any is applicable) by a factor expressed by the following formula:
n
--
12
( 1+g )
(---------) - 1
(1+c+0.005)
where,
G is the guaranteed rate in effect for the current Fixed Investment Option.
C is the current guaranteed rate in effect for new Fixed Investment Options with
duration equal to the number of years remaining in the current Fixed Investment
Option (rounded to the nearest whole number of years). If we are not currently
offering such a Fixed Investment Option, we will declare a guarantee rate,
solely for this purpose, consistent with interest rates currently available.
N is the number of complete months from the date of withdrawal to the end of the
current Fixed Investment Option. (If less than one complete month remains, N
equals one unless the withdrawal is made on the last day of the Fixed Investment
Option, in which case no adjustment applies.)
41
SAMPLE CALCULATION 1: POSITIVE ADJUSTMENT
Amount withdrawn or transferred $10,000
Guarantee period 5 years
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
Guaranteed rate (g) 4%
Guaranteed rate for new 3 year guarantee (c) 3%
Remaining guarantee period (n) 36 months
Market Value Adjustment:
( 36 )
( -- )
( 12 )
(( 1+0.04 ) )
10,000x((------------) -1)= 145.63
((1+0.03+0.005) )
Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
+ $145.63 = $10,145.63
* All interest rates have been arbitrarily chosen for purposes of this
example. In most cases they will bear little or no relation to the rates we
actually guaranteeing at the time.
SAMPLE CALCULATION 2: NEGATIVE ADJUSTMENT
Amount withdrawn or transferred $10,000
Guarantee period 5 years
Time of withdrawal or transfer beginning of 3rd year of guaranteed period
Guaranteed rate (g) 4%
Guaranteed rate for new 3 year guarantee (c) 5%
Remaining guarantee period (n) 36 months
Market Value Adjustment:
( 36 )
( -- )
( 12 )
(( 1+0.04 ) )
10,000x((------------) -1)= - 420.50
((1+0.05+0.005) )
Amount withdrawn or transferred (adjusted for market value adjustment): $10,000
- - $420.50 = $9,579.50
* All interest rates shown have been arbitrarily chosen for purposes of this
example. In most cases they will bear little or no relation to the rates we
are actually guaranteeing at any time.
42
APPENDIX B: Examples of Withdrawal Charge Calculations
DECLARATION AND PATRIOT VARIABLE ANNUITIES
Assume the Following Facts:
On January 1, 1997, you make a $5000 initial Purchase Payment and we issue you a
Contract.
On January 1, 1998, you make a $1000 Purchase Payment.
On January 1, 1999, you make a $1000 Purchase Payment.
On January 1, 2000, the total value of your Contract is $9000 because of good
investment earnings.
Now assume you make a partial withdrawal of $6000 (no tax withholding) on
January 2, 2000. In this case, assuming no prior withdrawals, we would deduct a
CDSL of $272.23. We withdraw a total of $6272.23 from your Contract.
$6,000.00 -- withdrawal request payable to you
+ 272.23 -- withdrawal charge payable to us
--------
$6,272.23 -- total amount withdrawn from your Contract
Here Is How We Determine the Withdrawal Charge:
(1) We FIRST reduce your $5000 INITIAL PURCHASE PAYMENT by the three annual
$30 Contract fees we assessed on January 1, 1998, 1999, and 2000. We withdraw
the remaining $4910 from your Contract.
$5,000
- 30 -- 1998 Contract fee payable to us
- 30 -- 1999 Contract fee payable to us
- 30 -- 2000 Contract fee payable to us
-----
$4,910 -- amount of your initial Purchase Payment we would consider
to be withdrawn
Under the free withdrawal provision, we deduct 10% of the total value of your
Contract at the beginning of the Contract Year, or $900 (.10 x $9000). We pay
the $900 to you as part of your withdrawal request, and we assess a withdrawal
charge on the remaining balance of $4010. Because you made the initial Purchase
Payment 3 years ago, the withdrawal charge percentage is 5%. We deduct the
resulting $200.50 from your Contract to cover the withdrawal charge on your
initial Purchase Payment. We pay the remainder of $3809.50 to you as a part of
your withdrawal request.
$4,910.00
- 900 -- free withdrawal amount (payable to you)
--------
$ 4,010
x .05
$ 200.50 -- withdrawal charge on initial Purchase Payment
(payable to us)
$4,010.00
- 200.50
--------
$3,809.50 -- part of withdrawal request payable to you
(2) We NEXT deem the entire amount of your 1998 PURCHASE PAYMENT to be
withdrawn and we assess a withdrawal charge on that $1000 amount. Because you
made this Purchase Payment 2 years ago, the withdrawal charge percentage is 5%.
We deduct the resulting $50 from your Contract to cover the withdrawal charge on
your 1998 Purchase Payment. We pay the remainder of $950 to you as a part of
your withdrawal request.
$1,000
x .05
-----
$ 50 -- withdrawal charge on 1998 Purchase Payment (payable to us)
$1,000
- 50
-----
$ 950 -- part of withdrawal request payable to you
43
Declaration and Patriot Variable Annuities - continued
(3) We NEXT determine what additional amount we need to withdraw to provide
you with the total $6000 you requested, after the deduction of the withdrawal
charge on that additional amount. We have already allocated $900 from the free
withdrawal amount, $3809.50 from your initial Purchase Payment, and $950 from
your 1998 Purchase Payment. Therefore, $340.50 is needed to reach $6000.
$ 6,000.00 -- total withdrawal amount requested
- 900.00 -- free withdrawal amount
- 3,809.50 -- payment deemed from initial Purchase Payment
- 950.00 -- payment deemed from 1998 Purchase Payment
--------
$ 340.50 -- additional payment to you needed to reach $6000
We know that the withdrawal charge percentage for this remaining amount is 6%,
because you are already deemed to have withdrawn all Purchase Payments you paid
prior to 1999. We use the following formula to determine how much more we need
to withdraw:
Remainder due to you = Withdrawal needed - [applicable withdrawal charge
percentage times withdrawal needed]
$ 340.50 = x - [.06x]
$ 340.50 = .94x
$ 340.50/0.94 = X
$ 362.23 = X
$ 362.23 -- deemed withdrawn from 1999 Purchase Payment
$-340.50 -- part of withdrawal request payable to you
------
$ 21.73 -- withdrawal charge on 1999 Purchase Payment deemed
withdrawn (payable to us)
$ 200.50 -- withdrawal charge on the INITIAL PURCHASE PAYMENT
$+ 50.00 -- withdrawal charge on the 1998 PURCHASE PAYMENT
$+ 21.73 -- withdrawal charge on the 1999 PURCHASE PAYMENT
------
$ 272.23 -- Total withdrawal charge
EXAMPLES OF WITHDRAWAL CHARGE CALCULATIONS - CONTINUED
Revolution Extra Variable Annuities
Assume the Following Facts:
- - On January 1, 2001, you make a $5,000 initial Purchase Payment and we issue
you a Contract.
- - On January 1, 2002, you make a $1,000 Purchase Payment.
- - On January 1, 2003, you make a $1,000 Purchase Payment.
- - On January 1, 2004, the total value of your Contract is $7,500 because of
the extra credits and favorable investment earnings.
Now assume you make a partial withdrawal of $7,000 (no tax withholding) on
January 2, 2004. In this case, assuming no prior withdrawals, we would deduct a
CDSL of $474.19. We withdraw a total of $7,474.19 from your Contract.
$7,000.00 -- withdrawal request payable to you
+ 474.19 -- withdrawal charge payable to us
--------
$7,474.19 -- total amount withdrawn from your Contract
Here Is How We Determine the Withdrawal Charge:
(1) We first distribute to you the $500 profit you have in your Contract
($7,500 total Contract Value less $7,000 of Purchase Payments you have
paid) under the free withdrawal provision.
(2) Next we repay to you the $5,000 Purchase Payments you paid in 2001 Under
the free withdrawal provision, $200 of that Purchase Payment is charge free
($7,000 total Purchase Payments paid x 10%; less the $500 free withdrawal
in the same Contract Year described in paragraph 1 above). We assess a
withdrawal charge on the remaining balance of $4,800 from your 2001
Purchase Payment. Because you made that Purchase Payment 3 years ago, the
withdrawal charge percentage is 7%. We deduct the resulting $336 from your
Contract to cover the withdrawal charge on your 2001 Purchase Payment. We
pay the remainder of $4,464 to you as a part of your withdrawal request.
44
$5,000
- 200 -- free withdrawal amount (payable to you)
-----
$4,800
x .07
-----
$ 336 -- withdrawal charge on 2001 Purchase Payment (payable to us)
$4,800
- 336
-----
$4,464 -- part of withdrawal request payable to you
(1) We NEXT deem the entire amount of your 2002 PURCHASE PAYMENT to be
withdrawn and we assess a withdrawal charge on that $1,000 amount. Because
you made this Purchase Payment 2 years ago, the withdrawal charge
percentage is 7%. We deduct the resulting $70 from your Contract to cover
the withdrawal charge on your 2002 Purchase Payment. We pay the remainder
of $930 to you as a part of your withdrawal request.
$1,000
x .07
-----
$ 70 -- withdrawal charge on 2002 Purchase Payment (payable to us)
$1,000
- 70
-----
$ 930 -- part of withdrawal request payable to you
Revolution Extra Variable Annuities - continued
(2) We NEXT determine what additional amount we need to withdraw to provide you
with the total $7,000 you requested, after the deduction of the withdrawal
charge on that additional amount. We have already allocated $500 from
profits under paragraph 1 above, $200 of additional free withdrawal amount
under paragraph 2, $4,464 from your 2001 Purchase Payment under paragraph
2, and $930 from your 2003 Purchase Payment under paragraph 3. Therefore,
$906 is needed to reach $7,000.
$7,000 -- total withdrawal amount requested
- 500 -- profit
- 200 -- free withdrawal amount
-4,464 -- payment deemed from initial Purchase Payment
- 930 -- payment deemed from initial Purchase Payment
-----
$ 906 -- additional payment to you needed to reach $7,000
We know that the withdrawal charge percentage for this remaining amount is 7%,
because you are already deemed to have withdrawn all Purchase Payments you paid
prior to 2003. We use the following formula to determine how much more we need
to withdraw:
Remainder due to you = Withdrawal needed - [applicable withdrawal charge
percentage times withdrawal needed]
$ 906 = x - [.07x]
$ 906 = .93x
$906/.93 = X
$ 974.19 = X
$ 974.19 -- deemed withdrawn from 2003 Purchase Payment
$ 906.00 -- part of withdrawal request payable to you
-------
$ 68.19 -- withdrawal charge on 2003 Purchase Payment deemed
withdrawn (payable to us)
EXAMPLES OF WITHDRAWAL CHARGE CALCULATIONS - CONTINUED
Revolution Value Variable Annuities
Assume the Following Facts:
On January 1, 2001, you make a $5,000 initial Purchase Payment and we issue you
a Contract.
On January 1, 2002, you make a $1,000 Purchase Payment.
On January 1, 2003, you make a $1,000 Purchase Payment.
On January 1, 2004, the total value of your Contract is $7,500 because of
favorable investment earnings.
45
Now assume you make a partial withdrawal of $7,000 (no tax withholding) on
January 2, 2004. In this case, assuming no prior withdrawals, we would deduct a
withdrawal charge of $289.36. We withdraw a total of $7,289.36 from your
Contract.
$7,000.00 -- withdrawal request payable to you
+ 289.36 -- withdrawal charge payable to us
--------
$7,289.36 -- total amount withdrawn from your Contract
Here Is How We Determine the Withdrawal Charge:
(1) We FIRST distribute to you the $500 profit you have in your Contract
($7,500 total Contract Value less $7,000 of Purchase Payments you have paid)
under the free withdrawal provision.
Next we repay to you the $5,000 Purchase Payments you paid in 2001. Under the
free withdrawal provision, $200 of that Purchase Payment is charge free ($7,000
total Purchase Payments paid x 10%; less the $500 free withdrawal in the same
Contract Year described in paragraph 1 above). We assess a withdrawal charge on
the remaining balance of $4,800 from your 2001 Purchase Payment. Because you
made that Purchase Payment 3 years ago, the withdrawal charge percentage is 4%.
We deduct the resulting $192 from your Contract to cover the withdrawal charge
on your 2001 Purchase Payment. We pay the remainder of $4,608 to you as a part
of your withdrawal request.
$5,000
- 200 -- free withdrawal amount (payable to you)
-----
$4,800
x .04
-----
$ 192 -- withdrawal charge on 2001 Purchase Payment (payable to us)
$4,800
- 192
-----
$4,608 -- part of withdrawal request payable to you
(2) We NEXT deem the entire amount of your 2002 PURCHASE PAYMENT to be
withdrawn and we assess a withdrawal charge on that $1,000 amount. Because you
made this Purchase Payment 2 years ago, the withdrawal charge percentage is 5%.
We deduct the resulting $50 from your Contract to cover the withdrawal charge on
your 2002 Purchase Payment. We pay the remainder of $950 to you as a part of
your withdrawal request.
$1,000
x .05
-----
$ 50 -- withdrawal charge on 2002 Purchase Payment (payable to us)
$1,000
- 50
-----
$ 950 -- part of withdrawal request payable to you
Revolution Value Variable Annuities - continued
(3) We NEXT determine what additional amount we need to withdraw to provide
you with the total $7,000 you requested, after the deduction of the withdrawal
charge on that additional amount. We have already allocated $500 from profits
under paragraph 1 above, $200 of additional free withdrawal amount under
paragraph 2, $4,608 from your 2001 Purchase Payment under paragraph 2, and $950
from your 2003 Purchase Payment under paragraph 3. Therefore, $742 is needed to
reach $7,000.
$7,000 -- total withdrawal amount requested
- 500 -- Profit
- 200 -- free withdrawal amount
-4,608 -- payment deemed from initial Purchase Payment
- 950 -- payment deemed from 2002 Purchase Payment
-----
$ 742 -- additional payment to you needed to reach $7,000
(4) We know that the withdrawal charge percentage for this remaining amount
is 6%, because you are already deemed to have withdrawn all Purchase Payments
you paid prior to 2003. We use the following formula to determine how much more
we need to withdraw:
Remainder due to you = Withdrawal needed - [applicable withdrawal charge
percentage times withdrawal needed]
46
$ 742.00 = x - [.06x]
$ 742.00 = .94x
$ 742.00/.94 = X
$ 789.36 = X
$ 789.36 -- Deemed withdrawn from 2003 Purchase Payment
$-742.00 -- part of withdrawal request payable to you
------
$ 47.36 -- withdrawal charge on 2003 Purchase Payment deemed
withdrawn (payable to us)
47
APPENDIX C: Optional Enhanced Death Benefits
DECLARATION AND PATRIOT VARIABLE ANNUITIES
"Stepped-Up" Death Benefit Rider
If you were under age 80 when you applied for your Contract, you may have
elected to enhance the standard death benefit by purchasing a stepped-up death
benefit. Under this benefit, if the Annuitant dies before the Contract's
Maturity Date, we will pay the Beneficiary the greater of:
- - the standard death benefit (described above) or
- - the highest total value of your Contract (adjusted by any market value
adjustment) as of any anniversary of your Contract to date, PLUS any
Purchase Payments you have made since that anniversary, MINUS any
withdrawals you have taken (and any related withdrawal charges) since that
anniversary.
For these purposes, however, we count only those Contract anniversaries that
occur (1) BEFORE we receive proof of death and any required settlement
instructions and (2) BEFORE the Annuitant attains age 81 (80 1/2 for PATRIOT
VARIABLE ANNUITIES).
You may have elected this benefit ONLY when you applied for the Contract and
ONLY if this benefit is available in your state. As long as the benefit is in
effect, you will pay a monthly charge for this benefit as shown in the Fee
Tables. For a description of this charge, refer to "What Fees and Charges will
be Deducted from My Contract?"
You should carefully review the tax considerations for optional benefit benefits
section before selecting this optional benefit. For a more complete description
of the terms and conditions of this benefit, you should refer directly to the
benefit. We will provide you with a copy on request.
Accidental Death Benefit Rider
If you are under age 80 when you apply for your Contract, you may elect to
purchase an accidental death benefit. In addition to any other death benefit,
this benefit provides a benefit upon the accidental death of the Annuitant prior
to the earlier of:
- - the Contract's Maturity Date, and
- - the Annuitant's 80th birthday.
Under this benefit, the Beneficiary will receive an amount equal to the total
value of the Contract as of the date of the accident, up to a maximum of
$200,000. We will pay the benefit after we receive, at the Annuities Service
Center:
- - proof of the Annuitant's death, and
- - any required instructions as to method of settlement.
You may elect this benefit ONLY when you apply for the Contract. As long as the
benefit is in effect, you will pay a monthly charge for this benefit as shown in
the Fee Tables.
YOU SHOULD CAREFULLY REVIEW THE TAX CONSIDERATIONS FOR OPTIONAL BENEFIT RIDERS
BEFORE SELECTING THIS OPTIONAL BENEFIT RIDER. FOR A COMPLETE DESCRIPTION OF THE
TERMS AND CONDITIONS OF THIS BENEFIT, YOU SHOULD REFER DIRECTLY TO THE RIDER. WE
WILL PROVIDE YOU WITH A COPY UPON REQUEST. NOT ALL STATES ALLOW THIS BENEFIT.
REVOLUTION ACCESS, REVOLUTION EXTRA, AND REVOLUTION VALUE VARIABLE ANNUITIES
You may have elected a death benefit that differs from the standard death
benefit by purchasing an optional death benefit Rider:
- - only if the Rider was available in your state when you applied for the
Contract;
- - if you elected the Enhanced Death Benefit Rider, only if each Owner and
each Annuitant was under age 80 at the time you applied for the Contract;
and
- - if you elected the Earnings Enhancement Death Benefit Rider, only if each
Owner and each Annuitant was under age 75 at the time you applied for the
Contract.
We may have waived either or both of the last two restrictions for Contracts
purchased prior to the date a Rider was available in your state.
As long as an optional death benefit Rider is in effect, you will pay the
monthly charge shown in the Fee Tables for that benefit. The Rider and its
related charges terminate on:
- - the Contract's Maturity Date, or
- - upon your surrendering the Contract, or
- - a change of ownership, except where a spousal Beneficiary continues the
Rider after an Owner's death (we explain Contract continuation by a spouse
in "Distributions Following Death of Owner" on page [#]).
48
In addition, you may terminate the Enhanced Death Benefit Rider at any time by
providing written notification to us at the Annuities Service Center shown on
the cover page. If you purchase an Earnings Enhancement Death Benefit Rider,
however, you CANNOT request us to terminate the Rider and its charges.
Enhanced Death Benefit Rider
Under this benefit, we will pay the greatest of:
- - the standard death benefit,
- - the amount of each Purchase Payment you have paid (but not including any
extra credits), accumulated at 5% effective annual interest during the
benefit's measuring period (less any partial withdrawals you have taken and
not including any interest on such amounts after they are withdrawn); or
- - the highest total value of your Contract (adjusted by any market value
adjustment) as of any anniversary of your Contract during the benefit's
measuring period, plus any Purchase Payments you have made since that
anniversary, minus any withdrawals you have taken since that anniversary.
The benefit's "measuring period" includes only those Contract anniversaries that
occur (1) before we receive proof of death and (2) before the measuring life
attains age 81. The benefit's "measuring life" is:
- - the Owner, if there is only one Owner under your Contract and the death
benefit is payable because the Owner dies before the Maturity Date,
- - the oldest Owner, if there are joint Owners under your Contract and the
death benefit is payable because either Owner dies before the Maturity
Date,
- - the Annuitant, if there is only one Annuitant under your Contract and the
death benefit is payable because the Annuitant dies before the Maturity
Date,
- - the youngest Annuitant, if there are joint Annuitants under your Contract
and the death benefit is payable because the surviving Annuitant dies
during the Owner(s) lifetime(s) but before the Maturity Date.
If an Owner is also an Annuitant, we will generally consider that person to be
an "Owner" instead of an "Annuitant" for purposes of determining the benefit's
measuring life.
For a more complete description of the terms and conditions of this benefit, you
should refer directly to the benefit. We will provide you with a copy on
request.
You should carefully review the tax considerations for optional benefits on page
[#] if you selected this optional benefit.
Earnings Enhancement Death Benefit Rider
(not available for Contracts issued to tax-qualified plans)
Under this benefit, the death benefit may be increased by an earnings
enhancement amount that will vary based on the age of the Owners and Annuitants
when you purchased the benefit. In certain marketing materials, this benefit may
have been referred to as the "Beneficiary Tax Relief" benefit because any
amounts paid under this benefit can be used to cover taxes that may be due on
death benefit proceeds under your Contract. Amounts paid under this benefit,
however, may also be subject to tax and may be greater than or less than the
amount of taxes due on the death benefits.
The earnings enhancement amount is determined as follows:
- - if all of the Owners and the Annuitant are under age 70 on the date your
benefit is issued, the earnings enhancement amount will be 40% of the
difference between the Standard Death Benefit (or Enhanced Death Benefit,
if that benefit is in effect) and your "Net Purchase Payments," up to a
maximum benefit amount of 80% of your "Adjusted Net Purchase Payments"
prior to the date of the decedent's death;
- - if any of the Owners or the Annuitant is age 70 or older on the date your
benefit is issued, the earnings enhancement amount will be 25% of the
difference between the Standard Death Benefit (or Enhanced Death Benefit,
if that benefit is in effect) and your "Net Purchase Payments," up to a
maximum benefit amount of 50% of your "Adjusted Net Purchase Payments"
prior to the date of the decedent's death; but
- - if there are joint Annuitants under your Contract, we will not count the
age of the older Annuitant for either of these purposes unless the older
Annuitant is also an Owner.
"Net Purchase Payments," for purposes of this benefit, means Purchase Payments
you paid for the Contract, less any withdrawals in excess of earnings from your
Contract (including any surrender charges imposed on these withdrawals). For
this purpose, we consider withdrawals to be taken first from earnings on your
Contract before they are taken from your Purchase Payments. "Adjusted Net
Purchase Payments" means Net Purchase Payments minus any Purchase Payments you
paid in the 12 month period prior to the decedent's death (excluding the initial
Purchase Payments).
For a more complete description of the terms and conditions of this benefit, you
should refer directly to the Rider. We will provide you with a copy on request.
49
YOU SHOULD CAREFULLY REVIEW THE TAX CONSIDERATIONS FOR OPTIONAL BENEFIT RIDERS
ON PAGE [#] IF YOU SELECTED ANY OF THESE OPTIONAL DEATH BENEFIT RIDERS. THE
DEATH BENEFITS UNDER THESE RIDERS WILL DECREASE IF YOU MAKE PARTIAL WITHDRAWALS
UNDER YOUR CONTRACT. THE ENHANCED EARNINGS DEATH BENEFIT RIDER MAY NOT BE
APPROPRIATE FOR YOU IF YOU EXPECT TO WITHDRAW EARNINGS.
50
APPENDIX D: Examples of Earnings Enhancement Death Benefit Calculation
(Not applicable to the Declaration or Patriot Variable Annuities)
The following are examples of the optional earnings enhancement death benefit.
We have assumed that there are earnings under the Contracts in each case. Actual
investment performance may be greater or lower than the amounts shown.
EXAMPLE 1
Earnings enhancement death benefit with standard death benefit, no adjustments
for withdrawals or additional Purchase Payments
Assume:
You elect the earnings enhancement death benefit Rider (but not the enhanced
death benefit Rider) when you purchase your Contract, At the time of purchase,
you and the Annuitant are each under age 70 and you pay an initial Purchase
Payment of $100,000, You allocate the Purchase Payment to a Variable Investment
Option, and make no transfers of Contract Value to other Investment Options,
We determine the death benefit before the Maturity Date, in the fourth year of
your Contract on a day when the total value of your Contract is $180,000.
Calculation of Standard Death Benefit
We compare the total value of your Contract ($180,000, with no market value
adjustment) to the total amount of Purchase Payments you paid ($100,000, with no
adjustment for withdrawals). The standard death benefit is the higher of the
two, or $180,000.
Calculation of Earnings Enhancement Amount
Because you and the Annuitant were both under age 70 when the Rider was issued,
the earnings enhancement amount is 40% of the difference between the standard
death benefit and your "Net Premiums," up to a maximum benefit amount equal to
80% of your "Adjusted Net Premiums."
Calculation of Net Purchase Payments and Adjusted Net Purchase Payments - To
determine "Net Purchase Payments," we reduce the Purchase Payments you paid
($100,000) by the amount of any withdrawals in excess of earnings ($0, with no
adjustment for withdrawal charges). In this example, the Net Purchase Payments
is $100,000. To determine "Adjusted Net Purchase Payments," we reduce the Net
Purchase Payments ($100,000) by any Purchase Payments you made, other than the
initial Purchase Payment, during the 12 months before we calculated the death
benefit ($0). In this example, the "Adjusted Net Purchase Payments" is $100,000.
Calculation of Maximum Benefit Amount - The maximum benefit amount under the
earnings enhancement death benefit Rider in this example is 80% of the Adjusted
Net Premiums ($100,000), or $80,000.
The earnings enhancement amount is 40% of the difference between the standard
death benefit ($180,000) and your Net Premiums ($100,000), up to the maximum
benefit amount. In this example, 40% of the difference is $32,000, which is less
than the maximum benefit amount ($80,000). The earnings enhancement amount is
therefore $32,000.
The total Death Benefit in this example is the standard death benefit ($180,000)
plus the earnings enhancement amount ($32,000), or $212,000.
EXAMPLE 2
Earnings enhancement death benefit with enhanced death benefit, adjusted for
withdrawal and additional Purchase Payments.
Assume:
- - You elect the earnings enhancement death benefit Rider and the enhanced
death benefit Rider when you purchase your Contract,
- - At the time of purchase, you are over age 70 and you pay an initial
Purchase Payment of $100,000,
- - You allocate the Purchase Payments to a Variable Investment Option, and
make no transfers of Contract Value to other Investment Options,
- - On the seventh anniversary of your Contract, your total value in the
Contract is $175,000, which is the highest value on any anniversary date,
51
- - On the day after the seventh anniversary of your Contract, you make a
withdrawal of $80,000,
- - On the eighth anniversary of your Contract, the total value of your
Contract is $110,000, and you make an additional Purchase Payment of
$10,000 at the end of the eighth year of your Contract,
- - We determine the death benefit before the Maturity Date in the middle of
the ninth year of your Contract, on a day when the total value of your
Contract is $120,000.
CALCULATION OF ENHANCED DEATH BENEFIT. In this example, the enhanced death
benefit is the highest of an accumulated premium "roll-up" amount, a "highest
anniversary value" amount and the value of your Contract on the date the death
benefit is determined.
CALCULATION OF PREMIUM ROLL-UP. We calculate the amount of each Purchase Payment
you have paid, accumulated at a 5% effective annual rate, minus any withdrawals.
In this example, the accumulated value of your initial Purchase Payment, after
adjustment for the $80,000 withdrawal, is $65,319.75, and the accumulated value
of your second Purchase Payment is $10,246.95. The total amount of the premium
"roll-up" is $75,566.70.
CALCULATION OF HIGHEST ANNIVERSARY VALUE. We determine the highest anniversary
value of your Contract on any anniversary date during the Rider's measuring
period ($175,000), plus any Purchase Payments since that date ($10,000), minus
any withdrawals since that date ($80,000). In this example, the "highest
anniversary value" is $105,000.
The total value of your Contract on the date the death benefit is determined
($120,000, with no market value adjustment) is higher than the premium roll-up
amount ($75,566.70) and higher than the "highest anniversary value" amount
($105,000). The enhanced death benefit is therefore $120,000.
CALCULATION OF EARNINGS ENHANCEMENT AMOUNT. Because you were over age 70 when
the Rider was issued, the earnings enhancement amount is 25% of the difference
between the enhanced death benefit and your "Net Premiums," up to a maximum
benefit amount equal to 50% of your "Adjusted Net Premiums."
CALCULATION OF NET PREMIUMS AND ADJUSTED NET PREMIUMS. To determine "Net
Premiums," we reduce the Purchase Payments you paid by the amount of any
withdrawals in excess of earnings (including withdrawal charges). In this
example, you withdrew $80,000 at a time when your earnings were $75,000 and no
withdrawal charges were imposed. The amount withdrawn in excess of earnings is
therefore $5,000. Net Premiums is the amount of Purchase Payments paid
($110,000) less amounts withdrawn in excess of earnings ($5,000), or $105,000.
To determine "Adjusted Net Premiums," we reduce the Net Premiums ($105,000) by
any Purchase Payments you made during the 12 months before we calculated the
death benefit ($10,000). In this example, the "Adjusted Net Premiums" is
$95,000.
CALCULATION OF MAXIMUM BENEFIT AMOUNT. The maximum benefit amount under the
earnings enhancement death benefit Rider in this example is 50% of your Adjusted
Net Premiums ($95,000), or $47,500.
The earnings enhancement amount is 25% of the difference between the enhanced
death benefit ($120,000) and your Net Premiums ($105,000), up to the maximum
benefit amount. In this example, 25% of the difference is $3,750, which is less
than the maximum benefit amount ($47,500). The earnings enhancement amount is
therefore $3,750.
The total Death Benefit in this example is the enhanced death benefit ($120,000)
plus the earnings enhancement amount ($3,750), or $123,750.
52
APPENDIX E: Qualified Plan Types
TRADITIONAL IRAS
Individual Retirement Annuities
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity or IRA
(sometimes referred to as a traditional IRA to distinguish it from the Roth IRA
discussed below). IRAs are subject to limits on the amounts that may be
contributed and deducted, the persons who may be eligible and on the time when
distributions may commence. Also, distributions from certain other types of
qualified retirement plans may be rolled over on a tax-deferred basis into an
IRA. The Contract may not, however, be used in connection with an Education IRA
under Section 530 of the Code.
The Contract may be issued with a death or an optional benefit Rider, such as an
Accumulated Value Enhancement or Guaranteed Retirement Income Benefit. The
presence of these benefits may increase the amount of any required minimum
distributions for IRAs and other Contracts subject to the required minimum
distribution rules.
Distributions
In general, all amounts paid out from a traditional IRA contract (in the form of
an annuity, a single sum, death benefits or partial withdrawal), are taxable to
the payee as ordinary income. As in the case of a Contract not purchased under a
Qualified Plan, you may incur additional adverse tax consequences if you make a
surrender or withdrawal before you reach age 59 1/2 (unless certain exceptions
apply as specified in Code section 72(t)). If you have made any non-deductible
contributions to an IRA contract, all or part of any withdrawal or surrender
proceeds, single sum death benefit or annuity payment, may be excluded from your
taxable income when you receive the proceeds.
The tax law requires that annuity payments under a traditional IRA contract
begin no later than April 1 of the year following the year in which the Owner
attains age 70 1/2. The amount that must be distributed each year is computed on
the basis of the Owner's age and the value of the Contract, taking into account
both the account balance and, in 2006 and subsequent years, the actuarial
present value of other benefits provided under the Contract.
ROTH IRAS
Section 408A of the Code permits eligible individuals to contribute to a type of
IRA known as a Roth IRA. Roth IRAs are generally subject to the same rules as
non-Roth IRAs, but they differ in certain respects.
Among the differences are that contributions to a Roth IRA are not deductible
and qualified distributions from a Roth IRA are excluded from income. A
qualified distribution is a distribution that satisfies two requirements. First,
the distribution must be made in a taxable year that is at least five years
after the first taxable year for which a contribution to any Roth IRA
established for the Owner was made. Second, the distribution must be:
- - made after the Owner attains age 59 1/2;
- - made after the Owner's death;
- - attributable to the Owner being disabled; or
- - a qualified first-time homebuyer distribution within the meaning of Section
72(t)(2)(F) of the Code.
In addition, distributions from Roth IRAs need not commence when the Owner
attains age 70 1/2. A Roth IRA may accept a "qualified rollover contribution"
from a non-Roth IRA. A Roth IRA, however, may not accept rollover contributions
from other Qualified Plans, except (and only to the extent) that you can
attribute designated Roth contributions to the rollover.
If the Contract is issued with certain death benefits or an optional benefit
Rider, such as an Accumulated Value Enhancement or Guaranteed Retirement Income
Benefit, the presence of these benefits may increase the amount of any required
minimum distributions for IRAs (which include Roth IRAs) and other Contracts
subject to the minimum distribution rules. Also, the state tax treatment of a
Roth IRA may differ from the Federal income tax treatment of a Roth IRA. If you
intend to use the Contract in connection with a Roth IRA, you should seek
independent tax advice.
Conversion to a Roth IRA
You can convert a traditional IRA to a Roth IRA, unless:
- - you have adjusted gross income over $100,000; or
- - you are a married taxpayer filing a separate return.
The Roth IRA annual contribution limit does not apply to converted amounts.
53
You must, however, pay tax on any portion of the converted amount that would
have been taxed if you had not converted to a Roth IRA. No similar limitations
apply to rollovers from one Roth IRA to another Roth IRA. Please note that the
amount deemed to be the "converted amount" for tax purposes may be higher than
the Contract Value because of the deemed value of guarantees. No similar
limitations apply to rollovers from one Roth IRA to another Roth IRA.
SIMPLE IRA PLANS
In general, under Section 408(p) of the Code a small business employer may
establish a SIMPLE IRA retirement plan if the employer employed 100 or fewer
employees earning at least $5,000 during the preceding year. Under a SIMPLE IRA
plan both employees and the employer make deductible contributions. SIMPLE IRAs
are subject to various requirements, including limits on the amounts that may be
contributed, the persons who may be eligible, and the time when distributions
may commence. If the Contract is issued with a death benefit or an optional
benefit Rider, such as an Accumulated Value Enhancement or Guaranteed Retirement
Income Benefit, the presence of these benefits may increase the amount of any
required minimum distributions for IRAs (which would include SIMPLE IRAs) and
other Contracts subject to the minimum distribution rules. The requirements for
minimum distributions from a SIMPLE IRA retirement plan, and rules on taxation
of distributions from a SIMPLE retirement plan, are generally the same as those
discussed above for distributions from a traditional IRA. Employers intending to
use the Contract in connection with such plans should seek independent tax
advice.
SIMPLIFIED EMPLOYEE PENSIONS (SEP-IRAS)
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees, using the employees' IRAs for such purposes,
if certain criteria are met. Under these plans the employer may, within
specified limits, make deductible contributions on behalf of the employees to
IRAs. If the Contract is issued with a death benefit or an optional benefit
Rider, such as an Accumulated Value Enhancement or Guaranteed Retirement Income
Benefit, the presence of these benefits may increase the amount of any required
minimum distributions for IRAs (which would include SEP-IRAs) and other
Contracts subject to the minimum distribution rules. The requirements for
minimum distributions from a SEP-IRA, and rules on taxation of distributions
from a SEP-IRA, are generally the same as those discussed above for
distributions from a traditional IRA.
TAX-SHELTERED ANNUITIES
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations to have their employers purchase
annuity contracts for them and, subject to certain limitations, to exclude the
Purchase Payments from gross income for tax purposes. These Contracts are
commonly referred to as "tax-sheltered annuities". Purchasers of the Contracts
for such purposes should seek competent advice as to eligibility, limitations on
Purchase Payments, and other tax consequences. In particular, purchasers should
note that the Contract provides death benefit options that may exceed both
aggregate Purchase Payments and Contract Value under the incidental death
benefit rules. It is possible that the death benefit could result in currently
taxable income to the Owner. There also are limits on the amount of incidental
benefits that may be provided under a tax-sheltered annuity. If a Contract is
issued with a death benefit or an optional benefit Rider, such as an Accumulated
Value Enhancement or Guaranteed Retirement Income Benefit, the presence of these
benefits may increase the amount of any required minimum distributions that must
be made.
Tax-sheltered annuity contracts must contain restrictions on withdrawals of:
- - contributions made pursuant to a salary reduction agreement in years
beginning after December 31, 1988;
- - earnings on those contributions; and
- - earnings after 1988 on amounts attributable to salary reduction
contributions (and earnings on those contributions) held as of the last day
of 1988.
These amounts can be paid only if the employee has reached age 59 1/2, separated
from service, died, or become disabled (within the meaning of the tax law), or
in the case of hardship (within the meaning of the tax law). Amounts permitted
to be distributed in the event of hardship are limited to actual contributions;
earnings thereon cannot be distributed on account of hardship. Amounts subject
to the withdrawal restrictions applicable to Section 403(b)(7) custodial
accounts may be subject to more stringent restrictions. (These limitations on
withdrawals do not apply to the extent we are directed to transfer some or all
of the Contract Value to the issuer of another tax-sheltered annuity or into a
Section 403(b)(7) custodial account).
PENSION AND PROFIT SHARING PLANS QUALIFIED UNDER SECTION 401(A)
In general, an employer may deduct from its taxable income premium payments it
makes under a qualified pension or profit-sharing plan described in Section
401(a) of the Code. Employees participating in the plan generally do not have to
pay tax on such contributions when made. Special requirements apply if a 401(a)
plan covers an employee classified under the Code as a "self-employed
individual" or as an "Owner-employee".
54
Annuity payments (or other payments, such as upon withdrawal, death or
surrender) generally constitute taxable income to the payee; and the payee must
pay income tax on the amount by which a payment exceeds its allocable share of
the employee's "investment in the Contract" (as defined in the Code), if any. In
general, an employee's "investment in the Contract" equals the aggregate amount
of after tax premium payments made by the employee.
Minimum distributions to the employee under an employer's pension and profit
sharing plan qualified under Section 401(a) of the Code must begin no later than
April 1 of the year following the year in which the employee reaches age 70 1/2
or, if later, retires. (In the case of an employee who is a 5-percent Owner as
defined in Code section 416, the required beginning date is April 1 of the year
following the year in which the employee reaches age 70 1/2).
CORPORATE AND SELF-EMPLOYED ("H.R. 10" AND "KEOGH") PENSION AND PROFIT-SHARING
PLANS
The Self-Employed Individuals' Tax Retirement Act of 1962, as amended, commonly
referred to as "H.R. 10" or "Keogh", permits self-employed individuals to
establish tax-favored retirement plans for themselves and their employees. Such
retirement plans may permit the purchase of annuity contracts in order to
provide benefits under the plans. The Contract provides death benefit options
that in certain circumstances may exceed both aggregate Purchase Payments and
Contract Value. It is possible that the presence of the death benefit could
result in currently taxable income to the participant under the incidental death
benefit rules. There also are limits on the amount of incidental benefits that
may be provided under pension and profit sharing plans. If the Contract is
issued with a death benefit or an optional benefit Rider, such as an Accumulated
Value Enhancement or Guaranteed Retirement Income Benefit, the presence of these
benefits may increase the amount of any required minimum distributions that must
be made. Employers intending to use the Contract in connection with such plans
should seek independent advice.
DEFERRED COMPENSATION PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT
ORGANIZATIONS
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current taxes. The employees must be participants in an eligible deferred
compensation plan. Generally, a Contract purchased by a state or local
government or a tax-exempt organization will not be treated as an annuity
contract for Federal income tax purposes.
A Section 457 plan must satisfy several conditions, including the following:
- - it must not permit distributions prior to your separation from service
(except in the case of an unforeseen emergency); and
- - all compensation deferred under the plan must remain solely the employer's
property, subject to the claims of the employer's creditors.
When we make payments under your Contract, the payment is taxed as ordinary
income. Minimum distributions under a Section 457 plan must begin no later than
April 1 of the year following the year in which the employee reaches age 70 1/2
or, if later, retires.
55
APPENDIX U: Accumulation Unit Value Tables
The following table provides information about Variable Investment Options
available under the Contracts described in this Prospectus. We present this
information in columns that compare the value of various classes of Accumulation
Units for each Variable Investment Option during the periods shown.
We use Accumulation Units to measure the value of your investment in a
particular Variable Investment Option. Each Accumulation Unit reflects the value
of underlying shares of a particular Fund (including dividends and distributions
made by that Fund), as well as the charges we deduct on a daily basis for
Separate Account Annual Expenses. (See the Fee Tables section of the Prospectus
for additional information on these charges).
The table contains information on different classes of Accumulation Units
because we deduct different levels of daily charges. In particular, the table
shows Accumulation Units reflecting the daily charges for:
- - Patriot Contracts with Initial Purchase of less that $250,000;
- - Patriot Contracts with Initial Purchase of $250,000, or more;
- - Declaration Contracts with Initial Purchase of less that $250,000;
- - Declaration Contracts with Initial Purchase of $250,000, or more;
- - Revolution Access Contracts with Initial Purchase of less that $250,000;
- - Revolution Access Contracts with Initial Purchase of $250,000, or more;
- - Revolution Extra Contracts with Initial Purchase of less that $250,000;
- - Revolution Extra Contracts with Initial Purchase of $250,000, or more;
- - Revolution Value Contracts with Initial Purchase of less that $250,000;
- - Revolution Value Contracts with Initial Purchase of $250,000, or more.
56
JOHN HANCOCK VARIABLE ACCOUNT JF
ACCUMULATION UNIT VALUES
REVOLUTION VALUE VARIABLE ANNUITY, REVOLUTION ACCESS VARIABLE ANNUITY,
REVOLUTION EXTRA VARIABLE ANNUITY
AND
DECLARATION VARIABLE ANNUITY AND PATRIOT VARIABLE ANNUITY
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
500 INDEX TRUST B - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year $ 18.70 -- -- -- -- -- -- -- -- --
Value at End of Year 19.32 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 1,911,056 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 236,963 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 609,115 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 10.08 -- -- -- -- -- -- -- -- --
Value at End of Year 10.45 -- -- -- -- -- -- -- -- --
No. of Units 4,262 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 9.93 -- -- -- -- -- -- -- -- --
Value at End of Year 10.27 -- -- -- -- -- -- -- -- --
No. of Units 39,274 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 15.61 -- -- -- -- -- -- -- -- --
Value at End of Year 16.17 -- -- -- -- -- -- -- -- --
No. of Units 75,382 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 18.70 -- -- -- -- -- -- -- -- --
Value at End of Year 19.32 -- -- -- -- -- -- -- -- --
No. of Units 197,318 -- -- -- -- -- -- -- -- --
ACTIVE BOND FUND (MERGED INTO ACTIVE BOND TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-01-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 11.57 11.00 10.39 10.00 -- -- -- -- --
Value at End of Year -- 11.97 11.57 11.00 10.39 -- -- -- -- --
Rev Value No. of Units -- 1,549,579 1,767,167 1,018,456 1,154,989 -- -- -- -- --
Rev. Access No. of Units -- 152,483 172,975 191,092 1,154,989 -- -- -- -- --
Rev. Extra No. of Units -- 508,142 561,305 391,520 1,154,989 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 14.78 14.02 13.20 10.00 -- -- -- -- --
Value at End of Year -- 15.33 14.78 14.02 13.20 -- -- -- -- --
No. of Units -- 13,113 24,515 24,867 12,777 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 11.57 11.00 10.39 10.00 -- -- -- -- --
Value at End of Year -- 11.97 11.57 11.00 10.39 -- -- -- -- --
No. of Units -- 55,188 65,067 22,897 22,387 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 14.78 14.02 13.20 10.00 -- -- -- -- --
Value at End of Year -- 15.33 14.78 14.02 13.20 -- -- -- -- --
No. of Units -- 31,793 36,530 8,785 9,232 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
U-2
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Value at Start of Year -- 11.57 11.00 10.39 10.00 -- -- -- -- --
Value at End of Year -- 11.97 11.57 11.00 10.39 -- -- -- -- --
No. of Units -- 534,099 670,444 400,122 341,607 -- -- -- -- --
U-3
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
ACTIVE BOND TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year $ 11.97 -- -- -- -- -- -- -- -- --
Value at End of Year 12.13 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 1,299,356 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 156,946 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 433,037 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 15.33 -- -- -- -- -- -- -- -- --
Value at End of Year 15.57 -- -- -- -- -- -- -- -- --
No. of Units 12,777 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 11.97 -- -- -- -- -- -- -- -- --
Value at End of Year 12.13 -- -- -- -- -- -- -- -- --
No. of Units 50,914 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 15.33 -- -- -- -- -- -- -- -- --
Value at End of Year 15.57 -- -- -- -- -- -- -- -- --
No. of Units 35,544 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 11.97 -- -- -- -- -- -- -- -- --
Value at End of Year 12.13 -- -- -- -- -- -- -- -- --
No. of Units 375,146 -- -- -- -- -- -- -- -- --
AIM V. I. CAPITAL DEVELOPMENT FUND (SHARES MERGED INTO MID CAP INDEX TRUST EFF 4-29-05)SERIES II CLASS SHARES (units first
credited 5-01-2002)
Contracts with no Optional Benefits
Value at Start of Year -- 9.93 7.45 10.00 -- -- -- -- -- --
Value at End of Year -- 11.31 9.93 7.45 -- -- -- -- -- --
Rev Value No. of Units -- 45,281 37,054 11,177 -- -- -- -- -- --
Rev. Access No. of Units -- 1,080 6,387 2,620 -- -- -- -- -- --
Rev. Extra No. of Units -- 4,632 4,066 -- -- -- -- -- -- --
AIM V. I. PREMIER EQUITY FUND (SHARES MERGED INTO 500 INDEX TRUST B EFF 4-29-05)SERIES I CLASS SHARES (units first credited
8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 7.29 5.90 8.57 9.92 11.77 10.00 -- -- --
Value at End of Year -- 7.62 7.29 5.90 8.57 9.92 11.77 -- -- --
Rev Value No. of Units -- 1,894,411 2,169,567 1,779,003 3,090,645 2,548,369 302,772 -- -- --
Rev. Access No. of Units -- 227,332 268,348 230,661 3,090,645 2,548,369 302,772 -- -- --
Rev. Extra No. of Units -- 675,995 791,576 646,051 3,090,645 2,548,369 302,772 -- -- --
BLUE CHIP GROWTH TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 7.41 -- -- -- -- -- -- -- -- --
Value at End of Year 7.82 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 1,324,980 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 121,357 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 445,212 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 7.52 -- -- -- -- -- -- -- -- --
Value at End of Year 35.40 -- -- -- -- -- -- -- -- --
No. of Units 3,877 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
U-4
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Value at Start of Year 7.41 -- -- -- -- -- -- -- -- --
Value at End of Year 7.82 -- -- -- -- -- -- -- -- --
No. of Units 53,262 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 7.52 -- -- -- -- -- -- -- -- --
Value at End of Year 35.40 -- -- -- -- -- -- -- -- --
No. of Units 9,370 -- -- -- -- -- -- -- -- --
U-5
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year $ 7.41 -- -- -- -- -- -- -- -- --
Value at End of Year 7.82 -- -- -- -- -- -- -- -- --
No. of Units 127,019 -- -- -- -- -- -- -- -- --
BOND INDEX FUND (REPLACED BY BOND INDEX TRUST B EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 12.57 12.28 11.31 10.63 9.63 9.65 -- -- --
Value at End of Year -- 12.91 12.57 12.28 11.31 10.63 9.63 -- -- --
Rev Value No. of Units -- 731,490 911,341 737,019 833,929 327,502 47,232 -- -- --
Rev. Access No. of Units -- 78,974 105,438 145,149 833,929 327,502 47,232 -- -- --
Rev. Extra No. of Units -- 176,431 215,193 232,070 833,929 327,502 47,232 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 12.74 12.42 11.41 10.66 9.66 10.00 -- -- --
Value at End of Year -- 13.12 12.74 12.42 11.41 10.66 9.66 -- -- --
No. of Units -- 9,826 9,826 9,826 9,826 9,826 9,826 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 12.58 12.29 11.32 10.64 9.63 10.00 -- -- --
Value at End of Year -- 12.92 12.58 12.29 11.32 10.64 9.63 -- -- --
No. of Units -- 7,901 9,232 18,388 14,281 19,106 22,733 -- -- --
BOND INDEX TRUST B - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 12.91 -- -- -- -- -- -- -- -- --
Value at End of Year 13.06 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 618,333 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 59,493 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 168,737 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 13.12 -- -- -- -- -- -- -- -- --
Value at End of Year 13.30 -- -- -- -- -- -- -- -- --
No. of Units 9,826 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 12.92 -- -- -- -- -- -- -- -- --
Value at End of Year 13.07 -- -- -- -- -- -- -- -- --
No. of Units 7,696 -- -- -- -- -- -- -- -- --
EARNINGS GROWTH FUND (REPLACED BY LARGE CAP GROWTH TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 3.65 2.96 4.43 7.11 10.00 -- -- -- --
Value at End of Year -- 3.70 3.65 2.96 4.43 7.11 -- -- -- --
Rev Value No. of Units -- 1,068,977 1,209,120 1,222,455 1,636,323 629,910 -- -- -- --
Rev. Access No. of Units -- 118,540 129,095 154,964 1,636,323 629,910 -- -- -- --
Rev. Extra No. of Units -- 174,391 227,056 239,167 1,636,323 629,910 -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 7.19 5.82 8.69 13.92 21.92 10.00 -- -- --
Value at End of Year -- 7.31 7.19 5.82 8.69 13.92 21.92 -- -- --
No. of Units -- 7,532 20,004 20,872 14,866 20,511 27,163 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 7.10 5.76 8.63 13.85 21.87 10.00 -- -- --
Value at End of Year -- 7.20 7.10 5.76 8.63 13.85 21.87 -- -- --
No. of Units -- 78,767 90,017 98,370 112,159 154,934 143,380 -- -- --
U-6
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
EQUITY INDEX FUND (REPLACED BY 500 INDEX TRUST B EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 17.10 13.49 17.58 20.22 22.54 10.00 -- -- --
Value at End of Year -- 18.70 17.10 13.49 17.58 20.22 22.54 -- -- --
Rev Value No. of Units -- 651,999 728,312 673,856 804,600 507,320 76,098 -- -- --
Rev. Access No. of Units -- 85,101 85,894 86,077 804,600 507,320 76,098 -- -- --
Rev. Extra No. of Units -- 171,065 164,996 154,223 804,600 507,320 76,098 -- -- --
U-7
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- $ 9.20 $ 7.23 $ 9.41 $ 10.79 $ 12.00 $ 10.00 -- -- --
Value at End of Year -- 10.08 9.20 7.23 9.41 10.79 12.00 -- -- --
No. of Units -- 4,262 75,959 75,959 79,909 79,917 61,962 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 9.08 7.16 9.33 10.74 11.97 10.00 -- -- --
Value at End of Year -- 9.93 9.08 7.16 9.33 10.74 11.97 -- -- --
No. of Units -- 47,638 51,022 60,758 84,207 115,506 110,398 -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 14.24 11.20 14.56 10.00 -- -- -- -- --
Value at End of Year -- 15.61 14.24 11.20 14.56 -- -- -- -- --
No. of Units -- 78,336 52,830 59,634 75,420 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 17.10 13.49 17.58 10.00 -- -- -- -- --
Value at End of Year -- 18.70 17.10 13.49 17.58 -- -- -- -- --
No. of Units -- 279,282 352,181 366,608 447,352 -- -- -- -- --
EQUITY-INCOME TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 13.72 -- -- -- -- -- -- -- -- --
Value at End of Year 14.09 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 1,650,936 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 186,140 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 525,745 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 13.93 -- -- -- -- -- -- -- -- --
Value at End of Year 22.34 -- -- -- -- -- -- -- -- --
No. of Units 14,210 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 13.72 -- -- -- -- -- -- -- -- --
Value at End of Year 14.09 -- -- -- -- -- -- -- -- --
No. of Units 48,062 -- -- -- -- -- -- -- -- --
FIDELITY VIP CONTRAFUND (MERGED INTO TOTAL STOCK MARKET INDEX TRUST EFF 4-29-05) - SERVICE CLASS SHARES (units first credited
8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year 11.95 10.49 8.28 9.25 10.69 11.61 10.00 -- -- --
Value at End of Year 11.56 11.95 10.49 8.28 9.25 10.69 11.61 -- -- --
Rev Value No. of Units 23,349 1,199,675 1,230,521 1,168,106 1,645,859 1,447,471 237,990 -- -- --
Rev. Access No. of Units -- 157,444 179,239 202,789 1,645,859 1,447,471 237,990 -- -- --
Rev. Extra No. of Units 4,280 371,068 386,807 377,519 1,645,859 1,447,471 237,990 -- -- --
FIDELITY VIP GROWTH (MERGED INTO 500 INDEX B EFF 4-29-05) - SERVICE CLASS SHARES (units first credited 8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year 7.92 7.76 5.92 8.59 10.57 12.04 10.00 -- -- --
Value at End of Year 7.37 7.92 7.76 5.92 8.59 10.57 12.04 -- -- --
Rev Value No. of Units 28,952 1,424,488 1,601,890 133,140 2,501,361 1,875,307 205,097 -- -- --
Rev. Access No. of Units 878 157,843 203,487 198,959 2,501,361 1,875,307 205,097 -- -- --
Rev. Extra No. of Units 2,761 400,455 480,716 507,521 2,501,361 1,875,307 205,097 -- -- --
FIDELITY VIP OVERSEAS (MERGED INTO INTERNATIONAL EQUITY INDEX TRUST B EFF 4-29-05 - SERVICE CLASS SHARES (units first credited
8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year 9.66 8.62 6.10 7.73 9.97 12.48 10.00 -- -- --
Value at End of Year 9.14 9.66 8.62 6.10 7.73 9.97 12.48 -- -- --
U-8
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Rev Value No. of Units 18,129 470,234 501,964 523,589 960,931 1,107,608 30,517 -- -- --
Rev. Access No. of Units -- 108,986 126,285 143,079 960,931 1,107,608 30,517 -- -- --
Rev. Extra No. of Units 631 165,213 170,854 193,599 960,931 1,107,608 30,517 -- -- --
FINANCIAL INDUSTRIES FUND (REPLACED BY FINANCIAL SERVICES TRUST EFF 4-29-05) - NAV SHARES (units first credited 4-30-1997)
Contracts with no Optional Benefits
Value at Start of Year -- 14.43 11.60 14.58 17.90 14.25 10.00 -- -- --
Value at End of Year -- 15.49 14.43 11.60 14.58 17.90 14.25 -- -- --
Rev Value No. of Units -- 418,976 488,871 542,851 855,100 642,376 113,876 -- -- --
Rev. Access No. of Units -- 18,431 21,825 49,964 855,100 642,376 113,876 -- -- --
Rev. Extra No. of Units -- 126,349 132,174 145,392 855,100 642,376 113,876 -- -- --
U-9
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- $ 14.67 $ 11.76 $ 14.75 $ 18.06 $ 14.35 $ 14.42 $ 13.41 $ 10.00 --
Value at End of Year -- 15.79 14.67 11.76 14.75 18.06 14.35 14.42 13.41 --
No. of Units -- 5,074 7,562 10,776 15,026 13,558 17,470 149,851 73,106 --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 14.43 11.60 14.58 17.90 14.25 14.36 13.39 10.00 --
Value at End of Year -- 15.49 14.43 11.60 14.58 17.90 14.25 14.36 13.39 --
No. of Units -- 22,357 24,757 29,786 44,296 59,272 59,300 1,826,652 645,730 --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 14.67 11.76 14.74 18.06 14.35 14.42 13.41 10.00 --
Value at End of Year -- 15.79 14.67 11.76 14.74 18.06 14.35 14.42 13.41 --
No. of Units -- 91,290 88,045 95,524 155,926 115,989 93,950 149,851 73,106 --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 14.43 11.60 14.58 17.90 14.25 14.36 13.39 10.00 --
Value at End of Year -- 15.49 14.43 11.60 14.58 17.90 14.25 14.36 13.39 --
No. of Units -- 656,027 791,313 946,719 1,210,792 1,113,582 1,506,906 1,826,652 645,730 --
FINANCIAL SERVICES TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 15.49 -- -- -- -- -- -- -- -- --
Value at End of Year 16.44 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 367,963 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 12,681 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 102,683 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 15.79 -- -- -- -- -- -- -- -- --
Value at End of Year 16.80 -- -- -- -- -- -- -- -- --
No. of Units 4,460 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 15.49 -- -- -- -- -- -- -- -- --
Value at End of Year 16.44 -- -- -- -- -- -- -- -- --
No. of Units 19,140 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 15.79 -- -- -- -- -- -- -- -- --
Value at End of Year 16.80 -- -- -- -- -- -- -- -- --
No. of Units 59,620 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 15.49 -- -- -- -- -- -- -- -- --
Value at End of Year 16.44 -- -- -- -- -- -- -- -- --
No. of Units 502,999 -- -- -- -- -- -- -- -- --
FUNDAMENTAL GROWTH FUND (MERGED INTO "LARGE CAP GROWTH" EFF 11-1-04) - NAV SHARES (units first credited 11-15-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 8.84 6.79 9.86 14.74 15.39 10.00 -- -- --
Value at End of Year -- 8.43 8.84 6.79 9.86 14.74 15.39 -- -- --
Rev Value No. of Units -- -- 328,022 337,037 589,572 525,081 38,912 -- -- --
Rev. Access No. of Units -- -- 49,535 66,283 589,572 525,081 38,912 -- -- --
Rev. Extra No. of Units -- -- 135,376 123,943 589,572 525,081 38,912 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 9.39 7.20 10.43 10.00 -- -- -- -- --
Value at End of Year -- 8.97 9.39 7.20 10.43 -- -- -- -- --
U-10
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
No. of Units -- -- 5,248 5,264 8,119 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 8.84 6.79 9.86 10.00 -- -- -- -- --
Value at End of Year -- 8.43 8.84 6.79 9.86 -- -- -- -- --
No. of Units -- -- 11,404 10,008 24,747 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 9.39 7.20 10.43 10.00 -- -- -- -- --
Value at End of Year -- 8.97 9.39 7.20 10.43 -- -- -- -- --
No. of Units -- -- 46,190 33,826 64,187 -- -- -- -- --
U-11
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- $ 8.84 $ 6.79 $ 9.86 $ 10.00 -- -- -- -- --
Value at End of Year -- 8.43 8.84 6.79 9.86 -- -- -- -- --
No. of Units -- -- 117,743 114,921 167,698 -- -- -- -- --
FUNDAMENTAL VALUE FUND (REPLACED BY EQUITY INCOME TRUST EFF 4-29-05) - NAV SHARES (units first credited 11-15-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 11.12 8.75 10.73 11.68 10.43 10.00 -- -- --
Value at End of Year -- 12.70 11.12 8.75 10.73 11.68 10.43 -- -- --
Rev Value No. of Units -- 1,256,245 603,015 569,649 802,605 347,760 64,904 -- -- --
Rev. Access No. of Units -- 143,234 78,791 85,139 802,605 347,760 64,904 -- -- --
Rev. Extra No. of Units -- 371,180 210,263 177,846 802,605 347,760 64,904 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 9.76 7.66 9.37 10.00 -- -- -- -- --
Value at End of Year -- 11.17 -- -- -- -- -- -- -- --
No. of Units -- -- 50,632 50,632 50,632 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 11.12 8.75 10.73 10.00 -- -- -- -- --
Value at End of Year -- 12.70 -- -- -- -- -- -- -- --
No. of Units -- 22,289 21,714 23,612 30,710 -- -- -- -- --
FUNDAMENTAL VALUE FUND B (FORMERLY "LARGE CAP VALUE CORE SM") (MERGED INTO FUNDAMENTAL VALUE FUND EFF 11-01-04 - NAV SHARES (units
first credited 8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 10.35 8.13 10.07 10.71 10.31 10.00 -- -- --
Value at End of Year -- 11.08 10.35 8.13 10.07 10.71 10.31 -- -- --
Rev Value No. of Units -- -- 816,510 826,588 1,056,790 520,128 92,493 -- -- --
Rev. Access No. of Units -- -- 71,994 80,764 1,056,790 520,128 92,493 -- -- --
Rev. Extra No. of Units -- -- 204,107 195,857 1,056,790 520,128 92,493 -- -- --
GLOBAL BOND TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 15.13 -- -- -- -- -- -- -- -- --
Value at End of Year 13.86 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 137,434 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 26,043 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 67,446 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 15.26 -- -- -- -- -- -- -- -- --
Value at End of Year 13.86 -- -- -- -- -- -- -- -- --
No. of Units 5,725 -- -- -- -- -- -- -- -- --
GLOBAL BOND FUND (REPLACED BY GLOBAL BOND TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 13.85 12.10 10.31 10.60 10.00 -- -- -- --
Value at End of Year -- 15.13 13.85 12.10 10.31 10.60 -- -- -- --
Rev Value No. of Units -- 150,408 180,511 141,303 71,857 -- -- -- -- --
Rev. Access No. of Units -- 31,596 32,488 28,155 71,857 -- -- -- -- --
Rev. Extra No. of Units -- 76,355 87,529 39,131 71,857 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 13.96 12.20 10.39 10.68 9.65 10.00 -- -- --
Value at End of Year -- 15.26 13.96 12.20 10.39 10.68 9.65 -- -- --
No. of Units -- 9,431 9,647 11,396 5,140 8,203 8,837 -- -- --
GROWTH & INCOME FUND (MERGED INTO GROWTH & INCOME TRUST II EFF 4-29-05) - NAV SHARES (units first credited 11-15-2001)
U-12
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Contracts with no Optional Benefits
Value at Start of Year -- 6.95 5.66 7.36 8.82 10.00 -- -- -- --
Value at End of Year -- 7.61 6.95 5.66 7.36 8.82 -- -- -- --
Rev Value No. of Units -- 2,011,770 2,127,364 1,293,111 1,817,947 12,749 -- -- -- --
Rev. Access No. of Units -- 149,584 160,565 126,954 1,817,947 12,749 -- -- -- --
Rev. Extra No. of Units -- 747,950 802,120 416,961 1,817,947 12,749 -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 12.30 9.99 12.97 10.00 -- -- -- -- --
Value at End of Year -- 13.52 12.30 9.99 12.97 -- -- -- -- --
No. of Units -- 15,633 16,765 11,472 17,169 -- -- -- -- --
U-13
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- $ 6.95 $ 5.66 $ 7.36 $ 10.00 -- -- -- -- --
Value at End of Year -- 7.61 6.95 5.66 7.36 -- -- -- -- --
No. of Units -- 283,703 306,082 182,202 225,112 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 12.30 9.99 12.97 10.00 -- -- -- -- --
Value at End of Year -- 13.52 12.30 9.99 12.97 -- -- -- -- --
No. of Units -- 54,413 145,833 26,987 92,665 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 6.95 5.66 7.36 10.00 -- -- -- -- --
Value at End of Year -- 7.61 6.95 5.66 7.36 -- -- -- -- --
No. of Units -- 2,038,882 2,463,202 1,034,165 1,326,556 -- -- -- -- --
GROWTH AND INCOME TRUST (FORMERLY, GROWTH & INCOME TRUST II) - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 7.61 -- -- -- -- -- -- -- -- --
Value at End of Year 8.19 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 1,762,597 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 142,242 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 682,260 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 13.52 -- -- -- -- -- -- -- -- --
Value at End of Year 14.58 -- -- -- -- -- -- -- -- --
No. of Units 14,829 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 7.61 -- -- -- -- -- -- -- -- --
Value at End of Year 8.19 -- -- -- -- -- -- -- -- --
No. of Units 254,401 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 13.52 -- -- -- -- -- -- -- -- --
Value at End of Year 14.58 -- -- -- -- -- -- -- -- --
No. of Units 54,549 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 7.61 -- -- -- -- -- -- -- -- --
Value at End of Year 8.19 -- -- -- -- -- -- -- -- --
No. of Units 1,515,204 -- -- -- -- -- -- -- -- --
HEALTH SCIENCES TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 10.98 -- -- -- -- -- -- -- -- --
Value at End of Year 12.75 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 130,066 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 4,983 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 68,732 -- -- -- -- -- -- -- -- --
HEALTH SCIENCES FUND (REPLACED BY HEALTH SCIENCES TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-01-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 10.00 7.69 9.73 10.00 -- -- -- -- --
Value at End of Year -- 10.98 10.00 7.69 9.73 -- -- -- -- --
Rev Value No. of Units -- 127,989 138,303 129,645 100,786 -- -- -- -- --
Rev. Access No. of Units -- 13,508 15,522 15,340 100,786 -- -- -- -- --
Rev. Extra No. of Units -- 65,016 60,627 33,411 100,786 -- -- -- -- --
U-14
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
HIGH YIELD TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 10.57 -- -- -- -- -- -- -- -- --
Value at End of Year 10.84 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 466,579 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 77,829 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 211,533 -- -- -- -- -- -- -- -- --
U-15
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year $ 10.66 -- -- -- -- -- -- -- -- --
Value at End of Year 10.84 -- -- -- -- -- -- -- -- --
No. of Units 4,281 -- -- -- -- -- -- -- -- --
HIGH YIELD BOND FUND (REPLACED BY HIGH YIELD TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year 10.57 9.90 8.60 9.12 9.04 10.27 10.00 -- -- --
Value at End of Year 10.25 10.57 9.90 8.60 9.12 9.04 10.27 -- -- --
Rev Value No. of Units 5,308 551,124 626,689 477,166 644,021 333,028 48,898 -- -- --
Rev. Access No. of Units -- 89,295 97,589 77,833 644,021 333,028 48,898 -- -- --
Rev. Extra No. of Units 855 238,160 234,126 149,911 644,021 333,028 48,898 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 10.10 8.76 9.26 9.16 10.38 10.00 -- -- --
Value at End of Year -- 10.82 10.10 8.76 9.26 9.16 10.38 -- -- --
No. of Units -- -- 6,229 2,466 2,470 2,473 2,423 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 9.98 8.67 9.19 9.11 10.35 10.00 -- -- --
Value at End of Year -- 10.66 9.98 8.67 9.19 9.11 10.35 -- -- --
No. of Units -- 5,093 6,395 11,108 9,657 10,644 11,541 -- -- --
INTERNATIONAL EQUITY INDEX FUND (REPLACED BY INTERNATIONAL EQUITY INDEX TRUST B EFF 4-29-05) - NAV SHARES (units first credited
5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 9.49 6.77 10.00 -- -- -- -- -- --
Value at End of Year -- 11.27 9.49 6.77 -- -- -- -- -- --
Rev Value No. of Units -- 211,686 206,714 9,558 -- -- -- -- -- --
Rev. Access No. of Units -- 34,893 31,853 906 -- -- -- -- -- --
Rev. Extra No. of Units -- 100,560 101,328 4,383 -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 9.61 6.84 8.14 10.32 12.62 10.00 -- -- --
Value at End of Year -- 11.44 9.61 6.84 8.14 10.32 12.62 -- -- --
No. of Units -- 8,050 8,075 8,099 8,123 8,148 -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 9.49 6.77 8.08 10.27 12.59 10.00 -- -- --
Value at End of Year -- 11.27 9.49 6.77 8.08 10.27 12.59 -- -- --
No. of Units -- 10,689 10,664 13,070 14,510 19,558 18,759 -- -- --
INTERNATIONAL EQUITY INDEX TRUST B - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 11.29 -- -- -- -- -- -- -- -- --
Value at End of Year 13.01 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 695,650 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 128,613 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 257,269 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 11.44 -- -- -- -- -- -- -- -- --
Value at End of Year 13.24 -- -- -- -- -- -- -- -- --
No. of Units 8,026 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 9.49 -- -- -- -- -- -- -- -- --
Value at End of Year 13.01 -- -- -- -- -- -- -- -- --
No. of Units 9,943 -- -- -- -- -- -- -- -- --
U-16
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
JANUS ASPEN GLOBAL TECHNOLOGY (MERGED INTO TOTAL STOCK MARKET INDEX TRUST EFF 4-29-05)SERVICE CLASS SHARES (units first credited
5-01-2003)
Contracts with no Optional Benefits
Value at Start of Year -- 13.67 10.04 -- -- -- -- -- -- --
Value at End of Year -- 13.58 13.67 -- -- -- -- -- -- --
Rev Value No. of Units -- 10,639 18,973 -- -- -- -- -- -- --
Rev. Access No. of Units -- 1,095 1,101 -- -- -- -- -- -- --
Rev. Extra No. of Units -- 4,092 2,704 -- -- -- -- -- -- --
U-17
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
JANUS ASPEN WORLDWIDE GROWTH (MERGED INTO INTERNATIONAL EQUITY INDEX TRUST B EFF 4-29-05)SERVICE CLASS SHARES (units first
credited 11-01-2000)
Contracts with no Optional Benefits
Value at Start of Year -- $ 6.19 $ 5.07 $ 6.90 $ 9.04 $ 10.00 -- -- -- --
Value at End of Year -- 6.39 6.19 5.07 6.90 9.04 -- -- -- --
Rev Value No. of Units -- 178,127 214,502 229,005 322,018 128,709 -- -- -- --
Rev. Access No. of Units -- 35,764 47,215 42,016 322,018 128,709 -- -- -- --
Rev. Extra No. of Units -- 52,533 53,367 51,239 322,018 128,709 -- -- -- --
LARGE CAP GROWTH TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 3.70 -- -- -- -- -- -- -- -- --
Value at End of Year 3.71 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 975,667 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 100,095 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 159,332 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 7.31 -- -- -- -- -- -- -- -- --
Value at End of Year 11.77 -- -- -- -- -- -- -- -- --
No. of Units 4,708 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 3.70 -- -- -- -- -- -- -- -- --
Value at End of Year 3.71 -- -- -- -- -- -- -- -- --
No. of Units 118,078 -- -- -- -- -- -- -- -- --
LARGE CAP GROWTH FUND (REPLACED BY BLUE CHIP GROWTH TRUST EFF 4-29-05) - NAV SHARES (units first credited 3-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 7.19 5.79 8.13 10.00 -- -- -- -- --
Value at End of Year -- 7.41 7.19 5.79 8.13 -- -- -- -- --
Rev Value No. of Units -- 1,439,838 540,715 167,749 77,662 -- -- -- -- --
Rev. Access No. of Units -- 146,532 49,259 10,413 77,662 -- -- -- -- --
Rev. Extra No. of Units -- 489,849 128,549 20,683 77,662 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 7.28 5.85 8.19 10.03 12.34 10.00 -- -- --
Value at End of Year -- 7.52 7.28 5.85 8.19 10.03 12.34 -- -- --
No. of Units -- 17,276 12,579 13,586 48,418 49,959 38,907 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 7.19 5.79 8.13 9.98 12.31 10.00 -- -- --
Value at End of Year -- 7.41 7.19 5.79 8.13 9.98 12.31 -- -- --
No. of Units -- 59,258 50,560 53,908 74,845 86,341 72,822 -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 6.97 -- -- -- -- -- -- -- --
Value at End of Year -- 7.52 -- -- -- -- -- -- -- --
No. of Units -- 34,293 -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 6.87 -- -- -- -- -- -- -- --
Value at End of Year -- 7.41 -- -- -- -- -- -- -- --
No. of Units -- 142,526 -- -- -- -- -- -- -- --
LARGE CAP GROWTH FUND B (FORMERLY LARGE CAP AGGRESSIVE GROWTH FUND) (MERGED INTO LARGE CAP GROWTH FUND EFF. 11-1-04) - NAV SHARES
(units first credited 8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 7.13 5.48 8.09 9.60 11.97 10.00 -- -- --
Value at End of Year -- 6.81 7.13 5.48 8.09 9.60 11.97 -- -- --
U-18
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Rev Value No. of Units -- -- 609,843 681,954 1,205,414 1,040,129 178,388 -- -- --
Rev. Access No. of Units -- -- 45,760 78,966 1,205,414 1,040,129 178,388 -- -- --
Rev. Extra No. of Units -- -- 294,010 322,673 1,205,414 1,040,129 178,388 -- -- --
LARGE CAP VALUE FUND (REPLACED BY EQUITY INCOME TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 12.08 9.75 11.38 10.00 -- -- -- -- --
Value at End of Year -- 13.72 12.08 9.75 11.38 -- -- -- -- --
Rev Value No. of Units -- 619,096 601,394 483,868 334,667 -- -- -- -- --
Rev. Access No. of Units -- 94,674 91,386 50,708 334,667 -- -- -- -- --
Rev. Extra No. of Units -- 209,987 155,358 97,450 334,667 -- -- -- -- --
U-19
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- $ 12.23 $ 9.84 $ 11.46 $ 11.44 $ 10.22 $ 10.00 -- -- --
Value at End of Year -- 13.93 12.23 9.84 11.46 11.44 10.22 -- -- --
No. of Units -- 22,174 54,141 54,818 47,784 47,784 36,375 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 12.08 9.75 11.38 11.38 10.20 10.00 -- -- --
Value at End of Year -- 13.72 12.08 9.75 11.38 11.38 10.20 -- -- --
No. of Units -- 35,552 40,103 45,084 69,954 80,984 101,992 -- -- --
MANAGED FUND (MERGED INTO MANAGED TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 9.41 8.00 9.34 9.73 10.00 -- -- -- --
Value at End of Year -- 10.05 9.41 8.00 9.34 9.73 -- -- -- --
Rev Value No. of Units -- 1,168,263 1,277,365 1,159,355 868,814 89 -- -- -- --
Rev. Access No. of Units -- 65,821 73,227 80,473 868,814 89 -- -- -- --
Rev. Extra No. of Units -- 166,993 185,973 154,757 868,814 89 -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 10.31 8.77 10.24 10.67 10.80 10.00 -- -- --
Value at End of Year -- 11.02 10.31 8.77 10.24 10.67 10.80 -- -- --
No. of Units -- 16,131 17,668 19,124 20,975 26,890 25,357 -- -- --
MANAGED TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 10.05 -- -- -- -- -- -- -- -- --
Value at End of Year 10.19 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 1,037,978 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 61,630 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 163,956 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 11.02 -- -- -- -- -- -- -- -- --
Value at End of Year 11.17 -- -- -- -- -- -- -- -- --
No. of Units 14,098 -- -- -- -- -- -- -- -- --
MFS INVESTORS GROWTH STOCK FUND (MERGED INTO 500 INDEX TRUST EFF 4-29-05) - INITIAL CLASS SHARES (units first credited 8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 7.46 6.14 8.58 11.45 12.36 10.00 -- -- --
Value at End of Year -- 8.05 7.46 6.14 8.58 11.45 12.36 -- -- --
Rev Value No. of Units -- 641,118 715,159 723,032 1,280,675 971,077 158,192 -- -- --
Rev. Access No. of Units -- 121,589 132,909 146,522 1,280,675 971,077 158,192 -- -- --
Rev. Extra No. of Units -- 253,985 281,892 331,636 1,280,675 971,077 158,192 -- -- --
MFS NEW DISCOVERY FUND (MERGED INTO SMALL CAP INDEX TRUST EFF 4-29-05) - INITIAL CLASS SHARES (units first credited 5-01-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 12.35 9.35 13.85 14.77 15.26 10.00 -- -- --
Value at End of Year -- 12.99 12.35 9.35 13.85 14.77 15.26 -- -- --
Rev Value No. of Units -- 225,250 256,805 277,963 533,377 431 36,557 -- -- --
Rev. Access No. of Units -- 57,556 76,297 83,268 533,377 431,090 36,557 -- -- --
Rev. Extra No. of Units -- 103,634 117,145 144,140 533,377 431,090 36,557 -- -- --
MFS RESEARCH FUND (SHARES MERGED INTO TOTAL STOCK MARKET INDEX TRUST EFF 4-29-05) - INITIAL CLASS SHARES (units first credited
8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 7.95 6.46 8.67 11.14 11.86 10.00 -- -- --
Value at End of Year -- 9.10 7.95 6.46 8.67 11.14 11.86 -- -- --
Rev Value No. of Units -- 517,686 578,045 621,468 970,571 672,010 73,452 -- -- --
U-20
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Rev. Access No. of Units -- 38,062 49,422 68,797 970,571 672,010 73,452 -- -- --
Rev. Extra No. of Units -- 160,507 183,241 177,806 970,571 672,010 73,452 -- -- --
MID CAP GROWTH FUND (REPLACED BY MID CAP STOCK TRUST EFF 4-29-05) - NAV SHARES (units first credited 8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 23.49 16.19 20.79 20.47 18.98 18.07 -- -- --
Value at End of Year -- 25.90 23.49 16.19 20.79 20.47 18.98 -- -- --
Rev Value No. of Units -- 210,494 228,854 200,020 242,085 136,439 14,779 -- -- --
Rev. Access No. of Units -- 28,188 29,359 29,475 242,085 136,439 14,779 -- -- --
Rev. Extra No. of Units -- 65,986 67,961 57,788 242,085 136,439 14,779 -- -- --
U-21
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
MID CAP INDEX TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year $ 11.31 -- -- -- -- -- -- -- -- --
Value at End of Year 12.15 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 52,742 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 11,718 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 6,834 -- -- -- -- -- -- -- -- --
MID CAP STOCK TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 25.90 -- -- -- -- -- -- -- -- --
Value at End of Year 30.14 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 207,932 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 25,048 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 63,351 -- -- -- -- -- -- -- -- --
MID CAP VALUE FUND (MERGED INTO MID CAP VALUE B FUND EFF. 11-01-04) - NAV SHARES (units first credited 5-01-2003)
Contracts with no Optional Benefits
Value at Start of Year -- 13.56 10.00 -- -- -- -- -- -- --
Value at End of Year -- 14.77 13.56 -- -- -- -- -- -- --
Rev Value No. of Units -- -- 27,470 -- -- -- -- -- -- --
Rev. Access No. of Units -- -- 8,029 -- -- -- -- -- -- --
Rev. Extra No. of Units -- -- 32,051 -- -- -- -- -- -- --
MID CAP VALUE B FUND (FORMERLY, SMALL MIDCAP CORE FUND) (MERGED INTO MID VALUE TRUST EFF 4-29-05) - NAV SHARES (units first
credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 15.68 10.94 13.06 13.16 12.73 11.00 -- -- --
Value at End of Year -- 18.39 15.68 10.94 13.06 13.16 12.73 -- -- --
Rev Value No. of Units -- 293,358 231,918 215,620 220,092 114,891 9,532 -- -- --
Rev. Access No. of Units -- 54,371 39,919 41,956 220,092 114,891 9,532 -- -- --
Rev. Extra No. of Units -- 128,593 70,945 67,848 220,092 114,891 9,532 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 14.91 10.38 12.36 12.42 11.99 10.00 -- -- --
Value at End of Year -- 17.53 14.91 10.38 12.36 12.42 11.99 -- -- --
No. of Units -- 9,924 4,305 5,358 6,506 6,516 5,870 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 14.73 10.27 12.27 12.36 11.96 10.00 -- -- --
Value at End of Year -- 17.27 14.73 10.27 12.27 12.36 11.96 -- -- --
No. of Units -- 16,112 16,311 15,084 19,421 16,718 12,272 -- -- --
MID VALUE TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 18.39 -- -- -- -- -- -- -- -- --
Value at End of Year 19.50 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 300,424 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 39,761 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 115,752 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 17.53 -- -- -- -- -- -- -- -- --
Value at End of Year 18.64 -- -- -- -- -- -- -- -- --
No. of Units 9,229 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 17.27 -- -- -- -- -- -- -- -- --
U-22
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Value at End of Year 18.32 -- -- -- -- -- -- -- -- --
No. of Units 12,517 -- -- -- -- -- -- -- -- --
MONEY MARKET FUND (REPLACED BY MONEY MARKET TRUST B EFF 4-29-05) - NAV SHARES (units first credited 5-01-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 10.12 10.15 10.12 10.00 -- -- -- -- --
Value at End of Year -- 10.10 10.12 10.15 10.12 -- -- -- -- --
Rev Value No. of Units -- 1,589,131 2,054,260 2,479,251 4,289,180 -- -- -- -- --
Rev. Access No. of Units -- 333,841 346,239 1,018,815 4,289,180 -- -- -- -- --
Rev. Extra No. of Units -- 549,370 837,553 1,371,649 4,289,180 -- -- -- -- --
U-23
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- $ 12.16 $ 12.17 $ 12.11 $ 10.00 -- -- -- -- --
Value at End of Year -- 12.17 12.16 12.17 12.11 -- -- -- -- --
No. of Units -- 65,316 83,691 86,772 92,991 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 10.12 10.15 10.12 10.00 -- -- -- -- --
Value at End of Year -- 10.10 10.12 10.15 10.12 -- -- -- -- --
No. of Units -- 63,446 62,638 67,782 53,661 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 12.16 12.17 12.11 10.00 -- -- -- -- --
Value at End of Year -- 12.17 12.16 12.17 12.11 -- -- -- -- --
No. of Units -- 17,913 23,367 28,641 20,225 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 10.12 10.15 10.12 10.00 -- -- -- -- --
Value at End of Year -- 10.10 10.12 10.15 10.12 -- -- -- -- --
No. of Units -- 288,851 412,229 552,435 457,386 -- -- -- -- --
MONEY MARKET TRUST B - NAV SHARES (units first credited 1-00-1900)
Contracts with no Optional Benefits
Value at Start of Year 10.10 -- -- -- -- -- -- -- -- --
Value at End of Year 10.27 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 1,263,530 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 246,064 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 469,050 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 12.17 -- -- -- -- -- -- -- -- --
Value at End of Year 12.40 -- -- -- -- -- -- -- -- --
No. of Units 63,596 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 10.10 -- -- -- -- -- -- -- -- --
Value at End of Year 10.27 -- -- -- -- -- -- -- -- --
No. of Units 53,013 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 12.17 -- -- -- -- -- -- -- -- --
Value at End of Year 12.40 -- -- -- -- -- -- -- -- --
No. of Units 13,773 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 10.10 -- -- -- -- -- -- -- -- --
Value at End of Year 10.27 -- -- -- -- -- -- -- -- --
No. of Units 213,156 -- -- -- -- -- -- -- -- --
OVERSEAS EQUITY FUND (MERGED INTO OVERSEAS EQUITY B FUND EFF 11-01-2004) - NAV SHARES (units first credited 8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 13.75 9.96 10.76 11.65 12.98 12.24 -- -- --
Value at End of Year -- 14.08 13.75 9.96 10.76 11.65 12.98 -- -- --
Rev Value No. of Units -- -- 201,570 174,540 128,318 63,735 5,361 -- -- --
Rev. Access No. of Units -- -- 35,964 24,431 128,318 63,735 5,361 -- -- --
Rev. Extra No. of Units -- -- 41,367 28,672 128,318 63,735 5,361 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 10.76 7.79 8.42 9.12 10.16 10.00 -- -- --
Value at End of Year -- 11.01 10.76 7.79 8.42 9.12 10.16 -- -- --
U-24
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
No. of Units -- -- 6,486 4,448 4,508 5,357 6,608 -- -- --
OVERSEAS EQUITY B FUND (MERGED INTO OVERSEAS EQUITY TRUST EFF 4-29-05) - NAV SHARES (units first credited 11-15-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 8.79 6.72 8.33 10.00 -- -- -- -- --
Value at End of Year -- 9.64 8.79 6.72 8.33 -- -- -- -- --
Rev Value No. of Units -- 694,057 301,848 190,914 20,457 -- -- -- -- --
Rev. Access No. of Units -- 102,357 16,942 18,535 20,457 -- -- -- -- --
Rev. Extra No. of Units -- 262,113 137,661 75,514 20,457 -- -- -- -- --
U-25
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- $ 8.90 $ 6.79 $ 8.39 $ 10.72 $ 12.94 $ 10.00 -- -- --
Value at End of Year -- 9.78 8.90 6.79 8.39 10.72 12.94 -- -- --
No. of Units -- 5,820 4,791 6,084 7,494 7,506 5,408 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 8.79 6.72 8.33 10.66 12.91 10.00 -- -- --
Value at End of Year -- 9.64 8.79 6.72 8.33 10.66 12.91 -- -- --
No. of Units -- 43,870 38,739 42,177 48,242 50,459 21,856 -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 8.90 6.79 10.00 -- -- -- -- -- --
Value at End of Year -- 9.78 8.90 6.79 -- -- -- -- -- --
No. of Units -- 9,076 7,752 7,963 -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 8.79 6.72 10.00 -- -- -- -- -- --
Value at End of Year -- 9.64 8.79 6.72 -- -- -- -- -- --
No. of Units -- 95,289 102,807 103,370 -- -- -- -- -- --
OVERSEAS EQUITY C FUND (FORMERLY "EMERGING MARKETS EQUITY" (MERGED INTO OVERSEAS EQUITY B FUND EFF 11-1-04)) - NAV SHARES (units
first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 14.06 9.07 9.85 10.00 -- -- -- -- --
Value at End of Year -- 15.37 14.06 9.07 9.85 -- -- -- -- --
Rev Value No. of Units -- -- 33,986 17,395 7,941 -- -- -- -- --
Rev. Access No. of Units -- -- 4,792 2,150 7,941 -- -- -- -- --
Rev. Extra No. of Units -- -- 20,573 7,320 7,941 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 14.06 9.07 9.85 10.35 17.48 10.00 -- -- --
Value at End of Year -- 15.37 14.06 9.07 9.85 10.35 17.48 -- -- --
No. of Units -- -- 6,003 8,809 7,313 7,636 8,609 -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- -- -- -- -- -- -- -- -- --
Value at End of Year -- -- -- -- -- -- -- -- -- --
OVERSEAS EQUITY TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 9.64 -- -- -- -- -- -- -- -- --
Value at End of Year 11.27 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 613,845 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 82,171 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 217,607 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 9.78 -- -- -- -- -- -- -- -- --
Value at End of Year 11.47 -- -- -- -- -- -- -- -- --
No. of Units 4,986 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 9.64 -- -- -- -- -- -- -- -- --
Value at End of Year 11.27 -- -- -- -- -- -- -- -- --
No. of Units 36,329 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 9.78 -- -- -- -- -- -- -- -- --
Value at End of Year 11.47 -- -- -- -- -- -- -- -- --
No. of Units 12,021 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
U-26
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Value at Start of Year 9.64 -- -- -- -- -- -- -- -- --
Value at End of Year 11.27 -- -- -- -- -- -- -- -- --
No. of Units 80,279 -- -- -- -- -- -- -- -- --
REAL ESTATE EQUITY FUND (REPLACED BY REAL ESTATE SECURITIES TRUST B EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 15.47 11.44 11.43 10.95 10.00 -- -- -- --
Value at End of Year -- 20.85 15.47 11.44 11.43 10.95 -- -- -- --
Rev Value No. of Units -- 253,425 267,781 217,276 138,332 1,766 -- -- -- --
Rev. Access No. of Units -- 31,913 48,314 48,847 138,332 1,766 -- -- -- --
Rev. Extra No. of Units -- 88,926 86,358 68,106 138,332 1,766 -- -- -- --
U-27
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- $ 17.95 $ 13.24 $ 13.20 $ 12.61 $ 9.63 $ 10.00 -- -- --
Value at End of Year -- 24.26 17.95 13.24 13.20 12.61 9.63 -- -- --
No. of Units -- 10,542 11,719 11,722 11,726 11,730 11,845 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 17.72 13.11 13.10 12.54 9.60 10.00 -- -- --
Value at End of Year -- 23.89 17.72 13.11 13.10 12.54 9.60 -- -- --
No. of Units -- 6,087 6,937 3,182 2,869 2,599 2,363 -- -- --
REAL ESTATE SECURITIES TRUST B - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 20.85 -- -- -- -- -- -- -- -- --
Value at End of Year 23.12 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 235,518 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 25,551 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 72,842 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 24.26 -- -- -- -- -- -- -- -- --
Value at End of Year 57.17 -- -- -- -- -- -- -- -- --
No. of Units 4,971 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 23.89 -- -- -- -- -- -- -- -- --
Value at End of Year 23.12 -- -- -- -- -- -- -- -- --
No. of Units 9,394 -- -- -- -- -- -- -- -- --
SHORT-TERM BOND FUND (MERGED INTO SHORT TERM BOND TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-03-1999)
Contracts with no Optional Benefits
Value at Start of Year -- 15.04 14.82 14.20 13.30 12.48 12.34 -- -- --
Value at End of Year -- 15.07 15.04 14.82 14.20 13.30 12.48 -- -- --
Rev Value No. of Units -- 765,939 884,537 621,051 440,240 126,421 15,433 -- -- --
Rev. Access No. of Units -- 98,324 118,364 132,895 440,240 126,421 15,433 -- -- --
Rev. Extra No. of Units -- 162,310 185,025 158,441 440,240 126,421 15,433 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 12.41 12.20 11.66 10.89 10.19 10.00 -- -- --
Value at End of Year -- 12.46 12.41 12.20 11.66 10.89 10.19 -- -- --
No. of Units -- -- -- -- -- -- 4,987 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 12.26 12.08 11.57 10.84 10.17 10.00 -- -- --
Value at End of Year -- 12.28 12.26 12.08 11.57 10.84 10.17 -- -- --
No. of Units -- 7,734 7,829 5,826 6,019 6,207 5,058 -- -- --
SHORT-TERM BOND TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 15.07 -- -- -- -- -- -- -- -- --
Value at End of Year 15.20 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 617,842 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 79,284 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 141,094 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 12.28 -- -- -- -- -- -- -- -- --
Value at End of Year 12.39 -- -- -- -- -- -- -- -- --
No. of Units 7,197 -- -- -- -- -- -- -- -- --
U-28
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
SMALL CAP EMERGING GROWTH FUND (MERGED INTO SMALL CAP GROWTH TRUST EFF 4-29-05) - NAV SHARES (units first credited 11-15-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 8.23 5.60 7.90 8.30 10.00 -- -- -- --
Value at End of Year -- 8.90 8.23 5.60 7.90 8.30 -- -- -- --
Rev Value No. of Units -- 692,587 116,428 110,281 79,406 535 -- -- -- --
Rev. Access No. of Units -- 66,206 12,351 8,332 79,406 535 -- -- -- --
Rev. Extra No. of Units -- 200,297 28,761 30,007 79,406 535 -- -- -- --
U-29
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- $ 8.62 $ 5.85 $ 8.23 $ 8.64 $ 9.58 $ 10.00 -- -- --
Value at End of Year -- 9.34 8.62 5.85 8.23 8.64 9.58 -- -- --
No. of Units -- 4,203 7,749 8,574 -- -- 1,452 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 8.52 5.79 8.17 8.60 9.56 10.00 -- -- --
Value at End of Year -- 9.21 8.52 5.79 8.17 8.60 9.56 -- -- --
No. of Units -- 48,346 12,101 14,125 12,245 16,236 14,326 -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 8.52 -- -- -- -- -- -- -- --
Value at End of Year -- 9.34 -- -- -- -- -- -- -- --
No. of Units -- 23,421 -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 8.40 -- -- -- -- -- -- -- --
Value at End of Year -- 9.21 -- -- -- -- -- -- -- --
No. of Units -- 316,019 -- -- -- -- -- -- -- --
SMALL CAP GROWTH FUND (MERGED INTO SMALL CAP EMERGING GROWTH FUND EFF 11-01-04) - NAV SHARES (units first credited 11-15-2001)
Contracts with no Optional Benefits
Value at Start of Year -- 12.39 9.81 14.19 16.44 21.19 14.27 -- -- --
Value at End of Year -- 12.27 12.39 9.81 14.19 16.44 21.19 -- -- --
Rev Value No. of Units -- -- 428,036 448,285 715,728 608,753 59,529 -- -- --
Rev. Access No. of Units -- -- 41,073 45,628 715,728 608,753 59,529 -- -- --
Rev. Extra No. of Units -- -- 143,040 134,266 715,728 608,753 59,529 -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 14.55 11.49 16.57 10.00 -- -- -- -- --
Value at End of Year -- 14.43 14.55 11.49 16.57 -- -- -- -- --
No. of Units -- -- 2,478 2,478 2,702 -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 12.39 9.81 14.19 10.00 -- -- -- -- --
Value at End of Year -- 12.27 12.39 9.81 14.19 -- -- -- -- --
No. of Units -- -- 29,375 31,651 35,009 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year -- 14.55 11.49 16.57 10.00 -- -- -- -- --
Value at End of Year -- 14.43 14.55 11.49 16.57 -- -- -- -- --
No. of Units -- -- 24,095 29,369 50,072 -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- 12.39 9.81 14.19 10.00 -- -- -- -- --
Value at End of Year -- 12.27 12.39 9.81 14.19 -- -- -- -- --
No. of Units -- -- 250,519 270,532 334,521 -- -- -- -- --
SMALL CAP GROWTH TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 8.90 -- -- -- -- -- -- -- -- --
Value at End of Year 10.31 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 650,669 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 51,319 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 182,932 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 9.34 -- -- -- -- -- -- -- -- --
Value at End of Year 10.85 -- -- -- -- -- -- -- -- --
U-30
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
No. of Units 4,203 -- -- -- -- -- -- -- -- --
Patriot Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year 9.21 -- -- -- -- -- -- -- -- --
Value at End of Year 10.67 -- -- -- -- -- -- -- -- --
No. of Units 42,275 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments greater than $250,000
Value at Start of Year 9.34 -- -- -- -- -- -- -- -- --
Value at End of Year 10.85 -- -- -- -- -- -- -- -- --
No. of Units 25,657 -- -- -- -- -- -- -- -- --
U-31
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/05 12/31/04 12/31/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 12/31/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- --------
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year $ 9.21 -- -- -- -- -- -- -- -- --
Value at End of Year 10.67 -- -- -- -- -- -- -- -- --
No. of Units 268,773 -- -- -- -- -- -- -- -- --
SMALL CAP INDEX TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 12.99 -- -- -- -- -- -- -- -- --
Value at End of Year 12.49 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 214,291 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 53,815 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 95,089 -- -- -- -- -- -- -- -- --
SMALL CAP VALUE FUND (MERGED INTO SMALL CAP VALUE TRUST EFF 4-29-05) - NAV SHARES (units first credited 8-10-1999)
Contracts with no Optional Benefits
Value at Start of Year 25.43 20.54 15.07 16.31 13.87 10.46 10.00 -- -- --
Value at End of Year 27.44 25.43 20.54 15.07 16.31 13.87 10.46 -- -- --
Rev Value No. of Units 377,974 444,257 467,842 467,201 546,648 241,338 -- -- -- --
Rev. Access No. of Units 60,124 63,114 79,351 81,318 546,648 241,338 -- -- -- --
Rev. Extra No. of Units 112,417 123,938 137,936 128,046 546,648 241,338 -- -- -- --
SMALL CAP VALUE TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 25.43 -- -- -- -- -- -- -- -- --
Value at End of Year 27.44 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 377,974 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 60,124 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 112,417 -- -- -- -- -- -- -- -- --
Declaration Contracts with no Optional Benefits with initial premium payments less than $250,000
Value at Start of Year -- -- -- -- -- -- -- -- -- --
Value at End of Year -- -- -- -- -- -- -- -- -- --
TOTAL RETURN TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 10.46 -- -- -- -- -- -- -- -- --
Value at End of Year 10.63 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 154,807 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 14,021 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 74,581 -- -- -- -- -- -- -- -- --
TOTAL RETURN BOND FUND (REPLACED BY TOTAL RETURN TRUST EFF 4-29-05) - NAV SHARES (units first credited 5-01-2003)
Contracts with no Optional Benefits
Value at Start of Year -- 10.11 10.00 -- -- -- -- -- -- --
Value at End of Year -- 10.46 10.11 -- -- -- -- -- -- --
Rev Value No. of Units -- 101,935 85,139 -- -- -- -- -- -- --
Rev. Access No. of Units -- 9,789 10,515 -- -- -- -- -- -- --
Rev. Extra No. of Units -- 44,923 61,613 -- -- -- -- -- -- --
TOTAL STOCK MARKET INDEX TRUST - NAV SHARES (units first credited 4-29-2005)
Contracts with no Optional Benefits
Value at Start of Year 12.50 -- -- -- -- -- -- -- -- --
Value at End of Year 12.74 -- -- -- -- -- -- -- -- --
Rev Value No. of Units 1,350,669 -- -- -- -- -- -- -- -- --
Rev. Access No. of Units 154,546 -- -- -- -- -- -- -- -- --
Rev. Extra No. of Units 440,425 -- -- -- -- -- -- -- -- --
U-32